JOHANNESBURG (miningweekly.com) – Mining giant Anglo American is preparing to take a $3-billion to $4-billion write-down for the first half of the year amid continued persistent price weakness and volatility of the bulk commodities, particularly iron-ore and metallurgical coal.
The impairment followed a mid-year review of Anglo’s near- and longer-term commodity price assumptions, the company said in its half-year report on Thursday.
“As a result, Anglo expects to record [post-tax] noncash impairments within special items at June 30 relating to [Brazil-based] Minas-Rio and certain Australian coal assets.”
This emerged as Anglo posted its production performance for the six months to June 30, which saw performance rally in the second quarter in line with the company’s expectations.
Ongoing ramp-up operations saw Minas-Rio producing three-million wet tonnes of iron-ore in the first six months of this year, with production gaining momentum during the second quarter, delivering 1.8-million wet tonnes – 55% higher than the first quarter.
While the ramp-up of Minas-Rio was progressing well, year-to-date production volumes were marginally behind plan owing to early adjustments required in the filtration plant, which had been addressed.
Iron-ore production from Kumba Iron Ore for the first six months of 2015 fell 1% to 22.6-million tonnes owing to mining feedstock constraints at the Sishen mine’s plants.
Iron-ore export sales reached 23.2-million tonnes for the period under review, an 18% rise on the 19.7-million tonnes recorded in the corresponding period of the prior year.
Record quarterly export sales of 11.7-million tonnes were achieved during the second quarter.
While domestic iron-ore sales remained steady at 2.8-million tonnes for the first half of the year, sales for the quarter ended June 30 recorded a 2% contraction to 1.3-million tonnes when compared with the second quarter of 2014.
Meanwhile, Anglo reported manganese ore production of 1.6-million tonnes for the six months to June 30, with manganese alloy production contracting 8% to 126 200 t.
For the six months to June, export metallurgical coal production decreased by 6% to 10.2-million tonnes, while export thermal coal production rose 8% to 17.3-million tonnes.
Limited water reserve levels during the half-year under review had hit copper production at Los Bronces, which recorded a 10% decline to 356 300 t.
The total net impact of water constraints on production during the six-month period was 28 000 t, with Central Chile continuing to experience abnormally low levels of precipitation, with June 2015 the driest on record.
However, the expected water supply constraints formed part of the mining and processing plans for the year, which included actively managing the use of the two processing plants based on available water and implementing additional water efficiency and supply projects, with longer-term initiatives progressing.
Nickel production, meanwhile, decreased by 34% to 13 000 t as the Barro Alto furnaces were rebuilt.
The Furnace 2 rebuild was concluded ahead of schedule, with first metal tapped in April 2015 and production now at nameplate capacity of 1.2-million tonnes a year.
The Furnace 1 rebuild started ahead of schedule and was expected to be concluded by October.
Meanwhile, equivalent refined platinum production increased by 55% to 1.1-million ounces, while diamond production contracted 3% to 15.6-million carats, mainly as a result of lower grades and reduced plant availability at Orapa.