Grootegeluk – living up to its name: Part 1

2022-06-13T14:38:14+00:00 July 1st, 2022|Cover story, Mine Excursion|

Grootegeluk is the world’s largest integrated coal beneficiation complex operating from a single open pit, offering mineable reserves to Exxaro Resources Ltd. and employment to the Waterberg community for more than 30 years to come, thus living up to the meaning of its name as well as Exxaro’s purpose to power better lives, writes Sharyn Macnamara.

Image credit: Sharyn Macnamara, African Mining

Image credit: Sharyn Macnamara, African Mining

Operations overview

Tommie Richards, manager for Planning and Optimisation at Grootegeluk Mine took African Mining on a tour of this open cast mine situated 20km from Lephalale in South Africa’s Limpopo province while letting us in on the plans for its future.

The importance of this operation lies in the fact that this mega complex holds 50% of South Africa’s remaining coal reserves, and 80% of Exxaro’s coal reserves. Grootegeluk is therefore Exxaro’s largest supplier of thermal coal to Eskom and metallurgical coal to Arcelor Mittal (Mittal) in South Africa. Notwithstanding that, Grootegeluk supplies the coal that contributes to over 25% of South Africa’s electricity provision.

At first glance, the magnitude of this operation is depicted in its sheer size.  The pit itself is 4km in length and 3kms wide with 13 benches going 120m deep and stretching over 1200ha. This conventional truck and shovel operation employs 3 500 permanent employees and produces a total of between 28-30Mt per annum of saleable coal – made up of semi-soft coking coal, thermal coal and metallurgical coal supplied to a combination of domestic and global markets.

The output of this operation is even more astounding. In terms of an existing contract with Eskom, the power station coal produced here comprises 25Mt of this annual production and is transported directly to Eskom’s Matimba and Medupi power stations on an impressive 7km conveyor belt system. An additional 1,3Mtpa of metallurgical coal is sold domestically to the metal industry and others on short-term contracts by Grootegeluk and the bulk of 1,2Mtpa of semi-soft coking coal is railed directly to Mittal under a long-term supply agreement, while approximately 1.5Mtpa of semi-soft coking coal and thermal coal is exported to Richards Bay Coal Terminal or sold domestically. There are plans to ramp up this export produce to 3 million tons in future.

In terms of Grootegeluk output, the total ex-pit tons amount to 90 million tons per annum. Of this, ROM (Run of Mine) constitutes 60Mtpa and over/interburden waste amounts to 30Mtpa, which is brought back from over 10 plants in the complex, running at 7 600 tons per hour to feed the backfill area. The backfill at the operation creates a closed loop in that rehabilitation takes place simultaneously to mining as the discard is brought back from the plants. The first level of the backfill is interburden, the next levels are created from plant discard, and this is sealed with overburden.

The mine has a total of 10 plants and began with the building of Grootegeluk 1 (GG1), followed by GG 2, 3, 4, 5 and 6, which has just been converted to a double stage plant, followed by GG7,
8 and 10, while a hold was put on the building of GG9 to optimise the portfolio.

In 2018 Exxaro pledged an investment of R20-billion to help rejuvenate the South African Economy and drive robust socio-economic development in South Africa at the South African Investment Conference (or SAIC). Over R10-billion of this investment has since been spent at the Grootegeluk Complex on projects such as the GG6 Expansion Project, a Rapid Load Out Station and Discard in Pit Project Backfill – the Thabametsi coal IPP has not been approved and hence has not been developed. This shows the importance of the Grootegeluk complex to Exxaro in its stable of assets.

Richards notes that the growth journey at Grootegeluk has been nothing short of incredible over the past 10 years, having experienced this growth personally while based at this mine for over twenty years. “When the mine was started, it only supplied Matimba with PSC, and we have doubled that with supply to Medupi too. On the SSCC front, we have put together the double stage plant at GG6 and our metallurgical coal supply has also doubled since. This complex has supplied a great impetus to the surrounding areas based on the employment created by the recent construction and growth, but what is more important is how we aim to now sustain this benefit in the future.” The Exxaro strategy for this complex going forward therefore is vital to optimise the output at the complex and to maintain this trajectory of growth for all.

The Early Value Coal Strategy

Despite the fact that this is a carbon mine, its overarching strategy is driven by the company ethos which focuses on responsible, sustainable mining and development using innovative technology, while understanding the importance of and planning for the end goal of carbon neutrality, and finally a net zero carbon environment within a Just Transition. The Exxaro strategy going forward therefore is of vital importance to manage this Just Transition from a coal focused company to a diversified resources company with a purpose to power better lives.

