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Despite significant logistical challenges experienced during the fourth quarter of 2018, JSE-listed Kumba Iron Ore met its production and sales volume guidance for the year.
Kumba produced 43.1-million tonnes of iron-ore and sold 43.3-million tonnes, in line with the year’s guidance output of between 43-million and 44-million tonnes and sales of 42-million to 44-million tonnes, respectively.
The total planned production volumes for the year, however, decreased by 4% compared with the output of 45-million tonnes in 2017, as the group offset high stock levels owing to rail constraints.
Quarter-on-quarter, production levels decreased by 3% to 10.2-million tonnes during the fourth quarter of 2018, when compared with 10.5-million tonnes produced in the third quarter of the year.
The fourth-quarter volumes were down 13% compared with the 11.6-million tonnes achieved in the fourth quarter of 2017.
Sishen Iron Ore's production decreased by 6% from 31.1-million tonnes in 2017 to 29.2-million tonnes in 2018, while production at the Kolomela mine remained flat at 13.9-million tonnes.
Production at Sishen contracted by 11% to 6.9-million tonnes when compared with the fourth quarter of 2017 but was stable when compared with the seven-million tonnes delivered in the third quarter of 2018.
At Kolomela, output plunged by 17% from 3.8-million tonnes in the fourth quarter of 2017 to 3.2-million tonnes by the fourth quarter of 2018, and 8% when compared with the 3.4-million tonnes produced in the third quarter of 2018.
This was attributed to elevated stock levels, following rail challenges. However, this has presented an opportunity at Kolomela to undertake additional maintenance on the dense media separation modular plant.
Meanwhile, export sales volumes for 2018 decreased by 4% to 40-million tonnes in 2018, with domestic sales contracting 4% to 3.2-million tonnes, owing to the rail constraints and the single loading of vessels following the scheduled refurbishment by Transnet of the ship loader at the Saldanha Port.
“However, the earlier reopening of the Iron Ore Export Channel following structural damage to a railway bridge, resulted in export sales in the fourth quarter of 2018 increasing 10% to 10.7-million tonnes, when compared with the third quarter.
“Relative to the fourth quarter of 2017, export sales were 6% lower,” the company said in a trading update on Thursday.
Kumba achieved an average realised iron-ore export price of $72/t for the year.