Building upon a pedigree and wealth of skills that stretch back decades, Exxaro Resources may be a relatively young business, but it has already solidified itself as one of South Africa’s largest diversified resources groups. Boasting interests in coal, mineral sands, ferrous and energy commodities, it is the country’s second largest coal producer with current production levels reaching 47 million tonnes per annum (mtpa). Exxaro’s diverse commodity portfolio helped the company record assets of R37 billion and a market capitalisation of R60 billion as of the end of 2011.
Exxaro’s eight managed coal mines produce power station, steam and coking coal, as well as char. The company is the largest supplier of power station coal to South Africa’s national power utility, Eskom. Exxaro’s Grootegeluk mine is one of the most-ef´¼ücient mining operations in the world, and operates the world’s largest coal bene´¼üciation complex, where 9,000 tonnes per hour of run-of-mine coal is upgraded in six different plants. Situated 25 kilometres from Lephalale in South Africa’s Limpopo province, this open-pit mine has an estimated minable coal reserve of 2,800 metric tonnes and a total measured coal resource of 4,600 tonnes , from which semi-soft coking coal, thermal coal and metallurgical coal can be produced.
Some 14.8 metric tonnes of annual production is power station coal, transported directly to Eskom’s Matimba power station on a seven kilometre conveyor belt. Grootegeluk also produces 2.5Mtpa of semi-soft coking coal, the bulk of which is railed directly to Mittal SA under a long-term supply agreement.
Such are the demands for power in South Africa, however, that Grootegeluk’s capacity is being doubled in order to supply Eskom’s new Medupi power station. The $1.3 billion Grootegeluk Medupi Expansion Project (GMEP) will increase throughput to 14,000 tonnes per hour, and supply Medupi with 14.6Mtpa of coal for 40 years.
Since its formation as South Africa’s largest BEE-empowered diversified resources company in November 2006, Exxaro has built itself upon a brand promise, which is “Everything we do and deliver today will allow others to realise their vision tomorrow”. It is this promise that the company states has influenced its drive towards sustainable development.
For Exxaro, sustainability is about securing the future. Our aim is to harmonise business, community and environmental needs and obligations to enable Exxaro to achieve its founding goal of being a company that makes a positive social and economic contribution to South Africa.
One of the ways it is achieving this goal is through the development of its employees and stakeholders. The company’s approach to its people is guided by a comprehensive suite of policies covering employment, labour/management relations, occupational health and safety, training and education, diversity and equal opportunity.
Supported by the leading practices developed in recent years, Exxaro concentrates on exceeding compliance targets in South Africa by training and development to maximise individual potential, equality and safety in the workplace, meeting its employment equity targets and improving standards of living in its stakeholder communities. Collectively, its initiatives are also contributing to reducing the shortage of skills in the industry.
Through its human resource development policy, Exxaro aims to develop and sustain core competencies and maximise human resources to meet the group’s strategic objectives and improve operational performance, while also creating a learning culture by assisting and facilitating the process in which employees and their dependants take responsibility for improving their own educational and competency levels. Further aims include ensuring the integration and uniformity in all learning and development processes by leveraging technologies, supporting and reinforcing its values through learning initiatives, making sure that these are career-focused and aligned with business objectives, and establishing life-long learning as the major thrust of learning and development.
While its portfolio in coal, mineral sands, base metals and ferroalloys has been well documented, Exxaro has also recently been increasing its exposure to iron ore through its interest in Sishen Iron Ore Company and its acquisition of African Iron in early 2012. Since assuming direct management and operational control of African Iron the company has completed a broad financial, technical and operational review of its projects in the Republic of Congo, one of the major ones being the Mayoko iron ore project. Early findings from the project at Mayoko indicate that this mine has significant potential in terms of resource quality and size, with much of the groundwork for this near-term development opportunity in an emerging iron ore province already completed by African Iron. The project currently has a JORC -compliant mineral resource of 685 metric tonnes of iron ore, consisting of a hematite cap of direct shipping ore (DSO) at 55 percent Fe and beneficial DSO ore at 41 percent Fe.
With a revised exploration programme and accelerated drilling, production began in 2013. This has already begun to be an economic boost for the small village of Mayoko and the broader region, from which much of the required labour will be drawn.
Exxaro is also currently investigating additional regional potential in terms of size and quality, with exploration drilling under way at Ngoubou-Ngoubou, adjacent to Mayoko, Mt Lekoumou and Mt Mipoundi.
Prospects for iron ore from this region are promising and the shortfall in lump ore production, due to growing production from Brazil and India, means production of pellets could double by 2021. For Exxaro, unlocking the full potential of this opportunity will require an intense focus on capital intensity to move Mayoko further down the US dollar per tonne scale, where it is already positioned in the lower half.
Exxaro has proven already time and again in South Africa that it has the expertise and experience to develop a large scale mining project from conceptual phase to production. The company’s track record showcases its extensive engineering capabilities in design, operational expertise, maintenance and project management, as well as its experience with bulk mining, opencast and underground operations, beneficiation and downstream processing and value-added products. It is characteristics like these that leave little doubt that the future of the Mayoko mine, and other projects yet to come, is in good hands.
Written by Will Daynes, research by Candice Nice and Robert Hodgson
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