Mafube

Mafube's Nooitgedacht operation produced its first coal in June 2018, ramping up the current production from four operating pits. The ramp-up is supported by an entrenched implementation of the theory of constraints approach to debottleneck projects combined with the early value strategy.

Mafube overview

Table 56: Mafube overview


Topic	Information
Location	30km east of the town of Middelburg in Mpumalanga, South Africa
History	Previous ownership	Material notes
1950 to 2017	Anglo American Coal	Coal Resource delineation drilling
2017 to 2021	Mafube Coal	Coal Resource delineation drilling and five-year mine plan infill drilling
2022	Thungela	Rooipan Coal Resource delineation and infill drilling
Adjacent properties	The majority of the properties adjacent to Mafube are owned by Glencore Operations South Africa Proprietary Limited (Glencore) – Phembani Group's Umcebo Holdings Mining Proprietary Limited (Umcebo). Other nearby owners of coal rights are Arnot Colliery (now owned by the Arnot OpCo consortium, consisting of former Arnot Colliery employees, communities and Wescoal Holdings Limited); Nucoal Mining (ground to the west of Mafube); Sumo Colliery Proprietary Limited and Optimum Colliery.
Infrastructure	The mine is accessible by tarred regional roads leading off the N4 national road and a railway line traverses the property in the north, connecting the rail load-out terminal with the Richards Bay Coal Terminal. Direct bulk power is supplied by Eskom at two points: main consumer substation adjacent to the CHPP and at the Overland Conveyor No 3 substation. Potable water is sourced on site as per the integrated water use licence specification from three authorised production drill holes at Springboklaagte and one at Nooitgedacht.
Coalfield	Mafube mine is situated near the northern 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. Only four of the five main coal seams occur within Mafube, S5 has been eroded.
Main seams	S4, S2 and S1.
Seam development	S4 is confined to the deeper parts (north-west) of the mining area, S3 is thin and of no current economic significance. An upper sub-seam, designated S2 upper (S2U), is sometimes present. The S2U and S2L are separated by a thin but distinctive parting (designated S2 parting (P2) with an average thickness of 0.55 m). The S2U is fairly thin (averaging 0.73 m in thickness) and consists of poorer quality coal and is therefore not economic. S2 lower (S2L) is the main economic seam with an average thickness of 4.2m. The quality is variable due to interbedded bright and dull coal plies with some shale and carbonaceous shale, mudstone and occasional sandstone bands. S1 is thin (average thickness of 1.3 m) and continuous throughout the Mafube area. It lies approximately 0.5m below the S2L. Two minor seams occasionally occur below S1 (designated S1L and S1LL). They are, however, of no economic significance.
Depositional control	Due to the mine's proximity to the northern edge of the Witbank basin, the primary control of coal development is surface topography and the pre-Karoo basement floor. There is minor influence from geological faulting, thrusting and intrusions within the Mafube area, despite aeromagnetic tentatively identifying some north-south trending lineaments. These aeromagnetic structures have not been confirmed by subsequent drilling. There are no known major geological structures that may affect the geology or coal seam continuity.
Resources and Reserves	Resources occur within most of the mining right and are limited by the boundary and the limit of weathering (coal sub-crop) whereas the Reserve are limited by the mining economics aligned with the existing LoMP strategy.
Mining method	The extraction of coal is based on opencast mining method. Six opencast pits have been identified as per the LoM. Four to five will operate concurrently.
Beneficiation	Thermal coal is beneficiated in a two-stage dense medium separation plant.
Product	CV 4 600kcal/kg and 5 800kcal/kg net as received
Market	Export market
Mining right	Mafube has two granted and executed new order mining rights that covers 10 933ha in total. We are addressing competing applications.
Environmental approvals	All environmental appeals have been favourably addressed for the declared Reserves with the exception of the Rooipan Reserves which are reported as Probable pending the approval of the IWUL.
Projects/feasibility studies	The de-bottlenecking project; which aims to enable an RoM production ramp up to 7Mt per annum; is currently on hold pending Rooipan IWUL approval.

