Johannesburg - Kumba Iron Ore, the Anglo American unit that owns Africa’s largest mine for the steelmaking ingredient, said first-half profit fell 16 percent after prices of the mineral dropped.
Profit excluding one-time items declined to 6.5 billion rand, or 20.28 rand a share, in the six months ended June 30 from 7.8 billion rand, or 24.13 rand a share a year earlier, the Pretoria-based company said in a statement today.
Iron-ore output increased 5 percent to 22.8 million metric tons, it said.
Kumba declared a dividend of 15.61 rand a share.
Iron-ore producers, including Rio Tinto and BHP Billiton, are expanding supply, betting the increase will more than offset declining prices, which fell to the lowest since September 2012 last month.
Kumba plans to almost double production by 2030, with new sites in western and central Africa potentially accounting for more than 20 percent of volumes.
“Iron-ore prices are expected to remain at current levels in the third quarter,” Kumba said.
“Restocking by steel mills and a slowdown in Chinese domestic iron-ore production in their winter is expected to support prices towards the end of the year.”
The average price of benchmark ore with 62 percent iron content delivered to the Chinese port of Tianjin in the first half of 2014 was $111.87 a dry ton, 18 percent lower than a year earlier. - Bloomberg News