Kumba Iron Ore Limited production and sales report for the quarter ended 31 December 2012
25 January, 2013
Kumba Iron Ore Limited ("Kumba") today released its production and sales report for the quarter ended 31 December 2012. Throughout this report, production and sales volumes referred to are 100% of Sishen Iron Ore Company (Pty) Limited (SIOC), and attributable to both shareholders of Kumba as well as the non-controlling interests in SIOC.
Overview:
- An exceptional performance from Kolomela mine, with 2.8 Mt (million metric tonnes) produced during the quarter.
- Total production of 9.0 Mt represented decreases of 19% year on year and 28% quarter on quarter mainly due to the impact of an illegal strike at Sishen mine during the quarter.
- Total export sales volumes were 9.0 Mt for the quarter, a decrease of 6% year on year and 10% quarter on quarter.
| Production summary | |||||
| ‘000 tonnes | Quarter ended |
% change |
Quarter ended |
% change | |
| Dec 2012 |
Dec 2011 |
Dec Q12 vs Dec Q11 |
Sep 2012 |
Dec Q12 vs Sep Q12 |
|
| Total | 9,013 | 11,160 | (19%) | 12,497 | (28%) |
| - Sishen Mine | 6,038 | 9,802 | (38%) | 9,756 | (38%) |
| DMS plant | 3,976 | 6,091 | (35%) | 6,610 | (40%) |
| Jig plant | 2,062 | 3,711 | (44%) | 3,146 | (34%) |
| - Kolomela mine | 2,793 | 1,167 | 139% | 2,500 | 12% |
| - Thabazimbi Mine | 182 | 191 | (5%) | 241 | (24%) |
| Sales summary | |||||
| ‘000 tonnes | Quarter ended |
% change |
Quarter ended |
% change | |
| Dec 2012 |
Dec 2011 |
Dec Q12 vs Dec Q11 |
Sep 2012 |
Dec Q12 vs Sep Q12 |
|
| Total | 9,813 | 10,842 | (9%) | 11,122 | (12%) |
| - Export sales | 8,980 | 9,600 | (6%) | 9,959 | (10%) |
| - Domestic sales | 833 | 1,242 | (33%) | 1,163 | (28%) |
| Sishen mine | 581 | 1,211 | (52%) | 854 | (32%) |
| Thabazimbi mine | 252 | 31 | 713% | 309 | (18%) |
Sishen mine’s production decreased by 38% year on year and quarter on quarter to 6.0 Mt, owing principally to the impact of an illegal strike during the fourth quarter, and low attendance in the mining section subsequent to the strike action. As at 31 December 2012, around 5 Mt of production was lost at Sishen mine as a result of the prolonged impact on the production ramp up following the illegal strike. Production rates continue to improve.
The faster than planned ramp up of Kolomela mine contributed to offsetting the negative impact on production at Sishen mine. Kolomela mine exceeded monthly design capacity since July 2012 and reached record levels in the fourth quarter. The mine, which produced 2.8 Mt for the quarter, is on track to produce at design capacity of 9 Mt per annum in 2013.
Production at Thabazimbi mine decreased by 5% year on year and by 24% quarter on quarter to 0.2 Mt, mainly due to pit complexities as the mine nears the end of its life.
Total export sales volumes decreased by 6% year on year and by 10% quarter on quarter to 9.0 Mt, impacted by the illegal strike at Sishen mine, but partially supplemented by production from Kolomela mine and sales from finished product stockpiles. Destocking by steel mills during the beginning of the quarter saw a decline in the demand for seaborne iron ore and consequently weaker index iron ore prices. The market has since recovered with steel mills returning to the market, which is reflected in the increase in index iron ore prices.
Domestic sales volumes decreased by 33% year on year and by 28% quarter on quarter to 0.8 Mt due to reduced off-take by ArcelorMittal South Africa Limited.
Total finished product stockpile levels amounted to 3.7 Mt as at 31 December 2012.