New Kumba mine a ‘model operation’

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Date: June 25, 2012 | Posted in Business News | News

Anglo CEO Carroll impressed as new R8,5bn open pit iron ore mine, planned to add 9-million tons from the end of next year, comes in on budget ahead of schedule

KUMBA Iron Ore launched its R8,5bn Kolomela mine on Friday, which will add 9-million tons from the end of next year with potential to grow output to 15-million tons by treating lower-grade ore by 2017.

The mine, near Postmasburg in the Northern Cape, delivered ore five months ahead of schedule and came in on budget, with its development marked by a “fantastic” safety record.

Globally, a number of iron ore mining projects that had been forecast to begin production by next year had run into trouble and were well behind schedule.

In SA, the government has been clamping down on safety violations at mines, temporarily shutting them down.

“This is a model operation. It’s world class,” said Cynthia Carroll, CEO of Anglo American, which owns 65% of Kumba, SA’s largest iron ore producer.

It is one of four big projects Anglo is bringing on stream in iron ore, nickel and copper.

“This is a fantastic example of how SA delivers,” she said.

Kumba CEO Chris Griffith repeated that Kolomela was targeting 4-million-5-million tons of ore this year, but everyone, from Ms Carroll down, was pushing for the mine to achieve more than that because there is rail capacity for 9-million tons. The mine produced 1,5-million tons in the first quarter and had done a “little bit better than that” in the second quarter, he said. Annualising these figures would indicate that the public target would be easily met if not surpassed.

The mine will match the flagship Sishen iron ore mine 80km away in the cost of ore delivered to Saldanha port once it reaches full production next year. The two mines will be in the lower half of the global iron ore production cost profile, he said.

A study is under way into the economics of expanding Kolomela to 15-million tons by processing lower grade material through a dense media separation plant. The plan is to have the increased output timed to match higher rail capacity of 83-million tons on the railway line to Saldanha compared to 60-million tons now, Mr Griffith said.

Kumba is developing two pits simultaneously and will bring a third into production next year, said Mike Carney, mineral resource manager at Kolomela.

The main pit, the Leeuwfontein, is 1,2km long and has potential to be expanded by another 1,2km to the south.

The northern portion of the pit will eventually go 170m below surface, while the southern portion will go down to 350m. “That’s an awful lot of waste rock we will have to move,” Mr Carney said.

Exploration on the lease area has revealed other ore deposits. “We have found other ore bodies but they are not in our life of mine plans. They are being investigated,” he said.

seccombea@bdfm.co.za

Source: Business Day