PRESENTATION ON LUBIMBI COALFIELD, by Peter Mutsinya

THE FOSSIL FUEL FOUNDATION
ZIMBABWE COAL INDABA
PRESENTATION ON LUBIMBI
COALFIELD AT THE ROSEBANK HOTEL,
JOHANNESBURG, SOUTH AFRICA ON
30 MARCH 2012
by
Eng. Peter Mutsinya
Technical Director
Liberation Mining (Pvt) Limited,

Demand(Mt/annum) 2007 2008 2009 2010 2011F 2012F
Western Europe 50 49 40 42 46 48
Eastern Europe 16 20 14 16 17 19
Brazil 11 12 10 11 14 15
Other 24 21 18 21 22 24
Japan 66 64 53 57 58 60
Korea 14 21 19 21 23 25
Taiwan 10 6 5 6 7 9
China 3 3 9 6 6 6
India 23 26 26 27 30 33
Totals 217 222 194 207 223 239

Supply (Mt/annum) 2007 2008 2009 2010 2011F 2012F
Australia HCC 84 84 83 91 97 103
Australia SSCC/PCI 54 51 46 49 53 53
Canada 25 25 21 24 25 26
USA 26 35 27 25 25 25
China 3 3 3 3 3 3
Russia 13 14 15 15 16 18
Poland 2 1 1 1 1 1
Indonesia 2 2 3 4 4 6
Mozambique 2 5
Other 8 8 6 6 6 7
Total Supply 217 223 205 218 232 247

COAL MINING IN SADC
Background: History, Current, Trends
SADC Picture: Coal
SADC Coal Production Trends 2005=100%
1600%
800%
400%
200%
100%
50%
25%
13%
6%
2005 2006 2007 2008 2009
Botswana
DRC
Malawi
Mocambique
South Africa
Swaziland
Tanzania
Zambia
Zimbabwe
SADC
The Majority of SADC
countries’ production has
been steady for the past five
years (2005-2009).
Mocambique’s production has
spiked up and Zambia’s
dropped drastically.

ZIM. HISTORICAL KNOWN COAL RESOURCES
(2003)
COAL DEPOSIT INSITU (million No. of Drill Holes
tonnes)
Mid-Zambezi
Hwange 1418 3 900
Chaba 103 150
Western area 952 26
Entuba 532 34
Lubimbi 21 083 550
Lusulu 1200 12
Sengwa 400 50
Lubu-Sebungu 83 5
Marowa 14 3
Sinamatella 96 6
Sub Total 24 881 4 304
Sabi-Limpopo
Sessami- Kaonga 1000 12
Bubi 60 13
Sabi 569 12
Tuli 115 5
Sub Total 1 744 42
GRAND TOTAL 26 625 4 346

Special Grant 4977 is situated in the Bulawayo
Mining District of Hankano & Gwayi farms with
extensions into Mazwa and Gundwane farms
respectively. The claim is bounded by the
Bulawayo/ Victoria Falls highway on the south,
the Gwayi river to the south west, west and north
west, the Shangani river to the north and north
east. It covers an area of approximately 16 545
hectares (see map on next slide).

• Approx. 7.850 billion tonnes of coal in situ is
estimated for Liberation Mining Coal Special
Grant No. 4977 which is 16,545 hectares in
extent and situated on the Hankano Coalfield
• It is estimated that about 30 to 40% of this coal
resource is opencastable and the rest can be
accessed from underground

Why
The Lubimbi
Coalfield?

Lubimbi Coalfield Area Comprises of Four (4) Major
Coalfields Known as follows:
1. The Dahlia/Gwaai Coalfield to the South –West of Gwayi
Business Centre
2. The Hankano Coalfield in the centre (Where Liberation
Coal Mining Company is Situated)
3. The Lubimbi Main to the North of Gwayi Business Centre
4. The Lubimbi East to the East of Lubimbi Business Centre

• It is estimated that the Lubimbi Coalfields hold
approximately 22 billion gross tonnes in situ [GTIS] when
the fourcoalfields areput together.
• This amounts to over 70% of the total Zimbabwe Known
CoalResources andCoalReserves.
• The Lubimbi Coalfield is therefore of great strategic and
economic importance Zimbabwe and the SADC region in
transforming their whole Energy,Fossil Fuel, Power and
Power Development Sectors

® Studies undertaken to date indicate that the Lubimbi
Coalfield presents vast opportunities and the future
potentialfor developing the entire value chain in the coalbased
energy sector of Zimbabwe. More particularly in
upstream coalmining; the hydrocarbons(oilandgas)and
power generation.
® Coal Gasification, middle stream coal beneficiation and
downstream coal resource transformation also offer
great opportunities for development of ahuge integrated
downstreamindustrialpark inthe Lubimbi coal area.

