Review of mineral resources and reserves
   
 

The mineral resources and ore reserves attributed to Kumba’s current operations and development projects are summarised in the tables below. Kumba’s tenure over its mineral assets as listed in the tables was audited and is confirmed. The status of the Hope Downs mineral resource as tabled may change in future, pending the outcome of an appeal against the arbitration decision allowing Hancock to buy Kumba’s 50% share in the project. Note that mineral resources are reported in addition to ore reserves; this differs from previous years, when mineral resources were reported inclusive of ore reserves. This change explains the significant difference between the figures reported this year and those previously reported. The Braeburn and Fairbreeze C-extension heavy minerals resources are subject to successful prospecting rights conversion. Mineral resources and ore reserves were estimated by the competent persons on an operational basis and in accordance with the SAMREC code (2000) for South African properties and the JORC code (1999) for Australian properties. All competent persons have sufficient relevant experience in the style of mineralisation, the type of deposit or mining method and in the activity for which they have taken responsibility, to qualify as “competent persons” as defined in these codes. They have signed off their respective estimates in the original mineral resource and ore reserve statements for the various operations and consent to the inclusion of the information in this report in the form and context in which it appears. A list of Kumba’s competent persons is available from the company secretary on written request. In addition, the processes and calculations associated with the estimates have been audited by internal independent competent persons. The person within Kumba designated to take corporate responsibility for mineral resources and ore reserves, HJ van der Berg, the undersigned, has reviewed and endorsed the estimates reported.

signature: HJ van der Berg
HJ van der Berg
MSc (Geology), BSc (Hons)
(Geology), Pr Sci Nat (400099/01)
Manager, Geological Services

Kumba has been actively involved during the consultation phase leading up to the promulgation of Act No 28 of 2002: Mineral and Petroleum Resources Development Act, 2002. Kumba fully supports the objectives of the Act and is committed to its implementation based on sound business principles. All applications pending on 1 May 2004 have been resubmitted under the new dispensation. The plan for conversion of old order to new order mineral rights is in place and will be executed as appropriate and according to compliance preconditions and good practice. The Limpopo and Eastern Cape heavy minerals deposits may be interpreted as “unused old order rights” although they form part of the heavy minerals business plan and will be utilised at a later stage, according to the life-of-mine schedule. Documents for conversion will be submitted before the end of April 2005.

As part of Kumba’s objective to use its mineral resources optimally, extensive research and testing of different technologies have confirmed the potential to upgrade low-grade iron ore and banded iron formation to an iron ore product with marketable iron levels. This development could have an effect on the business cases of both Sishen and Thabazimbi mines. If this process is proven to be economically viable, the present mineral resource and ore reserve estimates will increase significantly. Combined with the continuous improvement of selective mining practices, this technology could have a positive impact on the profitability and lives of both mines.

Innovative mineral resource utilisation is also part of the coal strategy in Kumba. Tests have indicated that raw coal from zone 11 at Grootegeluk is suitable for fluidised bed combustion by Eskom. This would save on beneficiation costs and add production capacity to the operation. Another opportunity being investigated at Grootegeluk is the production of char from shallowlying zones 2 and 3. The calcrete overburden in the area is being investigated as a possible sorbent for the fluidised bed combustion process.

Rosh Pinah mine in the south of Namibia has a calculated life of mine of five to six years, depending on the production rate. The present prospecting initiative is focused on mine exploration to identify and prove mineable ore reserves that can be utilised with limited further development of existing infrastructure.

