Tumelo overview

Exxaro only provides an overview in projects and operations directly under Exxaro’s management control. Tumelo shareholding is 51% Mmakau Mining and 49% ECC. We, however, decided to include an overview of Tumelo since it formed part of the original Total Coal South Africa complex. Tumelo mine forms part of ECC and is in Mpumalanga, 15km north-west of the town of Hendrina and 5km south-east of Hendrina power station. The Hendrina-Middelburg tarred road passes 6km east of the property. An all-weather dirt road linking the town of Hendrina and the power station runs 500m to the west of the property while the Wonderfontein- Broodsnyersplaas railway line lies 2km west with the closest siding being Pullenshope 3.5km away.

Tumelo’s mining right (10115MR) covers 462.9ha on the farm Boschmanskop 154 IS. Following the purchase of Total Coal South Africa assets by Exxaro in August 2015, the current Tumelo shareholding is 51% Mmakau Mining and 49% ECC. The project is included in the ancillary section as Tumelo forms an integral part of the ECC complex.

Surface infrastructure still in use includes mine buildings (offices, workshops and change houses), box-cuts to access the coal seam, conveyor belt systems and a RoM stockpile facility.

After operating for six years, Tumelo ceased production in January 2014 after its mining contract expired, and it was placed on care and maintenance. Since then, a series of technical and economic evaluations were conducted by Total Coal South Africa and Mmakau Mining, reviewing the potential of the remaining mineable Reserves, mining method and production rate. Mmakau Mining recommissioned the operation in 2019 with first coal mined in April.

Tumelo exploits S2 on the edge of the Springs-Witbank coalfield and RoM was trucked using existing roadways to Forzando North where it was beneficiated for a 5 800kcal/kg export product.

Tumelo history

Exploration activities started in the early 1990s with a mining right submitted in 2006 and first coal production in 2009. To date, there are 132 boreholes (103 with coal wash data) in Tumelo’s mining right area. The 2017 geological model update incorporated all existing boreholes with wash-quality information. In general, Tumelo has a borehole distribution of 0.22 boreholes/ha.

Figure 25: Tumelo locality map

Table 67: Tumelo project history

	Date range		Company		Material notes
	1990		Senekal mine		The first company to conduct exploration programme, drilling 26 boreholes
	1991		Hanover Mining		Further exploration work, 34 boreholes drilled
	2002		Total Exploration South Africa		Total Exploration South Africa acquired the project with 18 boreholes drilled during its tenure. A feasibility study in 2002 confirmed the presence of economic Coal Reserves. The Boschmanskop project would later become known as Tumelo
	2004 to 2013		Total Coal South Africa		Further exploration work undertaken by Total Coal South Africa. Mining right applied for in 2006 in the name of Tumelo coal mine. First coal recorded in 2009, exploiting S2 via bord-and-pillar method. Mining outsourced to SBS Mining, a mining contractor. Initially RoM coal was custom washed for an export product at the Shanduka (Glencore)-owned Koornfontein colliery washing plant but would later be trucked to Total Coal South Africa's Forzando North and washed for a 5 800kcal/kg export product
	2014 to 2015		Total Coal South Africa		Production ceased in January 2014 when the mining contract expired. Failure to agree on a possible extension with the contractor led to the operation being placed under care and maintenance in February 2014
	2015 to 2018		ECC		Total Coal South Africa became ECC after being taken over by Exxaro in August 2015. Tumelo remained under care and maintenance
	2019 to 2020		ECC		Mmakau Mining recommissioned the operation in 2019 with first coal mined in April. Normal production throughout 2020

Tumelo geology

Tumelo is to the 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 that of other ECC operations, Dorstfontein and Forzando with subtle location-induced differences.

Six coal seams are developed in the area, named from the base up as S1, S2, S4L, S4U, S4A and S5. The S1 is very thin, being only developed in the deepest part of the palaeo-valley. The thickest average seam is the S2 (0.5m to 5.3m), developed mainly in a palaeo-valley where it is either thin or absent over the adjacent palaeo-ridges. The S2 has been exploited since Tumelo production started in 2009. The S4L is the most continuous and secondthickest seam while S4U is thin and has mostly been eroded. The S4A is thin and patchily developed and S5 is only present in a topographically high area in the south-east. The only economically exploitable seam is S2.

Figure 26: Tumelo cross-section

Late Jurassic dolerite sills and dykes occur in the Tumelo area. The intrusions resulted in displacement of the various seams and devolatilisation of extensive areas of coal. The geological complexity and associated challenges are proactively managed by extensive infill drilling, downhole wireline logging for better contact definition and seam correlation as well as surface mapping, particularly of basement outcrops. This information is captured in a structural model, together with potential risks captured in a GIS-based RODA, allowing for a more integrated approach to risk management.

Tumelo Resource evaluation

All exploration boreholes are logged and sampled by qualified geologists, aligned with Exxaro logging-and-sampling standards and standard operating procedures. Samples are selected according to seam boundaries, visual variation in the vitrinite content, assisted by density logs, and non-coal material present in the seam boundaries. The geologist takes cognisance of the borehole purpose and drilling conforms to ECC standards.

ECC’s sampling governance and chain of custody requires that each sample to be submitted to the laboratories is accompanied by a sample submission list that also serves as a sample advice sheet with instructions for analysis. The laboratory is notified of samples that are ready for collection. On collection, the laboratory representative cross-checks all samples against the submission list to confirm the names and number of samples they are receiving. All submission lists are managed in duplicates with signed copies scanned and saved electronically in the geology server.

