Dorstfontein complex

Overview

Dorstfontein complex, illustrated below, lies just north of the town of Kriel, in Mpumalanga, South Africa. The complex comprises the underground Dorstfontein West (DCMW) operation and open-cast Dorstfontein East (DCME) mine. Dorstfontein complex is on the farms Welstand 55IS, Rietkuil 57IS, Fentonia 54IS, Dorstfontein 71IS, Vlakfontein 72IS and Boschkrans 53IS and occupies 8 733ha.

The 2017 reserve and life-of-mine plan (LoMP) entail introducing underground extraction of S4L at both DCMW and DCME, and open-cast activities at the latter, albeit to a lesser extent.

History

Since the mid-1950s, the Dorstfontein complex has been evaluated through various exploration phases guided by a number of companies. Exploration tools comprised diamond core or percussion drilling with appropriate coal-analysis techniques and geophysical surveys, the latter aimed at identifying positions of dolerite intrusions. To date, over 2 800 boreholes have been drilled, covering the 7 822ha complex. This translates to a density of over 11 boreholes per 100ha.

Ground and aerial magnetic surveys were undertaken between 1995 and 1997, supplemented by airborne surveys in 2007 to cover the remaining properties.

DCMW is currently mining S2, on the southern portion of the farm Dorstfontein 71 IS, for export and inland metallurgical markets. First coal was produced in 1997 by Anglovaal Proprietary Limited. Total Exploration South Africa (TESA) took over the operation from 1999 to 2004, followed by Total Coal South Africa (TCSA) from 2004 to mid-2015, producing some 1 000kt ROM per annum at its peak over 2004 – 2007.

Since then, production has averaged 600kt per annum. In 2016, DCMW achieved its highest production of 1 062kt ROM per annum in its 18 years of operation. It repeated this performance in 2017 when it produced a new record of 1 079kt ROM.

DCME is the only open-cast colliery in the ECC fold. First coal was in 2011 by TCSA. Seams being exploited are mainly S4 (S4U and S4L) and S2 (S2U and S2L). However, where thicker than 1,0m, S5, S3 and S1 are also mined. Mining activities used to be outsourced to Mutual Construction Company (MCC), whose contract expired in early-2016. Mining operations have since been outsourced to Andru Mining. In 2015, DCME reached a production milestone when the colliery achieved over 3 400kt ROM per annum. Due to the unfavourable environment of record-low coal prices and escalating input costs in 2015, the greater part of 2016 and 2017 production was concentrated in pit 1, leading to decreased ROM production of some 2 200kt. Pits 2 and 3, where higher stripping ratios are encountered, were only brought into production in 2017 as coal prices improved and the mining contractor was changed. The new mining contractor’s prices are more competitive.

Geology

Dorstfontein complex is on the northern margin of the Highveld coalfield between the towns of eMalahleni in the north and Bethal in the south. Dorstfontein complex is on the Smithfield ridge, the boundary between the Highveld and Witbank coalfields. Basement rocks in the area comprise pre-Karoo rocks, i.e. Transvaal supergroup, the Waterberg group, and intrusives of the Bushveld igneous complex. These are overlain unconformably by diamictites and associated glaciogenic sediments of the Dwyka group of the Karoo supergroup. Dwyka rocks are overlain by sediments of the Vryheid formation of the Ecca group. Coal seams in the area are hosted in the Vryheid formation which ranges in thickness from 80m to 300m.

Five major coal seams are present in the area, named from the base upwards, no 1 seam (S1), no 2 seam (S2 subdivided into S2L and S2U), no 3 seam (S3), no 4 seam (S4 subdivided into S4L and S4U) and no 5 seam (S5).

Numerous Jurassic dolerites (dykes and sills) intruded the Vryheid formation at various stratigraphic levels in the area. These intrusions tend to negatively influence stratigraphy and coal qualities in places. The distribution of the lower coal seams is strongly influenced by basement topography, while the distribution of the upper seams is controlled by present-day topography. Seams often thin and sometimes pinch out over and against palaeo-highs.

Strata (including coal) are often faulted, although displacements are rarely more than 1m. Faulting is not tectonically controlled, but the result of differential compaction during burial and lithification. Younger seams, such as S4 and S5, are less affected by basement topography than they are by present-day topography.

Structural displacements, resulting from intrusions of dolerite sills through seams, often complicate the mining of seams. In the Dorstfontein area, strata of the Permian Vryheid formation – comprising sandstone, mudstone, carbonaceous rocks and coal itself – are exposed on surface. Locally, these rocks are interrupted by the surface expression of the northwest/ south-east striking Smithfield ridge.

Resource evaluation

The DCM 2017 geological model was built in Geovia Minex 6.3.2 and data is in Cape L029, Clarke 1880 Datum. The geological model comprises two parts: a structure model and a quality model containing wash and raw coal quality variable grids per modelled seam. Various products can be extracted from the wash grids. Structure (seam roof, floor and thickness), quality and topographical model grids are built on a 25m x 25m grid over the same extent, with the same origin.

Resource reporting (2017) is based on the updated geological model (DCM v2017) incorporating 130 new boreholes. Interpretation of the prominent dolerite sill has been enhanced, allowing it to be modelled across the DCM complex. This created the ability to accurately predict areas of sill proximity to the seams and sill breakthrough zones, which guide mine planning and highlighted geotechnical and structural risks.

