JOHANNESBURG (miningweekly.com) – Anglo American’s Kumba Iron Ore on Thursday reported a 19% increase in headline earnings to R17-billion, as export iron-ore prices and export volume sales increased.

The JSE-listed company experienced an export sales volume increase of 3%, from 36.1-million tons during the year ended December 2010, to a record 37.1-million tons in 2011. China accounted for 68% of these export sales volumes.

The company also pointed to a “record-breaking” 39.1-million tons railed on the Sishen-Saldanha line during 2011 – an increase of 7%. This included 400 000 t railed from the Kolomela mine, in the Northern Cape.

However, owing to lower demand from steelmaker ArcelorMittal South Africa, as well as plant shutdowns at its Saldanha and Newcastle plants, total domestic sales volumes fell by 600 000 t, or 8%, to 6.4-million tons.

Meanwhile, Kumba’s total mining revenue reached R45.8-billion, 28% higher than the R35.8-billion achieved in 2010.

Further, an operating profit of R32-billion, up 27% from R25.1-billion, was achieved during the year ended 2011. This was mostly attributed to a weighted average increase of 26% in export iron-ore prices and the 3% growth in export sales volumes, contributing R8.9-billion and R954-million respectively to the operating profit.

“Total production decreased by 5% year-on-year to 41.3-million tons as a result of a decline in production from Sishen mine due to feedstock constraints at the mine’s dense media separation plant,” Kumba said.

The Kolomela mine produced 1.5-million tons for the year, while production at the Sishen mine fell 6% to 38.9-million tons.

Kumba pointed out that the company’s ability to supply iron-ore to the market would be enhanced by the Kolomela mine ramp-up to four- to five-million tons during 2012. This resulted in the group’s expectation of a three-million-ton increase in export sales volumes during 2012.

Domestic sales volumes would remain dependent on the off-take requirements from ArcelorMittal South Africa.

At December 31, 2011, the group has net cash of R1.6-billion, down from R1.7-billion at the end of 2010.

Attributable and headline earnings for the year were R53.11 a share and R53.13 a share respectively, on which a final cash dividend of R22.50 a share was declared.

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