Anglo American warns of risk to rights at Kumba mine

15th Oct 2013 08:38

Anglo American has revealed that the expansion of its subsidiary Kumba's Sishen mine in South Africa remains on track but warned a pending regulatory application could restrict access to the mine. Kumba Iron Ore has applied to the Department of Mineral Resources (DMR) to obtain rights to mine land previously occupied by the national railway line, which has been moved in order to accommodate the Sishen mine's westerly extension. While the relocation of the railway line was completed in May 2013 and registration of Anglo's new ownership rights of this land is currently pending at the Deeds Registry, the company's current mining rights do not cover this property. Kumba, a subsidiary of FTSE 100-listed Anglo American, said if its application with the DMR was unsuccessful it would "potentially" be unable to access around 33% of the Sishen reserve included in the current mine life plans, even though the ore reserves under this former railway land only constitute roughly 3.3% of the total ore reserve.The current ore reserve classification in the area that are affected by the applications may require adjustment in the company's annual 2013 Resource and Reserve statement to reflect the adjusted confidence level associated with the exploitation of these reserves. "Should the matter not be resolved at the time of reporting on [Sishen's] reserves in relation to Kumba's financial year which ends on December 31st 2013, the company will conduct a detailed assessment to determine whether to restate the Ore Reserve classification," Anglo said.Shares in Anglo American were up 1.2% to 1,541.5p on Tuesday at 08:55.OH