• The more than six Coal Concession holders conducting
studies at various levels of their projects should be
capable of moving the Lubimbi Coalfield from a coal
Research and Development Exploration Property which it
has remained for a very long time into an integrated
mega-projects for mine development, infrastructural
development andother value-add growthprojects.
• Logistical and marketing challenges being faced by the
coal Industry of Zimbabwe can start to be addressed as
the size of the mineral resource can attract real
investors and offer great potential for introduction of a
common solution-basedenergy integrated approach

COALFIELD
ESTIMATED INSITU
(Mt)
LUBIMBI 12600
HANKANO 7850
DAHLIA 2350

• Lack of Coal & CBM/Natural Gas Mineral Policy
• Environmental Issues (facilitate & aid projects)
• Mining Law & Legal Knowledge(35Acts: 60+ SIs:15 Ministries)
• Community Participation (key stakeholders can’t ignore)
• Corporate Social Responsibility (obligation)
• Resource Ownership (involvement & accountability)
• Shareholding 51/49% (comes with BOD responsibility)
• Resource Nationalism (mineral policy framework issue)
• Logistics & Marketing
• Energy & Power Poverty
• Resource Definition Project Funding
• Socio-Politico Issues

® Perceptions
® Attitude
® Social & Cultural Diversity
® Regional Integration
® Inter & Intra National Relations
® Geo-Politics
® Principles(e.g. Equator)
® Green House Effects
® Global Carbon Footprints
® Globalization & Internationalization (Global Village
Hype)

• Localisation
• Sustainability
• Logistics
• Value-Addition
• Operations Value Model
• Operating Model
• Investment Model (Financial Capability)
• Total Organizational Transformation (TOT)
• Communities
• Human Resources (Technical Capability)
• Knowledge Management
• NGOs

• Innovation
• Ideation
• Processes
• Needs Analysis
• Administrative & Operating Procedures
• Ownership Trust
• Governance Reporting Processes
• Critical Success Factors (Efficiency/Shareholder Value)
• Key Performance Indicators (Impact)
• Controlled Accounting Reporting
• Health Safety & Environmental Protection
• Quality Assurance (Impact on Markets)

The path we walked since 21 March 2010 when the Coal
Special Grant was issued and the
® Compliance Issues we handled
® Geological Exploration Undertaken
® Detailed Geological Survey conducted
® Detailed Mining Feasibility Study (DMFS) &
® Detailed Bankable Feasibility Study (DBFS) update and
current work-in-progress
® Corporate Social responsibility (CSR) issues

THE PROJECT FLOW PROCESS DIAGRAM WE USED TO GET
TO WHERE WE ARE TODAY IN 2012
Environment
Impact
Assessment,
CSR &
EMP
DRILLING SAMPLING COAL ANALYSIS
& PRODUCT
DEFINITION
DATA BASE
GEOPHYSICS
& BOREHOLE
LOGGING
INTERNATIONAL
LABORATORY
MINING
SOFTWARE
LOMP
(Min)20 YEARS
MINE DESIGN
& PLANNING
DATA
GEO MODEL
Detailed
Surveying
& SG
Beaconing

ó Localization of Project within Hankano Community
and Matabeleland North Province
ó As required in terms of the Environmental Mgt Act
ó Environmental Management Planning
ó Application Mining/Investment Licence
ó Detailed Acid Mine Drainage Study
ó Hydro-Geological Studies-SG the Gwayi-Shangani Dam
ó EIA and EMP to be completed & ready for submission
ó Rehabilitation, Restoration & Reclamation Planning
ó Mine Closure Planning

• Zambezi Water Project Co-Existence
• Gwayi-Shangani Dam & Project Co-Existence
• Gwayi-Shangani Dam-wall-32 km downstream
• Contaminated Water Sippage through Cracks
• Acid Mine Drainage Management
• Water Pollution –Project in the Valley
• Air Pollution –blasting, coal burning & dry processing
• Soil Neutralization for agricultural purposes
• Emissions –Processing Plants & Power Generation Plants
• Effluent -Coal Washing Plants & Coal to Liquid (CTL) &
Conversion Options
• Parks & Wildlife Conservation Projects Co-Existence
• Mine Flooding Dam Final heights (See next Slide)

LUBIMBI APPROXIMATE FLOODED
AREAS

® The following has beenachievedto date:
® Total distance surveyed(perimeter boundary-70km
® Total number of beacons constructed&completed-233
® Number of drilled boreholes surveyed-250
® Number of control points for satellite imagery
(DTM)marked-8
® Number of beaconspainted- 233

