[ferro-alloys.com] Mr Norman Mbazima CEO of KUMBAIron Ore hopes to make good progress in firming up the group’s expansion plans in South Africa over the next 6 months but the proposed diversification into West Africa is going to take longer to finalize.

Mr Mbazima was speaking at the release of the mining group’s results for the 6 months ended June. Kumba is 70% owned by Anglo American. That delay is despite apparently favorable deal making conditions created by the slump in the commodity markets in general and concerns over the pull-back in the Chinese economy in particular.

According to Kumba estimates, China accounted for 49% of global crude steel production which totalled 787 million tonnes in the H1 of 2013. The country imported 72% of global seaborne iron-ore exports which totalled 539 million tonnes.

Exxaro Resources, Kumba’s empowerment partner has already moved into West Africa. Exxaro received dividends amounting to ZAR 6.6 billion from Kumba’s Sishen Iron Ore mine during its 2011 and 2012 financial years and will get a further ZAR 1.75 billion from the latest interim payout.

Last year, Exxaro took over Sydney listed junior African Iron Ore, which controls an iron ore project in the Republic of Congo where it expects to start production this year.

Mr Mbazima said that "We continue to look at opportunities in West Africa, but it’s a difficult environment right now. Most of the people who are there are running away. I wish there were some obvious candidates, because I would have picked them up already. The issue in West Africa concerns what is available and the infrastructure requirements."

He said that "There are some big gorillas out there, but to develop them will require the construction of hundreds of kilometres of rail line and a new deep water harbor. Our balance sheet is strong, but it’s not that strong. At the other end is a range of smaller projects that we don’t want to get involved with. Ideally, it would be a project that would produce about 5 million tonnes annually at first but can then be scaled up. I am not being forced by my board to do anything in a hurry."

Source - bdlive.co.za