Motjoli seeks partners in new $1.6 bln mine

Wed Apr 13, 2011 2:49pm GMT

* Motjoli looks to develop into major iron ore producer

CAPE TOWN, April 13 (Reuters) - South African junior explorer Motjoli Resources said Wednesday that global steel makers and miners have expressed interest in developing a new 11 billion rand ($1.63 billion) iron ore project with the company.

Chairman Nchakha Moloi told Reuters the Cascades project in Mpumalanga province had a measured and indicated resource of one billion tonnes, with another one billion tonnes inferred.

"We are selecting a technical partner from a range of interested parties at the moment," Moloi said.

"There are a number of companies interested, including mines and steel-making companies. They are South African, some Indian and Chinese, as well as U.S. and European companies," he said.

Motjoli Resources already has a 28 percent equity stake with Australia's Aquila Resources (AQA.AX: Quote) in the Avontuur manganese mine in the Northern Cape.

It holds shares in another manganese project with mining giant BHP Billiton (BHP.AX: Quote), in coal miner Exxaro (EXXJ.J: Quote) as well as in Lafarge South Africa, a unit of the world's largest cement maker (LAFP.PA: Quote).

Moloi said construction at Cascades would hopefully commence in 2015. Initial production is set at six million tonnes a year, eventually ramping up to 20 million tonnes at full production.

South Africa is the world's top platinum producer and a major chrome and gold exporter. "The life of mine is expected to be 60 years and the final cost depend on how much the mine and a processing plant will cost," Moloi said.

(Reporting by Wendell Roelf, editing by Ed Stoddard, sourced Thomson Reuters)