Kumba upbeat on iron ore contract talks with China

KUMBA Iron Ore did not expect to be affected by a dispute between China’s state-owned iron ore buyer and mining giants BHP and Rio Tinto, saying on Thursday it would conclude contract talks this year.In September, China implemented curbs on iron ore imports through China Minerals Resources Group (CMRG). Established two years ago, CMRG was driving for better prices, telling steelmakers not to buy certain products. It is a development that bank Goldman Sachs believes could reshape the iron ore market in the longer term.“CMRB was only established a couple of years ago, but is by now responsible for probably 70 to 75% of Chinese iron ore imports. So the balance of power between buyers and sellers is shifting a little,” said Timo Smit, head of marketing for Kumba.“That said, I don’t really see any fundamental change, because China remains extremely dependent on imported iron ore,” he added.“We continue to see China as an extremely important market for our products, and our Chinese steel mill customers as long-term partners. I expect to conclude those discussions positively sometime this year.”China’s share of Kumba’s export sales increased to 56% in its 2025 financial year compared to 54% in 2024 despite the company targeting sales of between 45% to 55% to regions outside of China in the medium- to long-term.Smit was commenting in a presentation to media of Kumba’s full year results in which the company posted an 18% increase in headline earnings of R45.97 per share. Kumba cited average realised prices, higher sales, and penalty income from Transnet reported by Miningmx last year.Kumba, controlled by Anglo American, declared a final dividend of R15.43/share, taking the total dividend to R32.03/share – a 70% payout ratio.At $95 per wet metric ton, Kumba achieved an average realised price some 12% above the benchmark FOB export price of $85/t in its 2025 financial year. Its product is relatively high in iron content and is predominantly sold as higher graded, low impurity lump product. Despite the quality of lumpy iron ore, premiums closed at a record low last year.“There is pressure on the lump premium for sure, but the lump premium has started to recover a little,” said Smit. “From a low of about three cents per dry metric unit, it is now at six cents per dry metric unit,” he said.“I don’t think it has anything to do with the BHP dispute, to be quite honest. It’s normal market dynamics — the choice that mills make between lump and pellets, and the influence that the pellet premium has on that balance. That’s what’s at play here.”As per its fourth quarter report earlier this month, Kumba reported a 1% increase in iron ore production year-on-year of 36.1 million tons. Exports increased marginally by 2% to 37Mt at the upper end of the guidance.The group has guided to production of between 31 to 33Mt and sales of 35 to 37Mt as the company releases finished stock built up while it works on the “tie-in” of its ultra high dense media separation (UHDMS) technology. UHDMS, an R11.2bn project, is expected to increase iron ore recoveries for Kumba.The post Kumba upbeat on iron ore contract talks with China appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.comWeiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com