The world's number one steel manufacturer ArcelorMittal and the South Africa-based manganese development company Kalagadi Manganese have announced the establishment of a strategic equity partnership for the development of Kalagadi's manganese resources. The 50-50 percent JV is planning the construction of a manganese mine, beneficiation plant and sinter complex in Northern Cape Province in South Africa, as well as a smelter complex in Coega, near Port Elizabeth, SA.
Kalagadi Manganese's project is located in the Kuruman/Hotazel district of Northern Cape Province. The companies are planning the establishment of a manganese ore mine and sinter plant at Hotazel, which will have an initial production capacity of 2.4 million mt of sintered products. The JV will also involve the establishment of a ferromanganese alloy production facility in the Coega Industrial Development Zone in Port Elizabeth, which will have an annual output capacity of 320,000 mt - thereby meeting at least 50 percent of ArcelorMittal's requirements.
The project in question, which is due to commence operations in 2010, overlies the Kalagadi Manganese Basin, a world renowned source of manganese ore containing 80 percent of the world's known manganese resources. Kalagadi Manganese is 80 percent-owned by Kalahari Resources, whereas the remaining 20 percent is held by the South African state-owned financier, the Industrial Development Corporation.
The transaction for the establishment of the joint venture is subject to the fulfillment of various conditions, including the receipt of the necessary regulatory approvals.