KUMBA Iron Ore is deepening actions to cut spending and rein in production costs because of weak iron ore prices.
The iron ore price has fallen to below $50/tonne in recent weeks in an 18-month bear market. The price revived to between $52 and $54 a tonne after BHP Billiton indicated on Wednesday it would slow its iron ore production expansion.
"The significant weakness in iron ore prices has necessitated a review of our business," said Kumba, which is a subsidiary of Anglo American.
"While a number of actions have already been implemented, further initiatives are being taken to reduce capital expenditure and lower the cost of production," SA’s largest iron ore producer said in its quarterly production update.
Kumba’s flagship Sishen mine increased production by 3% year on year to 8.9-million tonnes in the March quarter. This was 4% lower than the December quarter.
The mine retained its full-year production forecast of 36-million tonnes.
The Kolomela mine increased output by 18% year on year to 3-million tonnes, keeping it on track to meet an annual output of 11-million tonnes.
Kumba exported 22% more tonnes compared with the same period a year ago, with sales of 11.5-million tonnes. This was because of higher output at the mines and improved logistics, the company said.
Kumba has stockpiles of 6.1-million tonnes.
source: http://www.bdlive.co.za