North block complex

Overview

North Block Complex (NBC) is in the Belfast-Carolina area (eMakhazeni local municipality) in Mpumalanga province, South Africa, and consists of the following collieries:

  • Glisa
  • Eerstelingsfontein
  • Strathrae.

The Glisa and Eerstelingsfontein collieries are currently operating. For Strathrae, although mining ceased in late 2010, the remaining coal resources are still reported in the corresponding competent person’s report. The sites are all accessible via the N4 highway between the towns of Middelburg and Belfast. NBC’s main offices are in Belfast.

The mining method at Glisa and Eerstelingsfontein, both being operational assets, is normal strip mining. At Glisa there are three operating pits (Blesbok, block A and block C), with one pit at Eerstelingsfontein.

NBC supplies thermal coal to Eskom. Mining activities at Eerstelingsfontein started in February 2015 and its contribution allowed NBC to re-enter other sectors of the domestic market.

The current coal-supply agreement (CSA) with Eskom is expected to end by June 2018, but Exxaro reasonably expects a continued market, either to Eskom or alternative customers in the near future. Supply of sized products to the domestic market is not based on long-term supply contracts, but rather on a spot sales principle.

History

NBC has a long mining history. Records suggest that mining at Glisa started in the early 1900s to supply coal to Paul Kruger’s railways. More recently, until 2006, the mine was an underground operation, focused on exploiting a ‘select’ portion of seam 2 (S2). Open-cast mining started after 2006, exploiting the full complement of the Witbank coalfield seams, and reclaiming S2 left in underground pillars.

Eerstelingsfontein was in project phase until October 2014, when the IWUL was reinstated and mining activities started in March 2015. In Strathrae, mining activities ceased in 2010 and the emphasis shifted to rehabilitation.

Geology

NBC (Glisa) mine resource area is close to the eastern edge of the Witbank coalfield, in the northern part of the main Karoo basin. All Witbank coalfield seams, i.e. S1, S2, S3, S4 and S5, occur in the Glisa area, with S2, S3 and S4 being economically important. Stratigraphy consists predominantly of the different coal seams separated by fine and medium to coarse-grained sandstone, with subordinate mudstone, shale, sandstone and carbonaceous shale.

The Eerstelingsfontein block to the south-east of Glisa comprises gently sloping topography. The coal resource here is contained in a single seam, S2. This seam occurs as an erosional remnant on high ground at shallow depths, suitable for open-cast mining. The thickness of the coal seam ranges from 0,5m to 3,1m, averaging 2,3m. The coal seam is overlain by medium to fine-grained sandstone with shaly bands. On top of the whole succession is overburden material comprising sandy soil and regolith. The average total depth to coal is relatively shallow at 10,7m and the maximum depth to top of coal is around 17,8m.

Resource evaluation

Resource evaluation is undertaken as per the Exxaro resource estimation procedure and based on 88 diamond boreholes, drilled between 2008 and 2013, and spaced some 350m apart. Coal quality compositing is undertaken in Geovia Minex on a weighted average basis and maximum extrapolation is set to 175m. A 0,5m seam thickness cut-off and 5% geological loss is applied to convert GTIS to MTIS. Resource classification is in accordance with SANS 10320:2004 and is based on the minimum cored borehole density per 100ha. Resources at both Glisa and Eerstelingsfontein were assessed and the outcome classified them in the measured category.

The change in resources estimation is due to:

  • Mining depletion (-4,3Mt), Glisa and Eerstelingsfontein actuals for January to December 2017
  • Reconciliation (+0,1Mt) of mined-out underground pillars
  • Areas of spontaneous combustion (-0,4Mt)
  • New information (+0,5Mt), increase in Eerstelingsfontein resource due to additional borehole information.

Reasonable prospects for eventual economic extraction

All criteria (table 24) have been considered.

Reserve evaluation

The geological model has been created using Minex software, and this is then supplied in the form of Minex grids. Map information was supplied in DXF format. The grids and DXF files are converted to Surpac files. The methodology used is to validate the geological information received, checking the integrity of the structure, and that quality and wash-table values are consistent.

With validation completed, a mining block model is developed in which product tonnages and qualities are calculated from wash-table inputs to determine an optimised exploitation strategy. These are used, along with geological, mining and processing recoveries, product prices and operating costs to determine the value of each model block, the ROM and product cost per tonne as well as the cost per unit of energy.

Once viable pit areas have been defined, the bench definition is developed considering bench height limitations determined by geotechnical parameters or dimensions of anticipated mining equipment. With the bench definition finalised, pit designs and access points are developed in viable pit areas. Mining block layouts are then prepared. The tonnage and volumes for these mining blocks, together with coal qualities where applicable, were extracted from the geological model and imported into XPAC. The pit areas were subdivided into mining phases in XPAC, to facilitate scheduling of the desired mining sequence as well as developing space for backfilling the pit at the earliest possible date.

The dependency rules in XPAC were then established to ensure the desired development sequence is followed and to maintain the required working space for proposed mining equipment.

When planning, the following practical mining limitations were adhered to:

Geological/mining parameters:

  • Minimum seam thickness of 0,5m for all seams
  • Coal resources are limited to the boundaries of the prospecting area
  • Coal resources above the limit of weathering (LOW) horizon are excluded.

Quality parameters:

  • Minimum yield of 25% for dense medium separation plant
  • Minimum calorific value of 16MJ/kg for crush and screen plant
  • Raw ash of 50% and above excluded.

The modifying factors applied are based on known mining and coal-processing methods. Resource and reserve discount factors have been confirmed as realistic by actual reconciliation.

Table 17: NBC modifying factors

RESOURCES

Geological losses (%)

    5%

Minimum thickness cut-off

    0,50%

Ash (%)

    >50%
RESERVES

Mining loss (%)

    10%

Contamination (%)

    5%
SALEABLE RESERVES

Practical DMS plant yield (%)

    85%

Practical crush & screen plant yield (%)

    99%
OTHER
Saleable product quality cut-off     Average calorific value of 21,88MJ/kg
Legal     9m mining right boundary cut-off
Social     None
Environmental     Wetlands at Eerstelingsfontein and block C
Geohydrological     None
Business plan     Strathrae
Strip ratio cut-off     Portions of Glisa’s block A and block C

Risks

Around 1,4Mt of NBC’s remaining ROM reserves are currently reported in the probable category, given the uncertainty of securing a market with the Eskom CSA expected to end in June 2018.

It is expected that total coal reserves will be depleted within one year and spontaneous combustion can result in seam 2 losses.

Minor risks at NBC are weathering and undulating floor, which introduces variations in coal seam thickness, particularly at Eerstelingsfontein.