| Tue 30 Mar 2004, 15:57 | | Avmin to produce superalloys for Rolls-Royce |
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Avmin to produce superalloys for Rolls-Royce
Anglovaal Mining Limited
(Registration number 1933/004580/06)
(Incorporated in the Republic of South Africa)
(Share codes: JSE: AIN
LSE: AGM
ISIN:ZAE000017141
("Avmin)
Avmin to produce superalloys for Rolls-Royce
Avmin Alloys ("Avalloy"), a division of Avmin, will produce a variety of high
performance alloys, known as superalloys, for the aerospace division of Rolls-
Royce plc ("Rolls-Royce").
The agreement, which is being finalised, relates to an initial three-year supply
of superalloys to the Rolls-Royce casting facilities in the United Kingdom,
China and Italy. Subject to successful completion of the commercial agreement
and demonstration of quality, reliability, and delivery standards, the scope
will increase to 250 tons of cast stick per annum. The Avalloy plant"s full
capacity is 4 000 tons. Depending on market conditions and Avalloy"s success in
entering other markets, full capacity may be reached within a three-year period.
It remains the intention of both Avalloy and Rolls-Royce to extend this
agreement beyond a three-year term and that Avalloy will become a long-term
preferred supplier to Rolls-Royce.
These superalloys, which are largely nickel-based, retain their strength at high
temperatures and are therefore ideal for jet engines, which operate with greater
efficiency at higher temperatures.
The Avmin board felt it was essential to seek a strategic alliance before
proceeding with the Avalloy project. By forging a technical and marketing
association with Rolls-Royce, the board"s criteria was met, and a decision to
proceed with the Avalloy project was made.
Avmin started construction of the Avalloy facility at the beginning of 2004 and
progress has been good. The Avalloy plant, which will cost an estimated R110
million to build and is located between Johannesburg and Pretoria at the NECSA
facilities at the Pelindaba site near Hartebeespoort dam, will produce its first
alloy in the second half of this calendar year. Avalloy will directly and
indirectly create nearly 100 employment opportunities. Avmin started its
investigations into the production of superalloys some years back as it produces
two of the core mineral elements of superalloys, namely nickel and cobalt (both
from Avmin"s Nkomati operation). In addition, South Africa is a net exporter of
nickel, which is derived as a by-product from the platinum group metals refining
process.
While the proposed agreement covers the supply of alloys to Rolls-Royce in cast
`stick" form, significant opportunity also exists for Avalloy to supply wrought
products also used in an aerospace engine, as well as in other industrial and
electrical applications. Avalloy"s plan is to enter the cast `stick" market
and, once successful, produce alloy in wrought form using existing equipment
owned by Avalloy as well as other facilities available in South Africa, such as
forging equipment.
Avmin chairman Rick Menell commented: "Avalloy will be South Africa"s first,
major, producer of superalloys and represents a significant investment in down-
stream beneficiation by Avmin. The proposed agreement with Rolls-Royce develops
some exposure for Avmin, and South Africa, to the aerospace industry. The
Department of Trade and Industry has, as one of its major growth objectives, the
participation of South Africa and South African companies in the world-wide
aerospace industry: dti"s aim is to achieve similar success to that of the
automotive industry."
Commenting on the announcement, Ralph Murphy, Rolls-Royce"s director Middle East
& African Affairs, said: "We are happy to say that the groups involved have a
shared vision of contributing to the prosperity of South Africa. We have
negotiated a commercial agreement to buy cast `stick" and assist Avmin as they
embark on this ground-breaking initiative for South Africa. We have the
operational knowledge, technology and products, to support Avmin in obtaining
accreditation and in securing demand as they look to supply new international
markets as well as increased skills and employment opportunities for South
Africans."
Pretoria, Tuesday, 30 March 2004
Enquiries:
Anglovaal Mining Limited
Tel: +27 11 634 0333
Rick Menell, Chairman
Ebrahim Takolia, Investor Relations
+ 27 83 291 3384
Date: 30/03/2004 03:15:09 PM Produced by the JSE SENS Department
