Coal growth prospects
Coal
A supply agreement for 45 years was awarded to Exxaro Coal by Eskom in March 2007 to supply 8,5Mtpa of power station coal from Grootegeluk mine to Eskom’s new 2 400MW Medupi power station. Phase I of the new power station consists of three generating units and is adjacent to both the Matimba power station and Grootegeluk. Feasibility studies are under way to also supply the additional three planned generating units at Medupi, which could increase total coal supply from Grootegeluk mine to the new power station to 14,6Mtpa.Construction of a four-retort Sintel char plant is almost complete and hot commissioning will begin in the first quarter of 2008. The Sintel plant will produce char for the ferroalloy industry from coal sourced from Grootegeluk. Production is expected to ramp-up to 160ktpa by the third quarter of 2008 at a revised project cost of R320 million.
The feasibility study to investigate the viability of a market coke plant has been extended due to more extensive test work on the coking characteristics of the process and is now scheduled for completion in the first half of 2008. If viable, the plant will produce high-quality market coke from semi-soft coking coal produced at Grootegeluk.
In May 2007, Exxaro was awarded a 2,5Mtpa export entitlement through RBCT by means of a subscription
process, in addition to the existing 0,8Mtpa entitlement. Exxaro also purchased a further 1Mtpa export
entitlement through RBCT from Billiton Energy Coal South Africa Limited, bringing the total export
allocation to 4,3Mtpa. On completion of the RBCT Phase V expansion scheduled for the second quarter of 2009, Exxaro will receive a further 2Mtpa export entitlement through the South Dunes Coal Terminal Company, bringing the total entitlement to 6,3Mtpa by end 2009.
Grootegeluk is well positioned to supply Eskom’s Limpopo power stations Botswana
South Africa
Exxaro’s operational and growth interests in Mpumalanga
The Mafube expansion project, in which Exxaro is a 50:50 joint venture partner with Anglo Coal, is expected to cost approximately R1,9 billion on completion. Construction started in July 2006 with the first coal-to-washing plant delivered in January 2008 and ramp-up to full capacity under way. This is expected to take some seven months.
Geological drilling and modelling at Mmamabula in Botswana, a joint venture between Exxaro and Magaleng,
continued until the end of June 2007. An application for a mining licence or special extension of the prospecting licence was submitted in March 2007. The feasibility study is planned to begin in 2008, subject to the special extension being granted.
Mining of the Eerstelingsfontein reserves near Belfast to supply 1Mtpa power station coal to Eskom could begin in 2008, subject to environmental approvals being obtained. The feasibility study on the project has been completed and a mine authorisation has been received.
A feasibility study for accessing the Diepspruit reserve at New Clydesdale has been completed, with
implementation expected in the third quarter of 2008. The R136 million project will produce 1,3Mtpa run- of-mine coal which will be beneficiated at the existing New Clydesdale beneficiation plant to supply coal to the export market.
Exploration and related work at the Moranbah hard-coking coal project, in the Bowan Basin in Queensland
Australia, is progressing according to plan. Exploration during 2008 will focus on geophysical work to delineate potential long-wall mining resources and, pending the success of this work, there is the possibility of fast-tracking an initial phase board-and-pillar/open-cut operation.
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