Anglo American's Kumba says strike will hit iron ore output, exports

South African miner Kumba Iron Ore, majority-owned by Anglo American, said production and exports would be hit by a strike at logistics company Transnet.

State-owned Transnet, which operates South Africa's freight rail network and all of its ports, declared force majeure at its ports last Thursday after workers walked out in a pay dispute.

"As a result of the disruption to Transnet’s rail and port services, the estimated impact on production is approximately 50,000 tonnes per day for the first seven days and thereafter approximately 90,000 tonnes per day. Export sales will be impacted by approximately 120,000 tonnes per day," Kumba said in a statement on Monday.

Kumba, which exports the bulk of its iron ore to China, Europe, Japan and South Korea, expects to produce and export between 38 million and 40 million tonnes of the mineral this year.

The United National Transport Union (UNTU) and the South African Transport and Allied Workers' Union (SATAWU), which together represent most Transnet workers, last week turned down Transnet's offer of a 3% - 4% wage rise, saying it was below South Africa's annual inflation rate, which was 7.6% in August.

Reporting by Frank Prenesti for Sharecast.com