"Approval of project underscores Kumba’s positive longer-term outlook and its commitment to extend the lives of mines and provid much-needed jobs and livelihoods in the Northern Cape"
KUMBA has announced the approval of the R7 billion Kapstevel South project at the Kolomela mine close to Kathu in the Northern Cape.
Themba Mkhwanazi, CEO of Kumba, said on Tuesday that the project had been approved by both Kumba and Anglo America’s boards.
“The total capital cost of the project will be approximately R7 billion, including pre-stripping,” Mkhwanazi said.
“It is anticipated that the addition of the Kapstevel South pit will deliver an after-tax internal rate of return of approximately 25% and allow Kolomela to maintain an estimated EBITDA (net income with interest, taxes, depreciation, and amortisation added back) of more than 35% in the long-term.”
The project entails the development of a new pit, Kapstevel South and associated infrastructure at Kolomela.
Mkhwanazi pointed out that the pit was 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 approximately 13Mt for the remaining life of mine. Pit establishment and waste stripping will commence this year with first ore expected in 2024.
“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.”