While geopolitical turbulence has stalled many global mining projects, Kumba Iron Ore is charging decisively in the opposite direction.
The company is aggressively marching ahead with its flagship R11.2 billion (approx. $631 million) Ultra-High Dense Medium Separation (UHDMS) project at the Sishen mine in South Africa—a bold technological leap designed to rewrite the economics of low-grade iron ore processing.
The mission is clear: transform material once considered marginal waste into a highly profitable, premium product that commands top dollar in the global green steel market.
Kumba is owned by global mining resources group Anglo American.
Current Progress: Construction Firing on All Cylinders
According to Kumba’s official business review for the interim period ended 30 June 2026, the UHDMS implementation is not just on track – it is accelerating.
“The execution of the UHDMS project continues to advance, with total progress at approximately 45%. Engineering activities are substantially complete at 96%, while structural steel installation is progressing well,” the company confirmed.
The numbers speak for themselves.
To date, 28% of structural steel has been installed, with a massive push scheduled for the second half of the year (47%), leaving the balance to be wrapped up by the end of 2028.
Crucially, all key long-lead capital items have been secured, with zero supply chain disruption arising from the Middle East conflict, a clear sign of meticulous forward-planning.
Navigating Technical Complexity with Precision
Implementing cutting-edge technology in an existing, operational plant is never straightforward, but Kumba is navigating these hurdles with surgical precision.
Commissioning of the first coarse and fines modules, alongside new modular substations and electrical infrastructure, is currently underway. While technical modifications related to installations in the existing plant infrastructure have slightly extended the commissioning timeline, this has not derailed the broader strategy.
In fact, construction of the second coarse module commenced in Q1 2026 and is already 40% complete, progressing smoothly through its structural and mechanical phases.
The massive main tie-in of the Dense Media Separation (DMS) plant is officially scheduled for August 2026.
During this planned shutdown, crews will construct new product and discard conveyors, rerouting existing transfer conveyors to seamlessly link into the new UHDMS modules.
To supercharge this timeline, Kumba has introduced an additional work shift, a tactical move that pushes full-year 2026 capital expenditure to R3.0–R3.2 billion.
However, disciplined financial management ensures this acceleration is offset by a reduced phased spend of R0.9 billion in 2028, keeping the total project budget firmly fixed at R11.2 billion.
Turning Low-Grade Ore into Gold
So, how exactly does UHDMS turn waste into profit?
The technology uses specialised ferrosilicon in the processing plant, allowing unprecedented flexibility to process a wider range of iron ore grades and densities. This unlocks a cascade of transformative economic benefits:
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Slashing the cut-off grade from 48% to ~40% Fe: This single shift renders millions of tonnes of previously uneconomic material suddenly viable, massively expanding the resource base.
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Drastically reducing the stripping ratio from 3.9 to 3.3: By moving less waste rock per tonne of ore, Kumba is projected to eliminate roughly 15 million tonnes of annual waste mining, saving a fortune in drilling, blasting, hauling, and processing costs.
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Crushing unit costs by $2.5 to $3 per tonne: These operational efficiencies feed directly into a leaner, more resilient cost structure.
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Exploding premium product yield from under 20% to over 50%: Higher quality means higher prices. The technology is expected to generate an additional $2–$3 per tonne in revenue through quality premiums, while meticulously preserving Sishen’s coveted 70:30 lump-to-fines ratio.
Financial Strength and Green Steel Alignment
The business case for this aggressive implementation is irrefutable. The project boasts an estimated internal rate of return (IRR) exceeding 30% and is projected to deliver an EBITDA margin of over 50%, placing it among the most profitable mining investments globally.
Furthermore, Kumba is perfectly positioning itself for the green steel revolution. As steelmakers race to decarbonize, they desperately need high-grade, low-impurity iron ore to reduce coke consumption and lower CO₂ emissions.
By converting low-grade stockpiles into premium feedstock, Kumba is securing a long-term strategic advantage as the preferred supplier for tomorrow’s eco-conscious blast furnaces.
Kumba Iron Ore is not waiting for market conditions to improve, it is improving its market conditions through decisive action. The UHDMS project is a masterclass in strategic execution, proving that with the right technology and relentless project management, low-grade waste can be transformed into a high-margin, future-proof profit stream.
With a 45% completion rate and key commissioning milestones underway, Kumba is marching ahead—and the finish line promises a radically more profitable and sustainable future for Sishen.
In 2024, Mpumi Zikalala, CEO of Kumba, stated “This investment demonstrates our focus on value over volume. Through utilising UHDMS processing technology, we can treble the proportion of premium iron ore product from our world-class Sishen mine. Premium iron ore is increasingly highly valued by our customers because it reduces carbon emissions from the steelmaking process and so plays a key role in green steel production. This supports higher margins and a compelling return on investment as well as creating a new pathway to extend Sishen’s life to 2044.
“The UHDMS processing technology will provide Kumba with an enhanced ability to respond to future customer requirements and improve flexibility across the value chain. The implementation will be phased over four years to ensure safety and operating stability across the site during construction whilst maintaining disciplined capital allocation.
“This major investment is also a clear demonstration of our long-term commitment to South African mining and to our host communities in the Northern Cape.”
