Tak­ing it easy

Finweek English Edition - - MARKETPLACE -

The Kumba Iron Ore up­date showed pro­duc­tion lev­els drop­ping by 27% rel­a­tive to the cor­re­spond­ing quar­ter last year. This is in line with the com­pany look­ing to mine the eas­ier and more prof­itable sec­tions of its mine. When, or maybe if, iron ore prices move higher and stay there, Kumba can start min­ing the less prof­itable ar­eas again. But in the cur­rent tough en­vi­ron­ment char­ac­terised by low prices, it makes per­fect sense to mine the more prof­itable sec­tions that are eas­ier to ac­cess. That said, the moves in the Kumba share price have been wild with the share up five times since the Jan­uary lows. But I think this is per­haps more to do with the planned exit by par­ent An­glo Amer­i­can rather than im­proved mar­gins or iron ore prices.

Op­er­a­tions at Kumba’s Sishen mine in the North­ern Cape.

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