23rd Apr 2020 08:04
(Alliance News) - Anglo American PLC on Thursday maintained its 2020 copper guidance despite seeing a drop in first quarter production, as the miner struggled to cope with the lockdowns seen across the world to combat the Covid-19 pandemic.
Chief Executive Mark Cutifani said: "The onset of varying degrees of lockdown or distancing measures in a number of our operating countries towards the end of the quarter, combined with the impact of longwall moves in our Metallurgical Coal business, led to 4% lower production compared to the same period of 2019, despite continued strong iron ore production at Minas-Rio."
In the three months to March 31, the miner's copper production slipped 9% year-on-year to 147,100 tonnes from 161,100 tonnes in the same period the year before.
The decrease was due to an expected reduction at Los Bronces, driven by the continued drought conditions in central Chile, partially offset by continued strong plant performance at Collahuasi.
Diamond production in the first quarter from Anglo's De Beers was 1% lower at 7.8 million carats.
Anglo produced 441,000 ounces of platinum in the first quarter, 7% lower year-on-year. Palladium output in the quarter fell 7% to 303,000 ounces.
Both commodities are mined via Johannesburg-listed subsidiary Anglo American Platinum Ltd.
Kumba Iron Ore Ltd, another JSE-listed subsidiary, saw a 1% fall in first-quarter production to 9.4 million tonnes.
Minas Rio in Brazil produced 6.4 million tonnes of iron ore in the quarter, up 31% on the year before with production only restarting at the end of 2018.
Anglo's metallurgical coal production for the quarter dropped 8% to 3.8 million tonnes. Thermal coal output fell 7% in the quarter to 6.2 million tonnes.
Lastly, Anglo's nickel production for the quarter climbed 11% to 10,400 tonnes. Manganese ore production for the quarter fell 4% to 843,000 tonnes.
Looking ahead, Anglo has revised its diamond, platinum, palladium, thermal and Kumba iron production guidance lower, while maintaining its copper, Minas-Rio iron, metallurgical coal and nickel guidance.
For 2020, Anglo is guiding copper production between 620,000 and 670,000 tonnes.
Diamond production was revised 7 million carats lower to fall between 25 million and 27 million. Platinum production is expected 0.5 million ounces lower, to between 1.5 million and 1.7 million.
Palladium is now expected 0.2 million to 0.4 million ounces lower, at around 1.0 million and 1.2 million. Kumba iron is expected to slip between 3.5 million to 4.million tonnes to 37 million to 39 million. And, finally, thermal coal is expected about 4 million tonnes lower at about 22 million.
Cutifani added: "Most of our sites around the world are continuing to operate, with our focus on safety reflected through appropriate health, hygiene and distancing measures. We are taking all necessary steps to ensure the security and integrity of our assets for the long term, preserving our ability to swiftly return affected operations to normal levels of production when appropriate."
He also noted Anglo is looking to implement a series of cash measures, that will reduce operating costs by USD500 million - resulting in a USD1.0 billion drop in capital expenditure.
"This further builds on our already robust current liquidity position of USD14.5 billion. Anglo American is a resilient and diversified metals and minerals business with a portfolio of attractive growth options spanning different products and time horizons. We are acting to protect our optionality through this uncertain period and will continue to act in the best interests of our shareholders, our employees, customers and our broad range of stakeholders across society," Cutifani said.
By Paul McGowan; [email protected]
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