Kumba Iron Ore Ltd., Africa’s biggest producer of the steelmaking ingredient, said first-half profit fell as much as 63 percent after prices of the steelmaking ingredient declined.
So-called headline earnings, which exclude one-time items, will drop to a range of 2.4 billion rand ($194 million) and 2.6 billion rand, or 7.50 rand and 8.05 rand a share, in the six months through June 30 from 6.51 billion rand, or 20.28 rand, a year earlier, the Pretoria, South Africa-based unit of Anglo American Plc said in a statement Wednesday.
“The significant decrease in export iron-ore prices is largely responsible for the decrease in earnings,” the company said.
Iron ore dropped 37 percent in the year ended June 30 due to a surplus that emerged after the largest miners including Rio Tinto Group, BHP Billiton Ltd. and Fortescue Metals Group Ltd. invested billion of dollars to boost output, exacerbating a glut as China, the biggest buyer, grew at the slowest pace in more than two decades.
Kumba pared earlier gains of as much as 4.6 percent and traded 3.4 percent higher at 128.42 rand by 1:16 p.m. in Johannesburg.