a summary of the announcement, page-5

Kumba doubles iron-ore benchmark export price

By: Creamer Media Reporter
Published on 3rd October 2008
Updated 4 hours ago

http://www.miningweekly.com/article.php?a_id=144417

JOHANNESBURG (miningweekly.com) – JSE-listed Kumba Iron Ore (KIO) on Friday announced that it had concluded its benchmark price negotiations for the 2008/9 iron-ore year.

The producer expected the average benchmark export price for its products to increase by between 100% and 110% on a rand-a-ton basis.

This was owing to the higher lump-ore weighting of KIO’s product mix, together with a weakening of the rand.

The South African miner, a subsidiary of Anglo American, noted that the prices were well aligned with leading settlements reached by other iron-ore producers earlier this year.

The world’s largest iron-ore producer, Brazil’s Vale, agreed price increases between 65% and 71% with large steelmakers in the first quarter of the year.

BHP Billiton agreed a 97% increase in July, while Rio Tinto secured a 96,5% price rise in June. The agreed price increases were effective from April 1.

KIO commercial head Tino Smit said during a presentation in July, that the company expected the prices for iron-ore to remain strong for the next three to five years, as the world’s miners would battle to keep up with demand.

Demand for the steelmaking ingredient was mainly driven by growing Chinese consumption. China represented over 50% of the seaborne iron-ore market.

KIO’s share price gained more than 4% in early morning trade on the JSE, trading at R183,24 a share by 10:00.