Developing resources in the Waterberg The Exxaro story - Mxolisi Mgojo Coaltrans Southern Africa May 2012
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Developing
resources in the
Waterberg
The Exxaro story
Mxolisi Mgojo
Coaltrans Southern Africa
May 2012
1Disclaimer Opinions expressed herein are by nature subjective to known and unknown risks and uncertainties. Changing information or circumstances may cause the actual results, plans and objectives of Exxaro Resources Limited (the “Company”) to differ materially from those expressed or implied in the forward looking statements. Financial forecasts and data given herein are estimates based on the reports prepared by experts who in turn relied on management estimates. Undue reliance should not be placed on such opinions, forecasts or data. No representation is made as to the completeness or correctness of the opinions, forecasts or data contained herein. Neither the Company, nor any of its affiliates, advisors or representatives accepts any responsibility for any loss arising from the use of any opinion expressed or forecast or data herein. Forward-looking statements apply only as of the date on which they are made and the Company does not undertake any obligation to publicly update or revise any of its opinions or forward looking statements whether to reflect new data or future events or circumstances.
The Waterberg Coalfield
Vital statistics
Dimensions:
• Stretches 40kms from N to S and
88kms E to W
• Extends Westwards into
Botswana
Geological Characteristics:
• Ecca group of coal deposits
• 75,7 billion tons of in-situ inferred
resources (Upper & Middle Ecca)
• More than 50% of the remaining
coal reserves in RSA
• Stratographic thickness of 115 m
(11 coal bearing zones)
• Mineable coal seams much
thicker than Witbank &
Mpumalanga coal fields
3Grootegeluk – history of improvement and value addition
OC Pit (1980)
GG2 (1990)
GG3 (1992)
GG4/5
(1996,1998)
GG1 (1980)
GG6 (2006) Char P1 (2007) GG7/8 (2013)
Multi products = 18.5 million annual tons (pre-Medupi) Resources = 4.8 billion tonsFuture development focus…
5 Power gen
Ore Beneficiation
Exports
Reductants
/ CTL
Mining Domestics
Metals Industry Power gen
Ore Reserves Co
Co--gen
More conventional
Downstream integration
Reducing the carbon
mining & beneficiation…
& beneficiation
footprint
SolarExxaro’s Waterberg development plan – now to 2025
Phase 1: Grootegeluk Mine Phase 2: Thabametsi Mine
• Brownfields mine expansion for • Greenfields development - new open
Medupi power station (4 800MW) coal pit coal mine and beneficiation
supply: complex also supplying Independent
– 14,6Mtpa to Medupi power station Power Producers (2 000MW)
– Time-frame: 2009 to 2016 – 17Mtpa to power station
– 2,8Mtpa to other markets
– Time-frame: 2015 to 2025
Phase 3: Exports Other downstream opportunities:
• Greenfields coal mines • Char plant
– 13Mtpa for exports – Phase 1 operational
– Time-frame: 2018 to 2025 – Phase 2 in feasibility study
• Market coke
– In feasibility study
• Electricity generation
– Co-generation & IPP
– Solar plant (Cennergi)A few hurdles to overcome...
Key challenges
1. Environmental stewardship
• Sustainable development
2. Spatial development
• Local skills creation
• Attract & retain employees
• Social upliftment
3. Outbound logistics
• Rail (affordable-):
• Will it be to East, West or North?
• Port:
• RBCT expansion beyond 91mtpa?
• Matola to expand to 20mtpa?
• Road:
• Migration from road to rail
4. Raw water supply
• In short supply and expensive
5. Need to dovetail rail and water
7
6. Power station off-takeThe ‘code’ required to expedite the unlocking of the
Waterberg infrastructure is an aligned Stakeholder vision
Stakeholder
1. Eskom
2. Waterberg bulk commodity
producers
3. Transnet Freight Rail
4. Department of Water Affairs
5. Presidential Infrastructure Co-
ordinating Commission (PICC)Water augmentation
20
Mokolo & Crocodile River (West) Phase 1
Augmentation Project (MCWAP)
1. Phase 1: Mokolo augmentation
Phase 2
• New 42km pipeline by end 2013
• Insufficient capacity to enable
the envisaged developments
2. Phase 2: Crocodile augmentation
• New pipeline from Vlieëpoort Phase 3
weir at Thabazimbi followed by
pipeline from Klipvoor dam
• Gauteng effluent (increasing in
volumes)
• Needs to be expedited to enable
Waterberg developments
• Requires focussed collaboration
between industry and
government to achieve the
required economies of scale
Phase 4Water Demand & Supply Projections for Waterberg Region (Ml/a)
200,000
Supply for Exxaro’s Waterberg projects will MCWAP 2
primarily be covered by MCWAP 1/2; however, Proposed
Exxaro has launched a number of local initiatives Completion
Final MCWAP2
Date
to reduce water dependency, as well as to
160,000 supply dependent
preserve/secure water so as not to delay projects. on demand
120,000
MCWAP 1
Proposed
Completion
Date
80,000 Future Supply
Current after MCWAP1
Total Supply
40,000
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2030
Municipality Irrigation IPPs (Incl. mines) Coal Mining Sasol (Incl. Mafutha Mine) Eskom
Source - 2009 estimates - DWAFExxaro’s Waterberg Coal transportation in context
Waterberg Coal Field:
75Bn ton resource
Grootegeluk Mine: IPP
Multiproduct mine
Matimba/
Medupi
Mpumalanga
(2015)
Domestic
Customers
AMSA
11The current coal logistics system is inherently constrained by its
engineering design and operating processes
Musina
Exxaro’s reality Waterberg Feeder
Waterberg Limpopo
• Traverse 3 discrete rail Coal Fields Coal Coal Backbone System
systems Fields
Coal Export Line
Lephalale
• 1,000km to RBCT
Swazi Link System
• Largely single line Springbok Flats
Coal Fields Coalfields
• Not a unitary TFR Thabazimbi
operating regime
(different Business Units)
New Line
• Multiple traffic types > 30Mtpa
Mpumalanga Komatipoort
Coal Fields CFM
• Prioritisation of Pyramid
commodities Broodsnyersplaas
Ogies Lothair
• Tractive effort – diesel Future Maputo
and electric Ermelo Link
• Technical and Tunnel
infrastructure challenges
en-route
• Marshalling yard
congestionThe PICC has prioritised Strategic Infrastructure Projects (SIP)
inter alia supporting unlocking of the Waterberg rail constraints
Northern Mineral
Belt
Eskom Road to
Rail Migration
State Owned Companies will play
significant delivery/facilitation* roles
* - guarantees, logistics, funding, infrastructureThere are multiple stakeholders in the Waterberg, all seeking
efficient and cost effective logistics solutions
Areas of alignment
1. Waterberg Task Team
2. Facilitated by Transnet
3. Focus on logistics
4. Designing and implementing
solutions for technical, operational
and commercial challenges
5. Adopting a common approach by all
bulk commodity producers and
relevant SOC in the development of
the Waterberg in line with NPC
initiatives
6. Joint rail flow managementConclusion Exxaro embarked on a number of expansions in the Waterberg in recent times but to really unlock the area’s potential we need access to affordable rail and water… … which requires collaboration by all stakeholders 15
Thank You
Questions?
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