Great Dykes Mining in South Africa announces pass in Proof of Concept on project

Nelson Mandela Bay Municipality to spend R99m on Reconstruction

After two years of proof of concept studies, Great Dykes Mining in South Africa is happy to announce that the 5 million tons per annum Bushbuckridge Stainless Steel Project has passed all criteria set for Proof of Concept with flying colours and position SA based proposed mill as a “world lowest cost producer with global competitive edge”.

The project will create 10 000 permanent jobs at operational phase and 30 000  jobs at construction phase.

The proof of concept study was completed in July 2015, the construction project is now progressing to Prefeasibility stage with Bankable Feasibility studies projected to be completed by third quarter 2017.

The Stainless Steel mill is planned to be constacted at Bushbuckridge situated in Mpumalanga Province of South Africa, this location is informed by the closer proximity of Stainless Steel making raw materials and high unemployment rate with 60% being youth amongst others.

The Proof of Concept operating data was provided by Danieli S.P.A., one of the leading steelmaking engineering companies in the world with rigorous financial analysis conducted by the EPCM contractors to the project – Royal HaskoningDHV Netherlands.

“We could never have achieved the rigorous and thorough analysis of the proof of concept that we have managed without the assistance of our Technology providers and EPCM consultants. We have had the benefit of the support and advice of the IDC who have been positively supportive of the process and are now reviewing the Proof of Concept data with a view to becoming involved in the funding and ownership of the project amongst support and endorsements from 3 tiers of government” says CEO Harold Mogoru-Vermaak.

The Program Director, Dr. Jo Kruger, confirmed “We are very happy with the outcome. At the initial stage of any project you only have a concept. To see the concept unfolding as a confirmable reality creates an enormous amount of enthusiasm in our team and our stakeholders. The operations will increase South African GDP by R450 billion or a net increase excluding imported input materials of R230 billion; turnover contribution to GDP of R130 billion

The proof of concept financial analysis model reflects, amongst other criteria, a forecast of 21% average EBITDA margin – a value very comfortably at the top of the sustainability index for such plants which is benchmarked at 16%, and an IRR of 24% based upon a 20 year life, moving to 27% based upon a more commonly experienced extended life.” he added.

The 5 million per annum production output is targeted primarily at the export market and informed by global Stainless Steel consistent demand exhibited during the past 50-60 years, of 5% per annum year on year and the South African NDP objectives.