Grootegeluk

Grootegeluk overview

Resource estimation

Exploration summary

Risks

Operational excellence

Table 38: Grootegeluk overview

Figure 13: Grootegeluk mine

Figure 14: Grootegeluk cross-section

Table 39: Resource estimation methodology and reporting

Table 41: RPEEE considerations

Grootegeluk Mine is a large multi-seam, multi-product surface coal mining operation that had been in operation since 1980. Grootegeluk has a long-term CSA with Eskom. The RoM is hauled to five tipping areas, which in turn feeds eight different beneficiation plants. The largest portion of the beneficiated product is power station coal, which is continuously dispatched to the Matimba and Medupi power stations via a conveyor belt system. Several sized metallurgical coal products, semi-soft coking coal as well as steam coal are railed to various customers and shipped to international clients. A small portion of the total product is sold on site to smaller customers and dispatched by road.

TOPIC	INFORMATION

Location	25km west of the town of Lephalale in Limpopo, South Africa


History	Previous ownership	Material notes
1960s to 1980	Yskor – Iscor – Iscor mining – Kumba	Exploration drilling
1980 to present	Kumba – Kumba coal – Exxaro Resources	Mine commissioned in 1980, continuous exploration drilling to increase Resource confidence. Mine in operation approximately 41 years.


Adjacent properties	Thabametsi to the west


Infrastructure	Grootegeluk can be reached from Lephalale via the hard-topped Nelson Mandela Drive, which is linked to the R510 road connecting Lephalale to the town of Vaalwater to the south and the Stockpoort border post between South Africa and Botswana to the north. Power supply to the mine is obtained directly from the power station via two 132kV lines that supply the mine's three 840MVA transformers. Raw water is delivered to the mine and to a water-treatment plant on the farm Zeeland by the 700mm-diameter Hans Strijdom pipeline. The pipeline originates at the Mokolo Dam. Potable water from the Zeeland water-treatment plant is in turn routed to the mine and local communities.


Coalfield	Grootegeluk is located in the Waterberg coalfield and the coal seams are from the Volkrust and Vryheid formations.


Main seams	The upper part of the coal deposit, the Volksrust Formation (approximately 60m thick) is classified as a thick interbedded seam deposit type, comprising intercalated mudstone or carbonaceous shale and bright coal layers. The Vryheid Formation (approximately 55m thick) forms the lower part of the coal deposit and comprises carbonaceous shale and sandstone with interbedded dull coal seams varying in thickness from 1.5m to 9m. It is therefore classified as a multiple-seam deposit type.


Seam development	These coal seams are subdivided into 11 coal zones which are further divided into separate coal and non-coal samples for analysis. A total of 77 samples are analysed per full succession drill hole consisting of 30 coal samples and 30 non-coal samples for the Volksrust Formation and 13 coal samples and four non-coal samples for the Vryheid Formation.


Depositional control	The Zoetfontein fault forms the boundary of the Waterberg coalfield in the north while the Eenzaamheid fault forms the boundary in the south. The Daarby fault, with a throw of some 350m, divides the coalfield into a deep north-eastern portion and a shallow south-western portion. The first fresh coal in the shallow south-western portion is on average 20m below surface. The lowermost coal seam (Zone 1) occurs at a depth of about 130m in the shallow portion of the coalfield but this may vary depending on the local structure. The predominantly horizontal coal-bearing formations have a very gentle dip to the south-east near Grootegeluk. Only a few dolerite dykes outcrop in the south-eastern portion of the Waterberg coalfield and no sills have been encountered in any exploration drill holes drilled in the mine right area to date.


Resources and Reserves	The Resource extent is restricted by the depositional controls discussed above. The Reserves are restricted within the Resource blocks.


Mining method	Grootegeluk comprises of one open-pit mine, which includes two overburden benches, nine RoM benches and three interburden benches. A series of parallel benches are advanced progressively across the deposit via a process of drilling, blasting, loading and hauling with truck-and-shovel fleets. RoM is transported to the Grootegeluk beneficiation complex via haul trucks and in-pit crushing and conveying systems.


