Ancillary Resource and Reserveinformation by operation

Belfast

In 2022 Belfast demonstrated its implementation of the early value coal strategy by opening its milestone fifth opencast pit. Belfast was on track in the first part of the year to reach
an all-time high record production. However, challenges relating to the mining business partner in the second part of the year negatively impacted production. The challenges are currently being addressed. The technical team is focused to optimise the full area within the mining right as outlined in the early value coal strategy and applicable studies are progressing well with the conclusion of the exploration campaign and exploitation plan.

Belfast overview

Table 16: Belfast overview

Topic	Information
Location	10km south-west of the town of Belfast in Mpumalanga, South Africa
History	Previous ownership	Material notes
1967	Fuel Research Institute of South Africa	Coal Resource delineation drilling
1969	Trans-Natal Steenkoolkorporasie Beperk	Coal Resource delineation drilling
1975 to 1983	Gold Fields Mining and Development	Coal Resource delineation drilling
2001 to 2003	Eyesizwe	Coal Resource delineation drilling
2008 to present	Exxaro	Drilling to delineate Coal Resources, detailed box-cut designs, five-year mine plan infill drilling and life extension project. The mine produced first coal in April 2019 from pit 5. In 2019 it also opened two box cuts on pit 1 and pit 7, ramping up production in 2020. In 2020 pit 2 was opened, followed by pit 4B box cut in 2021 and pit 4 box cut in 2022. Except for pit 4, the other opencast pits are in steady state.
Adjacent properties	The mineral tenure areas of Umsimbithi Mining (Wonderfontein coal mine) and Universal Coal (Paardeplaats) are to the west and north of Belfast, respectively.
Infrastructure	Belfast mine is adjacent to the N4 highway that connects Pretoria and Maputo and can be accessed from the N4 via the D1110 and D1770 district roads. The mine is adjacent to the railway line to Maputo and nearby loading facilities connect the railway line to the Richards Bay Coal Terminal. Existing Eskom power lines are on the property for electricity supply. Water is sourced on site as per the IWUL specification. Potable water is sourced from authorised water drill holes, and process water for dust suppression and running of the beneficiation plant is sourced through dewatering from pits.
Coalfield	Belfast mine is 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 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.
Main seams	S2, S3 and S4 are exploited where economical.
Seam development	Locally, mainly three seams are targeted (S2, S3 and S4). S5 was intersected in only a few drill holes in the northern part of the project area. S2, the most prevalent seam, is consistently developed, except in areas where it has been eroded. It has an average thickness of 2.6m and gently dips to the south. S3 and S4 are sporadically developed due to erosion and both have an average thickness of 1.0m.
Depositional control	Due to the mine's proximity to the northern edge of the Witbank basin, the primary control of coal development is the current weathering surface. The deposit is 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 drill hole 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.
Resources and Reserves	Resources occur within most of the mining right and Reserves are limited to the southern mining right area, aligned with the existing LoMP.
Mining method	Currently, mining takes place from five open pits using the doze-over, truck-and-shovel hybrid mining method. The LoM identifies 10 opencast pits, four or five of which will operate concurrently. There are prospects for additional opencast opportunities north of the existing operations.
Beneficiation	Thermal coal is beneficiated in a two-stage dense medium separation plant.
Product	CV 4 800kcal/kg, 5 300kcal/kg, 5 750kcal/kg air dried and filter cake.
Market	Export market
Mining right	Belfast has an approved mining right that covers 5 818ha.
Environmental approvals	All environmental appeals have been favourably addressed for the declared Reserves.
Projects/feasibility studies	Several studies relating to the optimisation of the mining right area were concluded and closed out in 2022. Reasonable alternatives were evaluated, and multiple scenarios identified with opencast as the current preferred mining option. We are currently applying for licences to operate. The following items will be addressed in future studies: Design and optimise discard facility to cater for life optimisation (BXP) discard material Continue with the licence to operate application process for the Belfast mining right area Update study documentation to reflect final designs and licence to operate applications outcomes

Figure 8: Belfast mine

Figure 9: Belfast west-east cross-section

 

