MR. GERRIT KRUYSWIJK INDUSTRIAL DEVELOPMENT CORPORATION OF SOUTH AFRICA LTD. 19 FREDMAN DR., P.O. BOX 784055 SANDTON 2146 REPUBLIC OF SOUTH AFRICA TEL: 011-27-11-269-3566 FAX: 011-27-11-269-3125

B -- SOUTH AFRICAN IRON DIRECT REDUCTION POC Carol Stillwell, USTDA, Room 309, SA-16, Washington, D.C. 20523-1602, Tel: (703) 875-4357, Fax No.: (703) 875-4009 The Grantee invites submission of Prequalification Statements from interested joint U.S.-South African teams which are qualified on the basis of experience and capability to develop a feasibility study evaluating the technical, economic, financial, and environmental feasibility of a greenfield 4.0 million tons per year iron direct reduction project. Based upon the Prequalification Statements, the Grantee will develop a short list of qualified teams which will be invited in writing to submit a formal Technical Proposal to carry out the study. TDA has signed a Grant Agreement with the Industrial Development Corporation of South Africa Ltd. (IDC) providing U.S.$800,000 for the execution of a feasibility study estimated to cost US$2.66 million. The entire grant, jointly funded by TDA and the IDC, will be awarded to either a U.S. company with offices in the U.S. and South Africa or a U.S. company in partnership with a South African firm for purposes of the study. The South African member of the team should have the capability and the capacity to undertake approximately 70% of the value of the contract. The team should be able to offer a full range of services including, but not necessarily limited to, technology evaluation, engineering, design, estimating, and environmental studies. It will utilize state of the art project execution tools, systems and procedures; be certified according to ISO 9001 standards for services rendered under this contract; and have global experience in undertaking feasibility studies. Furthermore, candidates should have direct and related experience in the technology and processes involved in iron ore beneficiation and the production of direct reduced iron. The selected team will be expected to undertake to contribute 10% of the total study cost in the form of a discount on the price quoted. The TDA-funded portion of the study will fund only U.S.-sourced contributions to the feasibility study, as specified in the Grant Agreement. The U.S.-South African team will evaluate the feasibility of a project to install a 4.0 million tons per year capacity iron direct reduction facility at an undetermined site in South Africa or Mozambique. The IDC is currently evaluating available iron direct reduction technologies to determine two or three provisional options which will be considered by the study. The scope of the technical evaluation is to make a detailed definition of the proposed plant with regard to its technological and engineering influence on the project. The technology options will need to be reviewed on the basis of their technical strengths and weaknesses, their suitability to the initial project concept, as well as their influences on the capital and operating costs of the overall facility. Such reviews of technology options shall include pyro-metallurgical testwork executed by the owners of such technologies. The infrastructure has to be defined in terms of technical requirements, its phased development in relation to the main operating facilities and integration into the overall project, optimizing the investment costs. The selected sites of the construction of the proposed plant shall be inspected for the infrastructure requirements and the transportation logistics of all raw materials and products involved. A geotechnical survey will be conducted on the selected site to determine the soil and rockbed characteristics in order to design and cost the foundation requirements and the best site layout. Finally, the environmental aspects of a project of this nature have to be investigated. The local regulations shall be evaluated, and recommendations shall be made to IDC for compliance with World Bank Environmental Guidelines and other international standards that fully comprehend the possible environmental impact of the proposed plant and the need to provide full protection over the lifetime of the project. The economic and financial analysis of the project shall involve extensive reviews of the sensitivities that are of crucial importance in determining the viability of a project of this magnitude and its impact on both the regional and national economies of the country. Much of the analysis will be done in conjunction with the IDC and involve validating previous analytical work. The U.S. firm selected will be paid in U.S. dollars from a $800,000 grant to the Grantees from the U.S. Trade and Development Agency (TDA). A detailed Request for Proposals (RFP), which includes the requirements for submission of the Prequalification Statements and the Technical Proposal, the Terms of Reference, and a background definitional mission/desk study report are available from TDA, at Room 309, SA-16, Washington, D.C. 20523-1621. Requests for the RFP should be faxed to the IRC, TDA at 703-875-4009. In the fax, please include your firm's name, contact person, address, and telephone number. Some firms have found that RFP materials sent by U.S. mail do not reach them in time for preparation of an adequate response. Firms that want TDA to use an overnight delivery service should include the name of the delivery service and your firm's account number in the request for the RFP. Firms that want to send a courier to TDA to retrieve the RFP should allow one hour after faxing the request to TDA before scheduling a pick-up. Please note that no telephone requests for the RFP will be honored. Only U.S. firms may bid on this TDA financed activity. Interested firms, their subcontractors and employees of all participants must qualify under TDA's nationality requirements as of the due date for submission of qualifications and proposals and, if selected to carry out the TDA-financed activity, must continue to meet such requirements throughout the duration of the TDA-financed activity. All goods and services to be provided by the selected firm shall have their nationality, source and origin in the U.S. or host country. The U.S. firm may use subcontractors from host country for up to 20 percent of the TDA grant amount. Details of TDA's nationality requirements and mandatory contract clauses are also included in the RFP. Interested U.S. firms should submit their Prequalification Statements as outlined in the RFP in English directly to the Grantee in South Africa. Evaluation criteria for the Prequalification Statements and the Technical Proposals are included in the RFP. Price will be a secondary factor in contractor selection, and therefore, Cost proposals should be submitted as separate proposals by those teams prequalified and asked to submit Technical and Cost proposals. The Grantee reserves the right to reject any and/or all Prequalification Statements or Technical and Cost Proposals. The Grantee also reserves the right to contract with the selected firm for subsequent work related to the project. The Grantee is not bound to pay for any costs associated with the preparation and submission of Proposals. (0271)

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