Kumba export sales hit by ‘challenging’ operating conditions at Saldanha Bay Port

Kumba Iron Ore’s total sales decreased by 10% to 8.5-million tonnes (Mt) in the first quarter due to port performance challenges, with 0.4Mt of shipments rolling over into the second quarter, the group said.

“Export sales volumes were significantly impacted by challenging operating conditions at the Saldanha Bay Port, with equipment maintenance now being undertaken by Transnet to primarily address the stacker-reclaimer reliability issues,” CEO Mpumi Zikalala said in a statement on Tuesday.

Total production decreased by 2% to 9.3Mt in the quarter ended March, in line with Kumba’s business reconfiguration to a lower production profile.

The group maintained its production and sales guidance for the full-year at 35-37Mt and 36-38Mt, respectively.

“Operationally, Kumba delivered a consistent and solid mining and production performance. In line with our business reconfiguration plan of aligning production volumes to Transnet’s logistics performance levels, total production decreased with a planned reduction at Kolomela, while Sishen delivered an increase in production,” she said.

“The execution of the business configuration plan is on track. The Section 189 Commission for Conciliation, Mediation and Arbitration consultations (CCMA) with affected employees commenced in March 2024 and is expected to be concluded by the end of May. We are engaging with service partner companies as part of this reconfiguration process,” Zikalala said.

Kumba said the iron ore market pulled back strongly in the first quarter and the reconfiguration of its business to a lower production and cost profile should ensure that it is more resilient in the face of a volatile market environment.

Steel demand remained lacklustre after the Chinese New Year. This was compounded by modest Chinese government stimulus announced at the ‘Two Sessions’ congress in February 2024 and several steel production cuts across various provinces in China.

Against this backdrop, Kumba achieved an average realised FOB export price of $89 per wet metric ton, reflecting the negative timing effect of provisionally priced volumes in a decreasing price environment. This was partly offset by the lump and iron ore quality premium that our products attract, it said.

“From a sustainability perspective, it is pleasing to report that both Sishen and Kolomela mines have achieved a 75% level of performance for the Initiative for Responsible Mining Assurance (IRMA) comprehensive mining standard. Kumba is the first iron-ore producer in Africa to complete the IRMA audit, providing all stakeholders with a way of accounting for sustainability practices that are transparent, verifiable, and comparable,” Zikalala added.

MackenzieJ@arena.africa