Kumba CEO talks H1 earnings, uplifting local communities & the journey to carbon neutrality
For the first six months of the year ending in June, it has been a rocky road for many local miners in South Africa but Kumba is beginning to see some signs of a turnaround. Joining CNBC Africa for more is Mpumi Zikalala, Chief Executive Officer of Kumba Iron Ore.
Tue, 26 Jul 2022 15:34:47 GMT
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AI Generated Summary
- Kumba Iron Ore excited about President Ramaphosa's energy plan, focusing on renewable energy projects and regional power ecosystem.
- Company achieved resilient results in the face of production challenges, with focus on safety, operational excellence, and community development.
- Plans in place to become carbon neutral by 2040, with targets for GHG emissions reduction and adoption of sustainable mining practices.
Kumba Iron Ore, a major player in the South African mining sector, has navigated through a challenging first half of the year but is optimistic about the future. The Chief Executive Officer, Mpumi Zikalala, shared insights on various aspects of the company's operations, including their response to the President's energy plan, the recent earnings report, and their commitment to sustainable practices.
In a recent interview with CNBC Africa, Zikalala highlighted the importance of President Ramaphosa's energy plan for the country. He expressed excitement about the plan, especially the removal of the 100-megawatt cap and the reduction of red tape for renewable energy projects. Kumba Iron Ore is planning a 65-megawatt solar installation at one of their mines and aims to contribute to a regional renewable energy ecosystem with three to five gigawatts of power from solar, wind, and hydro sources.
Regarding the earnings report for the first six months of the year, Zikalala acknowledged the challenges faced by the company, including a 13% drop in production due to factors like adverse weather conditions and safety interventions. Despite the difficulties, Kumba Iron Ore achieved resilient results with an average FOB export price of $136 per metric ton, 15% above the benchmark.
Looking ahead, Zikalala expects iron ore prices to be more subdued in the second half of the year but remains optimistic due to factors like stimulus packages in China and lower global iron ore supply. The company's focus on delivering high-quality products and reducing carbon emissions through sustainable practices positions them well for future market dynamics.
In terms of decarbonization efforts, Kumba Iron Ore has set a target to become carbon neutral by 2040. Zikalala outlined plans to reduce GHG emissions by 30% by 2030 and highlighted initiatives like a hydrogen fuel truck prototype and a 65-megawatt solar installation to achieve these goals.
Zikalala emphasized the company's commitment to safety, operational excellence, and sustainable mining practices. Kumba Iron Ore's sustainable mining plan includes a strong focus on community development, with initiatives to create shared value and support local communities in the Northern Cape region.
Noteworthy achievements mentioned by Zikalala include the establishment of a new hybrid employee share ownership scheme and the significant contribution to the local economy through procurement from BEE companies in the Northern Cape. The company's approach to stakeholder engagement and environmental stewardship underscores its dedication to long-term sustainability and responsible mining practices.