Beneficiation	Coal is beneficiated via eight different plants that produce power station coal (thermal coal) at 35% ash, variously sized metallurgical coal products at different quality specifications and semi-soft coking coal.



Product	Various sized metallurgical coal products at 15% ash and 11.25% ash, semi-soft coking coal at 10.3% ash, as well as steam coal at 12.5% ash are railed to various customers and shipped to international clients via an export harbour. A small portion of the total product is sold on site to smaller customers and dispatched by road.


Market	Local and export market.


Mining right	Grootegeluk has an approved mining right that covers some 26 325ha.


Environmental approvals	All environmental appeals have been favourably addressed for the declared Reserves.


Projects/Feasibility studies	The GGAMS project specifically refers to different methods of extracting, transporting, handling and placement of the OVB material at Grootegeluk mine by shifting it from the front of the advancing pit face to other destinations, especially the backfill area within the mined-out void of the pit.




PROCESS			INFORMATION

Drilling, logging and sampling			In order to have sufficient material available from each sample for the required suite of analyses to relative densities of 2.20g/m3, large-diameter: 123mm-diameter drill core are drilled. The large-diameter drill holes are drilled in between the existing 500m x 500m grid of small-diameter drill holes. The reason for this placement of large-diameter drill holes was that analysis of samples from the large-diameter drill holes could be used to supplement analysis of existing small-diameter drill holes where samples and density fractions were absent. Sampling of drill holes is only conducted after the stratigraphy has been correlated. The geologist in charge supervises all drill hole drilling and is responsible for logging and sampling.


Laboratory and accreditation			Bureau Veritas, SANAS T0469.


Laboratory dispatch and receiving process			Each sample submitted to the laboratory is accompanied by a unique sample number for validation and tracking, as well as a submission list that serves as a sample advice sheet with instructions for analysis.


Laboratory quality control and quality assurance			As part of the assurance and control process, audits are performed internally and externally. Bureau Veritas is accredited for analytical work and participates in monthly local and international round robins.


Data datum			WGS84 — LO27


Drill hole database			acQuire


Number of drill holes in MR			1240


Number of drill holes used for Resource estimation			1 083


Number of drill holes used for classification			545


Data compositing and weighting			Conducted in acQuire


Data validation			Conducted using queries in acQuire and Excel


Geological modelling software			Geovia MinexTM


Estimation technique			Growth algorithm


Previous model date			2016


Last model update			2020


Grid mesh size			20m x 20m


Scan distance			2 000m


Data boundary			200m


Model build limits			Upper: limit of weathering and topography/collar Lower: Zone 1 floor


Model outputs			Roof, floor and thickness grids generated for structure Raw and wash quality grids


Changes to modelling process			Definition of Bench 9A to exclude sample 25 and 25S from the RoM bench


Thickness cut-off and extraction height considerations			Opencast ≤0.5m


Quality cut-offs (adb)			≥65% ash Volksrust Formation coal, ≥50% ash Vryheid Formation coal


Geological loss applied			Variable per bench, calculated each year considering geological model estimation error and physical geological loss

Table 40: Resource classification criteria

ITEM	CRITERIA	CRITERIA MET	COMMENT

Geological data	Data has been validated and signed off by Competent Person	Yes	Geological structures, seam thickness ≤0.5m, ash content ≥65% ash Volksrust Formation coal and ≥50% Ash Vryheid Formation coal. Coal qualities reported on an air-dried basis


Geological model	Geological model has been considered and signed off	Yes	2020


Structural model	Structural model was considered and signed off	Yes	2019


Mining	Mining assumptions considered and defined	Yes	Opencast


Assurance	Exxaro internal audits and external audit conducted	Yes	Resource and LoM done in 2018


Economic evaluation	Exploitation study with economic and mining assumptions, including geotechnical and geohydrological assumptions	Yes	Exploitation strategy over mining right


Environmental	Reasonable demonstration that environmental approvals can be obtained within the context of local, regional and national governmental legislation	Yes	All applicable approvals are in place


Tenure	Formal tenure must be demonstrated with reasonable demonstration that a mining right approval can be obtained within the context of local, regional and national governmental legislation	Yes	Mining right with no impediments noted is valid till 2041 and there is reasonable expectation that the right will be renewed


