Iron Ore miner, African Minerals Limited (AML) Tuesday disclosed in a regulation filing that it now prefers to expand its existing rail and port infrastructure in Pepel, rather than develop a new port at Tagrin Point.
This revised expansion is expected to cost about $2billion in capital expenditure even though the iron ore miner reckons it will save it about $1billion in capital savings.
“This will significantly reduce capital costs, and de-risk the project’s delivery, whilst at the same time reducing social and environmental impacts,” saidChief Executive Officer, Keith Calder.
He explained “We have made good progress with value engineering and optimisation in our Tonkolili mine expansion strategy. While our strategy regarding the mine and plant is mostly unchanged, we have now decided to leverage our existing rail and port infrastructure at Pepel to achieve the expanded export tonnage.”
Calder added, “This approach will provide a significantly better value, capital efficiency and risk proposition for all of our stakeholders.”
The iron ore miner cut its production forecast for the third time this year and said it was in advanced talks to secure working capital facility of $250million and increase the size of its existing facility up to $150million.
AML also announced it was ramping up production at the Tonkolili ore mine, targeting saprolite hematite concentrate production of up to circa 35Mtpa from 2016.
The share ownership of China railway has also been raised from12.5% to 15% following a request from China Railway Minerals, although the voting shares will be limited to 12.5%.
CEO Calder remarked “We welcome this strong support from one of our cornerstone shareholders and partners as we ramp up production to a sustainable level of 20Mtpa in Q2 2013, and we believe this sends a strong signal of the underlying value of the Company to the market.”