Belfast mine

Belfast overview

The Belfast mine is located some 10km south-west of the town of Belfast in Mpumalanga, South Africa, on the far eastern edge of the Witbank coalfield. The coalfield extends about 190km east-west between the towns of Springs and Belfast, and about 60km in a north-south direction between the towns of Middelburg and Ermelo. The mineral tenure areas of Umsimbithi Mining and Universal Coal (Paardeplaats) are to the north of Belfast with the Umsimbithi Mining Wonderfontein coal mine to the far west.

The Belfast mine is adjacent to the N4 highway connecting Pretoria and Maputo, and can be accessed from the N4 via two district roads, namely D1110 and D1770. The mine is also adjacent to the railway line to Maputo. Nearby loading facilities connect the railway line to Richards Bay. Once fully developed, the mine will have seven opencast pits. There are prospects for additional opencast pits and an underground mining section.

Thermal coal is beneficiated in a two-stage dense medium separation plant to produce a primary product of 6 000kcal/kg net as received (NAR) and a secondary product of 21.6MJ/kg. Both products are suitable for the export market but the secondary product can also be sold in the domestic market. Mobile crush-and-screen plants may be brought on-site as needed. Existing Eskom power lines are on the property for electricity supply. The mining right has been approved and all environmental appeals have been favourably addressed. Mining operations began in the first quarter of 2019 and will ramp up in 2020. Coal Resources occur within most of the mining right whereas the Coal Reserve is limited to the southern mining right area aligned with the existing LoM plan. A project was initiated in 2019 to review the current exploitation strategy, including testing economic viability (macro-economic outlook) of the northern area considering both open cut, and underground mining scenarios.

Figure 12: Belfast mine

Belfast history

Belfast Coal has an approved mining right that covers 7 198ha. The geological model incorporates 616 boreholes. The geological database also includes 113 boreholes outside the mining right area.

Table 17: Belfast operation history

Belfast geology

The Witbank coalfield has up to five coal seams in the middle Ecca group sediments of the Karoo supergroup. The Karoo sequence in the area is represented by the Dwyka formation and the middle Ecca with little or no lower Ecca development. The middle Ecca sequence of coal horizons interbedded with sediments is highly truncated due to erosion with only very minor areas where the full sequence is developed. Locally, there are mainly three seams being targeted, seams 2 (S2), 3 (S3) and 4 (S4). Seam 5 (S5) was intersected in only two boreholes in the northern part of the project area. S2 the most prevalent seam is consistently developed, except in areas where it has been eroded, and has an average thickness of 2.8m dipping gently to the south. Both S3 and S4 are sporadically developed due to erosion and both have an average thickness of 0.6m. Due to the proximity of the northern edge of the Witbank Basin, the primary control of the coal development is the current weathering surface. The deposit is therefore divided by a perennial stream into two Resource blocks under two distinct spurs in the surface topography. There is no indication of pertinent faulting from the borehole information but potential intrusions of dolerite dykes are outlined by regional airborne magnetics, indicating the possible occurrence of regional north-south trending dykes.

There are no known geological structures that may affect the geology or coal seam continuity.

Belfast Resource evaluation

The geologist in charge supervises all borehole drilling, and is responsible for logging and sampling in compliance with Exxaro's logging and sampling standards as well as standard operating procedures. Sampling of boreholes is only conducted after the stratigraphy has been correlated. All samples collected and bagged are registered in a sample sheet, which is also used as a dispatch sheet. The dispatch sheet is signed by the receiving laboratory personnel after ensuring that the number and sample ID on the dispatch sheet matches that of the actual samples to be analysed. Once the laboratory receives and signs the dispatch sheet, it is responsible for safekeeping and storage of that batch of samples.

All coal analysis was conducted at an accredited Bureau Veritas ISO/IEC 17025:2005 laboratory. Great emphasis is placed on ensuring data integrity though rigorous procedures and supervision while processing. As part of the assurance and control process, audits are performed internally and externally. Bureau Veritas is SANAS-accredited for analytical work and participates in monthly local and international round-robins.

The Coal Resource classification methodology is fundamentally based on SANS 10320 and considers borehole spacing, type of boreholes and structural complexity of the Resource.

Figure 13: Belfast west-east cross-section

Table 18: Belfast Coal Resource reporting criteria

* Current proposed underground exploitation plan was used as a baseline for underground minimum thickness cut-off.

Table 19: Belfast Coal Resource estimation criteria

Table 20: Belfast Coal Resource classification criteria

Table 21: Belfast Resource and Reserve statement

Rounding of figures may cause computational discrepancies.

• All changes more than 10% are explained.
• Mining method: opencast (OC).
• Figures are reported at 100% irrespective of percentage attributable to Exxaro.
• The tonnages are quoted in metric tonnes and million tonnes is abbreviated as Mt. Coal Resources are quoted as mineable tonnes in-situ (MTIS) and refer to remaining Resources after 31 December 2019 and 31 December 2018.
• Coal Resources are reported on a mineable in-situ (MTIS) basis.
• Cut-offs applied as per Resource reporting criteria table.
• Coal Resources are quoted inclusive of Coal Reserves.

Table 22: Belfast RPEEE considerations

Belfast Reserve estimation

Scheduling of the Reserve is determined using mining scheduling applications from XPAC, which is the same software used to develop the LoM plan schedule. The geological 3D model used for the Resource statement is referred to as the Reserve geological 3D model.

The geological model is supplied to mining processes in the form of Minex^TM grids. The grids and DXF files are then converted by mining processes to Surpac files. The methodology used by mining processes is to initially validate the geological information received by checking the integrity of the geological structure and that quality and wash-table values are consistent.

Indicated Resources are generally converted to Probable Reserves and Measured Resources to Proved Reserves after consideration of all applicable modifying factors. If one or more of the modifying factors have not been fulfilled, Measured Resource is either not converted or the Measured Resource is converted but downgraded to Probable and the associated risk is clearly stated. Inferred Resources are not converted to Coal Reserves.

Some 0.7Mt of Inferred Resources are included in the LoM plan, representing 1.5% of the LoM plan, and are not considered material. The area with Inferred Resources, on the western edge of the pit, will only be reached towards the end of LoM.

Table 23: Belfast production figures

Table 24: Belfast modifying factors considered in converting Coal Resources to Coal Reserves

Belfast known risks

Weathering impacting on coal seam continuity is a continuous risk, which is managed through strict grade control and infill drilling practices.

Currently, all modifying factors are based on the company's knowledge of the Mpumalanga coal field due to the fact that this operation does not have any historic information on which to base the factors. As the mine continues to operate and mine-specific information is gathered, these factors will be reviewed and, if necessary, adjusted to actual performance. We do not know of any pertinent risks or other material conditions that may impact the company's ability to mine or explore, including technical, environmental, social, economic, political and other key risks.

Belfast operational excellence

Although every effort was made to include all value-adding opportunities in the project, it is inevitable that some opportunities still exist. If the macro-economic outlook, in terms of prices and exchange rates, improves significantly, a large portion of the orebody, currently excluded, could be added to the Coal Reserve, and subsequently extend the LoM. Opportunities exist to substitute some of the current mining equipment with other production haul trucks that could reduce the operating cost of the haul fleet.

Purchasing of the farms to the north of the current mine layout could potentially, after the review of the exploitation strategy and economic viability extend the LoM and add to the Coal Reserve.