Kumba Iron Ore reports profitable H1 - CNBC Africa

Kumba Iron Ore reports profitable H1

Earnings

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Kumba Iron Ore specialises in iron ore mining in South Africa. PHOTO: Getty Images

“The group remains focused on delivering on its growth strategy, targeting an additional 5 million tonnes in South Africa over the next three to five years, through incremental growth at Sishen and Kolomela,” Kumba said in a statement.

“The projects in support of the growth target are in various stages of study and subject to internal approval.”

[DATA KIO:Kumba Iron Ore] is a mining company specialising in iron ore and headquartered in South Africa. Kumba is also a member of the Anglo American plc group.

Headline earnings were 16 per cent lower at 6.5 billion rand for the six months ended 30 June 2014 from 7.7 billion rand in 2013.

Total revenue for the group increased marginally to 26.4 billion rand for the period from 26.3 billion rand in 2013.

(READ MORE: Kumba Iron Ore on road to recovery after 2013 strikes)

Operating expenses rose by 18 per cent to 14.1 billion rand from 12 billion rand in the first half of 2013. This was mainly as a result of a 10.2 million tonne growth in total mining volumes and inflationary pressure on output costs from the 6.2 per cent Consumer Price Index level, among others.

“The production outlook for Sishen mine in 2014 remains at around 35 million tonnes. The Sishen pit, however, remains constrained, therefore the planned waste ramp up is continuing as part of the strategy to improve mining flexibility over the longer term,” Kumba explained.

Total tonnes mined at Sishen increased by 5 per cent to 107.2 million tonnes from 102.5 million tonnes in 2013, and total tonnes mined at Kolomela mine rose by 11 per cent to 31.3 million tonnes from 28.2 million tonnes in 2013.

(READ MORE: Off-take by Arcelor Mittal improves Kumba's sales)

Total sales for Kumba for the period were 2 per cent higher at 22.5 million tonnes from 22.1 million tonnes in 2013. This was mainly due to a 38 per cent increase in domestic sales volumes in terms of a new supply agreement between Kumba and ArcelorMittal South Africa Limited.

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