[miningmx.com] — A SURGE in both iron ore export prices and sales volumes assisted Kumba Iron Ore to more than double its headline earnings during the group’s 2010 financial year.
It reported annual results for the period to end-December on Thursday with headline earnings at R14.3bn, up 106% from 2009’s R6.9bn.
“This financial performance was achieved as a result of a weighted average increase of 92% in export iron ore prices, a 6% increase in export sales volumes and cost containment through improved efficiencies.’
Earnings gains would have been more substantial but were offset by the stronger rand, which traded 13% up against the dollar on average during 2010.
The group declared a final dividend of R21.00, resulting in a total dividend for 2010 of R34.50 per share.
Iron ore index prices rose strongly in 2010, with the 62% Fe Platts index averaging about $147 per tonne, up from $80 in 2009.
“The majority of export sales volumes are currently committed to long-term contracts, which re-price on a quarterly basis, and the remainder is sold at index prices mainly to annual customers and as additional volume to long-term customers in China,’ the group said. China accounted for 61% of Kumba’s export sales, down from 75% in 2009.
“China’s economic growth continues to be robust, despite government-initiated macro-economic moderating measures, power restrictions and de-stocking through the supply chain.’
Domestic sales volumes were up 21%, due to higher demand from ArcelorMittal.
PRODUCTION UPTICK
Sishen Mine’s production increased by 5% during the year to 41.3 million tonnes, mainly through the ramping up of its jig plant which now produces in excess of its name plate capacity, Kumba said.
The development of Kolomela Mine in the Northern Cape remained on schedule, with production to commence in the first half of 2012.
The group said given that the jig plant was now operating at capacity, production volumes were expected to remain flat. Export sales volumes were also anticipated to be in line with volumes achieved in 2010.
Kumba’s shares were up 0.36% at R465.35 during early trade on Thursday.
