Kumba iron ore production up 10% for the first quarter 2021

Kumba’s mining activities were primarily hampered by weather-related safety stoppages and equipment reliability challenges, resulting in total waste stripping decreasing by 20% to 40.3Mt (Q1 2020: 50.1Mt).

Sishen’s waste stripping reduced by 22% to 29.1Mt (Q1 2020: 37.1Mt) and this was partly offset by a 16% increase at Kolomela to 15.1Mt (Q1 2020: 13Mt). We are focused on recovering our waste performance, supported by post rainfall recovery plans and enhanced equipment availability.

Production volumes increased by 10% to 10.6Mt (Q1 2020: 9.6Mt), demonstrating improved plant availability following the good progress made on scheduled plant maintenance. Kolomela reflected a strong performance with production up 19% to 3.5Mt (Q1 2020: 2.9Mt). Sishen’s production also improved, increasing by 6% to 7.1Mt (Q1 2020: 6.7Mt).

Rail performance deteriorated significantly during the period due to a series of operational challenges and train delays, caused by severe weather conditions and a locust outbreak. As a result, closing finished stock increased to 5.3Mt (31 December 2020: 4.8Mt) for the period with 4.9Mt held at the mines.

As a consequence of the decrease in iron ore railed to port and sub-optimal levels of finished stock at Saldanha Port, export sales reduced by 2% to 10.2Mt (Q1 2020: 10.4Mt).

Together with domestic sales of 0.1Mt (Q1 2020: 0.3Mt), total sales ended the period 4% lower at 10.3Mt (Q1 2020: 10.7Mt).

Kumba achieved an average lump:fine ratio of 69:31 and product quality of 64.2% Fe. This translated into an average realised FOB export iron ore price of US$180/wmt (equivalent to US$183/dmt), outperforming the average benchmark Platts 62 index FOB price of US$150/wmt (equivalent to US$153/dmt).

Kumba has maintained its full year guidance, subject to potential rail and weather-related disruptions, including low levels of stock at port. Kumba guidance for 2021 is 40.5 – 41.5Mt.

Kumba’s Chief Executive, Themba Mkhwanazi, said: “Kumba delivered a strong safety and operational performance, as we continued to support our workforce and local communities through the second wave of Covid-19 in South Africa.

Following a solid start to the year, we have maintained our production and sales guidance of 40.5 – 41.5Mt (equivalent to 40 – 41 million dry metric tonnes). Production in the first quarter was ahead of the comparative 2020 and 2019 periods, with sales in line with expectations. We continued to maximise realised value for our products and achieved an average FOB export price above benchmark levels on the back of demand for our premium quality products in a buoyant iron ore market.”

Overview:

• Fatality free production, strong safety and health track record maintained.
• Total production up 10% to 10.6Mt, driven by improved performance at both mines.
• Total sales decreased by 4% to 10.3Mt due to lower domestic offtake and rail constraints.
• Finished stock increased to 5.3Mt from 4.8Mt at 31 December 2020.
• Achieved a strong average realised FOB export iron ore price of US$180 per wet metric tonne (wmt), equivalent to US$183 per dry metric tonne (dmt), compared to the average benchmark price of US$150/wmt or US$153/dmt.