Tuesday, February 20, 2024

 SOUTH AFRICA

Anglo’s Kumba Iron Ore plans to cut 490 jobs as rail crisis hits output


20 February 2024 - 
BY NELSON BANYA

Kumba Iron Ore plans to cut about 490 jobs after reducing production as it struggles to overcome persistent rail bottlenecks and move sufficient volumes to ports. File photo.
Image: Kumba Iron Ore website

Anglo American’s Kumba Iron Ore plans to cut about 490 jobs, it said on Tuesday, after reducing production as it struggles to overcome persistent rail bottlenecks and move sufficient volumes to ports.

In December, Kumba said it was curbing production to match the limited capacity of state-owned rail operator Transnet, hit by shortages of locomotives and spares, as well as rampant cable theft and vandalism.

Stockpiles of iron ore stood at 7.1-million tonnes in December and the persistent challenge in moving the commodity to ports for exports has forced Kumba to cut output to between 35-million and 37-million tonnes from this year to 2026.

The restructuring is “necessary” for Kumba to remain competitive, the company said.

Job losses across the mining sector due to weaker commodity prices and infrastructure challenges add pressure on the government before this year's elections.

The official jobless rate, measured at 31.9% in the third quarter of 2023, is among the highest in the world.

On Monday, Anglo American Platinum announced plans to cut 3,700 jobs after a sharp decline in metal prices slashed annual profit by 71%.

Kumba's headline earnings per share rose 26% to R70.80 in the year ended December 31, up from R56.19 the previous year as its high grade iron ore continues to fetch prices 15% above the benchmark rate.

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