SMM12, May 5-South African transport company Transnet has declared force majeure under a railway operation contract with Kumba iron ore after a traffic accident led to the closure of the iron ore export channel or the IOEC railway line, Kumba said late Friday.
According to the statements of the affected parties, the repair work is expected to take approximately two weeks.
"Transnet informed Kumba, that a temporary bridge would be built and that the IOEC production line was expected to reopen on December 9," Kumba said in a statement.
"interim measures will be implemented to ensure that railway operations can begin within about 14 days," Transnet said in a separate statement.
IOEC shipped iron ore from Sishen and Kolomela in Kumba Northern Cape to the port of Saldanha Bay for export.
Market sources expect the impact of railway shutdowns to be limited and port supply is expected to be sufficient to meet timely shipments.
"We want to assure South Africans that iron ore stocks at the site will last for at least seven days," Transnet officials said on Friday. Based on this information, Kumba is currently expected to announce the low end of its 2018 guidelines in its interim results to be released on July 24. Kunba's total guidance in 2018 is 43 million to 44 million tons, with total sales of 42 million to 44 million tons. " Kumba said in its statement.
China's spot demand for South African iron ore usually increases in the winter because of low water content, according to market contacts.
The Gulf of Saldania exported 5.3 million tons of iron ore in November, up 39 per cent from October, according to export data provided by market sources.
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