Kumba’s objective is to use its mineral resources optimally
   
 

Table 1: Mineral resources reported inclusive of ore reserves for 2003 and 2004

       
2004
2003*
  
    % attributable   Resource Tonnes    Tonnes    % 
Commodity Operation to Kumba   category (million) Grade (million) Grade change 
          % Fe   % Fe  
Iron ore Sishen mine+ 78,6   Measured 754  65,2 975  65,1  
        Indicated 636  64,8 411  64,6  
        Inferred 249  64,2 248  64,3  
        Total 1 639  64,9 1 634  64,8 0,27 
  Thabazimbi mine 78,6   Measured 43  63,1 40  62,5  
        Indicated 19  62,4 26  62,5  
        Inferred 21  62,1 24  61,8  
        Total 83  62,7 90  62,3 (8,01)
  Hope Downs (Hope 1) 50,0   Measured 199  62,1 199  62,1  
  Australia(1)     Indicated 291  61,1 291  61,1  
        Inferred 29  60,4 29  60,4  
        Total 519  61,5 519  61,5 – 
  Sishen South project(2) 100,0   Measured 146  65,4 130  65,5  
        Indicated 147  64,6 126  64,5  
        Inferred 118  63,5 87  64,1  
         Total 411  64,5 343  64,8 19,90 
  Zandrivierspoort 50,0   Measured –  – –  –  
        Indicated 447  34,9 447  34,9  
        Inferred –  – –  –  
         Total 447  34,9 447  34,9 – 
          Coal   Coal  
Coal Grootegeluk mine 100,0   Measured 1 463  Raw coal 1 521  Raw coal  
        Indicated 2 075  Raw coal 2 075  Raw coal  
        Inferred 2 513  Raw coal 2 513  Raw coal  
        Total 6 051  Raw coal 6 109  Raw coal (0,94)
  Leeuwpan mine 100,0   Measured 186,9  Raw coal 159,9  Raw coal  
        Indicated 9,8  Raw coal 29,8  Raw coal  
        Inferred –  Raw coal –  Raw coal  
        Total 196,7  Raw coal 189,7  Raw coal 3,69 
  Tshikondeni mine 100,0   Measured 27,2  Raw coal 30,0  Raw coal  
        Indicated 10,1  Raw coal 10,1  Raw coal  
        Inferred –  Raw coal –  Raw coal  
        Total 37,3  Raw coal 40,1  Raw coal (7,05)
  Moranbah South Australia 100,0   Measured –  Raw coal –  Raw coal  
        Indicated 586  Raw coal 586  Raw coal  
        Inferred 124  Raw coal 124  Raw coal  
        Total 710  Raw coal 710  Raw coal – 
  Inyanda+ 50,0   Measured 15,3  Raw coal 15,3  Raw coal  
        Indicated –  Raw coal –  Raw coal  
        Inferred –  Raw coal –  Raw coal  
        Total 15,3  Raw coal 15,3  Raw coal – 
  Strehla 100,0   Measured –  Raw coal –  Raw coal  
        Indicated 22,5  Raw coal 22,5  Raw coal  
        Inferred –  Raw coal –  Raw coal  
         Total 22,5  Raw coal 22,5  Raw coal – 
          % Ilmenite   % Ilmenite  
Heavy Hillendale mine + Braeburn(3) 80,6   Measured 56  3,7 75  3,8  
minerals       Indicated –  – –  –  
        Inferred –  – –  –  
        Total 56  3,7 75  3,8 (25,20)
  Fairbreeze A+B+C+C ext(6) 80,6   Measured 196  3,7 140  2,8  
        Indicated 27  2,5 75  4,6  
        Inferred –  – –  –  
        Total 223  3,6 215  3,4 3,70 
          % Ilmenite   % Ilmenite  
  Gravelotte sand 80,6   Measured 75  9,1 75  9,1  
        Indicated –  – –  –  
        Inferred –  – –  –  
        Total 75  9,1 75  9,1 – 
                 

Mineral resources are now reported in addition to ore reserves

       
2004
 2003*  
    % attributable   Resource Tonnes        Tonnes        % 
Commodity Operation to Kumba   category (million)   Grade   (million)   Grade   change 
                         
