South African miner Kumba Iron Ore reported an increase in full-year earnings of 10 per cent to R23.4 billion, as export sales jumped 37% to 34.2 million tonnes. However, headline earnings per share fell to 21.82 rand ($2.86) from 23.02 rand in 2008, hit by a stronger rand against the U.S. dollar. Kumba said its operating profit remained highly sensitive to the rand/dollar exchange rate. The rand has risen by 20 percent since the start of 2009. Headline earnings are the main measure of profit in South Africa and strip out one-off, financial and non-trading items.
Kumba, Africa’s largest iron ore producer, saw an increase in exports to China of 130%. China now accounts for 75% of total exports. The company said it produced 41.9 million tonnes of iron ore last year, up from 36.7 million tonnes in 2008.
"Kumba is committed to a further increase in production volumes during 2010, with the continued ramp up of the Jig plant," the company said. "Although global steel demand is expected to return to growth in 2010, this is likely to be moderate and the sustainability of increase in demand outside of China remains uncertain," it added. Analysts expect exports to China to grow by 5% this year.
CEO Chris Griffith said " We expect demand for iron ore to rise further during 2010 as Chinese domestic iron ore production falls and a further recovery in steel markets outside of China, in our traditional markets, starts to take hold.”
Kumba is paying a final cash dividend of R7.40 per share, bringing the total cash dividend for 2009 to R14.60 per share. The company’s majority shareholder, Anglo American, reported that its 64% investment would generate underlying earnings of $490 million for the year ended 31 December 2009.
Showing posts with label kumba. Show all posts
Showing posts with label kumba. Show all posts
Thursday, February 18, 2010
Sunday, November 1, 2009
ArcelorMittal Loses SA Iron Dispute
Engineering News reported that an arbitration panel has ruled in favor of Kumba Iron Ore in a long running dispute over ArcelorMittal South Africa's right to participate in KIO's South African growth projects.
ArcelorMittal currently accesses 6.5 million tonne early on a cost plus basis from KIO and sources its remaining requirement at market prices.
But Africa's largest steelmaker was of the view that it was permitted, in terms of a 2001 agreement that led to the unbundling of the then Iscor into separate iron ore and steel entities that it could extend the arrangement to new projects, if it could prove that the material would be beneficiated in South Africa.
Mr Alec Erwin trade and industry minister of South Africa said that it is vital for the standalone steel entity to remain reverse integrated into iron ore, notwithstanding the unbundling. He asserted, too, that access to additional raw material at competitive rates would be key to sustaining the group's low cost position. ArcelorMittal South Africa took this principle to suggest that it could participate in new projects and access additional material on a cost plus basis.
However, KIO, which subsequently became a subsidiary of Anglo American, had a different interpretation, which led to the dispute. Corporate negotiations, which were pursued for some time, failed to secure a remedy which ultimately led to the arbitration process. The arbitration panel eventually assembled in mid 2009.
Recently, the panel issued an award in favor of the Sishen Iron Ore Company determining that ArcelorMittal South Africa was not entitled to participate in the ZAR 8.5 billion Sishen South project, currently under development in the Northern Cape. The ruling, which is said to contain 19 points, could be appealed but ArcelorMittal South Africa gave no immediate indication as to whether such a course of action would be pursued.
The steel company said would examine its options. The decision could have an impact on future investment decisions by ArcelorMittal South Africa inside the borders of South Africa. Ahead of the global economic crisis, the group was considering a new ZAR 3 billion long steel investment in Newcastle, KwaZulu Natal. The project was put on ice as recessionary conditions took hold and would now have to be remotivated to the board.
Source: Steel Guru
ArcelorMittal currently accesses 6.5 million tonne early on a cost plus basis from KIO and sources its remaining requirement at market prices.
But Africa's largest steelmaker was of the view that it was permitted, in terms of a 2001 agreement that led to the unbundling of the then Iscor into separate iron ore and steel entities that it could extend the arrangement to new projects, if it could prove that the material would be beneficiated in South Africa.
