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FEBRUARY 2011

Rockwell Diamonds, Ventersdorp, Tirisano project

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PROJECT INDEX

1 Projects in Progress 2011

INDUSTRIAL PROJECTS 3Electricity 4 Eskom’s Arnot capacity increase project 5 Eskom’s Ingula pumped-storage scheme 6 Eskom’s Kusile power plant project 7 Eskom’s Medupi power station project 8 Mmamabula energy project 10 Renewable energy feed-in tariff programme 11

Green Building Property Development 12 Absa Towers West office development 13 Menlyn Maine city precinct 14

Petrochemicals, Oil and Gas 15 PetroSA’s Project Mthombo 16

Transport and Logistics 18 South African Roads Agency Limited’s Gauteng

Freeway Improvement Project 19 The Gauteng Provincial Government’s Gautrain rapid rail link 20

Transnet’s new multiproduct pipeline 21

Water and Sanitation 22 eThekwini water and sanitation projects 23 Trans-Caledon Tunnel Authority’s Olifants River Water

Resources Development Project phase 2 24

MINING PROJECTS 25Coal 26 BHP Billiton and Xstrata’s Douglas-Middelburg

optimisation project 27 Exxaro Resources’ Grootegeluk Medupi expansion

project 28 Riversdale Mining’s Benga coal project 30 Riversdale Mining’s Zambeze coal project 31 Sasol’s Thubelisha coal mine project 32

Diamonds 33 Debswana’s Cut-8 project 34

Gold 35 Anglogold Ashanti’s Mponeng Below 120 Level

Phase 2 project 36 Gold Fields’ South Deep gold mine expansion 37 Great Basin Gold’s Burnstone gold project 38 Rangold Resources’ Tongon gold project 39 Witwatersrand Consolidated Gold Resources’

Bloemhoek gold project 40

Iron-ore 41 Assmang’s Khumani iron-ore expansion project 42 Kumba Iron Ore’s Kolomela iron-ore project 44 Iron Mineral Beneficiation Services’ iron fines project 45

Other mining sectors 46 Kalagadi Manganese project 47 Norilsk Nickel and African Rainbow Minerals’

Nkomati nickel mine phase 2 large-scale mining expansion project 48

Platinum 49 Anglo Platinum’s Thembelani shaft 2 platinum project 50 Anglo Platinum’s Twickenham project 51 Anglo Platinum’s Unki platinum mine and

processing plant 52 Impala Platinum’s No 16 Shaft project 54 Impala Platinum’s No 17 Shaft project 55 Impala Platinum’s No 20 Shaft project 57 Platmin’s Pilanesberg platinum mine 58 Royal Bafokeng Platinum and Anglo Platinum’s

Styldrift Merensky phase 1 project 59 Western Bushveld Joint Venture’s Project 1 60 Zimplat’s Ngezi platinum mine expansion project 61

Uranium 62 AngloGold Ashanti’s Vaal River South Uranium

recovery expansion/upgrade project 63 First Uranium’s Mine Waste Solutions tailings

recovery project 64

R846bn spending plan

Projects in Progress 2011The material contained in this report was compiled by Sheila Barradas (mining projects) and Lindiwe Molekoa (engineering projects) and the Research Unit of Creamer Media (Pty) Ltd, based in Johannesburg, South Africa. The information contained in this report has been compiled from sources believed to be reliable, but no warranty is made to the accuracy of such information.© Copyright Creamer Media (Pty) Ltd

Concrete examples of the long-promised alignment between the infrastructure development plans of South Africa’s State-owned enterprises and the government’s job- and industry-creation aspirations are emerging.

As this Projects In Progress publication goes to print, South Africa’s Infrastructure Development Cluster chairperson and Transport Minister Sibusiso Ndebele, together with Economic Development Minister Ebrahim Patel, are collectively seeking to maximise the job-creation and industrialisation opportunities from South Africa’s latest R846-billion infrastructure investment programme aimed at boosting electricity, transport and water infrastructure.

While South Africa often battles to implement it capital expenditure plans, this time around the Cabinet’s Infrastructure Development Cluster has made it clear that the country cannot afford any delays.

The cluster is strident on the need for a spirited execution across a broad front.

Simultaneously in the region, the Southern African Development Community (SADC) secretariat has started work on an infrastructure development master plan to deal with an estimated $100-billion deficit in Southern Africa’s roads, railways, ports and inland waterways, power, communications and water infrastructure.

The SADC is taking steps to strengthen the financial capacity of regional institutions to undertake regional infrastructure projects, through establishing a project prepara-tion and development facility, aimed at taking projects to bankable level.

Deputy executive secretary for regional integration João Caholo reports the plan will involve private sector funding and partnerships to alleviate public financing constraints.

While African governments are increasingly keen on public-private partnerships, there are also independent power producers with a combined generation capacity of 3 000 MW, as well as private-sector companies with port, airport and toll road concessions.

World Bank Institute vice-president Dr Sanjay Pradhan reports that the infrastruc-ture deficits in 24 African countries are reducing yearly potential growth rates by up to two percentage points and reducing productivity by 40%.

Pradhan adds that a “new frontier” for development practitioners has been created with the backing of the African Capacity Building Foundation, the Development Bank of South Africa, the German Agency for International Cooperation, the SADC Development Finance Resource Centre, South Africa’s National Treasury and the World Bank Institute.

Back in South Africa, the rail and road overhaul alone will take up more than half of the R846-billion capital expenditure plan.

The initial road maintenance budget is R75-billion, with R93-billion for commuter rail services and R260-billion to R300-billion for the long-distance rail service, Shosholoza Meyl.

All this is set to underpin ongoing project development across a broad infrastructural front and across extensive regional geography.

Martin CreamerPublishing Editor

Projects in Progress 2011 2

INDUSTRIAL PROJECTS

Electricity

Green BuildingProperty Development

Petrochemicals,Oil and Gas

Transport and Logistics

Water and Sanitation

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South Africa’s State-owned power utility Eskom has warned the nation that the security of power supply will remain under pressure in the next two years, until the introduction of the first of its new capacity projects, either in late 2012 or early 2013.

The new generation capacity programme is planned to add 13 000 MW of new energy to cater for rising electricity demand, and includes coal-fired, base-load power stations; the return-to-service power stations; the introduction of independent power producers (IPPs) and the deployment of renewable energy solutions.

The contribution of IPPs can be expected to materialise through the implementation of the renewable energy feed-in-tariff (Refit) programme, which is targeting 1 025 MW of renewable energy, by December 2013. The Refit programme, under the stewardship of the National Energy Regulator of South Africa, proposes to generate power mainly from solar, wind, landfill gas, biomass, biogas and small-scale hydro projects. This will account for 4% of the estimated electricity demand by 2013.

Electricity


Eskom’s Arnot capacity increase project

Name and LocationArnot capacity increase project, Mpumalanga, South Africa.

Project DescriptionThe project involves the extensive refurbishment of the Arnot power station, located 50 km east of Middelburg, to meet the increasing demand for power in South Africa.Arnot has six 350 MW units, making up a total installed capacity of 2 100 MW. The aim is to increase the capacity by 300 MW, while at the same time extending the station’s lifetime.

ValueThe project is valued at R1,48-billion. The sedimentation plant turnkey contract is valued at about R20-million.

DurationThe sedimentation plant contract was awarded in December 2006, and commissioned in December 2007. The handover to Eskom took place in December 2008, following a 12-month defects warranty period. The planned completion date for the last unit was November 30, 2010.

ClientEskom.

Key Contract and SuppliersActom (upgrade of turbines and boilers); Howden (fans), Sulz-er (upgrade of existing pumps); VWS Envig (cooling water-treat-ment plant and sedimentation plant); Veolia Water (sedimentation plant system development); Alstom (retrofit contract); Process Consultants through Refraline (ceramite burners); Steinmuller Engineering Services (engineering services).

Latest DevelopmentsIn 2010 VWS Envig, a wholly owned subsidiary of Veolia Water, has completed the sedimentation plant turnkey project for the power station. The plant will remove sedimentation from blowdown water created in the station’s cooling towers.

On Budget and on Time?Yes.

Contact Details for Project InformationEskom, tel +27 11 800 3304/3309/3343/3378, fax +27 11 800 3805 or email [email protected]; or Eskom spokesperson Hilary Joffe, tel +27 11 800 6993 or cell +27 79 697 9374.

ELECTRICITy


Eskom’s Ingula pumped-storage scheme

Name and LocationIngula pumped-storage scheme project, on the border between the Free State and KwaZulu-Natal, South Africa.

Project DescriptionThe pumped-storage scheme, located in the Drakensberg mountain range, on a site north-east of Van Reenen’s Pass, will comprise an upper dam (Bedford) and a lower dam (Braamhoek). The distance between the upper and lower reservoirs will be 4,6 km, with an elevation difference of about 470 m.The dams will be connected by underground waterways, through an underground powerhouse, which will house four 333 MW pump turbines, with a total capacity of 1 332 MW.The twin waterways, consisting of part concrete and part steel-lined headrace tunnels, pressure tunnels and shafts, will link the upper reservoir with the pump/turbines. Steel-lined extended draft tubes and a single concrete-lined tailrace tunnel will connect the pump/turbines to the lower reservoir.The upper reservoir will be a concrete-faced rockfill embankment dam 41 m high, with total capacity of 22,6-million cubic metres and an active water storage volume of 19,3-million cubic metres. The lower dam will be of roller-compacted concrete, 39 m high, with total capacity of 26,3-million cubic metres and an active storage volume of 21,9-million cubic metres.The upper reservoir will store enough water to generate electricity continuously, using all four units for 16 hours. Pumping the water back from the lower reservoir will take about 21 hours, giving an overall efficiency of 76% for the scheme.

ValueR16,6-billion.

DurationThe first 333 MW unit of the nearly R17-billion project is expected to be commissioned by 2012, while the remainder of the units will be commissioned in April, July and October, respectively; however, construction of the Bedford dam is expected to be completed by May 10, 2011.

ClientEskom.

Key Contracts and SuppliersThe Braamhoek Consulting joint venture (JV) consisting of Arcus Gibb, Knight Piésold and Stewart Scott (design monitoring and

supervision); Murray & Roberts (exploratory tunnel); Grinaker-LTA (access roads); CMC Mavundla, a CMC di Ravenna and PG Mavundla JV (main access tunnel); Afriscan (water supply, sewage treatment, small access roads and building of temporary Eskom offices); B&E Quanza Group (aggregate quarry); Acer (Africa) (environmental consultants); Braamhoek Dam JV, comprising Concor Roads & Earthworks, Wilson Bayly Holmes-Ovcon (WBHO), Edwin Construction and Silver Rock (dam contract); Voith Siemens Hydro Power Generation (electromechanical equipment contract); Atlantis Drill (ventilation shaft) and Sandvik Mining & Construction (raiseboring manager); Deutsche Bank (R1-billion loan); ABB (electrical balance of plant (eBoP) solution).

Latest DevelopmentsSeptember 2010Power and automation technology group, ABB, has been awarded an order valued at $23-million, to supply an eBoP solution for the Ingula project. As part of the turnkey eBoP solution, the firm will design, engineer, supply, install and commission the project. Key products to be supplied include the service and auxiliary transformers, dry-type distribution trans-formers and medium- and low-voltage switchgear.

August 2010The tailrace tunnel downstream from the construction adit stands at 605 m excavated and from the adit upstream at 499 m.To date, excavation on surge chambers 3 and 4 amounts to 8 929 m3, with chambers 1 and 2 excavated to 3 028 m3.Work on the outlet structure is 90% completed, with the installation of trash racks and grids currently under way. Construction on the tower and bridge is also in progress.Work on the draft tubes, which will be located below the turbines and will handle water flowing at a rate of 85 m3/s, is progressing well.Meanwhile, Eskom has signed a loan with the Deutsche Bank valued at R1-billion, which will be used to fund 85% of the turbine pump contract for Ingula.

On Budget and on Time?The project is reportedly on schedule for completion in May 2011.

Contact Details for Project InformationEskom media desk, tel +27 800 3304/3309/3343/3378, fax +27 11 800 3805 or email [email protected]. Eskom national call centre, tel 0860 037 566.Ingula Visitors Centre, tel +27 36 342 3122 or email [email protected].

ELECTRICITy


Eskom’s Kusile power plant project

Name and LocationKusile power plant project, Mpumalanga, South Africa.

Project DescriptionKusile will be a six-unit, greenfield, mine-mouth, supercritical coal-fired power plant, with about 4 800 MW of gross output. It will be built adjacent to the existing Kendal power station, in the eMalahleni municipal area.

ValueThe project’s cost has escalated from about R80-billion to an estimated R142-billion.

DurationThe first generating unit was scheduled to enter commercial operation by mid-2014, with the subsequent five units being commissioned at eight-month intervals thereafter. The last unit was expected to be in commercial operation in 2018.Eskom’s decision to delay the awarding of some of the project’s contracts will delay the overall delivery schedule, possibly by between 18 months and 36 months.

ClientEskom.

Key Contracts and SuppliersNinham Shand Consulting Services (environmental-impact assessment, geotechnical investigations and traffic impacts); AirShed Planning Professionals (air-quality impacts); Jongens Keet Associates (noise impacts); Strategic Environmental Focus (SEF) (visual impacts); Makecha Development Association (impacts on terrestrial fauna and flora); Golder Associates through Ecosun (aquatic-ecosystem impacts); Groundwater Consulting Services (ground water impacts); Ilitha Riscom (risk assessment); Northern Flagship Institution (archaeological impacts); University of the Free State (impacts on agricultural potential); Urban-Econ (UE) (socioeconomic impacts); Seaton Thomson & Associates (planning implications); Mark Wood Environmental Consultants (process review); Eskom in partnership with Black & Veatch (project management); Hitachi Power Africa (HPA), a subsidiary of Hitachi Power Europe (HPE) (boiler contract); Actom (formerly Alstom Power) (turbine island works and distributed control system (DCS)); Murray & Roberts (M&R) (boiler construction contract); Roshcon, a subsidiary of Eskom (terracing contract); Concrete Finishing Equipment (dust filters and silo and environ-mental safety); the Kusile Civil Works (KCW) Joint Venture (JV), comprising Stefanutti Stocks, Basil Read, Group Five and Wilson Bayly Holmes-Ovcon (WBHO) Construction (main civil works); and BHR Piping Systems (bending machine); Siemens (gener-ation transformers contract); Frankipile and Stefanutti Stocks under a subcontract to the KWC JV (pile installation); Karina Concor JV (construction of chimney shells/structures); Actom in consortium with Cosira (engineering, supply and installation of

flue gas desulphurisation system); DSE Structural Engineers & Contractors, subcontracted by Genrec Engineering (fabrication of steel columns for boiler 1 to 3); Steel Services Direct (SSD) (steel, pipes and wax plants); GB Bearings (supplier of HSR horizontal bearing assemblies and profile bore bearings); Sulzer Pumps South Africa, subcontracted by Actom (supply of booster and boiler feed pumps); Steloy Castings, subcontracted by Sulzer Pumps South Africa (supply of chrome steel components for the pumps); Clyde Bergemann Power Group subcontracted by HPA (supplier of sootblowers for boilers); Clyde Bergemann Africa (fly ash handling system); ABB (supplier of medium-voltage switchgear and associated equipment); PD Naidoo & Associates (PDNA) Industrial Projects (main water and wastewater treatment contractor); GE Water Engineered Systems, subcontracted by PDNA Industrial Projects (advanced water and wastewater treatment equipment).

Latest DevelopmentsJanuary 2011An environmental group is urging a government-funded bank to deny finance to South Africa’s Kusile coal-fired power project.The city of Milwaukee, in the state of Wisconsin, hosts two mining machine companies – Bucyrus International and Joy Global, which have asked the bank to make funding available for the Kusile project, as part of an effort to put themselves in a favourable position to win a contract to build a coal-mining dragline that will take 30 months to complete at a cost of $120-million.Bucyrus has stated that they hope the US Export-Import Bank (Ex-Im) swing its decision in their favour and make the funds towards Kusile available. The companies are expecting to create job opportunities in Milwaukee should the contract to build the dragline materialise.However, this has come up against environmental network Friends of the Earth, who are protesting the funding on grounds that Kusile will emit 36,8-million tons of carbon dioxide into the atmosphere, as well as toxins and other heavy metals, such as arsenic and mercury.The environmental group is also urging the bank, which in November 2010, gave some early approvals to Kusile’s environ-ment friendly features, to “end its fossil-fuel binge”. Meanwhile, US Ex-Im president Fred Hochberg, who sees the financing as helping South Africa to improve its energy capacity, has indicated that the bank will take some time to reach a final decision on financing the Kusile power project.

Contact Details for Project InformationEskom media desk, tel +27 11 800 3304/3309/3343/3378, fax +27 11 800 3805 or email [email protected]; or project managers Frenchie Collet-Serret, email [email protected]; and Abram Masango, email [email protected] national call centre, tel 0860 037 566.

ELECTRICITy


Eskom’s Medupi power plant project

Name and Location Medupi power station project, Lephalale, Limpopo, South Africa.

Project DescriptionMedupi will be a dry cooled coal-fired base-load power generating plant, comprising six 800 MW units, with a 4 800 MW installed capacity, the biggest of its kind in the world.

Value The price of the Medupi power station has escalated to R125-billion, from the previous figure of R100-billion. The project was initially estimated at R80-billion. The rise in the cost of the project has been attributed to higher interest charges, commodity prices and changes to the scope of the project.The flue gas desulphurisation (FGD) investment will add up to R6-billion to the project’s total capital cost, which was not initially included.

Duration The plant was initially expected to be commissioned by February 2012; however, the first unit is now expected to be synchro-nised to the national grid in September 2012, with other units scheduled to come on stream every six to eight months thereafter.

ClientEskom.

Key Contracts and SuppliersParsons Brinckenhoff (contracts manager); Exxaro Resources (coal agreement), Roshcon (civil engineering); BKS Group (audit and design of concrete steel structures); Murray & Roberts (M&R) MEI (structural steel fabrication and erection, mechanical installation works, boiler construction and civil works contract); Energy Fabrication (supply of 30 000 t of fabrication platework for the boiler ducting and coal bunkers); Hitachi Power Africa (HPA) and Hitachi Power Europe (engineering, supply, manufacturing, construction and commissioning of utility steam generators, as well as related components such as regenerative steam air-heaters, coal mills and feeders, sootblowers, fans, deashers, high pressure and low pressure pipework); Actom (P&C) (turbine generator protection equipment); SPX Corporation (pulse-jet fabric filters and air preheaters, and the manufacture of pressure parts); GEA (design, manufacture, supply and erection of the air-cooled condensers); Hansen Transmissions South Africa (condenser gearboxes); Afrimat in partnership with local suppliers Chobe Crushers (supply of aggregate); BroKrew Industrial (fabrication, corrosion protection and delivery of ducting for six air-cooled condenser sections); Genrec Engineer-

ing (awarded a number of projects by M&R MEI, which is con-tracted to HPA (undertake connection design, to detail, fabricate and supply structural steel for the boiler island, auxiliary bay structures, ash transverse conveyors, coal incline conveyors, and the primary and secondary coal conveyors); SSI (engineer-ing services); Cosira (turbine hall); Kwikspace (modular accom-modation units); Sarens (mobile crane hire); Voith Turbo (Vorecon drives); Concrete Finishing Equipment (dust filters and silo and environmental safety); Areva’s transmission and distribution division (switchgear cubicles); Mikropul (axial-flow fans and auxiliary equipment for the turbine halls’ ventilation); General Electric (switchgear system); Siemens (unit transformers); Clyde Bergemann Power Group subcontracted by HPA (supplier of soot-blowers for boilers); Clyde Bergemann Africa (fly ash handling and conditioning systems); DSE Structural Engineers & Contractors, subcontracted by Genrec Engineering (air preheater structure); Steel Services Direct (steel, pipes and wax plants); GB Bear-ings (supplier of HSR horizontal bearing assemblies and profile bore bearings); Sulzer Pumps South Africa subcontracted by Actom (fabrication of 48 pumps for boiler feed, booster and con- densate extraction duties); Steloy Castings, subcontracted by Sulzer Pumps South Africa (supply of chrome steel components for the pumps); ThyssenKrupp Materials Handling (supply of coal handling equipment).

Latest DevelopmentsJanuary 2011State-owned enterprise Eskom has reported that its direct civil works contract for the Medupi project is adhering to international contracting standards and norms. The civil works contract is being carried out by engineering contractor M&R, and the utility insists that it is being implemented with strict adherence to global standards, and that claims arising as a result of scope changes and variations are following due process.The contract is being governed under the standard conditions outlined by the International Federation of Consulting Engineers, or Fidic.M&R CEO Brian Bruce has noted that the scope changes and variations have become the norm, rather than the exception, at the Medupi power project, where it has been contracted directly to perform the civil works, and indirectly to complete the steel erection work for the boilerhouses.Bruce has warned that with 53% of the contract having been completed, the contract sum has already been exceeded, adding that it is necessary to find resolution to the claims before the advanced payments for the contract are used. The resolution is sought to prevent the company from having to stop work on the basis of nonpayment, which could have a grave impact on the progress of the works at Medupi. The civil works contract, awarded in early 2008, is valued at R3-billion.