Resource estimation

Table 17: Resource estimation methodology and reporting

Process	Information
Drilling, logging and sampling	Since 2019, most vertical surface drill holes have been wireline logged as per Exxaro's procedure. Drilling mainly focuses on delineating the split between soft and hard OVB to support geotechnical characterisation, as well as enhanced seam roof and floor mapping to delineate areas of seam floor rolls, seam thinning, seam thickening and seam pinching. We take photographs of the core after marking it. Geological information is captured on log sheets with lithology captured up to centimetre scale with detail. Sampling is conducted on site with the aid of wireline logs.
Laboratory and accreditation	SGS and SANAS T0561
Laboratory dispatch and receiving process	All the samples are collected, bagged and delivered to the laboratory for analyses accompanied by a dispatch sheet. The dispatch sheet also contains the sample advice that guides the laboratory on which analyses will be conducted on the samples. The dispatch sheet is signed by the receiving laboratory personnel to ensure chain of custody. Once the laboratory receives and signs the dispatch sheet, it is responsible for safekeeping and storing that batch of samples.
Laboratory QAQC	We emphasise ensuring data integrity through rigorous procedures and supervision while processing. As part of the assurance and control process, audits are performed internally and externally. SGS is accredited for analytical work and participates in monthly local and international round robins.
Data datum	WGS 84 – LO29
Drill hole database	acQuire
Number of drill holes in mining right	816
Number of drill holes used for Resource estimation	687
Number of drill holes used for classification	388
Data compositing and weighting	Data compositing is conducted per seam using a weighted value from individual samples that make up the seam, along with the relative density and length of each individual sample. This is conducted in GEOVIA Minex™.
Data validation	Conducted using queries in acQuire, Minex™ and Excel.
Geological modelling software	GEOVIA Minex™
Estimation technique	Growth algorithm
Previous model date	2018
Last model update	2022
Grid mesh size	25m x 25m
Scan distance	2 000m
Data boundary	200m
Model build limits	Upper: limit of weathering and topography/collar Lower: 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	Opencast ≤0.5m
Quality cut-offs (adb)	Ash ≥50%
Geological loss applied	5%

 

Table 18: 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 350m	May be more conservative after consideration of RODA	0.16
Indicated	Cored drill holes with applicable coal qualities	350m to 500m	May be more conservative after consideration of RODA	0.01
Inferred	Cored drill holes with applicable coal qualities	500m to 1 000m	May be more conservative after consideration of RODA	0.02

 

Table 19: RPEEE considerations

Item	Criteria	Criteria met	Comment
Geological data	Data has been validated and signed off by Competent Person	Yes	Considers geological structures and depositional extent, as well as seam thickness ≤0.5m, ≥50% ash content with coal qualities reported on an adb.
Geological model	Geological model has been considered and signed off	Yes
Structural model	Structural model was considered and signed off	Yes	2022
Mining	Mining assumptions were considered and defined	Yes	Opencast
Assurance	Exxaro internal review and external audit conducted	Yes	Internal review in 2022 and external audit by EY in 2020.
Economic evaluation	Exploitation study with economic and mining assumptions, including geotechnical and geohydrological assumptions	Yes	Belfast exploitation strategy updated in 2022.
Environmental	Reasonable demonstration that environmental approvals can be obtained within the context of local, regional and national governmental legislation	Yes	Environmental management plan, IWUL and National Environmental Management Act, 1998 (Act 107 of 1998) (NEMA) licences are in place and compliant.
Tenure	Formal tenure must be reasonably demonstration that a mining right approval can be obtained within the context of local, regional and national governmental legislation	Yes	Tenure is secured. Surface rights are secured for majority of current LoM with outstanding surface rights for two portions under procurement negotiations. For BXP surface access is secured and surface acquisitions are in process.
Infrastructure	Assumptions used should be reasonable and within known/assumed tolerances or have examples of precedence	Yes	Existing infrastructure is adequate or can be upgraded with new required infrastructure under construction.
Market	Potential market for the product with a reasonable assumption that this market is sustainable	Yes	RB2, RB3, RB4 and filter cake.

