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

Johannesburg – Kumba Iron Ore (KIO) witnessed a 19% decrease year-on-year and 28% decline quarter-on-quarter in total production for the fourth quarter ended 31 December 2012 due to the impact of an illegal strike at Sishen mine during the quarter.

Total production for the quarter amounted to 9.0 million metric tonnes (Mt).

This was despite an exceptional performance from Kolomela mine‚ which produced 2.8 Mt produced during the quarter.

Total export sales volumes also showed a decline due to the strike at Sishen‚ amounting to 9.0 Mt for the quarter - a decrease of 6% year on year and 10% quarter on quarter. Fortunately‚ sales were partially supplemented by production from Kolomela mine and sales from finished product stockpiles.

“Destocking by steel mills during the beginning of the quarter saw a decline in the demand for seaborne iron ore and consequently weaker index iron ore prices. The market has since recovered with steel mills returning to the market‚ which is reflected in the increase in index iron ore prices‚” the company said.

Domestic sales volumes decreased by 33% year on year and by 28% quarter on quarter to 0.8 Mt due to reduced off-take by ArcelorMittal South Africa Limited.

Total finished product stockpile levels amounted to 3.7 Mt as at 31 December 2012.

Sishen mine’s production decreased by 38% year on year and quarter on quarter to 6.0 Mt‚ owing principally to the impact of an illegal strike during the fourth quarter‚ and low attendance in the mining section subsequent to the strike action.

“As at 31 December 2012‚ around 5 Mt of production was lost at Sishen mine as a result of the prolonged impact on the production ramp up following the illegal strike. Production rates continue to improve‚” Kumba stated.

It added that the faster than planned ramp up of Kolomela mine had contributed to offsetting the negative impact on production at Sishen mine. Kolomela mine exceeded monthly design capacity since July 2012 and reached record levels in the fourth quarter.

The mine‚ which produced 2.8 Mt for the quarter‚ is on track to produce at design capacity of 9 Mt per annum in 2013.

Production at Thabazimbi mine decreased by 5% year on year and by 24% quarter on quarter to 0.2 Mt‚ mainly due to pit complexities as the mine nears the end of its life. - I-Net Bridge