Wrap Text
Kumba production and sales report for the quarter ended 30 September 2020
Kumba Iron Ore Limited
A member of the Anglo American plc group
(Incorporated in the Republic of South Africa)
(Registration number 2005/015852/06)
Share code: KIO
ISIN: ZAE000085346
(“Kumba” or “the Company”)
Kumba production and sales report for the quarter ended 30 September 2020
“In the third quarter of 2020, we continued to see good operational performance, demonstrating business resilience
and a capacity to successfully adapt to working under Covid-19 conditions”, said Themba Mkhwanazi, Kumba’s Chief
Executive. “Our first priority is always the health, safety and well-being of our workforce and local communities while
ensuring that we maintain planned throughput throughout the value chain. The business continues to perform well in
a favourable iron ore price environment and we are on track to deliver full year guidance.”
Overview:
• Safety performance and our WeCare Covid-19 programme continues to be a priority.
• Total production of 9.5Mt (Q3 2019: 10.5Mt), in line with plan.
• Total sales of 10.9Mt (Q3 2019:10.2Mt) was driven by a full recovery in Transnet’s logistical capacity.
• Finished stock levels of 5.3Mt reflect a drawdown from 6.2Mt at 30 June 2020.
• Average realised FOB export iron ore price of US$117/dmt (2020 Year to date: US$103/dmt).
Sales summary
000 tonnes Quarter ended % change Quarter % change
ended
Q3 Q3 vs Q3 Q2 vs Q2
2020 2019 2019 2020 2020
Total 10,908 10,154 7 8,070 35
- Export sales 10,908 9,670 13 8,070 35
- Domestic sales 0 484 (100) 0 0
Production summary
000 tonnes Quarter ended % change Quarter % change
ended
Q3 Q3 vs Q3 Q2 vs Q2
2020 2019 2019 2020 2020
Total 9,532 10,521 (9) 8,475 12
- Sishen Mine 6,511 7,153 (9) 5,782 13
- Kolomela Mine 3,021 3,368 (10) 2,693 12
Safety and health
Kumba continues to prioritise the health, safety and well-being of our workforce and our communities. In these
challenging times, our fatality free record of over four years is testament to our safety culture. This is underpinned by
critical control risk monitoring, risk reduction initiatives and our elimination of fatalities programme.
Our WeCare Covid-19 response programme and protocols are embedded across the operations and have become
part of our day-to-day procedures. We continue to provide essential services, including water, food parcels and
emergency medical support while contributing to the livelihoods and health of our host communities.
Mining and production
We continue to focus on balancing our value chain thereby ensuring that iron ore deliveries meet market demand.
Kumba delivered a solid mining performance for the period. While total waste stripping of 58.8Mt is 16% below the
69.6Mt achieved in Q3 2019 (“the comparative period”), it is ahead of both the first and the Covid-19 impacted second
quarter of this year of 50.1Mt and 44.5Mt, respectively. Overall, steady progress continues to be made with our
scheduled maintenance programme, and equipment performance has improved as a result.
Waste stripping for the period at Sishen increased by 37% to 42.9Mt (Q2 2020: 31.3Mt), driven by primary equipment
availability and a steady increase in direct operating hours. At Kolomela, waste stripping increased by 20% to 15.9
Mt (Q2 2020: 13.2Mt) following the optimisation of hauling routes, resulting in improved truck utilisation.
Production is managed carefully in conjunction with finished stock levels to optimise our value chain. Taking into
account the higher levels of finished stock in Q2 2020 due to Covid-19 related logistical constraints, and the annual
rail and port maintenance taking place in Q4 2020, we drew down on stock levels during the period. Total finished
stock reduced by 0.9Mt to 5.3Mt from 6.2Mt at 30 June 2020. Total production decreased by 1Mt or 9% to 9.5Mt
(Q3 2019: 10.5Mt) and increased by 12% relative to Q2 2020.
Logistics, sales and the market environment
The successful outcome of Covid-19 measures and initiatives to increase workforce capacity at Transnet resulted in
the iron ore export channel haulage rates returning to pre-Covid levels. Consequently, there was a significant
improvement in throughput at Saldanha Port.
Export sales increased by 13% to 10.9Mt (Q3 2019: 9.7Mt) and by 35% relative to Q2 2020. In line with expectations,
there was no off-take from ArcelorMittal South Africa during the period.
China’s strong economic rebound continued to support a favourable iron ore market, with the Platts 62 index CFR
price averaging US$119/dmt for the period. This compares, against US$101/dmt for the year-to-date (“YTD”). Kumba
achieved an average realised FOB export iron ore price of US$117/dmt for the period (2020 YTD: US$103/dmt),
benefiting from the recovery in markets outside of China and a lump:fine ratio of 71:29 (2020 YTD: 67:33). The product
quality averaged 64.2% Fe for the period (2020 YTD: 64.3%).
Full year 2020 guidance
Kumba is on track to meet its full year 2020 guidance announced at our interim results presentation on 28 July 2020.
Our guidance takes into account Transnet’s annual maintenance during October and is as follows:
• Total sales of 38 - 40 Mt
• Total production of 37 - 39 Mt
- Sishen: ~27 Mt
- Kolomela: ~11 Mt
• Waste:
- Sishen: 145 - 160 Mt
- Kolomela: 45 - 55 Mt
Production and sales volumes referred to for the period are 100% of Sishen Iron Ore Company Proprietary Limited
(“SIOC”), and attributable to shareholders of Kumba as well as to the non-controlling interests in SIOC.
This announcement contains forward-looking statements which are based on the Company’s current beliefs and
expectations about future events. The operational and financial forecasts provided in this announcement are
estimates and have not been reviewed and reported on by the Company’s external auditors.
Centurion
22 October 2020
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
For further information, please contact:
Company Secretary
Fazila Patel
fazila.patel@angloamerican.com
Tel: +27 12 683 7060
Mobile: +27 83 297 2293
Investors Media
Penny Himlok Sinah Phochana
penny.himlok@angloamerican.com sinah.phochana@angloamerican.com
Tel: +27 12 622 8324 Tel: +27 12 683 7019
Mobile: +27 82 781 1888 Mobile: +27 76 066 0655
Notes to editors:
Kumba Iron Ore Limited, a member of the Anglo American plc group, is a leading value-adding supplier of high quality
iron ore to the global steel industry. Kumba produces iron ore in South Africa at Sishen and Kolomela mines in the
Northern Cape Province. Kumba exports iron ore to customers in a range of geographical locations around the globe
including China, Japan, Korea and a number of countries in Europe and the Middle East.
www.angloamericankumba.com
Anglo American is a leading global mining company and our products are the essential ingredients in almost every
aspect of modern life. Our portfolio of world-class competitive operations, development projects and undeveloped
resources, provides many of the metals and minerals that enable a cleaner, greener, more sustainable world and
that meet the fast growing consumer-driven demands of developed and maturing economies. With our people at the
heart of our business, we use innovative practices and the latest technologies to mine, process, move and market
our products to our customers – and to discover new resources – safely and sustainably.
As a responsible producer of diamonds (through De Beers), copper, platinum group metals, the steelmaking
ingredients of iron ore and metallurgical coal, and nickel – with crop nutrients in development and thermal coal
operations planned for divestment – we are committed to being carbon neutral across our operations by 2040. We
work together with our business partners and diverse stakeholders to unlock sustainable value from precious natural
resources for the benefit of the communities and countries in which we operate, for society as a whole, and for our
shareholders. Anglo American is re-imagining mining to improve people’s lives.
www.angloamerican.com
Date: 22-10-2020 08:00:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
