DOWNLOAD THE MINING EXECUTIVE APP NOW
"Global Mining Descisions in Your Palms"
I MINING INVESTMENT I
JOHANNESBURG, SOUTH AFRICA
“The approval of this project, at a time when the global and South African economies face the challenges of Covid-19, underscores Kumba’s positive longer-term outlook for demand for its high-quality product. It also demonstrates our commitment to extend the lives of our mines and continue providing much-needed jobs and livelihoods in the Northern Cape region.”
Themba Mkhwanazi
Chief Executive Officer
Anglo American -Kumba Iron Ore.
Whilst most companies and other sectors of global economies are reeling and recoiling on the effects of Covid-19, mining seems to the be oasis in the desert of the lost hope, proving again to be a giant that can single handedly bolster the economy of any country that gets its requirements right. This has been the case with Australia where mining has managed to keep the country’s economy afloat whilst other sectors suffered.
For Northern Cape Province in South africa, mining is set not only to bolster the South african economy but, wither the Covid19 storm enabling sustenance of livelihoods.
In 2014, Vedanta Resources gave its iconic Northern Cape Gamsberg project the go-ahead in what culminated US$400 million investment in its 1st Phase of the project. Investigations into Phase 2 and 3 would see production of zinc-in-concentrate increase to 450,000 t/y, and in a modular fashion ultimately, to 600,000 t/y a reflection of an additional investment of $350-$400 million. The first blast occurred in mid-2015 just eight months after proclamation of the investment. President Cyril Ramaphosa officially inaugurated Gamsberg on 28 February 2019.
in a similar fashion, a move that will further solidify, the Cape region as a hub of intensive mining, Kumba has announced the approval of its Kapstevel South project at its Kolomela mine by both the Company’s and Anglo American’s boards.
The total capital cost of the project will be approximately R7 billion, including pre-stripping. It is anticipated that the addition of the Kapstevel South pit will deliver an after-tax internal rate of return of ~25% and allow Kolomela to maintain an estimated EBITDA margin of >35% in the long-term.
The project entails the development of a new pit, Kapstevel South and associated infrastructure at Kolomela. The pit is a conventional truck and shovel operation producing high quality direct shipping ore (DSO). Whilst the pit is included in the current life of mine, it contributes significantly to sustaining production of ~13Mt for the remaining life of mine. Pit establishment and waste stripping will commence this year with first ore expected in 2024.
Themba Mkhwanazi, CEO of Kumba, said: “The approval of this project, at a time when the global and South African economies face the challenges of Covid-19, underscores Kumba’s positive longer-term outlook for demand for its high-quality product. It also demonstrates our commitment to extend the lives of our mines and continue providing much-needed jobs and livelihoods in the Northern Cape region.”
Whilst this may be a great move for the economy, a few challenges still exists that threaten the sustainability of the industry and impact investments. The recent struggles in power and water supply have potential to hamper most mining operations in Africa and the global mining village.