Kumba Iron Ore : production and sales report for the quarter ended 30 September 2016

Overview:

• Sishen production up 46% to 8.3 Mt compared to Q2 2016 due to a significant improvement in productivity.
• Export sales of 10.3 Mt, up 18% from 8.7 Mt in Q2 2016 reflecting the improvement in production volumes at Sishen.

Sishen's production was up 46% to 8.3 Mt compared to Q2 2016 (3Q15: 7.7 Mt) following the successful completion of its restructuring. The improvement in production was due to increased run of mine feed rates, improved quality feedstock material and better plant yields. The mine transitioned to a 3-shift roster system in early September, which is expected to result in further improvements in equipment efficiencies over the medium term. Sishen remains on track to achieve guided production of ~27 Mt for the full year.

Consistent with the mine's lower cost pit configuration, waste removal decreased to 35 Mt (compared to 60 Mt in 3Q15). Waste run rates remain in line with the full year guidance of 135-150 Mt.

Detailed work to refine the Sishen life of mine plan, based on the revised pit configuration, was completed during Q3 2016. This life of mine plan validated the key performance metrics for Sishen including production and waste volumes, which are in line with guidance previously provided.

Kolomela's production was up 8% to 3.4 Mt compared to Q2 2016 (3Q15: 3.3 Mt). Waste mining increased to 14.6 Mt from 12.5 Mt during the same period. The mine is expected to exceed its 12Mt production target for the full year, with a commensurate marginal increase in waste.

Export sales increased by 18% to 10.3 Mt compared to Q2 2016 (3Q15: 9.8 Mt), reflecting improved production volumes at Sishen during the quarter. Total finished product stocks were 3.1 Mt, compared with 2.3 Mt at 30 June 2016.