Kumba Iron Ore on track to deliver full-year guidance
Kumba Iron Ore, in its production and sales report for the quarter ended 30 September 2020, says it continues to focus on balancing its value chain thereby ensuring that iron ore deliveries meet market demand.
Kumba delivered a solid mining performance for the period. While total waste stripping of 58.8Mt is 16% below the 69.6Mt achieved in Q3 2019 (the comparative period), it is ahead of both the first and the Covid-19 impacted second quarter of this year of 50.1Mt and 44.5Mt, respectively.
Overall, steady progress continues to be made with its scheduled maintenance programme, and equipment performance has improved as a result.
Waste stripping for the period at Sishen increased by 37% to 42.9Mt (Q2 2020: 31.3Mt), driven by primary equipment availability and a steady increase in direct operating hours. At Kolomela, waste stripping increased by 20% to 15.9 Mt (Q2 2020: 13.2Mt) following the optimisation of hauling routes, resulting in improved truck utilisation.
Taking into account the higher levels of finished stock in Q2 2020 due to Covid-19 related logistical constraints, and the annual rail and port maintenance taking place in Q4 2020, Kumba drew down on stock levels during the period. Total finished stock reduced by 0.9Mt to 5.3Mt from 6.2Mt at 30 June 2020. Total production decreased by 1Mt or 9% to 9.5Mt (Q3 2019: 10.5Mt) and increased by 12% relative to Q2 2020.
“In the third quarter of 2020, we continued to see good operational performance, demonstrating business resilience and a capacity to successfully adapt to working under Covid-19 conditions”, said Themba Mkhwanazi, Kumba’s Chief Executive. “Our first priority is always the health, safety and well-being of our workforce and local communities while ensuring that we maintain planned throughput throughout the value chain. The business continues to perform well in a favourable iron ore price environment and we are on track to deliver full year guidance.”
Export sales increased by 13% to 10.9Mt (Q3 2019: 9.7Mt) and by 35% relative to Q2 2020. In line with expectations, there was no off-take from ArcelorMittal South Africa during the period.
China’s strong economic rebound continued to support a favourable iron ore market, with the Platts 62 index CFR price averaging US$119/dmt for the period. This compares, against US$101/dmt for the year-to-date (“YTD”).
Kumba achieved an average realised FOB export iron ore price of US$117/dmt for the period (2020 YTD: US$103/dmt), benefiting from the recovery in markets outside of China and a lump:fine ratio of 71:29 (2020 YTD: 67:33). The product quality averaged 64.2% Fe for the period (2020 YTD: 64.3%).
FULL YEAR 2020 GUIDANCE
Kumba is on track to meet its full year 2020 guidance as follows:
• Total sales of 38 – 40 Mt
• Total production of 37 – 39 Mt
– Sishen: ~27 Mt
– Kolomela: ~11 Mt
• Waste:
– Sishen: 145 – 160 Mt
– Kolomela: 45 – 55 Mt
Kumba Iron Ore Limited, a member of the Anglo American plc group, is a value-adding supplier of high quality iron ore to the global steel industry. Kumba produces iron ore in South Africa at Sishen and Kolomela mines in the Northern Cape Province.
Kumba exports iron ore to customers in a range of geographical locations around the globe including China, Japan, Korea and a number of countries in Europe and the Middle East.
