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International agreement to develop Kalagadi manganese

The Ulgine ALZ
production site in
Genk, Belgium – one
of ArcelorMittal’s
production operations
in 20 countries
Johannesburg, South Africa — MININGREVIEW.COM — 03 September 2008 – ArcelorMittal – the world’s largest steelmaker – has finalised an agreement with Kalagadi Manganese to develop its managanese deposits in the Northern Cape.

In a media statement here, ArcelorMittal  confirmed that the parties had satisfied all conditions precedent to the transaction, and that it had been implemented. It added that ArcelorMittal had effected payment to subscribe for a 50% interest in Kalagadi Manganese, which is 80% owned by Kalahari Resources and 20% by the Industrial Development Corporation (IDC).

The US$432.5 million (R3.3billion) deal will result in the establishment and implementation of the joint venture between Kalahari Resources, the IDC and ArcelorMittal that will lead to the development in South Africa of a manganese mine, beneficiation plant and sinter complex in the Northern Cape Province, and a smelter complex in Coega, in the Eastern Cape Province.

Kalagadi Manganese chairperson Daphne Mashile-Nkosi commented: “The investment by ArcelorMittal provides Kalagadi Manganese with a solid platform to progress implementation and operation of the project. We believe that over and above the capital injection, our new partner will add significant value to the business in respect of enhancing operational efficiencies,” she added.

ArcelorMittal nominee director of Kalagadi Manganese Nku N. Nyembezi-Heita said: “This is an exciting greenfield project that will facilitate the ownership of previously disadvantaged communities into the manganese ore and alloy industries. It will result in employment opportunities in the Northern Cape and Coega areas, while bolstering export earnings for South Africa. We look forward to developing a world-class manganese operation together with our partners Kalahari Resources and IDC,” he continued

The Kalagadi manganese project is situated in the Kuruman/Hotazel area of the Northern Cape Province. The parties intend establishing a manganese ore mine and sinter plant at Hotazel that will ultimately produce 2.4 million tonnes of sinter product per annum. It will also see the establishment of a 320 000 tpa ferromanganese alloy production facility in the Coega industrial development zone in Port Elizabeth.

Drilling to date has confirmed the presence of a high grade manganese ore resource sufficient to support a life of mine in excess of 20 years.

The project – which is due to come on-line in 2010 – overlies the Kalagadi manganese basin – an internationally renowned source of manganese ore containing 80% of the world’s known manganese resources.

When implementation of the joint venture has been completed, Kalagadi Manganese will be 50% owned by ArcelorMittal, and 40% owned by Kalahari Resources – a majority black women-owned and controlled company – with the remaining 10% held by the IDC.