Leeuwpan

Leeuwpan mine has two opencast pits in operation and multiple face exposure for mining flexibility, which can be linked to the current market-to-resource strategy. The review of the LoM together with low production, due to the market-to-resource strategy, has resulted in eight remaining operational years. Exxaro is currently in a process of potential divestment from the operation.

Leeuwpan overview

Table 22: Leeuwpan overview

RISK			INFORMATION
Location			10km south-east of the town of Delmas in Mpumalanga, South Africa
History			Previous ownership	Material notes
1988 to 2006			Iscor – Iscor mining – Kumba	Exploration began in 1990, first box-cut was commissioned in 1992 and rights ceded to Exxaro in 2006.
2006 to 2021			Exxaro	Infill exploration drilling. Mine in operation for approximately 29 years.
Adjacent properties			Stuart Colliery, Delta Mining Company and HCI Khusela Coal are coal mines owning property in close proximity to Leeuwpan. Silica mine is also adjacent to Leeuwpan.
Infrastructure			Leeuwpan lies alongside the R50 hard-topped secondary road and is serviced by a rail track that includes a rapid load out station. Electricity is supplied directly to the mine by Eskom by means of a substation at Witklip which is linked to the nearby Eskom power line. Potable water is supplied from drill holes, which are used only for drinking water. Process water is supplied from a closed system, which includes the plant, slimes dams and pit dams. Water replenishment comes from the pits but, if this is insufficient, make-up water from six drill holes is also used.
Coalfield			Leeuwpan mine is in the Delmas coalfield, on the western border of the Witbank coalfield. The geology within the Delmas coalfield is similar to that of the Witbank coalfield. Like the Witbank coalfield, the Delmas 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. The basement is generally the Malmani dolomites from the Transvaal supergroup. .
Main seams			Two coal seams have been identified at Leeuwpan: top coal seam and bottom coal seam. The bottom coal seam correlates with the S2 of the Witbank and Highveld coalfields and the top coal seam correlates with the S4 and S5. The bottom coal seam qualities are generally higher than the top coal seam qualities.
Seam development			The coal seams at Leeuwpan are primarily interbedded with sandstone, shale and carbonaceous shale.
Depositional control			The coal was deposited on glacial sediments of Dwyka tillite, which in turn was deposited on dolomite of the Transvaal supergroup. A significant amount of magma intruded as concordant sills of dolerite in the Karoo strata in the Delmas area. Associated with the dolerite intrusion are numerous thin dolerite dyke structures that transgress the stratigraphy. Factors controlling geological and quality continuity are mainly surface weathering, significant variation in seam thickness due to an undulating tillite floor, faulting associated with dolerite activity and dolomitic basement, and devolatilisation and weathering due to dolerite intrusions (sills and dykes).
Resources and Reserves			Coal Resources occur in opencast pits OI, OL and UB, and Reserves occur within the same pits and are aligned with the existing LoMP.
Mining method			Leeuwpan is an opencast operation with various Reserves, in various pits, mined simultaneously. Current mining operations are on the OIW, OL and OI Reserves. The mine uses trucks and shovels for mining-related operations.
Beneficiation			Leeuwpan has two dense medium separation plants that beneficiate export thermal coal and two dry plants, crush-and-stack and bypass plants that handle selectively mined thermal coal either for the local market or the export market. The second dense medium separation plant, commissioned in 2016 is operated by Fraser Alexander whereas the original plant is operated by Exxaro.
Product			Both plants are geared for 5 300kcal/kg production. The crush-and-stack and bypass can produce either 5 300kcal/kg, 4 800kcal/kg or 4 200kcal/kg products.
Market			Leeuwpan supplies domestic and export markets.
Mining right			Leeuwpan has an approved mining right that covers 4 269ha.
Environmental approvals			All environmental appeals have been favourably addressed for the declared Reserves.
Projects/Feasibility studies			None

