Name and Location
Kalagadi Manganese project, Northern Cape and Eastern Cape, South Africa.

Client
Kalagadi Manganese is held by ArcelorMittal (50%), Kalahari Resources (40%) and the Industrial Development Corporation (10%).

Project Description
The project involved the construction of a manganese mine and a 2.4-million-ton-a-year high-grade sinter plant (Umtu sinter plant), near Hotazel, in the Kuruman area of the Northern Cape.

The output required to produce this amount of sinter will be three-million tons a year.

An additional component of the project is the construction of a 320 000 t/y ferromanganese smelter complex, in the industrial development zone (IDZ) of the Coega deep-water harbour, in the Eastern Cape.

The plant will be designed to also produce silicomanganese as an alternative product.

The smelter will be situated in Zone 6 of the IDZ metallurgical zone and could possibly be expanded to handle 640 000 t of ore.

The project area overlies the Kalahari manganese basin and is estimated to contain 80% of the world’s known high-grade manganese resources.

An evaluation of historically available information indicates that up to one-billion tons of mineable ore could exist under the 8 000 ha prospecting area.

Value
R11-billion, which will be funded by 40% equity and 60% debt.

Duration
The project is expected to be completed by the end of 2013.

Latest Developments
Kalagadi Manganese has secured a R2.2-billion loan from the African Development Bank for its mine, sinter plant and part of the proposed smelter complex.

The 11-year loan, with an undisclosed interest rate, has a two-year grace period.

Developmental funding institutions like the AfDB give longer loan tenure at favourable rates of interest, which facilitates development.

The sinter plant, which was hot commissioned on January 6, is currently producing at a rate of 2 000 t/d.

Funding is also being secured for the unfunded portion of the smelter, which is to be built in the Coega IDZ at the deep-water Ngqura port, near Port Elizabeth.

The smelter is designed to yield 320 000 t of high-carbon ferromanganese a year and, of the 2.4-million tons of sinter expected to be produced a year, 700 000 t is earmarked for the smelter and the rest will be exported.

Kalagadi has secured a product offtake agreement with the JSE-listed Metmar.

Key Contracts and Suppliers
Mineral Corporation (geological consultant); MDM Engineering (bankable feasibility study, front-end engineering and design; engineering and construction management); Civcon (main contractor); Shaft Sinkers and Grinaker-LTA (shaft sinking); Neutron Engineering (bulk earthworks for the shaft); Tubular (main and ventilation shaft headgears); Outotec (sinter plant); and Esorfranki Geotechnical (piling contract).

On Budget and on Time?
The project is on track and is expected be commissioned by July 2013.

Contact Details for Project Information
Kalagadi Manganese, tel +27 11 808 2000, fax +27 86 673 2122 or email info@kalagadi.co.za.
Esorfranki Geotechnical MD Roy McLintock or Tammy Davies, tel +27 11 882 3906, fax +27 11 882 3112 or email info@esorfranki.co.za.
Civcon, tel +27 11 206 9660, fax +27 11 316 6604 or email info@civcon.co.za.
Grinaker-LTA, tel +27 11 578 6000, fax +27 11 578 6161 or email enquiry@grinaker-lta.co.za.
Outotec investor relations vice president Rita Uotila, tel +358 20 529 2003 or email rita.uotila@outotec.com.
MDM Engineering marketing manager and public relations manager Vanessa Evans, tel +27 11 993 4300, fax +27 11 886 9306 or email Vanessa@mdm-engineering.com.