17 December 2002
Signing of a Memorandum Of Understanding regarding the Kalahari Iron Ore resource
The Government of the Republic of South Africa ("the Government"), through the Departments of Trade and Industry ("DTI"), Public Enterprises ("DPE") and Minerals and Energy Affairs ("DMEA") and Anglo American Corporation of South Africa Limited ("Anglo American") announce the signing of a Memorandum Of Understanding ("MOU") regarding the Kalahari Iron Ore resource.
The Government and Anglo American are pleased to announce the signing of an MOU regarding the development of the Kalahari iron ore resource in the Northern Cape region.
Alec Erwin, the Minister of Trade and Industry, said "the Government wishes to ensure that the iron ore resources and supporting infrastructure in the Kalahari region are developed to their full potential in a globally competitive manner and recognises that any such development needs to be carried out in an environmentally sensitive manner and in accordance with the recently agreed Broad Based Socio Economic Charter."
Anglo American shares the vision of the Government and both parties wish to co-operate with each other to give effect to this common vision.
2. Objectives of the partnership
Anglo American has sought to strengthen its existing mining interests with a considerable initial investment in the iron ore sector, by virtue of its recently acquired shareholdings in both Kumba Resources Limited ("Kumba") and Anglovaal Mining Limited ("Avmin") which holds 50.3% of Assmang Limited ("Assmang"). Together Kumba and Assmang manage a substantial portion of the Kalahari iron ore assets. The Government, through the IDC holds 14% of Kumba and through Transnet, owns and operates the Orex railway line (owner of the Sishen Saldanha railway line) and related port facilities in Saldanha which are primarily utilised by the Kalahari iron ore industry.
Anglo American and Government wish to co-operate with each other to establish a public private partnership to ensure that the iron ore resources and supporting infrastructure in the Kalahari region are developed to their full potential.
Furthermore the partnership's objectives are to:
- Create a framework within which the partners will co-operate to develop the iron ore and related assets in the Northern Cape region on a globally competitive basis to their full potential;
- Co-operate within this framework to:
- optimise the production and beneficiation of the Northern Cape iron ore deposits;
- optimise associated infrastructure investment to achieve Government's developmental objectives and both parties logistical cost reduction objectives;
- create opportunities at different levels within the broad framework of the Northern Cape iron ore assets to facilitate participation by appropriate partners in meaningful and sustainable empowerment initiatives, in terms of the Broad Based Socio Economic Charter;
- maximise local procurement where it is practical to do so;
- develop the skills of, and work towards the upliftment of, people in the Northem Cape region and the Kgalagadi region in particular, in a structured manner taking account of the Broad Based Socio Economic Charter and Local Economic Development initiatives that involve amongst others, national and local government; and
- approach environmental matters in an appropriate manner.
- Use their position to ensure that the corporate entities which own or operate the Northern Cape iron ore assets will maintain their head office in South Africa and maintain or establish their primary listing on the JSE Securities Exchange S.A.
Jeff Radebe, Minister of Public Enterprises is confident that "there is major potential for the Orex line, Saldanha port facilities and the Postmasburg to Coega and associated port facilities to make a significant contribution to the global competitiveness of the iron ore industry in South Africa".
The partners will work together with immediate effect to achieve the objectives of the partnership within a reasonable time frame.
A two stage approach has been agreed where the first stage will focus on unlocking the full potential of the Northern Cape iron ore assets' and the second stage on optimising the Orex line and Saldanha Port facilities.
Tony Trahar, Chief Executive of Anglo American said "Anglo American is fully committed to achieving the objectives outlined in the MOU, using its financial and technical resources to work with all stakeholders to develop the Kalahari iron ore mines and supporting infrastructure and to create a globally competitive iron ore industry within the parameters of the Broad Based Socio Economic Charter."
The Minister of Mineral and Energy Affairs, Phumzile Mlambo-Ngcuka, commented "this MOU outlines Government's dedication to create a globally competitive mining industry that draws on the human and financial resources of all South Africa's people and offers real benefits to all South Africans."
Anglo American plc
20 Carlton House Terrace London SW1Y 5AN United Kingdom
Tel: +44 (0)20 7968 8888 Fax: +44 (0)20 7968 8500
Registered office as above. Incorporated in England and Wales under the Companies Act 1985. Registered Number 3564138
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