Douglas-Middelburg Optimization Project (DMO)

The development of the Douglas-Middelburg Optimization Project, a Brownfields thermal coal project near Witbank, on which $400m will be spent to extend the life of the Douglas-Middelburg energy coal operation. This will result in a combination of the resources from the adjacent reserves of Douglas Colliery and Middelburg Mine, both of which are joint ventures with Xstrata. The project will use the lower-strip ratio areas available at Douglas to replace mined-out areas and high-strip ratio areas at Middelburg Mine. Underground operations and the adjacent process facilities at Douglas Colliery, which are nearing the end of their lives, will be closed. A new coal processing facility will replace the current facility and existing opencast equipment will replace the underground mine. The expected life-of-mine operations is to 2034. The capital expenditure for the first phase of the project will be in the order or $430-million, which is BHP Billiton's share. Estimated project value: R1.3 billion.