Kumba announces its results for the year ended 31 December 2015
“The sharp decline and volatility in the iron ore price over the past year, has been a significant factor for Kumba and the mining industry in general. We have responded decisively to position our business to withstand a longer period of lower iron ore prices. A shift in strategy from a volume to a value based strategy led to a reconfiguration of our mines to reduce the amount of waste and to save costs. Sishen’s pit was restructured to a lower cost shell, production at Kolomela was increased by ramping up low cost tonnes and optimising the waste profile, and mining at Thabazimbi was stopped,” says Norman Mbazima, Kumba Chief Executive Officer.
In addition, strict capital discipline and significant structural changes to cost was achieved through savings on capital expenditure, overheads, study costs and headcount reduction. These measures are part of a key objective – to preserve cash, reduce debt and ultimately position our business to grow sustainable free cash flow and shareholder returns over the long term.”
– No loss of life in 2015
– 42% drop in average iron ore price to US$56/t severely impacted earnings
– Total production decreased by 7% to 44.9 Mt
– Reorganisation and capital management delivered reduction of ZAR4 billion in controllable cost
– HEPS 66% lower at ZAR11.82 per share, R6 billion impairment
– Net debt reduced by 42% to ZAR4.6 billion
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