Johannesburg, South Africa — MININGREVIEW.COM —13 August 2009 – Assmang Limited “’ which is jointly controlled by African Rainbow Minerals (ARM) and Assore Limited “’ has announced that its 10 million tonne per annum Khumani iron ore mine has been completed on time and within budget.
Announcing this in a statement released here, the company also revealed that its board had approved additional capital expenditure of R5.5 billion for the completion of the Khumani expansion project to increase capacity from 10 to 16 Mtpa.
It added that the estimated total capex for the proposed Khumani expansion project was R6.7 billion, based on the feasibility study completed in June 2009, which compared favourably to the previous estimate in September 2008 of R7.2 billion. Expenditure of R1.2 billion had already been approved in September 2008 for early works and long lead items, hence the outstanding capital requirement for R5.5 billion.
Assmang explained that of the 6 Mtpa expansion, 4 Mtpa was intended for the export market and 2 Mtpa for the domestic market. The company had received a commitment from Transnet to extend the current iron ore export allocation on the Sishen/Saldanha export channel from 10 to 14 Mtpa, increasing Assmang’s export capacity accordingly. This dovetails with Transnet’s iron ore channel expansion from 47 to 60 Mtpa.
Assmang said it would fund the completion of the Khumani expansion project using existing cash resources, operational cash flows and existing borrowing facilities. The project had robust returns, and the high grade iron ore resource “’ with an excellent stripping ratio of 1.7 over the life of mining operations “’ ensured competitive mining costs.