Heavy KwaZulu–Natal(4) 80,6   Measured –   –   –   –    
minerals –Block P and     Indicated 50   3,0   84   3,0    
continued   Fairbreeze D     Inferred –   –   –   –    
        Total 50   3,0   84   3,0   (40,72)
  Eastern Cape 80,6   Measured 233   4,5   233   4,5    
  –Nombanjana, Ngcizele     Indicated –   –   –   –    
    Sandy Point old and recent     Inferred –   –   –   –    
        Total 233   4,5   233   4,5   – 
  Limpopo sand 80,6   Measured 13   10,5   13   10,5    
  –Gravelotte pebbles and     Indicated –   –   –   –    
    Letsitele sand     Inferred 31   4,0   31   4,0    
        Total 44   5,9   44   5,9   – 
  Limpopo rock 80,6   Measured –   –   –   –    
  –Gravelotte rock and     Indicated 54   25,9   54   25,9    
    Letsitele rock     Inferred 112   20,7   112   20,7    
        Total 166   22,4   166   22,4   – 
            % THM       % THM    
  Tiwest, Australia 25,8   Measured 137   3,2   103   3,6    
  –Cooljarloo     Indicated 322   2,4   316   2,6    
        Inferred 27,7   1,9   45,2   2,4    
        Total 480,7   2,6   464,2   2,8   4,96 
  Tiwest, Australia 25,8   Measured 44   4,6   44   4,6    
  –Jurien     Indicated 9,1   5,5   9,1   5,5    
        Inferred –   –   –   –    
        Total 53,1   4,8   53,1   4,7   – 
  Ticor, Australia 51,5   Measured 1,3   6,9   1,3   6,9    
  –Magnetic   minerals     Indicated 75,4   6,6   75,4   6,6    
        Inferred –   –   –   –    
        Total 76,7   6,6   76,7   6,6   – 
          % Zn   % Pb   % Zn   % Pb  
Base metals Rosh Pinah 89,5   Measured 2,3 8,2   2,2 2,0 8,4   3,0  
        Indicated 3,5 11,0   3,0 3,8 12,6   3,0  
        Inferred 0,6 9,0   3,8 0,9 9,5   3,6  
        Total 6,4 9,8   2,8 6,7 10,9   3,1 (3,68)
        Metallurgical dolomite   Metallurgical dolomite    
            % SiO2       % SiO2    
Industrial Glen Douglas dolomite mine 100,0   Measured 186   <2,5   187   <2,5    
minerals       Indicated –   <2,5   –   <2,5    
        Inferred 117   <2,5   117   <2,5    
        Total 303   <2,5   304   <2,5   (0,37)
        Aggregate   Aggregate    
          Raw material     Raw material    
        Measured – Raw material   – Raw material    
        Indicated – Raw material   – Raw material    
        Inferred 145 Raw material   145 Raw material    
        Total 145 Raw material   145 Raw material   – 
        Metallurgical dolomite   Metallurgical dolomite    
  Bridgetown dolomite mine (5) 50,0   Measured 8,0   <2,5   7,6   <2,5    
        Indicated –   <2,5   –   <2,5    
        Inferred 3,8   <2,5   12,7   <2,5    
        Total 11,8   <2,5   20,3   <2,5   (41,65)
                         
Footnotes
*
  		 Period of reporting is July 2003 to December 2004; mineral resource figures include ore reserve estimates; estimates are considered SAMREC/JORC compliant.
+
  		 Audited by independent, third party auditors during reporting period.
1.
  		 Status may change pending Kumba's appeal re arbitration.
2.
  		 Mineral resources increased because geological models for several of the deposits were updated to include additional exploration results.
3.
  		 Geological model revisions subsequent to additional drilling resulted in a decrease in mineral resources.
4.
  		 Relinquishing the prospecting rights on the KwaZulu-Natal deposits due to disappointing exploration results led to a decrease in mineral resource estimates.
5.
  		 Prospecting rights on the inferred mineral resource south of the northern quarry reported in 2003 were relinquished because of poor exploration results.
6.
  		 Braeburn and Fairbreeze C extension mineral resources subject to successful prospecting rights conversion.
  Mineral resources are now reported in addition to ore reserves
   
 
Table 2: Ore reserve estimate for 2003 and 2004
   
 
   
        2004 2003*  
    %                        
     attributable   Reserve ROM          ROM       
Saleable

