JOHANNESBURG (miningweekly.com) – Fast-growing Kumba Iron Ore has already got cracking on studies to expand Kolomela, its just-commissioned nine-million-ton project still in ramp-up phase.
The Anglo American-controlled company, which has performed superbly since listing on the JSE six years ago, is also evolving its growth strategy to embrace Africa as a whole.
Outgoing Kumba CEO Chris Griffith – who from September 1 takes over as CEO of struggling Anglo American Platinum – tells Mining Weekly Online (also see video attached) that the company remains committed to producing 70-million tons of iron-ore a year in South Africa by 2019. Norman Mbazima, currently CEO of Anglo American Thermal Coal, will take over from Griffith as Kumba CEO, also on September 1.
Kolomela, which was brought in ahead of schedule and which may still come in below budget - along with six-million tons of iron-ore this year to boot - has helped the JSE-listed Kumba to set a new 50-million-tons-a-year production base from only 28-million tons a few years back.
On a cumulative basis, Kumba has spent only R7.4-billion of its approved R8.5-billion Kolomela capital expenditure (capex).
Atop of the 50-million-ton base, the additional 20-million tons by 2019 will come from a number of smaller projects, 15-million tons from the Northern Cape for export and the rest in Limpopo province with both export and domestic-market possibilities.
Prior to Kolomela's nine-million tons, the Sishen Expansion Project (SEP) added 13-million tons.
Now another six-million tons are to come out of the upcoming Kolomela Expansion Project and close to a million tons more a year will arise out of a new SEP 1B phase.
South African growth on the cards between 2013 and 2019 is 26-million tons.
The company expects to spend between R4.8-billion and R5.4-billion capital in 2012, after which expansion capex is poised to taper off.
Kumba's growth strategy has evolved into an African-focused growth strategy and the company's aim is to create a second mining footprint in Africa, in partnership with its controlling shareholder, Anglo American, which has increased its stake in Kumba by another 4.5% to 69.7% from 65.2% at a cost of $950-million.
"It's a bit too soon to say what the individual African projects will be," Griffith comments.
The company is looking at a number of the iron-ore producing West African countries with a view to establishing itself in some or all of them through merger-and-acquisition and near-production opportunities, as well as through greenfields exploration.
Griffith anticipates that logistics in West Africa is likely to be brought about by a combination of different business players working together.
"I don't think you're going to see one company alone owning the big logistics channels. It looks likely that companies will work together to put in the necessary rail and port infrastructure," he adds to Mining Weekly Online.