COMPANIES
Kumba, Transnet in expansion deal
Posted Tue, 08 Mar 2005
A major expansion project at Kumba Resources' Sishen iron ore mine is expected to contribute around $250-million (about R1.4-billion) to the country's foreign exchange receipts.
"The project will contribute about $250-million per year additionally to South Africa's foreign exchange receipts when full production is achieved," Kumba Resources iron ore general manager Matie von Wielligh said in a statement on Monday.
The Sishen expansion project (SEP) will increase the Northern Cape mine's production from 28 million tons per annum (mtpa) to 38 mtpa by 2009, the company announced.
"The project will make a meaningful contribution to the Northern Cape and South African economy with 1800 direct construction jobs and more than 300 direct and 600 indirect long-term jobs being created through the expanded operations," von Wielligh said.
Direct and indirect tax payments would also contribute "significantly" towards the country's fiscus.
Construction was due to start
in mid-2005.
The additional ten mtpa would be exported via the 860 kilometre-long railway line to Saldanha Bay.
Transport company Transnet and Kumba on Monday signed an agreement for the transport and handling of the iron ore.
Transnet said it would, simultaneously with the SEP, expand both the rail and Saldanha's port facilities.
The contract was part of Transnet's plan to restructure its balance sheet. It also demonstrated the company's efforts to cut the costs of doing business, increase South Africa's economic competitiveness, and address the need for job creation.
"The profitability of the Sishen-Saldanha export channel has never been in question and this remains a highly valuable Transnet asset," said Transnet chief executive Maria Ramos.
"This contract ensures that Kumba's iron ore business maintains its profitable performance. It supports future growth plans and a sustainable business environment for both parties," said Kumba chief
executive Con Fauconnier.
The mining, plant and infrastructure expansion was expected to cost R2.96-billion.
Sapa
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