All geological core samples are sent to the laboratory for coal quality analysis. Two major laboratories have been used at Tumelo: Australian Laboratory Services and SGS with SANAS accreditation (T0611 and T0815 respectively). ISO and SANS have a standard set of tests and methods used for coal analysis by South African laboratories. These laboratories have committed to assuring the quality of results provided to the customer by ensuring quality assurance, quality control, data validation and proficiency testing procedures are observed.

Table 68: Tumelo Coal Resource reporting criteria

Thickness cut-off (thickness and extraction height considerations)	Quality cut-offs (adb)	Geological loss*
Underground ≤1.2m	DAFV ≤24% Raw ash ≥50%	10% to 50%

*

A 10% standard geological loss is applied but may vary based on consideration of structural complexity (dolerite sill breakthrough - 50% loss within determined spatial extent), seam gradient (>4 degrees - 50% loss) and dolerite sill proximity to seam (25% loss). A 15% geological loss is applied (weighted average of the various risk domains).

Table 69: Tumelo Coal Resource estimation criteria

		Item			Description
Database		Borehole database			acQuire
		Data datum			Cape LO29
		Number of boreholes used for Resource estimation			103 of 132 boreholes in the database with washability data
		Validation			The laboratory conducts data validation on samples. In acQuire, additional validations are conducted and corrected. Data is exported from acQuire into csv files where additional checks are conducted in Excel
		Data compositing and weighting			Data compositing is conducted per seam using a weighted value from individual samples that make up the seam, along with the relative density and length of each sample. This is done in Geovia MinexTM
Model		Previous model date			January 2010 in Stratmodel
		Last model update			January 2017
		Geological modelling software			Geovia MinexTM
		Estimation technique			Growth algorithm – general purpose gridding
		Grid mesh size			25m x 25m
		Scan distance			2 000m
		Data boundary			200m
		Model build limits			Upper: limit of weathering and topography/collar Lower: basement/Dwyka
		Model outputs			Roof, floor and thickness grids generated for structure. Raw quality and washability grids
		Changes to modelling process			Change in modelling package from Stratmodel to Geovia MinexTM

Table 70: Tumelo Coal Resource classification criteria

	Category		Type of boreholes		Borehole spacing		Structurally complex areas		Borehole/ha
	Measured		Cored boreholes with applicable coal qualities		0 to 350m		Structural complexity and coal variability – additional infill drilling		0.30
	Indicated		Cored boreholes with applicable coal qualities		350m to 500m		Structural complexity and coal variability – additional infill drilling		0.20
	Inferred		Cored boreholes with applicable coal qualities		500m to 1 000m		Structural complexity and coal variability – additional infill drilling		0.11

Table 71: Tumelo Coal Resource statement

	Category	2020 (Mt)		2019 (Mt)		Difference in tonnes (Mt)		Difference (%)			Reason for change
	Measured	7.7		8.4		(0.7)		(8)			Mining depletion of 0.75Mt
	Indicated	0.2		0.2		0.0		–
	Inferred	1.8		1.8		0.0		–
	Total Coal Resources	9.7		10.4		(0.7)		(7)

Notes:

• Rounding of figures may cause computational discrepancies.
• All changes more than 10% are explained.
• Mining method: UG.
• Figures reported at 100% irrespective of percentage attributable to Exxaro.
• Tonnages quoted in metric tonnes and million tonnes (Mt). Coal Resources quoted as MTIS and refer to remaining Resources after 31 December 2020 and 31 December 2019.
• Coal Resources reported on MTIS basis
• Cut-offs applied as per Resource reporting criteria table.
• Coal Resources quoted inclusive of Coal Reserves.

Table 72: Tumelo RPEEE considerations

Item			Criteria		Considered		Comment
	Geological data		Data validated and signed off by competent person		Yes		Geological structure and depositional extent, seam thickness >1.2m (underground), <50% ash content, >24% DAFV. Coal qualities reported on an air-dry basis
	Geological model		2017 geological model considered and signed off		Yes
	Structural model		Structural model considered and signed off		Yes
	Mining		Mining assumptions considered and defined		Yes		Underground areas defined and aligned with exploitation strategy
	Assurance		Policy-driven governance, internal and external audits		Yes		Internal Exxaro review 2012
	Economic evaluation		Concept-level exploitation with economic and mining assumptions, including geotechnical and geohydrological assumptions		Yes		Only approved economic assumptions and parameters applied
	Environmental		Reasonable demonstration that environmental approvals can be obtained within the context of local, regional and national governmental legislation		Done		Areas where there is reasonable expectation that mining will not be permitted are considered, such as wildlife sanctuary, river and streams, historic sites and monuments. Environmental and social concept assessments have been completed
	Tenure		Only areas in acceptable prospecting and mining rights. In areas adjacent to existing rights where legal section application is pending with reasonable expectation of approval		Yes		Mining right/prospecting right licences are valid. Extensions or annexations will be lodged as necessary
	Infrastructure		Assumptions used should be reasonable and within known/assumed tolerances or have examples of precedence		Done		Current infrastructure
	Market		Market(s) identified form part of an existing operation market strategy or potential market for which there is a conceptual market study		Done		Operational strategies aligned with existing markets

Tumelo known risks

The Tumelo mining right was approved in early 2019, executed in August 2019 and will expire in January 2025.

Boreholes received from third parties and drilled between 1990 and 1991 lack wash information for specific fractions. A limited amount of drilling is required to address this data gap. The Coal Resources estimates are received from Mmakau Mining.

Tumelo excellence

Continuous reviews of geological information and economic viability by Mmakau Mining lead to the mining of 0.47Mt during the reporting year.