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2016 Annual Results

Kumba's results for the twelve months ended 31 December 2016

14 Feb 2017

Kumba announces its results for the year ended 31 December 2016

Themba Mkhwanazi, CEO of Kumba Iron Ore, said, “It has been a successful year for Kumba, despite challenging and volatile iron ore markets. We acted quickly to restructure the business, reset the cost base and stabilise operating performance. In addition, we were awarded the residual Sishen mining right and settled our tax matter with SARS. We can now draw a line under these issues and focus on the business.

“The rise in prices and realising full value for Kumba’s premium product, together with our cost reductions, resulted in improved margins and strong cash flow generation. With total production of 41.5Mt, both Sishen and Kolomela exceeded operational guidance following a successful restructuring. Controllable costs were reduced by 34% lowering our average cash breakeven price to $29/tonne. Strong demand for our high quality product combined with excellent marketing allowed us to realise an impressive average price of $64 FOB - up 18% on last year.”

“This year’s excellent performance has enabled us to build a strong balance sheet and a net cash position of R6.2bn. This will support a conservative capital structure and place us, as a single commodity miner, in a strong position to deal with potential further market volatility.”

KEY FEATURES

-  Regrettably, two fatalities
-  Production of 41.5Mt, Sishen and Kolomela exceeding targets
-  Substantial 34% reduction in controllable costs
-  HEPS of R27.30 per share, up 131%
-  Average cash breakeven price reduced to $29/tonne on the back of an average realised price of $64/tonne
-  Balance sheet strengthened to net cash position of R6.2bn
-  Sishen 21.4% residual mining right awarded and settlement agreement reached with SARS

View full PDF of this press release (835KB, opens in a new window)

For further information, please contact:

Media Investors
Yvonne Mfolo Nerina Bodasing
yvonne.mfolo2@angloamerican.com Nerina.bodasing@angloamerican.com
Tel: +27 12 683 7067 Tel: +27 12 622 8324
Mobile: +27 83 469 4566 Mobile: +27 82 940 7505

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 mine and its Kolomela mine in the Northern Cape Province, and at Thabazimbi mine in the Limpopo 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

Notes to editors:

Anglo American is a globally diversified mining business. Our portfolio of world-class competitive mining operations and undeveloped resources provides the raw materials to meet the growing consumer-driven demands of the world’s developed and maturing economies. Our people are at the heart of our business. It is our people who use the latest technologies to find new resources, plan and build our mines and who mine, process and move and market our products – from diamonds (through De Beers) to platinum and other precious metals and copper – to our customers around the world.

As a responsible miner, we are the custodians of those precious resources. We work together with our key partners and stakeholders to unlock the long-term value that those resources represent for our shareholders, but also for the communities and countries in which we operate – creating sustainable value and making a real difference.

www.angloamerican.com

Real Mining. Real People. Real Difference.
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Kumba Iron Ore