(Minews) - South Africa's Kumba Iron Ore plans to cut jobs, production costs and capital spending to cope with expected weak prices of the commodity this year, it said on Tuesday, after reporting a fall in 2014 earnings.
The Anglo American subsidiary, whose shares fell more than 3 percent, said crude steel production was forecast to recover slowly this year, hampered by weaker growth in China, the main consumer of its iron ore exports.
"We do not expect a major recovery in price any time soon," Kumba's Chief Executive Officer Norman Mbazima said, adding iron ore prices slumped 47 percent in 2014.
"In response to the low iron ore prices, it was necessary to take swift action to enable Kumba to be resilient."
Kumba, South Africa's largest producer of the steel-making ingredient, said it would cut up to 150 jobs -- some 40 percent of staff at its head offices in Pretoria -- and slash exploration, technical and project study costs by half.
The company will decide the fate of its smaller Thabazimbi mine over the next three months, it said, noting the mine incurred a 439 million rand ($37.7 million) impairment cost and was becoming expensive to run.
Kumba reported a 29 percent fall in full-year headline earnings per share to 34.32 rand from 48.08 rand a year earlier, blaming weaker iron ore prices.
Its shares were down 3 percent by 1250 GMT.
Headline earnings is the main measure of profit in South Africa, and excludes certain one-time items.
The decline in export iron ore prices was, however, partially offset by a weaker rand versus the U.S. dollar.
Kumba had in January flagged that headline earnings per share would fall by as much as 31 percent.
The company declared a final dividend of 7.73 rand per share compared with 19.94 rand the year before, and paid a total dividend of 23.34 rand from 40.04 rand in 2013.
Total revenue fell 13 percent to 47.6 billion rand, due to the fall in prices, Kumba said.
Overall output rose 14 percent to 48 million tonnes for the year, with production at Africa's largest iron ore mine, Sishen, up 15 percent to 35.5 million tonnes. Kumba said it aimed to increase Sishen's output to 38 million tonnes for 2016 and 2017.
