South Africa's Kumba Iron Ore has said that it has recorded a fall of 28 per cent in headline earnings to R12.2bn during the year till December, 2012.

The company said that the fall is mainly due the effects of the illegal strikes of the previous year as well as increasing costs and lower prices. Kumba pointed out that its flag-ship Sishen mine has still not returned to full production months following illegal strike in the previous year.

Due to the strike, the company now has to mine between 10-million and 20-million tons more waste this year. The company has already planned to increase waste mining by 30-million tons. It is expected to mine a total waste of at least 189-million tons.

The company, which is 70 per cent owned by global mining company Anglo American, said that its export sales increased 7 per cent to a record 39.7-million tons and its production increased 4 per cent to 43.1-million tons during the period.

The company said that tis margins were affected by a 23 per cent fall in average iron-ore export prices to $122 per ton. CEO Norman Mbazima said that Kumba is factoring in a long-term iron-ore price of around $100/ton. The company is expecting price of about $150 in the market to record higher margins.