kumba success to rub off on conti

Given the continued success of Anglo American's Kumba IO subsidiary, of which SIOC-cdt is a beneficiary - surely their outstanding management performance over recent years will rub off on Conti. We are due to see two new board appointments from SIOC-cdt onto the CCL board, and one to the CCC board. These new board members have been involved in a professional, and world beating mining house at Anglo-Kumba and will, IMO, definitely raise the bar at Conti, helping Don, Johan & the Okap crew to achieve their goal of becoming a mid-tier coal company.

Kumba FY earnings up on higher iron ore prices

Thu Feb 9, 2012 1:49am EST

JOHANNESBURG, Feb 9 (Reuters) - Kumba Iron Ore , a unit of global miner Anglo American, reported a rise in full-year profit on Thursday, boosted by higher iron ore prices and said it expects export volumes to rise in the current financial year.

Kumba, Africa's largest producer of the steelmaking ingredient, said full-year diluted headline earnings per share totalled 52.99 rand, compared with 44.54 rand a year earlier.

Headline EPS, the main profit measure in South Africa, excludes some one-time items.

Africa is regarded by many in the industry as the next iron ore frontier with many global miners moving to cash in on the projected rise in demand for steel from Asia.

Kumba, the world's 10th largest producer of iron ore, said production dropped 5 percent to 41.3 million tonnes on the back of feedstock constraints at the company's Sishen mine.

Export sales rose 3 percent to 37.1 million tonnes and would rise by around 3 million tonnes in the current financial year as the company's Kolomela mine ramps up output.

Kolomela is on track to produce between 4 and 5 million tonnes of iron ore this year, before ramping up to full capacity of 9 million tonnes by 2013.

The company declared a final cash dividend of 22.50 rand per share.

Kumba said the medium to long-term outlook for iron ore demand remained robust on the back of infrastructure developments in China.

Short-term iron ore supply is expected to remain tight given weather problems in Brazil and Australia, and India's moves to control exports.

"Ongoing challenges producers face in delivering new supply will lead to increasing capital intensity and underpinned long-term pricing outlook," Kumba said in a statement.

Kumba's shares are up 8.8 percent so far this year, compared with a 6.42 percent rise in the JSE Top-40 blue chip index .

http://www.reuters.com/article/2012/02/09/kumbaironore-idUSL5E8D90GP20120209

PRIVATE EQUITY

Arkein (Fund Manager) pursues private equity investments on behalf of SIOC-CDT (the Fund, www.sioc-cdt.co.za), where the aim is to leverage the funds cash and balance sheet into selectively chosen transactions. Under private equity investments, there are two types of transactions namely Capital Growth investments and Dividend Paying investments.

Capital Growth Investments

These are investments into those companies that are already operational but require capital to accelerate growth of an existing core business that has a financial profile including recurring revenue, experienced management and a clear path towards having a positive EBITDA. Our equity return expectations are much higher as the risk is higher when compared to investments into dividend paying assets since sustainable financial performance is not proven. In the long-term, we believe the biggest growth on capital for the fund will be driven by the success of capital growth type assets. By 2016, we target to have 50% of SIOC-CDT’s invested capital having been deployed towards such type of investments.

Dividend Paying Investments

These are investments into mature operating companies that have a financial profile spanning more than five years, positive EBITDA for more than three consecutive years and a track record of consistent dividend pay out. On exit, the blended equity return expectations are moderate compared to Capital Growth investments. The strategic rationale in apportioning 40% of the invested portfolio towards the Dividend Paying assets is to provide a hedge in the invested portfolio for the downside risk associated with Capital Growth investments and also maintain SIOC-CDT’s balance sheet intrinsic net asset value.

http://arkeincapital.com/?page_id=43

SIOC-CDT is a broad based black community owned trust with more than 300,000 black family beneficiaries. SIOC-CDT has a balance sheet with an un-leveraged net asset value in excess of ZAR7.5 billion (just under US$1 billion) including cash and an annual dividend income averaging ZAR450-700 million (US$50-90 million). Arkein is duly authorised to represent the Trust and is the exclusive Fund Manager to the trust for all its Private Equity and Venture Capital investments.

http://arkeincapital.com/?page_id=277