Kumba Iron OreStrikes, low prices hit profit forecast

Kumba Iron Ore’s full-year profit would probably be lower because of lost output from strikes and reduced metal prices, the owner of Africa’s biggest iron ore operation said in a trading update yesterday. The unit of Anglo American estimated headline earnings a share for the year to December 2012 would be in a range of R36.30 to R38.80, down from R53.13 a year earlier. That’s below a median estimate of R38.88 from 15 analysts surveyed. “The decrease in earnings is largely attributable to a decrease in export iron ore prices in the period and the impact on production following the illegal strike at the Sishen mine,” the company said. Kumba suspended operations at its Sishen mine on October 3 after about 300 workers started a wildcat strike demanding higher wages. Unofficial walkouts across the mining industry resulted in pay increases of as much as 22 percent. The stock fell 0.78 percent to close at R582 on the JSE yesterday. – Bloomberg