The Honourable Susan Shabangu, Minister of Mineral Resources,
Board Members of Kumba Iron Ore,
Their Worships, the Executive and District Mayors of Tsantsabane and Siyanda,
Ms Lucas, MEC of Environmental Affairs and Nature Conservation,
Industry leaders and representatives of organised labour,
Distinguished representatives from China, Korea, Japan, India, Germany and Austria,
Host and CEO of Kumba Iron Ore, Chris Griffith,
Staff members of Anglo American and Kumba Iron Ore,
Ladies and Gentlemen,
Today is a big day for us at Anglo American. It marks the official opening of Kolomela mine and it is a great honour to be able to share this occasion with you.
The Kolomela mine is an R8.5 billion vote of confidence in the Northern Cape Province and in South Africa.
Kolomela in Setswana means to ‘dig deeper’ – a fitting name for a mine.
And everyone working on the Kolomela project has done just that – working together to deliver a result that is within budget; that was commissioned ahead of schedule; and that has an exceptional safety record – with 26 million Lost Time Injury Free hours.
Kolomela dispatched its first product to the port of Saldanha in December five months ahead of schedule and shipped its first ore for sale to customers in China.
There is only one way to finish a project: on time, on budget, and with zero harm.
This mantra is at the heart of our approach to project development – the Projects Way – and was adopted by everyone involved in the Kolomela mine.
I am so proud of the team that set a number of standards for the wider Anglo American Group in delivering this project.
This was true collaboration between the project and operations teams, and contractors, particularly Transnet Freight Rail. Everyone pulled together to deliver with enthusiasm and commitment.
We need to be globally competitive which is not easy. Markets are skittish and stocks are down. This is more reason to be linked up with customers, suppliers, government, and infrastructure providers and to remain focused. We need to be at the lower end of the cost curve to ensure our sustainability and success in any part of the cycle.
Kolomela’s first shipment of lump iron ore was an important step towards increasing production from our South African iron ore assets to 70 million tonnes per annum this decade. And it is clear that we are well on the way to reaching this goal – Kolomela is set to deliver 4 to 5 million tonnes of iron ore this year and will ramp up to its full 9 million tonnes next year.
Kolomela is just one of the three major mining projects delivered by Anglo American on or ahead of schedule during 2011 – Barro Alto and Los Bronces being the others.
This excellent performance will contribute significant new volumes of iron ore, nickel and copper as the new operations continue to ramp up throughout 2012.
In addition, we are making progress on our Minas Rio iron ore project in Brazil. When completed, this should push Group iron ore production up to 80 million tonnes per annum and will make us a significant player in the global seaborne market.
In the global commodities market, there is considerable uncertainty around the short-term outlook for the world economy.
But in the medium to longer term, the prospects are more encouraging.
We expect sustained growth in the emerging economies, notably in China and India, which will underpin robust demand for commodities, supplemented by early recovery signs in the US.
In 2011, global steel production increased by 7 per cent to 1.5 billion tonnes. In China, crude steel production for 2011 was 685 million tonnes.
We believe that medium term replacement of infrastructure in the developed world presents further opportunities for steel, with a bright future ahead for iron ore.
This outlook presents unique opportunities for South Africa.
For the past century, mining has been the engine room of this country’s economy. And it remains at its heart today. It has the world’s largest known mineral endowment at an estimated 2.5 trillion dollars.
This immense natural wealth must be managed for the benefit of all South Africans.
The South African government’s policy and regulatory foundations for the mining industry are sound. The focus now must be to ensure that they are effectively implemented and supported by the right investment in skills and infrastructure.
For our part, our commitment to South Africa remains as strong as ever.
We continue to invest significantly across our South African businesses. As recently as April, we officially opened the 4 billion rand Zibulo coal mine with our empowerment partner Inyosi Coal.
And we are working in partnership with the government, unions and our peers all over the country to uplift communities through education, social investment and health programmes.
Our teams continue to deliver within the context of these challenges, looking to measure success not only in terms of shareholder value, but also with a clear aim of making a lasting, positive difference to society.
It all comes down to having the best people – people who are committed to their work, their colleagues and communities.
Since joining Anglo American in 2007, I have made safety and sustainable development a priority.
It is fundamental that we build public trust through continuous engagement with stakeholders, and by demonstrating how we are a responsible, modern mining company.
For me, Kolomela is an example of these principles in action.
The project has prioritised safety throughout.
And it has shown how sustainable development issues such as water, energy and biodiversity are now core to the development of our major projects.
For example, Kolomela’s dry-plant technology means it uses less water. But extensive monitoring of the water it does use, to keep dust levels low, ensures its usage doesn’t negatively affect other land owners.
Low energy features such as heat pumps, solar geysers and efficient motors have been integrated into the design of the mine.
And, given its sensitive location, Kolomela has put in place one of the most extensive programmes known in South Africa to monitor its impact on biodiversity in the area.
All of this has been done in open dialogue with land owners through its environmental forum set up in 2008.
Kolomela has also made a significant contribution to its host community since construction began. This exemplifies the way that we put people and partnerships at the heart of our business.
In pursuing partnerships, mining companies have some very important responsibilities: the starting point is our contribution to economic development that benefits all stakeholders.
We are proud of the range of ground-breaking empowerment transactions that we have implemented across our operations at Anglo American. And none more so than Kumba’s employee empowerment scheme, Envision.
Envision is a broad-based success story that has quite literally transformed people’s lives. It is an initiative that we are immensely proud of, and which I believe sets a benchmark for empowerment goals and ideals in this country
In addition, Kolomela is an excellent example of Anglo American’s commitment to share the benefits of mining to its host communities.
Roughly 15,000 people have worked on the Kolomela project, enhancing their learning, skills and experience. Many were local people, employed for the first time in their lives.
There are more than 770 permanent employees and more than 700 contractors at Kolomela. At full production, the mine will employ 840 permanent employees and about 150 contractors – 87 per cent of the mine’s permanent employees come from the Northern Cape Province. That means local communities are benefiting directly from the R320 million Kolomela is paying in wages annually, much of which flows directly into local small businesses.
We have so far built close to 300 new homes for Kolomela employees. These houses have been integrated into the existing town of Postmasburg so communities also benefit from the 30 million rand spent on bulk services for the new areas. Another 270 homes are still to be come.
Over the past two years, Kolomela has supported more than 220 bursars and learners and trained 370 people in the community with new skills in bricklaying, welding and plumbing, among others.
Last year alone, we invested 16 million rand in skills development, training and education programmes at Kolomela.
And this year, we will launch the first Zimele hub in Postmasburg to support local businesses and entrepreneurs.
Beyond this, we invested 33 million rand in regional development last year.
I feel confident in saying this project has shown local communities that even before we develop a mine, we start developing a community.
Ladies and gentlemen thank you once again for joining us today. Kolomela embodies the standards of excellence that are core to Anglo American.
I believe we will become the leading global mining company – the investment, partner and employer of choice – though the operational excellence of world class assets like Kolomela.