THABAZIMBI – Kumba Iron Ore Limited released its production and sales report for the quarter ended 31 March 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.
Total production increased by 15% year on year to 10.1Mt, as the ramp-up of Kolomela mine continues. Total export sales volumes of 10.1Mt increased by 18% year on year. Domestic sales of 1.3Mt increased by 6% quarter on quarter but were substantially lower year on year mainly due to reduced off take from ArcelorMittal South Africa Limited (“AMSA”).
Following the successful commissioning of Kolomela mine, the mine continues to ramp-up well with 1.5Mt produced during the quarter, 30% more than the 1.2Mt produced in Q4 2011. During the quarter, 1.7Mt was railed from Kolomela mine to the Port of Saldanha. Should the current ramp-up performance be sustained, the mine should comfortably meet the 4 to 5Mt production target for 2012, ramping up to 9Mtpa design capacity in 2013.
Sishen mine’s production of 8.5Mt was in line with Q1 2011, however decreased by 14% compared with Q4 2011. As expected, production was impacted by the planned increase in waste stripping activity. However, during the first two months of 2012, the availability of material supplied to the mine’s dense media separation (“DMS”) plant and Jig plant was impacted by wet pit conditions resulting from heavy rainfall, and poor operator attendance. Production run rates recovered in March 2012 as the ramp-up in waste mining continued to improve.
Production at Thabazimbi mine of 0.1Mt is in line with the planned decrease in production as the mine nears the end of its life, scheduled for 2016, coupled with mining feedstock and quality constraints experienced during the quarter.
Total export sales volume of 10.1Mt increased by 18% year on year aided by the ramp-up of Kolomela mine, and further supplemented from finished product stockpiles at Sishen mine and Qingdao port.
Finished product stockpile levels at Sishen and Kolomela mines, and Saldanha and Qingdao ports were 4.2Mt as at 31 March 2012, down 1.0Mt from 5.2Mt at 31 December 2011.
Domestic sales volumes of 1.3Mt increased by 6% quarter on quarter but declined 28% year on year mainly due to reduced off take from AMSA from Sishen and Thabazimbi mines during the quarter.