Exxaro Resources Limited
Consolidated Mineral Resources and Mineral Reserves report 2022
Matla is a captive underground coal mine that extracts thermal coal. All coal is crushed, screened and sized before being delivered to the Eskom-owned Matla power station via a network of conveyor belts. Matla has three major LoM projects which will provide mining access to ~83% of the remaining Coal Reserves when completed. The projects are at different levels of implementation, with delays due to funding and project execution. The projects include a boxcut and associated declines to access mineable areas at Mine 1 from the surface and an incline and decline project to create underground interseam access at Mine 2 and Mine 3.
We conduct continuous optimisation and innovation initiatives to unlock value by accessing additional mining ground.
Table 32: Matla overview
| Topic | Information | ||
| Location | 15km west of the town of Kriel in Mpumalanga, South Africa. | ||
| History | Previous ownership | Material notes | |
| 1976 to 1990 | Trans Natal Mines | Construction began in 1976 with full production in 1983. | |
| 1990 to 2006 | Eyesizwe | Mining rights ceded to Exxaro in 2006. | |
| 2006 to present | Exxaro | Full production until Mine 1 closure in 2016. Mine 2 and Mine 3 continue to produce ~6Mtpa with ongoing exploration drilling to support operations. | |
| Adjacent properties | Seriti's Kriel Colliery neighbours Matla to the east and Zibulo (Seriti) and Khutala (Thungela) are situated to the north. | ||
| Infrastructure | Matla is situated on the P53-1 and R547 secondary roads branching off the R580 and R545. Existing infrastructure supporting the three shaft complexes includes three ventilation shafts, a network of conveyor belts, coal silos and stockpiles, a crushing and screening plant, four pollution-control dams, hospital, accommodation facilities, offices, workshops, and a water treatment plant. Potable water is received from Eskom and no potable water plant exists on the mine property. Electricity is sourced from Eskom (Matla power station). All coalis conveyed from the mine directly to Eskom's Matla power station. | ||
| Coalfield | Matla mine is situated in the Highveld coalfield, to the south of the Witbank coalfield. The coal seams are developed in the Vryheid Formation of the Karoo supergroup. The stratigraphic sequence in the Matla area includes five coal seams that can be easily correlated with seams found in the Witbank coalfield. | ||
| Main seams | The principal economic seams currently exploited are S2 and S4 with mining of S5 terminated in 1998 due to high levels of contamination and a subsequent increase in the abrasive index. | ||
| Seam development | Coal seams in the area are generally flat and continuous with subsequent igneous activity resulting in displacements and devolatilisation of coal seams in localised areas. The S5 is most prominent in the Mine 2 and Mine 3 areas and, to a limited extent, in the western limb of the southern part of the mining right area. The roof comprises approximately 0.5m of thick sandy micaceous shale at Mine 2 that thickens up to approximately 1.6m in Mine 3. The seam consists of mixed coal and torbanitic material with an average thickness of 1.5m. Economic S4 exists in the Mine 1, Mine 2 and Southern Reserve areas, and to a limited extent in the Mine 3 area. At Mine 3, the seam splits into two thin, poor-quality horizons towards the west, and is thus excluded from the mineable reserves. The best quality S4 is located at Mine 1 and at the eastern edges of Mine 2. The seam is composed of dull lustrous coal interspersed with bright coal bands. In-seam partings typically consist of discontinuous lenses of shales and siltstones less than 0.1m thick but these may thicken locally to 0.3m. Carbonaceous limestone lenses are also prevalent within the central portion of the Mine 2 area. The S2 at Matla is well developed in the north-western part of the mining area in the Mine 2 and 3 Resource areas. It thins out to the south, where the thickness averages between 1.2m and 2.5m. Much of the coal in this area is mined as a low seam. The S2 between Mine 1 and Mine 2 has been burnt by a prominent dolerite sill and is thus unmineable. S2 in the Mine 1 area is generally poor quality and discontinuous due to sill activity thus it is not mined in this area. | ||
