AMC 2019
CoalProjects

Coal production at Boikarabelo Coal Mine expected Q1 2019

The Boikarabelo coal mine is a two-phased open-cut coal mine being developed in the Waterberg coalfield in Limpopo province of South Africa.

Resource Generation (Resgen) is developing the project through Ledjadja Coal, a Black Economic Empowerment (BEE) subsidiary. Resgen holds a 74% stake in Ledjadja Coal, while the remaining 26% stake is held by Fairy Wing Trading 136, a South African company.

Spread over 9,018ha, the mine is expected to extract 616.85 million tonnes (Mt) of coal over its estimated mine life of more than 40 years. The annual coal production from the project is estimated to be 15.12Mt.

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Coal production from Boikarabelo is expected to start in the first quarter of 2019 and reach a steady rate of 1.26Mt a month from December 2019.

Boikarabelo coal mine geology

The Boikarabelo coal mine is a part of Waterberg Coalfield, which contains coal deposits occurring in the Grootegeluk and Vryheid Formations of the Karoo Supergroup.

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The sub-crop of the Boikarabelo displays a mixture of the Eendragtpan formation, the Grootegeluk formation, and the Goedgedacht or Vryheid formation.

The Grootegeluk formation comprises clear recurrences of mudstone and coal with the coal seams named from the base upwards.

“Coal production from Boikarabelo is expected to start in the first quarter of 2019 and reach a steady rate of 1.26Mt a month from December 2019.”

The eendragtpan formation has a layer between 25m and 35m thick over the majority of the area and, thereby, preserves the Grootegeluk and Goedgedacht Formations.

The Boikarabelo coal seam is found at a depth of 20m-30m below the surface and comprises an overburden strip ratio of 0.97:1. The seam has a thickness of 120m-130m with multiple zones of thermal and soft coking coal of altering quality.

Boikarabelo coal mine reserves

The Boikarabelo mine is estimated to contain JORC 2012-compliant coal reserves of 267Mt.

Mining at Boikarabelo mine

Open-pit truck and shovel terrace mining operation on multiple benches linked to a common ramp is proposed for the project.

The mine plan includes the formation of multiple mining benches to provide access to coal horizons, increase flexibility and improve plant feed quality control and equipment utilisation.

Ore processing at Boikarabelo

Coal will be processed in a coal handling and processing plant featuring a dense medium separation process to produce two products of different qualities.

The run-of-mine (ROM) feed size will be reduced to -50mm in a coal sizing station comprising three sizers (roll crushers). The sized raw coal will be stockpiled on two 75,000t live stockpiles before reclaiming through a twin bucket wheel bridge conveyor.

The material will then be fed to a 500t bin with limited surge capacity, which will feed two identical dense medium separation plants. It will then pass over a de-sliming screen, which separates -1.4mm material from the feed, which is routed to the coarse dense medium cyclones (DMC).

The separated -1.4mm fraction will be conveyed to the fine coal processing circuit, with the overflow from desliming screen forwarded to the primary large-diameter cyclone for waste removal through a high-density separator.

Overflow from the primary cyclone will be pumped to the secondary large-diameter cyclone for further beneficiation. The resulting overflow from the secondary cyclone is the export-quality product, while the underflow will be a domestic steam coal product.

The produced coal will be supplied to the markets and the coal terminals of Richards Bay for export shipments through a 44km rail loop and link. RME, a subsidiary of Transnet Freight Rail (TFR), will construct and operate the rail line.

Financing

Ledjadja Coal has obtained R5.52bn ($403m) in financing for the Boikarabelo coal mine construction. The financing was provided by FirstRand Bank, Industrial Development Corporation of South Africa, Public Investment and Noble Resources International.

Ledjadja Coal also secured an R540m ($44.7m) funding from Industrial Development Corporation of South Africa Limited (IDC) under a bilateral senior loan facility agreement.

Offtake agreement

Ledjadja Coal has entered an offtake agreement with Noble Resources International (Noble) for the supply of coal from the Boikarabelo mine.

LCL will sell 800,000t of coal a year for the first three years and up to 300,000t of coal a year as advised by LCL to Noble on a quarterly basis. The company has agreed to sell approximately 200,000t of coal a year from the fourth year.

Infrastructure at Boikarabelo mine

The Boikarabelo mine is accessible from the coal mining town of Lephalale. Power required to conduct the mining operations will be supplied by Eskom, the national power supplier, under a power supply agreement.

Power during the construction period will be supplied through two existing 22kV rural lines.

Water for the first phase operations will be sourced from boreholes and all relevant water infrastructure, while processed water required for the second phase operations will be collected from the proposed Marapong Boikarabelo Effluent Transfer (MBET) project.

Contractors involved

Stefanutti Stocks Mining Services was awarded the mining contract for the Boikarabelo coal mine.

Ledjadja Coal has awarded three separate contracts, worth $210m, to Sedgman (South Africa) and Sedgman Pty Limited (collectively Sedgman) for the Boikarabelo coal mine.

The contracts are for the engineering, procurement and construction (EPC) of the coal handling and preparation plant (CHPP), operation and maintenance of the CHPP, and for ancillary works related to the mine infrastructure.

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