Khumani 10mtpa Iron Ore Mine completed on time and within budget Approval of an additional R5.5 billion capital expenditure for completion of the Khumani 6 mtpa Expansion Project bringing total capacity to 16mtpa
12 August 2009
Assmang Limited, which is jointly controlled by African Rainbow Minerals (�ARM�) and Assore Limited (�Assore�), is pleased to announce that:
- The 10 million tonne per annum (�mtpa�) Khumani Iron Ore Mine (�Khumani�) has been completed on time and within budget;
- The ARM and Assore Board of Directors have approved additional capital expenditure (�capex�) of R5.5 billion for the completion of the Khumani Expansion Project, to increase Khumani’s capacity from the current level of 10 mtpa to 16 mtpa.
The estimated total capex for the proposed Khumani Expansion Project is R6.7 billion based on the feasibility study completed in June 2009, which compares favourably to the previous estimate in September 2008 of R7.2 billion. Expenditure of R1.2 billion has already been approved in September 2008 for early works and long lead items, hence the outstanding capital requirement for the completion of the Khumani Expansion Project comes to R5.5 billion.
Of the 6 mtpa expansion, 4 mtpa is intended for the export market and 2 mtpa for the domestic market. Assmang has received a commitment from Transnet to extend the current Iron Ore Export allocation on the Sishen/Saldanha export channel from 10 mtpa to 14 mtpa, increasing Assmang’s export capacity accordingly. This dovetails with the Iron Ore channel expansion from 47 mtpa to 60 mtpa.
Assmang Limited will fund the completion of the Khumani Expansion Project utilizing existing cash resources, operational cashflows and existing borrowing facilities. The Khumani Expansion Project has robust returns and the high grade iron ore resource, with an excellent stripping ratio of 1.7 over the life of mining operations, ensures competitive mining costs.
For more information please contact:
Corporate Development and Head of Investor Relations
Office: +27 11 779 1507
Mobile: +27(0) 83 4112881
Chief Executive : ARM Ferrous
Mobile: +27 82 492 6948
Issued by sponsor: Deutsche Securities (SA) (Proprietary) Limited