[miningmx.com] – KUMBA Iron ore, the Johannesburg-listed subsidiary of Anglo American, said it was giving mind to re-stating its iron ore reserves at its Sishen mine in the Northern Cape as it waited for a mining licence from the Department of Mineral Resources (DMR).
Up to a third of the company’s 919 million tonne (mt) total reserve base – the reserves it intends to mine in terms of its Sishen Western Expansion Project (SWEP) – could be affected if there was a delay in granting of the mining rights.
The company said, however, it was confident that the mining licence would be granted eventually, but perhaps not by the year-end which would precipitate a restatement of its 2013 reserves.
The reserves are located beneath property formerly occupied by a railway owned by Transnet. The rail route has been shifted to the far west of the Sishen property and the surface rights owned by Transnet have been granted to Sishen Iron Ore Company (SIOC), Kumba said.
However, the right to mine the property requires the approval of the DMR. Kumba’s statement comes in the light of surprise developments around mining licences across the spectrum in South African mining.
Mining licences have taken longer than expected to approve in nearly all minerals, not just iron ore, while in some cases mining companies have been surprised to learn of overlapping claims on properties for which they have successfully applied to mine or prospect.
Ownership of mining rights also has special relevance for SIOC which has for several years been embroiled in a dispute with ArcelorMittal SA, Imperial Crown Trading (ICT) and the South African government itself on whether ICT has rights to mine SIOC’s property. The matter is due to be heard in the Constitutional Court.
Said Kumba in a statement to the JSE today: “The status of the application for the mining rights does not, at this time, require an adjustment of SIOC’s total reserve base for the Sishen mine … as SIOC is confident that there is a reasonable expectation of these rights being granted by the DMR.
“However, while the ore reserves in the rail properties are not considered materially
significant … the expansion of the Sishen pit in a westerly direction may be materially affected by virtue of the fact that in the medium and long term SIOC would potentially not be able to access approximately 33% of the Sishen reserve currently included in SIOC’s life of mine”.
Kumba said in its latest annual report that it intended to increase production through its various projects to 70mtpa by 2019 including the 9mtpa Kolomela mine. It is targetting exports of 44mtpa this year. Kumba reported a 3% decline in exports in the six months ended June to 20mt.
The SWEP intends to access 283mt of run-of-mine ore from about 2013 followed by a second phase development, currently in feasibility, which involves the resettlement of the Dingleton town.
