Assmang Limited aims 20 mill tons

27 March 2012

Assmang Limited, a mining company of South Africa aims to expand its iron ore production to 16.5 Mill tons per annum by June, 2013. Subject to the maintenance of infrastructure, they will further target 20 Mill tons within a few years. Manganese production, which is 3rd globally, will be expanded by 14{d7683696febcc773a119109901fefe1b6dbafe1db663f95e0f7cae318801e978} to 4 Mill tons in the mid-short term, and in the long term they will aim 6 Mill tons which would make them the largest supplier of Manganese in the world. In addition to expanding production, they are in progress with optimizing production of ferroalloys given the limited electricity supply, and are considering setting up ferroalloy plants outside of South Africa.

Mr. Desmond Sacco, Chairman of Assmang Limited, Mr. Alastair Stalker, Managing Director of Ore & Metal Company Limited (Sales, Marketing and Shipping company of Assmang Limited), and Mr. Patrick Sacco, Deputy Managing Director of Ore & Metal Company Limited have answered to our interview on the 22nd. Mr. Desmond Sacco showed intention to further place emphasis on the relationship with Japanese buyers, whom have been their customers for more than 50 years.

Production at Assmang Limited’s Khumani Iron Ore Mine, which started operation in 2007, is estimated at 12-13Mill tons for the year ending June, 2012. They aim to produce 14 Mill tons in the following year, after they have secured railway allocation. Furthermore, they will expand production from Assmang Limited’s Beeshoek Iron Ore Mine to 2.5 Mill tons from the current 2 Mill tons. The majority of the production from the Beeshoek Iron Ore Mine is currently sold to the domestic steel market.

The railway to the Saldanha Bay Iron Ore Terminal is currently under expansion to carry 60 Mill tons, and studies are underway to achieve 80 Mill in future. After 80 Mill is realized, Assmang Limited will expand production at their Khumani Iron Ore Mine to 18 Mill tons. They also have a view of further production increase through developing new pits at the Beeshoek Iron Ore Mine and optimizing operations at the Khumani Iron Ore Mine.

Last year (2011), Assmang Limited commenced operation of a manganese beneficiation plant which is able to handle 6 Mill tons. Of the 3.5 Mill tons planned to be produced in the year ending June, 2012, 2.6 Mill tons will be exported.

Currently, the lack of sufficient railway capacity is covered by trucking approximately 0.6~0.7 Mill tons by road, butthis is not preferred, due to the high cost involved. Due to the lack of sufficient railway capacity, expansion to over 4 Mill tons is not facile. However, studies are being conducted towards production of 6 Mill tons.

Assmang Limited also produced Manganese Ferroalloys at its Cato Ridge and Machadodorp works situated in the Kwazulu Natal and Mpumalanga Provinces of South Africa respectively. With the increase in the cost of electricity, and lacking demand for Ferrochrome, they have converted the use of its furnaces at Machadodorp from making Ferrochrome to making High-Carbon Ferromanganese.