An 11 billion rand South African manganese building project, which includes a mine and smelter, was on track with first processed ore expected in July next year, investors said on Tuesday.

Because of the developmental impact the project will have in the poor provinces of Northern Cape and Eastern Cape, the IDC has committed a further 3.5 billion rand towards the implementation of the project, Abel Malinga, head of mining at the Industrial Development Corporation, said in a statement.

South Africa's IDC, a 10 percent shareholder, is helping develop the project together with black-owned company Kalahari Resources, which owns 40 percent.

The remaining 50 percent is held by top global steelmaker ArcellorMittal as the firms move to exploit the rich manganese ore bodies found in the Northern Cape, where the mine and sinter plant will be located.

The smelter would be in the Coega industrial zone in the Eastern Cape.

Shareholders have committed to fund 4.5 billion rand needed for the entire project, with another 6.5 billion sourced from commercial banks and development finance agencies, such as the

IDC.

Malinga told Reuters the ferromanganese alloy smelter would also be built at a cost of some 5.5 billion rand, producing an estimated 320,0000 tonnes from mid-2013.

Ferromanganese is an essential ingredient in the production of steel, a commodity in great demand from China.