Kumba says Sishen strike cost 2.2Mt so far

25th October 2012 By: Mariaan Webb - Creamer Media Deputy Editor Online

JOHANNESBURG (miningweekly.com) – South African miner Kumba Iron Ore has so far lost 2.2-million tons of finished product as a result of a two-week strike at its Sishen mine, in the Northern Cape, this month.

Despite police removing the illegal strikers last week, allowing Kumba to regain possession of its mining equipment and resuming production, the Anglo American subsidiary said on Thursday it was battling to ramp up production, as attendance rates in the mining area remained below 50%.

Incidences of intimidation were being reported, Kumba said in its production and sales report for the three months ended September.

Meanwhile, the miner increased its third-quarter production by 14% to a record 12.5-million tons driven by the faster-than-planned ramp-up of its new Kolomela mine, also in the Northern Cape.

Kolomela produced 2.5-million tons in the third quarter, which was a 44% increase on second-quarter performance. The new mine is expected to produce seven-million tons during the ramp-up this year, before reaching design capacity of nine-million tons in 2013.

The Sishen mine’s production increased by 300 000 t, or 3% quarter-on-quarter, to 9.8-million tons in the three months ended September. This was, however, 7% less than its production in the September 2011 quarter, as mining feedstock and quality impacted on plant throughput.

The company reported export sales of ten-million tons for the quarter, which was a 9% year-on-year increase, but a 6% decrease on the second quarter’s export sales.

“Destocking by steel mills during the beginning of the quarter saw a decline in the demand for seaborne iron-ore and consequently weaker index iron-ore prices. The market has since recovered somewhat, with steel mills returning to the market, which is reflected in the increase in index iron-ore prices,” Kumba stated.

Finished product stockpile levels amounted to 5.2-million tons at the Sishen and Kolomela mines and the Saldanha and Qingdoa ports.

Domestic sales dropped 400 000 t to 1.2-million tons, owing to reduced offtake by ArcelorMittal South Africa.