KEY POINTS
- Kumba’s premium ore cuts carbon in steelmaking.
- UHDMS technology boosts premium output and extends mine life.
- Rail and port upgrades improve sales performance.
South Africa’s Kumba Iron Ore is carving out a stronger position in the global steel supply chain as the industry chases lower carbon emissions. The Anglo American unit’s ore, mined in the Northern Cape, boasts an iron content well above the Platts 62 index benchmark, giving steelmakers a cleaner, more efficient feedstock.
That quality edge is translating into lower Scope 1 emissions for customers—and higher realized prices for Kumba—at a time when ore quality from some major producers is sliding. For the first half of 2025, Kumba’s iron (Fe) content averaged 64.1 percent with a 67:33 lump-to-fine ratio, outpacing industry peers whose grades have dropped to as low as 61 percent.
Cleaner steelmaking with premium-grade ore
Kumba’s higher-grade ore not only boosts blast furnace productivity but also trims emissions. As a rule of thumb, each 1 percent rise in Fe cuts CO₂ output by 2.5 percent, while lump ore can shave an additional 10 percent off emissions. Beyond blast furnaces, the company also supplies direct reduction (DR) producers of direct reduced iron (DRI)—a lower-carbon steelmaking route.
Globally, most blast furnace capacity is less than 20 years old and is likely to remain in service for decades. That means demand for high-grade inputs like Kumba’s will remain robust, even as green steel technologies scale up.
UHDMS boosts premium output and margins
The ultrahigh dense medium separation (UHDMS) plant at Kumba’s flagship Sishen mine is shifting the production profile. By lowering the cutoff grade from 48 percent to 40 percent, UHDMS is set to lift premium-grade output from under 20 percent to more than 50 percent of total volumes. The process also cuts the stripping ratio, extends mine life to 2040, and reduces mining costs by $2 to $3 per dry metric tonne.
Those gains allow Kumba to earn an extra $2 to $3 per tonne in marketing premiums—and to keep capital and waste costs in check. Without UHDMS, the miner says it would need to significantly ramp up equipment and waste handling.
Community impact and logistics improvements
Kumba’s economic footprint extends beyond its mine gates. Eighty percent of its workforce comes from local Northern Cape communities, and since 2018 the company has helped create over 42,000 jobs outside mining, spanning agriculture, tourism, and manufacturing. It invested R135 million in social programs this year, including bursaries, healthcare initiatives, and school support, reaching more than 10,000 learners.
Logistics are also showing signs of recovery. Rail performance reached 83 percent of contracted volumes in the first half, aided by closer cooperation with Transnet under the Ore Users’ Forum. Improved throughput at the Port of Saldanha Bay lifted sales by 3 percent. Long-term plans to restore ore corridor capacity hinge on private-sector partnerships and regulatory reforms now under way.
Kumba posted first-half Ebitda of R16 billion and free cash flow of R7.9 billion and kept C1 unit costs flat at $39 per wet metric tonne. The company achieved an 8 percent price premium to the benchmark, improved its break-even price to $64 per tonne, and declared an interim dividend of R16.60 a share.