Assore exposed to underlying commodity prices for steel-making

JOHANNESBURG – Assore said yesterday that the harsh manganese market coupled with lower iron ore volumes had hurt its earnings during the six months ended December 2019. Headline earnings fell by 28 percent to R2.1billion at the end of December 2019, compared with R2.9bn a year earlier, Assore said.

The group, which is exposed to underlying commodity prices for steel-making ingredients and fluctuations in exchange rates, said headline earnings from Assmang declined by 14 percent to R3.7bn from R4.3bn a year earlier.

Assore jointly operates Assmang with African Rainbow Minerals, which is chaired by billionaire Patrice Motsepe.

Headline earnings from the group’s operations outside of Assmang fell by 68 percent. “The change in the mix of earnings was driven by firm iron ore prices and notably lower prices for manganese ores and manganese alloys,” said the company.

Supply disruptions in Brazil and Australia, combined with limited supply expansion across the iron ore industry, saw prices rise in the period to $95 (R1486) a ton compared to $69 a ton a year earlier. However, this did not translate to higher iron ore sales for Assore due to logistics issues.