[miningmx.com] – KUMBA Iron Ore has warned the National Union of Mineworkers that continued weakness in the price of iron ore would result in the group laying off workers, said Reuters citing the union’s secretary-general, David Sipunzi.
“The price has put them in dire straights and there is a prospect of them issuing a Section 189 notice at Sishen mine,” Sipunzi told Reuters. “They have been trying to sensitise us to this possibility. If the price remains like this for a few months they will have no choice but to issue a Section 189,” he said.
“You’re going to see some more attempts at cost cutting,” Des Kilalea, an analyst at RBC Capital Markets said in December of Kumba Iron Ore, in which Anglo American, the UK-listed mining group, has a 70% stake. “I’m not sure where it will come from, but there has to be further scope,” he said.
Kumba CEO, Norman Mbazima, said in July that the company may reconsider its business if prices fell below $40 a ton in the near term. Iron ore is currently trading at around $41/t below Kumba’s break-even last year of $45/t.
