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Anglo American Plc - Mondi To Proceed With R2 Billion (us$220 Million) Expansion
Release Date: 25/03/2003 11:00:01 Code(s): AGL
ANGLO AMERICAN PLC - Mondi to proceed with R2 billion (US$220 million) expansion
at Richards Bay mill
ANGLO AMERICAN PLC
JSE Code: AGL
ISIN Code: GB0004901517
(The "Company")
Mondi to proceed with
R2 billion (US$220 million) expansion at Richards Bay mill
Anglo American plc announces that its wholly owned Forest Products subsidiary,
Mondi South Africa, is to proceed with a R2 billion (US$220 million) expansion
and modernisation of its Richards Bay mill in KwaZulu-Natal in South Africa,
increasing capacity for bleached eucalyptus pulp production by some 40%.
The mill"s total capacity, which includes both eucalyptus pulp and whitetop
kraftliner, will increase from the current 575,000 tonnes to 720,000 tonnes and
the additional production will be available from early in 2005. Incremental
revenues from the expansion are projected at some R500 million per year in
today"s terms, with the additional pulp planned mostly for export to Europe,
including to Mondi Europe"s Neusiedler paper mill.
Before proceeding with construction, formal approval is required from the
KwaZulu-Natal department of Agriculture and Environment Affairs, following the
formal environmental impact assessment (EIA). It is expected that this approval
will be received during April.
ENDS
Contact details:
London
Media Relations:
Kate Aindow
+44 (0) 20 7698 8619
Johannesburg
Investor Relations:
Anne Dunn
+27 11 638 4730
Media Relations:
Marion Dixon
+27 11 638 3001
Background notes
The modernisation will result in material improvements to the environmental
performance of the mill - air quality, water consumption and solid waste
generated. A new system will be installed to capture and burn as fuel the
malodorous (non-toxic) gases which arise from the timber digestion process.
Unit water consumption will be reduced by some 42%, from 55 cubic metres per ton
to 32 cubic metres per ton, as a result of new technology applied in the washing
and bleaching stages. The absolute reduction in water consumption, even at the
increased capacity, will thus be 25 000 cubic metres per day. Ash disposal
quantities will be halved.
While there is no alternative but to import some of the major equipment items,
about R800 million of the project cost will be spent in South Africa, with
obvious spin-offs for local businesses and their employees. Mondi will use the
project as an opportunity to expand its procurement from black-owned businesses
and to increase its training and development of historically disadvantaged South
Africans.
The project is significant in its beneficiation of timber resources, with an
additional 500 000 tons per year of eucalyptus pulpwood required for the
increased capacity. Much of this timber will in due course be sourced from
empowerment forestry company, SiyaQhubeka Forests. Its timber has the
attraction, as with Mondi"s other plantations, of Forest Stewardship Council
(FSC) certification. Mondi also continues to support its Khulanathi timber
grower assistance scheme which currently has 2 854 participants registered and 5
900 ha planted. During 2002, 120 000 tons of timber were purchased from
Khulanathi growers and this will increase to about 170 000 tons this year.
Mondi South Africa forms part of Anglo Forest Products, a division of Anglo
American plc. Anglo American plc is one of the world"s largest mining and
natural resource groups. With its subsidiaries, joint ventures and associates,
it is a global leader in gold, platinum group metals and diamonds, with
significant interests in coal, base and ferrous metals, industrial minerals and
forest products. The group is geographically diverse, with operations and
developments in Africa, Europe, South and North America and Australia.
(www.angloamerican.co.uk).
Anglo Forest Products" worldwide turnover and operating profits for 2002 were
$4,8 billion and $649 million respectively, with Mondi South Africa representing
33% of the operating profits.
SiyaQhubeka Forests in northern KwaZulu-Natal arose from the sale of Safcol
plantations to the SiyaQhubeka consortium. The shareholders are Mondi South
Africa, its black empowerment partner, Imbokodvo Lemabalabala Holdings and
entities representing the South African government.
Forest Stewardship Council (FSC) certification encompasses a regular independent
assessment of an organisation"s forest management practices, to measure
compliance with a range of internationally recognised social, economic and
environmental standards.
