COMMENTARY

Highlights

For the six months ended 30 June 2008 Kumba Iron Ore Limited (‘Kumba’) continued to deliver strong financial results. Revenue increased by 67% as a result of higher sales volumes, stronger iron ore prices and increased revenue from shipping services. Despite continued pressure on operating expenses, Kumba’s operating margin increased to 58% in 2008 (63% from mining activities), from 54% (57% from mining activities) in 2007. Profit for the six months ended 30 June 2008 was R3,5 billion, whilst headline earnings increased 76% from R1,6 billion to R2,8 billion. Cash generated by operations for the period increased to R4,6 billion, up 52% compared to the R3,0 billion generated during the corresponding period in 2007. Attributable and headline earnings for the six months were 890 cents per share, on which an interim cash dividend of 800 cents per share has been declared.

Safety performance

Kumba’s commitment to zero harm is reflected in the safety achievements of the first six months of 2008 which have shown meaningful improvement when measured by lost time injuries (‘LTI’s’) as Kumba worked for three of the six months without a single LTI. Sishen Mine achieved a lost time injury frequency rate (‘LTIFR’) of 0,08 which is the best ever performance in the history of the mine.

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