Asset optimisation and procurement

Kumba has implemented a number of revenue enhancing and operating efficiency initiatives as part of the asset optimisation programme which realised R1.6 billion operating profit benefits during the year. Except for certain once-off revenue enhancement activities that contributed R503 million for 2009, these initiatives are recurring in nature and will assist in enhancing the financial performance of the group and protecting operating profit margins in the future.

Revenue enhancing initiatives include, increasing tonnes on which shipping services are provided, decreasing maintenance shutdown intervals of the DMS plant and producing and selling niche products to enhance the premia received. The flagship Sishen Mine transformation programme (Bokamoso) launched during the year has started to deliver visible results in the area of operating efficiency improvements. During the year the mining truck and shovel fleet achieved a 28% efficiency improvement and the mine’s drilling fleet a 4% improvement. Further value from this programme will be unlocked as it progresses to the next key stages of the production process of the mine.

Further benefits of R603 million were realised through savings in operating costs and capital expenditure through the participation in the One Anglo Supply Chain programme.