ELECTRICITy

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Under the Fidic contracting principles, contractors have a certain number of days to lodge claims, while the client has a set time-frame to respond. Claims are either settled, or directed towards an arbitration process.Eskom is considering M&R’s claims with regard to the civil works contract; however, it has been unable to comment on matters surrounding the steel erection contract for the boilerhouses at both the Medupi and Kusile power stations, as these contracts were awarded to M&R by HPA, the recipient of the main boiler contract. It is reported that this contract has also attracted variation changes, but, given its size, these are not out of the ordinary.Meanwhile, Eskom together with telecommunications network operator Neotel, have been found guilty of noncompliance by the Environmental Management Inspectorate (EMI), known as the Green Scorpions, at some of their projects, in Limpopo.The inspections are set to continue in Mpumalanga from January 17 to January 21, 2011.Five of Eskom’s projects in Limpopo were inspected, including the Medupi power station project. Preliminary findings showed that, in Lephalale, where Eskom is building the Medupi power station and associated structures, including raw water reservoirs and pipelines, the compliance was generally in order and the pro-jects were progressing well.With regard to the alignment and the construction of a portion of the Afguns roads, as well as the construction of the telecommu-nication mast in the vicinity of the Medupi power station – these projects have been completed and the compliance status was also satisfactory.

However, the EMI established that Eskom was not complying with certain conditions of the environmental management plan, with regard to the construction of the Medupi–Marang 400 kV powerline.The Department of Environmental Affairs has indicated that all noncompliances detected during inspections are being reviewed, and will be met with appropriate enforcement action where necessary.Other Eskom projects still to be inspected include the Komati asbestos site, Camden substation, and the transmission line between the Duvha power station and the Janus substation.

On Budget and on Time?The cost of the Medupi project has surged from between R80-billion and R100-billion to about R125-billion. The plant was expected to be commissioned by February 2012, but the first unit is now scheduled to be synchronised to the grid in September 2012, with additional units coming online every six to eight months thereafter.The FGD technology retrofit will add about R6-billion to the project’s total capital cost. The timing has not been established.

Contact Details for Project InformationEskom Enterprise, Medupi project senior communications advisor Mashudu Ramulifho, tel +27 14 762 2148, fax +27 86 607 6080, cell +27 82 901 7184 or email [email protected] media desk, tel +27 800 3304/3309/3343/3378, fax +27 11 800 3805 or email [email protected] national call centre, tel 0860 037 566.

ELECTRICITyFrom page 8



CIC Energy’s Mmamabula energy project

Name and Location Mmamabula energy project (MEP), Botswana.

Project Description CIC Energy Corporation is developing four projects at its Mmamabula coalfield. The highest profile project is a new integrated coal mine and coal-fired base-load power plant, the MEP.The Mmamabula coalfield comprises three exploration licences: South block, Central block and the Eastern and Western blocks (the latter two combined under one licence). The global mineral resource estimate for the project totals about 2,6-billion tons in the measured and indicated categories (Canadian NI 43-101). An estimated 35-million tons is further reported in the inferred category.The first phase of the MEP is being designed as a 1 200 MW (net) capacity, comprising two units of about 600 MW each and a 4,5-million-metric-sales-tons-a-year coal mine. This project is being planned with provisions for expansion in multiple phases. CIC Energy anticipates that the MEP power station could be in commercial operation in early 2014, if regulatory approvals are obtained in 2010.At full production, a total of about six-million tons of run-of-mine coal a year will be required to support the power station.In addition to the MEP, CIC Energy is also planning three additional projects at the Mmamabula coalfield. The Mookane domestic power project is a planned 300 MW integrated coal mine and coal-fired base-load power plant. In March 2010, CIC Energy signed a memorandum of understanding with GCL Projects, an affiliate of Golden Concord Holdings. The planned export coal project is actively investigating ways to export A-grade thermal coal to international markets, while the coal- to-hydrocarbons (CTH) project is intended to produce syngas from coal, which can be converted to a variety of downstream products, including fuels and petrochemicals.

Value CIC Energy’s estimated capital equipment and infrastructure costs related to the 1 200 MW (net) power station and mine are currently estimated at $3-billion. Over and above this, there will be significant additional costs for other items, such as financing fees, hedging costs, interest during construction, contingencies and other expenses.

Duration The timeframe by which CIC Energy’s MEP could be generating electricity, depends in part on the timing of the finalisation of the second integrated resource plan, or IRP2010, by South Africa’s Department of Energy (DoE).

Client CIC Energy.

Key Contracts and Suppliers Consultants participating in the Mmamabula energy complex development include Snowden Mining Industry Consultants (resource estimates); Environmental Resources Manage-ment and Digby Wells & Associates (water and environmental solutions); DRA (mine beneficiation plant designs); Gibb Africa (surface water studies); Aurecon (design of common infrastruc-ture); Clifford Chance (project legal counsel); Jacobs Engineer-ing Group, Toyo Engineering Corporation, Lategan Bouwer Engineers and VGI (CTH technical studies); MRN Runge and

DRA (export coal project mine planning & design); Shell Global Solutions International (CTH value-chain study), Shanghai Electric Group (engineering, procurement and construction contract; Parsons Brinckerhoff (owner’s engineer); NM Rothschild & Sons (MEP financial advisers); Absa Capital and the Standard Bank of South Africa (lead arrangers for the commercial bank facility) and the Export Credit Insurance Corpor-ation of South Africa (debt financing).The expected participants in the power-purchase agreements are Eskom and the Botswana Power Corporation.

Latest DevelopmentsJanuary 2011In mid-December 2010, CIC Energy entered into an agree-ment with the Guma Group to amend certain terms of the Guma Warrant Agreement entered into by the company and Guma in April 2010, as well as the warrant certificate issued to Guma under the Guma Warrant Agreement.Under the terms of the amendment agreement, certain of the milestones for vesting of the warrants have been eliminated, the date for achievement of vesting in relation to financial close of the MEP has been extended and the expiry date of the warrants will be extended by three months in certain circumstances.Further, the amendment agreement has allowed CIC Energy to fulfil the condition in each of its agreements with JSW Energy for CIC Energy to obtain written clarifications in respect of vesting of warrants under the Guma Warrant Agreement. CIC Energy and JSW Energy entered into a binding agreement in November 2010, allowing the India-based company to buy all of the shares in the company. The acquisition is subject to JSW Energy obtaining all relevant regulatory approvals, while CIC Energy has to comply with certain conditions to the offer. The deal is expected to be completed by the last quarter of the current financial year ending March 31, 2011. Meanwhile, the amendments envisaged in the agreement are subject to CIC Energy obtaining stock exchange, corporate and other approvals (including shareholder approval, if necessary) as may be required.

On Budget and on Time? The project’s schedule has already been moved back several times. In January 2008, the company reported that it expected to be producing commercially from the first unit of the plant by late 2012 or early 2013.In December 2009 MEP’s legal, financial and engineering activities were deferred, pending the completion of the IRP2010. Commercial operations are not expected to start before 2014.

Contact Details for Project Information Eskom media desk, tel +27 800 3304/3309/3343/3378, fax +27 11 800 3805 or email [email protected] national call centre, tel 0860 037 566. Tau Capital Corp vice president of investor relations Erica Belling, tel +1 416 361 9636 or email [email protected], email [email protected].

ELECTRICITy

Renewable energy feed-in tariff programme

Name and Location Renewable energy feed-in tariff (Refit) programme, South Africa.

Project DescriptionThe Refit programme is a planned response to South Africa’s target of generating 1 025 MW of renewable energy by December 2013, as outlined in the integrated resource plan (IRP1), which is a long-term electricity capacity plan that defines the need for new generation and transmission capacity for the country. It is envisaged that the power will be generated mainly from solar (thermal and photovoltaic (PV)), wind, landfill gas, small-scale hydro projects, biomass and biogas. This will account for 4% of the estimated electricity demand by 2013, procured through the Refit programme, Eskom’s medium-term power purchase programme, the Sere wind farm project and concen-trated solar thermal power project.The programme aims to further advance the deployment of renewable solutions, by placing an obligation on specific organisations to buy the output from qualifying renewable energy producers, at predetermined prices.The preferred technologies and feed-in tariffs identified to generate the energy in the initial phase of the project include onshore wind (R1,25/kWh), small hydro (R0,94/kWh), concentrated solar power (trough) (R2,10/kWh) and landfill gas (R0,90/kWh), concentrated solar without storage (R3,14/kWh), large scale PV (R3,94/kWh), biomass (R1,18/kWh) and biogas (R0,96/kWh).The Refit programme will be reviewed every year for the first five-year period of implementation and every three years thereafter. The resulting tariffs will only apply to new projects.

DurationProjects developed under the Refit programme are expected to be connected to the national grid before March 2016.

ClientThe Department of Energy (DoE) and the National Energy Regulator of South Africa (Nersa).

Key Contracts and SuppliersDoE (regulator); National Treasury and the Development Bank of Southern Africa (participation of independent pow-er producers (IPPs)); Eskom through its System Operations and Planning division (independent system operator); Em-bassy of Denmark in South Africa (technical and monetary assistance in the request for information (RFI) process). EA Energy Analyses (processing and analysis of RFI).

Latest DevelopmentsIn late September 2010, the DoE issued a RFI, which sought potential private developers of both cogeneration and renewable energy projects to indicate their interest in, or to provide inform-ation on, the progress of their projects in South Africa, under the Refit programme.The objective of the RFI was to provide the department with enough information as to the progress made by independent power developers since the announcement of the Refit pro-gramme, as well as the readiness of the market to enter the procurement stage and accelerate the negotiation processes.Further, the department called for indications of interest from potential developers of cogeneration projects, as well as from

small project developers. Small projects are defined as projects smaller than 5 MW but bigger than 1 MW. Submissions from other potential participants including munici-palities, financial institutions (providers of debt and equity financ-ing, export credit agencies, development finance institutions); technology and equipment suppliers were also solicited.In response, the DoE received 384 replies to the RFI. One third of the responses received, amounting to 70% of the total capacity within the RFI, was made up of wind power projects. Solar PV projects accounted for one-third of the responses, and 15% of the estimated capacity. About 10% of the total capacity is reserved for concentrated solar power, which received 5% of responses. The balance was from biomass, hydropower, landfill gas and biogas projects.In total, the projects represented some 20 000 MW of renewable energy capacity, as well as 4 000 MW of cogeneration capacity. However, the department has indicated that only a small number of projects are in a sufficient ‘state of readiness’ to participate in the advanced procurement process, which will possibly lead up to power purchase agreements being signed with Eskom.Fewer than 30 of the projects identified during the RFI process have, for instance, received an indicative quote and preliminary timeframe for grid connection, which gives the conclusion that grid readiness is a potential barrier for deployment.Currently, the RFI findings are being compared with the existing industry conditions in consultation with Eskom. This includes mapping current market indications from the RFI to existing Eskom infrastructure and future grid planning.The new information gathered from the RFI will be factored into the second IRP2010, a draft of which has been released. Initially, the IRP2010 allocated around 7 200 MW of power gener-ation from renewable energy sources by 2030. However, should it be established that renewable energy can contribute more, this amount is likely to be increased going forward.It is also envisaged that the RFI will be followed by a request for proposal, which will bring structure to the procurement process under the Refit guidelines. Detailed documentation relating to the process can be expected during the first half of 2011.Although the tendering procedure is not yet clear, the DoE has stated that the Electricity Regulations on New Generation Capacity, which were published on November 30, 2010, offer adequate insight into the possible structure of the tender pro-cess.The DoE is also investigating the possibility of accelerating the environmental-impact assessment process.Pertaining to the commitment of lenders, the department has announced that banks have pledged to offer their financial due diligence at the bidding phase, according to discussions with the government. This will lead to financial close soon after the power purchase agreements (PPAs) have been signed. Further, the department has reported that the PPAs and the selection criteria are in advanced stages of completion.Meanwhile, the department has also signed a memorandum of agreement with the National Treasury and the DBSA on the participation of IPPs in the project.

Contact Details for Project InformationDoE spokesperson Bheki Khumalo, tel +27 12 444 4256, fax +27 12 444 4501, cell +27 82 773 2388 or email [email protected]; or media liaison officer Zodwa Batyashe, tel +27 12 444 4265, fax +27 12 444 4505, cell +27 82 455 9796 or email [email protected], Adele Greyling, tel +27 11 800 4952 or email [email protected].


ELECTRICITy


While the concept of green building in South Africa is still emerging, the development of envi-ronment friendly properties in South Africa seems to be gaining strength.

One such company to have embraced green building is Nedbank, which besides having completed the construction of its R1,2-billion head office in Sandton, in 2010, is officially the first tenant at the Menlyn Maine city precinct, currently under development. Nedbank’s new building has already been registered for a Green Star South Africa design rat-ing, under both the design and as-built phases of the rating system.

Meanwhile, the design of the Absa Towers West office building, which was expected to be completed by the end of 2010, is expected to further foster the principles of efficient energy and water consumption. One of its main features is the gas-fired generators, which operate without emitting smoke or exhaust gases.

Green Building Property Development

Absa Towers West office development

Name and Location Absa Towers West office development, Gauteng, South Africa.

Project DescriptionThe Absa Towers West development covers three city blocks and comprises two office towers, designated site A and site B, as well as a parkade – site C. The three buildings, with a total floor space of 160 000 m2, span across Main, Troye, Anderson and Von Weilligh streets, in Johannesburg.The office buildings will be 15-storeys-high, consisting of eight floors of office space, three floors of combination space and four floors of basement parking.The parkade building will provide 18 levels of parking space, with four basements and 14 storeys above ground, which will be able to accommodate over 100 cars at each level.The parkade will have lighting with motion sensors, to reduce energy requirements, and will include an energy centre in the basement.The idea for the energy centre came from the need for a reliable energy backup supply for the building. The 11,2 MW generators will self-generate electricity through gas, without emitting smoke or exhaust gas smells. Its gas engines are quiet, but the centre will also have a high level of sound attenuation. It will run from 07:00 to 20:00 on weekdays and will save the company more than two-thirds of its yearly electricity costs.Light fittings in the offices will have motion sensors and daylight dimmers.The building will use a grey-water system, which will be able to recycle 43 000 ∙ of water a day. Water from the gym showers will be collected and reused to flush toilets and urinals.Hot water for the showers and washbasins will be heated by heat recovery at the chiller plant.One of the most interesting features of the development is the above-ground linking bridge, spanning 17 m across Marshall street, connecting the two office components over seven levels above ground level. The bridge will accommodate office space as well as a landscaped atrium space.

ValueR1,8-billion.

DurationConstruction was expected to be completed by the end of 2010.

ClientAbsa.

Key Contracts and SuppliersMurray & Roberts (M&R) Construction (80%) and Enza Construc-tion (20%) (construction); Mokala Collins/JM Henrey & Associates joint venture (JV) (project managers); Poloko Architectural JV and Motsepe Architects (architects); SBDS Quantity Surveyors/

Thabo Senyolo & Partners JV (quantity surveyors); WSP Struc-tures in JV with Asakheni Consulting Engineers (structural and civil engineering related designs); Spoormaker & Partners/DTM Engineering JV (mechanical engineers); Taemane Consulting (electrical engineers); Johnson Controls Systems & Services South Africa (variable-speed drive (VSD) chillers and control system); Paragon Interface (interior architecture); Coprax (piping system); CDM Africa (Clean Development Mechanism and carbon trading solutions) and Diesel Electric Services (natural gas-powered generating sets); WSP Green by Design (green-building associated design).

Latest DevelopmentsJune 2010M&R reports that the Absa Towers West project has reached the phase where sectional handovers needed to be achieved, starting at the end of March 2010 through to August 2010, allowing the ‘fit-out’ project to proceed. The construction con-tractor is a joint venture between M&R Construction (80%) and Enza Construction (20%). M&R has also been contracted to do the project ‘fit-out’, which will be substantially complete by the end of 2010, with certain sections being completed in early 2011. Absa staff, however, will start taking up residence in the new facility by November this year.

February 2010Johnson Controls Systems & Services South Africa will provide VSD chillers for the offices, as well as the installation of a control system that will integrate all the chillers to make it easier to control and monitor the building’s cooling.

April 2009The Absa Towers West project is not only transforming the Johannesburg inner city skyline, it is taking green building in the city centre to a new level, as the financial giant has committed to design and construct its new offices incorporating green building elements.The building is modelled according to the Green Star SA energy modelling protocol, after which the modelled Absa Towers West will be compared with a notional building modelled according to the SANS 204 (energy efficiency in buildings standards) ‘deemed to satisfy’ criteria. Green Star rating points are awarded on the percentage improvement of the Absa building over the SANS 204 building.

On Budget and on Time? Not stated.

Contact Details for Project Information Absa Real Estate Asset Management, Quinton van Wyk, tel +27 11 671 7405 or fax +27 11 671 4764; or project manager Collin Taylor, tel +27 11 350 2031, fax +27 11 350 2471 or email [email protected].

GREEN BUILDING PROPERTy DEVELOPMENT


Menlyn Maine city precinct

Name and Location Menlyn Maine city precinct, Pretoria East, Gauteng, South Africa.

Project Description The project involves the construction of a 280 000 m2 multiuse precinct, comprising 138 000 m2 of office space, 44 000 m2 of retail and dining space, 15 000 m2 of luxury hotel space and 85 000 m2 of residential land – all of which will overlook 5 700 m2 of parklands that run through the centre of the entire precinct. The development will have an emphasis on saving energy and water.It will also have a centralised security centre, patrolling and state-of-the-art closed-circuit television system.The Ethernet Metropolitan Network, an integral state-of-the-art technology, which requires the installation of a fibre-optic grid, will service the Menlyn Maine business district. The system will be paired with the fourth generation wireless network, which will allow virtual plug and play connectivity for all the buildings.The roads around the precinct, situated next to the N1 highway and the Menlyn Park shopping centre, have been upgraded in a R76-million project to cater for the development. The South African National Roads Agency Limited has also upgraded the Atterbury and Garsfontein offramps surrounding the develop-ment in a R300-million project.The nearby substation is also being upgraded, in a R45-million project, to cater for the electricity needs of the precinct. Menlyn Maine will use 22 MVA of electricity – with the green nature of the development saving an estimated 10 MVA.

Value The project cost is estimated between R7-billion and R10-billion.

Duration Menlyn Maine city precinct is expected to be completed in the next eight years, with the first phase of infrastructure already completed, and the first building currently in the ground.

Client Menlyn Maine Investment Holdings, with its investment partners, Ice Finance, Equity Estates and Absa Bank.

Key Contracts and Suppliers Sanral (road upgrade); Urban Genesis (formerly Kagiso Urban Management) (precinct manager); Boogertman & Partners Architects (project design); Pro Arnan (Nedbank building pro-ject manager); Wilson Bayly Holmes-Ovcon Construction (main contractor for Nedbank building); Stefanutti Stocks (bulk earthworks and lateral support for Nedbank building); Standard Electrical (electrical contractor); Fire Control Systems (sprinkler installations); Melco (lift installer and supplier); Airgro (heat-ing, ventilating and air-conditioning systems); Compu-Power (uninterruptible power supply system); X-Cel (plumbing contractor); New Way Motor & Diesel Engineering (generator supplier for Nedbank building);

Latest Developments January 2011 The developers of Menlyn Maine have reported that they are currently in advanced negotiation on several new buildings, as well as in the process of designing one of the residential blocks, the shopping centre and a large hotel.

On Budget and on Time? The project is well under way, and on target to be completed in its estimated eight to ten-years build time.

Contact Details for Project InformationMenlyn Maine Investment Holdings, tel +27 12 361 7758, fax +27 12 361 8048 or email [email protected].

GREEN BUILDING PROPERTy DEVELOPMENT


The proposed $11-billion Mthombo oil refinery, in the Eastern Cape, is planned to transform the country’s refining capacity by limiting imports and, most notably, benefit the automotive and petrochemical industries through cleaner fuels.

It has been reported that, in the absence of new investments in South Africa’s refining capacity, up to 50% of the country’s fuel requirement will be met through imports, by 2025. The coun-try’s existing refineries currently produce a combined 692 000 bbl/d of petroleum products, and there is concern that these facilities are aging and using outdated refining technology, thus, contributing to higher imports.

PetroSA expects a final investment decision on the proposed project from the government in 2012.

Petrochemicals, Oil and Gas


PetroSA’s Project Mthombo

Name and Location Project Mthombo, Coega industrial development zone (IDZ), Eastern Cape, South Africa.

Project DescriptionSouth Africa’s State-owned firm PetroSA plans to build a 360 000 bl/d crude oil refinery, about 10 km from the harbour of Ngqura, in Coega, near Port Elizabeth, in the Eastern Cape, to meet the growing demand for fuel in the country.Once completed, the refinery will be the biggest in Africa and will reduce South Africa’s reliance on oil imports, by supplementing the country’s growing diesel and petrol shortfall, through cleaner fuels.An electricity power plant is also planned as part of the project. It is envisaged that the power station will generate about 800 MW of electricity, of which 200 MW will be used for the refinery. The excess power will be fed back into the national grid.

ValueThe project cost is estimated at $11-billion.

DurationBoth the prefeasibility and feasibility studies have been completed and the project is ready to proceed to the front-end engineering and design (Feed) phase.The Feed phase is expected to take 18 months to complete at an estimated cost of about R2,5-billion. PetroSA expects a final investment decision from the government in 2012. The refinery is scheduled to be completed by the end of 2015, with commissioning expected in 2016.

ClientPetroSA.

Key Contracts and SuppliersKBC Advanced Technologies (the project’s technical/commercial adviser), HSBC (project finance advisory service provider), KBR (feasibility and Feed study services), Edward Nathan Sonnenbergs consortium (legal advisers), the Council for Scientific and Industrial Research (environmental-impact assessment), and Fairbrother Geotechnical Engineering (geotechnical investigation).

Latest Developments January 2011In December 2010, PetroSA reported that there were several more decisions and definitive engineering studies still to be conducted before construction of the proposed Mthombo oil refinery possibly got under way in 2012. The project was found to be technically feasible and commercially viable following a

feasibility study, which was completed in 2009.The State is currently considering a proposal submitted earlier in 2010 by the PetroSA board, for the project to proceed to the Feed phase.The precise location for the planned refinery within the Coega IDZ has not yet been finalised. Current estimates indicate that a decision on the site could be made by March 2011, paving the way for the Feed phase to begin a month later. Meanwhile, South Africa’s Department of Energy has denied that it has received a proposal from oil groups BP Africa and Shell for government to take up a position in the Sapref refinery, in Durban, in preference to proceeding with a proposed invest-ment into a greenfield refinery at Coega, in the Eastern Cape. The department has also stressed that a decision on new refining capacity is growing increasingly urgent and that South Africa has no intention of becoming reliant on imports.

