Kumba Iron Ore Limited. JSE: KIO

Kumba Iron Ore shares

Background of Kumba

  • Kumba Iron Ore is a South African iron ore mining company and a subsidiary of Anglo American. The company is the largest iron ore producer in Africa and the fourth largest in the world.

  • Kumba’s flagship project is the Sishen mine in the Northern Cape, which accounted for 70% of the group’s production (or 31.4Mt) in 2015. Also in the Northern Cape, Kolomela mine is the company’s newest operation and contributes around 12Mt of iron ore per year. Thabazimbi mine in Limpopo is the company’s other asset, producing approximately 1Mt per year. Domestic sales accounted for 4.3Mt of product in 2015, with export sales accounting for 43.5Mt.

  • Kumba holds a 73.9% interest in Sishen Iron Ore Company (SIOC), which owns the operating assets of Kumba. The company employs over 11 000 people and makes product for sale to customers in South Africa, China, India, Japan, South Korea, Europe and the Middle East.

  • Kumba shares are available to buy on the Johannesburg Stock Exchange (JSE) with a market cap of R44.5 billion

Kumba Shares Growth Driver

  • Kumba share price and overall performance has been driven down steeply by the difficult conditions within the global steel industry and the local mining industry. The live online stocks chart shows that Kumba share price has fallen from a high of just over R600 in 2013, to R137.50 by August 2016.

  • The group’s latest annual report described the 2015 financial year as the most challenging in Kumba’s history, with the company having to contend with steeply reduced iron ore prices and depressed financial markets. This forced Kumba to change its life of mine plans and implement restructuring across the group through retrenchments and a refined operating model. The group is in the process of closing operations at Thabazimbi and has increased production at the successful Kolomela mine. Capital expenditure has been reduced by 20%, whilst savings have been achieved on overheads and project and technical study costs.

  • The group’s financial data for the year indicated a sharp drop in operating profit to R2.6 billion from R19 billion the previous year. The forecast doesn’t look good for the company in the short to medium term, with iron ore prices expected to remain depressed. The company believes that the restructuring process has better prepared it for these difficult trade conditions, and continuing attention will be paid to further reducing costs in future.

Kumba Investor Tip

  • Whilst Kumba share price has staged a slight recovery in 2016, the company still faces significant challenges in a very difficult market. Anglo American recently announced an intention to exit their 69.7% interest in the company, which will further dampen the confidence of investors to buy the shares.

  • Despite the drastic austerity measures put in place, investment analysts still predict that Kumba shares will under perform the market. It would take a brave investor to buy the shares today.

Kumba Major Shareholders

Anglo American, Industrial Development Corporation, Public Investment Corporation.

  • Sector

    Materials

  • Industry

    Iron & Steel

  • Sub industry

    Steel Raw Material Suppliers

How to buy Kumba Group Shares

  • Kumba : How to buy Kumba Group Shares Online

    We have made it simple to buy JSE listed firm shares online. The easiest way to buy Kumba shares or stocks is to; start by submitting the ‘BUY THIS SHARE’ form. Next, one of our experienced and certified stock brokers will personally get in contact with you to discuss your custom stock request. Finally, a stock advisor will confirm the amount of shares you are looking to invest in Kumba and assist you with the setup and management of your stock portfolio account.

  • Here are the steps you must follow to Buy / Purchase Kumba Group shares with utmost confidence:

    1. Start by Filling in the BUY THIS SHARE form.
    2. Insert your name, email, telephone number and monthly remuneration.
    3. Then, Indicate the amount you are looking to invest in Kumba.
    4. Click the “ INVEST NOW” button
    5. Once we have received your info, a dedicated stock advisor will personally call you back to discuss your personal share request.
    6. Lastly, your newly appointed personal stock advisor will handle all account setups and reporting as stipulated by the financial services board of South Africa (FSB)
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