Tuesday, November 20, 2018
Norman Mbazima

Norman Mbazima

Kumba Iron Ore

IF ever there was a South African mining company which consistently delivered the goods it was Kumba Iron Ore. It churned mouth-watering profits for years and was the lynchpin in arguably the most successful of the various BEE structures created in South Africa. Not only did it pay out hefty annual dividends to partner Exxaro Resources, but its 6,200 workers each got an after-tax payout of R345,000 in November 2011 when a five-year employee equity scheme matured. That was then. The current reality facing Mbazima is grim as he moves to restructure the group to cope with an iron ore price that has now dropped below $45/t which was Kumba’s previous break-even point. The first optimisation programme, started in July last year, had to be replaced by a more radical redesign of the main Sishen mine operation announced in December to cut both production and remaining life-of-mine. The new targets are FOB (free-on-board) costs of around $30/t and a breakeven price of around $40/t CFR (cost-and-freight) for 2016. The newly developed Kolomela mine has been shifted from a three- to a two pit operation aiming for a breakeven price of $38/t (CFR) in 2016.

LIFE OF NORMAN

The likeable Mbazima is a Zambian by birth who started his working career in the then nationalised Zambia Consolidated Copper Mines (ZCCM). He joined Anglo American at Konkola Copper Mines in 2001 after the Zambian government finally gave up on its policy of nationalisation - which had destroyed the country’s once vibrant copper mining sector - and opted for privatisation once more. Moving to South Africa he was CFO for Anglo Coal and then became finance director at Amplats in 2006. He was appointed CEO of Anglo Thermal Coal in 2009 and then moved to Kumba in 2012.