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Exxaro-Sasol joint venture

Coal – new mine
needed to supply
new CTL complex
Johannesburg, South Africa — MININGREVIEW.COM — 01 July 2009 – Diversified resources company Exxaro Resources Limited (Exxaro) has entered into a prospecting joint venture agreement with Sasol Mining Proprietary Limited (Sasol Mining) for the development of a new coal mine to supply Sasol’s potential new inland coal-to-liquids (CTL) project.

A news release issued here explained that Project Mafutha was an investigation into the development of another CTL project in South Africa, and was envisaged to be located in the north-western part of the Limpopo province, due to the substantial coal reserves in the Waterberg region.

It pointed out that, should the project proceed, it would require a new coal mine to produce feedstock for the 80 000 barrels-a-day CTL complex. The development would help meet the growing shortfall in South Africa’s domestic fuel production, most notably in the installed capacity for producing diesel and petrol. In recent years, South Africa had been a regular importer of refined fuels to supplement local production.

It is expected that such a mine would require an opencast truck-and-shovel extraction method, an area in which Exxaro has beneficial expertise.

The release revealed that the development of the new mine was in the pre-feasibility stage, with the mining of a bulk sample planned for before the end of 2009. It was expected that some 170 000 tonnes of coal would be mined for large-scale testing at the Sasol Synfuels Secunda plant.

Exxaro’s participation in the joint venture for the new mine is subject to the applicable regulatory approvals, the company’s continued interest in the project, and development of the CTL and associated Mafutha coal mine, the release added.