TOP NEWS: Anglo American Reports Mixed Production For Interim 2019

(Alliance News) - London and Johannesburg-listed miner Anglo American PLC on Thursday posted a ...

Alliance News 18 July, 2019 | 7:56AM
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(Alliance News) - London and Johannesburg-listed miner Anglo American PLC on Thursday posted a mixed production performance for the first half of 2019 with a rise in copper but a drop in diamonds and iron ore.

For the six months to the end of June, copper production rose by 2% to 320,000 tonnes on strong performances from the Los Bronces and Callahausi mines in Chile.

Anglo American's copper guidance for 2019 remains between 630,000 to 660,000 tonnes, reflecting a decrease from 2018's 668,000 tonnes.

Diamond production from the group's De Beers business dropped by 11% to 15.6 million carats due to a planned shutdown at the Orapa mine in Botswana and lower mined volumes from Venetia in South Africa.

Alongside declining output from Canada and Namibia, production guidance for the year was revised to 31 million carats, the lower end of the previous range of 31 million to 33 million carats.

In Anglo American's coal operations, metallurgical coal production decreased by 7% to 10.0 million tonnes while thermal coal output also declined by 5% to 13.2 million tonnes.

However, the miner has kept expectations for coal unchanged, with metallurgical coal expected in the range of 22 to 24 million tonnes, and thermal coal between 26 to 28 million tonnes.

Iron ore production from Minas-Rio in Brazil saw a major improvement, more than tripling in the six month period to 10.8 million tonnes from 3.2 million tonnes the year before.

Production was restarted at Minas-Rio in December after being suspended in March 2018 due to pipe leakages.

As a result, Anglo American has increased guidance for Minas-Rio in 2019 to 19 million tonnes to 21 million tonnes, from 18 million tonnes to 20 million tonnes, previously.

"We remain broadly on track overall to deliver this full year's production targets, with an increase to Minas-Rio guidance offsetting two reductions at De Beers and Kumba Iron Ore," said Chief Executive Officer Mark Cutifani.

Anglo American Platinum, a subsidiary of Anglo American, registered a substantial decline in production for the first half of 2019.

Total platinum group metals production for the period decreased by 17% to 2.15 million ounces on weaker performances from platinum and palladium.

Amplats's platinum production fell by 20% to 992,200 ounces year-on-year, and palladium production dropped 17% to 673,700 ounces.

However, Amplats has kept its PGM guidance for 2019 at between 4.2 million and 4.5 million ounces, down from 2018 due to the transition of Sibanye Gold Ltd material to a tolling agreement in place of concentrates purchased.

Kumba Iron Ore, another Johannesburg-listed subsidiary of Anglo American, reported an edge up in iron ore sales for the first half on improved rail performances, but a decline in production due to plant maintenance.

Production for the six months ended June 30 fell 11% to 20.1 million tonnes on declining output from the Sisken and Kolomela mines.

However, sales rose by 1% to 21.4 million tonnes as a 2% rise in export sales more than offset a 12% domestic sales drop.

Financially, Kumba Iron Ore Ltd expects headline earnings for the interim period to be between ZAR9.78 billion and ZAR10.28 billion, more than tripled from ZAR2.98 billion the year before.

Basic earnings are set to be in the range of ZAR9.74 billion and ZAR10.25 billion, also more than tripling from ZAR2.94 billion the prior year.

Kumba Iron Ore will publish its interim results on Tuesday next week.

By Dayo Laniyan; dayolaniyan@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar Rating
Anglo American PLC 1,698.40 GBX 0.13
Kumba Iron Ore Ltd 41,313.00 ZAC 2.23 -
Anglo American Platinum Ltd 79,453.00 ZAC -1.23 -
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