ArcelorMittal considers re-starting operations in its Thabazimbi mine in South Africa

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ArcelorMittal SA, the world’s largest steel producing company headquartered in Luxembourg, which secured full ownership of the Thabazimbi mine for a paltry sum, will decide in a few years whether it can re-start operations at the mine where activities stopped two years ago.

The Thabazimbi mine in Limpopo was jointly owned by ArcelorMittal and Kumba; it was a source of iron ore for ArcelorMittal which blended it with ore from Kumba’s flagship Sishen mine in the Northern Cape.

Kumba, an Anglo-American subsidiary and Africa’s largest iron ore miner, decided to shut down operations, after a failure of the pit wall in 2015. The move triggered talks with ArcelorMittal to buy the mine. Iron ore is a major ingredient of the steel making process.

ArcelorMittal CEO, Kobus Verster said “what we would like to achieve is to prolong the life of the mine. The town of Thabazimbi is dependent on that, but there has to be commercial value for ourselves”.

Both companies agreed in February 2017, that ArcelorMittal, which was responsible for 96 percent of the cost of rehabilitating Thabazimbi, would buy the mine’s assets and liabilities. It was also noted that the steel maker will assume responsibility of the 63 people working on rehabilitation at the site.

Verster said while rehabilitation is being completed, ArcelorMittal will extract 1.3 million tonnes of iron ore from stockpiled material through a small, relatively cheap modular plant rather than restarting the large idled processing plant. He however added that “the material on the surface is not our main objective. Our focus is on the rehabilitation”.

The CEO admitted that full ownership of Thabazimbi would make rehabilitation work easier. He said “we will start doing sampling and see what opportunities there are in the longer term to restart the mine. We have to consider what new technologies we could use, what the life of the mine would be, and how the ore could best be utilised”.

Verster revealed that the risk mitigation of sourcing iron ore from third parties was one of the reasons ArcelorMittal decided to have its own iron ore mine. He also noted that the company owning its own iron ore mine “would be beneficial from a pricing perspective and give more flexibility on the mix of material to use”.

The Thabazimbi mine which employed about 1,150 people, was a source of 2 million tonnes of ore a year that was supplied to ArcelorMittal for at least 5 years before the company decided to close it.

 

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