Kumba could hold the key to Coega's success

Posted On Thursday, 22 July 2004 02:00 Published by eProp Commercial Property News
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KUMBA Resources finds itself a key part of the emerging debate concerning the upgrading of Coega's Ngqura port.

Property-Housing-ResidentialTentative plans to deepen the new harbour to accommodate iron-ore shipments from Northern Cape were announced this week, and have already drawn questions about the viability of using the Eastern Cape port as an iron-ore terminal.

Kumba, SA's largest iron-ore producer, and the fourth-largest worldwide, has been one of the prime movers in developing Northern Cape's iron-ore assets, and this region will be the feeder for whatever is shipped at the Ngqura port.

Although talks on the codevelopment of Northern Cape's iron-ore assets with rival Assmang broke down last year, the area is so rich in iron ore, and the demand for the product is so high, that those who promote the Ngqura harbour may feel another shipping point is justified.

The key to the development of the assets south of the original Sishen mine is, as with most things in commodity markets today, China.

Earlier this year, Chinese demand for the key ingredient in steel led to a surge of 18% in contract prices. If that price hike can be sustained next year, and many analysts think it can, the logic for a rail extension to Coega becomes more compelling.

The iron-ore assets south and east of Sishen are yet to be developed, and may be more viably served by a rail link to Coega than to the existing, and already stretched, Saldanha port.

Last modified on Thursday, 26 June 2014 15:56

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