HCI Coal - Mining Outlook - issue 1

CREATING SUSTAINABLE BUSINESS THROUGH RESPONSIBLE MINING

CLEANING UP COAL

HCI Coal is the responsible mining company pursuing growth and diversification across South Africa. We dig deep into operations behind the Palesa mine with co-CEO, Pieter Terblanche

Writer: Phoebe Harper

Project Manager: Joshua Mann

The demand for commodities is changing as technology evolves worldwide and we need to be able to take advantage of this shift in demand.”

Like the tectonic plates that shape our Earth’s continents and oceans, the demand for the extractive resources that power our world is shifting.

In the advent of the clean energy economy, fossil fuels continue to fulfil a vital role in keeping the lights on, but the future lies in alternate resources. Adapting to this transition is a major prospect in a heavily coal-dependent

ENGINEERING SUCCESS

Radian Engineering is a high-precision engineering firm with over 25-years’ experience in the mining and bulk material handling sectors. Our depth of experience means that we can provide our clients with specific and specialised solutions which require a high level of engineering expertise.

Our pursuit of excellence is driven by three core values: integrity, reliability and precision. These values govern our approach to engineering, fabrication, client and supplier relationships and our employees. We are mindful of the importance of being a responsible corporate citizen and strive to achieve this through living our values.

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country that produces over 250 million tons of coal every year, and accounts for 90 percent of the coal consumed across the entire African continent.

As a junior mining company based in South Africa (SA), HCI Coal is all too aware of this paradigm shift and is channelling the spirit of agility and diversity to maintain both relevance and competitiveness in this evolving field.

For co-CEO Pieter Terblanche, the need for HCI Coal to look and invest beyond the commodity from which the company takes its name, is a pressing challenge that it intends to meet head-on. This is particularly pertinent in a country where funding for coal projects is simply no longer available, despite SA ranking among the world’s most coal-dependent nations.

“We need to be cognisant of the fact that coal will not be the commodity of choice in the long-term due to the environmental impacts,” he says.

Consequently, HCI Coal is pursuing diversification into other, future-relevant commodities, while

preserving its proud status as a responsible mining company.

INSIDE HCI COAL

HCI Coal is 100 percent owned by Hosken Consolidated Investment (HCI), a Johannesburg Stock Exchange (JSE) listed and Level 2 Black Empowerment investment holding company. A key benefit in driving the company’s need for diversification, HCI Coal benefits as a subsidiary and contributing part of the wider holding company, which comprises a varied portfolio. The HCI Group counts a diverse array of investments across sectors, from hotel and leisure to transport, mining, clothing and properties, amongst others.

Indeed, Terblanche credits this structure as a key advantage during the recent turbulence of the COVID-19 pandemic, as HCI’s various investments reinforced the overall group against volatile and unpredictable market conditions.

“It was evident during COVID-19 that the holding company had to rely on its subsidiaries to keep it going,” he says. “It is in tough times such as this that it helps to have a diversified portfolio.”

HCI COAL AND SUSTAINABILITY

SAFETY – Zero harm remains HCI Coal’s key safety objective at Palesa.

HEALTH – HCI Coal is committed to addressing the challenges of access to quality and affordable healthcare for its people. The health and wellness of its employees and contractors are of the utmost importance.

CLIMATE CHANGE – HCI Coal believes that the impact of climate change presents a serious challenge to society, its mining communities, and operations. It understands that urgent action is required to mitigate the local and global effects of climate change. The company remains focused on lowering its carbon footprint.

THE ENVIRONMENT – As a responsible corporate citizen, HCI Coal plays an active role in protecting and preserving the environment through initiatives aimed at reducing its carbon footprint.

COMMUNITIES – HCI Coal is committed to the empowerment of its people through investment in education, local employment, and the economic development of its host communities. The company’s Social and Labour Plan has a life cycle of 2020-2024, in which it has committed to construct low-cost houses in Region 7 and Thembisile Hani Local Municipality. Other community initiatives are supported through its Corporate Social Investment fund.

