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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
Johannesburg, 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.
ENDS
For more information please contact:
Monique Swartz
Corporate Development and Head of Investor
Relations
Office:
+27 11 779 1507
Mobile:
+27(0)
83 4112881
E-mail:
monique.swartz@arm.co.za
Jan Steenkamp
Chief Executive : ARM Ferrous
Mobile :
+27 82 492 6948
E-mail :
jan.steenkamp@arm.co.za
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