The Anglo American unit which produces the key steelmaking ingredient had record profits for the 2020 financial year and delivered R26-billion to shareholders, who look set to be well rewarded again. 

“The period under review has to date seen higher average export iron ore prices and a stronger rand/US dollar exchange rate relative to the comparative six months ended 30 June 2020,” the company said in a brief statement. 

The stronger rand is actually a minus for a commodity exporter, though it can also contain costs for imported equipment and fuel. But iron ore prices hit records during the period under review, part of a commodities cycle that is one of the few bright spots on the current South African economic landscape. South Africa’s hefty trade surplus, positive terms of trade position and healthy current account are mostly the result of surging commodities prices.     

“Shareholders are advised that headline earnings and basic earnings for the period are likely to be at least R12.602-billion and R12.612-billion higher (at least 150% higher), respectively, than reported headline earnings and basic earnings for the comparative period,” Kumba said. 

Its results will be released in late July and it will be of more than passing interest to see if this state of affairs leads to further investment, expansion or exploration. The South African mining investment environment – despite protests to the contrary by the tone-deaf Department of Mineral Resources and Energy – is riddled with uncertainty, though some progress has been made lately such as the freeing up of the embedded generation space. But overall, the climate is hazy. This is a real shame as a massive boat is being missed at this crucial time. DM/BM