“We always want to stretch our business to the full over the longer term and this is what we call the Northstar principle in our strategy,” says Richards. “The Grootegeluk vision is to deliver 29,2 million safe tons of coal to Eskom, with 7.1 million tons in high value product (HVP) and to continue our high value strategy ramping up to exporting 4 million tons, unlocking our value to deliver 8% year on year growth.” He explains that to do this, the current rail constraints and Eskom potential must be unlocked, and until then the company will sweat the operation’s assets to develop capacity and deliver the highest profit per ton in a constrained environment, whilst fast tracking the decarbonisation strategy to drive responsibility & sustainability through mining in support of Exxaro’s 2050 carbon neutrality emissions target. “Despite the current constrained environment, we are growing at 6% year on year. Once the TFR and Eskom constraints are unlocked however, the 8% will be achievable,” he says.

The ‘How’

Richards shared 6 strategic drivers over a timeline from 2021 to 2023 and beyond which would drive the North Star goal. Optimising the portfolio at Grootegeluk and pursuing an optimal product mix were drives completed in 2021, while sweating the assets is a focus for 2023, namely, securing continuity and maximising throughput. Beyond 2023, driving responsibility and sustainability, together with a shift to diversify to alternative revenue streams would be the order of the day.

Optimise the portfolio

Richards says that optimising the complex took place in 2021 when Grootegeluk disposed of assets not directly required to support the LOM, such as the divestment in Thabametsi and the halting of the GG9 project. More productive additional areas were explored such as the holding of Turfvlakte as a runaway panel and the additional maintenance to upkeep GG4 and 5.

Pursuing the optimal product mix

He notes that Exxaro leveraged advanced analytics in 2021 to continuously drive a high-value strategy to augment the uncertainty in the global thermal coal market. Using market insight, Grootegeluk continuously optimises its product mix to meet the market need, building-in production flexibility to align with this need. “The advantage that Grootegeluk has, lies in its size. We’ve got scale and we’ve got the economies that we can run, to make sure that we run at the lowest cost. In addition to this we have a vast range of coal products that we can deliver to market,” says Richards.

He adds, “The focus has been on maximising the high value products such as the SSCC and Metallurgical coal, and we will continue this strategy for as long as possible, making sure that we are the lowest cost supplier to Eskom and the HVP market to gain market share, supported by an additional effort to extend train capacity to sustain increased export volumes.”

Securing Continuity

“The current focus for GG involves ensuring we secure continuity as the most reliable supplier to Eskom and other domestic customers at a competitive price,” says Richards. “We plan to do this by leveraging Digital@Exxaro initiatives to minimise unplanned disruptions to our value chain while protecting the safety and health of our workers.”

Maximising throughput

Continually optimising the value chain to enable the sweating of the current assets to 36.3Mt, consisting of 29.2Mt PSC and 7.1Mt HVP, involving once again the leveraging of digital and automation solutions to increase efficiency and effectiveness and to continue pit optimisation removing current plant, dispatch, and train capacity bottlenecks will ultimately maximise throughput.

Beyond 2023

“Minimising our carbon footprint and reliance on external energy sources, while maximising our societal contribution is paramount for us. This includes creating alternative energy generation capacity to support GG energy requirements, such as renewable energy projects, while investigating waste, emission reduction and water conservation. We will continue to leverage our core capabilities to drive economic and social development for our host communities too.

“Finally Shifting to alternative revenue streams will be a drive going forward,” says Richards. Starting to augment coal revenue with adjacent revenue streams to create new job opportunities will be vital, such as commercialising carbon allotropes, by-products and waste. Leveraging the land footprint for alternative revenue streams and cost optimisation, and elevating enabling capabilities into services provided to third parties, will be a focus too,” says Richards.

Grootegeluk has indeed lived up to its name. Exxaro has taken its people with on this journey to success which has brought both ‘luck’ and ‘happiness’ through the economic stability it has brought to the Waterberg. Its success in driving the economy in the Waterberg community for the past 40 years bears testament to its name.

See our Grootegeluk – living up to its name: Part 2 in next months issue where we look at the Digital@Exxaro initiatives pulled through at Grootegeluk to sweat the asset in a safe, cost-effective and most environmentally sustainable way.