Anglo American production back on track

Anglo American says production at its operations across the globe is almost back to full capacity as it meets strong demand from its customers. However, it says there are still some limited constraints at certain of its operations due to Covid-19.

In a first-quarter production report, the diversified mining giant said output reached 95% of normal capacity in the three months to end-March. Production increased by 3% due to strong performance from its copper operations in Chile and platinum group metals (PGMs) and iron ore in South Africa. That more than offset downtime at its Minas-Rio iron ore mine in Brazil due to plant maintenance and the temporary suspension at its Moranbah metallurgical coal operation in Australia.

Diamond production also declined over the period, falling 7% from a year earlier, but it said De Beers’ rough diamond sales continued to improve amid midstream restocking following an encouraging holiday selling season for diamond jewellery in major global markets. Production of metallurgical and thermal coal, as well as nickel, came under pressure.

Copper production increased by 9% due to strong performances at both Los Bronces and Collahuasi. At Anglo American Platinum (Amplats) production of PMGs rose 7%, with output at the Mogalakwena mine jumping 17% due to higher throughput and grade. Iron ore production at Kumba increased by 10% driven by higher plant availability.

Anglo said it was proceeding with the demerger of its SA thermal coal operations, subject to shareholder approval of 5 May. Earlier this month, it announced plans to spin off the business into a new holding company, with Thungela Resources expected to list on the JSE on 7 June.

In South America, a renewable electricity supply agreement was signed for mains power at its Quellaveco copper project in Peru. All operations in the region would have 100% renewable electricity supply from 2022, the company said.Anglo American’s portfolio is increasingly tilted towards future-enabling metals and minerals, with our recently proposed demerger of our thermal coal operations in South Africa moving us further in that direction,” chief executive Mark Cutifani said. “We are also making good progress in ensuring every operation plays its part towards a lower carbon world, with 100% renewable electricity supply now secured for all of our operations across Brazil, Chile and Peru.”

Anglo has maintained its full-year production guidance for diamonds, copper, platinum, iron ore and nickel but has trimmed guidance for metallurgical coal to between 14 and 16 million tonnes, down from 18-20 million tonnes previously. Following the demerger of its SA coal operations, it adjusted guidance for the year to 14 million tonnes from about 24 million tonnes previously.

Anglo’s shares closed 0.3% down at R608.14 yesterday while Amplats declined 1.8% to R2,051.24 and Kumba ended 0.4% lower at R658.79.

Main Image: International Mining