Kumba Iron Ore, the world’s fifth-largest iron ore supplier led by South African executive Mpumi Zikalala, increased third-quarter sales despite a sharp decline in production as a planned shutdown at its Sishen mine enabled progress on a R11.2 billion ($682 million) project designed to boost premium-grade iron ore output.

According to its production and sales report for the three months ended September 30, 2026, Kumba Iron Ore’s sales rose 3% year-on-year to 10 million tonnes from 9.63 million tonnes in the same period of 2025.

$682 million project targets premium iron ore

Production, however, fell 19% to 7.5 million tonnes from 9.25 million tonnes, largely because of the temporary shutdown of Sishen’s dense-media-separation plant during the main tie-in of its ultra-high-dense-media-separation (UHDMS) project.

Chief Executive Mpumi Zikalala said production and sales remained on track to meet full-year guidance of 31–33 million tonnes and 35–37 million tonnes, respectively.

The Sishen UHDMS project is a key investment in Kumba Iron Ore’s long-term competitiveness. The project was approximately 60% complete, with construction progress at about 50%, while the main tie-in remained on schedule for completion before the end of 2026.

Capital expenditure for 2026 remains guided at R3 billion ($182.7 million) to R3.2 billion ($194.88 million), within the project’s total budget of R11.2 billion ($682.07 million). Final conversion of the processing modules is expected in 2028. Once completed, the project is expected to increase the proportion of premium-grade iron ore products, improve resource utilisation, reduce waste mining and extend Sishen’s mine life.

Stockpiles support sales amid production decline

The South African mining company controlled by Anglo American relied on existing inventories to maintain shipments during the shutdown. Finished stock declined to 4.8 million tonnes at the end of the third quarter, down from 7 million tonnes in June, comprising 2.9 million tonnes at its mines and 1.9 million tonnes at Saldanha Bay Port.

Production at Sishen fell 22% to 4.95 million tonnes, while Kolomela output declined 12% to 2.55 million tonnes.

The company revised its full-year waste-mining guidance to 175–190 million tonnes from 180–195 million tonnes, partly reflecting the lingering effects of heavy rainfall and flooding at Kolomela.

Iron ore prices face pressure

Weaker Chinese steel production, compressed steel mill margins and stronger seaborne supply weighed on iron ore prices.

Kumba Iron Ore’s average year-to-date realised export price fell to $86 per wet metric tonne from $94 a year earlier, but remained 9% above the $79 benchmark price, reflecting premiums for its higher-quality iron ore products.

The company maintained its full-year production and sales guidance, with sales expected at the upper end of its target range. Its 2026 capital expenditure guidance stands at R13.2 billion ($803.87 million) to R14.2 billion ($864.77 million), subject to operating conditions and logistics performance.