Reserve estimation

Table 20: Reserve estimation

Topic	Information
Software	OCCS
Reserving process	Scheduling of Reserves is determined using a mining scheduling application (Scheduler) from OCCS, which is the same software used to develop the LoMP 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, projects and technology in the form of Minex™ 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, that the quality and wash table values are consistent, and to convert the geological 3D model into mineable block sizes.
Conversion classification	Indicated Resources are generally converted to Probable Reserves and Measured Resources to Proved Reserves after considering the applicable modifying factors. If one or more of the modifying factors have not been fulfilled, the Measured Resource is either not converted or the Measured Resource is converted but downgraded to Probable Reserves and the associated risk is clearly stated. Inferred Resources are not converted to Coal Reserves.
Inferred Resources inside LoM	0.95Mt of Inferred Resources are included in the LoMP, representing 2.6% of the LoMP, and are not considered material. Inferred Resources, on the western edge of the pit, will only be reached towards the end of LoM.
Modifying factors
Average thickness cut-off	S2 ≤0.8m, S3 and S4 ≤1.0m.
Quality cut-offs	No quality cut-offs, economic cut-offs are applied.
Mining loss	0.1m
Boundary pillar	N/A
Dilution	0%
Contamination	0.1m
Mining recovery efficiency	100% (already accounted in mining loss).
Planned average slope angles	90 degrees on hards and on softs (there is a 45m-wide bench between hards and softs, as softs are stripped a strip ahead of intended/planned hards face).
Practical plant yield	Considered in the reserving process, as per the wash table data.
Strip ratio cut-off	Considered in the reserving process using the economic model, developed during the exploitation strategy, to get economical mining boundaries.
Environmentally sensitive areas	Areas considered based on the applicable environmental approvals.
Legal	Applicable mining right considered, and all the reserved areas are within the mining rights boundary and have obtained the water use licence thereof. The purchase of two portions of surface rights is pending.
Social	All graveyards have been identified and most were relocated, with the exception of two additional graveyards identified in 2020, but these are not on the Reserves areas and have been secured and managed accordingly. Most households have been relocated, with the exception of one household that is still within the Reserves area.
Geohydrological	Applicable surface and groundwater models considered.

 

Table 21: Belfast Coal Resource and Coal Reserve statement

Category	2022 (Mt)	2021 (Mt)	Difference(Mt)	Difference (%)	Reason for change
Measured	101.6	68.3	33.3	49	The decrease, due to mining (2.9Mt) and disposals (3.1Mt) is offset by increases from a model update (~32.7Mt), reconciliation with the previous year (0.1Mt), change in reporting methodology (cut-off) from UG to OC and the inclusion of S3 and S4 (6.5Mt).
Indicated	8.0	19.9	(11.9)	(60)	The decrease is the result of mining (0.1Mt), new information (11Mt) and disposals (~1.5Mt) is partially offset by new information in pit 4 and pit 4B, reconciliation (0.1Mt), and a change in reporting methodology (0.6Mt).
Inferred	13.2	33.8	(20.5)	(61)	The decrease due to new information (17.5Mt) and disposals (3.7Mt) is partially offset by a change in reporting methodology (0.7Mt).
Total Coal Resources	122.8	122.2	0.6	1
Proved	35.8	37.5	(1.7)	(4)	The decrease is primarily due to mining (3.1Mt), slightly offset by new information (1.3Mt) and reconciliation (0.1Mt).
Probable	1.4	2.4	(1)	(42)	The decrease is the result of new information (1Mt).
Total Coal Reserves	37.2	39.9	(2.7)	(7)

Rounding of figures may cause computational discrepancies.

Tonnages are quoted in metric tonnes and million tonnes (Mt). Coal Resources are quoted as MTIS.

Exploration summary

Table 22 outlines the exploration for the reporting year. For detailed expenditure, refer to Table 64.

Table 22: Exploration summary

Objectives	Progress in reporting year	Plans for next reporting year
	No drilling was conducted in 2022	Twenty (20) drill holes are planned as infill drill holes in the current operating pits and to increase resource confidence in future planned opencast pits.

Risks

Table 23: Belfast risks

Risk	Description	Mitigation
Surface rights	Securing surface rights in current LoM areas over portions 9 and 15 of Leeuwbank 427JS.	Property valuation concluded on both properties and negotiations in progress.
Encumberments on the Reserve	Relocation of last residents on the Reserve.	Process of relocation in advanced stages with reasonable expectation that Exxaro will be successful.
Transnet Freight Rail (TFR) performance	TFR offtake was lower than planned.	Alternative market offtake agreements to mitigate poor performance.
Challenges with mining business partner impacting production	Challenge investigated and solutions proposed.	Alternative service providers investigated.

Operational excellence

The market-to-resource strategy that was introduced in 2020 is still ongoing with RB2 as the preferred product. Through value chain optimisation and rigorous operational excellence initiatives there have been yield improvements experienced through the production of RB2. Five operating pits provide greater flexibility in executing the requirements of the market-to-resource strategy. Operational excellence initiatives implemented in 2022 include tracking drilling accuracy to eliminate coal losses associated with poor drilling practices; optimising blast designs to improve the powder factor and reduce costs; improving the dense media separation plant reliability to support production targets; and optimising the dense media separation plant throughput to support production targets.