9 November 2009

Publication: Engineering News

Author: Chanel de Bruyn

South African cement producer Sephaku Cement expects site establishment on a proposed 1,2-million tons-a-year cement milling plant, in Delmas, to start early in 2010, after the Mpumalanga Department of Agriculture and Land Administration approved the environmental-impact assessment for the project.

The approval served as a record of decision for the Delmas milling plant, providing the final go-ahead to start with construction, Sephaku stated on Monday, adding that its Sephaku Ash division had also proceeded with phase two of a fly ash facility at the Kendal power station.

The cement producer, in which Sephaku Holdings owned 80,2%, has completed preliminary geotechnical studies to determine whether ground conditions at the premises where it plans to build the milling plant, were suitable.

Additional geotechnical drilling and analysis to determine the most appropriate positioning of the major structures of the plant, was now under way, the company said in a statement.

The timing of the site establishment was, however, still subject to the finalisation of funding agreements, noted Sephaku.

The milling plant would be brought into production within about two years, providing 150 temporary jobs during the construction phase and 80 permanent jobs.

All labour would be sourced locally.

Meanwhile, Sephaku Ash had also commissioned phase two of a fly-ash facility at Eskom’s Kendal power station, in Mpumalanga province.

Raw ash received from the power station would be reclassified into finer particles known as unclassified hard ash, which would be supplied to the Delmas milling plant, and classified smart ash.

The hard ash would be added to the milling process at the Delmas plant.

Sephaku Ash would also supply fly ash directly to the construction and ready-mix markets, where a “healthy initial interest” for the product has been received, the company said.

“The benefits from the Delmas milling plant, combined with the commissioning of the fly-ash facility, are twofold. The cement product produced at the plant will have the extender element to it, which improves the cost and quality of the cement, and secondly, the fly ash facility becomes the second supplier of fly-ash into the market. This should improve service and quality levels to the clients,” commented Sephaku Cement CEO Pieter Fourie.

The increase in cement supply was in line with the company’s expectations of South African cement market growth in the next two years, where government was expected to continue with the roll-out of low-cost housing, as well as increased infrastructure in areas such as power and water, the company said.

“We are well positioned to supply the eastern side of Gauteng, where currently we have a substantial logistics advantage over our competitors. Supplying on our doorstep will reduce our transport costs of the product,” Fourie said.

Sephaku Cement was the first new entrant in the South African cement industry since 1934.

Parent company, Sephaku Holdings, listed on the JSE in August this year.