Kumba maintains production and sales guidance for full year 2024
Kumba’s solid operational performance in the first half of 2024, stems from its relentless focus on safety and operational excellence as it unlocks the value in its business and build resilience to ensure a sustainable future.
Kumba’s Chief Executive, Mpumi Zikalala, said: “In line with our business reconfiguration plan to align production to Transnet’s logistics performance, volumes were reduced by 2%, matching a 2% decrease in ore railed to port. Sales decreased by 5% with the benefit of the pro-active mini-shut and port equipment repairs undertaken in April 2024, largely offsetting the impact of port equipment outages in the first quarter. As a result, we have maintained our production and sales guidance for the full year 2024 of 35-37Mt and 36-38Mt, respectively.
“Progress is being made on our cost optimisation programme and we are well on track to achieving our C1 unit cost guidance of US$38/tonne. Guidance on capital expenditure is unchanged at R8.0 – 9.0 billion for the full year 2024.
The iron ore market pulled back strongly in the first half and the reconfiguration of our business to a lower production and cost profile is helping to build greater resilience in the challenging market environment.
Weak steel demand in China and Europe coupled with robust iron ore supply contributed to the Platts IODEX 62% Fe CFR benchmark iron ore price falling by 26% since the start of the year. An increase in steel exports provided some relief, while low levels of lump inventory supported the lump premium from which we benefit.
Kumba achieved an average realised free-on-board (FOB) export price of US$97 per wet metric tonne (wmt) relative to the 62% Fe FOB export price of US$96/wmt as the timing effect of provisionally priced volumes in a lower price environment were largely offset by the lump and iron ore quality premium that its products attract.
