Anglo American notes the recent announcement made by Kumba Iron Ore, the text of which appears below.
Kumba has recently announced the approval of its Kapstevel South project at its Kolomela mine, South Africa, by both the company’s and Anglo American’s boards.
The total capital cost of the project will be approximately ZAR 7 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 ~13 million t 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.”
The operational and financial forecasts provided in this announcement are estimates and the financial information has not been reviewed and reported on by the company’s external auditors.