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RE-IMAGINING
MINING
TO IMPROVE
PEOPLE’S LIVES
Renaissance Capital Conference, 27 May 2020
KUMBA IRON ORE LIMITED
Certain statements made in this presentation constitute forward-looking statements. Forward-looking statements are typically identified by the use of forward-looking
terminology such as ‘believes’, ‘expects’, ‘may’, ‘will’, ‘could’, ‘should’, ‘intends’, ‘estimates’, ‘plans’, ‘assumes’ or ‘anticipates’ or the negative thereof or other
variations thereon or comparable terminology, or by discussions of, e.g. future plans, present or future events, or strategy that involve risks and uncertainties. Such
forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the company's control and all of which are based on the
company's current beliefs and expectations about future events. Such statements are based on current expectations and, by their nature, are subject to a number of
risks and uncertainties that could cause actual results and performance to differ materially from any expected future results or performance, expressed or implied, by
the forward-looking statement. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks
and uncertainties facing the company and its subsidiaries. Such forward-looking statements are based on numerous assumptions regarding Kumba’s present and
future business strategies and the environment in which Kumba will operate in the future. Important factors that could cause Kumba’s actual results, performance or
achievements to differ materially from those in the forward-looking statements include, among others, levels of actual production during any period, levels of global
demand and commodity market prices, mineral resource exploration and development capabilities, recovery rates and other operational capabilities, the effects of
global pandemics and outbreaks of infectious diseases, the availability of mining and processing equipment, the ability to produce and transport products profitably,
the availability of transport infrastructure, the impact of foreign currency exchange rates on market prices and operating costs, the availability of sufficient credit, the
effects of inflation, political uncertainty and economic conditions in relevant areas of the world, the actions of competitors, activities by governmental authorities such
as permitting and changes in taxation or safety, health, environmental or other types of regulation where Kumba operates, conflicts over land and resource
ownership rights and such other risk factors identified in Kumba’s most recent Integrated Report. The forward-looking statements contained in this presentation
speak only as of the date of this presentation and the company undertakes no duty to, and will not necessarily, update any of them in light of new information or
future events, except to the extent required by applicable law or regulation.
Disclaimer
2
Rewarding employee talent
R5.0bnSalaries and benefits (FY18: R4.6bn)
Contributing to South Africa
R7.8bnIncome tax (FY18: R4.1bn)
R2.6bnMineral royalty (FY18: R983m)
Supporting local businesses
R13.9bnBEE business suppliers (FY18: R11.8bn)
R2.4bnHost community suppliers (FY18: R1.4bn)
Building communities
R171mDirect social investment (FY18: R124m)
Capital efficient, resilient business - improving people’s lives
3
SRI IndexEnvironmental, Social
& Governance Investing
41 35 20 21 17
158
9777
4151
2015 2016 2017 2018 2019
LTI TRC
Safety and sustainability is our core value
Safety Health Environment
28
122 7 8
2015 2016 2017 2018 2019
▪ Elimination of fatalities framework
▪ Technology enabling improved safety
▪ Leading indicator drives proactive safety
management
▪ Focused on reducing exposure to
occupational hazards
▪ Wellness and disease management
▪ Enhanced environmental management
leading to improved performance
▪ Increased awareness and monitoring
Occupational diseases
(new cases)
Major incidents
(level 3 – 5)
4
3.5 years fatality free
92%voluntary HIV test
1 0 0 0 0
2015 2016 2017 2018 2019
Achievedrehabilitation
targets
Proactive and dynamic response to COVID
5
WeCare: workforce &
communities
Cash conservation &
business continuity
WeCare supports workforce and communities where it is needed most
6
Implement operating protocols
Prevention Response Recovery
Maintain essential services for
communities (eg water, energy)
Integrated workforce and community
screening and testingEnsure safe and healthy operations
Community support (incl. health
training, food parcels)
Support education, job training,
healthcare and livelihoods
800
1000
700
920
960
325
FY18e FY18a FY19e FY19a FY20e
2.4
3.6-3.82.8–3.0
0.6
1.2-1.3
0.7-0.9
2.6
1.8-2.0
2.1-2.3
FY19 FY20e FY20 revised
SIB Expansion Deferred stripping
6.6–7.1
5.6
Cash conservation of R1.3bn to further strengthen our balance sheet
Capital expenditure (Rbn)Cost savings against target (Rm)
7
5.6–6.1
COVID
Response
COVID
Response
Sishen
▪ Production: ~ 27Mt (Previous ~ 29Mt)
▪ Waste: 145 – 160Mt (Previous 170 – 180Mt)
Kolomela
▪ Production: ~11Mt (Previous ~ 13Mt)
▪ Waste: 45 – 55Mt (Previous 55 – 60Mt)
Business continuity in challenging times
Total production Total sales
37 – 39Mt(Previous 41.5 - 42.5Mt)
38 – 40Mt(Previous 42 - 43Mt)
8
Iron ore stocks at port
Construction activity continues to remain seasonally strong in China..
9
0
50 000
100 000
150 000
200 000
250 000
300 000
Jan Apr Jul Oct
2020 2019 2018
Construction steel daily transactions (tonnes per day, 5DMA)
8
13
18
23
28
33
38
Jan Apr Jul Oct
Total steel stocks at mills & traders (MT) 2018
2019
2020
…resulting in continued destock of iron ore port stocks, which has
fallen to 4-year low of 107Mt.
50%
60%
70%
80%
Jan Apr Jul Oct
National BF Operating Rates (%) 2018
2019
2020
100
120
140
160
Jan Apr Jul Oct
IO Port Stocks (Mt, 41 ports)2018
2019
2020
…mills’ production continued to improve and has potential further
upside
…steel inventory overhang now 43% lower than peak level in early March
Dec
Dec
Dec
Dec
Positioned for recovery
10
Production ramping up and
healthy stock levels
Able to adapt quickly to
market dynamics
Committed to delivering our strategy
11
Operating assets at full potential Leveraging endowment Sustainable returns
▪ Enhanced product portfolio
▪ Improved operational efficiency
▪ Cost savings initiatives
▪ Optimisation and efficiencies
▪ Technology and futuremining
▪ Northern Cape exploration
▪ Business resilience
▪ Cash conservation
▪ Capital efficiency
Q&A
KUMBA IRON ORE LIMITED
RE-IMAGINING
MINING
TO IMPROVE
PEOPLE’S LIVES
KUMBA IRON ORE LIMITED
13
Penny Himlok
T:: +27 12 622 8324
M: +27 82 781 1888
INVESTOR RELATIONS
