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ARI
ARIM
ARI - African Rainbow Minerals Limited - Khumani 10mtpa Iron Ore Mine completed
on time and within budget
African Rainbow Minerals Limited
(Incorporated in the Republic of South Africa)
(Registration number 1933/004580/06)
JSE Share code: ARI
ISIN: ZAE000054045
("ARM")
Khumani 10mtpa Iron Ore Mine completed on time and within budget
Approval of an additional R5.5 billion capital expenditure for completion of the
Khumani 6 mtpa Expansion Project bringing total capacity to 16mtpa
Assmang Limited ("Assmang"), which is jointly controlled by African Rainbow
Minerals ("ARM") and Assore Limited ("Assore"), is pleased to announce that:
- the 10 million tonne per annum ("mtpa") Khumani Iron Ore Mine
("Khumani") has been completed on time and within budget; and
- the ARM and Assore Board of Directors have approved additional capital
expenditure ("capex") of R5.5 billion for the completion of the Khumani
Expansion Project, to increase Khumani`s capacity from the current
level of 10 mtpa to 16 mtpa.
The estimated total capex for the proposed Khumani Expansion Project is R6.7
billion based on the feasibility study completed in June 2009, which compares
favourably to the previous estimate in September 2008 of R7.2 billion.
Expenditure of R1.2 billion has already been approved in September 2008 for
early works and long lead items, hence the outstanding capital requirement for
the completion of the Khumani Expansion Project comes to R5.5 billion.
Of the 6 mtpa expansion, 4 mtpa is intended for the export market and 2 mtpa for
the domestic market. Assmang has received a commitment from Transnet to extend
the current Iron Ore Export allocation on the Sishen/Saldanha export channel
from 10 mtpa to 14 mtpa, increasing Assmang`s export capacity accordingly. This
dovetails with the Iron Ore channel expansion from 47 mtpa to 60 mtpa.
Assmang will fund the completion of the Khumani Expansion Project utilizing
existing cash resources, operational cashflows and existing borrowing
facilities. The Khumani Expansion Project has robust returns and the high grade
iron ore resource, with an excellent stripping ratio of 1.7 over the life of
mining operations, ensures competitive mining costs.
ENDS
For more information please contact:
Monique Swartz
Corporate Development and Head of Investor Relations
Office: +27 11 779 1507
Mobile: +27(0) 83 4112881
E-mail: monique.swartz@arm.co.za
Jan Steenkamp
Chief Executive : ARM Ferrous
Office: +27 82 492 6948
E-mail: jan.steenkamp@arm.co.za
Johannesburg
12 August 2009
Issued by sponsor: Deutsche Securities (SA) (Proprietary) Limited
Date: 12/08/2009 14:11:03 Produced by the JSE SENS Department.
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