Resource estimation

Table 23: Resource estimation methodology and reporting

PROCESS			INFORMATION
Drilling, logging and sampling			Vertical surface drill holes are drilled and subsequently logged on site. Lithological codes are used when capturing the lithology. Photographs of the core are taken after marking the core. Samples are split on the lithological contact, if needed, using a chisel and hammer to ensure a clean break. Each sample is put in an individual bag with all material represented in that interval, ensuring no contamination occurs between materials to be sampled. Two sample tags are marked using a permanent marker. One sample tag is placed inside the bag and the second on the outside of the bag then sealed with a cable tie.
Laboratory and accreditation			SGS, SANAS T0561
Laboratory dispatch and receiving process			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.
Laboratory quality control and quality assurance			SGS is accredited for analytical work and participates in monthly local and international round robins.
Data datum			Cape datum – LO29
Drill hole database			acQuire
Number of drill holes in mining right			2 993
Number of drill holes used for Resource estimation			612
Number of drill holes used for classification			492
Data compositing and weighting			acQuire
Data validation			Conducted using queries in acQuire and Excel
Geological modelling software			Geovia MinexTM
Estimation technique			Growth algorithm
Previous model date			2018
Last model update			2019
Grid mesh size			20m x 20m
Scan distance			1 000m
Data boundary			200m
Model build limits			Upper: limit of weathering and topography/collarLower: basement/Dwyka
Model outputs			Roof, floor and thickness grids generated for structure Raw and wash quality grids
Changes to modelling process			None
Thickness cut-off and extraction height considerations			2019 model ≤0.5m (S5 ≤1m)
Quality cut-offs (adb)			Ash ≥50%, a non-material amount of coal ≥50% ash may be included to ensure optimised extraction
Geological loss applied			5% to 100% based on geological loss domains (5% standard geological loss is applied but may vary based on the consideration of structural complexity (dolerite sill breakthrough – 50% loss within determined spatial extent and fault displacement zone – 100%) and seam floor adulation (10% loss).

Table 24: Resource classification criteria

CATEGORY

TYPE OF DRILL HOLES

DRILL HOLE SPACING

STRUCTURALLY COMPLEX AREAS

DRILL HOLES/HA

Measured

Cored drill holes with applicable coal qualities

0m to 100m

May be more conservative after consideration of RODA

1.1

Indicated

Cored drill holes with applicable coal qualities

100m to 200m

May be more conservative after consideration of RODA

0.6

Inferred

Cored drill holes with applicable coal qualities

200m to 1 000m

May be more conservative after consideration of RODA

0.2

Table 25: RPEEE considerations

ITEM			CRITERIA			CRITERIA MET			COMMENT
Geological data			Data has been validated and signed off by Competent Person			Yes			Seam depth, seam thickness ≤0.5m all seams except S5 thickness ≤1m, ≥50% ash content but a non-material amount of coal with ≤50% ash may be included to ensure optimised extraction, coal qualities are reported on an air-dried basis
Geological model			Geological model has been considered and signed off			Yes			2019
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			External audit by EY in 2021
Economic evaluation			Exploitation study with economic and mining assumptions, including geotechnical and geohydrological assumptions			Yes			LoM exploitation study
Environmental			Reasonable demonstration that environmental approvals can be obtained within the context of local, regional and national governmental legislation			Yes			Current required approvals 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 valid to 2039 with no impediments noted
Infrastructure			Assumptions used should be reasonable and within known/assumed tolerances or have examples of precedence			Yes			Current infrastructure
Market			A potential market for the product with a reasonable assumption that this market is sustainable			Yes			Current market

Reserve estimation

Table 26: Reserve estimation

TOPIC			INFORMATION
Software			OCCS
Reserving process			Scheduling of the Reserve is determined using a mine scheduling application (Scheduler) from OCCS, which is the same software used to develop the LoMP schedule. The geological three-dimensional (3D) model used for the Resource statement is referred to as the Reserve geological 3D model. The geological model is supplied to mining, projects and technology in the form of MinexTM grids. The grids are then imported into a reserving application (Reserver) from the same OCCS software. This application is used to validate the geological information received by checking the integrity of the geological structure and that quality and wash-table values are consistent, and to convert the geological 3D model into mineable block sizes. Careful product selection and balancing of remaining reserves is required at Leeuwpan to ensure maximum value for Exxaro.
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. This is the case for UB, where it is classified as a Probable Reserve because of additional modifying factors such as low volatiles and the limited market for this particular quality of coal. Inferred Resources are not converted to Coal Reserves.
Inferred Resources inside LoM			No Inferred Resources inside LoM.
Modifying factors
Average thickness cut-off			0.5m all seams except S5, which is 1.0m
Quality cut-offs			N/A
Mining loss			25% for S5 and 5% for all other seams
Boundary pillar			100m
Dilution			0%
Contamination			5% on dense medium separation plants and 1% on crush and stack plant
Mining recovery efficiency			5% (crush and stack) and 5% (dense medium separation bypass)
Planned average slope angles			45 degrees. For highwall stability, soft material is mined at least one strip ahead of hard material and coal mining activities
Practical plant yield			90% dense media separation and 90% Fraser Alexander dense medium separation with slimes loss on dense media separation of 9% and 15% on Fraser Alexander dense media separation.
Strip ratio cut-off			Strip ratio is determined using the energy strip ratio assessment and is considered in the reserving process using the economic model to get mining boundaries
Environmentally sensitive areas			Environmentally sensitive areas applications made, and approval acquired before mining.
Legal			Applicable mining right considered
Social			Applicable communities considered. Socially sensitive areas in the mining right (such as graveyards) are excluded from Reserves in the reserving process
Geohydrological			Applicable surface and groundwater models are considered. The pit floor was taken into consideration to minimise water handling in the pit face

