SISHEN (miningweekly.com) – The iron-ore supply demand balance indicated a potential seaborne iron-ore shortage in 2013 when the new Sishen South project would come into full production, Kumba Iron Ore CEO Chris Griffith said on Tuesday.

Griffith told Mining Weekly Online that Kumba was poised to expand its participation in seaborne iron ore at that key time of expected market tightness.

Mining Weekly Online formed part of a large contingent of journalists on a visit to Kumba's new R8,5-million, nine-million-tons-a-year Sishen South project, now called Kolomela, 70 km south of the existing high-performing Sishen mine near Postmasburg in the Northern Cape.

Kolomela's nine-million tons production would be direct shipping ore for export and State-owned rail transport provider Transnet was in the process of building a rail link from the proposed new mine to the Sishen-Saldanha rail line.

Kumba is the world's fourth-largest supplier of seaborne iron-ore and exported more than 24-million tons of iron-ore in 2008.

The company is poised to export 34-million tons in 2009 as production increases and domestic offtake lowers.

Kumba has secured 44-million tons a year of Transnet's 60-million tons a year rail capacity as part of the State enterprise's 1C expansion. The nine-million tons from Sishen South is included in the 44-million tons.

Kumba executive project head Francois Louw said that there was potential for expansion at the new mine, where the first production would begin in the first half of 2012.

The greenfield Kolomela's first shipment of iron-ore is expected to leave Saldanha for export markets in that year. The operation will produce 64,5% fine ore and 64% lump ore.

Griffith said that China's domestic supply of iron-ore was declining in product grades, effectively reducing the iron content to the steel mills, as well as declining in quantity, folowing the closure of high-cost mines.

The new 20-year-life operation would produce nine-million tons of iron-ore each year once the project is completed.

Kolomela, which will employ 750 people, will use about 20% of the capacity of the 861-km Sishen-Saldanha railway line, which is ultimately expected to facilitate the export of more than 60-million tons of iron-ore a year and in time also carry manganese for manganese miners in the Northern Cape, which operate in the vicinity of the iron-ore miners.

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