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Kumba’s iron-ore sales rise despite 5% production decline

Saturday, 18 February 2012 | 00:00
Kumba Iron Ore has posted a 5% decrease in annual production from its three active operations, owing to exceptional rainfall at its Sishen mine in the first quarter of 2011 and a planned slowdown of its Thabazimbi mine, which is nearing the end of its life.
The company’s newest addition, the Kolomela mine, in the Northern Cape, could not bolster production levels enough to reach the company’s targets, despite delivering five months ahead of schedule.
Sishen mine’s production decreased by 9% to 25.4-million tons owing to mining feedstock constraints and challenging wet pit conditions as a result of excessive rainfall.
In addition, Kumba CEO Chris Griffith said that absenteeism over the December period also affected production.
“After the Envision payout last year, we did observe quite a high rate of absenteeism,” he quipped at a results presentation in Sandton, Johannesburg, earlier this month, referring to the company’s R2.7-billion employee share ownership payout in November last year.
Meanwhile, waste mined at the company’s maturing Thabazimbi mine, in Limpopo, increased by 33% to 44.2-million tons as development of the last new pit progressed. Production was down by 55% to 0.9-million tons as a result of a planned decrease as the mine nears the end of its life in 2016, as well as unplanned production difficulties.
Kumba’s replacement supply operation for Thabazimbi, Project Phoenix, also in Limpopo, is currently at the feasibility stage, with first production planned for 2016.
A 2011 highlight for the company was the commissioning of its Kolomela mine, delivering five months ahead of schedule with a production of 1.5-million tons, and its first ore shipped to China and Europe in December.
The operation is on track to produce between four-million tons and five-million tons while ramping up in 2012, and nine- million tons a year from 2013.
Of the R8-billion capital expenditure set aside for Kolomela, R7-billion has been spent to date, with the remainder earmarked to finance additional housing and mining equipment, and to fund the ramping up of the mine.
Meanwhile, a record 39.1-miilion tons of ore was railed to the Saldanha port from the Sishen operation – a 7% increase from last year.
Total sales increased by 1% to 43.5-million tons, which was heavily supplemented by stockpiles, and the company achieved a record export sales volume of 37.1-million tons, despite decreased domestic sales.
Project Pipeline
Kumba’s pipeline of projects is driven by its production target of 70-million tons a year in South Africa by 2019, and feasibility studies are currently under way to deliver an additional 20-million tons a year by then.
Last year, the company announced its intention to evolve from a South Africa-focused to an Africa-focused enterprise, which aims to establish a ‘second footprint’ in Africa.
Thus far, the company has been tight- lipped on exact plans but has indicated that it has identified a broad spectrum of options in several target countries, both near-development projects and greenfield opportunities in Central and West Africa.
Meanwhile, Kumba’s 2012 plans include the ramp-up of waste mining at Sishen, which will put upward pressure on unit costs, which should be somewhat buffered by expected lower on-mine costs at Kolomela.
Export sales volumes are expected to increase by about three-million tons in 2012 as volumes from Kolomela rise.
Kumba also hopes to repeat its 2011 zero-fatality result.
Source: Mining Weekly
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