Anglo American Plc’s, Kumba Iron Ore, plans to cut about 490 jobs after reducing production as it struggles to overcome South Africa’s persistent rail bottlenecks and move sufficient volumes to ports.
In December, Kumba said it was curbing production to match the limited capacity of state-owned rail operator Transnet, hit by shortages of locomotives and spares, as well as rampant cable theft and vandalism.
Stockpiles of iron ore stood at 7.1 million tons in December and the persistent challenge in moving the commodity to ports for exports has forced Kumba to cut output to between 35 million tons to 37 million tons from this year to 2026.
The restructuring is “necessary” for Kumba to remain competitive, the company said.
Job losses across South Africa’s mining sector due to weaker commodity prices and infrastructure challenges add pressure for the government ahead of elections due later this year.
South Africa’s official jobless rate, measured at 31.9% in the third quarter of 2023, is among the highest in the world.
On Monday, Anglo American Platinum, opens new tab announced plans to cut 3,700 jobs in South Africa after a sharp decline in metal prices slashed annual profit by 71%.
Kumba’s headline earnings per share rose 26% to R70.80 in the year ended Dec.31, up from R56.19 the previous year as its high grade iron ore continues to fetch prices 15% above the benchmark rate.
