HCI auxiliary, HCI Khusela Coal (Pty) Ltd ("HKC"), has been allowed mining authorisation by the Department of Minerals and Energy for two of its mining operations. HKC is 80% claimed by HCI and 20% possessed by Khusela Women Investments (Pty) Ltd.

The two new mines are named Palesa (in the past Loopspruit) and Mbali (once in the past named Klippoortjie). HKC will put roughly R300 million in the improvement of the two new mines, including the development of two coal handling plants.

Both mines are open cut strip mines with strip proportions well inside industry standards. Mining operations started the primary week of June 2008 with earth-moving exercises to get ready for the opening of a case cut on Mbali.

It is normal that coal will be provided to clients from the finish of July 2008. The coal preparing plants are being built and authorizing is normal in October 2008.

For the fare item HKC has secured coal supply concurrences with global clients. The Mbali middlings item has been sold to Eskom under contract.

Mineral Resources as at 30th June 2008

IN-SITU TONS
—– Mbali Coal Palesa Coal Ogiesfontein Total
Project Project Project
Measured 89
8 759 067 81 140 279 – 899 346
Indicated 52
– – 52 296 335 296 335
Inferred 1
1 541 426 – – 541 426
Total 143 737
10 300 493 81 140 279 52 296 335 107

MINERAL RESERVES as at 30th June 2008

IN-SITU TONS
Mbali Coal Palesa Coal Ogiesfontein Total
Project Project Project
Proven 71
7 386 711 63 675 321 – 062 032
Probable
– – – –
Total 71
7 386 711 63 675 321 – 062 032