Dense media separation plant at Kumba Iron Ore's Kolomela operation.
JOHANNESBURG (miningweekly.com) – South African iron-ore producer Kumba has delivered a resilient financial performance in 2022, despite the year being characterised by a volatile macro environment, lower iron-ore prices, disruptive logistics, cost pressures and operational challenges, the JSE-listed company reported on Tuesday.
A final 2022 cash dividend of R5.2-billion has brought Kumba's total shareholder dividends to R14.5-billion, with the company’s empowerment partners receiving dividends of R4.7-billion for the year.
Speaking at the company’s full-year results presentation, Kumba CEO Mpumi Zikalala highlighted that despite market volatility, demand for Kumba’s high-grade iron-ore helped the Anglo American group company realise an average price of $113 per wet metric tonne, 13% above benchmark prices, while achieving adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) of R37.3-billion and headline earnings of R56.19 a share.
"We are committed to retaining a relentless focus on sustainability and safety. Sadly, we suffered a fatality on 13 February 2023 at Kolomela mine. We remain committed to zero harm and continue our relentless focus on eliminating fatalities and fostering a safe operating environment,” Zikalala stated in a release to Mining Weekly.
Last year Kumba paid R8.9-billion in taxes to the fiscus, R6.5-billion in salaries and benefits to employees, and invested R10-billion-plus capital to sustain the business and the life of its assets.
Locally, Kumba supports 45 schools and 48 early childhood development centres, provided 18 000 megalitres of water to communities, and spent R5.4-billion in procurement in the Northern Cape, where it employs 79% of its staff.
When mines thrive, broader communities benefit, as illustrated by more than 29 000 local offsite jobs being facilitated since 2018.
“Our performance has confirmed that we have a good set of fundamentals and strategy in place for value delivery,” Zikalala stated.
Kumba Iron Ore has premium quality, high-value assets with life extension opportunities, which positions the company well for future growth. This is supported by a strong marketing team, and efficient and prudent capital allocation.
“Looking forward we will continue our unrelenting focus on safety and sustainability, cost discipline, operational excellence and enhancing our premium products while supporting greater collaboration with Transnet to stabilise and restore the operational performance of our rail lines and ports.
“While we can’t control external factors, we believe there is much scope for optimism as we continue to focus on what is in our control, and to capitalise on our enduring competitive advantage – our high-quality product and working to decarbonise our value chain to meet the demand from a world hungry for green steel,” added Zikalala.
Kumba has had six-and-a-half years of fatality-free production, zero new cases of occupational diseases, and seven years without any level 3-5 environmental incidents.
It has created R63.3-billion of shared value and achieved 2022 cost savings of R1.1-billion, taking the total cost savings to R5.2-billion since 2018.
Its Ebitda margin of 50% is down from 63% and the company closed with net cash of R9.3-billion.
Attributable free cash flow of R10.4-billion is 66% lower and return on capital employed of 76% is down from 147%.