October 2010South African President Jacob Zuma estimates that the planned Mthombo oil refinery will save the country about R12,6-billion a year in energy costs, once it is up and running.The President says that the project will showcase the country’s competitive ability to its global counterparts, in an environment where the demand for automotive fuels exceeds the local production capacity.Meanwhile, PetroSA estimates that, without additional invest-ments in local refining capacity, South Africa will be forced to import about 8,5-billion litres of fuel a day, or 150 000 bbl/d, which will negatively impact on the country’s foreign exchange reserves, and make national supply vulnerable to external factors.Further, Minister of Energy Dipuo Peters has announced that she will submit plans for the engineering design of Project Mthombo to Cabinet shortly. Both the prefeasibility and feasibility studies have been completed and the project is ready to proceed to the Feed phase.The results of both the feasibility studies indicate that the project is technically feasible and commercially viable.The department is currently considering PetroSA’s request for approval to proceed to the Feed stage.

September 2010PetroSA reports that it has held talks with China’s oil group, Sinopec, and other potential investors to form a partnership on the Mthombo project. The firm is looking to sell up to a 30% equity stake in the refinery to an investor. However, the final decision on the size of the equity stake that will be sold, depends on the government.PetroSA has also held discussions with Malaysia’s oil company Petronas, as well as Sonangol of Angola, to identify potential areas of cooperation.

PETROChEMICALS, OIL AND GAS

To page 17


August 2010The Coega Development Corporation has announced that construction of the Mthombo crude oil refinery project could begin as early as 2012. The corporation is awaiting a decision on the final study from the government, which could be received in the next three months.The study is the last crucial phase before construction. About R2,4-billion is needed to complete the final study and the Feed, which details the construction of the refinery. The environmental-impact assessment will also be carried out in parallel with the Feed. Meanwhile, both the location and the prefeasibility studies, costing about R200-million, have been completed.

June 2010UK-based Infrastructure Journal and professional services firm KPMG International has showcased Project Mthombo in the top 100 global infrastructure projects list. The compilers of the list report that the project is of ‘huge economic significance’ and that it will modernise the country’s ‘long outdated’ energy infra-structure. PetroSA previously reported that the refinery would be a major employment hub once completed and compilers of the ‘Infrastructure100’ report reiterated that it will form an ‘economic bridge’ in the Eastern Cape region, where unemployment is rife.

May 2010PetroSA has announced that it will proceed with borehole drilling

work at the proposed project site. The R8-million geotechnical investigation will confirm the area’s underlying geological structure, which will inform future civil design work. Almost 110 holes of varied depths will be drilled in zones 11 and 6, with drilling expected to last about six months.However, BP chief economist Christof Ruehl argues that South Africa only needs to secure about 2% of net exports of refined oil products from newly-built refineries of the Middle East, India and South Korea to ensure security of supply. Therefore, the country should consider tapping into this “overhang” before building new refining capacity, which will probably require taxpayer support and will need to compete with existing refiners for export markets.Meanwhile, PetroSA has advised that the proposed refinery capacity has changed from the initial 400 000 bl/d to 360 000 bl/d.

On Budget and on Time? Too early to state.

Contact Details for Project InformationProject Mthombo, tel +27 21 929 3600, fax +27 21 929 3321 or email [email protected]. PetroSA spokesperson Thabo Mabaso, tel +27 21 929 3000, fax +27 21 929 9294 or email [email protected]; or midstream new ventures vice-president Joern Falbe, tel +27 21 929 3600.


PETROChEMICALS, OIL AND GASFrom page 16


With the majority of the infrastructural developments taking place in Gauteng, efforts by the South African government to improve public transport services are fast becoming a reality.

In 2008, the South African National Roads Agency (Sanral) began construction works on the long-term Gauteng Freeway Improvement Project, to accelerate the State’s plans to upgrade and expand the existing road network. The project entails the eventual upgrade and construction of about 561 km of freeways in the province.

Meanwhile, the Gautrain rapid rail link project, which connects Gauteng’s economic hubs of Sandton, Pretoria and Johannesburg to the OR Tambo International Airport, has officially entered the second phase of construction, following a successful run during the 2010 FIFA World Cup.

The introduction of Transnet’s new multiproduct petroleum pipeline is expected to take pressure off the old Durban to Johannesburg pipeline, starting in December 2013. The network is expected to have a capacity of 1 000 m3/h when brought on stream, and its life is expect to extend past 2020.

Transport and Logistics

South African National Roads Agency Limited’s Gauteng Freeway Improvement Project

Name and Location Gauteng Freeway Improvement Project (GFIP), South Africa.

Project Description The GFIP is a long-term freeway upgrade and expansion pro-ject and entails the eventual upgrade and construction of about 561 km of freeways. One of the main objectives of the project is to stimulate economic growth in the province.

Value The Department of Transport through the South African National Roads Agency Limited (Sanral) is investing more than R21-billion in the first phase of this project, with each kilometre costing about R80-million to upgrade. The project will be financed through the ‘user-pay’ principle and it will allow the roads to be funded, without resorting to the national fiscus for such projects.To date, Sanral has raised R26-billion in funding for toll projects, including the GFIP.

Duration Phase 1 was substantially completed in 2010 but, owing to the shortage of bitumen and adverse weather conditions, it is now expected to be completed in 2011. Phase 2 is scheduled for completion in 2020 and involves the further construction of about 63 km of new freeway sections. Phase 3 is expected to be completed after 2020 and will comprise the construction of a further 95 km of new routes subject to financial viability.

Client The project is managed by Sanral.

Key Contracts and Suppliers Basil Read (I/C improvements at the N1 section); Siyavaya joint venture (JV), comprising Group 5, Power Construction, Liviero, Umso Construction and Bophelong Construction (work package A and E); GFI Contractors JV, comprising Wilson Bayly Holmes- Ovcon, Sanyati Construction, Rainbow Construction, Glash Construction, Munasi Civil Contractors and Patula Construc-tion (work package B); GLMB JV, comprising Grinaker-LTA, a member of the Aveng group, Moseme Road Construction and Boitshoko Road Surfacing (work package C and F); Basil Read JV, also comprising Roadcrete, Chavani Construction and Dipcivil (BRCD) (work package D); CMC JV, comprising CMC di Ravenna South Africa and G4 Civils (work package G); Raubex Construc-tion (upgrade of the R21); Power Group (upgrade of the R21 section 1 and 2); Tosas (subcontractor – bituminous binders); ETC JV (multilane free-flow tolling system); Jet Demolition (demolition of Allandale I/C bridge); ARQ Consulting Engineers

(design of the Lynnwood Glen pedestrian and pipe bridge); Cadcon (subcontractor of BRCD JV) (manufacture of the Lynnwood Glen pedestrian and pipe bridge); Beka (luminaires); Esorfranki Civils (work package J); Goba SSI JV (Gillooly’s flyover); Much Asphalt, a Murray & Roberts company (asphalt supplier).

Latest DevelopmentsJanuary 2011Sanral has reported that its toll tariff structure for Gauteng free-ways has been finalised, and is currently awaiting the approval of the Minister of Transport Sibusiso Ndebele. The eagerly awaited tolling structure is expected to clarify toll tariffs initially proposed at 50c/km, which the agency still maintains a registered etag user will pay before discounts. For unregistered users, the amount is likely to be higher. Registration for the etags will start towards the end of the first half of 2011, and tolling will start from June 2011.In addition, more than 30 of the 42 toll gantries have been erected along the freeways. These will be fitted with toll collection equip-ment that will recognise the etag on a vehicle, while also classifying the vehicle type to determine the price, which will be deducted from the user’s registered toll account.The meeting will focus on finding a solution to the bitumen supply issue, and it will probably be the first in a series of meetings.Meanwhile, Sanral believes that one possible solution would be to declare bitumen a strategic mineral, meaning that it would be treated in a similar manner as fuel, with oil refineries obliged to keep minimum strategic reserves – even if by importing the product – and with the price also regulated by government.The agency notes that it might also be possible to simply ensure improved coordination between refineries in terms of maintenance shutdown periods, currently often overlapping, which should ease the flow of bitumen to the construction industry.

On Budget and on Time? The shortage of bitumen in South Africa has led to a delay in the start of tolling on Gauteng’s freeways. The tolling was initially expected to begin in April 2011; however, it is now expected to start in June 2011.Sanral plans on commissioning Phase two of the upgrade to the existing freeway network in the future and has not stated the exact timeframe for the start of construction.

Contact Details for Project InformationSanral northern region manager of toll and traffic and project manager Alex van Niekerk, tel +27 11 426 6200; or Inge Mulder, tel +27 12 426 6008 or email [email protected]; or project manager: communications Wanda Cloete, tel +27 12 426 6212, fax +27 12 348 1512 or email [email protected].

TRANSPORT AND LOGISTICS


The Gauteng Provincial Government’s Gautrain rapid rail link

Name and Location Gautrain rapid rail link, Gauteng, South Africa.

Project DescriptionThe Gautrain project involves a modern state-of-the-art rail connection, linking Sandton, Johannesburg, Tshwane and OR Tambo International Airport. The network, which will consist of about 80 km of railway line and which may be extended in the future, will be made up of two links – one between Tshwane and Johannesburg, and one between Sandton and OR Tambo.

Value The rail project will cost R26,4-billion, with inflationary pressures seeing the cost of the Gautrain escalate by R1-billion.

DurationConstruction started at the end of September 2006. On June 8, 2010, phase 1 of the Gautrain rail system was opened for commercial service.The second phase is scheduled for completion in June 2011.

ClientThe Gautrain has been structured as a public–private partner-ship project. The client is the Gauteng provincial government. The Bombela Concession Company is the private-sector partner and comprises Bombardier Transportation (25%), Bouygues Travaux Publics (25%), Murray & Roberts (25%) and the Strategic Partners Group (25%) as shareholders.

Key Contracts and SuppliersBohlweki Environmental (environmental-impact assessment and biophysical and socioeconomic evaluation), Standard Bank and Rand Merchant Bank (lead arrangers, underwriters and sole lenders to the Gautrain project), Nedbank (agent bank to the lender to manage the financial transactions and bank issuing project bonds to contractors), Arup SA (independent certifier), Tractionel Enterprise (supply and installation of the overhead contact distribution), Thales Transportation Systems and Sims (automatic fare-collection system), Bouygues Travaux Publics (tunnel-boring machine (TBM) operation), West Rand Engineering (valve, fittings and other consumables), Infrasors (aggregate and crusher sand), SPGIO (transportation of material excavated during construction), SA French (passenger hoists), Chryso South Africa (concrete admixture), SPC (concrete segments), Herrenknecht Engineers (TBM design and manufacture), Sarens (mobile-crane hire), Afri-Sam (contract to supply aggregate and 200 000 t of cement to the rail-link’s south section), C3 Shared Services (C3SS) (thermal-imaging equipment), ITT Water & Wastewater (ITT W&W) (drainage pumps) and Railway Safety Regulator (RSR) (safety permit); Taemane Consulting (electrical engineers).

Latest DevelopmentsDecember 2010On December 7, 2010, the Gautrain reached a milestone, which saw the last unit of the link’s locally assembled rail cars delivered to its depot, in Midrand, for testing. The unit is the last of 81 to be assembled at the UCW Partnership plant, in Nigel. The remaining 15 units were manufactured at Bombadier’s rolling stock plant, in Derby, in the UK.

The first of the rail cars was delivered in December 2008.Of the 96 rail cars, ten are specialised for use on the airport link of the rail system, and contain additional features, such as extra luggage space and wider seats. The other 86 are designed for commuter service.The lightweight aluminium car bodies – a first for South Africa – are expected to offer increased energy efficiency and to reduce maintenance requirements.The residents of Pretoria should, in the interim, expect to see the Gautrain passing by in their area from December 20, as the northern track will be functional by then.Meanwhile, the GMA has reported the following progress on the Gautrain for November 2010.With phase 1 of the Gautrain now opened for commercial service, future construction updates will focus on progress of the Gautrain phase 2 works, comprising the underground section between Sandton station and Park station, and the route between Midrand station and Hatfield station.

On Budget and on Time?Inflationary pressures saw the cost of the Gautrain escalate by R1-billion.Phase 1 of the project was completed by June 8, 2010, three weeks earlier than the original contractual completion date of June 27, 2010. The balance of the project, the second phase, is expected to be completed by June 2011, instead of March 27, 2011, as originally planned. The delay is owing to project “pinch points”, such as the extensive dolomite (which can lead to sink-holes), that the construction team encountered in Centurion, as well as the building of a complex bridge structure underneath Walker street, in Pretoria.The Gautrain also uses the Passenger Rail Agency of South Africa rail reserve from the Pretoria station to the Hatfield station, which sees 60 trains running there a day, adding to the construction complexity.However, GMA has said that it is not distressed by the three-month delay, as there is no similar pressure on the second phase to begin on time as there was with the initial phase, which had to be ready in time for the 2010 FIFA World Cup. The Bombela consortium, which is building and operating the system, will not pay penalties for the late completion of the project.

Contact Details for Project InformationGauteng Management Agency CEO Jack van der Merwe, tel +27 11 997 8900, fax +27 11 997 8901/2/3, or email [email protected].



Transnet’s new multiproduct pipeline

Name and Location New multiproduct pipeline (NMPP), from Durban to Gauteng, South Africa.

Project Description Transnet Pipelines (TPL), a subsidiary of Transnet, is constructing a NMPP to move petrol, diesel and jet fuel from Durban to Gauteng, to replace the existing and ageing Durban to Johannes-burg fuel pipeline (DJP).The full network comprises a 160 km, 16 inch inland pipeline network involving links from Kendall to Waltloo, Alrode to Lang-laagte, and from Alrode to Jameson Park; a 555 km, 24 inch trunk-line from Island View, in Durban, to Jameson Park, in Gauteng (crossing rivers, mountains and wetlands as it climbs 1 500 m from KwaZulu-Natal (KZN) to Gauteng; inland and coastal terminals; and three pump stations.The network is expected to have a capacity of 1 000 m3/h when brought on stream, which could be scalable by up to 3 000 m3/h through the addition of new pump stations.The new pipeline is designed to have a life cycle spanning over 70 years.The project also entails the upgrading of the Island View station at the Port of Durban.

ValueThe project value initially escalated by R2,75-billion from R12,67-billion to R15,42-billion. It has now been revised to R23,4-billion.

Duration Transnet had previously indicated that December 2012 was its earliest completion date, while August 2013 was the final completion date for all construction activities.Transnet has since made a formal request to the National Energy Regulator of South Africa (Nersa) for an amendment to its construction licence to allow for timeline changes. The revised schedule is for the 24 inch trunk-line to be completed in September 2011 and begin operations by December 2011. The 16 inch pipelines have been complete and are scheduled to be in operation in January 2011. The full system is scheduled to be completed and ready for operation by December 31, 2013.

Client TPL (formerly known as Petronet).

Key Contracts and SuppliersNersa (licence), Bohlweki-SiVest joint venture [environmental- impact assessment], Group Five Civils-Spie Capag consortium (construction contract), Arup (engineering, procurement and construction management), Impumelelo (coated-line pipe), McB Marketing and Engineering (mainline check and ball valves), Project Materials South Africa (induction bends), General Electric Nuovo Pignone (mainline and Jameson-Park pumps), Aqua Air Cape (launchers and receivers) and Filteg (mainline strainers), GE South Africa Technologies JV, (generator suppliers), Group Five KwaZulu-Natal/ Group Five Oil and Gas (pumpstations 1, 3 and 5), Group Five Civil Engineering, Group Five Projects (construction works terminal 2).

Latest DevelopmentsJanuary 2011Minister of Public Enterprises Malusi Gigaba has unveiled a

panel of experts to probe the cost escalations and time delays associated with the NMPP. The panel will report its findings by the end of April 2011.The team comprises pipeline specialist Ian Thompson; professor Raymond Nkado, a project management and construction specialist; advocate Kevin Trisk; regulatory and compliance specialist Inba Thumbiran; and Department of Public Enterprises project manager and financial analyst Adam Seedat.The minister has requested three independent reports; covering the governance, engineering and project management aspects of the NMPP, as well as independent legal opinion.All this comes after it was announced in December 2010 that the cost of the new pipeline had increased to R23,4-billion, from R9,5-billion, and that the delivery schedule had been delayed from an initial completion date of December 2011 to December 2013.Gigaba has stressed that the deployment of the panel is not a ‘witch-hunt’, but is designed to ensure accountability and to draw lessons for other large projects undertaken by State-owned enterprises.Transnet is reported to have consented to being part of the probe and will work with the expert team.As a result of the delays, Transnet has had to develop contingency plans, including road and rail transport options, to ensure security of fuel supply to Gauteng between 2010 and 2014.Further, Transnet has acknowledged that it should have ensured that the engineering, procurement and construction company overseeing the project had completed a full project re-estimation by late 2008, when it became apparent that the project’s character had significantly changed. This said, a benchmarking exercise conducted by independent international benchmarking authority, Turner & Townsend, has confirmed that the revised costs are a ‘fair reflection of total costs of an asset of this nature, complexity and magnitude’.

December 2010Transnet has reported that it has finalised the extensive review of all aspects of the NMPP, and that the board of directors have approved the schedule variation and cost changes for the con-struction of the pipeline.The review covered a wide range of issues including project management, cost estimates, schedule, contracting, regulatory and licensing issues.In addition to the schedule changes, the revised cost estimates for the NMPP are now estimated at R23,4-billion. Transnet attributed the revision to a number of reasons, including engi-neering and environment-impact assessment driven changes in scope, a tight construction schedule at the outset, as well as significant increases in both steel and equipment costs.

On Budget and on Time? The project cost has escalated to R23,4-billion and will be completed a year after the revised scheduled date of December 2012.

Contact Details for Project Information TPL acting head of communications and spokesperson Mboniso Sigonyela, tel +27 11 308 2458, cell +27 83 463 7701 or email [email protected].



The problem of adequate water supply in South Africa is a long-term challenge; however, the lack of proper infrastructure to improve and sustain the existing water supply network is an even greater task to manage.

The eThekwini municipality’s Water and Sanitation unit, in KwaZulu-Natal, has made a signifi-cant amount of progress in terms of its integrated water and sanitation projects, which saw the completion of its Asbestos-Cement Water Pipe Replacement project in June 2010. This component is one of three projects intended to underpin the province’s efforts to reduce wa-ter losses brought on by leaking pipes, and also supplement the entire water supply system with proper facilities.

Further, in Limpopo, the Department of Water Affairs has commissioned the second phase of the Olifants River Water Resources Development project to tackle the urgent need for bulk water within the middle part of the Olifants river catchment and surrounding areas. The project will meet water demands by both the local communities and the emerging industrial sector.

Water and Sanitation


eThekwini water and sanitation projects

Name and LocationeThekwini Water and Sanitation (EWS) projects, KwaZulu-Natal (KZN), South Africa.

Project DescriptionThe EWS projects include a Water and Sanitation (W&S) project, an Asbestos-Cement (AC) Water Pipe Replacement project and the Western Aqueduct (WA) project.

ValueThe W&S project currently has a budget of R396-million, of which R132-million was spent between January 2009 and June 2010. Some R129-million has been budgeted for the 2010/2011 financial year, with the balance allocated to the 2011/12 financial year.The AC pipe replacement project was initially valued at R850-million; however, it increased to R1,6-billion as the scope of work expanded.Phase 1 of the WA project is estimated at R150-million, and phase 2 is valued at about R865-million. The cost of the steel pipe is valued at R215-million and the cost of the supply and delivery of valves is R32-million. This brings the total of the value of the WA project to just over R1,25-billion.

DurationThe W&S project is programmed to reach completion by December 2011.The AC pipe replacement project started in July 2007 and was completed in June 2010.Phase 1 of the WA project was expected to be completed and in service by February 2011. The tender award for the construc-tion of phase 2 is currently being processed by EWS. This final stage of the project is expected to enter full service by early 2015.

ClientEWS.

Key Contracts and SuppliersW&S project:Aurecon (project management); WK Construction, Icon Con-struction, Wilson Bayly Holmes-Ovcon (WBHO) and Sanyati Con-struction (main contractors); Old Town Investment, Ekuhawukeni Trading Enterprise, Nomangisi Construction, Abangani Projects, Royal Africa Trading, Sbonisiwe Investment, Emzini Projects and Madondo-Hughes (subcontractors); European Investment Bank (EIB) (finance); Lwazi Projects (mentorship).

AC pipe replacement project:Aurecon (programme manager); BKS, CBI Consulting, GOBA and Stemele Bosch Africa (SBA) (design consultants); Icon Construction; Sanyati Construction; WBHO/InSitu Pipelines Joint Venture and WK Construction (contractors); Lwazi Projects

(mentorship); Abangani Projects, Bright Idea Projects, Chimu-renga Projects & Services, Hlanganani Civils, Imvusa Trading, Inyameko Trading, Madondo-Hughes, Makhathini Projects, Nomangisi Construction, Pule Civil Engineering & Construction, Qambothi Development, Royal Africa Trading, Sbonisiwe Invest-ments, Sibusiso Projects, The Business Zone and Ubuqha Civil Contractors (subcontractors).

WA project:Knight Piésold Consulting, Naidu Consulting and Stewart Scott International (a joint venture operating as engineering and environmental services consultants), WK Construction (main contractor), Extreme Turf Systems (environmental rehabilitation subcontractor) for phase 1.

