‘Ongoing logistics constraints have continued to place significant pressure on our value chain, resulting in stock levels increasing to unsustainable levels’
A CHEMICAL engineer by training, ‘Mpumi’ Zikalala probably never anticipated that she would need to apply her brains to trains. Like Kumba’s peers in the coal sector, its plans have been derailed by the snafu at South Africa’s state-run logistics company Transnet. The Anglo American unit extracts iron ore from the ochre sands of the arid Northern Cape province. This product needs to be delivered to port for export via a collapsing rail service that is short on locomotives and prey to criminal syndicates who steal copper cables for resale.
In December 2023, Zikalala said stock had reached “unsustainable levels”, forcing Kumba to curtail any production growth for at least two years and making it harder to counter mining inflation. Earlier in the year, the group’s 70% shareholder, Anglo American, said new growth projects would be held in abeyance until export volumes revived. The outcome is that Kumba’s short- and long-term ability to capitalise on iron ore markets has been stymied by Transnet. No wonder Anglo CEO Duncan Wanblad heavily criticised government at the Mining Indaba in 2023. It’s also worth keeping an eye on discussions said to have occurred between Anglo and government on possible job cuts at Kumba.
On the upside, Zikalala will be hoping to get approval for the redesign of the firm’s ultra-high dense media separation plant. The project, which was sent back by Anglo for review nearly two years ago, will be submitted for board approval this year. It’s a priority project for Zikalala as it will help improve yield, which will in turn help keep costs under control. In lieu of having influence over volumes (not to mention the iron ore price) this could be important for Kumba’s sustainability.
LIFE OF NOMPUMELELO
Zikalala holds a BSc in chemical engineering from the University of the Witwatersrand and completed leadership development at the London Business School. Appointed Kumba CEO in January 2022, she has spent over two decades in the Anglo American trenches. A De Beers Group bursar, she joined the diamond producer in 2001 as a process engineer. Zikalala became the first female general manager at the De Beers Group in 2007, eventually rising to the position of managing director, De Beers Group Managed Operations, in April 2019.