Mining giant Kumba Iron Ore yesterday maintained its full-year 2022 production guidance, despite the impact of industrial action at Transnet this month and the subsequent delay in Transnet’s annual maintenance shutdown.
Earlier this month, Transnet declared a force majeure after their workers downed tools and embarked on a strike over wages.
In its production and sales report for the third quarter ended September 30, 2022, released yesterday, Kumba maintained its production guidance, although at the lower end of 38-40 million tons (Mt).
Kumba, majority owned by Anglo American, said total production decreased by 8% to 10Mt. Relative to quarter two (Q2) 2022, production increased by 5%, driven by a 22% improvement at Kolomela.
It said export sales of 10Mt were flat year-on-year and 2% lower relative to Q2 2022 as rail constraints kept finished stock levels low at Saldanha Port.
Kumba’s CEO, Mpumi Zikalala, said: “Kumba’s third quarter of 2022 operational performance reflects our ongoing focus on safe and responsible production. Our safety commitments have kept our business fatality free since 2016.
“Despite lower waste mined and production compared to the third quarter of 2021, we have seen improved mining and processing stability. As a result, waste mining has increased by 10% and production by 5% since the second quarter of 2022. Sishen continued to deliver a solid performance, and Kolomela saw a 40% increase in waste mining and a 22% increase in production post its safety reset reported in the second quarter of 2022.”
More broadly, the economic slowdown, energy shortages in Europe, and rolling Covid-19 lockdowns in China continued to weigh on steel demand and iron ore prices, she said.
“Our premium product strategy continues to benefit us through increasing demand for high quality iron ore products that have carbon emission reduction properties. This contributed to Kumba achieving a year-to-date average realised price of $115 (R1990) per wet metric ton (wmt) for the third quarter of 2022, 8.4% above the benchmark price,” she said.
Total waste stripping decreased by 5% to 53.8Mt relative to the third quarter of 2021, driven by a 23% decrease to 12.4Mt at Kolomela.
“Kolomela’s mining performance was impacted by a slower than expected ramp-up in mining activity post the safety reset in Q2 2022. This was partly offset by Sishen’s waste stripping increasing by 2% to 41.4Mt due to improved mining stability and shovel availability,” the group said.
Feedstock constraints, largely due to the slower ramp-up in mining, resulted in Kolomela’s production decreasing by 11% to 2.9Mt.
“At Sishen, the combined impact of Eskom load shedding and plant reliability challenges resulted in production reducing by 6% to 7.1Mt,” it said.
Ore railed to port decreased by 2% to 10.1Mt compared to the third quarter of 2021.
“This resulted in finished stock levels remaining high at the mines and sub-optimal levels at Saldanha Port, impacting shipping throughput. Due to continued rail constraints, export sales remained flat at 10Mt compared to Q3 2021 and decreased by 2% relative to Q2 2022. Finished stock levels were at 4.6Mt, similar to that of 4.5Mt in Q2 2022,” Kumba said.
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