Africa's no 1 iron ore mine expects market surplus this year
Kumba Iron Ore (PINK: KIROY, JNB:KIO), Africa's largest iron ore producer, said Tuesday profits rose in the first half despite a crippling strike at its flagship owner of the the Sishen mine in South Africa.
The Anglo American-controlled company said earnings climbed slightly to $791 million (R7.76 billion) in the six months through June, after a 62% output jump to 5.26 million tonnes at its 18-month old Kolomela mine offset falling production at Sishen.
Iron-ore production at the Sishen mine in the north west of the country slid 10% to 16.1 million tonnes compared to the first six months of 2012.
The Sishen mine was brought to a standstill when around 300 employees disrupted operations and damaged equipment at the operation which produced over 40 million tonnes last year.
The company expects full-year production to come in at 37 million tonnes reflecting the knock-on effects of the strike, with total exports remaining at around 40 million tonnes.
"Steel fundamentals remain under pressure as the Chinese economy slows down," the company said. "Iron-ore prices are expected to remain under pressure as supply exceeds demand in the second half of the year though restocking by steel mills may support prices in the near term."
Iron ore import prices at China's Tianjin port added 0.3% to $131.90 on Tuesday, according to data compiled by The Steel Index, well below the 2013 high of just under $160 a tonne struck in February.