Kumba's profit has fallen. Photo: Simphiwe Mbokazi.

Johannesburg - South Africa's Kumba Iron Ore said on Tuesday its flag-ship Sishen mine was not back to full production months after an illegal strike ended, underscoring the long-term impact of last year's mine protests.

The company, a unit of global mining company Anglo American, said the labour unrest contributed to a 28 percent fall in headline earnings. Rising costs and lower prices also hit.

“We are not back to full production levels yet,” Kumba's chief executive Norman Mbazima said, referring to the situation at Sishen, in the remote Northern Cape province.

Normal operating levels are expected to return later in the second quarter of 2013 as the company trains heavy equipment operators to replace 100 workers dismissed over the unrest.

Around 300 workers started the stoppage in early October and the mine resumed production just over two weeks later but Mbazima said intimidation remained rife, hobbling efforts to ramp back up to pre-strike levels.

“There was a lot of intimidation and production was really severely constrained. Our attendance levels for weeks were only around 23 percent,” Mbazima told Reuters in a phone interview.

He said the full workforce, excluding those dismissed, were not able to return before December.


The Sishen strike followed a pattern of violence and intimidation that swept South Africa's gold and platinum sectors last year, triggering violence that killed more than 50 people.

The illegal stoppages pushed Anglo's platinum arm, Anglo American Platinum (Amplats), into the red and its production has also still not fully recovered.

Amplats is also facing stiff political and union resistance to plans to restore margins by mothballing two mines and cutting up to 14,000 jobs, adding to the woes of Anglo American which is to release its results on Friday.

Kumba said Sishen lost 5 million tonnes of final product as a result of the industrial action and total production fell by 13 percent to 33.7 million tonnes.

However, its Kolomela mine, commissioned in 2011, has been exceeding its targets and produced 8.5 million tonnes, enabling the company to raise total production by 4 percent to a record 43.1 million tonnes.

Kumba failed to reap the full benefit of this because of the commodity cycle. The company said the average export iron ore price it realised was down 23 percent to $122 a tonne.

“The start of 2013 has seen a rapid price recovery in iron ore prices. The consensus view is that this rally will not be sustained throughout the year ... but on average prices are anticipated to be firmer than in 2012,” the company said.

Kumba, which is Africa's top iron ore producer, said diluted headline earnings per share fell to 37.91 rand from 52.99 rand a year earlier. Headline EPS, the main measure of profit in South Africa, excludes certain one-time items.

The declared dividend was 12.50 rand compared to the 32.10 rand per share expected from the Thomson Reuters estimates. - Reuters