South African miner Kumba Resources and Australian mineral explorer Hancock Prospecting on Friday named Salomon Smith Barney as advisers to their proposed A$1,4-billion Western Australia iron ore project.
The Hope Downs project is in the Pilbara region of Western Australia.
Kumba and Hancock said in a joint statement Salomon Smith Barney would assist with development of a financing structure and identifying potential equity investors and debt financiers.
Feasibility studies suggest that Hope Downs could be in production by 2006 at an initial production rate of between five and 10-million tons of ore annually, rising to 25-million tons annually within five years.
Kumba’s executive, development strategy and business development, Richard Wadley, said Hope Downs was a major part of Kumba’s planned expansion.
”The development of Hope Downs is a key component in our growth strategy for the Kumba Group’s iron ore business,” Wadley said.
In a separate development in South Africa, the chief executive of Anglo American Corporation, Tony Trahar, said he was keen on increasing his company’s investment in Kumba.
Anglo has acquired 9,6% of Kumba and won Competition Commission approval to acquire an additional 10,6%through its takeover of mining investor Stimela.
However, state development agency Industrial Development Corp (IDC), which has 14% of Kumba, is reportedly seeking compensation from Anglo for what IDC calls its ”pre-emptive rights” in Kumba. – Reuters