Themba Mkhwanazi

Themba Mkhwanazi

Kumba Iron Ore

Themba Mkhwanazi announced ‘step-out’ plans for Kumba Iron Ore 12 months ago which effectively acknowledged the time had come to think beyond Sishen Iron Ore, the largest of the two mines it operates. Sishen has only 10 years of life left after a reconfiguration that Mkhwanazi implemented in which he pushed the use of technology in particular. In terms of the step out plan, however, Sishen is to explore for new sources of iron ore on existing tenements and mine different minerals. He didn’t give details at the time and hasn’t provided much update since, but it will be interesting to see what 2019 has in store for Kumba in this regard. A decision in July to implement a new dividend policy – paying out 35% to 50% of headline earnings instead of the discretional dividend approach – is a vote of confidence in the company and Mkhwanazi. It’s also good news for Anglo American which is Kumba’s 70% shareholder. Anglo considered selling Kumba during the commodity price correction of 2012. It hasn’t all been beer and skittles for Mkhwanazi, however. Derailments on the 860km Sishen-to-Saldanha route have been a regular occurrence for operator Transnet, a consequence of which has been a $175m working capital build up for Kumba. But at least the iron ore price has played ball. Mkhwanazi announced a marketing strategy to produce super high grade ore in order to fully capitalise on market conditions. Keep an eye out in 2019 on whether Kumba will allow Exxaro Resources to flip up its 20% stake in Sishen Iron Ore Company.

“First and foremost is to make the most of our existing resource endowment.”

LIFE OF THEMBA

A Swazi national, Themba Mkhwanazi cut his teeth at Sasol before joining Huntsman Tioxide as MD. He was snapped up by Rio Tinto before joining Anglo American in senior roles as head of first its South African coal business and then as Kumba CEO in 2016. He has an honours degree in chemical engineering from the UK’s University of Teesside.