Mpumi Zikalala

NOMPUMELELO (Mpumi) Zikalala’s Kumba Iron Ore is one South African operation the slimmed-down Anglo American will keep and when you look at the numbers, it’s clear why. Last year was not a great one for iron ore owing to faltering Chinese demand, which knocked prices. As for Kumba specifically, the ongoing underperformance of rail and ports utility Transnet was a constant hindrance. Yet Kumba still reported strong interim earnings – although it’s instructive it opted to retain cash over a larger dividend. 2026 ought to be a better year, though.

Firstly, the benefits of Kumba’s R7.6bn ultra-high-dense-media separation plant will start to flow as the facility is ‘tied in’ to production which could see a trebling in the proportion of Kumba’s premium product as well as a reduction in costs and mine life extension. Secondly, there’s been an improvement in Transnet’s performance transporting ore from Kumba’s Northern Cape mines to the Saldanha port in the Western Cape. A renewed focus on collaboration with Transnet is “starting to deliver positive outcomes in terms of logistics performance”, said Zikalala – a process assisted by the industry’s Ore Corridor Restoration and the Ore Users Forum initiatives. But the rebuild in the Kumba-Transnet relationship has not been without some awkward moments.

Kumba last year recouped R942m in contract-related penalties following years of underperformance. Meanwhile, efforts to increase private sector investment in the network are moving forward. Kumba lodged its interest in operating the ore corridor in terms of a Request for Information issued by government ahead of a Request for Proposal. However, warned Zikalala: “There is still a lot of work to be done. Fixing this will take time.”