| Depositional control | The coal was deposited on glacial sediments of Dwyka tillite, which in turn was deposited over a granitic basement. The Matla mining area is characterised by two distinct dolerite types, the B8 (porphyritic) and B4 (olive-rich) types which have varying effects on seam displacements and coal burning and devolatilisation. A dolerite sill with an average thickness of 10m is generally found above S5 in Mines 2 and 3. However, the sill intersects the coal seams and underlies S2 in Mine 1 and S4 on the south-western part of the Reserves. This sill hasburned and devolatilised S2 on the southern part of the mining area in Mine 1. Floor rolls have been encountered in S2 workings and created challenges in isolated mining areas. The floor rolls strike north-east-south-west, vary in width between 50m and 200m and have amplitudes up to 1.5m. The floor rolls are more prominent if the seam floor is close to the basement contact. Sandstone lenses encounteredare generally less than 0.5m in width but can reach up to 1.5m in thickness. | ||
| Resources and Reserves | Coal Resources and Coal Reserves occur within the domains of Mines 1, 2 and 3. The Coal Reserves are aligned with the existing LoMP. The reporting of LoM is restricted to the Mineral Right lapse date although there are Coal Reserves well beyond this date. | ||
| Mining method | Matla comprises three underground production facilities: Mine 1, Mine 2 and Mine 3. All three are long-life assets, each with a specific operating capacity comprising conventional coal circuits to produce bituminous coal. Production at Mine 1 was stopped in 2015 due to pillar instability and is planned to resume in 2025. Mine 2 and Mine 3 use bord-and-pillar methods to mine S2 and S4. Shortwall mining is also utilised to conduct mining of S2 in Mine 2. | ||
| Beneficiation | None of the coal mined at Matla is beneficiated but it is crushed and screened (sized) before being conveyed to the power station. | ||
| Product | Matla mine produces thermal coal exclusively for Eskom. | ||
| Market | Captive market: Eskom. | ||
| Mining right | Matla has an approved mining right that covers some 23 494ha. | ||
| Environmental approvals | With the exception of the expired WUL, which is being renewed, discussions with the DWS are ongoing. | ||
Figure 12: Matla mine
Figure 13: Matla cross-section Exxaro
Table 33: Resource estimation methodology and reporting
| Process | Information |
| Drilling, logging and sampling | Surface vertical, surface inclined and underground horizontal drilling methods are employed at Matla. Of these, only the vertical surface drill holes are used for resource modelling. All drill holes are geologically logged on a detailed log sheet with the content dictated by the Exxaro logging procedure. Logging is conducted by recording of lithology down to 1cm detail on logging sheets, according to the classification of the lithology. Once all core and sample markings are in place, the core is photographed on a 1m interval basis.Once correlated, sample intervals are defined based on lithological contacts and logical boundaries along the drill hole, across the named intervals or seams. If the entire unit is homogenous, samples are then collected at 1.5m intervals. All samples are placed into plastic sample bags, and a sample tag is placed inside the bag, with a duplicate attached to a cable tie on the bag's exterior. The sample tags are used to identify the samples according to a sampling convention, which is recorded in the log sheet and geological database to allow the laboratory results to be assigned to the correct interval in each specific drill hole. |
| Laboratory and accreditation | Siza Coal laboratory, SANAS T0447 |
| Laboratory dispatch and receiving process | All samples are allocated unique alphanumeric IDs corresponding to the associated drill hole ID, seam sampled and number of the individual sample. These samples are collected and bagged and are registered in a sample sheet which is also used as a dispatch sheet. All exploration samples are weighed on site prior to dispatch and recorded at the mine. The laboratory reports the weight of each individual sample, and these results are compared to the mine weights to validate that the correct samples were conveyed correctly and safely to the laboratory. 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 that should be analysed. The analyses required are also clearly explained in the sample dispatch sheet. All sample results are validated following a standard procedure including visual, logical and mathematical verification before acceptance and capture into the mine's database. |
| Laboratory QAQC | Matla conducted QAQC on Siza laboratory processes and equipment in 2022. Siza laboratory also does internal validations and checks as part of their QA/QC programme. Siza partakes in round robins. |
| Data datum | Cape datum – LO29 |
| Drill hole database | acQuire |
| Number of drill holes in mining right | 2 618 |
| Number of drill holes used for Resource estimation | S2 – 1 845S4 – 2 403 |
| Number of drill holes used for classification | S2 – 1 845S4 – 2 403 |
| 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 | 2020 |
| 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 seam structure Raw quality grids |
| Changes to modelling process | None |