Latest DevelopmentsJanuary 2011In mid-December 2010, the EIB announced plans to provide a €50-million long-term loan to finance the upgrading and expansion of the eThekwini municipality’s water infrastructure programme. The loan represents 15% of the programme’s total investment cost and it will be provided to Rand Merchant Bank (RMB), to allow the banker to fund the project at reduced rates.The project is expected to improve efficiency of the water supply system by reducing leakages, as well as interconnecting networks and enhancing the resilience of the overall system. This will, in turn improve service levels, supplement the existing water supply network and cope with climatic uncertainties.The eThekwini water project is part of an integrated approach by the EIB to support the water supply chain in KZN, including upstream bulk water and the upgrade of water supply network and treatment facilities by Umgeni Water.

On Budget and on Time?The AC pipe replacement project was completed on schedule in June 2010.The WA project is reportedly progressing on schedule.

Contact Details for Project InformationW&S and AC pipe replacement projects:Aurecon communications consultant Sue Monckton, tel +27 31 714 2500 or cell +27 72 198 6189; or programme manager Jochen Dedekind, tel +27 33 342 8721 or fax +27 33 342 7327; or lead project manager Evan Smith, tel +27 31 714 2500 or cell +27 83 635 8236.WA project:eThekwini municipality city manager Dr Michael Sutcliffe, tel +27 31 311 1100, fax +27 31 311 2170 or email [email protected]; or Ebrahim Seedat, tel +27 31 311 1624 or email [email protected] project executives Alan Kee, tel +27 31 311 8794 or email [email protected]; or Mandla Malakoana, tel +27 31 311 8147 or email [email protected].


WATER AND SANITATION

Olifants River Water Resources Development Project phase 2

Name and LocationOlifants River Water Resources Development Project Phase 2 (ORWRDP-2), Limpopo, South Africa.

Project DescriptionThe Department of Water Affairs (DWA) commissioned the ORWRDP that comprises two phases and a number of sub-phases:Phase 1 involved the raising of the Flag Boshielo dam by 5 m. This phase has been completed.Phase 2 (Phases A-I) involves the development of additional water resource infrastructure within the middle part of the Olifants water management area.Phase 2A entails the construction of the De Hoop dam, the realignment of a 20 km section of the provincial road between Steelpoort and Stoffberg (the R555), while Phase 2B-2I entails the construction of a bulk distribution system to be funded and implemented by Trans-Caledon Tunnel Authority (TCTA).The ORWRDP-2 is consequently a multipurpose project, incorporating both economic and social development objectives to cater for the water demands of commercial and social users.The project will consist of over 300 km of pipelines that will vary in diameter from 800 mm to 1 600 mm, several pump stations and storage reservoirs.As the De Hoop dam study area is an ecologically sensitive region, it required extensive environmental investigations, before a record of decision (RoD) was issued by the former Department of Environmental Affairs and Tourism (now the Department of Environmental Affairs) on November 21, 2005. This was followed by five appeals against the decision.These were investigated and responded to by the DWA and the Minister of the Department of Environmental Affairs and Tourism made a final decision, that is the revised RoD, on October 16, 2006, in support of the project, however, more stringent environ-mental requirements were incorporated.

ValueR2,85-billion, inclusive of VAT for Phase 2A, with the total cost of Phase 2 in the region of R7,4-billion.

DurationThe construction of the De Hoop dam started in July 2007, with the first delivery of water expected by April 2011.

ClientThe DWA (formerly known as the Department of Water Affairs and Forestry), represented by the TCTA.

Key Contracts and SuppliersFor Phase 2A, De Hoop, the key contractors are:

Main Road Contractor (realignment of the R555 road): Hillary, Liviero & Eigenbau (HLE) joint venture (JV), with subcon-tracts including Phahlamoloto Trading; Blackie Construction and Bakonzi Projects (steel fixing); Motshine Construction (concrete lined drains, kerb and channel); Nthekeng (installation of sub-soil drains); Jiane Construction (construction of culvert head and wing walls, and construction of concrete base for access roads); Zwelisha Projects (stone pitching and rip-rap); Raga Theto Projects (gabions); Lenong Signs (supply and erection of road signs); Archibold Construction; Polokwane Road Marking (road marking); Letsa Naka Construction (erection of guardrails); Bouwest (supply and erection of fencing and gates); Boreadi (guarding), Construction Industry Education and Training Services (training); Diponega/Limpopo RR JV (bulk earthworks Road E); Bhubezi (supply pipe culverts); Yebo Sales (supply box culverts); Polokwane Surfacing (bituminous surfacing); Holcim (cement); Chevron (diesel supply); and YaRena Civils (gauging weir bridge).

Main Civil Contractor (De Hoop dam): Dwaf Construction West, with subcontractors: B&E International and Quanza JV (supply of fine and course aggregate, crusher run and rip-rap); Limpopo RR & Construction (drilling and blasting); Regray Security (site security); SA Rock Drills (drilling and grouting of dame foundations); Drakensburg Technologies (supply of standard formwork); Formscaff (supply of special formwork); Allied Plant and Hire (erection of RCC conveyor system); SA French (erection of tower crane); NSI (commis-sioning and maintenance of batch plants); Twin Cities (supply of cement); Dura Pozz Bulk (supply of fly ash); BASF (supply of cement additives); and Steeledale Reinforcing (supply and fixing of reinforcement).TCTA will project manage the implementation of the ORWRDP-2B to 2I and will contract with various parties best able to manage the associated risks, to obtain the required services.

Latest DevelopmentsFebruary 2010Design work for the project is continuing.The TCTA’s most critical challenge is raising finance in the current market conditions.

On Budget and on Time?Not stated.

Contact Details for Project InformationDWA media liaison officer Linda Page, tel +27 12 336 8250, fax +27 12 336 6592, cell +27 83 460 4482 or email [email protected] Hoop Dam project manager Richard Martin, tel +27 12 336 8072.Contractor’s representative, De Hoop, Johan van Niekerk, tel +27 13 260 1111, fax +27 13 260 1356 or email [email protected], tel +27 12 683 1200, fax +27 12 683 1300 or email [email protected].


WATER AND SANITATION

MINING PROJECTS

Coal

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Other Mining Projects

Platinum

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South Africa and its coal miners are currently in a prime position to profit from higher thermal coal prices, buoyed by strong Asian demand and weather-related disruptions in territories such as Queensland, Australia. In fact, some market observers believe that thermal coal prices could perform more strongly than oil in 2011 and climb further from current levels of between $125/t and $130/t.

However, South Africa’s electricity sector is dominated by coal and the country’s major coal producers are, for the most part, focused on meeting State-owned power utility Eskom’s increasing coal demands, with a number of coal projects currently under development across the country to support this sector, as well as the country’s other significant coal user, the synthetic fuels sector. Projects include BHP Billiton’s recently completed Douglas-Middelburg optimisation project, Exarro Resources’ Grootegeluk Medupi expansion project and Sasol’s Thubelisha coal mine project.

Across South Africa’s border, in Mozambique, Riversdale Mining is developing the Benga coal project, which will produce about 1,7-million tons a year of high-quality hard coking coal, and 300 000 t/y of export thermal coal in its first stage of development.

Coal


BHP Billiton’s Douglas-Middelburg optimisation project

Name and LocationDouglas-Middelburg optimisation (DMO) project, Mpumalanga, South Africa.

Project DescriptionThe DMO project scope includes the use of reserves across the Douglas and Middelburg Mine Services (MMS) collieries and the development of new mining areas with low-strip ratio coal, with the product being fed into a new 14-million ton a year coal-processing plant.The project will produce ten-million tons a year of export thermal coal and 8,5-million tons a year of domestic thermal coal.The new coal-processing plant will supplant the existing, less efficient washing plant at the Douglas colliery. The project will enable BHP Billiton to maintain energy coal exports from the combined Douglas colliery and the MMS colliery at around current levels (about 9,5-million tons a year is BHP Billiton’s share), while simultaneously fulfilling domestic contractual commitments.The expected life-of-mine is to 2034.

ValueThe project will cost an estimated $975-million.

DurationThe DMO project entered the execution phase on February 29, 2008, and was completed in mid-2010.

ClientThe Douglas and MMS collieries are currently owned through

the Douglas Tavistock Joint Venture (DTJV), in which BHP Billiton has an 84% share and Xstrata, a 16% share. To facilitate the DMO project, which is to be developed and owned solely by BHP Billiton, the DTJV will be restructured, with each of the JV partners being allocated coal resources according to ownership share.A number of regulatory approvals are being sought to give effect to this restructure.

Key Contracts and SuppliersDRA Minerals Projects (engineering, procurement and construction management (EPCM) – coal processing plant); Bateman Engineered Technologies (EPCM materials handling); Jones & Wagener (EPCM civil engineering); Grinaker-LTA Roads & Earthworks (main earthworks contractor); WBHO Construc-tion (main civil contractor coal-processing plant), Group Five Civil Engineering (main civil contractor – materials handling), Cosira (structural, mechanicals and platework construction), B&W Instrumentation & Electrical (electrical construction and related works), AFS Group (fuel monitoring) and Eazi Access Rental (JLG telehandlers).

Latest DevelopmentsBHP Billiton reported in its exploration and development report for the quarter ended September 30, 2010, that the DMO project is complete and that first coal has been delivered on schedule and on budget.

On Budget and on Time?The project is complete.

Contact Details for Project InformationBHP Billiton corporate communications, Michelle Williams, tel +27 11 376 3500 or email [email protected].

COAL


Exxaro Resources’ Grootegeluk Medupi expansion project

Name and LocationGrootegeluk Medupi expansion project, Limpopo, South Africa.

Project DescriptionThe project entails a brownfield expansion of Exxaro’s Grootegeluk mine. Coal will be mined from the existing open-cast pit at an accelerated rate, with the mine’s current production increasing from 19-million sales tons a year to 34-million sales tons a year.The brownfield expansion requires new developments in mining processes, screening, beneficiation and the stockyard. The project will make use of new technology to enable the delivery of high-quality product. These will include semimobile crushers and tippers, dry screening of the material smaller than 6 mm, large-coal dense-medium separator (DMS) (larcodem) units and large cyclones.The expansion will be mined with semimobile in-pit tip-and-crusher units supplied by the truck and loading operations. The tipping bins and crushers will be mobile units, used in the pit, and will move as the mine moves forward.

The coal beneficiation process will be handled through two new DMS facilities, the Grootegeluk 7 and Grootegeluk 8 beneficiation plants, which will be constructed at the mine.

The run-of-mine (RoM) coal will be screened through the coarse coal screens to remove material smaller than 40 mm.

Material bigger than 40 mm and smaller than 100 mm will be beneficiated in the larcodems, while material smaller than 40 mm will be beneficiated in the large cyclones.

The fines in the process water will be recovered in the thickener dams and dried in the filter presses to be mixed into the final product. When water gets into contact with the coal, it will not be allowed into the environment. Polluted water will be kept in the loop circulation process to be reused.

The stockyard will accommodate about 430 000 t of coal. The coal will be stacked with two stackers and reclaimed with one reclaimer. The RoM stockpiles will be introduced between the mine, the plant and discard stackers to support continuous production.About 794 housing units are also being built to cater for the project team and the expanded work force thereafter.The expansion is part of the 40-year coal supply agreement, at an average of 14,6-million tons a year, that Exxaro secured with Eskom to supply the utility’s new Medupi power station, which is under construction near Lephalale, Limpopo.

ValueThe project will cost R9,5-billion. To date, R1,38-billion has been committed and R505-million has been spent. R4,5-billion is expected to be spent by the end of May 2012. Building of employees’ housing units will cost R590-million.

DurationSupply of coal is expected to start from the second quarter of 2012, coinciding with the project’s planned commissioning. Full coal production is expected from 2015.

ClientExxaro Resources.

Key Contracts and SuppliersPackages awarded:LSL Consulting, SSG Consulting, Engineering & Projects Company (E+PC) (design), Arup (civils), Consolidated Power Projects (overhead power lines and transformers), M Projects (building upfront infrastructure), Concor Holdings (bulk earth-works plant area, blending and load out), PRG Electrical Engi-neering & Services (construction power), MMD Mineral Sizing (Africa) (in-pit crushing system), Basil Read (in-plant workshop), Makeshift (relocation of piping and civil services), FLSmidth (stackers and reclaimers), Stefanutti Stocks Civils (RoM area civil) and SMEI Projects (assisting SCMEIPP) (plant area civil, thickeners civil, plant area structural, mechanical, platework and piping (SMPP), mining area bulk earthworks, buildings adminis-tration, blending and load out civil, 11 kV distribution, low-voltage (LV) panels and instrumentation plant area, blending and load out SMPP, filter plant SMPP, LV and instrumentation out plant area and RoM area SMPP).

Latest DevelopmentsDecember 2010The SMPP for the RoM is in the design phase and is expected to be completed at the beginning of 2012. The semimobile tips are in the manufacturing phase and are forecast to be completed in the second quarter of 2011. The bulk earthworks and civil mining area, which is forecast for completion in the first quarter of 2011, and the main civil RoM area, which is expected to be completed in the fourth quarter of 2011, are both in the construction phase.Meanwhile, the bulk earthworks plant area is forecasted for completion at the end of 2010, while the main civil wet plant and the SMPP wet plant, are both expected to be completed at the end of 2011. The main civil thickeners are also forecast for com-pletion at the end of 2011. All these project areas are already in the construction phases.The main civil screening, which is expected to be completed by mid-2011, with the SMPP screening plant expected for completion at the end of 2011. The SMPP is in the manufacturing phase. The filter plant and the LV panels and instrumentation are in the design phase and is expected to be completed at the end of 2010 and the beginning of 2011, respectively.The site preparation, services relocation and the 33 kV distri-bution panel have been completed for the infrastructure works. However, the buildings are in the construction phase and are expected to be completed in the second quarter of 2011, while the 11 kV distribution, is expected to be completed by mid-2011. Meanwhile, the plant workshop is under construction and is expected to be completed in the first half of 2011.Projects in the blending and load-out area, the LV and instrumentation are in the design phase, and are expected to be completed at the end of 2010. The SMPP blending and load-out area design is completed and manufacturing will begin in the first quarter of 2011. The stackers and reclaimers have moved into the manufacturing phase and are forecast for completion at the beginning of the third quarter of 2011. The manufacturing and construction phases are running simultaneously for the assizing plant structural, civils, mechanical, electrical, instrument-

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ation and piping processes, which are forecast to be completed by the second quarter of 2011, while the bulk earthworks blend-ing and load-out area is forecast to be completed at the end of the first quarter of 2011. The main civil contract for the blending and load-out area, which is forecast to be completed in the third quarter of 2011, has entered the construction phase.Meanwhile, the civil engineering and construction group Basil Read has started the construction of the plant workshop, capital store, and the paint and sandblasting building at the project.Although the company moved on site in August, construction only started in September, when all Exxaro’s, safety, health and environmental quality (SHEQ) requirements were met, including medicals, induction and safety training.The contract, which was awarded in June and is worth, just under, R50-million, includes the construction of the plant workshop and ancillary structures, which were additions to the original contract.Although the project had a slow start, Basil Read still expects to make the forecast completion date in February 2011.

August 2010Exarro reports that construction of the brownfields expan-sion of the Grootegeluk mine to supply Eskom’s Medupi power station has started and is progressing well to supply the first coal to Eskom during the second quarter of 2012, aligned with the start-up of the power station. The bulk of the front end detailed engineering design has been completed and orders for long-lead capital items have been placed.Exxaro and Eskom signed a revised agreement in March 2010 and a R4,5-billion bridge loan facility has been secured with a consortium of local and international financial institutions.

June 2010A sod-turning event was held on June 18, 2010, to mark the start of the construction phase. The date also marked the com-pletion of the first 270 out of a total of 794 housing units to be constructed for the project’s employees.The housing units incorporate sustainability principles, including the use of solar-powered geysers, gas stoves, energy-efficient appliances and air-conditioning units, installed insulation to regulate indoor temperatures, and the use of grey water for the toilets and gardens.

April 2010Exxaro Resources has confirmed the conclusion of a ‘definitive’ coal supply and offtake agreement with Eskom for the 4 800 MW Medupi power station, which is being developed in South Africa’s Limpopo province.The revised agreement will see the delivery of first coal during the second quarter of 2012, with ramp-up to full production by 2015. However, a stockpile will be developed, as from September 2011, ahead of Medupi’s start-up and will comprise material from Exxaro’s existing Grootegeluk mine, as well as some material from the new Grootegeluk-Medupi expansion.Under the initial agreement, signed in September 2008, Exxaro Coal was meant to supply an average of 14,6-million tons a year

to the power station, with delivery planned from the fourth quarter of 2011, ramping-up to full production by 2014.However, in December last year, Eskom requested Exxaro to review certain of the commercial terms of the agreement, which led Exxaro to temporarily suspend project funding for the R9-billion Grootegeluk-Medupi expansion project.

The final pricing deal struck between Eskom and Exxaro is seen as favourable to South African electricity consumers, primarily owing to the fact that future price escalations have been moderated under the reviewed deal. Exxaro has also secured agreements that will enable it to “derisk” the capital escalation portion of its own project.

The funding programme for the coal project, which is now likely to cost in the region of R9,5-billion, owing to the delay, has been reinitiated.

December 2009Exxaro has received notice from Eskom that it is seeking to review certain commercial terms contained in the coal supply and off-take agreement (CSA), including the coal price escalation mechanism and the coal delivery ramp-up.

Indications are that the date for first coal delivery to the power station, in terms of the CSA, has been confirmed to be during the first quarter of 2012, aligned to the commercial start-up of the power station. Exxaro is in separate discussion with Eskom with regard to the delivery of early coal from July 2011, to be used by the power station for precommissioning tests and the creation of stockpiles.

Pending the outcome of the review process, Exxaro will temporarily suspend its funding programme, as well as the placement of additional contracts associated with the Groote- geluk Medupi expansion project.

August 2009Exxaro has reported that the brownfield expansion of Groote- geluk is on schedule and that the first coal delivery for the Medupi power station is planned for November 2011, with a full ramp-up scheduled for early 2014.

January 2009The feasibility study for the project has been completed and the project will be entering the detailed engineering phase, with the long-lead items to be procured in due course.

September 2008An agreement has been concluded with Eskom for the supply of 14,6-million tons a year of power station coal for 40 years from the Grootegeluk mine to the adjacent Medupi power station, in the Lephalale district of Limpopo.

On Budget and on Time?The project is reportedly within budget and on time.

Contact Details for Project InformationExxaro Resources corporate communication manager Hilton Atkinson, tel +27 12 307 4843 or email [email protected].

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Riversdale Mining’s Benga coal projectName and LocationBenga coal project, Mozambique.

Project DescriptionThe initial stage 1 development at 5,3-million run-of-mine (RoM) tons a year, will produce about 1,7-million tons a year of high-quality hard coking coal, and 300 000 t/y of export thermal coal. Stage 1 will also include the relocation of some 59 households to an area called Mwaladzi, about 50 km from the Benga mine site. The stage-two expansion will include the installation of a second module of the coal preparation plant and increase RoM production to 10,6-million RoM tons a year.The final stage is expected to increase coal production to about 20-million RoM tons a year, through the installation of two additional coal preparation plant modules.

ValueStage 1 will cost an estimated $270-million, while stage 2 will cost about $150-million.

DurationThe stage 1 mine production and coal preparation plant start-up is planned for early 2011. The stage 2 production will start no later than 2014.

ClientRiversdale Mining (65%) and Tata Steel (35%).

Key Contracts and SuppliersMCC Contractors (mining contract for Benga Stage 1) and Sedgman Africa (coal-handling and processing plant (CHPP) design, supply and construction contracts), Ludowici (supply of two RC2020 reflux classifiers and lined piping), and Cosira Group (supply contract for coal processing and wash plant (CPWP)).

Latest DevelopmentsJanuary 2011The mining contractor for Benga stage 1 has assembled and commissioned various equipment on site, including an excavator, dump trucks, a dozer, graders and cranes. The bulk sample pit has been completed and samples loaded

into containers to be shipped. Overburden removal has started in the South pit. The RoM dump station and conveyor belts contract is progressing well with design and drafting substantially complete. The first components, namely conveyor belting, have been delivered to site and site construction work was restarted in the new year.Construction work on the CHPP is continuing and the completion date is scheduled for September 2011. The design of the plant power distribution system is largely complete. Civil works for mining facilities have started, with the first 1,2 km of the conveyor and secondary haul roads being completed. Temporary roads from the mining facilities to the mining area have been established and permanent haul roads are constructed. The batch plant has been commissioned and the concrete mix design trials completed. Bush clearing for the rail siding haul road has started. The agreement with Vale for the rail siding and haul road has been finalised, while the design for the Moatize rail siding and haul road earthworks and terraces has been completed. The environ-mental-impact assessment approval has been received from the government. Engineering design for the berth 8 terminal at Beira port is continuing and the project is being fast tracked, with construction work overlapping the design work. The dredging of Beira port is in progress and dredging specialists are advising on the feasibility of berth 8 accommodating bigger volume coal-loading vessels. Fieldwork and specialist studies for the environmental- and social-impact assessment (ESIA) for the barging programme were completed during the December quarter and drafting of the ESIA report is advanced. In November 2010, 26 families were relocated.

On Budget and on Time?The latest updated project schedule indicates that the first coal will be available for export at the port of Beira before the end of 2011.

Contact Details for Project InformationRiversdale Mining, tel +27 11 802 1677 or fax +27 11 802 6855 or email [email protected].

COAL


Riversdale Mining’s Zambeze coal project

Name and LocationZambeze coal project, near Tete, Mozambique.

