Kumba Iron Ore - 2019 Total Sales Guidance Update and Anglo American Bulks Seminar and Site Visit
12 November, 2019
2019 Total Sales Guidance Update
Shareholders are referred to ArcelorMittal SA Limited’s (“AMSA”) announcement on 11 November 2019, titled: “Conclusion of the first phase of the strategic asset footprint review and further information on the company’s section 189 process.” In particular, the statement that: “Following due deliberation and consideration, the decision has been made to undertake an orderly and commercial wind-down of steel operations at Saldanha Works (“Saldanha”), ultimately placing the operation on care and maintenance.”
Following AMSA’s decision to wind down its steel operations at Saldanha, Kumba has reduced the 2019 total sales guidance to 41.5-42.5Mt from 42-43Mt. The production guidance for the full year 2019 is unchanged at 42-43Mt.
Kumba will continue to assess the effect of AMSA’s strategic asset footprint review on domestic sales and will update the market in due course. Importantly, export sales contribute 94% towards the company’s total sales and Kumba’s high-quality iron ore products are well-positioned in global markets with ongoing customer demand and a stable export order book.
Anglo American Bulks Seminar and Site Visit
Shareholders are further advised that Anglo American plc (“Anglo American”) is this week hosting an analyst and investor visit to Queensland, Australia to provide a detailed update on Anglo American’s Bulks businesses. The update will cover Anglo American’s world-class steelmaking ingredient businesses of Kumba Iron Ore, Minas-Rio, and the Metallurgical Coal operations in Australia, as well as its nickel and export thermal coal operations.
Themba Mkhwanazi, CEO of Kumba, said: “Kumba is on an exciting journey of transformation to create value through quality and efficiency. We are unlocking value from our world class assets, by leveraging our capabilities and technologies to ensure that Kumba provides sustainable returns through the cycle.”
Kumba’s presentation includes production guidance for 2019-2022 and unit cost guidance for 2019-2020, as well as the long-term potential, as shown below. The guidance for 2020 onwards does not include the impact of the above-mentioned announcement from AMSA.
Total production (Mt) guidance
2019F: 42-43
2020F: 43-44
2021F: 43-44
2022F: 43-44
Long-term potential: ~45
Unit cost (FOB$/t) guidance
2019F: ~33
2020F: ~36
Long-term potential: ~33
The presentation will be available on the Kumba and Anglo American plc websites: https://www.angloamericankumba.com/investors/investor-presentations/2019.aspx and https://www.angloamerican.com/investors/investor-presentations/2019
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
12 November 2019
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)