| Wed 2 Aug 2006, 9:13 | | Full ramp-up of the Leeuwpan jig plant, at a capit |
|
Full ramp-up of the Leeuwpan jig plant, at a capital cost of R97 million, was
achieved in the second quarter of 2006. The plant increases the annual supply to
Eskom by approximately 1Mt of power station coal with potential for a further
increase of 400ktpa.
Commissioning of the R323 million new coal beneficiation module (GG6) at
Grootegeluk mine is planned for the second half of 2006. The plant will treat
and beneficiate coal previously sent untreated to the adjacent Matimba power
station and will supply 530ktpa to the coking plants being refurbished by Mittal
Steel at its Newcastle facility.
Construction of the 1Mtpa export-focused Inyanda mine near Witbank, which is a
50:50 joint venture between Kumba and Eyesizwe Coal to produce high quality
thermal coal, will be aligned with the Richards Bay Coal Terminal (RBCT) Phase V
expansion schedule and finalisation of the environmental impact assessment and
lease agreement with the National Ports Authority.
The Phase V expansion in which Kumba is a 12,5% shareholder, will provide Kumba
Coal with a 2,5Mtpa export allocation which will be filled by production from
the new Inyanda coal mine as well as from expanded output at Kumba"s Leeuwpan
and Grootegeluk mines.
Kumba board approval has been obtained for producing char for the ferroalloy
industry from the Grootegeluk mine. Construction is envisaged to commence in
August 2006. Production from the char plant will start at 80ktpa and is expected
to ramp up to 160ktpa by 2008. The revised capital estimate for the project is
R234 million.
A feasibility study to investigate the viability of constructing a market coke
plant is expected to be completed by the end of 2006. If viable, the plant will
produce high quality market coke from semi soft coking coal produced at
Grootegeluk mine.
A technical feasibility study to potentially supply 7,3Mtpa of power station
coal to a new 2100MW power station, adjacent to the Matimba power station, was
completed in June 2006. Commercial agreements are being negotiated and if
approved by Kumba and Eskom, construction could commence in 2008 with production
from 2010.
Kumba and Anglo Coal Australia concluded a joint venture agreement to undertake
a feasibility study on the high-grade coking coal resource on the adjacent
properties of Moranbah South and Grosvenor South in Queensland, Australia.
Exploration of the potential resources is currently being conducted and a pre-
feasibility study for an initial phase underground mine is expected to be
completed by year-end.
Mineral Sands
The Kumba board has approved the construction of the Fairbreeze mine, south of
Ticor SA"s existing Hillendale mine in KwaZulu-Natal, subject to the obtaining
of a new mining right for the Fairbreeze C Extension area and the applicable
environmental authorisations. Production is planned to commence in 2008.
Drilling on the Ranobe and Monombo-Marombe exploration areas comprising the
Toliara Sands project in south-western Madagascar is indicating resources
capable of supplying long-term ilmenite feedstock to the Ticor SA furnaces. It
is envisaged that the feasibility study will be completed in 2007 after which a
development decision will be made.
Ticor Australia acquired the Dongara project in March 2003 as part of its
takeover of Magnetic Minerals. Located 90 km south of Geraldton in Western
Australia, the 20Mt reserve containing 10% heavy minerals will provide
supplementary feedstock for Tiwest"s mineral separation plant and synthetic
rutile facility. A bankable feasibility study is being conducted and if viable,
production is expected to start at the end of 2009.
Base Metals
Following the recent expansion of the Chifeng zinc refinery located in Chifeng,
Inner Mongolia, People"s Republic of China to a capacity of 50ktpa, smelter
capacity will be further increased to 110ktpa. Kumba will participate in the
expansion by swapping a portion of its existing shareholding into the new
expansion. Kumba will retain a significant interest in the expanded operation.
AlloyStreamTM
An exclusive co-operation agreement has been concluded with Samancor Limited to
establish AlloyStreamTM in the ferromanganese sector. The parties are
undertaking a feasibility study for the construction of a 200ktpa high carbon
ferromanganese project with the first phase of the project, if viable, expected
to come on stream in 2009.
TRANSFORMATION TRANSACTION
Considerable progress has been made on the implementation of the empowerment
transaction announced on 13 October 2005. Most of the legal agreements and
funding arrangements have been finalised and the company has commenced with the
process of obtaining regulatory approvals.
It is expected that the transaction will be implemented in the fourth quarter of
2006.
OUTLOOK
Strong demand for the group"s portfolio of commodities at favourable price
levels, except for titanium feedstock, and a currency at weaker levels, are
expected to benefit the results of the group for the next six months.
Iron ore will benefit from the recent price increase for the full ensuing six
months while the continued strong demand for coal at higher prices, and the
significant recovery in the zinc metal price, should have a positive impact on
the operating results for these commodities. A surplus in the supply of high-
grade titanium feedstock and the repairs and modifications to furnace 1 at Ticor
SA will negatively affect the results of the mineral sands operations while
sales of zircon, which remain in short supply, and stable offtake of pigment
from Ticor Australia, will make a positive contribution.
INTERIM DIVIDEND
The directors have declared an interim dividend (number 8) of 180 cents per
share in respect of the 2006 interim period. The dividend has been declared in
South African currency and is payable to shareholders recorded in the books of
the company at close of business on 8 September 2006.
In compliance with the electronic settlement system of JSE Limited, the
following dates are applicable:
Last date to trade cum dividend Friday, 1 September 2006
Shares trade ex dividend Monday, 4 September 2006
Record date Friday, 8 September 2006
Payment date Monday, 11 September 2006
Share certificates may not be dematerialised or rematerialised between 4
September 2006 and 8 September 2006, both days inclusive.
On behalf of the Board
AJ Morgan Dr CJ Fauconnier DJ van Staden
(Chairman) (Chief Executive) (Executive Director, Finance)
1 August 2006
Kumba Resources Limited
Registration number 2000/011076/06
JSE Share code KMB
ADR CODE KBREY
ISIN CODE ZAE 000034310
Registered office Kumba Resources Limited
Roger Dyason Road
Pretoria West, 0002
TEL NO +27 12 307 5000
FAX NO +27 12 307 4080
Transfer secretaries
Computershare Investor Services 2044 (Pty) Limited
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Directors
AJ Morgan (Chairman),
Dr CJ Fauconnier (Chief Executive),
PM Baum, BE Davison, JJ Geldenhuys, MJ Kilbride*,
Dr D Konar, CF Meintjes*, WA Nairn, SA Nkosi, CML Savage,
Dr NS Segal, F Titi, DJ van Staden*, PL Zim. *Executive
Company Secretary MS Viljoen
Corporate Affairs and Investor Relations Trevor Arran +27 12 307 3292
Sponsor J.P. Morgan Equities Limited +27 11 507 0300
If you have any queries regarding your shareholding in
Kumba Resources, please contact the Transfer Secretaries
at +27 11 370 5000
This report is available at the Kumba Resources website at:
http://www.kumbaresources.com
Harnessing the Power of the Earth
Date: 02/08/2006 07:01:17 AM Produced by the JSE SENS Department
