By Shapi Shacinda
SISHEN MINE, South Africa, Nov 24 (Reuters) - Kumba Iron Ore , a unit of Anglo American Plc, said on Tuesday it would produce 38 million tonnes of the steel-making ingredient this year, and boost exports of the commodity.
During a visit to the company's Sishen South mine, which is undergoing expansion, Chief Executive Chris Griffith said South Africa's Kumba, the continent's biggest producer of iron ore, was keen to grow its exports in north Africa.
"We will produce this year close to 38 million tonnes, exports will be about 34 million tonnes," Griffith's told a media presentation near the mine.
Kumba produced 36.6 million tonnes of iron ore, and exported 24 million tonnes or iron ore last year.
Kumba said its 8.5 billion rand ($1.13 billion) expansion of the Sishen South mine is on target.
The mine will lift the group's output by 9 million tonnes per year when complete. It is expected to start producing in the first half of 2012 and to peak by 2013.
Kumba said in an update to the market that total iron ore production year-on-year rose 12 percent in the third quarter to end September 2009 and that export volumes rose 39 percent to 26.5 million during the same period..
Griffith said although there had been no agreement reached on prices for next year, he expected an increase.
"There has been no agreement reached on prices, but consensus is that there will be a 10 percent price increase next year," he said.
He said spot prices were about $100 per tonne, and between $60 to $70 per tonne free on board.
Slumping demand for steel owing to the global downturn forced producers across the globe to cut production sharply and delay expansions, leaving the iron ore market with a glut of material and making it almost hard for miners to achieve a price increase.
On rail capacity, Griffith said industry players were talking to South Africa's logistics company Transnet with the hope of expanding rail capacity.
Transnet has committed to make available up to 12 million tonnes of additional rail capacity in the period 2009-2011 at an additional cost, allowing Kumba to raise exports, if needed.
"We would like to participate in infrastructure development. Transnet has not done badly but together we can do better," he said.
(Editing James Jukwey) (For more Reuters Africa coverage and to have your say on the top issues, visit: http://af.reuters.com) ($1=7.493 Rand) Keywords: KUMBA/
(shapi.shacinda@thomsonreuters.com; +27 11 775 3142)
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