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South Africa's Kumba in talks with unions over Thabazimbi mine closure
Fish lumatha, a Haul truck driver looks on at Kumba Iron Ore, the world's largest iron ore mines in Khathu. PHOTO BY REUTERS /Siphiwe Sibeko
16/07/2015
JOHANNESBURG (Reuters) - South Africa's Kumba Iron Ore is in talks with unions about closing its Thabazimbi mine, which could lead to nearly 1,200 job losses, as the Anglo American unit battles weak commodities prices.
The fate of loss-making Thabazimbi in northern South Africa has been in doubt in recent months as iron ore prices tumbled to levels many analysts have said would make it difficult for smaller players to make money.
The benchmark iron ore spot price fell to $44.10 a tonne last week, its lowest since late 2008, on concerns about oversupply and tumbling equity markets in China.
"We have looked at all options to further sustain the mine, having already extended its life several times in recent years, and have come to the inevitable conclusion that this mine has
now come to the end of its life," CEO Norman Mbazima said in a statement on Thursday.
One such attempt was made less than two years ago, when Kumba took over the mine's financial and operational risks from ArcelorMittal South Africa.
Kumba, which reported a 9 percent decline in quarterly output on Thursday, said there was no longer any commercial logic to keeping the more than 80-year-old mine running.
The Thabazimbi operation, the smallest of the company's three mines, employs about 800 permanent staff and 360 contractors.
Shares in Kumba slumped 7 percent to 123.70 rand by 0846 GMT, on course for their heaviest daily percentage fall in more than two months.
Kumba said its total production for the quarter to the end of June fell 9 percent to 10.4 million tonnes, with Thabazimbi contributing 328,000 tonnes.
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