Archive - 2009

FIRST QUARTER OVERVIEW

• 14% increase in production year on year as production from the Jig plant reached 2.0 Mt for the quarter
• Export sales volumes of 6.0 Mt increased 3.5% from 5.8 Mt sold during the fourth quarter of 2008
• Domestic sales down by 0.8 Mt year on year and against contractual volumes
• Finished product stockpile levels at Sishen Mine, Saldanha and Qingdao ports have increased by 1.7 Mt – from 5.8 Mt at 31 December 2008 to 7.5 Mt at 31 March 2009.

Results for the six months ending 30 June 2009 will be announced on 23 July 2009.

PRODUCTION REPORT

In the first quarter of 2009 total production increased 14% from a year earlier to 9.3 Mt (million metric tonnes), which is 2% or 0.2 Mt, lower than production in the fourth quarter of 2008. Sishen Mine’s production increased by 1.2 Mt to 8.7 Mt for the quarter ended 31 March 2009. The 2.0 Mt produced by the jig plant accounted for 23% of Sishen Mine’s production. The ramp up of production from the jig plant has seen a healthy increase during the quarter, reaching 806Kt in March, equivalent to an annualised rate of 9.6Mtpa. Kumba remains on schedule to achieve an annualised rate of 13Mtpa from the Jig plant during the fourth quarter of 2009. Although the yield from the DMS plant at Sishen Mine has improved during the quarter to 84% production was negatively impacted by the availability of feedstock. Production from Thabazimbi Mine was stable during the quarter.

The challenges faced by the global economy that led to unprecedented volatility and rapid decreases in commodity prices and iron ore sales volumes traded have continued into the first quarter of 2009. Kumba has targeted customers in China in an attempt to redirect any lost export contract volumes from Europe and Japan. Export sales volumes into China have increase by 45% during the first quarter of 2009 from a year earlier as Kumba increased production from the Jig plant and redirected certain export sales volumes.

Finished product stockpiles at Sishen Mine, Saldanha and Qingdao ports have increased to 7.5 Mt as at 31 March 2009, an increase of 1.7 Mt from the 5.8 Mt stockpiled at 31 December 2008, in line with expected sales. Of this increase, 0.6 Mt is due to domestic iron ore sales from Sishen Mine falling below contractual volumes and 1.1 Mt is due to difficult export market conditions. The stockpiles are currently 5.2 Mt in excess of base operating levels. The decrease in domestic demand has resulted in a build up of finished product stock now occurring at Thabazimbi Mine – with stockpiles growing 0.2 Mt during the quarter to 0.7 Mt as at 31 March 2009.

Production during the first quarter was in line with plan and Kumba remains committed to increase production by some 10% during 2009 should market conditions permit. Management continues to monitor closely stock levels and will consider cut-backs in production should the extent to which demand cuts from Europe and Japan escalate and are not absorbed by China, domestic demand decreases further and physical stockpile capacity is exceeded.