ó Define the Coal Seams
ó Structures in Target Area
ó Sample and come up with coal quality
ó Geological Modelling
ó Estimation of coal reserves
ó Define the Initial Mine Layout
ó Allow Detailed Mine Planning & Design (DMPD)
ó Life of Mine Planning (LOMP)
ó Detailed Bankable Feasibility Study (DBFS)

STAGE/PHA
SE
No. OF
BOREHOLE
S DRILLED
TOTAL
METRES ®
DRILLED
(M)
TOTAL
AREA
(HECTARES
)
ESTIMATED
INSITU
RESERVE
(TONNES)
1 (2010) 57 3957.25 850 +- 600 Mio
Inferred
11 (2011) 50 5835.29 15 000 +- 1,018 Mio
Indicated

STAGE
PHASE
No. OF
SAMPLES
WEIGHT OF
SAMPLES
(KG’S)
No. OF
BOREHOLE
RESULTS
RECEIVED
LABORATORY
ASSESSMENT
I (2010) 1281 N/A 10/57 Fair /Average
II (2011) n/a 4 568.8 33/50 Good/Considerabl
e

–GTIS : 1,018 million (t) Opencast able
–Inferred : 1,900 million (t) Opencastable
–SUB-TOTAL : 2,918 million (t) Opencastable
–Inferred : 6,249 million (t) Underground
–TOTAL : 9,167 million (t) O/CAST + U/G
–Potential :
N/A CBM/Natural Gas[Afpen’s exploration
programme established a potential reserve on the edge of the Hankano
Coalfield which is part of the Lubimbi]
Source: O. Thomson (1983) , Liberation Mining (2011)

® Geological Modelling of the first open pit is
work-in-progress and ongoing
® Waiting for part of the assay results to
complete the geo-modelling.
® Scoping/Conceptual Study completed
® Detailed Mining Feasibility Study (DMFS) will
continue leading into Detailed Bankable
Feasibility Document (DBFD)

® A preliminary draft of the mine planning parameters has
been completed detailing production tonnages per
annum and the Siting Of Works Plan done
® Zero-based budgeting and costing and initial mining
infrastructure requirements determination has been
done.
® Contract mining versus owner operator has also been
considered and both studies have been completed.
® Part of the drill hole assay data was made available
and work on Phase III Drilling will only progress once
all results have been received and correlated.

® Run of mine (ROM) projected at 4 million tonnes per
annum. This gives a life planning of +22years for the first
pit in the northern tip.
® Trial mining of first box cut anticipated in 2012 and coal
Production in 2013. (will flow from the successful
granting of the mining licence and raising funding for the
project)
® Subject to the availability of all laboratory assay results
from Phase II Diamond Drilling application for
converting the three year Exploration Property License
to a Coal Mining Company Property is expected to be
submitted for approval to the Mining Affairs Board in the
next coming three to four months.

• Objectives Were:
a. scoping/Concept Study
b. Profitable Mine
c. Conceptual Design for CHPP
d. 4 Mta ROM Coal
e. Local, Export & Thermal Markets
f. Power Station Middlings
g. LOMP minimum 20 years and
h. Three (3) products

• 4.0 Million tonnes per annum
• Three (3) coal products based on CVs and Ash Content
were made the basis for the Scoping/Conceptual Study
and fed into the database as follows:
1. Semi-Soft Coking Coal (Exports)
2. Power Station Coal (local)
3. Thermal Coal (local)

• Coal Production 4,000,000 mt/annum ROM
• Thermal Coal 2,000,000mt/annum (local)
• Semi-Coking Coal 800,000mt/annum (export)
• Power Station (Spot Price) US$30/t (2011)
• Coke US$280/t (2011)
• Mining &Processing Cost/t N/A
• Labour Complement (Estimated) 350 Emloyees
• Initial Capital Outlay 1 st &2 nd Year N/A
• Capital Outlay over LOMP N/A
• LifeOfMinePlanning(LOMP) 22years

® NPV US$125 million
® IRR 17%
® PBP 5.5 years
® Initial Capital Outlay n/a
® Total Capital over LOMP n/a
® ROM Coal Cost n/a
® Direct + Processing Cost n/a
® Life Of Mine Planning (LOMP 22 Years

Area Total LOM Year 1 Year 2
Pre-Stripping 30.6 21.7 8.9
Open Cast
Mining Capital 198.7 31.7 16.2
CHPP Capital 53.8 31.3 22.5
Engineering &
Infrastructure
Capital 18.5 11.7 6.6
Indirect Costs 67.8 42.4 25.5
Total 369.3 138.8 79.6

