HomeBusiness and policyExxaro commits to R20 billion investment in South Africa

Exxaro commits to R20 billion investment in South Africa

South African coal producer Exxaro believes investment is needed to help drive a brighter future and has committed R20 billion to building and expanding its production portfolio.

Investment in South Africa’s mining sector has dropped significantly over the last few years – driven by political uncertainty and a general lack of confidence in the country.

It’s not all bad news however. Local coal producer Exxaro recognises that strong investment is needed now to help drive a brighter future for the country and its people.

As such, the company has committed R20 billion to building and expanding its production portfolio in the short to mid-term future, executive head of projects and technology JOHAN MEYER tells LAURA CORNISH and CHANTELLE KOTZE.

This article first appeared in Mining Review Africa Issue 1, 2019

“Exxaro’s strategic business may be coal production but we believe this is the foundation upon which we can deliver our broader objectives and purpose – powering better lives in Africa and beyond,” says Meyer, who is responsible for all Exxaro mega projects.

“South African president Cyril Ramaphosa has outlined his ambition to acquire $100 billion from the global investment market to help boost the economy. Exxaro’s objectives to drive a brighter future for the country aligns with the president’s focus and we are, as contributors to this objective, investing around R20 billion to grow our own production pipeline and in doing so deliver economic growth opportunities for the country and its rapidly growing demand for power.”

And while a R20 billion spend commitment is significant, it is not a commitment for the distant future.

Exxaro is already well underway with its growth ambitions and is injecting approximately R10 billion into expansion projects in the Lephalale region where its flagship Grootegeluk operation is located and another R10 billion in the Mpumalanga area where the remainder of its mines are situated.

“We  are already producing around 45 Mtpa of coal products and are aiming to increase this to 60 Mtpa by 2025. To achieve this, we will be employing  around 6 500 people on all construction sites during 2019 over and above our existing workforce to deliver this.

“The downstream benefits increase this number to around 50 000 people when considering indirect employment opportunities.  Reinvesting in South Africa is the only way to deliver real food onto the tables for our people. This is our narrative and is one we believe will drive a more promising future for every citizen in South Africa,” Meyer outlines.

Within the Mpumalanga region, the company’s largest investment is the delivery of a new Greenfield project – Belfast – which represents not only a new coal project in the country (of which there are few) but also South Africa’s first truly digital, connected mine.

Belfast: the connected mine

Exxaro’s R3.3 billion Belfast mine has been 20 years in the making and will mine the last substantial coal deposits remaining in the 100-year old Mpumalanga coalfields.

The company, thanks to its rich history of successful mine development, is making quick work of Belfast.

“Having broken ground at the mine at the end of 2017, Exxaro has already spent R1 billion of the budgeted R3.3 billion on on-site bulk earthworks and civil infrastructure development including haul roads, bridges as well as the construction of a brand new 13 km tarred road linking from the N4 highway to site,” says Meyer.

Exxaro has already started with the construction of the overland conveyor, which will be used to transport the coal from the mine and primary crusher in the norther portion of the mining lease to two 7 500 t ROM silos (which have already been erected) in the southern portion of the mining lease for storage before processing.

South Africa-based engineering and project delivery specialist DRA Group has also begun the construction of a two-stage, 500 tph dense medium separation (DMS) plant to enhance processing and preparation of coal produced at the site.

The processing plant will also include a fines DMS and filter section as well as a product handling site.

Following the 24-month construction period, expected to be completed at the end of 2019, the company will begin ramping up towards production at the start of 2020.

Once operational in mid-2020, the open cast mine is expected to produce a total of 2.7 Mtpa of thermal coal, at a rate of 3 Mtpa ROM over its 17-year life of mine, comprising 2.2 Mtpa of A-Grade, export-quality coal (typical 6 000 kcal/kg), and a secondary-quality product, or ‘middlings’ product (typical 21.5 MJ/kg) of 0.5 Mtpa, both of which will be exported.

A prefeasibility into Phase 2 of the Belfast mine, dubbed the Belfast expansion project, is already underway (expected to be completed end-2019) and could potentially double coal production and add another 10 to 15 years to the current 17-year life of mine at Belfast – macro-economic conditions dependent.

The development of the Belfast mine is being largely driven by innovation and digitisation, says Meyer, outlining that the mine will be the first of its kind in South Africa to have a “digital twin” – a complete digital replica of the mine that will enable the relevant people to connect to and manage it from anywhere in the world.

“We decided to go the digital route mainly to improve costs and productivity,” says Meyer, who explains that the digital twin is about connecting the value chain from pit to port to ensure that the entire operation is visible to the operations team, allowing them to make integrated decisions and thereby allowing Exxaro to produce and supply coal quickly to the market and to have less product in stock.