%  
Commodity   Operation to Kumba   category (Mt)   Grade   Saleable product (Mt)   Grade   product change 
            % Fe   Iron ore (Mt)     % Fe   Iron ore (Mt)  
Iron ore   Sishen mine+ 78,6   Proved 510    63,6   436 @ 66,3% Fe 655    63,1   525 @ 66,0% Fe  
        Probable 208    63,7   178 @ 66,1% Fe 132    62,7   103 @ 65,8% Fe  
        Total 718    63,6   614 @ 66,3% Fe 787    63,0   628 @ 65,9% Fe

(8,87)

                                   
    Thabazimbi 78,6   Proved 15    60,9   13 @ 63,5% Fe 15    63,0   13  
    mine(8)     Probable 1    61,5   1 @ 64,1% Fe 5    62,1   4  
        Total 16    60,9   14 @ 63,5% Fe 20    62,8   17

(19,23)

    Hope Downs                                
    (Hope 1) 50,0   Proved 190    61,9   Not reported 190    61,9   Not reported  
    Australia(1)     Probable 259    61,1   Not reported 259    61,1   Not reported  
        Total 449    61,4   Not reported 449    61,4   Not reported

– 
    Sishen South 100,0   N/A                            
    Zandrivierspoort 50,0   N/A                            
            Coking   Thermal  Metall.      Coking   Thermal    Metall.   
            (Mt)   (Mt) (Mt)     (Mt)   (Mt)   (Mt)  
Coal   Grootegeluk 100,0   Proved 706    35,1   264  40,0  768    38,6   306    43,5   
    mine     Probable 67    5,0   26  0,7  67    4,4   28    0,7   
        Total 773    40,1   290  40,7  835    43,0   334    44,2 

(7,44)

    Leeuwpan 100,0   Proved 111    N/A   57 87    N/A     39    
    mine(9)     Probable 48    N/A   23 48    N/A     18    
        Total 159    N/A   80 135    N/A     58  

18,13 
    Tshikondeni 100,0   Proved 7,1    4,1   N/A 9,7    4,9     N/A    
    mine(10)     Probable –    –   N/A –    –     N/A    
        Total 7,1    4,1   N/A 9,7    4,9     N/A  

(26,12)

    Moranbah South 100,0           N/A                
              A-grade export steam coal                
    Inyanda(11)+ 50,0   Proved 14,6        10,1   Not reported            
        Probable –        –   Not reported            
        Total 14,6        10,1   Not reported          

100,00 
    Strehla 100,0               N/A            
          %   THM Composition   %   THM Composition  
          THM   % Ilm % Rut % Zir    THM   % Ilm % Rut   % Zir  
Heavy   Hillendale                                
minerals   mine(12) 80,6   Proved 41  6,6   58,4 –   57  8,1   50,5 –   –  
    (excl Braeburn)     Probable –  –   – 3,2 7,2  –  –   – 2,4   6,5  
        Total 41  6,6   58,4 3,2 7,2  57  8,1   50,5 2,4   6,5

(27,57)

    Fairbreeze                                
    A+B+C 80,6   Proved 138  6,1   59,7 – –  120  5,3   59,0 –   –  
    (excl Fairbreeze C ext)     Probable 20  4,2   49,1 3,3 8,1  38  7,6   51,2 3,3   8,1  
        Total 158  5,9   58,7 3,3  8,1  158  5,9   56,9 3,3   8,1

0,18 
    Gravelotte sand 80,6   Proved 52  13,0   85,0 – –  52  13,0   85,0 –   –  
        Probable –  –   – – –  –  –   – –   –  
        Total 52  13,0   85,0 N/A N/A  52  13,0   85,0 N/A   N/A

– 
    Eastern Cape 80,6   –                            
    Limpopo sand 80,6   –                            
    Limpopo rock 80,6   –                            
          %   THM Composition   %   THM Composition  
          THM   % Ilm % Rut % Zir    THM   % Ilm % Rut   % Zir  
    Tiwest, Australia 25,8   Proved 43,2  2,9   60 4,5 10  47,4  4,0   58 4,4   11  
    – Coolljarloo(13)     Probable 131  2,5   61 4,1 10  108  2,8   62 4,1   9  
                                   
