HCI subsidiary, HCI Khusela Coal (Pty) Ltd (“HKC”), has been granted mining authorisation by the Department of Minerals and Energy for two of its mining operations. HKC is 80% owned by HCI and 20% owned by Khusela Women Investments (Pty) Ltd.

The two new mines are named Palesa (formerly Loopspruit) and Mbali (formerly named Klippoortjie). HKC will invest approximately R300 million in the development of the two new mines, including the construction of two coal processing plants. Both mines are open cut strip mines with strip ratios well within industry norms. Mining operations commenced the first week of June 2008 with earth-moving activities to prepare for the opening of a box-cut on Mbali.
The Palesa mine already has a mining pit in place and mining activities will continue from there. The mining rights for both properties have been executed.

It is expected that coal will be supplied to customers from the end of July 2008. The coal processing plants are being constructed and commissioning is expected in October 2008.

Palesa will supply coal product into the domestic market and a coal supply agreement has been concluded with Eskom. The Mbali mine is located outside Ogies, and is a multi-product mine. For the export product HKC has secured coal supply agreements with international customers. The Mbali middlings product has been sold to Eskom under contract.

Total production from both mines, on an annualised basis at full production, will be about 4 million tons ROM. It is expected that the capacity will be fully operational by the calendar year end. The company`s third project, Nokuhle is underway. The bankable feasibility is being prepared and it is anticipated that
a mining right will be applied for in August. It is expected that this mine will also be a multi-product mine. HKC`s total in-situ tonnage for the three projects, detailed in the Competent Person`s Resource Statement from EPA (Pty) Limited, and in compliance with SAMREC are :

MINERAL RESOURCES as at 30th June 2008

—– 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

Mbali Coal Palesa Coal Ogiesfontein Total
Project Project Project
Proven 71
7 386 711 63 675 321 – 062 032
– – – –
Total 71
7 386 711 63 675 321 – 062 032

The in-situ tons stated in the mineral resources table are inclusive of the in-situ tons in the mineral reserve table.

The Competent Person qualifies as a Competent Person in terms of the Samrec Code and has agreed in writing that the information can be used in this announcement