Kumba sees 3% sales boost from improved logistics services

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In a trading update ahead of the release of its half-year results on 29 July, the Anglo American unit said its sales for the six months to June 30 were 18.7 million metric tonnes, up from 18.1 million metric tonnes during the same period last year.

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Kumba, Africa's biggest iron ore miner, expects headline earnings to be between R6.841bn and R7.341bn in the six months, compared to R7.148bn previously.

The company kept its full-year production and sales forecast within the range of 35 million to 37 million metric tonnes.

Commodity exporters have provided technical and equipment assistance to South Africa's state-owned freight rail and ports operator, Transnet.

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It has for years struggled to provide adequate services, blaming equipment shortages, cable theft and vandalism. Companies, including Kumba, have been forced to cut output to match the limited logistics capacity.

"Overall, the collaborative partnership between the ore users' forum and Transnet on the ore corridor restoration programme is starting to deliver positive outcomes in terms of logistics performance," Kumba said.

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Its increased sales followed a 4% increase in ore transported by rail to Saldanha Bay, as well as improved equipment availability at the port over the first half of the year.

Kumba has previously suggested that private investors should run the 861km rail line from its mines to the port to enhance efficiency. It is unclear whether that could happen.