RAIL derailments on the Sishen to Saldanha railway contributed towards an 8% decline in fourth quarter iron ore deliveries, said Kumba Iron Ore.Commenting in a fourth quarter and full year production update, the Anglo American group said on Thursday it still achieved full year sales guidance, just.In terms of production guidance for the next three financial years, Kumba has also made a heavy cut for 2026 as it incorporates its Ultra High Dense Media Separate Plant (UHDMS), a project it will now recommence after a period of re-engineering.For the year in review, total sales came in at 36.2 million tons (Mt) compared to full year guidance of between 36 to 38Mt. Deliveries were also impacted by a 15-day shut down for maintenance in the fourth quarter.Disappointingly, the derailments occurred after the shut-down.Kumba said it drew on stocks at the mines and cut production 17% quarter-on-quarter while sales increased by 1% to 9.1Mt. Kumba ended the year with production of 35.7Mt – a 2% decline year-on-year – compared to guidance of 35 to 37Mt.In terms of the market, Kumba said its realised average price of $92/t was 3% above the benchmark, but it general the iron ore market was under pressure owing to “subdued” steel demand and an increase in iron ore supply. Stimulus efforts in China and strong exports of steel from China partially offset negative market factors.The firm issued a trading statement in which it said basic share earnings would be 33% to 39% lower year-on-year or R43.06 to R47.64 per share.Earnings guidance included a reversal of an impairment on its Kolomela mine taken out for the 2022 financial year related to adjustments Kumba made to the rail crisis in South Africa in which it cut production to match lower rail capacity.Deteriorating infrastructure and a lack of sufficient rolling stock has resulted in a massive decline in the efficiency of the rail export network, operated by state-owned company Transnet. In response to the crisis, Government has set out plans to partially privatise the network. In December, Transnet published a ‘Network Statement’ in which users such as Kumba were invited to bid for rail slots it would operate.“Kumba is engaging with Transnet on how the Network Statement will be implemented in relation to the current contractual agreements for both Sishen and Kolomela,” the company said, adding the initiative was “a significant step forward in terms of the liberalisation of the South African railway industry”.Kumba acknowledged, however, that despite these efforts, rail performance would take time to improve. As a result, production guidance for the current financial year is unchanged year-on-year at 35 to 37Mt while production guidance for the 2026 has been cut heavily to between 31 to 33Mt. This is to accommodate the UHDMS. Sales will be supplemented in 2026 with finished stock at Sishen port.For the 2027 financial year, iron ore production is expected to increase to between 35 to 37Mt, said Kumba.The post Kumba Iron Ore hit by derailments despite 15 day maintenance appeared first on Miningmx.
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