Kumba Iron Ore Limited (“Kumba”), a business unit of the Anglo American group, has today commenced a consultation process in terms of section 189 of the Labour Relations Act, through its subsidiary Sishen Iron Ore Company (Pty) Ltd, as part of closure procedures at its Thabazimbi mine in Limpopo Province, South Africa.

Kumba’s decision to close the operation follows an extensive review of the Thabazimbi mine and is in response to a combination of factors that have affected the mine’s economic viability. These include the following:

• The mine is more than 80 years old, and has over the past 15 years had its closure postponed 6 times through a number of mine life extension plans;
• Difficult mining conditions due to the inherent geo-technical complexities are now exacerbated by a limited remaining iron ore resource;
• Very high operating costs which are due to high waste stripping requirements; and
• A slope failure on 6 June 2015 which has rendered the iron ore resources in the one remaining pit uneconomic to mine.

The closure of the mine will impact approximately 800 employees and 360 contractors. Kumba is conducting extensive consultations and this will continue throughout the process.

Norman Mbazima, CEO of Kumba Iron Ore, explained: “These are challenging times for the iron ore industry and difficult times for our employees and the mine’s contractors. We are however taking the steps necessary to ensure we have a viable and resilient business for the long term. Closing a mine is a difficult and painful process and its impact cannot be taken lightly. We have looked at all options to further sustain the mine, having already extended its life several times in recent years, and have come to the inevitable conclusion that this mine has now come to the end of its life.”

“We are committed to supporting all our employees and treating them with care and respect through this difficult process, mindful of the sensitivity the situation demands.”Guided by global best practice, the Anglo American Closure Standards and the applicable statutes, Kumba will strive to conclude the process as soon as possible, taking employees, the environment, Thabazimbi town and its community into consideration throughout.