Name and Location
Boikarabelo coal project, Limpopo, South Africa.

Client
Resource Generation (Resgen).

Project Description
Boikarabelo has probable reserves of 744.8-million tonnes, a measured resource of 1.1-billion tonnes, an indicated resource of 551.7-million tonnes and an inferred resource of 1.5-billion tonnes.

The Boikarabelo coal seam is between 20 m and 30 m below surface, enabling low-cost, opencut mining. The seam is between 120 m and 130 m thick, with zones of varying-quality thermal and soft coking coal.

The mine will be developed using a two-phased approach to limit upfront capital expenditure. The first phase will deliver about 14-million tonnes of run-of-mine coal a year, which will equate to about six-million tonnes of product coal. Of this, three-million tonnes will be exported and three-million tonnes will be used domestically.

Phase 2, planned for 2022, will involve ramping up production to 20-million tonnes of product thermal coal.

The project includes a 40 km rail link to the existing rail network.

Boikarabelo hosts a life-of-mine of up to 100 years.

Value
The estimated capital cost for the project is $480-million.

Duration
Resgen’s black economic-empowerment subsidiary, Ledjadja Coal, received the Boikarabelo mining rights from the Department of Mineral Resources in April 2011.

Initial construction of the mine started in the first quarter of 2013 and is scheduled for completion in the first half of 2017.

The mine is expected to begin production in mid-2017.

Latest Developments
Resgen is continuing negotiations to finalise debt funding to fast-track the development of its Boikarabelo coal mine.

In the three months to March, the company plans to focus on the development of power infrastructure and a 13 km section of pipeline, with some of the other activities to be deferred until debt funding is finalised.

Resgen has noted that while its pursuit of $400-million in debt funding has been protracted, the continuation of negotiations indicates that all parties “seek to agree to a structure that provides the funding” required to complete construction of site infrastructure and the rail link.

In a report for the three months to December 31, Resgen notes making progress on the construction of infrastructure at the mine, with EHL Energy having started erecting power poles for the 132 kV power transmission lines.

With earthworks completed, the construction of the substation and switch room, which has been funded from a deferred payment facility, is on track for completion in October this year.

Meanwhile, earthworks for the rail network stabilisation facility have been completed. The rail turnouts and associated signalling will be installed by midyear.

Resgen has also completed the construction of the first three of seven rail link bridges under and over the rail line. The rail turnouts and associated signalling will be installed by mid-year.

Further, the permanent water supply infrastructure has been completed, including holding tanks and pumping facilities, while the earthworks for the 13 km section of the pipeline adjacent to a main road have been concluded. The pipes were delivered for installation during the March quarter.

In addition, the construction camp and services, offices, kitchen and dining facilities for 1 320 people and the accommodation units for 400 workers have been built.

Key Contracts and Suppliers
Digby Wells Environmental (mining right application, mine-waste licence, environmental authorisation process for power plant); RSV Enco (engineering, procurement and construction management, or EPCM, for mine construction); FLSmidth Roymec (coal handling and preparation plant); RCE (rail design and construction); Ceenex (water EPCM services) and Komatsu Financial Limited Partnership (mobile equipment fleet).

On Budget and on Time?
First production has been delayed to the first half of 2017.

Detailed mining and engineering plans, together with the results of tenders, support the estimated first-stage cost of the mine of $480-million.

Contact Details for Project Information
Resgen (Australia), tel +61 2 9376 9000, fax +61 2 9376 9013 or email info@resgen.com.au; or (South Africa), tel +27 12 345 1057 or fax +27 12 345 5314.
Boikarabelo mine site, tel +27 14 944 0199.
Digby Wells Environmental, tel +27 11 789 9495 or +27 11 504 1400, fax +27 11 789 9498 or +27 11 504 1446, or email info@digbywells.co.za.
RSV Enco, tel +27 11 498 6010, fax +27 11 498 6210 or email enco@rsvenco.com.
RCE, tel +27 12 450 0040 or fax +27 12 450 0060.
FLSmidth Roymec, tel  +27 10 210 4000 or fax +27 10 210 4050.
Ceenex, tel +27 12 347 2620.
Komatsu Financial Limited Partnership, tel +1 888 500 6001 or fax +1 847 437 3199.
EHL Energy, tel +27 11 370 7400 or fax +27 11 834 4203.