At Arnot, the No. 1 Seam, No. 2 Seam, No.4 Seam and No. 5 Coal Seams are present, however, only the No. 1 and No. 2 Coal Seams are considered economic at this point.

The No. 1 Seam is consistently developed in the western half of the Arnot Project area, while in the eastern portion, it only occurs as isolated patches. It is intersected at an average depth of more than 50m in the underground extents, rendering it not feasible for exploitation in these areas. It, however, occurs at shallower depths of at least 23m in the opencast areas and remains a good prospect in these resource areas. It is, however, patchily distributed.

The No. 2 Seam is site-specifically subdivided into Seam 2 Lower (“S2L”), Seam 2 Upper (“S2U”) and Seam 2A (“S2A”) marked by two intra-seam partings, namely parting P2 and P3, respectively. The S2L constitutes the majority of the coal resources in the Arnot area and consists of hard, dull to lustrous coal with several bright coal bands and occasional stone partings. The S2L is continuous across the Arnot Project. The depth to the top of the S2L depends largely on local surface topography and reaches a maximum depth of 80m along the eastern boundary of the project area, pinching and thinning out in the eastern parts of the mining section due to local, pre-Karoo basement palaeo-highs.

The No. 4 Seam occurs erratically across the lease area with an average thickness of 0.7m. The seam is often split by internal clastic partings into Seam 4 Lower (“S4L”) and Seam 4 Upper (“S4U”). The No. 4 Seam is overlain by interlaminated units of siltstone and shale with the No. 5 Seam sporadically developed in areas. Neither No. 4 Seam nor No. 5 Seam are included in the coal resource estimate.

A well-developed dolerite sill is present some 15m to 20m above the S2L in the topographically elevated areas in the south-eastern portion of the Arnot Project area. This sill is between 5m to 40m thick, with an average of c. 11m, and has resulted in devolatilisation and minor resource loss where the volatile matter dropped below 18%. Feeder dykes are expected to occur in the vicinity of the sill. A number of dolerite dykes are also known to have intruded the Karoo Supergroup succession in the area, with six dykes having been intersected in the underground workings to date. The dykes often lack magnetic signature and are not responsive to geophysical methods of detection.

Faults with displacement in excess of 2.5m are rare and to date only six have been encountered in the underground mine (Sambo and Van der Merwe, 2015). A high density of compactional structures (i.e. slips and faults), however, occurs in zones adjacent to pre Karoo palaeo-highs. Similar features are observed on the flanks of relatively large floor rolls, scour and dome structures. The aforementioned geological structures have an adverse effect on underground coal mine roof and strata stability as they manifest into roof and side falls, caving of the roof and more rarely in subsidence of the ground surface.

Arnot was contracted to supply coal to the nearby Eskom Arnot power station until 31 December 2015. This was achieved by extracting 2 seam lower (S2L) from two underground shafts, 8 and 10, using mechanised mining equipment (bord-and-pillar extraction) while Mooifontein opencast used conventional truck-and-shovel, roll- over mining method to extract S2L and 1 seam (S1). One beneficiation plant handles around 14% of the RoM and the mine is served by several good access roads, gravel and paved. The mining right area is 15 021.21 hectares and annual production in 2014 and 2015 was 1.44Mt and 1.40Mt respectively. Arnot has a mining right (MP325MR) that is executed and lapses December 2038.

Wescoal Processing is the primary coal processing facility. The plant was purchased from Muhanga in 2014 and is regularly upgraded to meet customers’ product quality and quantity requirements. The combined installed ROM treatment capacity is currently proven to be more than 200 000 tonnes a month.

The upgrades to the raw coal handling section enable more than 250 000 tonnes a month to be crushed. The complex consists of a crushing section and drum/cyclone and fines treatment plants that can produce a range of products to meet the demands of Eskom, other domestic consumers and the export market.

Wescoal’s strategy to diversify its income streams has placed the group in a better position to meet Eskom’s increased demand as well as to optimise supply into other domestic and export customers.