23 Feb Kumba Iron Ore to extend life of giant South African mine to 2040
Kumba Iron Ore has announced plans to spend US$246 million extending the life of its giant Sishen open pit operation in South Africa’s Northern Cape province.
Anglo American’s South African iron ore unit will continue to mine at the Sishen operation until 2040, thanks to additional mining efficiencies and the use of ultra-high dense medium separation (UHDMS) technology. The initial mine life would run until 2034.
“This is a game-changer for us,” said Kumba CEO Themba Mkhwanazi. “This is a significant investment if you consider the [business] environment at the moment with COVID-19.”
Kumba announced a pre-tax profit of $2.81 billion for last year – a 37% rise on 2019 – despite seeing production decline during 2020. The improved performance was driven by higher iron ore prices and the depreciation of the rand against the dollar.
The company sees the iron ore market remaining robust in 2021 due to continued strong demand from China and supply constraints. Kumba realised an average price of $115 per tonne last year, as prices climbed.
“We have a very positive view of the market, but prices are unlikely to be sustained at these levels,” said Kumba’s head of marketing Timo Smit. “Supply still looks fairly constrained, but prices are likely to start coming down.”
Kumba joins fellow South African miners Sibanye-Stillwater and Anglo American Platinum in outlining an investment plan to extend the life of its operations and boost metals output.