Championing a holistic vision, HCI Coal’s plans for growth fall into the wider picture of contributing to the progress of the HCI Group as a whole and to the benefit of its shareholders. Currently, HCI’s majority shareholder is the South African Clothing and Textile Workers Union – a trade union encompassing over 10,000 members.

ENGINEERING SUCCESS

Radian Engineering is a key partner to numerous mining companies and processing operations throughout the South African mining industry. HCI Coal is one of our longstanding mining and beneficiation partners. We have been a proud provider of mechanical and civil services including structural audits, vibrating screening equipment, structural plant, environmental and pollution control solutions, across all their plants and operations.

Radian Engineering is extensively involved in the mining operations of our broad range of clients, based on our in-depth knowledge and understanding of plant operations and the challenges faced by our mineral processing customers. Our aim is to ensure more than 95 percent production availability of the operations by providing optimally designed, manufactured, and tested equipment.

Having this level of operational experience, Radian Screens are precisely designed for our clients’ specific plant requirement. The vibrating screens are easy to operate and maintain due to the efficient design and the availability of spares and accessories.

As the original equipment manufacturer (OEM) a full range of spares and accessories are manufactured, to original specification and held in stock in our facilities throughout Southern Africa.

Due to our experience and breadth of understanding in metallurgical processing, Radian Engineering is a crucial partner to our customers in the design and construction of a new process plant. A regular service we offer is plant improvements and optimising expansions to deliver process efficiencies and increased production output.

The mining industry is a demanding sector in which Radian Engineering is renowned for integrity, reliability, and precision. In March 2022 a major mining client had an

urgent requirement for a large desliming banana screen as part of a vital plant expansion project. The standard lead time of a machine of this magnitude is 10 weeks. Due to the critical nature of this machine the client needed the screen designed, fabricated, tested, and installed within four weeks. Radian delivered exactly on time and the machine was successfully commissioned.

Radian Engineering is not only a specialist in vibrating equipment but in the entire bulk material supply chain.

Our approach to delivering turnkey projects is to provide customised complete material handling solutions which include conveying systems, crushing equipment and mobile link conveyors.

Radian Engineering’s involvement in manganese loading at the harbours has led to us becoming an industry standard in rail to port transportation with our RadianSkip for bulk loading.

We have recently embarked on a Tippler refurbishment project and 2023 will see the installation of a newly fabricated Tippler at a major export hub in South Africa.

We make use of the latest parametric 3D design software to ensure functionality, longevity and to determine the maintenance requirements of our machines. Extensive analysis of our designs is performed. These include Discrete Element Modelling (DEM), Material Flow Simulations, Finite Element Analysis (FEA), Fatigue Analysis, and Kinematic and Dynamic Simulations.

All Radian Engineering designs are managed through a product lifecycle process ensuring configuration control, traceability of the product, lifecycle maintenance which allows for accurate planning and enables cost effective management of the plant and machinery.

Radian Engineering is driven by our values of integrity, reliability and precision in all our business endeavours, and we look forward to discussing your requirements with you.

HCI Coal’s primary operations are centred on its sole operating mine –Palesa – which is located 37 kilometres (km) north of Bronkhorstspruit, and forms part of the Thembisile Hani Local Municipality, bordering the Nkangala Township within the City of Tshwane Metropolitan Municipality.

The company was originally formed in 2006, born as a joint venture with a consortium to mine coal at the Palesa site which is then sold to both local and export markets. As of financial year 2021 – 2022, the mine resumed the supply of coal to export markets on a medium-term basis.

A PARTNER OF QUALITY

As reported in 2022, coal accounts for a staggering 85 percent of SA’s electricity. Reflecting this dynamic, Palesa produced an initial supply of 4,653 tons of coal in the first month to Eskom – SA’s largest electricity public utility, when the mine became operational in 2009. Shortly after, in March 2010, Palesa signed an eightyear contract to supply 160,000 tons per month of coal to Eskom and in April, an additional 40,000 tons were negotiated.

“When Palesa went operational, the run-of-mine (ROM) qualities

restricted us to the energy market and we therefore entered into a longterm offtake agreement with Eskom,” Terblanche explains. A second offtake agreement followed in 2018 to supply 240,000 tons per month.

