JOHANNESBURG – South Africa’s Kumba Iron Ore, a unit of Anglo American, said on Tuesday earnings fell 16% in the six months to June, mostly because of weaker prices.
The company, one of Anglo’s top profit generators, said earnings per share fell to R20.30 from R24.16 in the same period in the previous year.
Kumba said the decrease was mainly because iron ore export prices had fallen 17%, a trend which was partly offset by a softer rand currency against the dollar.
Export sales volumes were marginally down, the group said. About two-thirds of Kumba’s exports are destined for China.
But there was an almost 40% increase in domestic sales volumes on the back of a new supply agreement sealed with ArcelorMittal South Africa.
Kumba also said wage negotiations with its workforce were progressing and expected to be concluded soon.
Chief executive Norman Mbazima said on a conference call the company now recognised the Association of Mineworkers and Construction Union (Amcu), but declined to say what percentage of Kumba’s workers it now represented.
Amcu had not yet met the threshold for bargaining rights, he added.
This means the negotiations are being conducted with the National Union of Mineworkers and the Solidarity trade union, both less militant than Amcu which recently lead a five-month strike in the platinum sector.