JOHANNESBURG (miningweekly.com) – Diversified miner Exxaro, which has a R2-billion cash war chest, is studying a number of iron-ore options in Africa, South America and Australia, Exxaro CEO Sipho Nkosi tells Mining Weekly Online in a video interview.

Nkosi says that that Exxaro, already Kumba Iron Ore's black economic empowerment partner in the lucrative Sishen Iron Ore Company (SIOC), is continuing to look seriously at the iron-ore business.

"We're looking at a number of options and there are quite a number of them that have come our way, on the continent of Africa, some of them in South America and some in Australia.

"We're evaluating all of them and as soon as we come to appoint where we're comfortable that we can invest in any of those, we'll let the public know," Nkosi says.

SIOC, which paid Exxaro a dividend of R638-million in the six months to June 30, has proved a "great investment" for the JSE-listed company.

Exxaro CFO Wim de Klerk says that SIOC's dividends basically covered the R352-million first-half interim dividend that Exxaro itself paid, plus the tax for the period and also the net financing costs.

Exxaro was able to double cash in hand to R1,9-billion.

The final evaluation of the Turkey iron-ore project concluded that it did not meet Exxaro's investment criteria with respect to size.

The finalisation of the subsequent divestment of its 76% share in the project joint venture is expected this year.

The group's entry strategy into the iron-ore market includes the leveraging of unique beneficiation technology.

"We have iron-ore technology which has the potential to release more value on the iron-ore side, and we are pursuing it," Nkosi says.

Exxaro has also secured a technology partner to participate in the commercialisation of its AlloyStream^TM technology, used in the production of high-carbon ferromanganese and ferronickel.

The technology will allow for the processing of raw materials that were previously difficult to utilise in conventional processes and the commissioning of a large demonstration facility in South Africa is planned for 2012.

"A lot of work has gone into our ferromanganese business and we believe that once our business is structured, we'll have a very good business in that space," Nkosi adds.

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