“Eskom is our majority market, and we intend to keep it that way,” he shares.

The original ROM quality that restricted HCI Coal to the energy market remains a point of focus and improvement. At present, the company is engaged in efforts to improve the quality of its product in terms of ash and sulphur content. The culmination of this endeavour is HCI Coal’s recent major investment into an FX Air Separation Plant to facilitate the continued partnership with Eskom, but with a higher quality product.

“The reason behind this investment is to secure offtake in the medium- to long-term, but also to support the principle of cleaner coal since this will reduce the level of harmful emissions at the power stations,” Terblanche elaborates. HCI Coal’s recent interest in a new solar farm facility to be built on the land surrounding the Palesa mine will also further support these efforts.

MINING OUTLOOK: COULD YOU EXPAND ON YOUR RECENT INVESTMENT IN A NEW SOLAR FARM FACILITY?

PIETER TERBLANCHE, CO-CEO: “As a responsible mining company taking into consideration the environmental impacts as well as the risk associated with power supply in the country, we made a decision to investigate the option of investing in a solar project. Palesa is situated in a rural area with a significantly high rate of unemployment, and although a solar farm would only create a limited number of jobs, it would still contribute to the local economy.

“We are in the process of securing the required environmental approvals and we expect to be in a position to begin construction in the latter part of 2023 or first quarter of 2024, depending on that process.”

TFD Capital Investments

A special thanks to Palesa Mine (HCI) for choosing to trust us with moving their products to various destinations. This has subsequently paved the way for other strategic partnerships like Scania SA and Afrit, where TFD has formed relations with these organisations to ensure timeously and safe delivery of Palesa’s products. We look forward to maintaining relationships we have and establishing new partnerships by learning more about the logistics industry in order to improve efficiency, reliability and being timeous.

For any enquiries

Contact: Tumelo Doone

Contact number:

072 413 0878 or 079 931 6224

Address: 378C Simunye Street, Kwa-Mhlanga 1022

Email Address: Tumelodoone@yahoo.com

Tumelodoone@yahoo.com

Fanaye Business Enterprise

Fanaye Business Enterprise is a professional service provider in the transportation and plant hire business. Established in 2002, Fanaye Business Enterprise has vast experience in the relevant fields.

Our mission is to provide high quality and excellent services at a reasonably lower cost to broad based clients and to uphold the competitive standards.

Our core services include:

• Transportation of coal by road, using 34 tonne side tippers

• Supply of earth moving machinery, namely ADTs, front end loaders, graders, water bowsers, excavators and dozers

One of Fanaye’s most important aspects is putting safety first. We ensure that our employees are well orientated and educated with the useful equipment and machines to be utilised. Our monitoring systems are of high standards to make sure the safety aspects are adhered to.

For more info contact: 0822607616 / 0828961383

fanaye.online@gmail.com

The visionary behind TFD Capital Investments Pty Ltd is a young, vibrant man who defines himself as an entrepreneur and explorer. After qualifying as a Chartered Accountant (CA (SA)) he embarked on a journey of exploring the logistics industry, which was then the genesis of TFD Capital Investments Pty Ltd in South Africa. The company’s mission is striving to provide world class services to the clients by providing the highest standard of efficiency and reliability, and ensuring that all safety measures are applied. The company aims at addressing poverty and unemployment issues by employing local community members. TFD is currently based and operates in the Mpumalanga Province and employs 11 dedicated and hard-working individuals.

TFD is currently solely transporting coal from Palesa Mine to a number of Eskom Power stations, and we are operating seven trucks with the aim of growing the fleet and moving other commodities. We aim to grow the business by being active in other types of logistics like transportation of food, beverages and textiles to various destinations within and outside Mpumalanga.

Contact us

072

413 0878

A professional service provider in the Transportation and Plant Hire Business

Fanaye Business Enterprise has vast experience in the relevant fields.

Our mission is to provide high quality and excellent services at a reasonably lower cost to broad based clients and to uphold the competitive standards.

