Themba Mkhwanazi on how COVID-19 has impacted Kumba’s H1 earnings

Kumba Iron Ore, a major player in the iron-ore mining industry, has recently released its interim results, revealing a 17% drop in earnings for the first half of the year. The decline has been attributed to the disruption caused by the COVID-19 pandemic on output and sales. Despite the challenges, Themba Mkhwanazi, the CEO of Kumba Iron Ore, remains positive about the company's resilience and ability to navigate through these turbulent times. In an interview with CNBC Africa, Mkhwanazi highlighted the proactive measures taken by the company to mitigate the impact of the pandemic. He emphasized the importance of a holistic approach that not only focused on business operations within the mine gate but also extended to supporting communities and stakeholders. Kumba Iron Ore implemented stringent health and safety protocols, including screening, testing, and infrastructure improvements, to ensure the well-being of employees and the surrounding communities. Mkhwanazi acknowledged the collaborative effort of various stakeholders, including governments, communities, unions, and peers, in managing the challenges posed by COVID-19. He shared that the company had successfully contained the spread of the virus within its mines, with only 248 reported cases, of which 76 had already recovered. The comprehensive testing facilities established by Kumba Iron Ore have not only benefited the company but also the wider community and industry players. Despite the prevailing economic uncertainties, Kumba Iron Ore has remained optimistic about its future prospects. Unlike many other companies that have cut dividends and capital expenditure, Kumba Iron Ore has taken a different approach by investing in capex and expanding its operations. Mkhwanazi explained that the decision to increase capex, particularly in projects like Carpetsville South and the UHDMS project, reflects the company's confidence in its long-term sustainability and commitment to growth. The CEO highlighted the significance of the investments in sustaining production levels and supporting local economies, such as the Tansabani region, where Kumba's operations have a significant impact. The company's resilience and strong cash flows, despite the challenges posed by COVID-19, have bolstered confidence in its ability to weather the storm and emerge stronger. Looking ahead, Mkhwanazi expressed cautious optimism about the company's performance in the next six months, given the ongoing uncertainty surrounding the pandemic. While acknowledging the potential logistical challenges that may arise, he reiterated Kumba Iron Ore's confidence in its ability to adapt and thrive in the changing landscape of the mining industry. In conclusion, Kumba Iron Ore's H1 earnings may have been impacted by COVID-19, but the company's proactive strategies, collaborative approach, and long-term investment plans signal a positive outlook for the future. As the mining sector continues to navigate the challenges brought on by the pandemic, Kumba Iron Ore stands out as a beacon of resilience and innovation in the industry.