Figure 18: Mafube mine

Figure 19: Mafube west-east cross-section

Resource estimation

Table 57: Resource estimation methodology and reporting

Process	Information
Drilling, logging and sampling	Mafube has typically used conventional core drilling (diamond drilling) for most of the holes drilled. This produces a 63.5mm diameter solid core for logging and sampling. Full core is usually produced once competent strata have been intersected. Open-hole drilling techniques are employed for the near-surface overburden material (usually by-products of current day weathering). The core is measured, any core loss is identified and recorded, and important geological units are marked off before logging commences. The core is logged by the field geologist responsible for Mafube exploration drilling. Core logging data are recorded manually on the Borehole Coding Sheets ("logging sheets"), using a logical letter coding system ("Dictionary of Codes"). This data is then captured into Excel and imported into the acQuire database where standard QAQC routines ensure the correctness of the data. Since 2019, most vertical surface drill holes have been wireline logged for the purpose of enhanced seam roof and floor mapping to delineate areas of seam floor rolls, seam thinning, seam thickening and seam pinching. Photographs of the core are taken after marking the core. Geological information is captured on log sheets with lithology captured up to centimetre details. Sampling is conducted on site with the aid of wireline logs as per Mafube sampling standard.
Laboratory and accreditation	Bureau Veritas Inspectorate Laboratories Proprietary Limited and SANAS T0313
Laboratory dispatch and receiving process	All samples collected and bagged are registered in a sample control sheet (SCS) and the sample advice sheet. Once the samples are entered onto SCS, sample request forms are generated which keeps record of samples requested and sent to the laboratory. On receiving the samples, the laboratory personnel ensures that the number and sample identity on the Sample Request Forms matches that of the actual samples to be analysed. The laboratory personnel then signs the sample request forms in duplicates with one copy remaining at the lab and the other filed by the Exploration Geologist at the mine.
Laboratory QAQC	Emphasis is placed on ensuring data integrity through rigorous procedures and supervision while processing. 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	WGS 84 – LO29
Drill hole database	acQuire
Number of drill holes in mining right	1 351
Number of drill holes used for Resource estimation	1 342
Number of drill holes used for classification	S1 – 522 S2L – 962 S4 – 36
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 and Excel
Geological modelling software	GEOVIA Minex™
Estimation technique	Growth algorithm
Previous model date	2018
Last model update	2020
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	S1 ≤ 0.8m, S2L ≤ 1.0m, S4 ≤ 1.0m
Quality cut-offs (adb)	None
Geological loss applied	Resources not in LoM Measured – 10% Indicated – 15% Inferred – 20% Resources in LoM Sub-outcrop – 30% Measured – 10% Indicated – 12%

Table 58: 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	Geoloss domains of 10%	8
Indicated	Cored drill holes with applicable coal qualities	350m to 500m	Geoloss domains of 15%	4
Inferred	Cored drill holes with applicable coal qualities	500m to 1 000m	Geoloss domains of 20%	1

Table 59: RPEEE considerations

Item	Criteria	Criteria met	Comment
Geological data	Data has been validated and signed off by Competent Person	Yes	Geological structures and depositional extent are considered as well as seam thickness 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	Yes	2021
Mining	Mining assumptions considered and defined	Yes	Opencast
Assurance	Exxaro internal audits and external audit conducted	Yes	External independent review by SRK in 2020.
Economic evaluation	Exploitation study with economic and mining assumptions, including geotechnical and geohydrological assumptions	Yes	Mafube early value exploitation strategy and debottleneck project.
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 NEMA licences in place and compliant. Application for authorisation in terms of the NEMWA or in terms of NEMA for the mining of Pan 11 (Rooipan) has been prepared and submitted. The submission was made after the completion of the required technical studies, draft scope submitted to DMRE and the completion of the water balance and treatment plant requirement assessment. Phase 1 has been completed and we are awaiting DWS to review, approve and link Mafube to Phase 2 (Ref. No. CT23656).
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	Tenure is secured. Surface right ownership is secured for current LoM.
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	Potential market for the product with a reasonable assumption that this market is sustainable	Yes	Both primary and middlings products are sold to JV partners for their individual export markets.