Our core services include:

• Transportation of coal by road, using 34 tonne side tippers

• Supply of earth moving machinery, namely: ADTs, front end loaders, graders, water bowsers, excavators and dozers

One of Fanaye’s most important aspects is putting safety first. We ensure that our employees are well orientated and educated with the useful equipment and machines to be utilised. Our monitoring systems are of high standards to make sure the safety aspects are adhered to.

Contact us 0822607616

Both undertakings will play an integral part in driving HCI Coal’s involvement in SA’s Just Energy Transition Partnership (JETP), as announced at COP26 in Glasgow, Scotland. Pledging net zero carbon emissions by 2050, the JETP seeks to address SA’s problematic status as the world’s 13th–biggest emitter of carbon by leveraging the finances of countries including the US, Germany, France and the UK, to help expedite its energy transition.

PROUDLY LOCAL

As a responsible corporate citizen, HCI Coal’s demonstrated concern for improving its environmental impact is complimented by a company-wide emphasis on social upliftment.

“It makes sense that people within the area where our business operates should benefit,” Terblanche states. “This is not just for those who are directly employed, but also their families and the communities as a whole.”

Mindset Mining Consultants

Mindset Mining Consultants is delighted with its involvement in the erection and commissioning of the air plant at HCI Coal’s Palesa mine. Having previously provided Palesa with project management services, Mindset is proud of its continued good relationship with the mine.

Mindset assisted Palesa in the daily management of the site, troubleshooting issues as they arose and keeping track of the project budget. Mindset assisted and managed the various contractors involved in bringing the air plant online and quality management of the final deliverables.

Mindset is excited to see the mine reap the benefits of this impressive technology.

www.mindsetmining.co.za

HCI Coal comprises 154 employees and 510 contractors at present, with a relatively young management team taking the helm. Across the board, there is an explicit focus on employing locally to contribute to the economic wellbeing of communities surrounding the Palesa mine.

Committed to Black Economic Empowerment (BEE), this is set in stone by the company’s social and labour plan (SLP) and reflected by HCI Coal’s tender processes, which reinforce its stance on ensuring that local black entrepreneurs are aware and benefit from the opportunities generated by its mining activities.

Mining operations

Plant operations

Palesa coal mine

“When you initially start a project, you are not sure whether you are going to be able to recruit employees locally with the necessary skills and experience,” says Terblanche, which is a particular issue in a remote rural location such as Palesa.

“However, I am proud to say that more than 80 percent of our employees are from the local communities, including our contractors.”

In addition, HCI Coal uses the services of almost 50 local transport companies who are contracted to transport the coal directly to the company’s customers.

“It really is an injection for the local economy. This makes our employees proud and in turn means that the community then supports our

• Full-service mining consulting firm

• Proven experience in providing technical advice & engineering solutions

• We provide on-site project management services to keep projects on track & in budget

• We can take your prospect from concept-level to an operating mine

• We conduct evaluations that include all aspects associated with the investigation, design, economic analysis & resulting investment decision-making for a mine – both greenfields and brownfields

success,” he surmises. Furthering this community support is HCI Coal’s emphasis on creating a sustainable pipeline of talent through myriad opportunities for training and development. From learnerships for artisans at its mines to internships for top performing graduates, the company is committed to developing and nurturing local talent found within its immediate vicinity.

CREATING A SUSTAINABLE BUSINESS

Moving into the years ahead, HCI Coal’s priorities are centred on continuing to create a sustainable business that looks beyond coal and works to reduce its environmental footprint.

“Our first key priority is to successfully commission and operate the FX plant in order to negotiate an extension of our current offtake agreement with Eskom or enter into a new agreement,” outlines Terblanche. “We also want to get some traction on our solar project over the course of the next 12 months.”

Simultaneously, HCI Coal will be keeping its eye on new ventures, evaluating upcoming mining projects whilst continuing to deliver to export markets and exploring other alternative markets domestically.

Regardless of these new pursuits and the changing face of global resources, HCI Coal remains steadfast in its commitments to prospecting for commodities while creating opportunities and investing in local communities.

“TO CREATE A SUSTAINABLE BUSINESS, WE NEED TO DIVERSIFY”

– PIETER TERBLANCHE, CO-CEO, HCI COAL