Africa’s largest iron ore miner hit hard by weak prices

Africa’s largest iron ore miner hit hard by weak prices

Sishen mine, located in South Africa’s Northern Cape Province, is Kumba’s flagship operation and one of the largest open-pit mines in the world.

South Africa's Kumba Iron Ore, Africa’s largest iron-ore miner, warned Friday it expected first-half profit to slide by as much as 19% after prices of the steelmaking ingredient touched rock bottom.

Profit excluding one-time items is likely to fall between 19.50 rand (US$1.82) and 21.50 rand a share in the six months through June from 24.13 rand a year earlier, Anglo American’s (LON:AAL) division said in an e-mailed statement.

“The decrease in earnings is largely attributable to a decrease in export iron ore price,” Kumba said.

Iron ore prices crashed through $90 last month, the lowest levels since 2012, due to oversupply and weakening Chinese demand growth. The steel-making ingredient is down roughly 33% year to date (now trading at $96.90) and first declined to double digits mid-May.

Kumba’s earnings for the six months to end June 2014 will be released on July 22.

Image by Rogiro, via Flickr Commons