By Anthony O. Goriainoff
Anglo American PLC said on Tuesday that first half pretax profit at its Kumba Iron Ore Ltd. subsidiary fell, and that the company backed its guidance for the year.
Anglo American owns 69.7% of Kumba, according to FactSet.
The FTSE 100-listed miner said that for the six months ended June 30, Kumba's pretax profit was 15.17 billion South African rand ($923.9 million) compared with ZAR18.17 billion for the year-prior period.
Earnings before interest, taxes, depreciation and amortization fell 14% to ZAR17.4 billion, the company said.
Kumba's revenue was ZAR31.58 billion, down from ZAR34.5 billion in the first half of 2019.
The board declared a ZAR19.60 interim dividend, down from ZAR30.79 the year before.
Kumba confirmed its expectations of capital expenditure for the year in the ZAR5.6 billion to ZAR6.1 billion range, including the deferral of ZAR1.0 billion of non-critical capital expenditure to 2021.
Kumba Iron also announced that the Kapstevel South project at its Kolomela mine in South Africa was approved by its board, as well as Anglo American's board. The company said the total capital cost for the project will be around ZAR7 billion. The project entails developing a new pit, Kapstevel South, and associated infrastructure at the Kolomela mine.
"It is anticipated that the addition of the Kapstevel South pit will deliver an after-tax internal rate of return of around 25% and allow Kolomela to maintain an estimated Ebitda margin of over 35% in the long-term," the company said.
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