        Total 174,2  2,6   61 4,2 10  155,4  3,2   61 4,2   10

12,26 
                                   
        2004 2003*  
    % attributable   Reserve ROM            ROM             

%  
Commodity   Operation to Kumba   category (Mt)   Grade   Saleable product (Mt)   Grade   Saleable product change 
Heavy   Tiwest, Australia 25,8   Proved 13,9  6,3   55 8,4  11  13,9  6,3   55 8,4    11   
minerals   – Jurien     Probable 1,9  6,6   54 6,1  7  1,9  6,6   54 6,1    7   
        Total 15,8  6,3   55 8,1  11  15,8  6,3   55 8,1    11  – 
    Ticor, Australia 51,5   Proved –  –   – –  –  –  –   – –    –   
    – Magnetic minerals     Probable 22,1  10,0   48 7,0  10  22,1  10,0   48 7,0    10   
        Total 22,1  10,0   48 7,0  10  22,1  10,0   48 7,0    10  – 
                Zn metal  Pb metal          Zn metal    Pb metal   
Base         % Zn   % Pb (kt) (kt)   % Zn   % Pb (kt)   (kt)  
metals   Rosh Pinah(7) 89,5   Proved 1,0  9,5   2,7 91  26  1,6  7,0   2,5 112    41   
        Probable 2,7  10,9   2,6 299  72  3,7  11,5   2,7 431    102   
        Total 3,7  10,6   2,7 390  98  5,3  10,2   2,7 543    143  (30,86)
                Metallurgical         Metallurgical  
            %SiO2   dolomite (Mt)     %SiO2   dolomite (Mt)  
Industrial   Glen Douglas 100,0   Proved 34    <2,5   N/A 35    <2,5   N/A  
minerals   dolomite mine     Probable –    –   – –    –   –  
        Total 34    <2,5   N/A 35    <2,5   N/A (3,27)
    Bridgetown 50,0   Proved 7,7    ~1,0   4,6 7,3    ~1,0   3,7  
    dolomite mine     Probable –    –   – –    –          
        Total 7,7    ~1,0   4,6 7,3    ~1,0   3,7 5,87 
                Aggregate (Mt)         Aggregate (Mt)  
    Glen Douglas 100,0   Proved 12,2  Raw dolomite N/A 18,4  Raw dolomite 12,8  
    dolomite mine(14)     Probable –    –   – –    –   –  
        Total 12,2  Raw dolomite N/A 18,4  Raw dolomite 12,8 (33,97)
    Bridgetown 50,0   Proved –  Plant fines 3,9   Not reported        
    dolomite mine     Probable –    –                      
        Total –  Plant fines 3,9   Not reported        
   
 
Footnotes
* Period of reporting is July 2003 to December 2004; ore reserve estimates are included in mineral resource estimates; estimates are considered SAMREC/JORC compliant.
+ Audited by independent, third-party auditors during reporting period.
1. Status may change pending Kumba’s appeal re arbitration.
7. Normal production depletion (1,28Mt), changes to mining layouts and minor mining losses contributed to the change in ore reserves over the reporting period.
8. Change mainly due to production depletion; the exclusion of the "west" West pit at Donkerhoek because of high mining costs is offset by gains due to new mining layouts.
9. The slightly more than 18% increase in coal reserves is the result of an increase in yield, made possible by changes in specifications required by clients.
10. Normal production depletion and minor changes to mining layouts resulted in the decrease in ore reserves for the reporting period.
11. Coal reserve estimates were not reported in 2003.
12. Most of the change is attributable to normal production; Braeburn had been erroneously included in the ore reserves in 2003.
13. Mineral resource and subsequent ore reserve models were updated to include the most recent exploration results.
14. The aggregate tonnage was inaccurately determined in 2003 (18,4Mt); it has been recalculated at 12,2Mt.
   
 
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