Sephaku Cement projects, South Africa

25th January 2013

By: Martin Zhuwakinyu

Creamer Media Senior Deputy Editor

  

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Name and Location
Sephaku Cement projects, South Africa.

Client
Sephaku Cement, a subsidiary of Nigeria-listed Dangote Cement (64%) and associate of JSE-listed Sephaku Holdings (36%).

Project Description
The projects entail the construction of the Aganang cement production facility, 25 km west of Lichtenburg, in the North West; a cement grinding facility, in Delmas, in Mpumalanga; and a 3 000 t/d clinker and cement production facility, near Dwaalboom, in Limpopo.

It is estimated that the Aganang and Delmas cement plants will deliver about 2.5-million tons a year of cement.

The Aganang operations will include limestone mining and chemical processing of raw materials to produce clinker. The limestone deposit is located on the Stiglingspan, Verdwaal and Klein Westerford farms, 7 km south-west of Itsoseng. Half of the clinker will be ground, milled and blended to produce cement. The rest will be transported to the Delmas plant for further processing using fly ash produced at the fly ash classification plant at Kendal power station as an extender to produce the final cement.

The limestone quarry and the cement project have an expected life of between 30 and 48 years, depending on the availability of the delineated mineral resources and the guaranteed kiln production figures.

Value
Construction of the Aganang and Delmas plants will cost R3.3-billion. The balance of the finance will be funded by debt guaranteed by Dangote, a majority shareholder in the projects.

The value of the clinker and cement production facility, in Limpopo, has not been disclosed.

Duration
Sephaku started construction on the Aganang cement production facility in late 2011, with first production scheduled for November 2013, after the commissioning of the plant’s clinker in October 2013.

Construction of the Limpopo plant is planned to start in 2014 and is expected to come into production in 2016.

Latest Developments
Sephaku Cement has released a tender for a logistics provider for its projects, which are expected to start producing in December next year. Transport tenders, comprising between 300 and 400 trucks, are expected to be awarded in March.

The cement producer is confident that it will complete the projects within budget and notes that the budget of R3.2-billion is still the same as when it went to the market with the project in 2008; the only difference is that it a 6 000 t/d plant instead of the originally planned 5 000 t/d plant has been built.

In 2013, Sephaku Cement will focus on the installation of large pieces of equipment, operational preparedness and commissioning.

Commissioning is expected to start in June this year. It will be a sequential process, as different production phases would have to be commissioned.

Commissioning is expected to be completed by November; however, after production has started there will be another three-month test period during which the guaranteed outputs, such as fuel and coal consumption and emissions will be evaluated.

Ensuring operational preparedness includes the recruitment and training of new staff and about 200 skilled workers will be appointed in the second half of 2013.

Further, Sephaku Cement indicates that it will enter the cement market in the second half of 2013. “While we will only start to produce cement by the end of 2013, we will start interfacing with customers in the second half of the year,” says CEO Pieter Fourie.

Key Contracts and Suppliers
Nedbank Capital (lead financial arranger), Sinoma International Engineering (construction), Eskom (power-supply agreement for the plant in the North West) and Africa Geo-Environmental Services (environmental consultant for Limpopo plant).

On Budget and on Time?
Despite a three-month delay in the original timeline, the projects remain on track and within budget.

Contact Details for Project Information
Dangote Cement, Anthony Chijiena, cell +234 807 049 0149.
Sephaku Cement, tel +27 1861 555 2020 or fax +27 12 665 4391/+27 12 684 6402; or CEO Pieter Fourie, tel +27 12 686 4800 or email pieter.fourie@sepcem.co.za; or Nokuthula Nxumalo, tel +27 12 686 4837 or cell +27 82 954 6644.
Sinoma International Engineering, tel +86 10 6439 9518, fax +86 10 6439 9510 or email zcb@sinoma.com.cn.

Edited by Creamer Media Reporter

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