Mr Alec Erwin trade and industry minister of South Africa said that it is vital for the standalone steel entity to remain reverse integrated into iron ore, notwithstanding the unbundling. He asserted, too, that access to additional raw material at competitive rates would be key to sustaining the group's low cost position. ArcelorMittal South Africa took this principle to suggest that it could participate in new projects and access additional material on a cost plus basis.
However, KIO, which subsequently became a subsidiary of Anglo American, had a different interpretation, which led to the dispute. Corporate negotiations, which were pursued for some time, failed to secure a remedy which ultimately led to the arbitration process. The arbitration panel eventually assembled in mid 2009.
Recently, the panel issued an award in favor of the Sishen Iron Ore Company determining that ArcelorMittal South Africa was not entitled to participate in the ZAR 8.5 billion Sishen South project, currently under development in the Northern Cape. The ruling, which is said to contain 19 points, could be appealed but ArcelorMittal South Africa gave no immediate indication as to whether such a course of action would be pursued.
The steel company said would examine its options. The decision could have an impact on future investment decisions by ArcelorMittal South Africa inside the borders of South Africa. Ahead of the global economic crisis, the group was considering a new ZAR 3 billion long steel investment in Newcastle, KwaZulu Natal. The project was put on ice as recessionary conditions took hold and would now have to be remotivated to the board.
Source: Steel Guru
Tuesday, January 20, 2009
Kumba Expected To Post Strong Profits Despite Q4 Dip
South Africa's largest iron ore producer, Kumba Iron Ore, has warned of a dip in output and reduced profits in the fourth quarter of 2008. However, the company still expects to post strong full-year results.
Kumba, which is 63% owned by the multinational Anglo-American, told shareholders the first three quarters of 2008 had been strong and resulted in the company expecting full-year headline earnings and basic earnings to be between R6.8bn and R7.5bn against the previous period’s restated R3.1bn and R3.2bn respectively.
The strong financial performance came from high iron ore prices and a weaker rand versus the dollar.
“However, the performance for the year was adversely affected in late 2008 by the unprecedented volatility in the global economy,” the company said.
“Production volumes in the fourth quarter were marginally reduced as Sishen Mine increased the quality of its production in order to secure export volumes, it said.
“In addition certain export sales volumes were lower than planned due to lower demand and limited volumes of lower quality production were sold at below contractual prices,” it added.
A worldwide economic weakness has seen a drop in production and demand for steel causing South Africa's major ferrochrome producers to mothball furnaces. Xstrata, the world’s largest supplier of ferrochrome, has shut 80% or nearly 1.4 million tonnes of installed capacity in its joint venture with South Africa’s Merafe Resources.
Kumba CEO Chris Griffith has been visiting clients in Asia and elsewhere to assess their needs and stressing the high quality of Kumba’s lumpy iron ore which, he said,
doesn't break down much during transportation and which means buyers receive a better quality material compared to other iron ore miners.
Source: MiningMx.com
Kumba, which is 63% owned by the multinational Anglo-American, told shareholders the first three quarters of 2008 had been strong and resulted in the company expecting full-year headline earnings and basic earnings to be between R6.8bn and R7.5bn against the previous period’s restated R3.1bn and R3.2bn respectively.
The strong financial performance came from high iron ore prices and a weaker rand versus the dollar.
“However, the performance for the year was adversely affected in late 2008 by the unprecedented volatility in the global economy,” the company said.
“Production volumes in the fourth quarter were marginally reduced as Sishen Mine increased the quality of its production in order to secure export volumes, it said.
“In addition certain export sales volumes were lower than planned due to lower demand and limited volumes of lower quality production were sold at below contractual prices,” it added.
A worldwide economic weakness has seen a drop in production and demand for steel causing South Africa's major ferrochrome producers to mothball furnaces. Xstrata, the world’s largest supplier of ferrochrome, has shut 80% or nearly 1.4 million tonnes of installed capacity in its joint venture with South Africa’s Merafe Resources.
Kumba CEO Chris Griffith has been visiting clients in Asia and elsewhere to assess their needs and stressing the high quality of Kumba’s lumpy iron ore which, he said,
doesn't break down much during transportation and which means buyers receive a better quality material compared to other iron ore miners.
Source: MiningMx.com
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