One of the trading updates that hit the markets recently was from Kumba Iron Ore, with HEPS expected to be lower by some 12%-19%. This suggests that it is probably producing more iron ore, albeit at a lower USD price but helped by a weaker rand-dollar exchange rate. In short, the update was better than I expected. Taking the middle of the range and their recent dividend cover of 1.2 times, suggests a dividend of around 1 700c for the first half of the year. Take another 15% fall in earnings for the second half compared to last year and we should see another 1 700c dividend at the same cover ratio. This leaves the miner with 3 400c for the year and a forward dividend yield of around 10%. That remains a very chunky yield. The argument for Kumba has been that while iron ore prices are falling, the company is a very lowcost producer that can still pay great dividends. The evidence seems to support this idea.