Project DescriptionThe project proposes the development of Riversdale Mining’s second major coal project in the Moatize basin, adjacent to the company’s Benga coal project. The tenement is characterised by relatively flat topography and is contiguous to excellent infrastruc-ture, including the City of Tete, power, water, sealed roads, rail, the international airport and direct access to the Zambezi river. The project structure includes 22 coal seams outcropping over a strike length of 14 km.The proposed 247,4 km2 Zambeze project has an estimated coal resource of nine-billion tons. The total coal resource includes about 2,3-billion tons in the indicated category.Based on washability analyses, potential coal products that could be produced after beneficiation by the project include an export hard coking coal and a secondary thermal coal product, consisting of high-energy export thermal coal for the Indian and African markets.

ValueThe total value of the project has not been disclosed.

DurationThe project is estimated to start production in 2014.

ClientThe project is a joint venture development between Riversdale Mining and Wuhan Iron & Steel Corporation (Wisco).

Latest DevelopmentsJanuary 2011Riversdale Mining reports in its quarterly activities report that activities for the Zambeze project have been focused on mine development drilling and completion of the draft prefeasibility study.Meanwhile, a total of nine drilling rigs were deployed across the central and northern portion of EL946L in the quarter, con-centrating on slimcore coal sample drilling, subcrop and fault delineation drilling. A second drilling contractor started at the beginning of November, adding an incremental four rigs to the previous fleet of five.

A total of 81 holes were completed during the quarter, comprising 5 582 m of partial and full core drilling. A further 10 912 m of open hole drilling (58 holes) were completed during the quarter. The infill-drilling programme has been expanded to cover the full extent of the proposed opencut mine area in accordance with the next phase of the project schedule. Drilling was initially concen-trated within the area designated for the initial five years of mining. Drilling will continue in EPL946L into 2011, with priority on com-pleting the infill core drilling within the mine plan footprint and the definition fault structures and mining limits along seam subcrop zones. Due to extensive outcrops of the coal-bearing Karoo group of sedimentary rocks throughout the target resource area, plans are under way to undertake further surface geology field mapping to assist with delineation of faults, as well as confirming coal seam outcrops.In June 2010, Riversdale announced that it had signed a non-binding memorandum of understanding (MoU) with Wisco and a logistics partnership agreement with the China Communications Construction Company for the development of the Zambeze coal project. The definitive agreements were not concluded nor were regulatory approvals in China and Australia obtained by the due date set out in the MoU, which has consequently expired. Discussions with Wisco have been suspended while the Rio Tinto offer is open.On December 23, 2010, Riversdale Mining announced a recom-mended takeover offer by Rio Tinto for $16 a share. The offer price values the fully diluted equity of the company at about A$3,9-billion.The offer is subject to a number of conditions, including a minimum acceptance condition of greater than 50%.The offer is scheduled to close on February 18, 2011.

October 2010In the quarter ended September 2010 the Zambeze project study team reviewed a number of conceptual mine plans. These options have been fine-tuned and compared with a single go-forward option developed into a prefeasibility study. This study will be presented to the board in the forthcoming quarter for approval to progress to a definitive feasibility study.

Contact Details for Project InformationRiversdale Mining tel +61 2 8299 7900, fax +61 2 8299 7999 or email [email protected].

COAL


Sasol’s Thubelisha coal mine project

Name and LocationThubelisha export coal mine, Mpumalanga, South Africa.

Project DescriptionThe proposed Thubelisha export coal mine, in Secunda, will supply Sasol’s synthetic fuels factory, also in Secunda, as well as assist in catering for the export market. The mine will replace the depleting Twistdraai operation and is expected to have a produc-tion capacity of 10,6-million tons of coal a year.A 17 km long overland conveyor will transport coal to the beneficiation plant. The mine’s main components are three shafts, which are in the process of being sunk.

ValueR3,1-billion has been allocated to the project. The sinking of the three shafts requires a capital investment of R500-million. The overland conveyor, the bunkers and the associated infrastructure will cost R850-million. The remaining investment will go towards surface infrastructure, which includes power provision and road-works.

DurationThe first portion of the mine is scheduled to come on stream in 2012 and will ramp up to full production over three years.

ClientSasol Mining.

Key Contracts and SuppliersRead, Swatman & Voigt Energy & Coal Consulting (RSV Enco), in joint venture (JV) with consulting engineering firm Goba (engineering procurement and construction management (EPCM) contract), Sandvik Materials Handling (underground convey-ing system), Group Five Housing (terrace buildings, workshops and substations) and Hansen Transmissions South Africa (gear-boxes).

Latest DevelopmentsOctober 2010Group Five Housing has been awarded a R134,7-million contract for the terrace buildings, workshops and substations at the project. The contract started in June 2010 and is scheduled for completion in November 2011.

Further, gearbox manufacturer Hansen Transmissions South Africa, the local subsidiary of the Belgium-based Hansen Industrial Transmissions, will supply 19 gearboxes to the Thubelisha colliery. The gearboxes will be installed in the colliery’s incline shafts, overland conveyors, and bunker reclaim and trunk conveyors. Delivery is planned for the fourth quarter of 2010 and commissioning in 2011.

March 2010Sasol has allocated R3,1-billion for the new export coal mine and construction has started.

January 2010Sanvik Materials Handling was recently awarded a contract worth over R850-million for the design, supply, erection and commissioning of the underground conveying system, including the incline conveyors that deliver the run-of-mine to a 15 000 t concrete coal bunker, which also has a 15 000 t throughput facility.

March 2009Engineering and management consulting firm RSV Enco, in JV with consulting engineering firm Goba, have been awarded the Thubelisha project.RSV Enco and Goba will design and construct the 10,6-million tons a year mine for Sasol Mining under EPCM contract. The scope of the contract covers the development of the complete mine complex, including the shaft systems, the materials handling systems (including an 18 km long overland conveyor) and all supporting mine infrastructure.


Contact Details for Project InformationSasol Mining, tel +27 17 614 1111 or +27 17 614 5036.

COAL



The international diamond industry suffered the full effects of the global financial crisis and subsequent recession, which took hold of the global economy in the closing months of 2008. To counter lower prices and a lack of liquidity in the system, the major diamond producers responded with deep cuts in production and, in certain instances, mining operations were halted at the peak of the diamond market recession.

Botswana experienced a significant slump in diamond sales in the final quarter of 2008 and the first quarter of 2009. So severe was the downturn in demand for diamonds that Deb-swana temporarily halted production in late-December 2008 and only resumed operations at most of its mines in mid-April 2009.

Market conditions seem to be improving, however, with the shareholders of the Debswana Diamond Company – a joint venture between De Beers and the government of Botswana, announcing at the beginning of 2010 that the major extension project of the Jwaneng mine had been given the green light to proceed.

Diamonds

Debswana’s Cut-8 project

Name and LocationCut-8 project, Jwaneng mine, Botswana.

Project DescriptionThe project involves a major extension at the Jwaneng mine and will ensure profitable and continuous production at the mine until at least 2025.The development will require the removal of 658-million tons of overburden to allow diamond miners to access 91-million tons of ore that will yield around 102-million carats of diamonds.

ValueDebswana will invest $500-million in capital expenditure. Taking into account all project stages, including feasibility, design, implementation and mining operations, as well as the cost of plant and equipment, the estimated total project investment is likely to be $3-billion over the next 15 years.The engineering, procurement and construction management (EPCM) contract is estimated to be worth $450-million.

DurationConstruction began in late 2009 and will have embraced earthworks, civils, piling, structural steel erection and electrical installation by the end of 2011.The first phase of waste removal began early in 2010 and will last until 2012, when 60-million tons will have been moved. Phase two will begin in 2011 and will ramp up to 110-million tons a year – which is three times the current rate of 40-million tons a year – by the end of 2016.

ClientDebswana – a joint venture between the government of Botswana and De Beers.

Key Contracts and SuppliersFluor Corporation (feasibility study and EPCM), Basil Read (contractor).

Latest DevelopmentsJanuary 2011The Cut-8 project was officially launched on December 10, 2010.

October 2010Most of the large specialist contractors have mobilised to site and begun earthworks, civils, piling, structural steel and electrical installation.While the project is 20% complete overall, only 3% of the over-burden has been removed to date.Meanwhile, a prefeasibility study is being undertaken into the next envisaged extension – the Cut-9 project – which is seen as having the potential to extend the life of Jwaneng to 2030 and mine depth to 850 m.Cut-10 is likely to be the last surface extension, after which the mine may go underground.

Contact Details for Project InformationDebswana, Esther Kanaimba, tel +267 361 4216.


DIAMONDS


At the end of 2010, the gold price set a record above $1 430/oz.Predictions are that the gold price will rise over 2011, possibly breaching $1 600/oz either late this year or early 2012.

However, the gold price was not the only element in the market that saw an increase. Ac-cording to precious metals consultancy GFMS, world gold mine production rose to a new all-time high of about 2 652 t in 2010, a “significant” increase of 2,7% year-on-year, beating the previous output record set in 2001.

The consultancy is forecasting further increases in mine production for at least the next cou-ple of years, and contributing to this production will be, among others, AngloGold Ashanti, which is developing the Moab Zaaiplaats extension and Mponeng Below 120 Level Phase 2 projects; Gold Fields, which is expanding the South Deep gold mine; Great Basin Gold whose Burnstone mine achieved its first gold pour in October 2010; Witwatersrand Consolidated Gold Resources, which plans to develop the Bloemhoek gold project; and Randgold Re-sources, which is developing the Tongon gold mine in the Côte d’Ivoire.

Gold

Anglogold Ashanti’s Mponeng Below 120 Level Phase 2 project

Name and LocationMponeng Below 120 Level Phase 2 project, Gauteng/North West province, South Africa.

Project DescriptionThe Mponeng Below 120 Level Phase 2 (formerly Mponeng Carbon Leader Reef Below 120), at the Mponeng mine, involves accessing the Carbon Leader Reef (CLR) about 900 m below the Ventersdorp Contact Reef (VCR), which is currently being mined. It will also access the VCR below the current infrastructure on levels 126 to 141.Production is forecast at an estimated 14-million ounces of gold, with the inclusion of the VCR area below 126 level.

ValueThe project is estimated at R17-billion.

DurationThe project is expected to be presented to the AngloGold Ashanti board for approval in February 2011.

ClientAngloGold Ashanti.

Key Contracts and SuppliersNone stated.Latest DevelopmentsImplied by the change in name, this project will be executed in a phased approach where Phase 2 represents the extraction of the CLR on the uppermost levels from 120 level down to 126 level.Further phases will involve additional exploitation of the CLR up to 141 level or the VCR below the current 126 level infrastructure or a combination of the two reef packages.


Contact Details for Project InformationAngloGold Ashanti vice-president of mining and strategic design Shaun Newberry, tel +27 18 290 3052 or email [email protected].


GOLD

Gold Fields’ South Deep gold mine expansion

Name and LocationSouth Deep gold mine expansion, Gauteng, South Africa.

Project DescriptionThe project comprises a main shaft and a ventilation shaft – collectively referred to as the Twin Shaft complex. The Twin Shaft complex will have a combined hoisting capacity of 330 000 t/m of ore. The main shaft was completed in 2004 and comprises a single drop to a depth of 2 995 m.The ventilation shaft is currently being deepened from 2 760 m to about 3 000 m, as well as being equipped with ore-storage silos and conveyor belts at shaft bottom, a new rock winder and new headgear. In addition, the project entails the development of a new tailings facility, an upgraded metallurgical plant to increase milling capacity by 10 000 t/m to 330 000 t/m, the development and installation of infrastructure around the shaft systems, changing to full plant tailings backfill for increased production levels, refrigeration and ventilation installations, and the development and opening of the orebody in preparation of mining.The South Shaft complex, which is currently being refurbished, will add an additional 120 000 t of hoisting capacity to the mine, bringing the total combined hoisting capacity to 450 000 t/m.The South Deep operation currently has a resource of 63,6- million ounces and a reserve of around 29,3-million ounces, which would give the operation a life-of-mine of around 50 years.

ValueGold Fields has allocated R8,5-billion until the end of 2014.

DurationThe commissioning of the ventilation shaft rock winder is expected by December 2011. The deepening and equipping of the ventilation shaft is scheduled to be completed by July 2012. Full production of between 750 000 oz/y and 800 000 oz/y of gold is expected to be reached by December 2014.

ClientGold Fields.

Key Contracts and SuppliersMurray & Roberts Cementation (mine development and shaft deepening); Wilson Bayley Holmes-Ovcon (WBHO) and Wade Walker (tailings dam); Redpath (battrice panel installation and replacement of South Shaft steelwork); MM&G (steelwork fabrication); Steel Services (Ventilation Shaft headgear; Newrack (Secondary support); TWP (metallurgical plant design) Howden (commissioning of main surface ventilation fans): and AEL Mining Services (blasting contract to deepen ventilation shaft).

Latest DevelopmentsDecember 2010The first section of the ventilation shaft headgear was erected during December 2010, and the shaft has been successfully equipped from surface to 100 level. The bottom portion of the shaft has been sunk from 110 to 110A level.

September 2010Gold Fields is working on plans to increase output at South Deep to one-million ounces a year. To achieve this, the processing plant would need to be expanded to 450 000 t/m.The board is expected to make a decision in the middle of 2011. Gold Fields has put out a tender for design work on the extension, to cost the project ahead of the decision.To feed the plant extra ore, the company is investigating mining the area around the South Shaft, which is undergoing a R100-million refurbishment to double its capacity to 120 000 t/m.The South Shaft was intended to be an additional exit for hoist-ing ore when Gold Fields acquired South Deep from Western Areas and Barrick Gold in 2006. The plan is now to make it a production shaft in its own right.The company is also weighing options on bringing gold and uranium tailings into account.

On Budget and on Time?Yes.

Contact Details for Project InformationGold Fields corporate affairs manager Sven Lunsche, tel +27 11 562 9763 or email [email protected]; or investor relations senior manager Nikki Catrakilis-Wagner, tel +27 11 562 9706 or email [email protected].


GOLD

Great Basin Gold’s Burnstone gold project

Name and LocationBurnstone gold mine, Witwatersrand basin, South Africa.

Project DescriptionThe project involves the construction of a new shallow, low-cost, long life gold mine in the north-eastern part of the Witwatersrand basin, 80 km south-east of Johannesburg.The feasibility study recommended flexible, mechanised materials handling and conventional narrow-reef underground mining of the Burnstone deposit, using a combination of decline and vertical shaft access.A 4,5 m wide by 4,8 m high decline started development in August 2006, to enable early access to the orebody for mining, and the vertical shaft has reached its final depth of 487 m in May 2010. At full production, the decline will be used as a secondary access to the orebody and the vertical shaft will be used for both men-and-materials and rock hoisting.The development of the ventilation shaft occured in two phases. The first phase included the piloting and reaming of a 5,1 m diameter, 305 m deep ventilation shaft, which acts as an upcast shaft that provides sufficient ventilation for the mining of blocks B and C.Phase 2 consisted of establishing support by lining the first 90 m of the shaft with shotcrete, as well as connecting three 720 kW surface fans.The processing plant has been designed with a nominal capacity of 175 000 t/m and consists of conventional crushing, semi- autogenus and ball-milling, followed by gravity separation and carbon-in-leach treatment before gold refining. The expected metallurgical recovery is 95%, with 4,1-million ounces to be recovered over the 19-year life-of-mine.The project will have an expected average production of 254 000 oz/y of gold at a cash cost of $392/oz.

ValueThe need for a larger metallurgical facility and the construction of a second decline has resulted in development costs increasing from $173-million to $175-million to commercial production.

DurationMining of blocks B and C is planned over three years. Phase 1 took 12 months to complete, while Phase 2 was completed in August 2010, in line with the planned production build-up.

ClientGreat Basin Gold (GBG).

Key Contracts and SuppliersCredit Suisse (export loan facility), Eskom (electricity), Grinaker-LTA Mining, Sandvik Mining & Construction, Dowding Reynard &

Associates (DRA), TWP Consulting, Superwatt, FLSmidth Minerals, Thoroughbred Technologies, Fraser Alexander Tailings, Turgis Consulting, ITT Flygt, DRA Technical Services and Zest Electric Motors.

Latest DevelopmentsJanuary 2011The capital expenditure programme at the mine has generally been completed with the vertical and ventilation shafts commissioned. The mine has started with production build-up. Development continues with 5 747 m of on-reef development completed to the end of December 2010. The focus of current work is to increase the rate of stoping panel development and long hole stoping; both are progressing well.The metallurgical plant was successfully commissioned and started milling low-grade development ore by mid-October 2010; 65 534 t of low-grade ore had been treated by the end of December 2010. The company was not in the position to declare commercial production prior to the Christmas break in December; however, during the first 17 days of January 2011, 51 653 t of production material was treated, which is in line with the planned build up for the metallurgical plant. A total of 2 186 oz of gold has been recovered, including 9 kg (289 oz) by gravity, 34 kg (1 093 oz) loaded onto carbon and 25 kg (804 oz) in residue. Owing to the lower grade of the development ore being processed by the mill, an average recovery of 86% was achieved but is expected to increase to 95% when higher grade material is processed. It is expected that commercial production will be reached by the end of January 2011.At January 17, 2011, there were 156 000 t on the ore stockpile at Burnstone.Meanwhile, exploration and evaluation drilling has continued at both the Burnstone, and the company’s Hollister operations, in the US. At Burnstone, drilling is currently being conducted from surface and underground to provide infill evaluation and structural data on future mining blocks. Block evaluation is being advanced by detailed underground channel sampling of on-reef mine development exposures.

On Budget and on Time?The Burnstone metallurgical plant completed its first gold pour on October 31, 2010.

Contact Details for Project InformationGBG investor relations officer Tsholofelo Serunye, tel +27 11 301 1800, fax +27 11 301 1814 or email [email protected].


GOLD

Rangold Resources’ Tongon gold project

Name and LocationTongon gold project, Côte d’Ivoire.

Project DescriptionThe project involves the construction of a 300 000 t/m gold mine, with a mine life of more than ten years.

ValueThe total capital value, excluding the mining fleet and ongoing capital, amounts to $280-million.

DurationThe mine was brought into production on schedule in the face of significant challenges, including a presidential election on October 31, 2010.

ClientRandgold Resources, New Mining Côte d’Ivoire and the government of Côte d’Ivoire.

Key Contracts and SuppliersSGS (laboratory services); Senet (engineering, procurement and construction management contract); Digby Wells & Associates (scoping study); SRK (testwork); DTP Terassement (earthmoving operations) and Tomi, a subsidiary of DTP (contract miner).

Latest DevelopmentsFebruary 2011During the quarter ended December 31, 2010, a total of 3,14-

million tons was mined at Tongon, including 415 000 t of ore, and 355 000 t of ore were processed through the newly commissioned plant Production has been affected by the current political situation in Côte d’Ivoire, as well as groundwater conditions. The operation continues to be run at reduced output, with a single milling stream for better efficiency in terms of power/diesel consumption. The process plant throughput of 487 000 t (including pre- production tons) for the fourth quarter was 42% below the target of 834 000 t. The construction of phase 1, being the oxide treatment circuit of the process plant, is practically complete with both mills having been commissioned during the fourth quarter of 2010. With the mills and oxide circuit operational, focus has shifted to the sulphide treatment circuit and the ancillary/support equipment. The diesel standby power plant has been commissioned and is operational. The grid power project, the Korhogo substation and the Tongon substation are 90% and 24% complete respectively. The 90 kV overhead line is 85% complete and the grid power project is forecast for completion in March 2011.

On Budget and on Time?The completion of the second stream has been delayed.

Contact Details for Project InformationRandgold Resources group corporate communications manager Lois Wark, tel +44 207 557 7745 or email [email protected]; or investor and media relations, Kathy du Plessis, tel +44 207 557 7738 or email [email protected].


GOLD

Witwatersrand Consolidated Gold Resources’ Bloemhoek gold project

Name and LocationBloemhoek gold project, Free State, South Africa.

Project DescriptionA prefeasibility study on the Bloemhoek gold project has indicated that the project is both technically sound and economi-cally viable.The prefeasibility study is based on an estimated indicated mineral resource in the Bloemhoek area of around 39,9-million tons at an average grade of 7,17 g/t, containing 9,2-million ounces of gold.Envisaged is the sinking of a twin shaft system to 1 951 m, with the deeper areas being accessed by systems of declines. A remote vertical ventilation shaft has been included in the schedule to reduce underground development to remote blocks of reef.Similar to other standard mining operations in South Africa, the layout comprises a system of footwall haulages, cross-cuts to reef at 180 m intervals, interlevel reef raises and breast stoping by conventional means. Significant mechanisation of the operation is not considered suitable, owing to the narrow mining width.All aspects of the proposed mine design are based on well established current mining practice for neighbouring and similar orebodies.

ValueTotal life-of-mine capital expenditure is estimated at R7,66- billion.

DurationNot stated.

ClientWitwatersrand Consolidated Gold Resources (Wits Gold) currently owns 100% of the prospecting rights to Bloemhoek. Should the company complete a bankable feasibility study over the area, Harmony Gold Mining Company has an option to acquire a 40% stake in the project by refunding 40% of the historical exploration costs since April 2004 and contributing 40% of the capital required to build the new mine. Should Harmony decline to participate in the development of Bloemhoek, Wits Gold will have the option to either progress the project alone or negotiate terms with another operator.

Key Contracts and SuppliersTurnberry Projects (prefeasibility study), Ukwazi Mining Solutions (mine design and production scheduling), Geosearch (drilling), Anglo Research Laboratories (assay analysis), Snowden Group (resource estimates) and AMD Consulting (three-dimensional structural modelling).

Latest DevelopmentsApril 2010The project is currently in its prefeasibility phase.

November 2009Wits Gold has reported in its unaudited financial results for the six months ended August 31, 2009, that additional work will be required to be undertaken on the Bloemhoek project before a decision will be made to initiate a definitive feasibility study.


