Kumba Iron Ore Limited("Kumba"or"the Company")today released its production and sales report for the quarter ended 30 September 2012.Throughout this report,production and sales volumes referred to are 100%,attributable to shareholders of Kumba as well as the non-controlling interests in Sishen Iron Ore Company(Pty)Limited.
Overview:
- Total production of 12.5Mt(million metric tonnes)represented increasesof 14%year on year and 9%quarter on quarter.
- Ramp up of production at Kolomela mine ahead of schedule,with 2.5Mt produced during the quarter.
- Total export sales volumes of 10.0Mt-an increase of 9%year on year.
Jun Q12 Total11,122 10,705 4 11,966(7)-Export sales9,959 9,167 9 10,598(6)-Domestic sales1,163 1,538(24)1,368(15)Sishen mine854 1,336(36)981(13)Thabazimbi mine309 202 53 387(20)
Sishen mine's production increased by 0.3Mt or 3%quarter on quarter to 9.8Mt,driven by the implementation of a production improvement plan.However,Sishen mine's production declined by 7%year on year,as mining feedstock and quality constraints continued to impact plant throughput.
Kolomela mine continues to ramp up well and remains within its capital expenditure budget.Production of 2.5Mt from Kolomela mine was 44%higher than the second quarter.The mine reached monthly design capacity in July 2012 and sustained these levels during the third quarter.Kolomela mine should produce at least 7Mt whilst ramping up in 2012,before reaching design capacity of 9Mtpa in 2013.
Production at Thabazimbi mine increased by 18%year on year to 0.2Mt,mainly as a result of the implementation of mining and production improvement plans.However,production decreased by 8%quarter on quarter due to pit complexities as the mine nears the end of its life.
Total export sales volumes increased by 9%year on year to 10.0Mt,but decreased by 6%quarter on quarter.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 somewhat,with steel mills returning to the market,which is reflected in the increase in index iron ore prices.
Finished product stockpile levels amounted to 5.2Mt at Sishen and Kolomela mines,Saldanha and Qingdao ports as at 30 September 2012.
Domestic sales volumes of 1.2Mt declined 0.4Mt year on year due to reduced off-take by Arcelor Mittal South Africa Limited during the quarter.
During October 2012,production was impacted when less than 300 employees embarked on an illegal strike on Wednesday,3 October 2012 at Sishen mine.Production was suspended on Thursday,4 October 2012,when the miners blocked access to the pit,creating an unsafe environment for mining operations.The illegal strikers were removed by the police on the morning of 16 October 2012.The Company regained possession of all the heavy mining equipment which was held by the illegal strikers.However,production continues to be impacted during the process to ramp-up production again at the mine,as attendance rates in the mining production area are on average still lower than 50%,with incidences of intimidation being reported.As at Wednesday,24 October 2012,Kumba lost approximately 2.2Mt of finished product at Sishen mine.