'Our industry is under tremendous pressure with the market now pricing in a more muted trend for the iron ore price over the medium to longer term. This is driven mainly by the expectation that supply growth will remain strong, against the backdrop of an ever more cautious outlook on China's economic growth trajectory. These circumstances have reinforced the need to make tough decisions for our business, that will enable it to withstand a longer period of much lower prices,' said CEO Norman Mbazima.
The new pit shell configuration will allow for a more flexible approach, reduce execution risk and lower capital cost over the life of mine. The mine will target FOB unit costs of ~$30/t and a breakeven price of ~$40/t CFR for 2016. Waste movement is expected to be materially below previous guidance of ~230mt, at ~135 Mt and production is expected to be reduced from previous guidance of 36 Mt for 2016 to ~26 Mt.
Kolomela continues to perform strongly
In order to reduce costs, Kolomela has been transitioned from three pits to two in the short to medium term. The mine is targeting a 2016 FOB unit cost of ~US$27/t and a breakeven price of ~$38/t CFR for 2016. The production target remains at 13Mt by 2017.
Thabazimbi closure on track
The Thabazimbi mine closure is progressing according to plan with the processing of previously mined material continuing until 1H2016.
Norman Mbazima emphasised, 'Our first priority remains safety as we start to implement our plan to continue delivering improvements in performance and cost competitiveness. Attention remains focused on taking every step possible to ensure that we maintain positive cash generation to see this cycle through.'
Further details will be provided at the Anglo American investor presentation this morning in London. The presentation will begin at 11.00am CAT and end at approximately 1.00pm CAT, and will be webcast live via the Anglo American website [www.angloamerican.com]. The presentation slides will be available on Kumba's website [www.angloamericankumba.com] from 11.00am CAT today.
A further operational update will be given at the Company's 2015 annual results presentation on 9 February 2016.
This announcement contains forward-looking statements and is subject to a number of risks and uncertainties, many of which are beyond Kumba's control and all of which are based on the Company's current beliefs and expectations about future events. The operational and financial forecasts provided in this announcement are estimates and have not been reviewed and reported on by the Company's external auditors.
Centurion
8 December 2015