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Kumba performance shines

A worker at
Kumba Iron Ore
Johannesburg, South Africa — MININGREVIEW.COM —- 09 July 2010 – Kumba Iron Ore  “’ a unit of global miner Anglo American “’ says that for the six months ended 30 June 2010, its earnings and headline earnings are likely to be between R6.1billion and R6.6 billion, with headline earnings per share (HEPS) and earnings per share (EPS) being between 1 900c and 2 055c.

A company statement released here went on to say that headline earnings and basic earnings reported for the financial results for the six months ended 30 June 2009, had been R3.422billion and R3.435billion respectively, while HEPS and EPS reported for the comparative period were 1 076c and 1 073c respectively.

The company said the sharp increase in earnings was largely attributable to an increase in export iron ore prices and a 10% increase in export sales volumes in the period. From 1 March 2010 Sishen Iron Ore Company had invoiced ArcelorMittal SA at market prices.

ArcelorMittal has paid only cost +3% on purchases of 1.452Mt of iron ore from Sishen Mine. In determining earnings for the period Kumba has accounted for revenue at cost +3% to ArcelorMittal, in the absence of agreement on an interim price.

Export iron ore index prices traded above contract export prices during the six months ended 30 June 2010 and peaked above US$200/tonne. Contract export iron ore prices for the first quarter of 2010 (January to March) were at 2009/2010 iron year prices, and for the second quarter of 2010 (April to June) were settled at increases in excess of 90% of contract prices achieved for the first quarter of 2010.

Kumba is due to release its results on 22 July 2010.