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Exxaro Resources Limited
Consolidated Mineral Resources and
Mineral Reserves report
31 December 2023

Mafube

Mafube overview

Mining commenced 2018 (Nooitgedacht)
Type of mining Opencast
Market Export
Beneficiation Two-stage DMS plant
Products CV 4 600kcal/kg and 5 800kcal/kg net as received
Year-on-year RoM ↓ 12% mining ceased in Patattafontein as a result of competing mining right applications, altering the LoM schedule to resume mining once resolved
Year-on-year product ↓ 10% impacted by the change in RoM schedule
Exploration 182 drill holes focused on increasing geological confidence
Year-on-year Resources No change, mainly due to new information offsetting mining depletion
Year-on-year Reserves ↓ 6% as a result of production and excluded area based on environmental considerations
Remaining LoM 20 years
Opportunities/operational excellence Due diligence on S4 exploitation strategy planned for 2024
Figure 12: Mafube mine Figure 12: Mafube mine
Figure 13: Mafube west-east cross-section Figure 13: Mafube west-east cross-section

50%
attributable
to Exxaro

Table 56: Mafube overview

Topic   Information  
Location   30km east of the town of Middelburg in Mpumalanga, South Africa
History   Previous ownership Material notes
1976 to 1988   Anglo American Coal Coal Resource delineation drilling (~900 drill holes).
1989 to 2006   Mafube Coal

Coal Resource delineation drilling and five-year mine plan infill drilling (731 drill holes).

Mining ceased at Springboklaagte in 2018 and commenced at Nooitgedacht the same year.

2007 to 2015   Thungela Resource definition drilling to support and derisk the mine plan (~370 drill holes).
Adjacent properties   Most of the properties next to Mafube are owned by the 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.

Eskom supplies direct bulk power at two points: the main consumer substation adjacent to the coal processing plant and the Overland Conveyor No 3 substation. Potable water is sourced on site per the IWUL 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 Springs and Belfast, and about 60km in a north-south direction between 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, and S5 has been eroded.

Main seams   S4, S2L and S1.
Seam development  

S4 is confined to the deeper parts (north-west) of the mining area, and S3 is thin and of no current economic significance. An upper sub-seam, designated S2 upper (S2U), is sometimes present. The S2U and S2 lower (S2L) are separated by a thin but distinctive parting (designated S2 parting (P2) with an average thickness of 0.25m). The S2U is fairly thin and consists of poorer quality coal; it is therefore not economic.

S2L is the main economic seam with an average thickness of 4.91m. 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 0.75m) 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. Despite aeromagnetic tentatively identifying some north-south trending lineaments, there is minor influence from geological faulting, thrusting and intrusions within the Mafube area. 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 Reserves are limited by the mining economics aligned with the existing LoMP strategy.
Mining method   The extraction of coal is based on the 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 DMS 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 cover 10 933ha in total. We are addressing competing applications.
Environmental approvals   All environmental approvals and authorisations are in place for the declared Reserves with the exception of the Rooipan Reserves which are reported as Probable pending the approval of the IWUL and environmental authorisations.
Projects/feasibility studies   The debottlenecking project, which aims to enable an RoM production ramp-up to 7Mt per annum, is currently on hold pending Rooipan IWUL approval.

 

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 OVB 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 is 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 and the sample advice sheet. Once the samples are entered onto the sample control sheet , sample request forms are generated which keep record of samples requested and sent to the laboratory. On receiving the samples, the laboratory personnel ensure that the number and sample identity on the sample request forms match the samples to be analysed. The laboratory personnel then sign 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. Audits are performed internally and externally as part of the assurance and control process. 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   1 836
Number of drill holes used for Resource estimation   1 342
Number of drill holes used for classification   S1 – 552
S2L – 1 836
S4 – 126
Data compositing and weighting   Data compositing is conducted per seam using a weighted value from individual samples that make up the seam, along with each sample's relative density and length. 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   2020
Last model update   2023
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)   Ash ≥50%
Geological loss applied   Sub-outcrop/Inferred – 30%
Indicated – 12%
Measured – 10%

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%   0.08
Indicated   Cored drill holes with applicable coal qualities   350m to 500m   Geoloss domains of 12%   0.04
Inferred   Cored drill holes with applicable coal qualities   500m to 1 000m   Geoloss domains of 30%   0.01

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 off.   Yes   2023
Mining   Mining assumptions considered and defined.   Yes   Opencast
Assurance   Exxaro internal audits and an 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 specialist studies. Final EIR/EMPr was submitted on 30 October 2023 to the Department of Mineral Resources and Energy (DMRE) and on 20 November 2023 to the DWS. Reports are under review for approval.

The addition of the designs for the new water uses (PCD) necessitated withdrawal and relaunching in the eWULAAS to amend water uses. Approval from the DWS moved to the third quarter of 2024.

Tenure   Formal tenure must reasonably demonstrate 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 or 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   Both primary and middlings products are sold to joint venture 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 validates the geological information received by checking the integrity of the geological structure and its quality, ensures wash table values are consistent, and converts 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 0.2Mt of Inferred Resources are included in the LoMP, representing 0.2% of the LoMP, 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 RoM.
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   2023 (Mt)   2022 (Mt)   Difference in tonnes (Mt)   Difference (%)   Reason for change
Measured   141.0   125.0   16.0   13   Mining depletion (4.8Mt) and sterilisation of Resources (1.8Mt) was greatly offset by new information (22.6Mt).
Indicated   2.2   16.3   (14.1)   (87)   The decrease is due to new information (15.1Mt) offset by reconciliation (1.0Mt).
Inferred   0.6   2.5   (1.9)   (76)   The decrease is the result of new information (1.9Mt).
Total Coal Resources   143.8   143.8   (11.8)   (9)    
Proved   82.6   80.6   2.0   2   The decrease due to depletion (4.8Mt) and sterilisation (4.6Mt) was offset by new information (4.0Mt) and an upgrade from Probable Reserves (7.4Mt).
Probable   32.0   40.8   (8.8)   (22)   The decrease is the result of new information (7.4Mt) and sterilisation (~1.3Mt).
Total Coal Reserves   114.7   121.4   (6.7)   (6)    
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 2023 exploration programme was primarily directed at acquiring Resource confidence, enhancing geological modelling and quality estimation as well as infill drilling for the five-year LoMP.  

170 of the planned 182 holes were completed in the reporting year. 12 additional holes were drilled in the new MGG box cut area. Exploration results overall confirmed the continuity of the coal seams.

 

182 drill holes are planned as infill 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. Final EIR/EMPr was submitted on 30 October 2023 to DMRE and to DWS on 20 November 2023. Reports are under review for approval. The addition of the designs for the new water uses (PCD) necessitated withdrawal and relaunching in the eWULAAS to amend water uses. Approval from DWS moved to the third quarter of 2024. 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.

 

Other than the risks listed above, there are no known environmental, social, political and governance risks that could potentially impact the exploitation of the Coal Reserves.

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 its environment. Its operational excellence strategy applies the theory of constraints as the operating philosophy to optimise business performance and ensure profitability for shareholders.

Automated dozing in action at Mafube. From the left: Sheperd Nkadimeng (general manager), Mogodi Mahapa (mining manager) and seated Ernest Sibanyoni
(training officer)

Automated dozing in action at Mafube. From the left: Sheperd Nkadimeng (general manager), Mogodi Mahapa (mining manager) and seated Ernest Sibanyoni (training officer)