Having been a mining company for the past 50 years, Exxaro has used its past knowledge to design an information management blueprint based on quicker decision making using new technology.

“By equipping our operation with the correct connectivity devices right from the start we will remove the slow human interface so that we have real time information to make quicker decisions to move the tons faster through the value chain,” he explains.

By using the latest technologies and all the new in-field devices that the Fourth Industrial Revolution offers, various management and supervisory levels will be connected to the mine allowing for full digital control and monitoring of the entire Belfast operation.

Exxaro will be able to deploy a digital mine operations management system that will generate insights and reports to improve decision-making that will in turn, reduce the mine’s costs and ensure it remains low on the cost curve. The digital twin has the potential to increase productivity at Belfast by roughly 10%.

To give an example of how the digital twin will assist in maximising efficiency, Meyer illustrates how the crusher, overland conveying and processing plant– the heartbeat of the mine – will be controlled via the digital twin to ensure that it always runs optimally.

“In the eventuality that the crushing system is not operational on site, the engineering manager will be able to run various simulations of the processing system on the digital twin to review and decide on the best option on how to better utilise the equipment, thus allowing the operations team to plan better to make sure the equipment operates optimally.

“Our aim is to maximise the utilisation of plant by running it at maximum efficiency, and in so doing use the plant for exactly what it was designed. Running simulations on the digital twin will allow us to run the plant in such a way,” Meyer adds.

Not only is Exxaro focusing on digital connectedness and the best available technology, but is also using the best available equipment to help the company improve its energy consumption and water use.

Developed internally by Exxaro’s information management team – the digital twin framework was borne out of the packaging together by Exxaro into a central database all of the electronic information from the various OEM suppliers to create the digital twin of the Belfast mine.

Once the mine enters production in 2020, data will be generated, captured and analysed to see where improvements can be made going forward, while Exxaro will look at incorporating the digital twin framework into its Brownfield expansion projects in the future by applying its learnings from Belfast.

Exploiting the Grootegeluk ore body further

Exxaro currently produces a massive 29 Mtpa of power station coal for Eskom’s Matimba and Medupi power stations and an additional 1.0 Mtpa of semi-soft coking coal (SSCC) for the domestic metal industry from the Waterberg-based coal mine.

Nonetheless, Meyer says the mine’s ore body has far greater potential to be further exploited and so is expanding one if its existing plants (there are eight in total) to accommodate additional coal tonnage.

The company is now approximately half way through converting its single-stage beneficiation GG2 plant to a new double-phase beneficiation plant to process this new coal.

“Our R4.8 million new plant expansion – referred to as GG6 – will add an additional 1.7 Mtpa of SSCC to the mine’s total coal output and through the incorporation of new process technology, will upgrade a small coal fraction product to a semi-soft coking coal, designated for the export market,” Meyer describes.

The integrated Brownfield expansion project commenced in Q2, 2017 and is due for commissioning at the end of 2020. It incorporates:

  • A new small coal beneficiation plant, enabling the processing of fragments of less than 10 mm
  • Improving fines plant beneficiation processes through the use of reflux classifier technology
  • A dewatering plant – incorporating the largest filter press to be installed in the southern Hemisphere; and
  • Expansion of the current stockyard.

Environmental and process technologies expert ENPROTEC is responsible for the design, construction and commissioning of the 660 tph filtration plant – which alone is valued at R600 million. It will not only ensure the project effectively reduces its external water use, but will further enable the operation to recover additional coal fines as well.

Although relatively new entrant in the South African coal industry, reflux classifiers are ideally suited to beneficiating coal between 1.5 mm to 0.25 mm and more specifically semi soft coking coal product from coal fines.

“This technology is ideally suited to GG6’s product and will enable us to produce a product considered highly valuable for export,” notes Devraj Reddy, process engineering and design principal manager.

Also of critical importance to the expansion project is Exxaro’s ability to transport the coal to the Richards Bay Coal Terminal (RBCT) for export. This requirement poses no challenge to the GG6 however.

In November 2017 the company signed a coal export transportation agreement with Transnet which will increase coal volumes from Waterberg to RBCT. The delivery of the rail system is already well underway.

The 10-year agreement will allow for the transportation of a total of 6.5 Mt of export coal, of which the new 1.7 Mtpa from GG6 will be included. “This is a key milestone in unlocking the greater Waterberg coal resource, which could include our Thabametsi resource as well.”

The project further entails the R1.3 billion construction of a new rapid load-out station which incorporates a silo that will feed trains continuously – designed specifically to fill 100 wagons under four hours – without disrupting other rail operations on the line.

The agreement is a key contribution to the Waterberg expansion programme earmarked in the National Development Plan (NDP) as a strategic coal mining area and national asset to growing the South African economy.

You can read the full digital magazine here or subscribe here to receive a print copy