Saturday, 20 Aug 2011
African Minerals confirmed that the Tonkolili iron ore mine in Sierra Leone will have a capacity of 15 million tonnes per annum rather than 12 million tonnes per annum. However it also revealed that phase one of the project will now cost an additional USD 284 million, including USD 132 million to increase capacity, on top of the original cost of USD 1.1 billion.
African Minerals also revised its sales outlook for the mine's ramp up period. It now expects to sell 1.2 million tonnes of direct shipping ore this year (cut from 2.5 million tonnes) while next year it expects to sell 12 million tonnes (up from 10 million tonnes).
Tonkolili is still on course to deliver its key development milestone, of first ore on ship, in the fourth quarter of this year. To achieve this AMI expects to commission its rail link from the mine by the end of September 2011.
It confirmed that excavation and civil works for the railway and the port stockyard are complete now complete. This has effectively de risked from any adverse effects of the rainy season.
Mr Frank Timis chairman of African Minerals said that "Overall the board is pleased with the achievement of the increase in Phase I capacity from 12 million tonnes per annum to 15 million tonnes per annum, with a very low capital intensity of this expansion of just USD 44 per annual tonne, allowing African Minerals to take advantage of the continued strong markets for iron ore. The overrun costs of the project are in part due to the steps that we have taken to de risk the construction of the rail and port ahead of the rainy season, to deliver the project on schedule by Q4 2011."
(sourced proactiveinvestors)
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