KUMBA RESOURCES LIMITED - KUMBA TO CONDUCT PRE-FEASIBILITY STUDY ON SENEGAL IRON
ORE PROJECT
KUMBA RESOURCES LIMITED
JSE SHARE CODE: KMB
ISIN: ZAE000034310
KUMBA RESOURCES LIMITED - NEWS RELEASE
7 July 2004
KUMBA TO CONDUCT PRE-FEASIBILITY STUDY ON SENEGAL IRON ORE PROJECT
Metals and mining company Kumba Resources Limited (Kumba) today signed an
agreement with Miferso, a Government of Senegal-owned project development
company, granting it the right to conduct and develop a pre-feasibility study on
the Faleme iron ore project situated in the south-eastern region of the country.
The development is in line with Kumba`s strategy of seeking growth opportunities
that generate value for its shareholders and consolidating the company`s
position as one of the principal diversified mining companies in Africa.
The agreement also gives Kumba subsidiary Kumba International BV, at completion
of the pre-feasibility study, an option to acquire an 80% interest in the Faleme
project from Miferso and to subsequently conduct a bankable feasibility study.
Kumba will conduct limited exploration during the 10-month pre-feasibility study
to prove that the mineral resource can support at least a 20-year life of mine
with a sustainable 12Mtpa production output. At the same time, Miferso will
develop a business case for the funding, construction and operation of the rail
and port infrastructure required.
`The Faleme project consists of three elements, namely a mine and associated
infrastructure; a 741km railway line of which 311km still has to be constructed;
and a new deep-water port for iron ore exports to be developed near Dakar,` said
Richard Wadley, Kumba`s executive director for strategy and business
development.
It is estimated that the preliminary capital cost of about US$950 million would
be split between the mine and port handling facilities (US$306 million), the
railway line and rolling stock (US$537 million), and the new deep-water port
(US$107 million).
`In terms of the agreement Kumba will limit its commercial responsibility to the
development of the mine and port handling facilities. The financing and
development of the rail and port infrastructure will be the responsibility of
Miferso and the Government of Senegal.
`Kumba will use its technical, financial and project development expertise to
assist Miferso with the development of the infrastructure business case,` said
Wadley.
The Faleme project is attractive to Kumba as its proximity to Europe in relation
to other global iron ore operations offers reduced sea-borne transport costs and
shipping time, and a competitive advantage in the European market. In addition,
the 260Mt resource has an acceptable in-situ Fe content of 58% and lump fine
ratio of 50:50 with low impurities.
The project is aligned with Nepad (New Partnership for Africa`s Development) and
will, if implemented, be one of the largest public and private sector
partnerships for the development of local infrastructure in West Africa.
ends
Sponsor
JPMorgan
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
Media relations enquiries:
Pat Mdoda
General Manager: Corporate Affairs
Tel: +27 12 307 4553
Mobile: +27 83 609 1204
Investor relations enquiries:
Trevor Arran
General Manager: Investor Relations
Tel: +27 12 307 3292
Mobile: +27 83 609 1444
KUMBA RESOURCES LIMITED
Telephone : + 27 (12) 307 4843 P.O. Box 9229
Telefax : + 27 (12) 307 4080 PRETORIA 0001
Date: 07/07/2004 04:00:04 PM Produced by the JSE SENS Department
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
