Kumba earnings up at least 20%

Kumba Iron Ore’s full-year profit has grown, driven by higher iron-ore prices as well as the weakening of the rand against the dollar, the company says.

Kumba, which is SA’s largest iron-ore miner and owner of two opencast mines in the Northern Cape, will release its full-year results on February 14.

It told shareholders on Friday its earnings and headline earnings would be at least 20% higher than the R469m and R3.79bn it posted at the end of last year.

This meant an increase of at least R94m and R758m for basic earnings and headline earnings respectively, the Anglo American subsidiary said.

Headline earnings per share and earnings per share would be R2.36 and 30c higher than the R11.82 and R1.46 recorded last year.

Kumba has undergone an extensive restructuring at its flagship Sishen mine as it changed its mining plans to move less waste rock to expose fresh iron ore and cut costs. The company set itself a target of mining and delivering ore at below $40/tonne.

The price for ore with a 62% iron content delivered to China is around $72/tonne.

Part of Kumba’s production includes a lumpy ore, which fetches a premium price.

Kumba is one of the businesses Anglo has said it no longer wants along with its coal and manganese assets in SA as it narrows its focus to three key commodities — platinum, copper and diamonds.

Anglo owns 85% of De Beers, the largest producer of rough diamonds by value, and 80% of Anglo American Platinum, the largest producer of the metal.

Anglo CEO Mark Cutifani said the company could be one of the world’s top three copper producers with its assets and resources.

Anglo appears to have pulled back on its strategy of quickly disposing of bulk commodities in nickel, coal and metallurgical coal as prices for these products have improved during the course of 2016.