Kumba Iron Ore Profit Sinks by Two-Thirds, Charge Booked on Mine

  • Slump in iron-ore prices hits Anglo American unit's earnings
  • Kumba cuts jobs to weather slump, impairs Sishen mine value

Kumba Iron Ore Ltd.’s profit fell by about two-thirds last year and the company booked an impairment on the biggest mine in Africa producing the steelmaking ingredient after global prices for the commodity slumped.

Headline earnings, excluding one-time items, dropped to 3.67 billion rand ($230 million) to 3.86 billion, from 11 billion rand, the Pretoria-based unit of Anglo American Plc said in a statement Tuesday. Basic earnings per share fell as much as 96 percent to 1.37 rand. The company will provide a definitive earnings figure for the year on Feb. 9.

Kumba is also booking an impairment on its Sishen pit in South Africa’s Northern Cape province after iron ore prices fell 69 percent since the start of 2012 amid a glut. Kumba will cut as many as 3,900 jobs to weather the slump. “The decrease in earnings is largely attributable to the significant decrease in export iron-ore prices,” the company said.

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