Assmang - Press Announcements

By: Assmang  11-11-2011
Keywords: Iron ore, Manganese

ASSMANG PROVISIONAL RESULTS FOR THE YEAR ENDING 30 JUNE 2010

For the financial year ended 30 June 2010, Assmang Limited (“Assmang”) reported a 57% decrease in headline earnings to R2.7 billion (F2009: R6.3 billion). Despite challenging market conditions, especially pronounced in the first half of the financial year under review, Assmang achieved increased sales volumes across all commodities. The decrease in earnings was due mainly to the decline in dollar commodity prices and a strengthening of the Rand versus the US Dollar. Realised prices decreased in US Dollar terms for iron ore (14%), manganese (57%), ferromanganese (49%) and ferrochrome (17%) when compared to the 2009 financial year.

Iron ore sales volumes increased by 32.3% to 9.8 million tonnes, whilst sales of manganese ore increased by 43.8% to 3.1 million tonnes.

Manganese export sales are limited by export capacity from Port Elizabeth, Assmang has successfully secured additional export capacity through Durban and Richards Bay to take advantage of improving market conditions and increasing demand. This additional export capacity however incurs higher logistics cost. There was a marked improvement in prices and thus headline earnings in the last quarter of the financial year. Iron ore prices increased by 42% in the second half of the year while manganese, ferromanganese and ferrochrome prices increased by 15%, 33% and 27% respectively owing to an improvement in market conditions. Assmang’s headline earnings in the second half of the year increased by 252% to R2 127 million when compared to the first half year earnings of R604 million.

The iron ore operations achieved a decrease in unit production costs of 6% owing to increased production at the Khumani mine as the 10 mtpa expansion ramped up. On mine production unit costs at the manganese operations increased as a result of lower mined production with the increase in sales of manganese ore achieved from inventory. Above inflation cost increases at the manganese alloys and charge chrome operations were due mainly to an increase in electricity and reductants.

Total capital expenditure was R3.3 billion (F2009: R2.8 billion). The main expenditure items include the ongoing infrastructure development at the Khumani 16 mtpa Expansion Project (R2.1 billion) and the upgrading of the beneficiation plant at Nchwaning Mine (R305 million), while development at the Nchwaning Mine amounted to R63 million. At Cato Ridge and Machadodorp Works, R258 million was spent on rebuilding furnaces, with a further R46 million incurred at Machadodorp Works on the conversion of a chrome furnace to a manganese furnace. The remaining capital was spent on IT related projects, vehicles and other equipment replacements.

Keywords: Iron ore, Manganese

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11-11-2011

Assmang - Press Announcements - press

Further to the press comment following disclosure in Kumba’s results announcement, dated 22 August 2003, of the heads of agreement entered into between Kumba and Assmang, both Kumba and Assmang wish to provide the following clarification in relation thereto.