The total capital cost of the project will be approximately R7-billion, including prestripping.

Kumba said in a release to Mining Weekly that it is anticipated that the addition of the Kapstevel South pit would deliver an after-tax internal rate of return of 25% and allow Kolomela to maintain an estimated earnings margin of more than 35% in the long term.

The project entails the development of a new pit, Kapstevel South and associated infrastructure at Kolomela.

The pit is a conventional truck and shovel operation producing high quality direct shipping ore.

Whilst the pit is included in the current life-of-mine, it contributes significantly to sustaining production of 13-million tonnes for the remaining life-of-mine.

Pit establishment and waste stripping will commence this year with first ore expected in 2024.

“The approval of this project, at a time when the global and South African economies face the challenges of Covid-19, underscores Kumba’s positive longer-term outlook for demand for its high-quality product. It also demonstrates our commitment to extend the lives of our mines and continue providing much-needed jobs and livelihoods in the Northern Cape region,” Kumba CEO Themba Mkhwanazi said.