KUMBA IRON ORE LIMITED - Kumba Iron Ore Limited production and sales report for the quarter ended 30 June 2016

Kumba Iron Ore Limited production and sales report for the quarter ended 30 June 2016

Kumba Iron Ore Limited
A member of the Anglo American plc group
(Incorporated in the Republic of South Africa)
(Registration number 2005/015852/06)
Share code: KIO
ISIN: ZAE000085346
(“Kumba” or “the Company”)

Kumba Iron Ore Limited production and sales report for the quarter ended 30 June 2016

Kumba Iron Ore Limited (“Kumba”) today released its production and sales report for the
quarter ended 30 June 2016. Throughout this report, production and sales volumes referred
to are 100% of Sishen Iron Ore Company Proprietary Limited (“SIOC”), and attributable to
shareholders of Kumba as well as the non-controlling interests in SIOC.

Overview:
- Production decreased by 15% to 8.9 Mt consistent with revised Sishen mine plan.
- Total sales of 9.7 Mt (0.8 Mt higher than production), a 26% decrease as stock levels
   reduced further.


                                  Quarter        % change     Quarter   % change

’000 tonnes                                      Q2 2016                 Q2 2016
                         Q2 2016      Q2 2015      vs         Q1 2016       vs
                                                 Q2 2015                 Q1 2016
Total                      8,864       10,385       (15)        8,925        (1)
- Sishen mine              5,700        7,177       (21)        5,842        (2)
DMS plant                  3,581        4,420       (19)        3,550         1
Jig plant                  2,119        2,757       (23)        2,292        (8)
- Kolomela mine            3,164        2,880        10         2,713         17
- Thabazimbi mine              -          328      (100)          370      (100)


                                  Quarter       % change      Quarter   % change

’000 tonnes                                      Q2 2016                 Q2 2016
                         Q2 2016      Q2 2015      vs         Q1 2016       vs
                                                 Q2 2015                 Q1 2016
Total                      9,666       13,081       (26)       10,544        (8)
- Export sales             8,730       11,733       (26)        9,376        (7)
- Domestic sales             936        1,348       (31)        1,168       (20)
   Sishen mine               699          906       (23)          717        (3)
   Thabazimbi mine           237          442       (46)          451       (47)

In order to position the company to withstand the significant decrease in iron ore prices,
Kumba revised the Sishen mine plan and reconfigured the pit to a lower cost shell.

Sishen’s operations were impacted by the implementation of the revised mine plan, which
effectively halved mining volumes, and resulted in a ~31% reduction in the number of
permanent employees and contractors. As a result, production for the quarter decreased by
21% to 5.7 Mt (2015: 7.2 Mt) and waste mined by 47% to 31 Mt.

Run rates were affected by the significant restructuring process, which began in the first
quarter, and which has now been substantially completed. Run rates were also affected by
higher than normal levels of rainfall and safety incidences including a fatal incident in May
which resulted in the issuing of a Section 54 notice.

The successful restructuring increased mine flexibility and run rates on key operating
parameters showed a marked improvement during June 2016. Total tonnes handled and ex-
pit ore increased by 28% and 38% respectively from May 2016 to June 2016, in support of
the guided production level of 27 Mt for the full year.

Kolomela produced 3.2 Mt for the quarter, a 10% increase (2015: 2.9 Mt). Waste mining
decreased to 12.5 Mt from 13.2 Mt in 2015, in line with the optimisation of the mine. Plant
efficiencies and throughput continue to improve in line with the mine’s full year production
target of 12 Mt, as guided for 2016.

Processing activities at Thabazimbi ended on 31 March 2016, following the ceasing of mining
activities on 30 September 2015. Mine closure processes are going according to plan.

Total sales decreased by 26% to 9.7 Mt (2015: 13.0 Mt) and more than total production of 8.9
Mt, as stocks were further reduced to a level of 2.3 Mt (2015: 3.9 Mt).

Logistics volumes for the quarter were impacted by low stock levels through the logistics
chain as a result of lower production. At the mines, finished product stock reduced to 1.1 Mt
and port stockpiles to 1.2 Mt, while total finished product stock decreased to 2.3 Mt by 30
June 2016 (2015: 3.9 Mt).


For further information, please contact:

Investors and analysts
Nerina Bodasing
Tel: +27 12 622 8324

Centurion
20 July 2016

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

Notes to editors:
Kumba Iron Ore Limited, a member of the Anglo American plc group, is a leading value-
adding supplier of high quality iron ore to the global steel industry. Kumba produces iron ore
in South Africa at Sishen and Kolomela mines in the Northern Cape Province, and at
Thabazimbi mine in the Limpopo Province. Kumba exports iron ore to customers in a range
of geographical locations around the globe including China, Japan, Korea and a number of
countries in Europe and the Middle East.
www.angloamericankumba.com

Notes to editors:
Anglo American is a globally diversified mining business. Our portfolio of world-class
competitive mining operations and undeveloped resources provides the raw materials to
meet the growing consumer-driven demands of the world’s developed and maturing
economies. Our people are at the heart of our business. It is our people who use the latest
technologies to find new resources, plan and build our mines and who mine, process and
move and market our products – from diamonds (through De Beers) to platinum and other
precious metals and copper – to our customers around the world.

As a responsible miner, we are the custodians of those precious resources. We work
together with our key partners and stakeholders to unlock the long-term value that those
resources represent for our shareholders, but also for the communities and countries in
which we operate – creating sustainable value and making a real difference.
www.angloamerican.com

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