Commentary

Highlights

At R6.5 billion Kumba’s headline earnings for the six months ended 30 June 2010 were 90% above the R3.4 billion achieved in the first half of 2009. This operational and financial performance was due to the implementation of the group’s production and sales growth plans and cost containment initiatives, notwithstanding the legal issues which arose in the first half of 2010 and are referred to in note 11 to the reviewed condensed consolidated interim financial report. Kumba continues to deliver increasing value to its shareholders. Through capital appreciation and substantial dividend cash returns to its Black Economic Empowerment (‘BEE’) shareholders, Sishen Iron Ore Company (Pty) Limited (‘SIOC’) has contributed towards its commitments to South Africa and empowerment. Attributable and headline earnings for the period were R20.27 and R20.28 per share respectively, on which an interim cash dividend of R13.50 per share has been declared.

Sishen Mine’s production increased by 17% year-on-year or 3.1Mt to 21.1Mt, principally through the Jig plant ramping up to name plate capacity, and remains on track to achieving an overall increase of 5% in production volumes for 2010.

The development of Kolomela Mine in the Northern Cape continues and overall project progress remains on budget and on schedule to deliver initial production during the first half of 2012.

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