Assmang Limited, which is jointly held by African Rainbow Minerals (ARM) and Assore Limited, has announced that approval has been given for the start-up capital programme for the additional 6 mt expansion project at the Khumani Iron Ore Mine in the Northern Cape Province.
This follows the successful completion of the Khumani mine expansion pre-feasibility study that shows significant value, given conservative iron ore pricing assumptions.
A feasibility study on the project is expected to be completed in the second quarter of the 2009 calendar year and, pending a positive outcome, final approvals will be sought from the respective boards for the official commencement of the expansion.
Should the expansion proceed, this will mean that Khumani mine will increase its capacity from the current level of 10 mtpa to 16 mtpa.
Total capital expenditure for the expansion is estimated at R7.3B. Approval of the initial capital (R1.2B) will enable the mine to order long-lead items, which will in turn assist in the rapid construction of the project.
Of the 6 mt expansion, 4 mt will be for the export market and 2 mt for the domestic market.
Assmang has received a commitment from freight rail operator Transnet to extend the current Iron Ore Export allocation from 10 mtpa to 14 mtpa, increasing Assmang’s export capacity accordingly. This will dovetail with the Iron Ore channel expansion from 47 mtpa to 60 mtpa.
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