| Thickness cut-off and extraction height considerations | ≤1.8m |
| Quality cut-offs (adb) | DAFV ≤ 26%CV ≤15MJ/kg, Ash ≥50% |
| Geological loss applied | 10% (may vary considering RODA) |
Table 34: 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 | Infill drilling is conducted where basement highs and/or seam structure creates uncertainty around continuity. | 0.13 |
| Indicated | Cored drill holes with applicable coal qualities | 350m to 500m | Infill drilling is conducted where basement highs and/or seam structure creates uncertainty around continuity. | 0.04 |
| Inferred | Cored drill holes with applicable coal qualities | 500m to 1 000m | Infill drilling is conducted where basement highs and/or seam structure creates uncertainty around continuity. | 0.02 |
Table 35: RPEEE considerations
| Item | Criteria | Criteria met | Comment |
| Geological data | Data has been validated and signed off by Competent Person | Yes | Seam depth ≤40m, seam thickness ≤1.8m, dry ash-free volatiles ≤26%, CV≤15MJ/kg and ash ≥50% with coal qualities reported on an adb. |
| Geological model | Geological model has been considered and signed off | Yes | 2022 |
| Structural model | Structural model was considered and signed | Yes | 2022 |
| Mining | Mining assumptions considered and defined | Yes | Underground |
| Assurance | Exxaro internal audits and external audit | Yes | 2019 (model and chain of custody). |
| Economic evaluation | Exploitation study with economic and mining assumptions, including geotechnical and geohydrological assumptions | Yes | LoM exploitation study (2022). |
| 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. An application for stooping was submitted and there is a reasonable expectation that the approval will not be withheld. Surface acquisitions for future stooping can be achieved based on the current acquisition strategy. |
| 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 | The mining right expires in 2025. Application to renew is in process and there is reasonable expectation that it will be renewed 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 coal supply agreement (CSA) in place until June 2023. Extension period and terms under negotiation. All considerations remain. Exxaro has reasonable expectation that the CSA will be renewed. |
Table 36: Reserve estimation
| Topic | Information |
| Software | UGCS |
| Reserving process | Scheduling of the Coal Reserve is determined using mine scheduling applications from UGCS. The geological 3D model used for the Coal Reserve estimation is referred to as the Reserve 3D model. The Coal Resource model uses the full coal seam while the Reserve model only defines a select mining height. The process ensures the model represents reality regarding the technical capability of current production equipment. Resources are converted to Reserves where the Resource confidence, continuity and other factors (including economic, environmental, safety and social aspects) allow for the reasonable expectation of successful extraction. Reserves are converted using modifying factors which account for layout design and associated losses. The Reserves stated are subject to verification according to an approved fact pack, which sets out the standards and considerations for all reserving and scheduling processes. This document is reviewed annually and vetted by all relevant stakeholders. |
| Conversion classification | At Matla, Indicated Resources are generally converted to Probable Reserves and Measured Resources to the Proved Reserve category, except if any modifying factors have not been (partly) fulfilled, where the Resource is either not converted or downgraded to the Probable Reserve category, clearly stating the outstanding requirement and risk. |
| Inferred Resources inside LoM | Some 5.6Mt of Inferred Resources are included in the LoMP, representing 3.4% of the LoMP, and are not considered material. |
| Modifying factors | |
| Average thickness cut-off | ≤1.8m, low seam ≤2.1m, high seam ≤3.6 and ≥4.8m |
| Quality cut-offs | DAFV ≤26% and CV ≤18.5MJ/kg |
| Mining loss | Already included in model, based on specific geological conditions and mining restrictions. |
| Depth to roof | 40m unless rock strength allows otherwise |
| Safety factor | Main development >2.1, secondary panels >1.8 and tertiary panels >1.6 |
| Bord width | 7m |
| Barrier pillar | Main development 19m, secondary and tertiary panels 17m |
| Pillar centres | Main development 24m, secondary panels 20m and tertiary panels 19m |
| Boundary pillar | Main development 24m, secondary and tertiary panels 17m |
| Mining height | Low seam ≤2.1m, high seam =3.6 and ≥4.8m |
| Extraction factor | Low seam 58%, S2 48% and S4 50% |
| Dilution | Already included in model |
| Contamination | Moved from % to cm (new UGCS software). Low seam 2.1m plus 10cm roof cut. Other seams 10cm roof cut. |
