25th Oct 2016 06:25
LONDON (Alliance News) - Anglo American PLC on Tuesday tweaked some of its full-year production guidance and revealed year-on-year rises in output of most commodities in the third quarter of the year, but production since the start of the year is still mostly lower on 2015.
Anglo American is undertaking the most ambitious restructuring among its peers in response to the global downturn in commodity markets, stripping out the majority of its portfolio over the forthcoming years to focus on just three key commodities: diamonds, platinum and copper.
On Tuesday, Anglo American said production of diamonds, copper, metallurgical and thermal coal all fell in the first nine months of 2016 versus the previous year, whilst nickel and platinum production has risen. Iron ore production from Kumba was lower but iron ore output from Minas Rio has soared.
Diamond production in the third quarter of 2016 totalled 6.3 million carats, edging up from 6.0 million carats a year earlier. Year-to-date production stands at 19.6 million carats, down 9.0% from 21.6 million carats last year.
Full-year diamond guidance remains unchanged at 26.0 to 28.0 million carats, "subject to trading conditions".
Platinum production was 1.0% higher year-on-year in the third quarter at 619,000 ounces versus 614,000 ounces. Nine-month production also rose, coming in 2.0% higher at 1.8 million ounces from 1.7 million ounces.
Full-year platinum production should still be in the range of 2.3 million to 2.4 million ounces, Anglo American said.
Copper production was 9.0% lower in the third quarter at 139,800 tonnes from 153,100 tonnes a year earlier. That takes production in the first nine months of the year to 430,500 tonnes, down 6.0% from 456,600 tonnes.
Copper production over the whole of 2016 should be between 570,000 to 600,000 tonnes.
Nickel production in the third quarter was 11,300 tonnes, compared to 6,800 tonnes a year earlier, an arresting 66% rise. Production was 70% higher in the first nine months of the year, totalling 33,600 tonnes compared to 19,800 tonnes.
Full-year nickel production should still be in the range of 45,000 to 47,000 tonnes.
Iron ore production from Kumba was 3.0% higher in the third quarter at 11.8 million tonnes from 11.4 million tonnes last year. Production in the first nine months came in at 29.5 million tonnes, down from 33.9 million tonnes, representing a 13% fall.
However, iron ore production from Minas-Rio was 91% higher in the first nine months of the year at 11.3 million tonnes from 5.9 million tonnes, following a solid third quarter when the operation produced 4.5 million tonne,s versus only 2.9 million tonnes a year earlier.
Kumba iron ore production guidance this year has been tweaked. The Shishen mine remains unchanged at 27.0 million tonnes, whilst Kolomela is expected to "marginally exceed" its 12.0 million tonne target. For Minas-Rio, production guidance remains unchanged at 15.0 to 17.0 million tonnes.
Metallugical coal production in the third quarter rose 1.0% year-on-year to 5.5 million tonnes, bringing production in the first nine months to 15.5 million tonnes, down 1.0% from 15.7 million tonnes a year before. Thermal coal production in the third quarter was flat at 8.8 million tonnes, with nine-month production 6.0% lower at 24.5 million tonnes from 26.1 million tonnes.
Metallurgical coal production is now expected to be 20.5 million to 21.5 million tonnes rather than 21.0 to 22.0 million tonnes, due to the Foxleigh coal mine being sold. Thermal coal production remains unchanged at 28.0 to 30.0 million tonnes.
"Operational improvements continue across the portfolio, delivering a 4% production increase on a copper equivalent basis in the third quarter, and a 12% increase compared to the second quarter of 2016. The latter increase is largely due to the strong recovery at Kumba's Sishen mine, a 46% production increase, following the successful completion of its restructuring," said Anglo American Chief Executive Mark Cufitani.
"In our diamond and platinum businesses, we continue to maintain discipline on volumes by mining to demand, whilst the ramp-ups at Minas-Rio and Grosvenor are progressing well, and Barro Alto has now reached nameplate capacity. The modestly higher production at De Beers is reflective of improved market conditions relative to the third quarter of 2015, but we maintain a cautious outlook," he added.
By Joshua Warner; [email protected]; @JoshAlliance
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