Contact Details for Project InformationWits Gold, tel +27 11 832 1749 or fax +27 11 838 3208; or exploration manager Dirk Muntingh, email [email protected].


GOLD

In 2009, newly created iron-ore output worldwide reached 75-million tons. The United Na-tions Conference on Trade and Development reports that up to the end of May 2010, newly undertaken iron-ore projects had an aggregate planned iron-ore output of 685-million tons. These new iron-ore projects will be put into production from 2010 to 2012.

Among the iron-ore projects expected to come into production are Kumba Iron Ore’s Kolomela iron-ore project in South Africa’s Northern Cape province, which expects to deliver first production in the second half of 2012; and Assmang’s Khumani mine expansion project, also in the Northern Cape, which will see production ramp up starting in January 2012.

Further into the future, a plan to convert iron-ore fines into metallic briquettes for use as a scrap supplement in electric steelmaking, is undergoing a bankable feasibility and will be de-veloped in Phalaborwa, in South Africa’s Limpopo province.

Iron Ore


Assmang’s Khumani iron-ore expansion project

Name and LocationKhumani mine expansion project, Northern Cape, South Africa.

Project DescriptionThe Khumani expansion project entails the expansion of the mine from ten-million tons a year to 16-millions tons a year. The expan-sion will include the development of a new mining area, exploiting additional orebodies. To service the new mining area, the primary and secondary crushers will be duplicated, while a new overland conveyor will be constructed.The existing washing, screening and beneficiation plant will be expanded to allow for the increased capacity.Storage areas for run-of-mine materials and product also will need to be expanded, as will the primary thickener and paste plant.A new rail loop and loadout station will be built, as well as a rail link directly to the local line.

ValuePhase 1 and phase 1A to ten-million tons a year cost R4,5-billion.The estimated total capital expenditure for the proposed Khumani expansion project is R6,7-billion.

DurationPhase 1A has been completed and the mine is ramping up to ten-million tons a year.A feasibility study on the second phase of the project was completed in June 2009. Production ramp up is expected to be begin in January 2012, with full production to start in the 2013 financial year.

ClientAssmang, a 50:50 joint venture (JV) between Assore and African Rainbow Minerals (ARM).

Key Contracts and SuppliersFor the Khumani mine expansion:Africon (consulting services for detailed earthworks design for King and Parsons); Alliance Cost Management Services (con-sulting services for quantity surveying (civils and structural, mechanical and piping contract); Alstom (signal construction at local siding – Parson); Alstom, Megatron, ABB, Siemens (design, fabricate, supply and medium-voltage (MV) switchgear for King); ATC (supply and delivery of cable); B & W lnstrumentation (installation of the 22 kV reticulation ring and installation of ID tags for the 22 kV overhead); B&W (supply and erect of construction power for King & Parsons); Benja Trading (domestic waste bins and removal of waste); Bosworth (fabricate and supply of conveyor pulleys and bearings for King); Brelko (supply of

conveyor belt scrapers for King); Bulk Solids Flow (consulting services); Burgess & Burger (fabricate, supply and erect of King infrastructure -SMP package 1); Charles Corbett Photography (photographic services); Concor (civil and earthworks works); Control Lab (civil and earthwork quality surveillance); Cosira lMS (supply and install tunnel vacuum cleaner – King); Crane Load Tech, Terex, MMS (supply of mobile cranes – King); IDesSoft (supply of instrumentation and electrical design software package – King and Parsons); Desta Power, Alstom, Steelcor, Zest (design, fabricate and supply of distribution transformers for King); IDesta Power, Alstom, Steelcor, Zest (design, fabricate and supply of distribution transformers for Parsons); DRA (engi-neering procurement and construction management early works contract C2917); ECE (design, fabricate, supply and erect of pressurisation systems for crushers); Eclipse (supply of control room computer equipment – King); ECMP (design, fabricate, supply and erect compartmentalisation of tails dam – King); Eisen (supply of impact idlers for King); ER Signs & Safety (supply of safety and construction signage); Fabricated Steel (supply and erect temporary mobile construction offices and ablutions – King and Parsons); FLSmidth (design, fabricate and supply of cyclones – Parsons); FPS (fabricate, supply and erection of piping at the Port Eleizabeth rail crossing – King); FSM (supply and erect permanent prefabricated buildings/offices – King and Parsons); Hatch (consulting services); Humboldt Wedag (Supply lumpy and fines jigs); lnkjet Technology Supplies (fleet vehicle signage); Ivuzi (consulting services); Joest (design, fabricate and supply of screens and vibrating feeders for King and Parsons); KPMG (consulting services for escalation variables); Lilliput (Installation of Lilliput SBC 6000 – King); M&J Engineering (design, fabricate and supply of WEBA chutes for King); Malvern (designs, fabricate and supply of conveyor belt magnets – King); Matador (supply of conveyor belting for King); Matthee Furniture Removals (transportation of goods); Metso (supply of secondary and tertiary crushers (long lead items) – King and Parson, supply of centrifugal, spillage and clean water pumps – King & Parsons, and supply of primary crusher (long lead items); Moody International (consulting services); Morris Materials (design, fabricate and supply of EOT cranes for King); Office Furniture Suppliers (supply of construction office furniture for King and Parsons); Osborn (design, fabricate and supply of apron feeders for King); Qfinsoft (consulting services); Rufco (fabricate, supply and erect of King overland conveyors - SMP package 213); Saco Systems (supply and erect access control/time and attendance – King, Parsons and local siding); Sandvik (design, fabricate, supply and erect run-of-mine stackers and reclaimers – Parsons); Scaw Metals Eclipse East Foundry (supply of manganese liners – King and Parsons); Sectional Poles (design, fabricate, supply and erect of high-mast lighting – King and Parsons); Siemens (supply of conveyor drives for King); Smart Words Editing Services (editing of the KEP feasibility); SMEI (fabricate, supply and erect of king structures and conveyors – SMP package 2A); Snowden Mining (mine planning services); SRK Consulting Engineers (consulting services for geotechnical drilling at King

IRON ORE


and Parsons); Sunglide 28 (design, supply and install of con-struction water – King and Parsons); Swift Flite (charter flights to Sishen); Vivo-Tech Engineering (consulting services); Vuleka (consulting services); WEC (supply and erect sewage plant – King and Parsons); Westech (design, fabricate, supply and erect of primary thickener mechanism and rails – King and Parsons); Wilichem (consulting services).

For the Khumani mine:Africon (detailed earthworks and design for King and Parsons); SRK Consulting Engineers (geotechnical drilling); DRA (engineer-ing, procurement and construction management (EPCM) con-tractor); Metso (primary, secondary and tertiary crushers); Murray & Roberts Construction, part of the BKM Civils JV with Grinaker-LTA (lead contractor); Voest-Alpine Materials Handling (stackers and reclaimers); Barloworld (mining equipment); Osborn (apron feeders); Polysius (high-pressure roller crushers); Humboldt Wedag (lumpy and fines jigs); Joest (screens and vibrating feeders); Concor Holdings (earthworks and civil contracts ); Rockwell Automation (PLC equipment); Warman Africa (pumps); Zest Electric Motors (low-voltage motors); Shaw Controls (frame agreement); ScanMin (Geoscan online analysers); M&J Engi-neering (Weba chutes); VAE (rail material supply); R&H Railway Consultants (rail and road consultant); Edison Jehamo Power (overhead lines and construction power); VVB Construction (haul roads); Bateman (rapid-rail load-out station and primary thickener); Matador (steel-cord conveyor belting); Alstom (MV switchgear); ECMP (paste disposal); Sandvik (run-of-mine and product yard conveyors); Life Occupational Health (occupational health services); Ivusi (environmental management programme); Matomo (sample preparation plant); Aberdare Cables (electrical cable); Cosira Tubular JV (subcontractor management plan (SMP) for A & B); Roymec (plant product and waste discard conveyors SMP); Crane Load Tech (mobile cranes – 120 t); Charles Corbett Photography (aerial and surface photography); B&W and Brand Engineering South Africa (electrical and instrumentation installation); Shelela Foods (contractors’ camp); Eclipse Networks (computer equipment for JD Edwards Solutions); Shaw Controls (motor control centres); Goodyear (conveyor belt-ing); SA Fence & Gate (security fencing); Fabricated Steel Manu- facturers (buildings and prefabricated infrastructure); Botes & Kennedy Manyano (small works, culverts and crossings); Elan

Civils CC (small works and stockpile extension civils); Rufco Engi-neering (process plant expansion SMP); Lennings (rail installation), Tanstank (rail refuelling station); Siemens (siding signalling system); VAE (supply of rails and turnouts); Swift Flite (charter flights to and from Sishen); and Bearings International (copper split rings).

Latest DevelopmentsOctober 2010The feasibility on the iron-ore export channel for dual products and the upgrade from to 93-million tons to 95-million tons a year technical feasibility is expected by March 2011.

April 2010Kumba has reported that Transnet, was engaged in “serious talks” with Northern Cape iron-ore and manganese miners on the creation of capacity beyond 60-million tons a year.Consulting engineering company Aurecon has been introduced to shed fresh light on how the Sishen–Saldanha corridor could be expanded beyond that yearly capacity.Transnet is currently completing the execution of the expansion to 47-million tons a year, and is in the construction phase of the expansion from 47-million tons to 60-million tons.Increasing the capacity beyond 60-million tons, for which plans have still to be drawn up, is scheduled to take place by 2013.Transnet has made it clear that its balance sheet can withstand expansion of the iron-ore line up to 60-million tons, but that, beyond that level, private-sector participation will be necessary.Consultants involved will be required to ensure that any future expansion is done at an appropriate capital cost. Initial estimates tabled have reportedly been deemed to be prohibitively expensive.

On Budget and on Time?The first phase of the project has been completed and the mine is ramping up to ten-million tons a year.

Contact Details for Project InformationARM corporate development and head of investor relations, Jongisa Klaas, tel +27 11 779 1507 or email [email protected].

IRON ORE


Kumba Iron Ore’s Kolomela iron-ore project

Name and LocationKolomela (previously Sishen South) project, Northern Cape, South Africa.

Project DescriptionThe project entails the development of an iron-ore mine some 80 km south of the Sishen mine, near Postmasburg.The mine will have a 30-year life-of-mine and produce direct shipping ore, producing 9-million tons a year.Kolomela will be mined by conventional openpit mining. The plant will be a full dry crush and screen operation only.The ore will be transported on the main Sishen-Saldanha iron-ore export channel to the Port of Saldanha Bay by means of a 36 km rail link to be built from the mine.Main offices and general infrastructure will be established at the mine site. Access to the mine will be created by a new surface road running south from the Beeshoek mine up to the site office area.The mine will be supplied by a 132-kV overhead line from the Eskom Postmasburg substation.Further, the mine will build 718 houses in the Tsantsabane local municipal area to house the permanent employees.

ValueR8,5-billion.

DurationThe first production from the mine is expected to be delivered in the first half of 2012, ramping up to full capacity of nine-million tons a year in 2013.

ClientKumba Iron Ore.

Key Contracts and SuppliersBearings International (bearings and transmission equipment), Metso Minerals (crushers), Takraf South Africa (stackers and reclaimer), Concor Roads & Earthworks (earthworks), Grinaker-LTA Civil Engineering (Civils), Group 5 (Buildings), Hatch Africa, BVi Consulting Engineers Gauteng, Jeffares & Green, Ninham Shand (engineering, procurement and construction management (EPCM), and consultants), Komatsu (equipment), Caterpillar (equipment), TTC (SMPP), LSL Consulting (load-out station design), MikroPul (dust control contracts), Senet (conveyors), Condra Crane (cranes), Speedspace (prefabricated structures).

Latest DevelopmentsDecember 2010Kumba’s annual report notes that R4,4-billion of capital expenditure, including R407-million of capitalised mining operating expenses, has been incurred to date.During October, the project started its first subsystems com-missioning, concluded its main civil works, commissioned its first three modular motor control centres and started on the site construction for the haul road contract.All the significant equipment for the mine, which comprises the primary, secondary and tertiary crushers, the screens, the stacker and reclaimers and the major lifts, has been delivered and is in the process of being installed.Meanwhile, in the process of developing the first pit, over 17-

million tons of waste have been removed from the Kolomela mine since the first blast in September 2009.As the bulk of the iron-ore is not on the surface, about 25- million tons to 30-million tons of waste must be removed before the ore is exposed. The ore is expected to be reached by mid-2011.The total stripping is about 30-million tons of waste for nine- million tons of direct shipping ore (DSO), of which all of the iron-ore will be exported and sold.The plant yield will be 99,8% and the remaining 0,2% consists of dust suppression and dust extraction material, which will be deposited in the slimes dam.The Kolomela products will be similar to those produced in the Sishen jig plant and will be sold in Kumba’s current market, which comprises about 60% of the production exported to China and the rest to Japan and Europe.Analysts predict that there will be a potential iron-ore shortage in 2013 that the Kolomela mine will be ready and able to fill.Meanwhile, Hatch Africa has successfully implemented a global EPCM information sharing strategy for Kolomela, and has seen the company’s R2,5-billion role in the project remain ahead of schedule and within budget.Hatch Africa reports that the company’s role in the project will be just under 90% complete by the end of 2010. Project handover is now expected to be in June 2011.Hatch Africa’s scope of work for the plant and stockyard area was originally estimated to be worth about R2,8-billion. How- ever, savings in construction and ?favourable escalation resulted in that figure being reduced.The engineering and procurement aspects of the project are already complete, while construction work stands at around 80% complete, with a small amount of civil works still to be carried out.The company expects the plant area to be completed by mid-2011.Further, Speedspace has reported that the construction of a 600-person labour camp for the Kolomela mine was successfully completed on October 23.

On Budget and on Time?The project is within the original schedule and budget.

Contact Details for Project InformationKumba Iron Ore head of projects Francois Louw tel +27 12 683 7057 or email [email protected].

IRON ORE


Iron Mineral Beneficiation Services’ iron fines project

Name and LocationIron fines project, Limpopo, South Africa.

Project DescriptionThe project will see the construction of a 50 000-t/y demonstration facility, in Phalaborwa, to convert iron-ore fines into metallic briquettes for use as a scrap supplement in electric steelmaking.The facility will use Iron Mineral Beneficiation Services’ (IMBS’s) patented Finesmelt technology.The technology, which still has to be proved commercially, enables the conversion of previously stockpiled waste fine and ultrafine material into a saleable product.

ValueThe demonstration project will involve an investment of between $12-million and $15-million, and could be the precursor to a larger $120-million project to produce 500 000 t/y of the briquettes.

DurationThe plant, which is still undergoing a bankable feasibility study, could be operational within 18 to 24 months.

ClientIMBS (66,7%) and the Industrial Development Corporation (IDC) (33,3%).

Key Contracts and SuppliersNone stated.

Latest DevelopmentsThe project will be backed by the State-owned IDC, which will take up to 33,3% of the equity in the initial venture.Talks are also currently under way with Palabora Mining Company (PMC), which is owned by resources giant Rio Tinto, on a supply agreement for the initial facility and for the possible expansion to 500 000 t/y.PMC has also been given the option of taking an equity stake in the project.


Contact Details for Project InformationIMBS, tel +27 11 996 4920, fax +27 11 658 1286 or email [email protected].

IRON ORE


Demand for nickel and manganese is directly dependent on the needs of the steel indus-try, as both are essential ingredients in the production of steel – manganese by virtue of its sulphur-fixing,deoxidising, and alloying properties, and nickel by virtue of its tensile strength in the production of stainless steel. As a result, both metals are sensitive to mar-ket fluctuations in the steel sector.

Analysts are mixed on the level of steel demand expected for 2011. Demand in China, which has seen double digit increases in steel demand for the past few years, is slowing and most analysts expect growth to be around 8% this year. Meanwhile, India is seeking to secure supplies of manganese ore, as it plans to increase steel manufacturing capacity by almost 67% to 120-million tons by 2012. In that period, the country’s manganese ore demand is expected to almost double to 4,5-million tons. One South African manganese miner that could benefit from this increase in demand could be Kalagadi Manganese, which is developing a manganese mine and sinter plant, in the Northern Cape and East-ern Cape provinces.

With the growth in emerging markets’ consumption, nickel demand is also expected to increase, with global stainless steel production expected to increase by around 3% to 31-million tons in 2011. Global nickel output is expected to reach 1,61-million tons this year as new capacity comes into production, and recently commissioned projects, such as African Rainbow Minerals and Norilsk Nickel’s Nkomati nickel expansion, ramp up to full production.

Other Mining Projects


Kalagadi Manganese project

Name and LocationKalagadi manganese project, Northern Cape and Eastern Cape, South Africa.

Project DescriptionThe proposed project envisages the construction of a manganese mine and a 2,4-million ton a year sinter plant (Umtu sinter plant), near Hotazel, in the Kuruman area of the Northern Cape. The output required from the mine to produce this amount of sinter will be three-million tons a year.An additional component of the project is the construction of a 320 000 t/y ferromanganese smelter complex in the industrial development zone (IDZ) of the Coega deep-water harbour. The plant will be designed to have the flexibility to produce silicomanganese as an alternative product.The smelter will be situated in Zone 6 of the IDZ’s metallurgical zone, and could possibly be expanded to handle 640 000 t of ore.The project area overlies the Kalahari manganese basin and is estimated to contain 80% of the world’s known high-grade manganese resources. An evaluation of historically available information indicates that up to one-billion tons of mineable ore could exist under the prospecting area, covering an area of 8 000 ha.

ValueKalagadi has arrived at a project value of R10,5-billion for the building of the manganese mine and sinter plant, in the Northern Cape, and the ferromanganese smelter, at Coega, in the Eastern Cape.

DurationCompletion of the shaft system is expected in the second quarter of 2012, although a lot of the underground development will involve the production of saleable ore.The sinter plant will be completed in June 2012 and the smelter in July 2012.

ClientArcelorMittal South Africa paid a total of $432,5-million for its interest in Kalagadi Manganese, which is now 50%-owned by Mittal, 40%-held by black women-owned and -controlled Kalahari Resources, and 10%-owned by State-owned financier, the Industrial Development Corporation.

Key Contracts and SuppliersMineral Corporation (geological consultant), MDM Engineering (bankable feasibility study (BFS)), front-end engineering design (Feed) engineering, and construction management (ECM)), Shaft Sinkers and Grinaker-LTA (shaft sinking), Neutron Engineering (bulk earthworks for the shaft), Tubular (main and ventilation shaft headgears) and Outotec (sinter plant).

Latest DevelopmentsNovember 2010MDM Engineering has been given a letter of award for the ECM for the provision of services and infrastructure to the Umtu sinter plant. The project scope is valued at some $140-million.

September 2010The South High Court has ordered the Companies and Intellectual Property Registration Office (Cipro) to replace the names of the

eight people that “hijacked” Kalahari Resources, with those of the original two directors Daphne Mashile-Nkosi and Brian Mashile.Kalahari Resources chairperson Mashile-Nkosi started urgent legal action on September 8, after she and Mashile, were removed as directors of the company, claiming that this move was illegal.According to Cipro records, Mashile was shown as resigned and Mashile-Nkosi was displayed as disqualified.Changes to the directors were made electronically, on August 27, by Harlambos Sferopoulos.Sferopoulous was one of the new directors listed on the Cipro system, together with businesspersons Sandi Majali and Stephen Khoza, Elvis Ndala, Maria Carter, Roberto Rizzo, Nothando Nkosi and Dlamini Welhencia.Mashile-Nkosi said that the eight directors had “illegally high-jacked” the company on August 27, but that this was only discovered on September 8.Metmar, which holds a stake in Kalahari Resources, has reported that the dispute would not delay development of the Kalagadi manganese project.

March 2010Grinaker-LTA has been awarded a contract for the continuation of the shaft sinking and Outotec has been awarded a contract for the construction of the sinter plant, on a lump-sum turnkey basis.

January 2010In June 2009, MDM Engineering started with the Feed phase of the Kalagadi Manganese Umtu sinter plant project, in the Northern Cape.In 2008, the company completed a BFS for the Kalagadi Manga-nese project, which was valued at R3,5-billion.The Feed phase will incorporate a control budget estimate to take advantage of the weaker commodity prices in the current environment.The company is also “engaging” with Kalagadi Manganese on a number of other matters.


Contact Details for Project InformationKalagadi Manganese technical director David Wellbeloved, tel +27 11 234 4154, fax +27 11 234 4076 or email [email protected].

OThER MINING PROJECTS



Norilsk Nickel and African Rainbow Minerals’ Nkomati nickel mine phase 2 large-scale mining expansion project

Name and LocationNkomati nickel mine phase 2 large-scale mining expansion, Mpumalanga, South Africa.

Project DescriptionThe Nkomati mine currently produces about 6 000 t/y of nickel in concentrate from 100 000 t/m of main mineralised zone (MMZ), almost equally divided between undergound and openpit oper-ations. The mine also produces copper, cobalt, platinum-group metals and chrome as by-products. The current operation resulted from an interim expansion to replace the original massive sulphide body, which was depleted in 2008.Nkomati is constructing the Phase 2 large-scale expansion, which will produce a total of 625 000 t/m of both MMZ and periodtite chromititic mineralised zone (PCMZ), two separate mineralised zones within the Uitkomst layered intrusive complex.Mining will continue from the undergound mine, at a rate of 47 000 t/m while the two openpits, Pit 2 and Pit 3, will produce 578 000 t/m of ore at steady state production.A new 375 000 t/m concentrator for the MMZ is being constructed and the current 100 000 t/m concentrator will be upgraded to 250 000 t/m to process the PCMZ ore, providing a total concen-trator capacity of 625 000 t/m.The mine’s related infrastructure is also being upgraded, including the construction of two new tailings facilities and an upgrade of the power supply to 80 MVA.The average yearly nickel production in concentrate is forecast to be 20 500 t over the 18-year life-of-mine

ValueThe project will cost an estimated R3,7-billion, with the interim phase expected to cost about R384-million and the phase 2 expansion about R3,34-billion.

