EXPLORATION

Exploration in existing operations of our coal business consisted of drilling (diamond core and reverse circulation) with surface geophysical surveys, when required, and downhole geophysical logging.

Exploration was primarily conducted on mining right and associated adjacent prospecting right areas and new information incorporated into updated geological models and included in the Mineral Resource statement. Drilling was carried out for production purposes and to improve geological confidence to enhance geological modelling and estimation. These boreholes are depicted in the relevant locality maps in the ancillary section. A limited amount of geotechnical and hydrogeological drilling was conducted to improve mine-planning parameters and is included in exploration results (below).

No exploration was conducted on areas not included in the Coal Resource statement. The resource in the various operations were reviewed in 2018 to identify and outline geological challenges/complexities. Based on this review, an integrated exploration plan was compiled that includes activities required to address Coal Resource-and-metallurgical characterisation, overburden characterisation, geological structure as well as rock engineering and hydrogeological data requirements.

Grootegeluk Mine drilled a number of large-diameter cored exploration boreholes to advance Inferred and Indicated to Measured Resources to mitigate geological risk and enable detail mine planning. Positions were carefully selected to fill Coal Resource information gaps and to increase our confidence on rock engineering and hydrogeological information to fulfil applicable Coal Resource to Reserve modifying factor requirements. Additional core drilling, surface geophysical surveys and percussion drilling were applied to better define geological faulting that poses challenges for future mining. Resource drilling will proceed in 2019 but there will be a substantial increase in percussion drilling in front of the advancing pit. This will improve the definition of geological faulting as well as the characterisation of the overburden to enhance the study progress of the in-pit crushing and conveying overburden (IPCC OVB) project and backfill strategy.

At Matla mine exploration activities in recent years have aimed to address the considerable information gap created by several changes to LoM layouts to accommodate delayed Eskom approvals of the Matla expansion projects. Vital progress has been made and drilling in 2019 will proceed to mitigate geological risk in the short and medium term, derisking accessibility and mineability (roof stability) within the LoMP. Geological faulting, impact of sill and dykes as well as seam variability are the mayor challenges addressed through the integrated and focused exploration activities.

Cored and openhole (percussion) drilling at the Belfast operation was primarily focused on derisking the two box-cut areas where mining will start. The objectives were to clearly define coal seam thickness, outline areas of weathering (minimise losses) and enhance overburden characterisation (to improve slope design and mining recommendations). Drilling in 2019 will focus on further derisking the two- to five-year plan through selective infill drilling.

Drilling at Leeuwpan mine was executed to confirm and improve the confidence of coal seam structure and coal qualities in the OI west resource expansion area. In addition percussion drilling was conducted in the OI reserve to improve the understanding of the geological contacts for slope design and safety considerations. The OI expansion project presents significantly higher striping ratios and lower yields, and slope design recommendations are vital to ensure an optimal extraction design.

Exploration activities at ECC focused on increasing the level of geological confidence and around a third were specifically drilled for geotechnical purposes. A number of holes will be drilled in 2019 at Dorstfontein West to better define geological faulting and seam variability in the new seam 4 underground expansion project. Selective cored holes are planned adjacent to the two open pits at Dorstfontein East to confirm seam continuity and, specifically at pit 2, for improved definition of geological structure (faulting, sills and dykes) in the area earmarked for underground mining. Drilling at Forzando is primarily planned to upgrade Inferred and Indicated Resources to the Measured Resource category.

Table 80: Summary of exploration expenditure for coal