CEO Today Africa Awards

SOUTH AFRICA www.ceotodaymagazine.com 72 CEO Today Africa Awards 2018 ROWAN KARSTEL CEO of Buffalo Coal Buffalo Coal two years ago environmental red flags were identified. The company is working hard to address these issues to become fully environmental compliant. The rehab and closure fund were also addressed and now compliant with DMR legislation. CREATING SUSTAINABILITY Rowan’s approach has always been holistic and to look at the whole value chain and to see how the company can generate a sustainable business. A lot of technical work was done on resource and reserve statements to understand the asset better and life of mine models were optimised to increase NPV value add. A lot of work was done on process cost models to understand the value drivers in the business. Coal is a narrow margin business and the company needs to know what levers to pull to make money in this very tough market. NEW BUSINESS STRATEGY Buffalo Coal is busy with an anthracite development footprint over the next few years. The current Aviemore reserves will be depleted Q3 201202. The current Avie operation is cut off from the western reserves by a geological discontinuity. To increase the life of mine of Aviemore the plan is to build a North Adit on the North-Western part of the Aviemore mine to extend the life of mine by 13 years. As an interim measure Buffalo plans to open the Old Balgray minewhile the North adit is being build The North Adit bankable feasibility study was recently completed and the plan is to take the funding process internal and to look for IDC funding going forward. The water use licence was submitted Q3 2017 and approval is expected Q1 2019. The capital cost of the North adit is R335 million and the construction time 18 months. The pan is to start with two drill and blast section and then 3 years later add to more sections. Buffalo is currently busy with a pre-feasibility study on the Old Balgray anthracite mine. The plan is to start building infrastructure Q4 2019 and be operational Q3 2020. The studies show the reserve can accommodate two drill and blast sections and the life of mine is 6 years. Rowan Karstel is the CEO of Buffalo Coal, a TSX and JSE-listed coal producer with operations in Kwa-Zulu Natal, South Africa. Buffalo Coal is a high-quality metallurgical coal producer with operations close to Dundee, Kwa-Zulu Natal. The operating mine Aviemore, has substantial coal resources, and the Company supplies anthracite and calcine into both domestic and export markets. The thermal mine, Magdalena, was recently put on care and maintenance due to very difficult geological conditions and rising cost base. In 2010, Forbes & Manhattan Coal acquired the Magdalena and Aviemore mines through the acquisition of Slater Coal, a South African company (subsequently renamed Forbes Coal and then Buffalo Coal Dundee). Between 2013 and 2015, Resource Capital Fund, a resource focused, US based private equity fund, provided a USD29 million convertible loan facility to Forbes & Manhattan Coal, which was renamed and rebranded as Buffalo Coal in 2014. OPERATIONS Buffalo Coal Dundee’s head office is located in the town of Dundee, KwaZulu Natal, South Africa on a site known as “Coalfields”. The mine offices, one of the Company’s two processing plants and the Company’s rail siding are located at Coalfields. The Aviemore underground mine has an estimated mineable measured 35.35 million tonnes of in situ coal and production capacity of 45,500 tonnes of anthracite coal per month. The Aviemore product is processed at the Coalfields processing plant. The process plant at Magdalena is used to wash buy-in thermal coal from local junior operations. Toll washing options are also investigated going forward. HSEC Health and safety are one key values for management and a lot of time and effort were put into approving the safety KPI’s of Buffalo Coal. A big focus area is behaviour-based safety and initiatives like visible felt leadership (VFL’s) are driven by management. Secondly leading indicators are monitored and closely followed by the HSEC team. When Rowan started with