JOHANNESBURG (miningweekly.com) -  In a year that CEO Themba Mkhwanazi describes as a "royal flush", Kumba Iron Ore posted a 12% increase in headline earnings to R9.7-billion.

Headline earnings reached R30.47 a share, while earnings before interest, taxes, depreciation and amortisation increased by 6% year-on-year to R19.6-billion and attributable free cash flow increased by 10% year-on-year to R12.3-billion.

"Kumba delivered a strong operational performance in 2017 as the strategic changes made in the prior year, became embedded and have gained traction," Mkhwanazi said on Tuesday, adding that both the Sishen and Kolomela mines had exceeded guidance, which resulted in an 8% increase in its production, to 45-million tonnes.

Speaking at a presentation of the company's results, in Johannesburg, he added that the company achieved these numbers, despite operating in a highly competitive and uncertain environment.

Meanwhile, he explained that the 10% increase in Sishen mine's production to 31.1-million tonnes - with 39% fewer trucks - was owing to the new mine plan, an ongoing implementation of its operating model and pushing production higher during the first half of the year to gain from the higher iron-ore prices at the time.

Mkhwanazi noted that higher steel production bolstered iron-ore demand, while the closure of induction furnaces in China, in its aims to cut 40-million to 60-million tonnes of production, had a further positive effect on iron-ore prices.

At its Kolomela mine, Kumba recorded a 12% increase in total tonnes mined to 71.8-million tonnes.

Despite severe weather disruptions at port and rail in early 2017, Kumba's higher production led to a 6% increase in volumes railed on the Sishen-Saldanha Iron Ore Export Channel.

In a strong fourth quarter, Kumba shipped 41.6-millon tonnes from the Saldanha port destined for the export market, an increase of 7%, including 1.4-million tonnes shipped through the multi-purpose terminal at the Saldanha port.

Total export sales increased by 7%, to 41.6-million tonnes, with total sales reaching 44.9-million tonnes for the full year.

Looking ahead, the miner expects to produce between 44-million and 45-million tonnes, with Sishen contributing about 31-million tonnes and Kolomela about 14-million tonnes.

Total sales volumes of 44-million tonnes to 45-million tonnes are expected this year.