South African iron-ore miner Kumba Iron Ore's export sales routes to its markets in Asia and Europe remain open and have not been impacted by shipping disruptions caused by the conflict in the Middle East, CE Mpumi Zikalala has assured stakeholders.

Reporting on the company's production results for the quarter ended March 31, she says the company's supply chains have been secured for the remainder of this year.

"We continue to closely monitor developments and manage potential associated risks, including cost inflation," she adds.

Kumba's production was 2% lower year-on-year at 8.8-million tonnes for the quarter. The Kolomela mine's production decreased by 15% year-on-year to 2.6-million tonnes owing to a planned drawdown of finished stock to accommodate State-owned Transnet's planned logistics maintenance shutdown in May.

Production at the Sishen mine, meanwhile, increased by 5% year-on-year to 6.3-million tonnes, as a result of improved feedstock quality and plant performance.

Increased sales volumes were, however, supported by improved finished stock levels and equipment availability at the Saldanha Bay port.

Ore railed to port by Transnet decreased by 1% to 9.7-million tonnes for the first quarter, as adverse weather conditions led to a rail wash-away in February, impacting about 400 000 t of iron-ore rail volumes. Despite this, high port stock volumes and improved port equipment performance resulted in sales increasing by 3% to 9.3-million tonnes.

Kumba says iron-ore market fundamentals remained supported by demand from China, other Asian countries and Europe.

Iron-ore prices and lump premium, which were initially under pressure due to weak steel mill margins in China, recovered in March on restocking and increased blast furnace utilisation rates.

Kumba achieved an average realised free-on-biard export price of $93 per wet metric tonne.

Subject to Transnet's logistics availability and performance, Kumba’s full-year output guidance remains unchanged at between 31-million to 33-million tonnes, and sales guidance at between 35-million and 37-million tonnes.

Sishen's production will be weighted to the first half of this year, owing to the tie-in of the ultrahigh dense media separation (UHDMS) project in the second half of the year. Sales are not expected to be impacted by the UHDMS project tie-in owing to the planned drawdown of finished stock.

“In terms of our strategic priorities, as we position for a sustainable future, construction of Sishen's UHDMS project continues, with preparations underw ay for the main plant tie-in scheduled for the second half of the year.

"Notably, Kolomela [also] received its first wheeled renewable electricity from Envusa Energy, a joint venture between Anglo American and EDF Renewables, achieving a 72% reduction in Scope 2 carbon emissions in March," Zikalala points out.