Modelling was based on diamond-cored boreholes and quality model grids were constructed from input analyses data using the Minex growth algorithm. Raw quality data is weighted by raw RD and the seam thickness, and wash data is further weighted by the fractional yield for each seam. Geological risk domains have been used in reporting resources, whereby a set geological tonnage loss is tied to a given risk condition:

  • High seam gradient (>4 degrees) – 50% geological loss
  • Dolerite sill breakthrough (transgression and burning) – 50% geological loss
  • Dolerite sill proximity to coal (expected burning) – 25% geological loss.

Total coal resources increased by roughly 17% with an associated increase in the level of confidence (resource categories). The changes in Vlakfontein and Rietkuil Vhakoni resource classification are mainly due to re-correlating historical boreholes used in the DCM 2017 model, whereas changes in the DCME and DCMW mining rights reflect recent drilling campaigns.

The change in resource estimation is due to the following:

  • Depletion (-3,6Mt), mining actuals from January to December 2017
  • Economic assumptions (5,6Mt), improved geological loss domains applied
  • New information (+50Mt), inclusion of 130 boreholes
  • Disposal DFTW (-2,3Mt), remnant blocks from mined-out areas.

Reasonable prospects for eventual economic extraction

All criteria (table 24) have been tested and considered favourable. Seam thickness cut-off (0,50m (O/C) and 1,20m (U/G), coal quality (50% maximum raw ash, 24% minimum (DAFV)) and updated geological loss domains were applied.

Reserve evaluation

Reserve estimations were done using XPAC’s mine planning software package, allowing for parameters and modifying factors to be applied for reporting purposes. The 2017 geological model was used to build the 2017 reserve model.

On receipt of the geological model, an evaluation is conducted to determine areas that can be converted into reserves. The process ensures that only economically viable areas are reserved by applying key cut-off criteria and discount factors associated with conversion factors and modifying factors. The evaluation process considers coal boundaries based on property and infrastructure proximity, as well as economic factors derived from coal quality, thickness, depth and haulage distance parameters.

The process followed is to first apply geological and mining losses to the model’s in-situ coal values, as well as mining dilution and process plant recoveries, to convert these in-situ values to product values. Qualities of washed coal are also incorporated into calculations and energy contained in the product is calculated. Where applicable, coal losses are converted from tonnes to volumes and these are added to waste volumes to be handled.

Actual operating costs (per operation and mining type), both mining and processing, are applied to coal tonnes and waste volumes as applicable. An estimated income, based on price and exchange rate, is calculated. The outcome of this process is a set of value plots mapping the distribution of net value per ROM tonne, per product tonne and per energy unit. Reserves are then determined based on the best (most valuable) product, along with the optimal mining method per area/seam.

A bankable feasibility study for the S4L project at DCMW is in the detailed design and implementation stage. An incline from the S2 workings to S4 workings is being developed. Expansion options exist at DCME with the investigation of both underground and open-cast potential in an area south of pit 3 on the farm Fentonia 54 IS portions 2 and 3 and the inclusion of pit 1 NW extension, once EMPR permission is granted. Further strategic expansion potential exists with the intended inclusion of the Rietkuil Vhakoni prospecting right into the Dorstfontein West mining right through a section 102 that has been submitted to the DMR.

Dorstfontein complex coal-reserve estimates have been done by converting measured and indicated resources to proved and probable reserves respectively, with inferred resources in LoMP making up less than 10% of the life of mine. Inferred resources in the LoMP are not included in reserves.

Dorstfontein West (underground operation)

Dorstfontein West is currently mining S2, and a bankable feasibility study was completed for mining S4L in this area. Therefore, S4L reserves are reported in the statement. The same modifying factors applied for S2L were used for S4L.

Table 11: Dorstfontein open-cast modifying factors

OPEN-CAST
MODIFYING FACTORS     2017
RESOURCES      
> Geological losses     Domains
RESERVES      
Losses      
> Mining losses     5%
Layout parameters      
> Boundary pillar     15m
> Environmentally sensitive areas     50m
Scheduling parameters      
> Dilution     Already included in the model
> Contamination     0,15m

Table 12: Dorstfontein underground modifying factors

UNDERGROUND
MODIFYING FACTORS     2017
RESOURCES      
> Geological losses     Domains
RESERVES      
Losses      
> Mining losses     5%
Layout parameters      
> Depth to roof     20m
> Safety factor     2,0
> Bord width     6,5m
> Barrier pillar     At least equal to panel pillar width
> Boundary pillar     15m
> Pillar centres     14m x 14m
Mining parameters      
> Mining height     1,65m
> Extraction factor     71%
Scheduling parameters      
> Dilution     Already included in the model

Risks

We do not know of any pertinent risks or other material conditions that may impact on the company’s ability to mine or explore, including technical, environmental, social, economic, political and other key risks.

Geological complexities (dolerite activity, floor undulation and thinning of coal seams) continuously pose challenges for coal extraction at both the west and east operations.

Operational excellence and innovation

A number of initiatives are under way, including the potential reviews of the southern portion of Vlakfontein DCMW S4L and extensions of pit 1 and pit 3 at DCME. These could add potential reserves for the operation.