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Kumba heads for worst month in four years

Johannesburg - Kumba Iron Ore, owner of Africa’s biggest mine for the steel-making ingredient, headed for the worst month in more than four years after ore prices dropped 30 percent from the 2013 high reached in mid-February.

The shares fell 4 percent to 486.05 rand, the lowest level in more than five months, by the close in Johannesburg today.

Kumba's profit has fallen. Photo: Simphiwe Mbokazi. Credit: INDEPENDENT MEDIA

That extended the stock’s drop since the start of February to 14 percent.

Kumba is heading for the biggest drop on a month basis since October 2008, when it slumped 32 percent.

Iron ore for immediately delivery recovered from a three- year low of $86.70 a metric ton on September 5 to $158.90 a ton on February 20, according to a price index compiled by The Steel Index Ltd.

The price has since slipped to $134.40 a ton.

“Iron-ore prices are certainly the lead driver behind Kumba’s shares,” Ryan Wibberley, a trader at Investec Asset Management, said by phone from Cape Town today.

“The recovery in ore prices during late last year has been reversed since February.”

Iron-ore prices may average $139 a ton this year compared with $144 last year, Goldman Sachs Group Inc. said in a report today. - Bloomberg News

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