Activity at Kumba Iron Ore’s Kolomela operation.
JOHANNESBURG (miningweekly.com) – In its sixth year of fatality-free production, Anglo American group's iron-ore mining company Kumba Iron Ore averaged prices considerably above the global benchmark in the six months to June 30, when it also increased export sales.
The average realised free-on-board wet metric tonne (wmt) export price for the Johannesburg Stock Exchange-listed company’s ore was a 15%-higher $136/wmt – or $138 per dry metric tonne (dmt).
Kumba’s 2%-higher first-half export sales of 19.7-million tonnes reflected a 7%-higher second-quarter boost.
A challenged first quarter was the main cause of total half-year production falling by 13% to 17.8-million tonnes.
Kumba's operational performance is improving in the face of operational and mining cost inflation headwinds.
Sishen has stabilised production following a tough, heavy-rainfall start to the year and a turnaround in performance throughout the rest of the year is expected at Kolomela, which experienced second-quarter safety intervention and equipment reliability challenges.
“We reiterate our full-year production and sales guidance of 38 to 40 wet metric tonnes and increase Kolomela's unit cost guidance to R420 to R440 per tonne, while maintaining Sishen's unit cost guidance of R500 to R530 per tonne,” Kumba CE Mpumi Zikalala stated in a release to Mining Weekly.
"The first half performance has demonstrated the need for us to continue to focus on operational excellence to enhance productivity and cost efficiency, and ensure that we secure the full value of our products in the market to deliver sustainable value to our stakeholders," Zikalala added.
The iron-ore market also came under pressure in the second quarter, driven by the extended Covid-19 lockdown in China and weaker global economic prospects as the inflationary effects of the pandemic were compounded by the conflict in Ukraine.
Within that context, Kumba’s average prices were well above the $118/wmt, or $120/dmt, benchmark prices.