Rio Tinto announces a coal resource of over 1 billion tonnes at Chapudi

Rio Tinto has further strengthened its presence in South Africa with the discovery of a open-pittable coal resource of 1.04 billion tonnes in the Limpopo Province. The coal is bituminous, and is suitable for generating electricity.

Where is the deposit

The discovery at Chapudi came through Rio Tinto’s coal exploration programme in the Limpopo (Soutpansberg) coal basin of South Africa. The exploration work has been conducted in conjunction with Rio Tinto’s BEE partner, Kwezi Mining. Exploration rights over the resource are held by two JV companies; Chapudi Coal PTY Ltd (Rio Tinto 70%) and Kwezi Mining Exploration PTY Ltd (Rio Tinto 49%).

Deposit Location

Rio Tinto and Kwezi are continuing with exploration activities for thermal and coking coal east of the Chapudi project.

The chief executive of Rio Tinto Energy & Minerals, Preston Chiaro, said: ” This is a significant find in an area that has previously been viewed as having little geological potential. The project’s potential to produce thermal coal for electricity generation comes at a time when South Africa needs to rapidly increase its generating capacity. In addition, the basin offers the opportunity to produce a range of products, from thermal to hard coking coal for the export markets. We are currently planning the next phase of the project by beginning our pre-feasibility studies.”

Chapudi Geology

The newly discovered Chapudi Resource lies within the Limpopo coal basin, in the northern part of South Africa. The coal is hosted in sediments of the Karoo Group, similar to other coalfields in Southern Africa. The coal seams at Chapudi occur in mudstones that can be correlated to the Upper Ecca formations of the Main Karoo basin.

Rio Tinto and Kwezi Mining began exploring for coal in the area in 2003, when the 1st borehole was drilled on the farm Chapudi. This borehole intersected significant thicknesses of coal. Since then, the Rio Tinto-Kwezi JV has drilled about 90 boreholes in the project area, and conducted geophysical surveys to aid the geological interpretation. A total of 12,400 metres have been drilled to date.

The central part of the project now has sufficient drilling coverage to define a measured and indicated resource. The rest of the project area has been drilled to inferred resource status.

In-situ Resource (SAMREC/JORC)

The resource at Chapudi has been generated to comply with both SAMREC and JORC code guidelines. The tabulated figures below include the Seam 6 in-situ resource, as confined by Rio Tinto’s granted tenure.

Resource Category
Western Zone (Mt)
Central Zone (Mt)
Eastern Zone (Mt)
Total Chapudi (Mt)

Measured

90

90

Indicated

220

220

Inferred
410

320
730

All Categories
410
310
320
1,040

Note: Blank cells mean no resource in this category in the relevant zone as the entire resource in the zone is in different category(ies).

Preliminary studies indicate that up to 40 per cent of the coal may be recoverable for utilisation in a power station.

Significant potential for further resources exists in the area. Some of the potential occurs on ground that already belongs to the JV (and can be incorporated into the Chapudi resource by further drilling), whilst other potential is on ground currently under lease application.

Future Direction

The coal has been demonstrated through test work to be suitable for combustion to generate electricity.

Rio Tinto and Kwezi Mining are currently investigating the feasibility and economics of establishing a mining operation to feed coal into a power station. They are currently engaging with Eskom, and a number of Independent power providers to this effect.

CP statement

The information in this report that relates to Mineral Resources is based on information compiled by Steen Kristensen, who is a member of the Australian Institute of Mining and Metallurgy. Steen is a full-time employee of Rio Tinto Energy and has experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity which they have undertaken to qualify as a Competent Persons as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves’. Steen Kristensen consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

About Rio Tinto

Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.

Rio Tinto’s business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.

Forward-Looking Statements

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