With the release of its ‘Production and Sales Report’ for the first quarter of this year (Q1 2019), Kumba Iron Ore, part of the Anglo American group, has reaffirmed its guidance for total 2019 production and sales, issued in February (when it announced its annual results for 2018).
Kumba has two mines in the Northern Cape province – Sishen and Kolomela, the latter being the younger operation, having started production at the end of 2011. The iron-ore miner highlighted that, during the first quarter, it maintained its record of having suffered no fatalities since 2016.
In terms of actual production during Q1 2019, “[t]otal production volumes decreased by 12%, compared with Q1 2018, due to maintenance requirements at Sishen and Kolomela”, stated Kumba in its press release. Q1 2019 production totalled 9 516 000 t (Sishen: 6 447 000 t, Kolomela: 3 070 000 t), compared with 10 855 000 t during Q1 2018 (Sishen: 7 325 000 t, Kolomela: 3 530 000 t) and 10 170 000 t in Q4 2018 (Sishen: 6 960 000 t, Kolomela: 3 210 000 t). Production during Q1 2019 was 12% down on Q1 2018 and 6% down on Q4 2018. The respective figures for Sishen are 12% and 7%, and for Kolomela, 13% and 4%.
The two mines are linked to their export port of Saldanha Bay, in the Western Cape province, by an 861 km railway line, operated by the State-owned Transnet group. This was disrupted by derailments last year, including a two-week disruption when an accident damaged a bridge.
“Total sales volumes of 10.9 Mt [million tons] were broadly flat, relative to Q1 2018 with export sales growth of 2% to 10.1 Mt partially offset by lower domestic sales. Relative to Q4 2018, export sales decreased by 6% due to lower opening stock levels at Saldanha Port at the beginning of the year, following the derailments and bridge incident in 2018 . . . Logistical performance improved during the quarter, reflecting the progress made by the joint steering committee and the benefits of working more closely with Transnet. This progress was one of the key factors underpinning the maintenance of the 2019 full-year guidance.”
“From a mining perspective, waste stripping at Sishen was 3% lower at 40.9 Mt (Q1 2018: 42.2 Mt) due to a marginal reduction in shovel availability, while, at Kolomela, longer haul distances led to a 5% decrease in waste stripping to 12.8 Mt. Improving mine-to-plan practices and operating equipment performance are key priorities as we progress towards new levels of benchmark operating performance.”
The company’s guidance remains that total production for this year will be in the range of 43 Mt to 44 Mt. Total sales should also range from 43 Mt to 44 Mt. The iron-ore producer will continue its “focus on improving its health, safety and operational performance”. During the course of this year, Sishen is expected to produce 30 Mt of iron-ore (with 170 Mt to 180 Mt of waste) and Kolomela’s iron-ore output should be 13 Mt to 14 Mt (with 55 Mt to 60 Mt of waste).Kumba states on its website that the ore it produces has a high iron content and has ‘excellent’ thermal shock resistance, which means less fines are generated in the top of the blast furnace, as a result of which fewer of the fine particles are lost to the off-gas. The ore does not break down as much as other ores during handling and transport, the result being that customers receive a larger fraction of valuable lump ore. Further, the ore is characterised by increased sinter productivity.