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August 10, 2010 20:49

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Motjoli seeking 1.5 billion U.S. dollars to its iron ore project in South Africa Develop

Motjoli Resources Ltd., a South African miner, plans to raise as much as $1.5 billion to fund the construction of an iron ore mine that may produce as much as 20 million metric tons of the steelmaking ingredient a year.

Motjoli will apply to the Industrial Development Corp. and the
Development Bank of South Africa, among others, to fund a project that
may start operating as soon as the final quarter of 2011, Executive
Chairman Nchakha Moloi said in an interview in Moscow yesterday. The
company may also look to steelmakers and mining companies for funding,
he said.

“We’ll look for outside funding, which could include funding from South
African development institutions, corporate banks and also other
investors with deeper pockets,” Moloi said. “As we expand, we’ll bring
in more investors.”

Motjoli’s ore project, at Piet Retief in South Africa’s Mpumalanga
province, has 1.2 billion tons of proven reserves, said Moloi, a former
deputy director general of the Department of Mineral Resources. This
could grow to more than 2 billion tons once land around the main site
has been fully explored.

While the mine is initially expected to produce about 6 million tons a
year, this could rise to as much as 20 million tons within three years,
Moloi said. To expand beyond that, the company would need railroads to
be built, allowing it to sell iron ore abroad, he said. The project is
located near the kingdom of Swaziland, not far from the border with
Mozambique.

Motjoli, which means the leader of a flock of birds in the Sotho
language, plans to expand into other African nations to broaden the
range of commodities it mines.

Chrome in Madagascar

The company sees possible iron ore, cement and limestone projects in
Mali and chrome and bauxite deposits in Madagascar, Moloi said. Rare
earth metals may be another area of expansion, he said.

The company may attract investors from abroad, including from Russia,
for its new projects, Moloi said ahead of meetings with investors this
week.

“There’s a lot of commonalities between South Africa and Russia in the
resources sector and mining,” said Moloi, who was travelling as part of a
South African delegation led by President Jacob Zuma. “The kind of
commodities we work with, iron ore, manganese and coal, are exactly what
the Russians are interested in. So, there could be business
opportunities.”

Source: Bloomberg