ARM publishes trading statement

[img:ARM%20-%20Pic%201_0.jpg|A night shot of ARM’s
Nkomati Nickel Mine
]Johannesburg, South Africa --- MININGREVIEW.COM --- 13 February, 2008 - African Rainbow Minerals Limited (ARM) – a niche, diversified South African mining company with excellent long-life, low-cost operating assets in key commodities – has published a trading statement relating to the imminent announcement of its financial results for the six months ended 31 December 2007.

PROCESSING PASTE THICKENER UNDERFLOW

Particle Separation Systems Technologies (PSST) has developed and patented a new technology that can dewater paste thickener underflow, economically and effectively, to the dryness selected.
Paste thickener
Iron ore.

The technology accepts the paste thickener underflow, which is introduced onto a woven steel belt (SBF) in a dyke and furrow shape. The paste is subsequently subjected to medium wave infrared radiation (MIR) under vacuum. The symbiosis of both negative pressure (vacuum) and MIR on the SBF provide for evaporation rates whereby 1 kWh power evaporates in excess of 2-3 l of water from a paste. The retention time decides the final paste moisture discarded from the SBF.

SOLVING A COMPLEX ORE BODY PROCESSING CHALLENGE

Fernando Monteiro, business development director of Multotec Process Equipment, says that in the case of a complex ore body, there are many variables such as viscosity and rheology that can give abnormal operating conditions.
Ore boding processing
The 900B two in one slurry
bed sampler handles close
to 4,000 m3 an hour.

“Test work allows for the various different factors to be included in the simulation model for the selection of equipment and the prediction of the plant performance,” he says.

ASSMANG PLACES R250 MILLION ORDER

Assmang (jointly owned and controlled by African Rainbow Minerals and Assore) has placed an order worth R250 million (US$35 million) for the supply of nine materials handling machines – four rail-mounted bucketwheel reclaimers and five rail-mounted stackers – with Sandvik Materials Handling Africa (SMHA) for its greenfields development at its Khumani Iron Ore mine (BKM Project) near Sishen.
assmang
Freddie Human, Assmang contracts
manager (left), hands a copy of the
contract to Manfred Schaffer, MD
of the Sandvik factory in Austria,
where the equipment will be
manufactured.

The order is the biggest placed with Sandvik for a materials handling project in Southern Africa and follows a major development late last year when ETS, one of South Africa’s leading materials handling specialists, was integrated into the company’s operations, according to Jan Detlof- Wismer, SMHA’s manager for business development.

NEW TYPE OF CRUSHER

Iron ore and chrome producer Assmang, which is jointly owned and controlled by African Rainbow Minerals and Assore, has commissioned a primary crushing system for its Khumani mine in the Northern Province of South Africa.
new type assmang
One of Metso’s crushers similar to
that which will be installed at
Khumami mine.

The equipment is supplied by Metso Minerals Johannesburg, part of global engineering and technology corporation Metso that last year notched up sales to the value of about EUR4.2 billion in 50 countries.

PROJECT IMPLEMENTATION RISKS HAVE INCREASED

These new risks are a result of the global commodities boom and economic expansion. They are a result of increased activity in the construction sector in major developing markets, including South Africa, the primary source of materials and expertise for undertaking mining projects in the region.

One such risk is the escalation in demand for commodities used in mining projects themselves and increases in prices of those commodities. For example, the recently experienced shortage of tyres for large earthmoving equipment globally was a result of the economic boom in China. The price of steel in South Africa has surged dramatically in the last two years owing to the import pricing parity formula used in South Africa, which makes its steel manufacturers among the most profitable in the world. This impacts the cost of implementing projects in the region and causes problems in managing steel price escalation.

FEWER BIG MINING RISKS IN AFRICA, BUT MORE OF THEM

These middle risks are issues such as HIV/AIDS, the lack of transport and communication infrastructure, unclear implementation of legislation, corruption, and social issues such as the presence of artisanal miners. Broadly speaking, while the investment climate in Africa’s mining sector is more favourable than in the past as a result of a better political climate coupled with better mining legislation, the new risks require more management.

“The plus side, however, is that if the management of mining companies do the right things many of these community and socially related risks can be managed,” Cattaneo says. “One can mitigate risks related to changes in regimes by forming good relationships with a variety of stakeholders including the host government, local suppliers and forming joint ventures.”

WHY NOT ALT-X FOR MINING AND EXPLORATION LISTING?

Greenhill believes that ALT-X is very much suited to mining and exploration. “South African and African resource-based companies source their labour, technology and of course the resource itself in this region; there is no reason they should need to use entirely foreign capital. South Africa does have an investment environment where one is able to raise capital for listings and the ALT-X listing requirements are appropriate for start up exploration projects, late stage exploration or junior mining projects.”

GRINAKER-LTA M&E POSITIONS ITSELF IN THE MINING CONSTRUCTION SECTOR

“One of the current bottlenecks regarding our capacity to build projects is determined by the capacity of fabricators of structural steel,” Smith says. The availability of steel and project timing impact directly on the output capacity of the workshops. It seems that the fabricator is always in a state of either feast or famine. “Late design changes also cause unnecessary rework, hampering throughput.” These are probably all symptoms of fast track projects.

A further and more concerning restriction on construction capacity is the shortage of human resources in the industry. The construction upswing has stretched resources to the limit. There are only so many teams available. Succession planning is also a problem – it seems that there is a relatively big gap between the older experienced resources and the next level younger entrants. In these market circumstances, it will probably be to the advantage of both the clients and constructors to negotiate upfront participation on new projects and reserve capacity, Smith says. This will ensure that competent teams are allocated to the projects.

WHY TEAL IS NOT JUST AN AVERAGE JUNIOR

Teal average 1
Julian Gwillim, TEAL
vice president investor
relations and corporate
development.
One of these is the depth of history it has in the areas where it operates. TEAL, once the African exploration arm of Avmin, is now 65% owned by African Rainbow Minerals (ARM) and this legacy means that for many years it has had people and offices in two of the three countries where it has exploration projects, Zambia and Namibia, while the Zambian office also served TEAL’s activities in the Democratic Republic of Congo (DRC). In addition to its association with a mining group that has long operating knowledge of these regions, it also offers genuine country as well as precious and base metal risk diversification. It has invested significant exploration resources on projects covering gold, zinc, nickel and copper in those countries.

TEAL missed the opportunity that a group such as First Quantum Minerals took of building itself during a counter cyclic period, but it has a degree of early mover status in that it has been able to choose its ground well, having been in those regions in the form of Avmin for a long time. As a result it is not searching out ground at a market peak, having kept its holdings since the bottom of the cycle. TEAL was formed to allow a greater focus on the exploration and feasibility projects it has by ARM, as the latter has a strong portfolio of its own development projects in South Africa.

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