Infrastructure	Assumptions used should be reasonable and within known/assumed tolerances or have examples of precedence	Yes	Existing infrastructure adequate or can be upgraded with new required infrastructure under construction


Market	A potential market for the product with a reasonable assumption that this market is sustainable	Yes	Current CSAs for local and export markets

Table 42: Reserve estimation

TOPIC			INFORMATION

Software			XPAC


Reserving process			RPM Global’s XPAC mine-scheduling software is used to derive the remaining saleable Reserves from RoM Reserves in the approved pit layout. After converting the geological model’s grids to the appropriate format, the floor, roof and thickness data as well as quality data for each bench is imported into the XPAC model. In this model, validations are performed to evaluate the data for possible discrepancies, such as incremental yields anomalies for each bench, thus ensuring they rise with increases in the relative float densities. The Resource category areas are also loaded into the XPAC model for Reserve categorisation purposes. The XPAC model integrates new geometallurgical principles into the LoM planning process and scheduling model to better predict as-mined plant performance. This is an all-inclusive model that can simulate all the plants in the Grootegeluk complex from one integrated flow sheet. The washability tables for each blast block are imported into the geometallurgical model (XPAC). The geometallurgical schedule imitates reality at Grootegeluk as portions of a single blast block can be allocated to several beneficiation plants in a particular scheduling period. Once the production schedule has run, a blend of blast blocks from different benches is allocated to each plant for each scheduling period. A new composite wash table is then derived for each plant for each scheduling period, which represents the blend of material fed from the mine to that plant. This composite wash table is then used to derive the specific products required to be produced by that plant for that period. A set of calibrated plant factors is applied per plant to adjust theoretical product yields to practical expected levels. It is thus not assumed that a block in its entirety is allocated to one plant only, as this does not represent reality at Grootegeluk. The scheduled mining blocks are of the same size as current actual blast blocks in the mine. The fact that material from different benches is combined and beneficiated simultaneously creates difficulty in reporting saleable product tonnages per bench. The preferred reporting practice at Grootegeluk is therefore RoM tonnes per bench and saleable product tonnes per beneficiation plant.


Conversion classification			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.


Inferred Resources inside LoM			Some 137Mt of Inferred Resources are included in the LoM plan, representing 5.3% of the LoM plan, and are not considered material. The impact of the Inferred Resources are known with the majority thereof occurring at the tail end of the LoM plan and addressed by an integrated exploration plan that is reviewed every year.

Modifying factors


Average thickness cut-off			≤0.5m


Quality cut-offs			≥65% ash content (raw in situ)


Mining loss			No loss applied due to the fact that all mining boundaries are reached and no pillars are left


Boundary pillar			N/A


Dilution			Applied to in situ mineable Reserves due to the inter-layered composition of the deposit


Contamination			Varies per bench. 0 to 0.75m applied to interburden seams


Mining recovery efficiency			Varies per bench. 0 to 0.75m depending on bench height


Planned average slope angles			<61.7 degrees


Practical plant yield			Considered in the reserving process as per wash table information per combination of blocks per planning increment and the empirically determined practical yield adjustment factor


Strip ratio cut-off			Energy strip ratio >7GJ/ex-pit tonne


Environmentally sensitive areas			Areas underlying wetlands and other eco-sensitive areas are excluded from the Reserves, distance as per environmental requirements


Legal			The layout is within the mining right boundary and not closer than 15m


Social			There are no known socially sensitive areas in the pit layout (for example, graveyards and dwellings)


Geohydrological			Areas identified are flagged and excluded or reclassified in the reserving process

