Nov 21 2007
ArcelorMittal, the world's largest steel company, and Kalagadi Manganese, a South African manganese development company, have today announced a strategic equity partnership in respect of the development of Kalagadi's manganese resources. The 50/50 joint venture will see the development in South Africa of:
- a manganese mine, beneficiation plant and sinter complex in the Northern Cape Province; and
- a smelter complex in Coega
Commenting, Mr. Malay Mukherjee, Member of the Group Management Board, Responsible for Asia and Africa, Mining, Stainless, at ArcelorMittal said: "We are pleased to have been selected as the joint venture partner on this exciting project. The Kalagadi Manganese project will not only prove to be an important and competitive source of manganese for our plants but a notable contribution to the economy of South Africa." He added: "This is a further sign of our commitment to South Africa, a country which forms an important part in our expanding global operations."
Daphne Mashile-Nkosi, Chairperson of Kalagadi Manganese, said: "We are delighted to have attracted a strategic equity partner of the calibre of ArcelorMittal who are the biggest player in the steel industry in the world. The deal is particularly important as it comes at a time when we are spearheading the trend towards backward integration into raw materials. We believe our new partner will add enormous value to the business particularly in respect of enhancing efficiencies. ArcelorMittal's operating track record in South Africa is a significant advantage to the implementation and operation of the project."
Kalagadi Manganese's project is situated in the Kuruman/Hotazel district of the Northern Cape Province. The Parties intend establishing a manganese ore mine and sinter plant at Hotazel which will ultimately produce 2.4 million tons of sinter product per annum. It will also see the establishment of a 320 000 tpa ferromanganese alloy production facility in the Coega Industrial Development Zone in Port Elizabeth, which will account for at least 50% of ArcelorMittal's needs. Drilling to-date has confirmed the presence of a high grade manganese ore resource sufficient to support a life of mine in excess of 20 years.
The project, which is due to come on-line in 2010, overlies the Kalagadi Manganese Basin, a world renowned source of manganese ore containing 80 percent of the world's known manganese resources. Kalagadi Manganese is 80% owned by Kalahari Resources, a majority black women owned and controlled company. The remaining 20% is be held by the South African state-owned financier, the Industrial Development Corporation.
The joint venture transaction is subject to the fulfilment of various conditions, including the obtaining of the necessary regulatory approvals required for the implementation of the transaction.