JSE-listed iron-ore miner Kumba Iron Ore increased its production by 9% in 2021, with 40.9-million tonnes mined as volumes recovered following the Covid-19 impacts of 2020, and plant reliability improved.

For the fourth quarter of 2021, the miner produced 9.7-million tonnes. 

Production at the Sishen mine decreased to 6.5-million tonnes for the quarter, compared with 6.6-million tonnes produced in the fourth quarter of 2020.

The Kolomela mine recorded an increase in production, from 3.1-million tonnes in the fourth quarter of 2020, to 3.2-million tonnes in the quarter under review.

For the year as a whole, the Sishen mine’s production increased by 9% year-on-year to 28-million tonnes, while the Kolomela mine’s production increased by 8% to 12.8-million tonnes.

In terms of sales, Kumba sold 40.3-million tonnes of iron-ore in 2021, the same as in 2020.

Sales for the fourth quarter were 3% higher year-on-year at 10.7-million tonnes – all of which went to the export market.

This increase includes additional shipments resulting from vessels brought forward, as well as improved equipment reliability and throughput at the Saldanha port, following increased engagements between industry and State-owned rail operator Transnet to address infrastructure maintenance and capacity constraints.

Kumba expects its headline earnings for the 2021 full-year to be between R31.26-billion and R34.59-billion and its headline earnings per share (HEPS) to be between R97.43 and R107.80 – an increase of between 37% and 52% from that achieved in 2020.

For comparison, Kumba’s reported headline earnings and HEPS for 2020 were R22.79-billion and R71.07, respectively.

Basic earnings in 2021 are expected to be between R31.27-billion and R34.59-billion, while basic earnings per share (EPS) are expected to be between R97.45 and R107.82 – an increase of between 37% and 52%.

For comparison, Kumba’s reported basic earnings and EPS for 2020 were R22.77-billion and R71.03, respectively.

The increase in earnings in 2021 is largely attributable to the higher average realised free-on-board export ore price, partly offset by a stronger rand:dollar exchange rate, relative to 2020.

“Thanks to the hard work and commitment from our workforce, we have achieved production of 40.9-million tonnes and sales of 40.3-million tonnes – above our previous guidance of 40.5-million tonnes and 39.5-million tonnes, respectively,” says Kumba CEO Mpumi Zikalala.

In addition, she says the company’s strong safety performance in 2021 means it has achieved more than five years of fatality-free production.

“Our focus on product quality and development of markets beyond China contributed to an average realised price of $161 per wet metric tonne (wmt), 18% above the benchmark price of $136/wmt,” says Zikalala.

While market uncertainty may persist, she says Kumba’s premium-quality products and value-focused strategy ensure the company is playing its role in the global steel industry’s transition to a cleaner and more sustainable future.

Meanwhile, more than 75% of Kumba’s workforce is fully vaccinated against Covid-19, while a booster programme is currently being rolled out to further protect its workforce against the pandemic.

As a result, Kumba continues to see reduced operational disruption.

Further, Kumba continues to actively encourage those who have not yet been vaccinated to take the earliest opportunity to do so and protect themselves and those around them.