Table 43: Grootegeluk Coal Resource and Coal Reserve statement

Category	2021 (Mt)	2020 (Mt)	Difference in tonnes (Mt)	Difference (%)	Reason for change
Measured	2 481	2 532	(52)	(2)	Reduction of 55Mt through mining depletion, increase of 2Mt from the survey adjustment relating to 2020 reporting, minor changes due to reconciliation and mining in previously sterilised areas.
Indicated	1 421	1 422	0	0
Inferred	338	338	0	0
Total Coal Resources	4 240	4 292	(52)	(1)
Proved	1 682	1 730	(48)	(3)	Reduction of 55Mt through mining depletion, increase of 2Mt from the survey adjustment relating to 2020 reporting, 2Mt reduction due to reconciliation, 6Mt increase due to rounding of figures between the various benches.
Probable	898	898	0	0
Total Coal Reserves	2 580	2 628	(49)	(2)

Rounding of figures may cause computational discrepancies.
Tonnages quoted in metric tonnes and million tonnes (Mt). Coal Resources quoted as MTIS.

Summary of the exploration for the reporting year can be seen in Table 44. For detailed expenditure, please refer to Table 54.

Table 44: Exploration summary

Table 45: Grootegeluk risks

RISK	DESCRIPTION	MITIGATION

Fault position accuracy	The structure interpretation (fault positions) in the geological model is based on drill hole information that is widespread	Additional percussion drill holes are drilled in structurally complex areas after it is covered by the normal cored exploration drill hole grid.


Removal for weathered material in the pit	If the weathered material is not removed properly, downstream problems are experienced in the beneficiation plants.	A strict block declaration procedure is followed to minimise the amount of weathered material left on a block before blasting and loading occurs.



Semi-soft coking coal (SSCC) yield loss	The yield of the SSCC as obtained in the beneficiation plants at Grootegeluk is much lower than the theoretical yield as determined from exploration drill hole samples at Bureau Veritas laboratory. The main reason for this phenomenon is related to near density material that is inadvertently misplaced to the power station coal product and lost to slimes during the mining and beneficiation process.	Although the low actual SSCC yield has a negative impact on the mine’s profitability, it poses a low risk on the Resource because empirically calculated plant correlation factors are used in the Mine Planning department to compensate for the misplaced material in the plant.


Power station coal sulphur content	Benches that are utilized for power station coal by means of crush and screen operations, have high sulphur concentrations. This is mainly due to the presence of pyrite nodules within the coal structure. Should this RoM material have to be beneficiated to lower the Sulphur content, an associated yield loss and additional beneficiation costs will be incurred. There will also be less dry coal material available for the management of the coal product moisture content.	To cater for the impact of pyritic sulphur in Vryheid Formation coal, the GG7 plant has the capacity to process the coarse fraction, where the pyritic sulphur typically reports. This assists in reducing the final sulphur in the product.

OBJECTIVES

PROGRESS IN REPORTING YEAR

PLANS FOR NEXT REPORTING YEAR

Primarily on geological and geotechnical overburden material characterisation for the GGAMS project.

The appointment of a new exploration drilling service provider resulted in a delay in the start-up, necessitating a revision of the exploration plan. Thirty six (36) drill holes were successfully completed during the year.

Thirty one (31) percussion holes were drilled for overburden material classification and sampling. These drill holes were also used to improve delineation of faults in structurally complex areas.

Nine thy seven (97) drill holes planned in 2022:

Twelve (12) rotary core drill holes for quality analysis and resource characterisation

Four (4) rotary core drill holes for geotechnical characterisation

Five (5) percussion drill holes to be used for water monitoring

Seventy six (76) percussion drill holes for overburden classification structural interpretation

Grootegeluk mine continually strives to improve operational performance in all aspects. To this end, the mine has embarked on several initiatives to improve not only data accuracy, but also, readiness to assist in decision making and Resource optimisation. Building on the success of the short-term sample model, the mine is investigating the implementation of a sample-based long-term model that covers the entire Resource area and LoM thus unlocking the value in aligning actual mining conditions, increased flexibility and prevailing market conditions. In conjunction with the sample-based long-term model, the mine has implemented the OCCS mine planning software, which is a fully integrated mine planning solution that is envisaged to unlock incredible value across the MRM value chain. Lastly, the Grootegeluk Survey department has recently commissioned in-pit static scanners to augment their current survey capabilities (which include drones and mobile scanners) and to aid in in-time data collection. These scanners will aid in providing real-time data.

Truck and shovel at Grootegeluk