ANGLO American intended to extend its mining operations held in Kumba Iron Ore by a further ten years to bring it in line with the group’s 25 year average life of mine.
Kumba announced earlier this week that it had approved a R3.6bn project which would see it mine at its flagship Sishen mine to 2039. Including existing extension projects, this latest project increased mine life by six years.
“We would like to push out the life by another 10 years,” he said. “Exploration is very important [in the Northern Cape province].” He added that Anglo would be prepared to enter into cross-border consolidation with other regional miners.
“We would join up with others if that makes sense in order to share exploration. We have people thinking in smart ways about the right places to go and this is on the agenda.”
Cutifani also hailed steps by South Africa to modernise its system of exchange controls saying the development created a single balance sheet and made investment in the country easier to conduct.
“The Minister for Finance [Tito Mboweni] has done a helluva job to deregulate the market. He deserves great credit,” said Cutifani during the UK-listed group’s annual results presentation to media on Thursday. “We’ve got more flexibility.”
Mboweni said in the National Treasury’s 2020 budget speech last year that steps would be taken over a year-long to adopt a capital flow management system. He said on Wednesday, during his 2021 budget address that other structures affecting exchange control would be tackled.
“I have worked in South Africa since 2007 and the single most important issue has been exchange control. So the changes are massive. This is a critical step as there is only one balance sheet which is important to future investment.”
South Africa accounted for 55% of Anglo American’s earnings before interest, tax, depreciation and amortisation (EBITDA) in its 2020 financial year from a “normal” contribution of between 30% to 40%, partly owing to the strength of iron ore and platinum group metal (PGM) prices.