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Kumba delivered another year of resilient performance. We successfully completed our business reconfiguration as we align our production with the logistics performance, ensured exceptional levels of operational safety, realised significant cost savings of R4.4 billion and continued to deliver on our three strategic objectives: unlocking the full potential of our core business, positioning for a sustainable future, and creating enduring stakeholder value. This strong performance was achieved in the context of a sharp decrease in iron ore price and continuing profound challenges with the Transnet Ore Export Corridor (OEC). During 2024, in response to the significant challenges with Transnet’s rail and port performance, we took the decision to reconfigure the business to align production more closely with the existing and anticipated logistics capacity. This year, as we integrated the reset of our mine plans across the business, we maintained our primary focus on safety as our highest priority, while optimising our mine plans in line with logistics performance.
To address these challenges, we have been working closely with Transnet, through the Ore Users Forum and our participation on the National Logistics Crisis Committee. A key focus has been to convert the outcomes of the recent independent technical assessment into a multi-year Ore Corridor Restoration programme to restore the OEC’s capacity. We have been encouraged by Transnet’s Network Statement, issued in December 2024, and we are continuing to engage actively with Transnet and government to explore opportunities for a private sector participation concessionaire model. While there are positive signs of progress, significant work remains to deliver a high-performance rail and port system in the country.
Attributable free cash flow
Total cash dividend per share
Return on capital employed
Outstanding safety and operational performance – achieved amid some unsettling change associated with our business reconfiguration – is testament to the quality and resilience of Kumba’s people, who have been exceptional in demonstrating their commitment. It is pleasing to report that as a result of our ongoing safety interventions, we secured our lowest ever total recordable injury frequency rate of 0.76, as well as a marked reduction in total lost time injuries and high potential incidents, with Sishen achieving nine years of fatality-free performance.
In line with our business reconfiguration plan, total tonnes mined this year decreased by 27% to 197.7 Mt, while total waste was down 28% to 155.7 Mt. Total production for the year was in line with 2024 at
35.7 Mt; production at Sishen increased 1% to 25.7 Mt and reduced at Kolomela by 2% to10.1 Mt. Production and sales were within guidance of 35 to 37 Mt and 36 to 38 Mt, respectively. Consistent with our strategy of aligning production with Transnet’s logistics performance, production of 35.7 Mt matched ore railed to Saldanha Bay port of
35.6 Mt, while sales of 36.3 Mt reflect the impact of logistics capacity constraints on finished stock levels at port.
The reconfiguration of our operations, coupled with our focus on operational excellence, unlocked R4.4 billion of value through cost savings, exceeding our full-year 2024 target of R2.5 to 3.0 billion. This contributed to our operating expenses increasing by just 2%, well below the 4.6% increase in the consumer price index.
Our C1 unit cost improved by 5% to US$39/wet metric tonnes (wmt). These cost reductions have been essential in ensuring our financial resilience, particularly given the sharp decrease in iron ore prices, which were at US$100/tonne by the end of December 2024, down from a high US$143/tonne in January 2024.
As a result of the fall in iron ore prices, Kumba’s average realised price decreased by 21% to US$92/wmt. The combined premium achieved for Fe, lump and marketing was US$11/wmt, which was partly offset by an unfavourable timing effect of declining prices on provisionally priced sales volumes. This led to a total product premium of US$3/wmt, underpinning a 3% gain in Kumba’s realised price, ahead of the benchmark free-on-board export price of US$89/wmt.
Our financial performance for the year reflects our decision to reconfigure our business to a lower production profile, as well as the impact of the lower iron ore prices, resulting in our adjusted earnings before interest, taxes depreciation and amortisation (EBITDA) decreasing 39% to R28.1 billion and an adjusted EBITDA margin of 41%. The significant progress in reducing costs proved beneficial as lower sales and a stronger ZAR/US$ exchange rate further tested our financial resilience. For the full year, our net cash position of
R14.7 billion increased by 11%, supporting the Board’s decision to declare a total cash dividend of R38.67, representing a payout ratio of 100% of headline earnings.
