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Kumba sells loss-making iron ore mine to ArcelorMittal SA

PUBLISHED: Thu, 09 Feb 2017 11:49:14 GMT

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Kumba Iron Ore said on Thursday it is selling its Thabazimbi mine to the mine’s sole customer, ArcelorMittal South Africa (AMSA), for a nominal sum.

Operations at the mine in northern South Africa ceased in September 2016 after a combination of factors, including high operating costs.

Kumba, a unit of Anglo American and AMSA said in a joint statement the identified assets and liabilities of the more than 80-year-old mine will be transferred at a purchase consideration of 1 rand plus the assumed liabilities and the remaining 63 employees.

“In line with our strategy to manage our costs more efficiently … this agreement allows us to take full management control of the processes and costs related to the rehabilitation liability at the Thabazimbi mine,” AMSA’s chief executive Wim De Klerk said.

The steel maker will investigate the feasibility of restarting operations at the mine, De Klerk said.

Until 2014 the mine was owned and run by Kumba, but supplying ore exclusively to AMSA, which was responsible for the funding of the mine.

The steel maker is accountable for 96 percent of the mine’s current rehabilitation liability, with Kumba responsible for the site’s management.

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($1 = 13.4305 rand)

(Reporting by Nqobile Dludla; Editing by Greg Mahlich)