BULKS

South African Transnet strike hits exports

Anglo American’s South African Kumba Iron Ore business has received a force majeure notice from the country’s logistics utility Transnet which it says will impact export sales by about 120,000 tpd.

 Anglo-American-Kumba-Iron-Ore-Sishen.jpg

Anglo-American-Kumba-Iron-Ore-Sishen.jpg

The company said it received the notice on 7 October, which is due to strike action by Transnet's unions.

"We have implemented contingency plans to safeguard our assets and minimize the impact on operations," Kumba said.

"However, as a result of the disruption to Transnet's rail and port services, the estimated impact on production is approximately 50,000tpd for the first seven days and thereafter, approximately 90,000tpd.

"Export sales will be impacted by approximately 120,000tpd," it said.

Kumba's 2022 production and sales guidance is for 38 million-40 million wet t.

"Kumba will continue to monitor the situation closely and provide further updates, as appropriate," the company said, noting that its sales report for the third quarter is scheduled for release on 27 October.

Last week, Australia's Department of Industry, Science and Resources forecast that South Africa - which is responsible for about 4% of global iron ore exports - will export 66 million t of iron ore this year, which would be down 2.9% from 68 million t last year.

"The global seaborne iron ore market is expected to remain relatively balanced over the outlook period, with growth in exports from both Australia and Brazil offsetting falls from mid-tier exporters such as India," the department said in its Resources and Energy Quarterly.

The outlook period is to 2024.

"However, growing macroeconomic headwinds - such as weakening global growth, energy shortages and further COVID-19 outbreaks - presenting a mountain risk to steel demand growth over the outlook, which would have repercussions for iron ore demand," it said.

Kumba's share price was down 3.46% day on day at ZAC39,193 (US$21.67).

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