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Kumba's iron-ore sales are up 3% thanks to improved rail and port services

Kumba Iron Ore reported that its mineral sales in South Africa increased by 3% over the first six months of this year. This helped offset the inflation-related increases due to an improvement in rail freight operations and port operations.

Anglo American's unit released a trading update on the 29th of July, ahead of its release of half-year results. The company said that its sales during the six months ending June 30 had increased from 18.1 millions metric tonnes in the same period of last year.

Kumba, Africa’s largest iron ore mining company, expects its headline earnings in the first six months to range between 6.841 and 7.341 billion Rand ($389.40-$417.86 millions), compared with 7.148 billion.

The company's full-year sales and production forecast was kept within a range of 35 to 37 million metric tonnes. Commodity exporters provided Transnet, South Africa's state owned freight rail and port operator, with technical and equipment support.

Since years, it has struggled to deliver adequate services. It blames equipment shortages and cable theft, as well as vandalism. Kumba and other companies have had to reduce their output in order to meet the limited logistic capacity.

Kumba stated that the overall collaborative partnership between Transnet and the Ore Users' Forum on the ore-corridor restoration programme has started to produce positive results in terms of the logistics performance. The increased sales were a result of a 4% rise in the amount of ore shipped by rail to Saldanha Bay as well as an increase in the availability and efficiency at the port during the first half year. Kumba had suggested in the past that private investors run the 861-kilometre (535-mile) rail line between its mines and the port, to improve efficiency. It's unclear if that will happen.

(source: Reuters)