In its production and sales report for the six months ended 30 June 2021, Kumba says total production increased by 12% to 20.4 Mt (1H 2020 18.2 Mt), driven by good ex-pit ore and plant performance. Q2 2021 increased by 14% to 9.8 Mt (Q2 2020: 8.6 Mt).
Total sales increased by 3% to 19.5 Mt (H1 2020: 18.9 Mt), on the back of a 5% increase in export sales to 19.4 Mt, partly offset by a 0.3 Mt decrease in domestic off-take to 0.1 Mt. Sales in Q2 2021 increased by 12% to 9.2Mt.
Finished stock levels increased to 6.1 Mt (31 December 2020: 4.8 Mt), with 1.7 Mt at Saldanha Port. Average realised FOB export iron ore price of US$216 per wet metric tonne (wmt), equivalent to US$220 per dry metric tonne (dmt), well above the average benchmark price of US$163 per wmt or US$166 per dmt, reflecting the high quality of Kumba’s iron ore.
Kumba achieved an average lump:fine ratio of 69:31 and content of 64.1% Fe. Together with stronger iron ore prices, this combination of product attributes (including the lump premium that Kumba product attracts in the market), translated into an average realised FOB export iron ore price of US$216/wmt (equivalent to the FOB price of US$220/dmt), considerably outperforming the average benchmark Platts 62 index FOB price of US$163/wmt (equivalent to the FOB price of US$166/dmt).
FULL YEAR 2021 GUIDANCE
Kumba’s full year 2021 guidance for sales has been revised lower by 1 Mt due to the rail constraints and adverse weather at the port in the first half of the year.
Kumba’s Chief Executive, Themba Mkhwanazi, said: “Kumba’s performance in the first half demonstrates our operational strength underpinned by our strong commitment to safety and health. We have now operated for more than five years without a fatality and continued to protect our workforce and support our communities through the Covid-19 pandemic. On behalf of the Kumba team, I thank each and every one of our people and contractors for looking after each other. It is through these collaborative efforts that we can continue to keep each other safe and healthy.
“Our operations performed well and production increased by 12%, while sales increased by 3%, reflecting the impact of rail constraints and periods of severe weather at Saldanha Port. We are therefore revising sales guidance down by 1 Mt to 39–40 Mt while maintaining production guidance at 40-41 Mt as we continue to build up stock at the port.
“As the iron ore market strengthened, we have seen a strong and sustained demand for our high quality products. We achieved an average realised price of US$220 per tonne in the first half of the year, well above the benchmark price of US$166 per tonne, driven by our focus on optimising the value of our products for the long-term benefit of all our stakeholders.”