Close

Wildcat strikes and a significant drop in iron ore prices has led to Anglo American company Kumba Iron Ore‘s operating profits falling to R23 billion for the year ended 31 December 2012, compared to R32 billion in the previous year.

The protests at Kumba‘s Sishen mine in the Northern Cape had a large impact on the companys production volumes, resulting in 33.7 Mt of iron ore being achieved in 2012. The company says it expects an increase in production at its Sishen mine to at least 37 Mt in 2013.

Waste mining at Sishen is expected to increase by an additional 30 Mtpa, however, in line with the planned ramp-up that started in 2009, while an anticipated 10 to 20 Mt of waste will be mined in 2013 in an effort to mitigate the loss of mining volumes owing to strikes.

The company says it is optimistic that it will recover in 2013 as it anticipates growth in global crude steel production owing to China‘s crude steel production forecasted to grow to 740 Mt. The company also anticipates reduced production from some developed countries.

Kumba says 2013 has seen a rapid recovery in iron ore prices, and although it believes this rally will not be sustained throughout the year, the restoration of China‘s steel consumption growth will provide support to prices throughout the year.

Meanwhile, the company says the ramp-up of its Kolomela mine, near Postmasburg, Northern Cape,is on track to produce at its full design capacity of 9 Mt in 2013, adding that this will enhance the company’s ability to supply iron ore to the market during this year.

Additional Reading?

Request Free Copy