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Less Eskom coal, fewer S African diamonds, less refined platinum, lower iron-ore sales – Anglo

Anglo CEO Mark Cutifani

Anglo CEO Mark Cutifani

Photo by Duane Daws

23rd October 2014

By: Martin Creamer

Creamer Media Editor

  

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JOHANNESBURG (miningweekly.com) – Diversified mining company Anglo American on Thursday reported 12% lower coal production for South Africa’s State electricity utility Eskom, 31% less refined platinum production, 4% lower iron-ore exports and fewer diamond carats from South African diamond mines, in the three months to September 30.

The London- and Johannesburg-listed Anglo, headed by CEO Mark Cutifani, said production for Eskom was down to eight-million tons owing to municipal protest action temporarily impacting production at its Kriel colliery and a longwall move at its New Denmark colliery.

Lower third-quarter South African diamond output was the result of a focus on waste movement to clear an area of unstable ground at the Voorspoed diamond mine in the Free State and a planned plant upgrade at Venetia; a 19-day strike at Namdeb Land also negatively impacted production volumes in Namibia.

Refined platinum production fell 31% to 460 000 oz (also see separate Anglo American Platinum report), and third-quarter iron-ore sales were 4% down to 9.1-million tons at export level and 14% down to 1.1-million tons at domestic level; iron-ore stocks are up 2.7 times on the third quarter of last year.

Anglo increased the production of export thermal coal from its South African collieries by 11% to five-million tons and domestic non-Eskom production by 12% to 1.9-million tons.

Production of iron-ore also increased by 37% to 13-million tons. (See separate report on Kumba Iron Ore production).

The lower South African and Canadian diamond production was counterbalanced by a strong performance at Jwaneng diamond mine in Botswana, where access to higher-grade material supported De Beers’ overall 6% production increase to 8.2-million carats.

First production from the Gahcho Kué diamond-mining project in Canada is expected in the second half of 2016, with full commercial production in 2017.

Full-year diamond production guidance is slightly up at 32-million carats.

While third-quarter iron-ore production of 9.3-million tons at Sishen was 44% higher and 3.4-million tons at the Kolomela mine 20% higher, the export sales fall followed the yearly maintenance shutdown by Transnet in August and a slow start-up thereafter by the State rail company, and domestic iron-ore sales fell as a result of reduced offtake by steelmaker ArcelorMittal South Africa.

Total finished product iron-ore stocks increased to 6.5-million tons, 2.7 times more stock than the 2.4-million tons in the third quarter of last year.

In Brazil, the Minas-Rio iron-ore project ore stockpiles are being built at the Port of Açu, where first ore loading has begun.

“From a market perspective, production growth in the already oversupplied bulk commodities will further weigh on prices,” London mining analyst Liberum said in a note.

Full-year iron-ore production guidance is 45-million to 46-million tons.

The production of South African manganese ore increased by 10% and manganese alloy production by 25% on improved smelter stability at Metalloys in Meyerton.

In Australia, export metallurgical coal production increased by 4% to 5.1-million tons but export thermal coal production fell 6% to 1.6-million tons owing to lower production from the Drayton mine, which is nearing the end of its life.

In Canada, Anglo’s Peace River Coal operations will be placed on care and maintenance from the end of 2014, owing to weak market conditions.

Full-year production guidance for export metallurgical coking coal is from 20-million to 21-million tons.

Anglo’s copper production fell 15% to 176 900 t with production from Los Bronces falling 10% to 95 700 tons, production from Collahuasi plunging 24% to 48 500 t, production from El Soldado tumbling 29% to 6 700 t and combined production from Mantos Blancos and Mantoverde down 6% to 26 000 t.

Nickel production increased by 13% to 10 700 t, with output from Barro Alto rising 17% to 8 300 t but Codemin remaining broadly flat at 2 400 t.

Full-year production guidance for nickel has been increased to up to 37 000 t from a previous top level of 35 000 t.

Edited by Creamer Media Reporter

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