coal
49
07.13
T
he DFS has defined a 16-year LOM at a mine
average gate cost of R865,00 (US$88,71) per
saleable hard coking coal tonne (after thermal
coal byproduct credit). Mining is expected to take
place at an average rate of 12,6 Mt/a ROM in order
to produce 2,3 Mt/a of hard coking coal and 3,2 Mt/a
of thermal coal, at a steady state. The resource would
be mined on an opencast basis with the potential for
expansion into underground operations. The capex
is estimated at R3,96 billion (including contingency)
and the non-discounted peak funding requirement at
R4,2 billion.
“We are delighted to announce the results of our
Feasibility Study on our flagship, Makhado project,”
comments CoAL’s Chairman, David Brown. “This
high quality hard coking coal project will not only
deliver robust economic returns but also contribute
meaningfully to the economic development of the
Limpopo Province in South Africa. Makhado further
provides South Africa with a new coking coal pro-
ducing asset in the region, utilising established in-
frastructure for domestic and international markets.
The Makhado project represents the future of the
company and is the first step in the development of
a major 8 billion tonne resource across our Soutpans-
berg coalfield.
“We have now embarked on the financing stage of
the Makhado project and have already commenced
discussions with both potential Black Economic Em-
powerment (BEE) groups, including our communi-
ties and strategic partners. We are working towards
a funding structure which will include debt funding,
whereby CoAL retains majority ownership with the
incoming partner’s contribution meeting CoAL’s full
equity requirement for the project. Our regulatory ap-
proval and funding requirements are targeted to be
completed by H1CY14.”
Makhado is located 36 km north of the town of
Makhado in the Tshipise South subdivision of the
Greater Soutpansberg coalfield. Within the project
area, a number of coal seams occur within a 30 m to
40 m thick carbonaceous zone of the Madzaringwe
Formation. The seams dip northwards at approxi-
mately 12 deg. The coalfield was extensively ex-
plored by Iscor in the 1970s and 1980s. CoAL pur-
chased Iscor’s dataset in 2007 and in the same year
DFS
confirms
Makhado
as a robust coal project
Makhado project site plan. Makhado has been divided into three separate mining areas, namely East Pit, Central Pit and West Pit.
Coal of Africa Limited (CoAL) has announced the results of a Class II Definitive Feasibility Study (DFS) on
its Makhado coking coal project. Makhado is CoAL’s anchor project in the Soutpansberg coalfield, where
the company has access to a significant hard coking and thermal coal resource, with the estimated in situ
resource being in the order of 8 billion tonnes. The DFS indicates that the project would deliver a favourable
IRR of 30,1 % (unleveraged) and an NPV of R7,69 billion (US$697 million) at a real discount rate of 8 %.