Table 27: Leeuwpan Coal Resource and Coal Reserve statement

Category	2021  (Mt)	2020  (Mt)	Difference  in tonnes  (Mt)	Difference  (%)			Reason for change
Measured	77.9	79.9	(2.0)	(2)			Reduction by 4.6Mt due to mining depletion and increase of 2.6Mt due to Resource conversion from the Indicated category.
Indicated	0.0	2.6	(2.6)	(100)			Resource conversion to Measured category due to increased Resource confidence.
Inferred	3.6	3.6	–	–
Total Coal Resources	81.5	86.1	(4.6)	(5)
Proved	40.2	42.0	(1.8)	(4)			Reduction by 4.5Mt due to mining depletion, 2.5Mt increase due to Reserve reclassification from Probable, 1.3Mt increase due to model refinement, 0.4Mt reduction due to methodology and 0.7Mt reduction due to reconciliation relating to 2020 reporting.
Probable	3.2	5.7	(2.5)	(44)			Reduction by 2.5Mt is due to a change in the Resource classification to Measured.
Total Coal Reserves	43.4	47.8	(4.3)	(9)

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

Exploration summary

Summary of the exploration for the reporting year is outlined in Table 28. For detailed expenditure, refer to Table 54.

Table 28: Leeuwpan exploration summary

OBJECTIVES			PROGRESS IN REPORTING YEAR			PLANS FOR NEXT REPORTING YEAR
Increase Resource confidence from Inferred Resource to Measured Resource in the OI area			Twelve (12) surface vertical drill holes were drilled using conventional diamond drilling. TWN core was recovered, logged and sampled. The spacing of the drill holes was such that in the next geological model update the area's geological classification will be converted to Measured category. All the drill holes were wireline logged.			Ten (10) drill holes are planned, mainly in the OL extension, to delineate the sandstone washout zone and increase confidence in the OL-OI Bridge area.

Risks

Table 29: Leeuwpan risks

RISK			DESCRIPTION			MITIGATION
Dolerite sill impact on slope stability			Reserve blocks UB and OI have a dolerite sill overlying the coal strata and the sill orientation affects slope stability.			Apply RODA to identify the areas of high geological risk. The bench design is modified based on dolerite dipping towards the seam.
Major faults			Major faults with displacements greater than the seam widths occur between OL and OI. This is also associated with sill transgression.			Inclusion in the RODA plan and higher geological losses applied to major fault zones.
Coal quality			In seam quality deviations are generally localised and are associated with minor channel washouts.			Manage quality variability through grade control practices.
Water accumulation			In-pit water accumulation due to excess groundwater either from the pit face or with coal exposure.			Proactive groundwater management and pit dewatering.
Reserve losses			In OI West, along the R50, the rock engineering design requires that a safe stand-off distance is established to prevent potential slope failure and infrastructure damage (Eskom power line and national road).			Geotechnical design has been done to establish safe benching practice. Application process in progress to allow mining within 100m of power line and national road.

Operational excellence

Operational excellence at Leeuwpan exists to focus on the continual sustainable improvement of core processes in the value chain using principles such as performance benchmarking, waste reduction, theory of constraints, productivity improvement, and new technologies on the existing processes, people and systems. The value-driven focus at Leeuwpan is on the top five initiatives, Lean 5 compliance and Digital@Exxaro innovation. The key focus remains on mining operations, plant processing and engineering to assist in improving throughput, cost reduction and safety compliance for the benefit of the entire mine value chain.