Kumba Iron Ore Limited production and sales report for the third quarter ended 30 September 2019
22 October, 2019
Kumba’s first priority is the safety of its employees and the company continues its focus on further improving its safety and sustainability performance. Production is on track to meet the full year 2019 guidance of 42-43Mt, while lower domestic sales volumes has resulted in the reduction of the total sales guidance to 42-43Mt from 43–44Mt. Production and sales volumes referred to in this report are 100% of Sishen Iron Ore Company Proprietary Limited (“SIOC”), and attributable to shareholders of Kumba as well as the non-controlling interests in SIOC.
Overview:
- Kumba has operated for more than three years without a fatality and continues its focus on further improving its safety and sustainability performance.
- Total sales volumes decreased by 3% to 10.2Mt, compared to Q3 2018, following a 36% decline in domestic off-take, while export sales were flat.
- Total production volumes of 10.5Mt were similar to Q3 2018 with increased production at Sishen offset by lower production at Kolomela due to the DMS upgrade.
- Lower domestic sales volumes resulted in the reduction of total sales guidance for the full year to 42-43Mt from 43–44Mt.
Sales summary | |||||
---|---|---|---|---|---|
' 000 tonnes | Quarter ended | ||||
Q3 2019 | Q3 2018 | % change vs Q3 2018 |
Quarter ended Q2 2019 |
% change vs Q2 2019 |
|
Total | 10,154 | 10,492 | (3) | 10,472 | (3) |
- Export sales | 9,670 | 9,737 | (1) | 9,756 | (1) |
- Domestic sales | 484 | 755 | (36) | 716 | (32) |
Production summary | |||||
---|---|---|---|---|---|
' 000 tonnes | Quarter ended | ||||
Q3 2019 | Q3 2018 | % change vs Q3 2018 |
Quarter ended Q2 2019 |
% change vs Q2 2019 |
|
Total | 10,521 | 10,508 | 0 | 10,544 | 0 |
- Sishen mine | 7,153 | 7,030 | 2 | 7,310 | (2) |
- Kolomela mine | 3,368 | 3,478 | (3) | 3,234 | 4 |
Total sales decreased by 3% to 10.2Mt (Q3 2018: 10.5Mt) driven by domestic sales declining by 36% to 0.5Mt (Q3 2018: 0.8Mt) due to lower off-take from ArcelorMittal South Africa, while export sales were flat at 9.7Mt. Total finished stock increased to 5.1Mt from 4.5Mt at 30 June 2019, as a result of the scheduled refurbishment of the second ship loader at Saldanha Port.
Total production volumes were similar to Q3 2018 at 10.5Mt with the 2% increase in Sishen to 7.2Mt (Q3 2018: 7Mt) offset by lower volumes from Kolomela of 3.4Mt (Q3 2019: 3.5Mt). Relative to Q2 2019, production at Sishen decreased by 2% due to unscheduled maintenance of the dense media separation (DMS) plant. However, this was largely mitigated by a 7% increase in production from the JIG plant.
Kolomela’s production decreased to 3.4Mt (Q3 2019: 3.5Mt), as expected, reflecting the impact of the infrastructure upgrade on the DMS plant, which is scheduled to reopen in the fourth quarter. Compared to Q2 2019, Kolomela’s production increased by 4% following the step-up in performance of the direct shipping ore plant.
Waste stripping at Sishen increased by 18% to 53Mt (Q3 2018: 44.8Mt) and at Kolomela by 7% to 16.6Mt (Q3 2018: 16Mt), demonstrating progress on improving operating equipment efficiency.
Full year 2019 guidance
Total production remains on track to meet the full year guidance as announced in Kumba's 2019 interim results on 23 July 2019. Lower domestic sales volumes have resulted in the reduction of the total sales guidance to 42-43Mt from 43–44Mt. The 2019 full year guidance is as follows:
- Total production of 42-43Mt:
- Sishen: 29-30Mt
- Kolomela: ~13Mt
- Waste:
- Sishen: 170-180Mt
- Kolomela: 55-57Mt
- Total sales of 42-43Mt