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Kumba Iron ore reports 2018 results

Mining News - Published on Wed, 20 Feb 2019

Image Source: Metals Consulting
Themba Mkhwanazi, Chief executive of Kumba, said, "In 2018, Kumba continued to achieve important milestones in our strategy of unlocking our full potential through margin expansion and life of mine extension. We kept our commitment on safety and remained fatality-free with significant improvement across multiple safety indicators. Our focus on productivity and efficiency continued to gain traction improving by 7% as we reached 65% of benchmark. This, together with our drive to optimise costs, saw us realise close to R1 billion of cost savings against our target of R800 million.

"The flexibility in our approach to production allowed us to lift product qualities to an average of 64.5% Fe, enabling higher price realisation whilst mitigating logistical constraints. We achieved our production and sales volume guidance, with unit costs remaining well contained. This solid performance resulted in net cash generated from operations of R18.9 billion, which coupled with disciplined capital allocation, translated into a total dividend of R30.24 per share for the year. Furthermore, in line with our resource development plan, I am pleased to announce that we were granted the right to expand Kolomela into the adjacent Heuningkranz area which presents an exciting opportunity to extend our life of mine.

It is clear that alongside the solid performance achieved, Kumba has significant value to unlock. While challenges are part of the uncertain environment that we operate in, the quality of our assets ensures that we are well positioned to serve our diversified and growing customer base, and we have the right strategy and teams in place to create sustainable shareholder value."

Highlights – year ended 31 December 2018
Delivering sustainable shareholder returns
Strong cash generated from operations of R18.9 billion
Headline earnings R30.28 per share
Final cash dividend of R15.73 per share, total dividend of R30.24 per share
Strong safety and operational performance
Maintained fatality free record
High potential incidents reduced by 67%
Operating efficiency up from 58% to 65% of benchmark
Margin benefit from enhanced product portfolio
Product quality improved from 64.1% to an average Fe of 64.5%
Average realised FOB export price of US$72/tonne
Cost savings of R1 billion exceed target of R800 million
EBITDA margin up 3 percentage points to 45%

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Posted By : Rabi Wangkhem on Wed, 20 Feb 2019
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