Kumba’s new mine counters strike losses

South African mining firm Kumba Iron Ore reported on Tuesday that company profits increased in the first half of 2013 as a result of profits from its new mine countering losses caused by strikes.

New Northern Cape mine Kolomela has increased output by 62% to 5.26-million tonnes since it started commercial production in December 2011. But operation stoppages late last year caused iron-ore production at the firm's Sishen mine in Northern Cape to decrease by 10% to 16.1-million tonnes compared with a year earlier. Operations at Sishen came to a standstill when 125 employees occupied the mine for 14 days in October.

Kumba released its interim results on Tuesday for the six months to 30 June 2013, showing an increase in earnings to R7.76-billion from R7.66-billion a year earlier. The company sees its growth as being aligned to its ability to deliver on social and environmental objectives, Kumba Iron Ore chief executive Norman Mbazima said.

"Kumba has worked to deliver a meaningful impact on outh Africa that goes beyond its corporate contribution to the mining industry. We continue to strive for job creation, skills development and a new standard of safety and operational excellence in our work. However, in addition to all of this, we seek to achieve real transformation in our workforce and within the communities around our mines."

Kumba Iron Ore shareholders received R4-billion and its BEE shareholders received R1.1-billion in the first half of 2013.

Kumba is the largest private-sector employer in the Northern Cape, with the vast majority of staff residing in local communities. But the employee relations environment in the mining industry remains difficult, Mbazima said.

"We will continue to actively engage with our employees and their representatives in this coming period. We are pleased that following the unprotected strike last year, our labour environment at Kumba stabilised in the first six months and we were fortunate not to have been affected by the labour unrest seen in the mining industry this year. We concluded a two-year wage agreement in July 2012 and will therefore not be negotiating remuneration this year."

"With markets and our operations permitting, we will be able to continue our work of empowering our employees, their families and broader community groups," Mbazima said. – additional reporting by Bloomberg

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