Kumba Iron Ore CE Themba Mkhwanazi
JOHANNESBURG (miningweekly.com) – Iron-ore mining company Kumba Iron Ore said on Thursday that it was targeting a cost saving of R325-million and deferral of R1-billion of non-critical capital expenditure (capex) as a measure of prudence in the face of broad-based economic uncertainty across the world’s markets.
Mining Weekly can report that the cash preservation measures of the JSE-listed Anglo American company will add to its liquidity position, which remains at levels similar to those at the end of last year.
Kumba CE Themba Mkhwanazi expressed full commitment to South Africa’s efforts to combat the Covid-19 pandemic and had scaled down its operations to ensure physical distancing, issuing personal protective gear and providing rigorous health screening, along with continuous supply of essential services to local communities.
Production and sales guidance has been updated to 37-million to 39-million tonnes and 38-million to 40-million tonnes respectively to reflect the anticipated impact of the 35-day lockdown.
First-quarter production in the three months to March 31 had decreased by 1% to 9.4-million tonnes compared with the corresponding period last year and sales of 10.5-million tonnes were 3% below the same period, driven by a 51% lower domestic offtake.
Operations were disrupted by unfavourable weather conditions resulting in safety-related stoppages, planned maintenance on the key shovel fleet at Sishen and reliability issues with the truck fleet at Kolomela.
Waste stripping at Sishen reduced by 9% to 37.1-million tonnes and only increased by 2% to 13-million tonnes at Kolomela.
With total sales ahead of total production, finished stock was drawn down resulting in total finished stock levels reducing to 5.5-million tonnes.
The company said that capex deferrals had been carefully considered to ensure long-term asset value was protected. As a result, the Sishen ultrahigh-density medium separation and Kapstevel South feasibility studies remained on track for completion during the second half of this year.