By Silvia Antonioli
CAPE TOWN Feb 4 The chief executive of Kumba
Iron Ore, a unit of Anglo American, said he
expected South Africa to grant a key mining licence for the
company's expansion programme by the end of the first half of
Like other major iron ore miners, Kumba, Anglo's most
profitable division, plans to expand output but technical
problems are constraining production and it is waiting for a
licence important to the expansion of the Sishen mine in the
Northern Cape province.
The company said it expected to get the mining rights over
logistics group Transnet's rail properties on its
expansion site by the first half of this year.
Failure to secure such rights could result in the company
not being able to access about 30 percent of Sishen's reserves.
"We have been interacting with (the authorities) about the
process and nothing that we have seen so far suggests that there
is any problem with getting that right granted," Chief Executive
Norman Mbazima told Reuters.
"If we don't get it by the end of the first half ... it
could impact production in the longer term. We would have to
replan the mine and we haven't done any new plans yet; the
geologists are doing it now just in case. We really want to get
the rights and I have no doubt that we'll get it."
Large iron ore miners such as Anglo Australian miners BHP
Billiton and Rio Tinto have
plans to ramp up their production in the next few years to
offset declining prices for the steelmaking ingredient.
The Kumba executive said he expected iron ore prices to
remain stable in the first half of 2014 and then soften in the
second half, as more supply from large producers came on stream.
"In the last two weeks prices have been moderating fairly
rapidly but we think they have stabilised now and we expect that
stability to continue for the first half of the year," he said.
"After that, I think that the (growing) supply from the
majors will start to soften the prices again."
Iron ore was trading at around $122.60 per
tonne on Tuesday.
Kumba is aiming to expand its output at the Sishen mine from
31 million tonnes in 2013 to 35 million in 2014 and 37 million
by 2016 and for the rest of the mine's life.