Kumba Iron Ore Ltd. (KIO.JO), South Africa's largest producer of the steel-making ingredient, said Friday an increase in export ore prices has helped boost its half-year earnings by as much as 92%.

The company, almost 63% owned by U.K.-based mining concern Anglo American PLC (AAL.LN), said it also benefited from a 10% increase in sales volume.

Basic earnings are expected to have increased to between 6.1 billion and 6.6 billion rand ($803.3 million-$869.2 million) for the first six months of the year, from ZAR3.44 billion a year earlier, Kumba said. Earnings per share is likely to be between 1,900 cents and 2,055 cents against last year's 1,073 cents, it said.

Export iron ore index prices traded above contract export prices during the six months and peaked above $200 a ton. Contract export iron ore prices for the second quarter of 2010 were settled at increases in excess of 90% of prices achieved for the first quarter.

Kumba's main Sishen mine from March has invoiced ArcelorMittal South Africa Ltd. (ACL.JO), the country's biggest steel producer, at market prices after ending a long-running contract to sell iron ore from the mine at 3% above cost. The two companies are caught up in a dispute over pricing, and Kumba said ArcelorMittal has paid only cost-plus-3% on purchases of 1.452 million tons.

Kumba's Sishen and Thabazimbi produce more than 40 million tons of iron ore a year, which accounts for roughly 80% of South Africa's total output and about 4% of global seaborne trade.

Kumba is scheduled to release its six-month results July 22.

-By Robb M. Stewart, Dow Jones Newswires; +27 11 783 7848; robb.stewart@dowjones.com
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