| Practical plant yield | N/A |
| Strip ratio cut-off | N/A |
| Environmentally sensitive areas | Areas underlying wetlands and other eco-sensitive areas are excluded from Reserves. A higher safety factor is used underneath rivers and surface structures. |
| Legal | Reserves are downgraded from Proved to Probable where surface ownership is pending for stooping. |
| Social | Applicable communities considered. |
| Geohydrological | Applicable surface and groundwater models considered. |
Table 37: Matla Coal Resources and Coal Reserves statement
| Category | 2022 (Mt) | 2021 (Mt) | Difference in tonnes (Mt) | Difference (%) | Reason for change |
| Measured | 657 | 639 | 18 | 3 | Mining (9Mt) was offset by new information (27Mt). |
| Indicated | 91 | 114 | (23) | (21) | Decrease (23Mt) is the result of new information. |
| Inferred | 87 | 93 | (6) | (6) | Decrease is due to new information indicating thinning seams against basement outcrop areas as well as burnt coal zones (2Mt). Additional drilling upgraded 4Mt to the Measured category. |
| Total Coal Resources | 835 | 847 | (11) | (1) | |
| Proved | 130 | 124 | 6 | 5 | Mining (6Mt) and the removal of stooping areas (4Mt) was offset by new information (16Mt). |
| Probable | 38 | 38 | – | – | |
| Total Coal Reserves | 167 | 162 | 6 | 3 |
| Rounding of figures may cause computational discrepancies. |
| Tonnages quoted in metric tonnes and million tonnes (Mt). Coal Resources quoted as MTIS. |
Table 38 outlines the exploration for the reporting year. For detailed expenditure, please refer to Table 64.
Table 38: Matla exploration summary
| Objectives | Progress in reporting year | Plans for next reporting year |
| Increase geological confidence in S2L Mine 3 medium-term mine plan | Drilling within the five-year mine plan at Mine 3 S2 low seam has better defined areas of thicker coal development. These areas have been confirmed and subsequently targeted for fast tracking during 2023 to improve seam heights and resultant mining conditions at the low seam. | Drilling at the low seam will continue in 2023 to better define key access areas within the mine plan. |
| Identify additional mineable ground on the eastern extent of Mine 2 | Additional drilling was conducted to identify additional ground required to supplement current production requirements as a result of LoM project delays. | |
| Increased confidence in floor undulation positions at the Mine 2 shortwall | Extensive drilling and surface seismic surveys were conducted to understand small-scale variability and undulations ahead of shortwall mining. This information has been used for risk domaining and detailed for the shortwall. |
Table 39: Matla risks
| Risk | Description | Mitigation |
| Limited pit room due to project execution delays | Approximately 78% of the current Reserves are within the delayed expansion projects. The delayed LoM expansion projects have resulted in limited pit room availability with the risk of having to mine in structurally complex and/or low-quality coal areas. | Continuous investigations on accessing new mining areas that were previously excluded from the LoM either due to quality, structural complexity or geological confidence. Layouts optimised to achieve RoM blend of required product quality. |
| Geological structures | High risk geological structures impact mining due to ground stability and the need to develop through these structures to access mineable reserves. Structures include dolerite sills and dykes, faults and jointed ground within known shear zones. | Structure delineation is conducted through surface directional and underground horizontal drilling, targeting structures defined using geophysical interpretation. The resultant structural data informs the mine plan layout, orientation, roof and sidewall support during excavation. |
| Eskom purchasing of surface farms to commence with stooping | Stooping is a total extraction mining method that will have an impact on the surface farmland. Require ownership of farms where stooping is planned. | Eskom to purchase surface ownership of a list of farms as per CSA. Stooping ground below private land is reported as Probable Reserves. |
| Environmental authorisation for stooping | The environmental management plan for total extraction during stooping can commence when land ownership has been secured. | Eskom to purchase surface ownership of a list of farms as per CSA. |
A focus on creating additional ground availability and production improvement following life of mine project delays has resulted in multiple initiatives to unlock additional value at Matla.
These initiatives include additional drilling, geophysical surveys, short-term modelling and consolidated technical studies for the evaluation of new mining areas. These initiatives include:
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