DWA - ORWRDP - Technical Workshop

Mogalakwena Regional Raw Water Scheme(MRRWS)

21 Feb 2013

Ossie Rossouw

Victor Couto

Bertus Bierman

 

Flag Boshielo Dam

Witbank Dam

Loskop Dam

140

De Hoop Dam165

Steelpoort

27

165

138

133

Mooihoek

12

31

78

Mogalakwena

Polokwane

Phase 2C Mines

Existing LWUA South

Sekhukhune

5

• Demand• Available Water

2

LWUA

2A

2C

12

3859

LWUAMines (new)Social (new)

LWUAMines (new)

39

90

Note: Already allocated in Flag

Boshielo

Note: Already allocated in

Flag Boshielo49

77Note:

Already allocated

in Flag Boshielo

10

2B

2D

ORWRDP PH2 – SCHEME BALANCE

DWA Data Yield Analysis Feb. 2011 coincide with DWA

Recon Study, March 2012

13 Ml/d currently available in the existing Lebalelo system from

Havercroft for Mooihoek purification plant

 

Flag Boshielo Dam

Witbank Dam

Loskop Dam

140

De Hoop Dam165

Steelpoort

27

165

138

133

Mooihoek

12

31

78

Mogalakwena

Polokwane

Phase 2C Mines

Existing LWUA South

Sekhukhune

5

• Demand• Available Water

COST EFFECTIVE SOLUTION - PHASE 2B

3

LWUA

2A

2C

12

3859

LWUAMines (new)Social (new)

LWUAMines (new)

39

90Note: Already

allocated in Flag Boshielo

49

77Note:

Already allocated

in Flag Boshielo

10

2B

2D

MOGALAKWENA PIPELINE

• LWUA application for extension of area of jurisdiction

• Phase 2B extended beyond Pruissen to Sekhuruwe

• LWUA can construct as one contract with significant savings

• LWUA mine members are willing to provide significant portion of capacity for Mogalakwena Municipality free of charge

Sekuruwe

Note: Already allocated in Flag

Boshielo

 

Flag Boshielo Dam

Witbank Dam

Loskop Dam

140

De Hoop Dam165

Steelpoort

27

165

138

133

Mooihoek

12

31

78

Mogalakwena

Polokwane

Phase 2C Mines

Existing LWUA South

Sekhukhune

5

• Demand• Available Water

COST EFFECTIVE SOLUTION - OPTIMIZATION & UPGRADING OF LWUA INFRASTRUCTURE

4

LWUA

2A

2C

12

3859

LWUAMines (new)Social (new)

LWUAMines (new)

39

Note: 60 – 100 Ml/d AMD already included in river balance

Note: Fig 9.7 Upper Olifants River surplus – 110 Ml/d (40x106mᵌ)

Note: Fig 9.13 Surplus high growth – 82 Ml/d (30x106mᵌ)

90

Note: Already allocated in Flag

Boshielo

49

77Note: Already

allocated in Flag Boshielo

10

2B

2D

Sekuruwe OPTIMIZATION OF LWUA EXISTING INFRASTRUCTURE

• The existing LWUA pipeline from Havercroft can support all the social and mining demands in the Phases 2E and 2D areas up until 2021

• 2021 - 2025 augment 12 Ml/d (4x106 m3/a) from the De Hoop Dam side by reverse pumping through the existing LWUA pipeline up until 2025

• 2030 Demand: 28.4 Ml/d (10x106

m3/a) will need to be augmented from De Hoop Dam by 2024 with the Phase 2D pipeline or 12.5 km upgrade of the existing LWUA pipeline (35 Ml/d (13x106 m3/a))

Havercroft Weir

  ORWRDP PH2 – PoE AGREEMENTS

5

• Accept recon study – resource/yield• 2C – by TCTA - review line size for revised yield • 2D – not required now. 13 Ml/d of social water available

now– LWUA can implement appropriate upgrade of existing

LWUA infrastructure when required (2025)– Aligned to current LWUA infrastructure and associated

changes/upgrades– No risk or contribution from DWA (member agreement)

• 2B – to proceed

  MRRWS (2B+)

6

120Ml/d R2.4bn

(2B+ 2011 scope - excl contingency) Old

2B Scope

2B+ Proposed

Scope

  EXPECTED MEMBERSHIP

7

• “Industrial members” - possibly 5 to 8 new members:– Anglo American Platinum Limited– Akanani Mining (Proprietary) Limited– Tameng Mining and Exploration (Pty) Limited– Lesego Platinum Mining Limited– Platreef Resources (Pty) Limited– Polokwane Iron Ore Company (Proprietary) Limited– Messina Platinum Mines Limited– Ironveld (Pty) Limited– Minmetals First Chrome Mine (Pty) Limited

• “Ordinary members” - possibly 2 members:– Respective Municipalities

  MRRWS - SCOPE

8

• MRRWS Scope – Historical - TCTA 2B based on ~77km pipeline delivering 60Ml/d

between Flag Boshielo and Pruissen– Historical - 2011 LWUA concept assessment based on ~118km

pipelines delivering 120Ml/d between Flag Boshielo, Pruissen and Sekuruwe (R2.4bn in 2011 terms indicative estimate)

– Current – forecast to include ~195km of pipelines delivering 140Ml/d scheme between Flag Boshielo, Pruissen, Sekuruwe to Akanani and associated mining tee offs

– Layout (map)

• Bulk Potable Water– Not currently included above scope. LWUA willing to discuss the

implementation as separate project funded by government– LWUA willing to support the appointed water services authority in

operational readiness set up

  WATER REQUIREMENTS IN THE MRRWS AREA

9

Requirement between 120Ml/d

and 150Ml/d – Propose 140Ml/d

Mining:~78Ml/d

Social:~62Ml/d

(39Ml/d Mog Municipality,

11Ml/d Bakenberg and 12Ml/d Agenang)