DurationPhase 2a of the project has been completed and commissioning started on September 15, 2009.Phase 2b was expected to be completed by December 2010.

ClientAfrican Rainbow Minerals (ARM) and Norilsk Nickel, which acquired the operation after it bought Canada-based LionOre for C$6,8-billion.

Key Contracts and SuppliersDRA, Golder Associates Africa, Hatch (bankable feasibility study); DRA Minerals Projects (engineering, procurement and con-

struction management); WBHO Construction (main earthworks contractor and main civil contractor); Cosira (structural steel-work and mechanicals (SMP – package A)) and Aveng/Grinaker-LTA (SMP – package B)); and Fabricated Piping Systems (main piping contractor); ECMP (tailings dam); Delras (conveyors), Wade Walker (electrics and instrument installation) and B&W Instrumentation & Electrical (B&W) (electrical and instrumentation works).

Latest DevelopmentsNovember 2010ARM has reported, in its annual results for the year ended June 2010, that the Nkomati management team is currently addressing problems with the variability of the openpit ore feed into the plant. The variability in the hardness of the rock is resulting in fragment-ation, crushing and flotation challenges at the mine.Nkomati underground ore has not experienced such variability problems, and it is likely that this will be a two to three-year concern, owing to the proximity of the ore to surface.Short-term contingency plans have been implemented and research is being conducted to find a sustainable long-term solution.The 100 000 t/m plant was stopped in June 2010, in preparation for the upgrade to the 250 000 t/m PCMZ plant, which is expected to be commissioned in December 2010.Further, the Eskom power supply project for the 375 000 t/m plant is complete and two of the three new 40 MvA transformers have been installed and energised. The third 40 MvA transformer is expected to be commissioned this month. The next phase of the Eskom power supply project is the upgrade of the 132 kV overhead distribution lines and this is expected to be completed by end of 2011. This will improve the mine’s backup power supply position.

On Budget and on Time?All components of the phase 2a project have been completed on schedule.The project was on target to achieve the scheduled completion date in December 2010, within budget.

Contact Details for Project InformationARM corporate development and head of investor relations, Jongisa Klaas, tel +27 11 779 1507 or email [email protected].

OThER MINING PROJECTS

Platinum demand was boosted in the first nine months of 2010 by improved economic con-ditions, which increased business and consumer confidence and led to a recovery of many industrial sectors. The outlook for 2011 is less certain, with the possibility that sovereign debt concerns, tighter credit, and national austerity measures may slow economic growth.

Overall the platinum market is expected to remain in moderate surplus in 2011, with near-flat production, and rising demand offset by greater levels of recycling. The recent performance of platinum suggests that its price is currently largely unmoved by supply-demand fundamen-tals. It will remain strongly influenced by external factors such as the strength of the USdollar, the gold market and speculative investor interest.

This said South Africa, with more than three-quarters of the world’s platinum reserves, is expected to boost supplies in the next couple of years from a number of platinum projects currently under development in the country, as well as from one or two projects under way in Zimbabwe.

Platinum


Anglo Platinum’s Thembelani shaft 2 platinum project

Name and LocationThembelani 2 (formerly Paardekraal 2) shaft replacement project, Rustenburg, North West, South Africa.

Project DescriptionThe Thembelani 2 shaft project is a replacement project that will gain access to deeper Merensky reef reserves at a rate of 120 000 oz/y.The project is the first of this magnitude in more than a decade, and includes a downcast vertical men-and-materials shaft, and an adjacent matching vertical upcast ventilation shaft, which will intersect the existing horizontal connections. It will also involve the extension of the existing declines at Paardekraal’s 1 shaft project.The proposed vertical men-and-materials shaft will access declines on the 28, 32 and 33 level elevations and the upcast vertical ventilation shaft will access declines on the 28 and 31 level elevations. The surface infrastructure will include a standard shaft bank layout, a dedicated refrigeration plant, supply chain store, offices, change houses and compressor station (not required if electrical drilling is selected). Bulk services will include overhead power lines, road access, sewage reticulation and water supply pipelines to the new Paardekraal 2 shaft.

ValueR2,3-billion.

DurationProduction of 120 000 oz/y of refined platinum is expected by 2015.

ClientAnglo Platinum.

Key Contracts and SuppliersTWP (engineering, procurement, and construction management (EPCM)), Louwil (headgear) and Winder Controls (winder) and ATD (trade-off studies).

Latest DevelopmentsFebruary 2011Anglo Platinum reports that the ventilation shaft has reached its bottom station (1 058 m below collar) and infrastructure to hoist rock during initial ore reserve development has been established for lateral development. The men-and-materials shaft, 28 level station (890 m below collar) and 32 level station is complete. Bulk infrastructure, such as the refrigeration plant, consumer substation, 11 kV substation and 33 kV yard has been completed and commissioned. This project is currently behind schedule and steady-state production from this shaft will be reached during 2015.

December 2010Anglo Platinum reports that the men-and-materials shaft at the project is currently 1 074 m deep.The mine expects the completion of the men-and-materials shaft sinking in 2011.A high-level investigation is under way to consider other available resources and the optimisation of the Thembelani 2 shaft, which will comprise the conversion of the men-and-materials shaft to include rock winding facilities. Provision for this and concurrent extraction of the upper-group two resource was made in the original design.This strategic focus will optimise infrastructure, reduce operating time and close old high-maintenance infrastructure.Meanwhile, the ventilation shaft sinking was completed in September and is 1 058 m deep. This shaft is currently being prepared and converted for ore reserve development.Other surface infrastructure completed at the mine includes a new consumer substation for State-owned power utility Eskom, a shaft substation and a refrigeration plant.Further, the underground connection from the Thembelani 1 shaft has been dug, with the decline extension and ore reserve development in progress.Apart from the shaft pillar reef extracted at the Thembelani 2 shaft, the project is already producing Merensky reef at the Thembelani 1 shaft from 27 level and 28 level.

On Budget and on Time?The project is currently behind schedule and steady-state production from this shaft will be reached during 2015.

Contact Details for Project InformationAnglo Platinum investor relations, Anna Mulholland, tel +27 11 373 6683 or email [email protected]; or corporate communications, Thabisile Phumo, tel +27 11 373 6846 or email [email protected].

PLATINUM


Anglo Platinum’s Twickenham project

Name and LocationTwickenham project, Limpopo, South Africa.

Project DescriptionThe project will expand current operations, and exploit the upper-group two reef zone, to contribute 180 000 oz of refined platinum.

ValueR7,1-billion.

DurationThe Twickenham concentrator is planned for commissioning in 2015.The project will reach steady state of 3-million tons a year in 2019.

ClientAnglo Platinum


Latest DevelopmentsIn 2010, the Twickenham mine was handed over to the Anglo Platinum projects team. A new investment proposal for the project will be submitted for approval in the third quarter of 2011.The project is now focused on unlocking the backbone of the mine by converting the operational component of the project into capital development work.

On Budget on Time?Completion of the project has been delayed by two years, production is now expected from 2018.

Contact Details for Project InformationAnglo Platinum investor relations, Anna Mulholland, tel +27 11 373 6683 or email [email protected]; or corporate communications, Thabisile Phumo, tel +27 11 373 6846 or email [email protected].

PLATINUM


Anglo Platinum’s Unki platinum mine and processing plant

Name and LocationUnki platinum mine and process plant, Zimbabwe.

Project DescriptionAnglo Platinum is developing its first platinum mine in Zimbabwe, at the Unki deposit located south-east of Shurugwi. The mine is expected to produce about 65 000 oz/y platinum when fully operational.The orebody will be mined using the bord-and-pillar mining method.Once operational, the concentrate will be transported by truck for refining at Polokwane, in Limpopo, South Africa.Work on the Unki project includes the construction of an 8 km pipeline from the Luciliapoort dam to the mine reservoir, a 132/11 kV substation and a 33 km powerline. The development of a twin decline, as well as four ventilation shafts, is also planned.The development of eight equipped mining sectors, and a contractors’ camp equipped to house 1 300, is under way. A housing development consisting of 915 houses in a nearby town will take place in 2011.

ValueThe estimated cost for the project is R3,4-billion.DurationThe concentrator at Unki mine was commissioned in the fourth quarter of 2010.

ClientAnglo American Zimbabwe. Anglo Platinum manages the project.

Key Contracts and SuppliersVhumbanani (mine design), DRA (concentrator design and engineering, procurement and construction management (EPCM) contractor for the remaining scope of work, which includes mining and infrastructure), UWP/JRG (earthworks contractor), Steffanuti Stocks (civil contractor), Costain (part of the building works), Cosira (structural, mechanical, pipework and platework installation (SMPP) contract and conveyor structural, mechanical and piping (SMP)), A&A Containers, ABB Powertech, ABECO, Aberdare Cables, African Cables, Air Blow Fans, Alco-Safe, Allied Tube Fittings & Valves, Alstom Protection & Control, AMS Haden, APS, Astore, ATD, Atlas Copco, AutoRock, Avis Forklit Centre, Babcock, Barloworld Energy, Bell Equipment, Benoni

Bolt, Bentley, Bintech, Bison Construction, Boart Longyear, Bolt & Engineering, Bosworth, Botank, Bowman Cranes, Breiko Con-veyor Products, Brokrew, Carpe Diem/Aspen Containers, CBC (Benoni Bolt), Centre for Mineral Research, CHI Control Com-ponents, Chubb Fire, Container Conversions, Container Trust Division, Container World, Continental Conveying, Continental Meco, Control Dosing, Conveyor Pulley Manufacturers, Crane Load Tech, David Brown Industries, Dell, Delras, Demag Cranes, Denwa Engineering, DFC Mining, Diesel Electric Services, Digicopy, Dimako Transformers, Doculam, Drager South Africa, Drizit Environmental, Dunlop Belting, Dunlop Industrial, Duraset, Dymot Engineering, Dywidag Systems, East Rand Truck Sales, Econo Steel Construction, Elephant Lifting Equipment, Fermel, Fest Fire Security, Flender Transmissions, Flexible Steel Lacing, Fluid Mixers Equipment, Fluxcon, Forklift Spares Specialist, Galaxy Africa, Gardner Denver, Gauteng Pumps, GC Baars, Geo-System Africa, GHH Mining Machines, Global Splicing, Good-year, Hansen Transmissions, Harrison & White, Hau-Tech, HB Technologies, HHK Earthing & Lightening Protection Systems, Howden Donkin Fans, IES Consulting & Turnkey Services, Ilva General Engineering, Incledon, Independent Site Services, Ingersol Rand, Insamcor, Internet Solutions, Irca, Joy Mining, KAB Instruments, Keens Rustenburg, Kemix, Klinger Mzansi, Komatsu, Letaba Dewatering, LF Trailers, Lonspeare, Louwill Engineering, M&J Mining, Macfor Marketing, Macsteel Tube & Pipe, Magnalec, Magnitech, Man-Dirk, Manhattan Corpor-ation, Manica Africa, Manitou, Marsh Vikela, MCC Solutions, McNaughtens, Melco, Mercury DCI Pipes, Micon Coatings, Mine Machines, Mine Radio Systems, Mine Support Products, Mine Rescue Servives, Mining Market, Mining Pressure System, Minova RSA, MM & G Mining & Engineering, Morris Material Handling, MSA Africa, Murray & Roberts Cementation, NetCare 911, New Wave, Norneco, Osborn, Outokumpu, Owi Communi-cations, Petrotech Services, Petzetakis, Platmed, Power Drives (Bearing Man), Power Quality Company, Prentec, Professional Cost Consultants, Pump & Lifting, Purchex Africa, Q-Con, Quoin, Rare Water, Reef Switchboards Manufacturers, Rema Tip Top Industrial, Rentach Renergy Technologies, Robor Pipe Systems, RSS Mining, Ryaison North Engineering, SAME Water, Sasol Nitro, Satiec, Scaw Metals, Schauenburg Flexaduz, Shaft Engineering, Shaft Sinkers, Shaw Controls, Shorrock Auto- mation, Siemens, Siyageza Technologies, SMC, SMT Mining, Sound Mining Solutions, Span Africa Steel Structures, Spray Nozzle, SRK Consultants, Steelcor, Stewart & Lloyds Export, Stratabolt t/a Minova, Structa Technology, Test-A-Relay Power Systems Protection Specialists, Transformer Manufacturers, Tri-Cor Signs, Turner & Townsend, Umndeni Circon, Unitrans Freight and Logistics, Universal Fans, UWP Consulting, Verlinde

PLATINUM


Cranes, Voith Turbo, Warman, Wear Check Africa, West Rand Engineering, Willard (Rentech Renergy), Wondatrade, and Zest Electric Motors.

Latest DevelopmentsFebruary 2011The concentrator at Unki mine was commissioned in the fourth quarter of 2010. Tons mined during the year reached 391 594 t, compared with 71 750 t in 2009. The mine is now in ramp-up phase and is expected to reach its steady state of 120 000 t/m milled in the third quarter of 2011.

August 2010The deadline for Cosira’s second contract for the conveyor SMP at Unki was August 10, 2010.The contract involved the supply and installation of the overland conveyor feeding the feed silo and the concentrator plant.The installation of the overland conveyor comprised 150 t of steelwork and 8 km of piping in and around the mine.As a result of the intricate construction work required, the mine was expected to be shut down temporarily to accommodate the installation of the 20 t interconnecting structure.

On Budget and on Time?The project is on track to be commissioned in the third quarter of this year.

Contact details for project informationAnglo American Corporation Zimbabwe, tel +263 470 4461 or fax +263 470 3734.Anglo Platinum investor relations, Anna Mulholland, tel +27 11 373 6683 or email [email protected]; or corporate communications, Thabisile Phumo,tel +27 11 373 6846 or email [email protected].

PLATINUM


Impala Platinum’s No 16 Shaft project

Name and LocationImpala No 16 Shaft project, North West, South Africa.

Project DescriptionThe shaft development is situated on the south-east corner of the Impala mining lease down-dip of the No 1 Shaft.The No 16 Shaft is expected to produce 226 500 t/m of reef from seven operational levels. The shaft will access both the Merensky and Upper-Group Two (UG2) reef horizons.The No 16 Shaft ore reserves will be accessed by a downcast rock and men-and-materials shaft.The rock and men-and-materials shaft will be lined to an inside diameter of 10 m and sunk to 1 648 m, while the ventilation shaft will be a 6,8 m diameter inside-concrete lining shaft, sunk to 1 390 m below the surface.Being a shaft that will access reef below 1 000 m, full-time refrigeration will be required for the underground workings, introduced through the rock and men-and-materials shaft. The refrigeration is designed to ventilate a maximum of 900 kg/s of cooled air from the surface.The No 16 Shaft headgear, with a structural height of 108 m, will be built to house two Koepe winders. One will hoist personnel and material, while the other will only hoist rock. The rock hoist tipping arrangement will be located inside the concrete headgear to reduce noise pollution.A conveyor will transfer reef and waste from the headgear bins to a transfer tower, from where reef will be transferred into two concrete silos – one for Merensky and one for UG2.The power requirements for the new shaft will be met from a new Eskom 88/33 kV yard at the No 15 Shaft.

ValueR7,2-billion.

DurationFull production of 226 500 t/m of platinum is scheduled for 2015.

ClientImplats.

Key Contracts and SuppliersShaft Sinkers (shaft sinking); Read Swatman & Voigt (engineer-ing procurement and construction management); JJG Construc-tion (civil works – phase 2); Louwill Engineering (structural steel – phase 2); NIC Instruments & Engineering (electrical – phase 2); FLSmidth Minerals (Koepe winder – mechanical); and ABB South Africa (Koepe winder – electrical).

Latest DevelopmentsDecember 2010Concurrent development on 27 level and belt-loading level and main pumpstation for the main shaft is nearing completion. Sinking to shaft bottom will start in February 2011, with shaft equipping following in the second half of the year. Installation of all the permanent winders has been completed.Development to reef on the top four levels is progressing bet-ter than expected through the ventilation shaft and will continue until the main shaft is complete. The main shaft is scheduled for completion towards the second half of 2012, and will start with reef production immediately from raises developed from the ven-tilation shaft.July 2010Horizontal development of the station D sections on 27 level, as well as on the belt-loading level, the last working level at a depth of 1 601 m below collar, is in progress.Development on belt loading level comprises the main pump chamber, permanent settlers and clear water silos, as well as loading conveyor excavations.The surface infrastructure is progressing according to schedule, with the permanent Koepe winder installation expected to be commissioned ahead of schedule.

January 2010The main shaft is at a depth of 1 570 m below the collar. The refrigeration plant and the surface compressors were commis-sioned in November 2009.

August 2009The No 16 main shaft is currently at a depth of 1 499 m below collar and the sinking of the ventilation shaft is complete at a depth of 1 390 m below collar.The installation of the Koepe winders has just started and is progressing as scheduled.

February 2009The project remains on schedule.

August 2008The No 16 Shaft project remains on schedule.

On Budget and on Time?The project budget and schedule are under review.

Contact Details for Project InformationImpala No 16 Shaft mine manager Andre Fryer, tel +27 82 807 4294 or project manager Jako Pienaar, tel +27 82 929 5069 or email [email protected].

PLATINUM



Name and LocationImpala No 17 Shaft project, Rustenburg, North West, South Africa.

Project DescriptionImpala Platinum’s (Implats’) No 17 Shaft project consists of three new vertical shafts at the company’s Rustenburg operation to replace production from its older shafts that are nearing the end of their productive life.

ValueR11,1-billion.

DurationFull production of 225 000 t/m of platinum bearing rock is scheduled for 2018.

ClientImplats.

Key Contracts and SuppliersTWP (engineering, procurement and construction manage-ment contract), Scribante (earthworks), Murray & Roberts (civils) Shaft Sinkers (ventilation, main and refrigeration shafts), Louwill Engineering (building structures), NIC Electrical & Instrument-ation Construction (C&I), Grinaker-LTA (shaft headgear erection contract), DRA Technical Services, ABB, Siemag Tecberg, Coilmec, Actom, Siemens and Winder Controls (supply of winders for the project).

Latest DevelopmentsDecember 2010All shafts continue to be sunk, with the main shaft being 1287 m below collar. The ventilation shaft and refrigeration shafts are 1 434 m and 1 365 m respectively below collar.Meanwhile, station development has started on 21 level, the first level from the refrigeration shaft and the ventilation shaft has now reached 22 level.A total of over 4 000 m have been sunk to date and no major concerns have been encountered in the programme.

June 2010The sinking has progressed to 933 m below collar on the main shaft and the intermediate pumpstation is currently being developed. The ventilation and refrigeration shafts have progressed to 1 214 m and 1 130 m below collar, respectively.Currently, the main focus on the project is to reach 21 level at 1 360 m below collar and to start station development.All sinking systems are performing well and sinking advance is being achieved as planned.

January 2010The sinking of the three shafts is progressing as scheduled. The main shaft, ventilation shaft and fridge shaft are at depths of 618 m, 845 m and 938 m, below the collar, respectively.

August 2009Infrastructure required for sinking has been installed and all three shafts are now in fast sinking mode. The main is currently at a depth of 307 m below collar, the ventilation shaft is 442 m below collar and the refrigeration shaft is 715 m below collar.

February 2009Implats has reported that the main shaft headgear of 81 m high has been erected and both Koepe winders, to be run in single drum mode for sinking kibbles, have been commissioned. Further, the headgear change-over for sink is in progress and fast sink will start from mid-February 2009.The shaft bottom is currently 74 m below collar and the subsurface cold air duct to 43 m below surface has been com-pleted.The ventilation shaft has progressed to 200 m below collar and the refrigeration shaft to 300 m below collar.

November 2008The site for the erection of Implats’ No 17 Shaft headgear structural steel has been established.Grinaker-LTA’s Mechanical & Electrical business unit says that the detailing of the TWP design for the sinking and permanent sinking has been completed and fabrication and trial assembly is in the advanced stages.The scope of work comprises over 2 000 t of structural and plate work steel, as well as the installation of a 78 m stair tower with a lift. An 81-m high, 30-t overhead crane will be free issued for the Metals and Minerals division of Grinaker-LTA’s Mechanical & Electrical business unit to complete the erection.Grinaker-LTA reports that the sinking and sinking-permanent steel work needs to be completed by mid-December 2008, so that the shaft sinking company can change over to fast sink by the end of January 2009.The main shaft progressed to a depth of 74 m below collar with the ventilation and fridge shafts being sunk to 120 m and 194 m below the collar respectively.The winders for the main sink are in the process of installation and all three shafts will be in the fast-sink phase by February 2009.

August 2008Shaft sinking has started.

April 2008Shaft Sinkers has completed the erection of a 218 t headgear at

PLATINUM

To page 57


Implats’ new ventilation shaft.The headgear will be used in the sinking of the ventilation shaft, which will also hoist miners, material and rock.Shaft Sinkers Mets division designed the square superstructured headgear, which was preassembled in five sections of 77 t, 46 t, 45 t, 43 t and 47 t.East Rand company Burgess & Burger fabricated the headgear.Headgear preassembly was conducted over two months and headgear erection over three days.Shaft Sinkers is also responsible for the sinking of the main and refrigeration shafts at Impala No 17 Shaft.

February 2008The Implats board has approved the development of the project.

September 2007The feasibility study on the proposed new No 17 Shaft project in Rustenburg will be submitted to the November board meeting for final approval.Initially, the plan had been to take the No 17 Shaft proposal to the board in August, but instead, interim funding was obtained to carry out additional work ahead of the November submission to the board.It is understood that the former Department of Minerals and Energy has approved the record of decision on the environmental management programme report and that approval has also been obtained from the North West Department of Agriculture, Con-servation and Environment to reclassify the land from agricultural to mining land.

