Tumelo

Exxaro’s attributable interest in Tumelo is 49%. Exxaro is expected to retain management control over the mine and hence this ancillary section is provided.

Overview

Tumelo mine is in Mpumalanga, 15km north-west of the town of Hendrina and 5km south-east of Hendrina power station. Tumelo’s mining right (116MR) covers an area of 461,9ha over the farm Boschmanskop 154IS and was acquired by TESA in October 2000. The Boschmanskop project (as Tumelo was known then) would be further explored through diamond drilling by TCSA. A 2002 feasibility study confirmed the presence of economic coal reserves. First coal was recorded in 2009, with Tumelo exploiting S2 using bord-and-pillar. Mining was outsourced to SBS Mining Proprietary Limited, a mining contractor.

Using one continuous miner, the mine produced some 700kt ROM at its peak. Initially, this was custom washed for an export product at the Shanduka (Glencore-owned) Koornfontein mine washing plant, but would later be carted to Forzando North and washed for a 5 800kcal/kg export product.

Tumelo mine was placed under care and maintenance in January 2014 after contract-renewal terms could not be agreed with the mining contractor. A decision was made to investigate the continuation of mining operations with another contractor, allowing for a simultaneous review of the remaining mineable resources, mining method and production rate.

Following the purchase of TCSA assets by Exxaro in August 2015, the current Tumelo coal mine shareholding is 51% Mmakau Mining and 49% Exxaro Coal Central (ECC) Proprietary Limited.

History

A total of 132 boreholes have been drilled over the 462,9ha area, resulting in a theoretical density of 23,5/100ha. Early exploration operators were Senekal Mine and Hanover Mining from which TESA acquired the surface and mineral rights before transferring these to TCSA.

Geology

Tumelo lies north of the Smithfield ridge on the north-eastern edge of the Springs-Witbank coalfield. The area is part of the Karoo basin with stratigraphy similar to Dorstfontein and Forzando, but with subtle location-induced differences.

Six coal seams are developed in the area, named from the base upwards as S1, S2, S4L, S4U, S4A and S5. S1 is very thin and only developed in the deepest part of the palaeo-valley. The thickest seam is S2 (0,45m to 5,31m), developed mainly in the palaeo-valley. A uniform seam, S2 is either thin or absent over the adjacent palaeo-ridges. This is the seam that has been exploited since Tumelo production started in 2009. S4L is the most persistent and second-thickest. S4U is thin and may have been eroded in this area or poorly developed. S4A is thin and patchily developed. S5 is only present in a topographically high area in the south-east.

Resource evaluation

The Tumelo geological and structural models were updated in 2017 in Geovia Minex 6.3.2, using the Minex growth algorithm. Criteria for MTIS estimation included: underground >1,20m (UG equipment limitation), raw ash <50%, 12% geological loss (weighted average across geological loss domains).

The change in resource estimation is due to:

  • New information (1,25Mt), new borehole information
  • Inclusion (3,4Mt) of S4LM resources beyond sill break through zone, improved interpretation.

Reasonable prospects for eventual economic extraction

All criteria (table 24) have been considered.

Reserve evaluation

The 2010 geological model was used for reserving purposes. The process was to ensure that only economically viable areas are reserved. This considers mining, beneficiation, material handling and transport costs, i.e. input costs.

Risks

A prospecting right was submitted that overlaps with our mining right over portions 6 and 10 of the farm Boschmanskop. Exxaro reasonably expects that an appeal lodged against this application will be successful.

Table 18: Tumelo modifying factors

UNDERGROUND
MODIFYING FACTORS     2017
RESOURCES      
> Geological losses     10%
RESERVES      
Losses      
> Mining losses     2%
Layout parameters      
> Depth to roof     20m
> Safety factor     Tertiary panels 1,6
Main development 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     1,60m
> Extraction factor     65%
Scheduling parameters      
> Dilution     Already included in the model
> Contamination     0,10m
Tumelo