  MRRWS – SCOPE OPTIONS ASSESSMENT

10

• Require life cycle cost trade offs - Capex and Opex:– Member take off points– Potable water take off points– Storage capacity and points– Power supply trade offs – pump points, member power supply

points and alternate power supply points– Pipeline geotechnical data– Land negotiations– 140Ml/d design - allows for future growth requirements (20 years)

  MRRWS – FUNDING

11

• Mining members can facilitate implementation of cost efficient projects. Using LWUA, risk of alternative funding cost impacts and capacity issues mitigated

• Capped the governments capital contribution on raw water for potable/social - minimizes financial risk to government

• LWUA overhead very low• Funding options:

– Capital contribution:• Members contribute their full capital component upfront

(internally or externally funded) or• Members provide guarantee to LWUA for their full capital

component and fund on a 3 or 6 month basis• LWUA borrow on open market (IDC, IFC, WB, other) using

member take off and capital guarantees– Take off agreement

  MRRWS – CAPEX ASSESSMENT

12

• Capex and cash flow assessment requires scope to be better defined and assessed:– Finalize scheme membership – Finalize scheme capacity– Scope and do trade offs incl cost (capex/opex) and fund modelling– Select preferred option– Do design and final costing– Obtain final member approval– Run funding options in parallel

  MRRWS – PROPOSED CAPEX MODEL

13

• Capital cost• Aligned to the current LWUA Constitution and Membership

Agreement (incl member voting rights)• The parties will need to agree to an equitable capital contribution

based on capacity and point of supply and the associated scope/deliverables

• Members accepted that a social component of raw water intended for potable water, be funded as follows:– Mining members: 58% (35/60 l/c/d) and– Government: 42% (25/60 l/c/d) – Applies to the capital cost for the section between Flag

Boshielo Dam to Pruissen. Opex to be covered by the domestic users

• Beyond Pruissen no allocation agreements have been reached

  MRRWS – COST MODEL

14

• Operating Cost• Aligned to the current LWUA Constitution and Agreement• Opex (O&M) constitutes fixed and variable costs:

– Fixed costs:• Working capital• Personnel cost• Consultant fees

– Variable costs:• Raw water cost• Electricity costs according to demand• Maintenance costs and• Personnel costs associated with overtime

• The Olifants River regional tariff principals are to be defined by DWA in conjunction with LWUA/JWF and other stakeholders asap – risk mitigation

  PROPOSED PROGRAMME / DELIVERY STRUCTURE

15

• LWUA PM and Procurement processes - adapted to suit member requirements

  CURRENT SCHEDULE

16

• Proposed compressed (Optimistic) schedule with a parallel PFS/FS considered - key milestone dates:

– Complete the CS in Q3 2013 and review/approval/funding Q4 2013

– Conduct a PFS/FS for completion in Q1 2015 and review, approval and funding in Q3 2015

– Run legislative requirements (EIA, etc.) between Q3 2014 and Q3 2015 and

– 24 month construction period allowing first water to be available in Q4 2017

• Currently 3 months late due to delayed approval of area of operation

• Optimistic Schedule – Q4 2017

  KEY PROGRAMME CONCERNS

17

• Approval by DWA of the implementing agency – time• Alignment (members) – scope, time and cost• Reviews and approvals (members) - time• Funding (members) – time and cost• Legislative requirements (EIA, servitudes, etc) - time

  POSSIBLE SCHEDULE RISK MITIGATIONS AND FURTHER OPPORTUNITIES

18

• Approve implementing agent immediately - risk• Agree on demand/scope - risk• Sharing of existing survey, design and environmental information -

opportunity• Improved authority (government) turn around times – EIA, borrow pit,

servitudes, etc - opportunity• Improved member review, approval and funding turn around times:

– Industrial and Ordinary members - opportunity • Option to proceed with study using government funding (part R500m –

apportioned contribution to scheme) - opportunity• Run funding model assessment in parallel with upfront study work -

opportunity• Option to skip concept study and move into PFS (opportunity)

however first need:– Defined scope (140Ml/d and possible growth)– Define trade off options to be assessed– Get member commitment

 

19

Project Lifecycle Time Influence

FEL 1 – Business Case• Overall• Each Programme• Study Work Plan/Project Execution Plan and Charter for Options

FEL 3 – Single option detailed assessment• Each Programme & Project• PEP and Charter for Selected Option

BEST PRACTICE PROJECT MANAGEMENT

FEL 2 – Option assessment• Each Programme & Project• SWP/PEP and Charter for Selected Option

  CASH FLOW

20• Based on current Optimistic schedule and 6 month member rolling funding

  MRRWS RISKS

21

  DWA CAPACITY BUILDING

22

• LWUA willing to assist DWA with capacity building• Need to better understand DWA requirements for skills

development• Propose that DWA second staff to the programme and LWUA

provide training as agreed between the parties• DWA cover cost of DWA secondees• Opt for an EPC model with LWUA conducting the Management • LWUA (members) determine the selection process for EPC and

suppliers

  MRRWS – WAY FORWARD

23

• Obtain approval on extension to area of operation• Obtain historical data/information not previously shared• Commitment and funding for front end loading (studies)• Set up project steering committee• Recruit owners team members• Define DWA capacity building needs and process• Secure support consulting services• Update the Concept study• Review and approve the updated Concept study• Define and agree funding models• Proceed with Pre-feasibility Study/Feasibility Study• Review and approve the Pre-feasibility Study/Feasibility Study (incl

funding vehicles) • Approval and funding for execution • Design, procure, fabricate, construct and commission

  QUESTIONS

24