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Kumba Iron Ore expects surging interim profits after price recovery

14 July 2017 Comments (0) Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s Kumba Iron Ore said it expects half-year profits to rise by as much as 58 percent due to a recovery in iron ore prices.

Kumba, which is 70 percent owned by Anglo American, said headline earnings per share (EPS) were likely to be between 13.70 rand and 14.85 rand for the six months through June, an increase of between 46 percent and 58 percent.

“The increase in earnings for the period is largely attributable to higher export iron ore prices, partially offset by the stronger rand/US$ exchange rate,” the company said in a statement.

Headline EPS is the main profit measure in South Africa and strips out certain one-off items.

Shares in Kumba were down 1.2 percent at 171.50 rand by 0710 GMT, hit by a near 3 percent drop in China’s iron ore futures after data added to concerns about surplus supply.

 

(Reporting by TJ Strydom; Editing by Susan Fenton)

 

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South Africa’s Kumba Iron Ore tells union to brace for lay-offs

20 January 2016 Comments (0) Africa, Australia, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Kumba Iron Ore has told South Africa’s National Union of Mineworkers (NUM) it will issue lay-off notices this year if low prices persist for the steel-making ingredient, the union’s general secretary said on Wednesday.

“The price has put them in dire straights and there is a prospect of them issuing a Section 189 notice at Sishen mine,” NUM General Secretary David Sipunzi told Reuters.

He was referring to the regulatory process South African employers must follow before they lay off staff.

“They have been trying to sensitise us to this possibility. If the price remains like this for a few months they will have no choice but to issue a Section 189,” he said.

Officials from Kumba were not immediately available for comment.

The group has said it plans to reconfigure its Sishen mine, the largest iron ore operation in Africa, and was targeting 2016 production there of 26 million tonnes, down from a previous guidance of 36 million tonnes.

Lay-offs are a politically thorny issue in South Africa, where the jobless rate is around 25 percent and local elections are expected this year. The NUM is also a key political ally of the ruling African National Congress (ANC).

Sipunzi said he expected to see more lay-off notices this year from other sectors but the union wanted to work with companies to find ways to minimise job cuts.

In line with other commodities, prices for iron ore have been sliding due to oversupply and and slowing economic growth in China, the world’s bigest metals consumer.

Mining giant BHP Billiton said on Wednesday that it saw no recovery in iron ore or coal prices in the next few years.

 

(Reporting by Ed Stoddard; Editing by James Macharia)

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