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Kumba’s first-quarter sales fall 10% on port challenges

Kumba CEO Mpumi Zikalala

Kumba CEO Mpumi Zikalala

23rd April 2024

By: Sabrina Jardim

Creamer Media Online Writer

     

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Anglo American subsidiary Kumba Iron Ore has reported a 10% year-on-year decrease in sales to 8.5-million tonnes for the quarter ended March 31, on the back of port performance challenges.

About 400 000 t of shipments have been rolled over to the second quarter as a result.

Kumba CEO Mpumi Zikalala points out that export sales volumes were significantly impacted on by challenging operating conditions at the Saldanha Bay port, with equipment maintenance now being undertaken by State-owned utility Transnet primarily to address the stacker reclaimer reliability issues.

“Operationally, Kumba delivered a consistent and solid mining and production performance. In line with our business reconfiguration plan of aligning production volumes to Transnet’s logistics performance levels, total production decreased with a planned reduction at Kolomela, while Sishen delivered an increase in production,” she adds.

The business reconfiguration contributed to a 2% year-on-year decrease in the miner’s production to 9.3-million tonnes for the March quarter.

Kolomela’s production decreased by 12% year-on-year to 2.7-million tonnes, while Sishen's production increased by 4% to 6.6-million tonnes, supported by healthy buffer stocks sustained across the value chain.

Kumba has, nevertheless, maintained its production and sales guidance for the full-year at 35-million to 37-million tonnes and 36-million to 38-million tonnes, respectively.

LOGISTICS CHALLENGES

Kumba notes that ore railed to port by Transnet of 9.4-million tonnes for the first quarter was flat year-on-year.

Owing to a derailment in March, coupled with equipment and locomotive failures, the company says stock at the mines increased by 400 000 t to 6.9-million tonnes, compared with 6.5-million tonnes as at December 31, 2023.

At the Saldanha Bay port, in the Western Cape, Transnet’s performance was primarily impacted on by stacker reclaimer reliability challenges, as well as adverse weather conditions.

This resulted in stock levels at the port doubling to 1.2-million tonnes, compared with 600 000 t as at December 31, 2023.

Consequently, total finished stock increased by 1.4-million tonnes to 8.5-million tonnes.

Kumba, as part of the Ore User's Forum, says it continues to support Transnet's logistics restoration programme. This included equipment maintenance on the railway line and at the port in the second quarter.

During this time, higher levels of stock at the port, combined with increased direct loading and additional loading arranged at the multipurpose terminal, are expected to largely mitigate the impact of the maintenance and repairs shutdown.

HEALTH AND SAFETY

Meanwhile, Kumba reports that it has achieved fatality-free production of more than seven years at Sishen and one year at Kolomela, with an improved total recordable injury frequency rate (TRIFR) of 0.48, relative to the first quarter 2023 rate of 1.27.

“Safety is our highest priority and our TRIFR of 0.48 relative to the first quarter 2023 rate of 1.27 demonstrates the progress we are making. This was underpinned by an ongoing focus on eliminating high-energy, high-risk incidents through critical controls, along with the management of practices and processes that enable a safe working environment,” says Zikalala.

The company says its commitment to improving safety performance is supported by the continued implementation of its safety and health improvement programmes.

“These are focused on safeguarding our people and contractors by maintaining operational safety and stability as we reconfigure our business. We continued to invest in safety leadership and training in the first quarter, as well as eliminating high-energy and high-risk incidents.

“This was driven by an ongoing focus on leading indicators, improved compliance in terms of critical controls and the management of practices and processes that enable a safe working environment,” the company says.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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