Kumba to invest R8.5bn in new mine

4 August 2008

Kumba Iron Ore has announced plans to invest R8.5-billion into the new Sishen South mine, which is scheduled to start production in 2012, increasing to full capacity of nine metric tons per annum by 2013.

The new mine will be located 80km to the south of the existing Sishen mine, near the town of Postmasburg in the Northern Cape province, and will have a lifespan in excess of 20 years.

It will produce direct shipping ore for the export market, with the ore being transported on the main Sishen-Saldanha railway line to the port of Saldanha Bay, via a rail link to be built from the Sishen South mine.

“This is another exciting achievement for Kumba, and one that demonstrates our commitment to deliver on a strong project pipeline,” Kumba Iron Ore CEO Chris Griffith said in a statement last week.

“The development forms part of Kumba’s expansion strategy to grow Iron ore export channel volumes to 44 metric tons per annum by 2013,” he said, adding that the company’s project pipeline remained robust, with the potential to deliver 70 metric tons per annum by 2015.

New mining rights

According to the company, the project was made possible by the recent granting of Sishen South’s new order mining rights, the issuing of its integrated water use licence, a commitment from Eskom to honour its electricity supply contract, and the recent positive conclusion to the negotiations with Transnet regarding the additional capacity on the Sishen-Saldana iron ore export channel.

“An experienced project team has been secured and we have ensured that the people and skills deployed in the Sishen expansion project were retained for the development of the Sishen South mine,” Griffith said. “Orders have also been placed on long lead equipment, which means that we are in a strong position to ramp up swiftly to full capacity.”

The mine will have a positive effect on the economy of the Northern Cape, as approximately 750 people will be employed by the mine, with a further 2 000 jobs created at the peak of the construction phase, while indirect job creation is estimated to be in the region of 4 000 jobs.

The company has since submitted an environmental impact assessment, environmental management plan, and social and labour plan to the Department of Minerals and Energy, all of which have been accepted.

“Kumba expects the iron ore market to remain attractive for some time and customers are very excited about Sishen South coming on line,” Griffith said. “Kumba is delivering this additional capacity into a market of favourable iron ore prices and strong demand.”

SAinfo reporter

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