BHP Billiton and Anglo American plc announce proposed joint expansion of coal resources in the Western Complex, South Africa
20 May, 2004
Subject to the outcome of the investigation it is proposed to establish the Western Complex as a joint venture company managed by Ingwe and Anglo Coal.
BHP Billiton and Anglo American plc (“Anglo American”) jointly announced today that they have entered into a Memorandum of Understanding enabling BHP Billiton's Ingwe Collieries Limited (“Ingwe”) and Anglo American's Anglo Coal to investigate a proposed expansion of adjacent coal resources in the Western Complex, South Africa, incorporating the development of BHP Billiton's proposed US$280 million Klipspruit Project.
The investigation will include a review of the parties' coal assets in the Ogies area (some 100 kilometres east of Johannesburg), in particular Ingwe's mines at Khutala and Klipspruit and the Weltevreden coal resources and Anglo Coal's coal resources at Zondagsfontein, Smaldeel and Beesting.
The investigation, which is expected to take several months to complete, will include a due diligence review of the parties' coal assets, followed by a feasibility study, with final approval for an expansion from the Boards of BHP Billiton and Anglo American. Included in the feasibility process will be the introduction of suitable Black Economic Empowerment (BEE) partners.
Should the proposed expansion prove viable, the establishment of the Western Complex will be an important development for the South African coal industry and could provide long term coal supplies to Eskom, South Africa's power utility, as well as to the export market.
Notes to Editors:
- Ingwe own and/or operate in the Ogies area:
- Khutala mine: an underground and open cut mine producing 15 million tonnes per annum for sale to Eskom. It has 1 400 employees. Should the proposed expansion prove viable it is expected that the service contracts of Khutala employees would transfer to the Western Complex;
- Klipspruit Project: at present a mini pit, with a larger mine development planned to 6 million tonnes per annum via an opencast dragline operation, at an estimated cost of US$280 million for mine development, coal processing plant and rail infrastructure, currently in the last stages of feasibility study.
- Weltevreden: coal resources.
- Anglo Coal's assets in the area are the coal resources at Zondagsfontein, Smaldeel and Beesting.
- BHP Billiton is the world's largest diversified resources company with some 35 000 employees working in more than 100 operations in approximately 20 countries. BHP Billiton is distinguished from other resource companies by the quality of its assets; deep inventory of growth projects; customer-focused marketing; diversification across countries, commodities and markets; and its Petroleum business.
- Reflecting its aim to be a premier global company, BHP Billiton occupies industry leader or near industry leader positions in major commodity businesses, including aluminum, energy coal and metallurgical coal, copper, ferro-alloys, iron ore and titanium minerals, and have substantial interests in oil, gas, liquefied natural gas, nickel, diamonds and silver.
- Anglo American plc is one of the world's largest mining and natural resource groups. With its subsidiaries, joint ventures and associates, it is a global leader in gold, platinum group metals and diamonds, with significant interests in coal, base and ferrous metals, industrial minerals and paper and packaging. The group is geographically diverse, with operations and developments in Africa, Europe, South and North America, Australia and Asia. (www.angloamerican.co.uk).
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