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Kumba cuts production outlook for 2023, 2024
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Profit down 46% in 2022
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Stockpiles grow as rail service deteriorates
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Shares fall 3.7%
(Adds 2022 production figures, shares, stockpiles, background)
By Helen Reid
JOHANNESBURG, Feb 21 (Reuters) - A lack of freight
trains to carry minerals to ports in South Africa forced Kumba
Iron Ore Ltd on Tuesday to lower its production outlook
for the next three years.
South Africa's freight rail capacity has plummeted as
state-owned logistics firm Transnet is hobbled by years of
underinvestment, a lack of locomotives, and theft of hundreds of
kilometres of copper cable from rail lines, costing coal and
iron ore exporters billions of rand in revenue.
Kumba, a unit of Anglo American , warned at the start
of the month that its profit would take a hit. Headline earnings
per share for 2022 came in lower than expected at 56.19 rand
($3.10), a 46% drop from the previous year.
Kumba shares were down 3.7% by 0855 GMT.
"We are engaging with Transnet and the government to improve
the stability and reliability of rail and port infrastructure as
a matter of urgency," Kumba CEO Mpumi Zikalala said.
The company now expects to produce between 35 and 37 million
tonnes in 2023, having last year guided to 39 to 41 million
tonnes. For 2024, it sees an output of 37 to 39 million tonnes,
down from 41 to 43 million tonnes previously.
Kumba will have to wait until 2025 to reach production
levels it previously expected for 2023.
Production fell by 8% to 37.7 million tonnes in 2022, from
40.9 million tonnes the previous year. Kumba said the amount of
ore sent by rail to Saldanha port fell by 9%, and a build-up of
stockpiles at its mines limited space for further production.
Overall, sales of iron ore to the export market fell by 9%.
Kumba was left with 7.8 million tonnes of iron ore stockpiled at
its mines and at the port, up 28% from the previous year, as the
lack of trains left commodities stranded.
($1 = 18.1153 rand)
(Reporting by Helen Reid; Editing by Kim Coghill, Uttaresh.V
and Shounak Dasgupta)
