| Thu 31 Jul 2008, 8:06 | | KIO - Kumba Iron Ore Limited - Kumba To Invest R8.5 Billion In New Sishen South |
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KIO
KIO
KIO - Kumba Iron Ore Limited - Kumba To Invest R8.5 Billion In New Sishen South
Mine
Kumba Iron Ore Limited
A member of the Anglo American plc group
(Incorporated in the Republic of South Africa)
(Registration number 2005/015852/06)
JSE Share code: KIO
ISIN: ZAE000085346
KUMBA TO INVEST R8.5 BILLION IN NEW SISHEN SOUTH MINE
Kumba Iron Ore Limited ("Kumba") is pleased to announce the approval of an
R8.5bn investment in the new Sishen South mine.
Sishen South mine is located 80km south of the Sishen mine, near Postmasburg in
the Northern Cape. The new mine is scheduled to start production in the first
half of 2012, ramping up to full capacity of 9Mtpa in 2013.
It will have in excess of 20 years life and produce Direct Shipping Ore ("DSO")
with product qualities of 64% Fe lump and 63.5% Fe fine ore for the export
market. The ore will be transported on the main Sishen-Saldanha rail line to the
port of Saldanha Bay via a rail link to be built from Sishen South mine.
Chris Griffith, CEO of Kumba, said:
"This is another exciting achievement for Kumba, and one that demonstrates our
commitment to deliver on a strong project pipeline. The development forms part
of Kumba`s expansion strategy to grow Iron Ore Export Channel ("IOEC") volumes
to 44Mtpa by 2013. Including current domestic production of 9Mtpa, this
increases Kumba`s total production to well over 50Mtpa. The project pipeline
remains robust with a potential to deliver 70 Mtpa by 2015.
This milestone has been made possible by the recent granting of Sishen South`s
new order mining rights, the issuing of its Integrated Water Use Licence, and
the positive conclusion to the negotiations with Transnet regarding the
additional capacity on the Sishen-Saldanha iron ore export channel. Eskom has
also committed to honour the supply contract for electricity to the Sishen South
mine.
An experienced project team has been secured and we have ensured that the people
and skills deployed in the Sishen Expansion Project ("SEP") were retained for
the development of the Sishen South mine. Orders have also been placed on long
lead equipment, which means that we are in a strong position to ramp up swiftly
to full capacity."
Approximately 750 people will be employed by the mine, with a further 2000 jobs
created at the peak of the construction phase. Indirect job creation is
estimated to be in the region of 4000 jobs. The mine will have a positive impact
on the economy of the Northern Cape.
Kumba is committed to its high standards of environmental responsibility and
safety in the development of this mine. An Environmental Impact Assessment,
Environmental Management Plan and Social and Labour Plan were submitted to and
accepted by the Department of Minerals and Energy. This will result in the
immediate implementation of the local economic development projects as agreed to
with key stakeholders.
Kumba expects the iron ore market to remain attractive for some time and
customers are very excited about Sishen South coming on line. Kumba is
delivering this additional capacity into a market of favourable iron ore prices
and strong demand.
For further information please contact:
Tebello Chabana
Tel.: +27 (0)12 683 7067
+27 (0)82 920 9229
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 31/07/2008 08:05:59 Produced by the JSE SENS Department.
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