On Budget and on Time?No major concerns have been encountered in the programme.

Contact Details for Project InformationImpala No 17 Shaft project manager Jacey Kruger, cell +27 82 801 1232.

PLATINUMFrom page 56



Name and LocationImpala No 20 Shaft project, North West, South Africa.

Project DescriptionThe project involves sinking a cluster of four declines to service ten working levels. Two vertical shafts provide access to surface, intersecting the declines about midway. The decline package is situated between the Merensky and upper-group-two reef planes, allowing access across ramps to the reef planes and the footwall-strike drives. Conventional track bound transport in the footwall strike-drives will be used to supply materials to and transfer ore from the workings to ore-passes at each decline station area. A conveyor system will convey the rock to the main shaft for hoisting to the surface.There will be a total of three stations on the main shaft. A decline system, attached to the vertical shaft below the Merensky reef plane, will facilitate transportation of material and personnel. The main shaft, is equipped with rock, worker-and-service con-veyances to a depth of 1 050 m. A single station at 897 m below the surface will be used to access the upper two declines. One will house a chairlift, and the other a twin-track electric monorail transport system. The lower two declines will be accessed from a main shaft station at 937 m below the surface. One of these will be an airway decline, and the other will be equipped with a conveyor belt to transfer ore from the declines to the main shaft.The main shaft measures 8,5 m in diameter and is 1 051 m deep, enabling the hoisting of some 240 000 t/m of ore and waste. The ventilation shaft, which is 6,5 m in diameter and 1 020 m deep, is designed to move some 650 kg/s of refrigerated air through the workings.

ValueR6,8-billion.

DurationFull production of 185 000 t/m of platinum ore is scheduled for 2013.

ClientImpala Platinum (Implats).

Key Contracts and SuppliersConsultants and companies involved at No 20 Shaft were TWP Consulting (engineering, procurement and construction management, Murray & Roberts Cementation (shaft sinking and development contract), Bluhm Burton Engineering (refrigeration plant), Wade Walker (electrical phase 3 – electrical installation of compressor house, ventilation fans substation and surface con-veyor), ABB (electrical equipment), DSE Structural Engineers & Contractors, Grinaker-LTA, AA Containers, African Cables, Alexander Forbes, Alstom Industry, B&C Agencies, Bellam-bie Mining & Industrial, DCS, Desta Power Matla, Deton Engineering, Dynamic Crane Systems, Fabricated Steel Manu-facturers, FFE Minerals – Vecor, Fixtrade 1092, G&L Fencing, Haggie Steel Wire Rope, Itasca Africa, JIC Mining Services, K&S Electrical Automation, Kimberley Engineering Works, Letab Projects, Magnitech, Marqott Power Industries, MTEC, Octa Engineering, PDS Technologies, Rapha Pretorius Associates, Relay Settings, RUCO Engineering, Schneider Electric, Siemens, Steelcor, Test-a-Relay, Transformer Manufacturer, Trident SA, Trucking & Engineering, Ubuntu Technologies, Walter Becker, Weir Envirotech, Willard Batteries, WJ Engineering, SMT Scharf (Africa), Sareco and Steel Services .

Latest DevelopmentsDecember 2010Development of the decline and incline splines continues at the mine.In January 2010, a specialist development company, Byrnecut Australia, will be allocated a section of this work to improve performance and skills transfer. The reef is in the process of being opened up on 21 level. Construction of the underground conveyors and associated equipment is also progressing. Installation of the monorail will start in the new year.


Contact Details for Project InformationImpala No 20 Shaft manager Pieter Coetzee, tel +27 14 569 000.

PLATINUM


Platmin’s Pilanesberg platinum mine

Name and LocationPilanesberg platinum mine (PPM), North West, South Africa.

Project DescriptionThe PPM, situated on the western limb of the Bushveld Complex, some 80 km from Rustenburg, in the North West, extends over an area of about 5 450 ha on the Tuschenkomst, Ruighoek, Witkleifontein and Rooderand properties. The PPM has total measured and indicated mineral resources of 5,49-million ounces (3,98-million ounces), inferred mineral resources of 5,71-million ounces (4,14-million ounces attribut-able) and proven and probable mineral reserves of 4,23-million ounces (3,06-million ounces attributable).The shallow resource, underlain by the Merensky, upper-group two (UG2) and Pseudo reefs, lends itself to opencast mining. Mining and plant operations are outsourced to MCC Contracts and Minopex respectively. In terms of an off-take agreement, PPM smelts and refines its concentrate at Northam Platinum.PPM operates two concentrator plants, for Merensky and UG2 ore respectively. The monthly treatment and milling capacity is 417 000 t and 285 000 t respectively. PPM is connected to the national electricity grid with 37 MVA secured power provided by Eskom, and has a fully synchronised 10 MVA power plant, which provides flexibility to run the high-grade UG2 circuit of the con-centrator or to top up Eskom supply in the event of rationing. The mine has secure access to adequate water supplies.ValueThe total project expenditure to end-June, had amounted to $456,4-million.

DurationThe Tuschenkomst open pit construction started in October 2007, followed by mining operations in December 2008, with the plants commissioned in mid 2009. The first concentrate was shipped in the same time period. Forecast yearly production for 2011 is 150 000 oz of platinum-group metals, with full production expected in 2012.

ClientPlatmin (72,39%), the Bakgatla-Ba-Kgafela community and the Pallinghurst Investment Consortium joint venture (27,61%).

Key Contracts and SuppliersSRK Consulting (independent consultant), DRA Mineral Projects (detailed design of processing plant and associated infrastruc-ture), MCC (mining contractor) and Minopex (plant management).

Latest DevelopmentsNone stated.


Contact Details for Project InformationRussell and Associates on behalf of Platmin, Charmane RussellTe +27 11 880 3924 or email [email protected], tel +27 12 661 4280, fax +27 12 661 4139 or email [email protected].

PLATINUM


Royal Bafokeng Platinum and Anglo Platinum’s Styldrift Merensky phase 1 project

Name and LocationStyldrift Merensky phase 1 project, North West, South Africa.

Project DescriptionThe Styldrift project area is adjacent to the existing Boschkoppie mining area. The mine will exploit one of the last major Merensky mining blocks on the Western Bushveld. A total of about 68- million tons is expected to be extracted over the life of the mining operation between 2016 and 2043.The mine will process 230 000 t/m of Merensky reef at steady state.The project will deliver an underground operation, which will be accessed by way of a twin shaft system sunk to about 700 m. Production will initially be through wide reef trackless mining methods and, later, by way of narrow reef conventional mining methods. As the latter is expected to start by 2020, the intention is to continue to evaluate the potential for low-profile mechanised mining methods, as opposed to conventional mining.The Styldrift project site is located some 5,5 km from the existing Bafokeng Rasimone Platinum Mine (BRPM) concentrator and an overland conveying system will be constructed to transport the ore to the concentrator.During steady operations, the mine will produce some 220 000 oz/y of platinum, effectively doubling BRPM’s platinum ounce production to about 400 000 oz/y.Shaft site infrastructure will comprise the twin shaft system, associated mining surface infrastructure and the waste rock dumps. No tailing dam will be built at the project site; rather an extension to the existing tailings dam will be constructed to accommodate the tailings from the Boschkoppie/Stydldrift combined mine.

ValueR12-billion.

DurationThe project was approved by the Anglo Platinum and the Royal Bafokeng Holdings’ boards during the third quarter of 2008.Production is expected to start in 2015.

ClientThe BRPM and Styldrift properties were previously managed through a 50:50 joint venture (JV) between Royal Bafokeng Resources (RBR) and Rustenburg Platinum Mines; however, this was changed at the beginning of 2010 when RBR took over management control from Anglo Platinum.

The new structure became unconditional in mid-December 2009, when Royal Bafokeng Platinum (RBPlat) listed on the main board of the JSE in November 2010.

Key Contracts and SuppliersTWP Projects (main project engineering, procurement and con-struction management contractor); Shaft Sinkers (main and services shafts and associated works); Louwill Engineering (main and service shafts’ headgears and winder house structural manufacturing and erection); FLSmidth Minerals (main shaft personnel and material winder mechanical portion); Actom (formerly Alstom Industry) (main shaft personnel and material winder electrical portion); Coilmech (service winder mechanical and electrical portions); Stefanutti Stocks Civils Wramatshe JV (civils Phase 2 contract – main bulk surface civils).

Latest DevelopmentsDecember 2010The main and services shaft sink, line and associated works contract was awarded to Shaft Sinkers in July 2010. Main bulk civils at the main and services shaft including shaft collars, headgear foundations and winder house civils have been completed as planned during October 2010. Shaft sinking at the main and services shafts has started as planned and progress at the end of 2010 was in line with the project programme. Preparation for the start of the main sink is under way.Headgear manufacture for both shafts has been completed and erection is planned for January 2011.

June 2010TWP Projects is executing the project for a deep-level shaft on the Styldrift Merensky phase 1 project.TWP reports that the surface terracing and earthworks on the project is complete and the excavation and foundation work for the winder houses is progressing.Further, the main sinking contract will soon be awarded.

February 2010Anglo Platinum’s project capital spend is now directly related to its long-term ounce requirements and the reduction in the rate of spend has resulted in a number of its projects being delayed, including Styldrift.

On Budget and on Time?The project is currently within budget and on programme.

Contact Details for Project InformationRBPlat investor relations manager Lindiwe Montshiwagae, tel +27 11 530 8056, fax +27 86 219 5131 or email [email protected].

PLATINUM


Western Bushveld Joint Venture’s Project 1

Name and LocationWestern Bushveld Joint Venture (WBJV) Project 1, North West, South Africa.

Project DescriptionThe WBJV is divided into three distinct project areas: Projects 1, 2 and 3.The mine plan for Project 1 has been revised.The new mine plan for Project 1 envisages the construction of a platinum mine and concentrator, to produce between 234 000 oz/y and 300 000 oz/y of combined platinum, palladium, rhodium and gold (4E) in concentrate. During nine years of peak production, about 275 000 oz/y of 4E in concentrate will be produced from the project’s Merensky reef horizon.The Merensky reef will be mined at widths between 93 cm and 176 cm and the UG2 reef will be mined at widths between 105 cm and 205 cm.The mining and development plan includes conventional hand-held drilling, using electrical drills and scrapers, as well as winch cleaning similar to the successful conventional mining operations at the adjacent mines.Declines and primary access to the deposit have been designed for development with mechanised equipment. Ore will be initially hauled out of the mine with mechanised equipment and assisted by conveyor from year four of the planned mine life to the end of the mine’s life. The project has an estimated 22-year planned life-of-mine.The concentrator has been designed and recosted, based on treating the optimal 140 000 t/m. The revised mine plan has increased this treatment rate to 160 000 t/m and, for the concentrator to treat this increased quantity of reef, the recovery has been reduced with a discount of up to 2,5% for treatment over the nominal “name plate” capacity.

ValuePeak funding for 100% of the project has been reduced from $507-million to $443-million.

DurationThe revised mine plan for Project 1 calls for production of ore from underground in 2011 and first concentrate sales in the first quarter of 2013.

ClientThe WBJV comprises project operator Platinum Group Metals (PTM)(74%) and Wesizwe Platinum (26%). PTM currently holds 54,75% in Projects 1 and 3 in the WBJV, with a right to subscribe

for a further 19,25%. JSE-listed Wesizwe holds the other 26%, plus 100% of Project 2.Key Contracts and SuppliersTurnberry Projects (prefeasibility study and overall feasibility study), Wardrop Engineering (decline access), GRD Minproc (concentrator design), Grinaker-LTA Mining (vertical shaft design), Golder Associates Africa and Oryx Environmental (public consultation and environmental permitting work), and DRA Mining (engineering, procurement and construction management (EPCM)).

Latest DevelopmentsJanuary 2011PTM has approved $100-million of capital spending for Project 1. Further, the company has appointed CEO of Avanti Mining AJ Ali as project finance adviser, to assist in structuring the over-all project finance package, for the construction of Project 1. The company is currently involved in discussions with multiple international banks, relating to debt financing for the outstand-ing portion of capital required to complete the Project 1 platinum mine.The group has also hired DRA Mining for the EPCM of the project.The EPCM contract with DRA will provide about 30 fulltime pro-fessionals to plan and oversee the execution of the development of surface infrastructure, power delivery, water delivery, civil works and excavations and the development of underground tunnels to access ore over the next 18 months.DRA’s scope of work will include engineering, design, construc-tion management, administration and cost and schedule control.DRA has already started work on the detailed project implemen-tation for power and water, so that work on site can start as soon as permits for excavations have been received.Further, locations for construction power and water supply from existing infrastructure have been confirmed.The company said that budgeting for underground access has generally tracked within the comparable budget sections in the October 2009 feasibility study.The underground mining contract for the sinking of declines will go out to tender in the weeks ahead and a more detailed review of implementation costs will be completed after the contract is awarded.

On Budget and on Time?Cost estimates on the project have decreased by $64-million to $443-million.

Contact Details for Project InformationPTM investor enquiries, tel+1 604 899 5450, fax +1 604 484 4710 or email [email protected] Platinum, tel +27 11994 4600.

PLATINUM


Zimplat’s Ngezi platinum mine expansion project

Name and LocationNgezi platinum mine expansion, Zimbabwe.

Project DescriptionThe phase 1 expansion project allowed for the simultaneous development of mining Portals 1 and 4 at Ngezi platinum mine, as well as the construction of a new two-million-ton-a-year concentrator; some 715 new staff houses near Ngezi, as well as the upgrading of amenities within the area.The expansion will increase the mine’s overall throughput to 3,6-million tons a year from 2,2-million tons a year.The second phase expansion was approved in May 2010 and will consist of a two-million-ton-a-year underground mine, a concentrator module of the same capacity, and related infra-structure. It is expected to increase production from 180 000 oz/y to 270 000 oz/y.

ValuePhase 1 – $340-million.Phase 2 – $450-million.

DurationThe phase 1 will take production on an annualised basis to 180 000 oz/y in 2011.Phase 2 of the Ngezi expansion is expected to take three years to complete from time of approval.

ClientZimplats is part of Impala Platinum Holdings (Implats).

Key Contracts and SuppliersThe Reserve Bank of Zimbabwe and Absa Bank (finance), DRA Mineral Projects (engineering, procurement and construction management contract), Stefanutti Stocks (main civils contractor),

JR Goddard Contracting (main earthworks contractor), Searlcom (main housing contractor), High Voltage Construction (main electrical contractor), Cosira Projects (main structural steelwork and mechanical contractor), Sandvik Mining & Construction (materials handling consultant), and Mining Pressure System (pipe-work contractor).

Latest DevelopmentsDecember 2010Outstanding work on underground development and houses for phase 1 is nearing completion.For phase 2, the Portal 3 boxcut is also nearing completion, with the detail design and the early site work being progressed.

July 2010The phase 2 expansion was recently approved and work has started.Development continues at Portal 4, which will be completed on schedule in terms of the Phase 1 project in May 2011.

February 2010Implats is withholding further expansionary investment in Zimbabwe until the Zimbabwe government resolves “outstanding issues” and clarifies its latest indigenisation statements.Implats has said that, while the technical feasibility for a second-phase Zimplats expansion is being completed, its implementa-tion is dependent on the resolution of “outstanding issues with the government of Zimbabwe, including the latest indigenisation statements”.Should the Zimplats phase 2 project fail to go ahead, Implats will still have its proposed 18 Shaft project at Impala Platinum in South Africa to fall back on in order to maintain its million-ounce production level going into the future.

Contact Details for Project InformationZimplats, tel +263 4 332 590/3 or fax +263 4 332 496 or email [email protected].

PLATINUM


Nuclear power is expected to play a significant role in the global energy mix for at least the next 50 years, and by most forecasts well past that. Providing, of course, that a sufficient supply of uranium is available to sustain the nominal growth rate for nuclear power of 1% to 3% a year that is projected by some analysts.

With the demand for uranium expected to be strong in future, a number of companies world-wide are developing uranium projects. In South Africa, First Uranium is undertaking a three-phase expansion of its Mine Waste Solutions operation in the North West, which includes three gold and uranium plant modules, while AngloGold Ashanti is upgrading/expanding of its existing Vaal River South Uranium recovery plant to service all three of its uranium-bearing operations in a single plant.

Uranium


AngloGold Ashanti’s Vaal River South Uranium recovery expansion/upgrade project

Name and LocationVaal River South Uranium recovery upgrade/expansion project, South Africa.

Project DescriptionAngloGold Ashanti will be upgrading infrastructure at their operations at Vaal River to increase uranium production. The facilities installed will allow more uranium bearing ore from the Kopanong shaft to be processed. The upgrades include increasing rail capacity to transfer additional track and rolling stock; modifying train loading facilities to ensure ore deliveries can continue over weekends when the shaft is not hoisting; installing additional thickening capacity ahead of the existing uranium plant to enable efficient operation at the higher throughputs; replacement of the solvent extraction section and the upgrade of services.The upgrade/expansion will increase production from the current 1,4-million pounds a year to a peak of 1,8-million pounds a year, to about 1,8-million pounds a year in future.

ValueThe estimated capital budget for the upgrade/expansion is about R500-million.

DurationThe project is forecast to be in full production by mid-2013.

ClientAngloGold Ashanti.


Latest DevelopmentsCapital expenditure of R200-million has been approved for the first phase material handling, thickening and rail upgrades.Contracts will shortly be awarded for the rail and material handling components of the project.


Contact Details for Project InformationAngloGold Ashanti, tel +27 11 637 6000.

URANIUM


First Uranium’s Mine Waste Solutions tailings recovery project

Name and LocationMine Waste Solutions (MWS) tailings recovery project, North West, South Africa.

Project DescriptionMWS consists of 15 tailings dams from three gold and uranium mines, with a combined footprint of 1 300 ha spread over 300 km2.The deposits comprise over 349-million tons of minerals resources of which 323-million are mineable reserves estimated to contain 55-million pounds of U3O8 and 2,9-million ounces of gold.The tailings dams are being hydraulically mined with high- pressure water cannons to slurry the tailings, which are then pumped to the plant for recovery of gold and, in the future, uranium.The expansion of the MWS operation is taking place in three phases.In Phase 1A, the gold plant for the tailings recovery operation, was expanded to 633 000 t/m and the pipeline from Buffels- fontein tailings dam to the gold plant was commissioned (December 2007). MWS began operating at its planned through-put in July 2008.The Phase 1B or second gold plant module was commissioned in September 2009 and has an ore processing capacity of 650 000 t/m.Phase 1B also includes the first two uranium plant modules at MWS, with a design capacity of 128 000 t/m.Phase 2 will consist of the third module of the gold plant, with a capacity of 650 000 t/m, and the third module of the uranium plant, with a capacity of 65 000 t/m.Following the completion of Phase 2, the project’s overall processing capacity is expected to reach an estimated 1,93- million tons a month.The processed material will be deposited into a single, consolidated tailings disposal facility, using the cyclone deposition technique. The application of this technology will allow the reprocessed material to be consolidated into an area of about 530 ha, as opposed to the more than 1 300 ha currently occupied by the 15 dumps. Therefore the footprint of the new tailings storage facility (TSF) will be nearly three times smaller than the combined area covered by the existing facilities.

ValueR3,2-billion.

DurationPhase 1A was commissioned in December 2007.

MWS started operating at its planned throughput in July 2008.Construction of the new TSF started in November 2010, with commissioning expected in May 2011.Phase 1B – the second gold-plant module and first two modules of the uranium plant were commissioned in September 2009. The second gold plant is now expected to be restarted in May 2011, owing to delays following the withdrawal of environmental approval in January 2010.Phase 2 – commissioning of the third gold-plant module is now also expected in May 2011. Operation of the uranium modules and three flotation plants is expected to start in August 2011. Construction of the pressure leach circuit of the uranium plant is expected by April 2013.

ClientFirst Uranium Corporation.

Key Contracts and SuppliersMDM Engineering (cost budget estimate for phase 2) and Civcon (earthworks, reinforcing, concrete laying and formwork).

Latest DevelopmentsOctober 2010MDM Engineering has announced that work has started on the MWS phase 2 project, following the suspension of work earlier in the year.MDM is currently managing the engineering and construction of the existing tailings retreatment plant extension.Construction on the plant started in August 2010 and will see an increase in gold production by a further 650 000 t/m.There are about 350 MDM and Civcon personnel on-site, working towards the completion of the plant and pipeline feeds, which are expected to be completed by March 2011.

On Budget and on Time?Withdrawal of the environmental approval for the TSF disrupted plans in securing the financing for the project. Environmental authorisation has since been reinstated.MWS remains on-track to increase its throughput from 1,2-million tons a month to 1,8-million tons a month by September 2011.The remaining capital programme, comprising the third gold plant module and the new TSF, including adjoining infrastructure, is expected to be completed on schedule by May 2011.

Contact Details for Project InformationFirst Uranium, tel +1 416 342 5640? or fax +1 416 342 5632; or investor relations vice president Bob Tait, tel +1 416 342 5639, cell +1 416 558 3858 or email [email protected].

URANIUM


Projects in Progress, February 2011The material contained in this report was compiled by the Research Unit of Creamer Media (Pty) Ltd, based in Johannesburg, South Africa.

The information contained in this report has been compiled from sources believed to be reliable, but no warranty is made as to the accuracy of such information.

This document is designed to be used as a source of information for subscribers to Creamer Media’s Research Channel Online and Creamer Media’s MiningWeekly.com Research and is not to be reproduced or published for any other purpose.

In particular, the report may not be re-published on any other websites, or intranet sites or be distributed by email outside of the subscribing company.

The reports draw on information published in Engineering News and Mining Weekly, as well as from a range of other sources, and should provide an invaluable and easy-to-read snapshot of key industrial sectors.

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