Johannesburg - Assmang, the Avmin-controlled chrome, iron ore and manganese
producer, said yesterday it would spend R1 billion on new projects and mine
expansions over the next four years.
The largest project is a R500 million new shaft system at its Nchwaning
manganese mine in the northern Cape.
If approved by the government, work will start in August and the new shaft
will be commissioned in the second half of 2003.
The new shaft will enable the mine to reach ore reserves separated from the
current mining operation by a major fault zone.
The next large project is a new open-cast chrome mine at Dwarsriver in
Mpumalanga. The group bought mineral rights to the property for R163
million.
The group said it would spend R190 million on the new mine as well as
furnace upgrades and expansions at its existing Mpumalanga operations, to
enable them to handle the additional ore. It said it was also considering
building a pelletising plant, at a cost of a further R120 million, to
process fine ore.
Assmang said the new mine would supply metallurgical grade ore to
Feralloys, an Assmang subsidiary, as well as the higher quality foundry and
chemical grade products for export.
It said ferrochrome capacity at Feralloys would be expanded by next July to
175 000 tons a year from its current 150 000 tons a year. Assmang was also
considering building another furnace to expand capacity to 275 000 tons a
year by 2003.
The group said it planned to fund the R1 billion required from its own
resources.
Rowan Goeller, a resources analyst at brokerage Deutsche Morgan Grenfell,
said Assmang should have no difficulty funding the expansion because its
cash flow would be boosted by an upturn in commodity prices.
He said the latest quarterly ferrochrome contract negotiations had secured
producers a 3c price increase to $0,375 a pound.
He said the only problem the market had with Assmang was its illiquid
shares, which made trading difficult for private and institutional
shareholders.
Julian Gwillim, an Avmin spokesman, said the new projects would create 100
to 150 jobs, primarily in Mpumalanga..