Reserve estimation

Table 60: Reserve estimation

Topic	Information
Software	OCCS
Reserving process	Scheduling of the Reserve is determined using a mining scheduling application (Scheduler) from OCCS, which is the same software used to develop the LoMP schedule. The geological model is supplied to mining, project 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 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 consideration of all 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 as is the case with Rooipan and the associated risk is clearly stated. Inferred Resources are not converted to Coal Reserves.
Inferred Resources inside LoM	Some 1.59Mt of Inferred Resources are included in the LoMP, representing 1.3% of the LoMP, and only accounts for 0.1% in the next five years and are not considered material.
Modifying factors
Average thickness cut-off	S1 cut-off of 0.8m, S2L cut-off of 1.0m, S4 cut-off of 1.0m
Quality cut-offs	Ash < 50% cut-off VM > 17% cut-off
Mining loss	10% mining loss is subtracted from the mineable Resource to calculate the uncontaminated run of mine
Boundary pillar	N/A
Dilution	Already included in geological model
Contamination	0.1m
Mining recovery efficiency	100% (already accounted in mining loss)
Planned average slope angles	90 degrees on hards and 45 degrees on softs
Practical plant yield	Considered in the reserving process
Strip ratio cut-off	Considered in the reserving process using the economic model, developed during the exploitation strategy, to get mining boundaries
Environmentally sensitive areas	100m boundary
Legal	Applicable mining right considered as well as competing applications
Social	Applicable communities considered
Geohydrological	Applicable surface and groundwater models considered

Table 61: Mafube Coal Resources and Coal Reserves statement

Category	2022 (Mt)	2021 (Mt)	Difference in tonnes (Mt)	Difference (%)	Reason for change
Measured	125.0	104.3	20.7	19.8	Mining (5.3Mt) was offset by the inclusion of Rooipan (26Mt).
Indicated	16.3	9.9	6.4	64.6	Mining (0.9Mt) was offset by the inclusion of Rooipan (5.8Mt) and new information (1.5Mt).
Inferred	2.5	2.6	(0.1)	(3.8)	The inclusion of Rooipan (1.5Mt) was offset by new information (~1.5Mt).
Total Coal Resources	143.8	116.8	27.0	23.2
Proved	80.6	26.7	53.9	202	Depletion (5.5Mt) is offset by the update of the LoMP including new Reserve areas (39.7Mt), as well as pits MGA and MGF (Probable to Proved) (19.6Mt)..
Probable	40.8	23.0	17.8	77	The increase is a result of new information (6.7Mt) and the inclusion of Rooipan (30.6Mt) in the updated LoMP, slightly offset by the movement of the MGA and MGF Reserves to the Proved category (19.6Mt)..
Total Coal Reserves	121.4	49.7	71.7	144

Rounding of figures may cause computational discrepancies.

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

Exploration summary

Table 62 outlines the exploration for the reporting year. For detailed expenditure, refer to Table 64.

Table 62: Exploration summary

Objectives	Progress in reporting year	Plans for next reporting year
The 2022 exploration programme was primarily directed in acquiring Resource confidence, enhance geological modelling and estimation as well as infill drilling for the five-year LoM plan. An additional seventy six (76) drill holes were planned for the Rooipan area to increase the level of geological confidence once the general authorisation was received from the DWS.	A hundred and ninety one (191) holes of the planned two hundred and fifty seven (257) were completed in the reporting year. Drilling was significantly affected by challenging weather conditions as well as poor drill performance and personnel turnover from the drilling contractor at the start of the drilling season but improved during the latter part of the campaign. Exploration results overall confirmed the continuity of the coal seams.	A hundred and seventy (170) drill holes are planned as in-fill drilling.

Risks

Table 63: Mafube risks

Risk	Description	Mitigation
Environmental	Environmental approval for Rooipan.	Application for authorisations in terms of the NEMWA or in terms of NEMA for the mining of Pan 11 (Rooipan) has been submitted. The submission was made after the completion of the required technical studies, draft scope submitted to DMRE and the completion of the water balance and treatment plant requirement assessment (Ref. No. CT23656). The EIA/EMPr and EA for mining Rooipan was submitted to the DMRE and are awaiting approval. We have reasonable expectation that the approvals will not be withheld.
Social	Failure to reach consensus on grave relocation within the Coal Resource area.	Extensive engagement was undertaken with affected parties during grave relocation negotiations. SAHRA permit has been received.
Competing applications	Competing coal prospecting right application over Patattafontein	Mafube Proprietary Limited has recently been notified of a legal challenge in respect of the historic sub-division of portion 1 of the farm Patattafontein 412 JS, which, if not resolved, may have a non-material impact on the Reserve basis and mine planning.

Operational excellence

Mafube Colliery positions itself as the benchmark operation for its shareholders. It prioritises employee safety, and its stakeholder management enables strong relationships with surrounding communities and the environment it operates in. Its operational excellence strategy applies the theory of constraints as the operating philosophy to optimise our business performance and ensure profitability for shareholders.