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A lack of freight trains to carry minerals to port forced South Africa’s Kumba Iron Ore KIOJ.J on Tuesday to lower its production outlook for the next three years.
South Africa’s freight rail capacity has plummeted, hobbled by inadequate maintenance, a lack of spare parts, and theft of hundreds of kilometres of copper cable from rail lines, costing coal and iron ore exporters billions of rand in revenue.
Kumba, a subsidiary of Anglo American, had warned at the start of the month that its profit was likely to slump. Its headline earnings per share for 2022 came in lower than expected at 56.19 rand ($3.10), a 46% drop from the previous year.
The company now expects to produce between 35 and 37 million tonnes in 2023, having last year guided to 39 to 41 million tonnes. For 2024, it sees an output of 37 to 39 million tonnes, down from 41 to 43 million tonnes previously.
“We are engaging with Transnet and the government to improve the stability and reliability of rail and port infrastructure as a matter of urgency,” Kumba CEO Mpumi Zikalala said.