Leeuwpan coal mine

Overview

Leeuwpan is 10km south-east of the town of Delmas, 80km east of Johannesburg and 70km south-east of Pretoria in Mpumalanga. It lies alongside the R50 secondary road and is serviced by a rail track that includes a rapid load-out station.

Leeuwpan is an open-cast operation with various reserves mined simultaneously. We estimate that the mine will be in production until 2029, with the mining right lapsing in 2040.

Leeuwpan supplies the domestic market and export market. The mine is equipped with a rapid rail load-out station and this is also the preferred means of coal offtake, although road transport is accommodated. Leeuwpan has a dense medium separator (DMS) plant that mainly beneficiates metallurgical and export thermal coal, a jig plant mostly beneficiating thermal coal (including export grade) and a crush-and-stack (C&S) plant that handles selectively mined thermal coal. The jig plant was decommissioned in November 2016 and replaced with a DMS plant that will be operated by Fraser Alexander. This new plant was commissioned in December 2016, with product mainly routed into the export thermal coal market.

The Leeuwpan life extension (OI) project is under construction and development of the box-cut is progressing well.

History

Iscor (later Kumba Resources Limited) bought the Leeuwpan coal reserve from Southern Sphere in 1988. Kumba’s exploration started in 1990, which led to opening a box-cut for mining in 1992. Mineral rights to Leeuwpan were originally owned by Kumba Coal Proprietary Limited, a 100% owned subsidiary of Kumba Resources. After unbundling Kumba Resources in 2006, the mineral rights were ceded to Exxaro Resources.

Exploration continued year on year over the whole project area, systematically increasing geological confidence and defining coal reserve blocks in more detail. Most resources at Leeuwpan are currently at 100m x 100m drill spacing, depending on infrastructure and wetland restrictions. Areas with high geological variability have a smaller drilling grid size to increase the confidence level of various resources.

Geology

Two coal seams have been identified at Leeuwpan: upper coal seam (TC) and bottom seam (BC). Bottom coal correlates with seam 2 of the Witbank coalfield and top coal with seams 4 and 5.

The coal seams at Leeuwpan are primarily interbedded with sandstone, shale and carbonaceous shale. A significant amount of magma intruded as concordant sills of dolerite in the Karoo strata in the Delmas area. Associated with the intrusion of many dolerite sills are a number of thin dolerite dyke structures that crosscut the stratigraphy.

Factors controlling geological and grade continuity are mainly surface weathering, significant variation in seam thickness due to an undulating tillite floor, devolatilisation and weathering due to dolerite intrusions (sills and dykes).

Resource evaluation

The borehole density is shown in table 15 below and separate geological models are compiled for each resource based on this validated borehole information. Additionally, a Lidar digital terrain model signed off by the Exxaro group surveyor is used for topographical modelling. Modelling is undertaken in Geovia Minex software where seam roofs, floors and thicknesses are gridded using the Minex growth algorithm and validated by cross-sections and contour plots. Coal-quality compositing is undertaken in Sable Data Warehouse, using representative substitute values for unsampled non-coal material.

Table 15: Borehole density at Leeuwpan

RESOURCE     BOREHOLE DENSITY PER 100HA     BOREHOLE SPACING
OI     168 boreholes per 100ha     100m x 100m
OL     86 boreholes per 100ha     100m x 100m
OJ     103 boreholes per 100ha     100m x 100m
UB     307 boreholes per 100ha     100m x 100m
OWM     142 boreholes per 100ha     100m x 100m
OH     346 boreholes per 100ha     50m x 50m
OI (inferred)     28 boreholes per 100ha     400m x 400m

Modelling is undertaken within resource boundaries that have been delineated based on a minimum seam thickness of 2m, as evident from borehole information, together with other information used to assess mineability. This implies the geological models represent total tonnes in-situ (TTIS) of the resource and extrapolation is not required due to TTIS resource blocks falling within the borehole grid. For conversion to MTIS, a 5% geological loss is applied.

A standalone structural geology model was compiled for the resource blocks. This model was not used explicitly within the Minex model, mainly due to the low level of confidence assigned to the interpreted structures. However, these structures are considered on a risk-based approach for both mine planning and production. The exception lies with modelling the dolerite sill and this was undertaken directly in Minex.

