Kumba delivering sustainable growth

Kumba released its interim results today for the six months to 30 June 2013, showing a steady performance for the half year, with headline earnings of R7.7 billion.

Speaking after the release of the financial results, CEO of Kumba Iron Ore, Norman Mbazima stressed that it is important for the mining industry to make a difference in the lives of all their stakeholders and share the wealth created, especially with staff and host communities.

“Our long-term profitable growth is linked intrinsically to our ability to deliver on our social and environmental objectives. Kumba has worked to deliver a meaningful impact on South Africa that goes beyond its corporate contribution to the mining industry. We continue to strive for job creation, skills development and a new standard of safety and operational excellence in our work. However, in addition to all of this, we seek to achieve real transformation in our workforce and within the communities around our mines.”

Stakeholder empowerment highlights returns of over R5 billion to shareholders, R4 billion to Kumba shareholders and R1.1 billion to Sishen Iron Ore Company (SIOC) BEE shareholders. “Envision, our broad based success story, which we at Kumba are immensely proud of, continues to add significant value to employees. They continue to share the benefits of SIOC’s performance through dividends.  With this dividend, Envision will receive R271 million, of which R95 million will flow to almost 6 600 employees, around R12 000 each, after dividend withholding tax,” Mbazima continued.

Kumba remains the largest private sector employer in the Northern Cape with the vast majority of staff coming from local communities.

Mbazima said that the employee relations environment in the mining industry remains difficult.

“We will continue to actively engage with our employees and their representatives in this coming period.  We are pleased that following the unprotected strike last year, our labour environment at Kumba stabilised in the first six months and we were fortunate not to have been affected by the labour unrest seen in the mining industry this year.  We concluded a two year wage agreement in July 2012 and will therefore not be negotiating remuneration this year.”

“With markets and our operations permitting, we will be able to continue our work of empowering our employees, their families and broader community groups,” Mbazima concluded.

Kumba Iron Ore also reported on Thursday 18 July that total production of 11.3 Mt for the second quarter ended June decreased by 1% compared with the same quarter last year.

Kumba said that production at the Thabazimbi mine decreased by 50% compared with in the second quarter of last year but increased by 28% compared with the first quarter, which was in line with ArcelorMittal South Africa Limited’s (AMSA) requirements.

Pit complexities and geotechnical challenges at Thabazimbi continued as the mine approached the end of its economic life.

However, it said total production for the quarter was up by 9% compared with the first quarter mainly because of improved production at Sishen along with an exceptional performance of Kolomela mine.

Total export sales volumes decreased by 4% while domestic sales volumes fell by 17%. Total finished product stockpile levels were at 3.3m tons at the end of June.