Africa’s largest iron ore miner hit hard by weak prices

Sishen mine, located in South Africa’s Northern Cape Province, is Kumba’s flagship operation and one of the largest open-pit mines in the world.

South Africa’s Kumba Iron Ore, Africa’s largest iron-ore miner, warned Friday it expected first-half profit to slide by as much as 19% after prices of the steelmaking ingredient touched rock bottom.

Profit excluding one-time items is likely to fall between 19.50 rand (US$1.82) and 21.50 rand a share in the six months through June from 24.13 rand a year earlier, Anglo American’s (LON:AAL) division said in an e-mailed statement.

“The decrease in earnings is largely attributable to a decrease in export iron ore price,” Kumba said.

Iron ore prices crashed through $90 last month, the lowest levels since 2012, due to oversupply and weakening Chinese demand growth. The steel-making ingredient is down roughly 33% year to date (now trading at $96.90) and first declined to double digits mid-May.

Kumba’s earnings for the six months to end June 2014 will be released on July 22.

Image by Rogiro, via Flickr Commons