Most of the resources are classified as measured as borehole spacing is at a minimum of 100 x 100m in all reserves. Some resources are classified as inferred due to an approximate spacing of 400m which does not provide sufficient data to upgrade the portion. Indicated and Inferred areas are because of extrapolating the geological model to the boundary of the resource block and are therefore not reported on inside the LoMP.

The change in resources estimation is due to:

  • Depletion (-6,97Mt), actuals from January 2017 to December 2017
  • Disposals (-2,79Mt), disposal at resource block OM on geotechnical considerations.

Reasonable prospects for eventual economic extraction

All criteria (table 24) have been considered.

Reserve evaluation

The reserve model used for Leeuwpan was the 2015 and 2013 (UB) geological model that was converted from a resource to reserve for scheduling purposes. Modifying factors were used to convert geological model to mine planning model. Table 16 details the modifying factors. The level of investigation for the reserve is a completed and approved Leeuwpan Lifex project.

Table 16: Leeuwpan modifying factors

MODIFYING FACTORS (AVERAGED)     2017
BLOCK MODEL PARAMETERS
RESOURCES      
> Geological losses (%)     5%
RESERVES      
> Contamination (%)     55% for DMS wash plant
1% for C&S plant
>Mining recovery efficiency (%)     95% (C&S)
> Mining losses     25% (seam 5) and 5% (seam 4 and 2)
SALEABLE RESERVES      
Practical plant yield     Slimes: 15% (DMS) and 15% (Frazer Alexander DMS)
Plant efficiency: 88% DMS and 90% FA DMS
Pit optimisation parameters      
Planned averaged slope angles (degrees)     45°
Other      
Averaged grade cut-off (%) if applicable     1m for seam 5
0,5m for seam 4 and 2
Environmental     OJ
  • Mining method: Mining is open-pit in a modified terrace configuration using conventional truck-and-shovel
  • Geotechnical: For high-wall stability, soft material is mined at least one strip ahead of hard material and coal mining activities
  • Geohydrological: The pit floor was taken into consideration to minimise water handling in the pit face
  • Mining limits: the following mining limits were applied to the resource model
    • Economic cut off
    • Farm boundary cut off
    • Tenure and licence approvals
    • Seam thickness
    • Environmentally sensitive areas such as wetlands.
  • A factor of 25% was applied to seam 5 ROM and 5% to seam 4 and seam 2 ROM as mining loss. The quality of coal was considered not to be affected by the mining loss
  • A contamination factor of 5% was used on washing plants (DMS and FA DMS) and a contamination factor of 1% on the C&S plant
  • The plants are designed to make thermal and metalliferous coal. ROM coal is tipped at the three plants. Coal is directly tipped into the jig/FA DMS and DMS tip-bin and on the ROM stockpile at the C&S plant. Details of plant efficiencies were included in the modifying table.

The LoM on 31 December 2017 at Leeuwpan is 12 years or until 2029 compared to the mining right expiry date of 2040. An EMP was granted for underground mining for reserve block OI/OL/UB, and was resubmitted for open-cast mining and approved. Reserve UB was classified as a probable reserve for the period ending 31 December 2017. This represents 3,25Mt of Leeuwpan’s reserves, and the UB reserve will remain in the probable category. The road (R50) from Delmas to Leandra overlies reserve block OI. This road must be moved for open-cast mining and will form part of the Leeuwpan life-extension project (LPN LIFEX).

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.

A dolerite sill that overlies coal seams in resource blocks UB and OI may negatively affect pit slope stability and coal quality. Occurrence of dolerite dykes and undulating floor conditions are minor risks.

Operational excellence and innovation

In line with Exxaro’s commitment to unlock value, an expansion project to extend the life of mine by 10 years was implemented in the reporting year. The updated plan incorporates changes in the price structure of the export market, with higher prices for lower-energy products leading to higher yields. The ~R500m optimisation project will enhance Leeuwpan’s performance by better aligning access roads to the site, as well as upgrading the existing plant and producing high-quality thermal and metallurgical coal to both domestic and export markets.