February 2015
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Inyanda has a modern fully functioning coal handling and preparation (DMS) plant with feed capacity of c.2.4Mtpa. The plant was designed and constructed by Dowding, Reynard and Associates
(DRA) Mineral Projects in 2008. The facility is relatively new and in excellent condition. The plant has been well maintained to exceptionally high standards by Exxaro and has associated ancillary infrastructure, which is also still in immaculate condition.
Inyanda has its own private rail siding. The private rail siding is one of TFR’s preferred sidings as it loads 100 jumbo wagons in four hours. The siding is also located on TFR’s main line and can export via Richard Bay Coal Terminal or Maputo Terminal in Mozambique. Inyanda thus has the logistics infrastructure required to export or sell coal in the domestic market.
Inyanda has a new order mining right and the colliery has also been issued with an integrated water use licence.
3,000
2,500
2,000
1,500
1,000
500
-
2009 2010 2011
Run of mine
2012 2013
2

Exxaro Resources Limited (“Exxaro”) is launching the potential sale of the assets and liabilities of its
Inyanda Coal Mine (“Inyanda”) through a formal disposal process (“the Disposal Process”).
Inyanda has been operating since 2008 and consists of two coal reserves, namely Kalbasfontein and
Pegasus South. The reserves will be depleted by the end of 2015. The Disposal Process will therefore mainly include the surface rights, plant infrastructure and a private rail siding.
If your company or a consortium is interested in participating in the Disposal Process, please submit the information specified in section 5 on page 6 of this document to project.stallion@exxaro.com
by no later than 17:00 (South African Time) , Friday, 20 March 2015.
After submitting expressions of interests, Exxaro will furnish selected potential bidders with a process letter for the Disposal Process and a Non-Disclosure Agreement (“NDA”). Interested parties need to sign the NDA and return it to Exxaro by the date that will be specified in the process letter.
Despite the coal reserves nearing depletion, Exxaro firmly believes that the established integrated beneficiation and logistical infrastructure, which complies to the high standards of Exxaro, holds significant value for interested parties compared to establishing new beneficiation and infrastructure facilities.
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The Inyanda mine is situated approximately 14km north of eMalahleni (previously known as Witbank) in the Mpumalanga province of South Africa. See Figure 1 for location on the map.
Figure 1: Location of Inyanda
R544
N
Hartebeestspruit
Leeupoort
Aandrus
R555
Hlalanikahle
Ferrobank
Klarinet Riverview AH
Kwa Guqa
N4
Ackerville
R104
EMALAHLENI
Modelpark
N4
RBCT rail li ne
R544
R547
R555
No rth
Ra nd
Ro ad
N12
Tasbetpark
W at er m ey er
S t
Dixon AH
Klippan
East
Klippan
West
0 1 2 3 4 5
Kilometres
Sources: Esri, HERE, DeLorme, USGS, Intermap, increment P Corp, NRCAN, Esri Japan, METI, Esri China (Hong
Kong), Esri (Thailand), TomTom, MapmyIndia, © OpenStreetMap contributors, and the GIS User Community.
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The Kalbasfontein coal reserve will be depleted in early 2015 and mining of the Pegasus South reserve is anticipated to commence during 2015, whereupon it would also be depleted towards the end of 2015. Mining operations throughout the life of mine included continuous rehabilitation resulting in minimal closure and rehabilitation liabilities. Exxaro will rehabilitate the two pits
(Kalbasfontein and Pegasus South) after completion of mining.
Inyanda’s coal handling and preparation plant is a modern facility with a ROM throughput capacity of c.2.4Mtpa. The plant was designed and constructed by Dowding Reynard and Associates (“DRA”)
Mineral Projects and fully commissioned in 2008. The mine has maintained the infrastructure in excellent condition.
The plant has a grizzly at the tip feed bin and as a result the maximum allowable boulders from the pit are 800x500mm. The front-end section consists of a double-stage closed crush-and-screening circuit, which ensures that a maximum top size of 50mm is fed to the Dense-Medium-Separation
(“DMS”) circuits. There is adequate stockpile capacity in the front-end section of the plant.