• Strategic Marketing Study Results Show:
• Zim Local Markets 2,000,000 t/annum
• Export Market 800,000 t/annum
• Negotiations on Off-Take Agreements ongoing
• ---------------------------------------------------------------
• Logistics Studies Show:
• Train/Locomotives Capex US$35,487,500
• Road 44km to Dete-Hwange 260,000t/month
• Operating Cost US$0.60/tonne

® Has assisted and financed the incorporation of
Ridge Security (Pvt) Limited, a company
wholly owned by former war veterans based
locally and gave them a long-term security
services contract renewable annually
® Has rehabilitated 15 km of the Gwayi-Lubimbi-
Lusulu gravel road

INSTITUTION # OF STUDENTS DISCIPLINE SEX STAGE/YEA
R
WOMEN’S
UNIVERSITY
1 SOCIOLOGY F 2ND
SCHOOL OF MINES 10 GEOLOGY(3) 2M,1F 2ND
MINING (3)
2M,1F
SURVEY (2)
METALLURGY(
2)
M
M

q
q
q
q
q
q
q
q
q
q
q
Coal Mine Development
Coke Production for Zim Local & Exports
Power Generation
Coal To Liquid (CTL) Technologies
Coal Bed Methane Gas & Coal Gasification
Infrastructure development
Procurement Equipment Supplies & Consumables
Technical Support Services
Products & Services
Skills and manpower development
Participation in the construction of the Gwayi/Shangani Dam &
the Zambezi Water Project

qRenewables (Alternate Energy)
qMine Mouth Power Plants (Forward Integration )
qCoal Based Fuels: Coal to Liquids (Product Diversification)
qCoal Based Fuels: Coal Gasification (Product Diversification)
LIBMINE CURRENT OTHER OPTIONS ON NEXT SLIDE

Renewables (Alternate Energy)
Alternate
Energy Sources
Forward
Integration
Product
Diversification
Capacity
Expansion
• Clean Development Mechanisms (CDM) is one of the mechanisms under the Kyoto Protocol that allows the
developing countries selling emission reduction from various projects to the developed countries.
• Due to decreasing oil exploitation activities in the country, Indonesia has been a net oil importer for the past
few years. Hence, through the revised energy policy, the government of Indonesia intends to adopt an
energy mix scenario which emphasizes the utilization of alternatives sources of energy, including renewable
energy, and also encourages energy efficiency measures
Mine mouth power plants (Forward Integration )
• PTBA has started the development of two mine-mouth power plants – the Banjarsari Power
Plant and the Banko Tengah Power Plant with coal consumption at 1.2 MT & 10-12MT, to be
ready in 2010. They are partnering with major energy firms.
• Adaro has started the development of two power plants (2x30 MW ) to be set up by MSW, to
support future power requirements, using their Wara Coal
Coal Based Fuels: Coal to Liquids (Product Diversification)
• Bumi Resources planned to build an 80,000 barrel/day CTL factory in South Sumatera. The
company was in discussion with South Africa's Sasol (Sasol), the world's top producer of
synthetic fuel, to convert coal or natural gas to liquid fuel without the generation of crude oil as
an intermediary product.
• Sasol has built a 34,000 bpd CTL plant in Qatar and is conducting a feasibility study to build 2
x 80,000 bpd CTL plants in China.
• There is significant potential for the uptake of CTL technology in major coal countries e.g.
Poland, the Czech Republic, USA and where industry is now starting to reconsider the
development of CTL processes.
Coal Based Fuels: Coal Gasification (Product Diversification)
• Indonesia government’s supports increase of coal utilization in energy mix
• There are many chemical plants (methanol, ammonia, urea fertilizer) that can use syngas produced from
coal via gasification as their main feedstock
• Coal gasification is capable of processing a wide range of coal qualities, which fits Indonesia’s spread of coal
resources and qualities

• Sustainable Coal Mine Development in the Lubimbi
Coalfields is possible once all stakeholders leverage their
resources in areas that will have measurable impact on
the basic needs of mining communities where they are
operating
• Long-term logistical & marketing solutions can only be
found once individual coal concessions come together en
bloc so that the coal reserve base begins to make business
sense for huge investors. The level of capital outlay
anticipated for the entire Lubimbi Coalfield over the next
ten to fifteen years is US$10.00 billion.
• Economies of scale can also be achieved in the Lubimbi
Coalfield because studies have show on several
occasions since 1980 that the size of the coalfield, the coal
quantity and quality can be developed economically
once the markets and logistical factors have been
adequately addressed by all key stakeholders

Global coal consumption is expected to almost
double by the year 2030. In conclusion
therefore, the presentation proposes that we
take advantage for such ahuge resource base
in Zimbabwe such as the Lubimbi Coalfield to
be able to get the competitive advantage that it
offers in Zimbabwe, the SADC Region and in
the Southern Hemisphere.

THANK YOU