Kumba’s production gets knocked by logistics constraints

JOHANNESBURG - PRODUCTION at Kumba Iron Ore, South Africa’s biggest iron ore producer, was rocked by rail constraints, as well as lower domestic offtake, in the first quarter to the end of March.

Kumba, a unit of Anglo American plc, said in a production report for the first quarter that total sales had fallen by 4 percent to 10.3 million tons and export sales were down 2 percent to 10.2 million tons on the decrease in iron ore railed to port, as well as suboptimal levels of finished stock at Saldanha Port.

“Rail performance deteriorated significantly during the period due to a series of operational challenges and train delays caused by severe weather conditions and a locust outbreak,” said the group. It said as a result, closing finished stock increased to 5.3 million tons for the period, with 4.9 million held at the mines.

The group reported a 70 percent decline in domestic sales to 107 000 tons in the first quarter, from 357 000 tons a year earlier, reflecting the diminishing offtake from ArcelorMittal.

On a positive note, Kumba recorded a 10 percent increase in total production to 10.6 million volumes in the first quarter compared with 9.6 million tons recorded a year ago.