HomeBase MetalsKumba struggling with iron ore price but still delivers on production

Kumba struggling with iron ore price but still delivers on production

Kumba’s Sishen mine produced 8.9 Mt this quarter, an increase of 3% when compared to Q1, 2014 but 4% lower than Q4, 2014

The significant weakness in iron ore prices has necessitated Kumba Iron Ore to review its business, which includes initiatives to reduce capital expenditure and lower the cost of production.

Kumba‘s Thabazimbi iron ore mine also remains under review with a decision on its future expected in the near term.

This was announced yesterday as part of the company’s production and sales report for the quarter ended 31 March 2015.

Sishen mine produced 8.9 Mt, an increase of 3% when compared to Q1, 2014 but was 4% lower than Q4, 2014. The implementation an operating model in the North mine continues to yield improved operating equipment productivity.

This operating model is now being rolled out to the pre-strip mining and heavy mining equipment maintenance (HME) areas of the mine.

Waste removal increased by 27% to 49 Mt relative to Q1, 2014. The redesign of the western pushbacks of the pit and increased vertical rate of advance, in conjunction with waste removal run rates indicate sufficient ore exposure to support our 2015 production guidance of 36 Mt.

Kolomela mine produced another solid quarterly performance in line with achieving full year guidance of 11 Mt. The mine produced 3 Mt for the quarter, an increase of 18% on Q1, 2014 and by 9% compared to Q4,2014, due largely to improved plant performance.

Production at Thabazimbi mine almost doubled from the previous quarter, but decreased by 26% compared to Q4, 2014 to 0.3 Mt. Total export sales volumes of 11.5 Mt increased by 22% relative to Q1, 2014 but decreased by 2% compared to Q4, 2014, mainly due to higher production, improved logistics performance and the utilisation of the Multi-Purpose Terminal at Saldanha port.

Domestic sales volumes increased by 1% relative to Q1, 2014 and by 59% compared to Q4, 2014 to 1.4 Mt. Total finished product stockpile levels amounted to 6.1 Mt as at 31 March 2015.

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