Kumba Iron Ore's multibillion-rand Sishen South expansion project is expcted to go ahead as planned despite the plunge in commodity prices caused by the global economic downturn and despite concerns about the viability of the project.
Sishen South, situated 80km south of the Sishen mine near Postmasburg in South Africa's Northern Cape, should increase Kumba's annual production by 9,000,000 tonnes a year by 2013 but analysts have raised concerns about the project's economic viability in the current market conditions. Kumba CEO, Chris Griffith, says the project will go ahead with production commencing in the first hald of 2012.
To date, around R2.5-billion has been committed with a further R6-billion set aside for the remainder of the project.
“This is a significant achievement for Kumba, and one that demonstrates its commit- ment to deliver on a large project pipeline. The development forms part of Kumba’s strategy to grow iron-ore export volumes to 44-million tons a year by 2013. Including current domestic production of nine-million tons a year, this increases Kumba’s total production to well over 50-million tons a year. The company’s project pipeline remains robust, with potential to deliver 70-million tons a year by 2015,” says Griffith.
The Sishen South expansion project is set to benefit greatly from the Sishen Expansion Project, due for completion by the end of this year.
“An experienced project team has been secured and Kumba has ensured that the people and skills deployed in the Sishen Expansion Project were retained for the development of the Sishen South mine. Orders have also been placed on long-lead equipment, which means that the company is in a strong position to ramp up swiftly to full capacity,” says Griffith.
Source: Mining Weekly
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