Iron ore and manganese
Overview
We are the world’s fourth largest iron ore producer with a large high-quality resource base in South Africa and Brazil.
Share of Group operating profit (2009): 30%
Share of Group net operating assets (2009): 27%
Our strategy is to grow our position in iron ore and to supply premium, high-quality iron ore products in the face of declining quality global supplies.
Our iron ore assets are divided into two operating units: Kumba Iron Ore in South Africa and our iron ore business in Brazil.
We hold a 62.76% shareholding in Kumba Iron Ore, a pure-play iron ore company, which listed on the Johannesburg Stock Exchange following its unbundling from Kumba Resources in November 2006. The company operates two mines in South Africa – Sishen in the Northern Cape, and Thabazimbi in Limpopo. Kumba is a leading supplier of seaborne iron ore and exported more than 85% of its total iron ore sales volumes in 2009.
Our iron ore business in Brazil
In Brazil, we have a 100% interest in the Minas Rio iron ore project. We also hold a 49% shareholding in LLX Minas Rio, which owns the port of Açu (currently under construction) from which iron ore from the Minas Rio project will be exported and a 70% interest in the Amapá iron ore system.
The Minas Rio iron ore project will include open pit mines and a beneficiation plant in Minas Gerais producing high-grade pellet feed, which will be transported through a slurry pipeline more than 500 kilometres to the Port of Açu in Rio de Janeiro state. The Amapá iron ore system is in the Amapá state in northern Brazil.
Samancor Manganese
We have a 40% shareholding in Samancor Manganese, which owns Hotazel Manganese Mines and Metalloys, both in South Africa, and Australian-based Groote Eylandt Mining Company (GEMCO) and Tasmanian Electro Metallurgical Company (TEMCO). BHP Billiton owns 60% of Samancor and has management control.
Our iron ore and manganese business in China
Kumba's first operational involvement in China followed its 1994 investment of $13 million in the development of the iron ore terminal at Qingdao Port, which facilitated the growth of its iron ore sales to China. The present level of Kumba’s iron ore sales to China represents about half of all exports from South Africa. Kumba Resources’ iron ore accounts for around 5% of China’s total iron imports.
Kumba also entered into an equity joint venture with Chifeng Hongye Zinc Smelting Company Limited and Chifeng Baiyinnuoer Lead Zinc Mine Company Limited in 2003. Currently, Exxaro, a company formed by the demerger of Kumba's non-iron ore assets, continues in the role of the joint venture partner.
These projects offer sound opportunities for operational involvement in China and serve as a platform from which Kumba can consider further investments in China.