2 July 2012
The outlook seems to be bright for South Africa’s iron ore miners, with a major new mine recently opened, expansion work begun on the country’s main iron-ore rail line – and global investment bank Morgan Stanley saying SA is set to overtake India as the world’s third-largest exporter of iron ore.
In its latest forecasts, Morgan Stanley predicts that South Africa will overtake India this year as the world’s third-largest exporter of iron ore after Australia and Brazil, news agency Bloomberg reported on Friday.
According to Bloomberg, Morgan Stanley said it expected South African seaborne exports to total 53-million tons this year, 4-million tons more than its prior forecast, while Indian exports were expected to fall to 41-million tons.
In May, the South African government launched a major infrastructure upgrade in the country’s West Coast region, focusing on expanding the iron-ore rail line between Sishen in Northern Cape and Saldanha Bay in the Western Cape.
The upgrade forms part of a massive, state-led infrastructure drive aimed at boosting economic growth and job creation in the country.
Announcing the programme in February, President Jacob Zuma said the West Coast project would boost the region’s iron-ore transport capacity to 100-million tons per annum, adding that this would help to feed the developing world’s demand for iron ore, which is used in making steel.
And last month, Anglo American subsidiary Kumba Iron Ore opened its R8.5-billion Kolomela mine, situated about 80km away from its Sishen mine in the Northern Cape.
Noting that Kolomela had delivered its first ore to the Saldanha harbour five months ahead of schedule, Kumba CEO Chris Griffith said at the opening ceremony that the delivery of the Kolomela project was “in line with Kumba’s growth strategy of ramping up South African production to 70-million tons per annum by 2019”.
Griffith predicted that existing supply-and-demand dynamics would sustain the prevailing higher prices of iron ore for longer than was anticipated.
Anglo American CEO Cynthia Carroll, speaking at the same ceremony, said: “We believe that medium-term replacement of infrastructure in the developed world presents further opportunities for steel, with a bright future ahead for iron ore.”
Carroll described the R8.5-billion development of Kolomela as a “vote of confidence” in South Africa.