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Kumba Resources Limited
ISIN: ZAE000034310
JSE Share code: KMB
KUMBA RESOURCES LIMITED AND EYESIZWE COAL LIMITED
JOINT NEWS RELEASE
Metals and mining company Kumba Resources Limited ("Kumba") and black-owned coal
and energy company Eyesizwe Coal (Pty) Limited ("Eyesizwe") today announced that
they have signed an agreement to jointly develop and operate the Kalbasfontein
project near Witbank in Mpumalanga province.
The joint venture agreement is the culmination of a process initiated by the two
companies in 2001 to explore synergies and coal partnership opportunities.
Total capital expenditure for the proposed open pit colliery is about R280
million, and the operation is planned to produce 1Mtpa of high-grade steam coal
for the export market when it reaches maximum production capacity.
Development of Kalbasfontein is scheduled to coincide with the Phase V expansion
of the South Dunes Coal Terminal Company (SDCT) at the Richards Bay Coal
Terminal which makes provision for additional export tonnages. Go-ahead for the
project is subject to the SDCT expansion and an 18-month construction and ramp-
up phase will start once the SDCT expansion is announced.
The project is a 50:50 joint venture and will have an estimated 10-year lifespan
and a competitive cost structure that will ensure a low-cost operation.
To sustain the export capacity of 1Mtpa through SDCT thereafter, Eyesizwe will
commission a reserve equivalent in value to Kalbasfontein to be jointly
developed by the companies in the future.
"Kumba expects the agreement with Eyesizwe to lead to a constructive working
relationship between the two companies. We are confident that Eyesizwe has the
management and operational skills, along with a complementary corporate culture,
to enable us to work together successfully," said Ernst Venter, general manager
of Kumba Coal, Kumba"s coal division.
"Eyesizwe views the joint venture as a milestone in realising the South African
government"s aim of transforming the mining industry and the redistribution of
resources. The joint venture offers synergies that will prove to be mutually
beneficial in building and strengthening our coal interests. We acknowledge
Kumba"s commitment in ensuring that black economic empowerment becomes a reality
in the industry," said Sipho Nkosi, Eyesizwe chief executive officer.
The companies share the view that the South African mining industry needs to
focus on value-growth investment propositions to adequately achieve sustainable
levels of black economic empowerment as proposed by the Mining Charter. Value-
growth propositions enable empowerment players to enter the industry by
acquiring stakes in underlying assets such as new projects.
Kumba currently produces about 18,2Mtpa of coal at open pit collieries at
Grootegeluk near Ellisras in Limpopo province and at Leeuwpan in Mpumalanga
province, together with an underground colliery at Tshikondeni in Limpopo
province.
Eyesizwe produced 23Mtpa in 2002 and has forecast production of 25Mtpa of coal
this year at open pit and underground collieries situated at Witbank, Kriel,
Middelburg and Belfast in Mpumalanga province.
ends
Note
Kumba Resources Limited, one of the largest South African-based mining companies
listed on the JSE Securities Exchange, is a focused metals and mining company
with a diverse commodity portfolio consisting of iron ore, heavy minerals, coal,
base metals and industrial minerals. www.kumbaresources.com
Eyesizwe Coal (Pty) Limited is the fourth largest coal producer in South Africa.
It is a black-owned and controlled coal and energy company with broad-based
empowerment credentials.
5 May 2003
For media relations enquiries, please contact:
Pat Mdoda
General Manager, Corporate Affairs: Kumba Resources
Tel: 012 - 307-4553
Mobile: 083 609 1204
Sipho Nkosi
Chief Executive Officer: Eyesizwe Coal (Pty) Limited
Tel: 011 - 688-7664
Mobile: 083 625 7703
For investor relations enquiries, please contact:
Trevor Arran
General Manager, Investor Relations: Kumba Resources
Tel: 012 - 307-3292
Mobile: 083 609 1444
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