The beneficiation plant consists of two dense medium modules and a fines circuit. Each dense medium module utilises cyclones for beneficiation and has its own medium circuit. The fines circuit utilises triple-start spirals for beneficiation. The plant has a thickener for the recovery of process water from the slimes. The plant also has a large co-disposal facility. In order to further improve yield and water recovery, the plant has been installed with a belt filter press. The plant also has product sizing facilities, and thus peas and small nuts can also be produced for the domestic market.
The plant is located near a main tarred public road and is only 14km from eMalahleni town. The plant has all necessary modern ancillary infrastructure (i.e. control room, office buildings, workshops, water and electrical infrastructure).
Inyanda contracts the mining to a third party who owns the mining equipment which are therefore excluded from the transaction. The movable assets owned by Inyanda will form part of the transaction as well as the surface rights and immovable properties.
Inyanda uses a third party to load and haul its product coal from the beneficiation plant to its private rail siding and to load coal into train wagons. Product loading and hauling equipment are therefore excluded from the transaction.
Inyanda has its private rail siding, Blackhill, for transport of coal to its export markets. The siding is located 30km from the plant. The private rail siding is one of TFR’s preferred sidings as it loads
100 jumbo wagons in four hours. The siding is ideally situated and can export via Richard Bay Coal
Terminal (“RBCT”) or the Maputo Terminal in Mozambique.
Inyanda has a new order mining right in terms of the Mineral and Petroleum Resources Development
Act no. 28 of 2002 (“MPRDA”), which was granted in 2006. Inyanda has also been issued with an integrated water use licence and its environmental management plan has been approved by the
Department of Mineral Resources.
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Inyanda produced mainly A-grade coal (6,000 kcal/kg), which was exported by Exxaro through RBCT.
Exxaro could consider entering into negotiations with shortlisted parties for the potential facilitation of exports. The potential facilitation of exports by Exxaro will be discussed at a later stage in the
Disposal Process.
The summarised operational information in this document has been extracted from Exxaro’s financial reporting system.
Table 1: Inyanda historic operational information
ROM – (kt)
2008 2009 2010 2011 2012 2013
2031 2308 2267 2447 2292 2364
In order to participate in the Disposal Process, interested parties are required to:
Expressions of interest should be forwarded to Exxaro at the following e-mail address: project.stallion@exxaro.com
. The expressions of interest should reach Exxaro by no later than
17:00 (South African time), Friday, 20 March 2015.
Exxaro will evaluate all expressions of interest received in terms of its pre-qualification criteria as they may deem fit and reserve the right to reject any or all expressions of interests submitted and to deal with any one or more interested parties to the exclusion of others, without giving reasons therefore. Parties who will progress to the next phase of the Disposal Process will be notified by Exxaro. Exxaro will also inform the unsuccessful interested parties.
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“DMS”
“kcal/kg”
“kt”
“ktpa”
“LOM”
“MPRDA”
“Mt”
“Mtpa”
“RBCT”
“ROM”
“t”
All communication must be directed to Exxaro’s Carbon Business Development and Strategy department. For the duration of this Disposal Process, no contact may be made with Exxaro’s directors, shareholders, employees, customers, other advisers, consultants, banks or suppliers without the prior written consent of Exxaro’s Carbon Business Development and Strategy department. Exxaro reserves the right to cease all discussions and immediately demand the return of all confidential information and documentation from any party that Exxaro reasonably considers to have breached this instruction, or breached the spirit of this requirement.
Enquiries regarding this document and process should be directed to the personnel below.
We look forward to your response to this opportunity.
Neo Kgatuke
+27 12 307 4876 neo.kgatuke@exxaro.com
Leon groenewald
+ 27 12 307 4329 leon.groenewald@exxaro.com
Riaan Smit
+ 27 12 307 4156 riaan.smit@exxaro.com
Throughout this document, unless the context indicates otherwise, the words in the column on the left below shall have the meaning stated opposite them in the column on the right.
dense medium separation; thousand calories per kilogramme; thousand tonnes; thousand tonnes per annum; life of mine;
Mineral and Petroleum Resources Development Act no. 28 of 2002; million tonnes; million tonnes per annum;
Richards Bay Coal Terminal; run of mine; and metric tonnes.
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Exxaro shall not accept any liability of whatsoever nature arising from or in connection with the use and/or reliance of the information contained in this document and/or any additional information furnished to the interested parties which includes any omissions and/or errors contained therein.
The purpose of the information in this document is to assist interested parties in making their own evaluation and does not purport to contain all the information that interested parties may require.
Nothing contained in this document shall constitute or be deemed to constitute or be construed as constituting any representation and/or warranty whatsoever in respect of Exxaro.
Exxaro, its subsidiaries, shareholders, directors and/or employees make no representation nor warranty as to the accuracy or completeness of the information contained in this document and the aforesaid parties will not incur any liability for any omissions and/or errors in or any loss that may result from the use of such information and Exxaro is not obliged to update the information contained in this document or any other document.
It remains the responsibility of any person who obtains possession of this document, in whatever manner, to comply with all applicable legislation in terms of its legal entitlements and authorities in order to respond to or act as a participant in the Disposal Process as outlined herein. Any person who acts upon this document as a participant shall be deemed to have warranted in favour of
Exxaro that it is legally entitled to respond and/or act upon this document and has complied with all applicable laws.
The only contractual obligations binding on and enforceable against Exxaro in respect of the Disposal
Process shall arise in terms of the sale and purchase agreement after execution by all the parties thereto and when it has become unconditional. Exxaro is not liable for any costs incurred by any person arising from or incidental to any investigations undertaken in respect of Inyanda and/or the negotiation, preparation, execution and/or implementation of any agreement relating thereto.
Exxaro reserves the right in its sole discretion and without furnishing reasons therefore, to vary, amend and/or terminate the Disposal Process at any time; terminate discussions with any or all interested parties; reject any or all proposals and offers submitted by any or all interested parties and negotiate and/or enter into an agreement with any person, to the exclusion of any other person, in respect of the Disposal Process.
Any party who responds to this document accepts that the provisions contained herein will be construed in accordance with the laws of the Republic of South Africa and subjects itself to the jurisdiction of the High Court of South Africa (South Gauteng Local Division) for any proceedings arising out of or in relation to this document and the Disposal Process provided that nothing in the foregoing will restrict Exxaro from institution proceedings arising out of or in relation to this document and the Disposal Process in any court of competent jurisdiction.
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[ON INTERESTED PARTY’S LETTERHEAD]
Exxaro Resources Limited
Exxaro Corporate Centre
C/O Roger Dyason Rd & Voortrekker Rd
Pretoria West
0183
Attention: Neo Kgatuke/Riaan Smit/Leon Groenewald
Date:
Dear Sirs
POTENTIAL ACQUISITION OF INYANDA FROM EXXARO
All capitalised terms used in this letter, but not defined herein, shall bear such meanings as are ascribed to such terms in the Project Stallion introductory information document.
We (“the Interested Party”) refer to the Project Stallion document issued by Exxaro, relating to the Disposal
Process.
The Interested Party hereby requests to be admitted to the Disposal Process and agrees to abide by the
Disposal Process, as it may be amended by Exxaro and/or Inyanda from time to time; to be bound by the terms of the confidentiality and non-disclosure agreement; undertakes to comply with its obligations in terms of the process relating to the Disposal Process and to abide by all decisions made by Exxaro and with respect to the
Disposal Process.
The Interested Party hereby appoints:
[Name]
[Address]
[Phone/fax numbers]
[E-mail address] as its representative for the purpose of the Disposal Process.
Please see the attached appendices for information relating to the Interested Party:
• Appendix A: Detailed profile of the Interested Party’s company or bidding consortium (including current activities, coal mining experience, current shareholders and current sustainability initiatives);
• Appendix B: Summary of Interested Party’s Black Economic Empowerment credentials;
• Appendix C: Copy of the latest audited annual financial statements of the Interested Party; and
• Appendix D: Description of the quantum and source of the funds available to the Interested Party for the purpose of the Disposal Process.
Yours sincerely,
Name:
Authorised signature:
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