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Anglo pleased with copper's first-quarter performance

Anglo CE Duncan Wanblad.

Anglo CE Duncan Wanblad.

23rd April 2024

By: Martin Creamer

Creamer Media Editor

     

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JOHANNESBURG (miningweekly.com) – Copper production increasing by 11% as Quellaveco achieved its highest plant throughput rate in Peru, and Collahuasi and El Soldado in Chile benefitting from higher copper grades were among the first-quarter performance aspects that pleased diversified mining company Anglo American in the three months ending March 31.

“We’re driving operational excellence across our assets, focusing on stability and effective cost management as levers to deliver significant value through the cycle,” Anglo CE Duncan Wanblad highlighted in a release to Mining Weekly on Tuesday.

“We’re progressing through our asset review to optimise value by simplifying and improving the overall quality of the portfolio,” he added.

With copper now representing 30% of total production, the business is being set up to deliver and grow into the major demand themes against the backdrop of several organic medium-term copper growth options.

Steelmaking coal production also increased by 7%, owing to the performance at the Aquila longwall and Capcoal opencast operations in Australia, the London- and Johannesburg Stock Exchange-listed company stated in the First Quarter Anglo American Production Report.

Anglo diamond mining and marketing company De Beers, the report noted, implemented changes to lower its diamond production for the year by about three-million carats.

This, combined with 7% lower production of 834 000 oz from Anglo’s platinum group metals (PGM) operations resulted in flat production for the group overall when compared with the first three months of 2023. The lower PGM production reflected expected lower volumes from the Kroondal PGM mine, which is reported as third-party purchase of concentrate from November 2023, and lower production at the underground Amandelbult PGM mine in Limpopo.

Iron-ore production was flattened by the planned logistics-linked decrease to 15.1-milion tonnes at South Africa’s Kumba Iron Ore offsetting the 4% production rise at Minas-Rio in Brazil.

Full-year diamond production guidance has also been lowered to 26-million carats to 29-million carats, with unit costs revised up to $90/ct.

Realised prices were all down except for diamonds. The biggest realised price fall was 61% for rhodium. Other big realised price falls were for palladium, which was 38% down, nickel, which was 37% down, Minas-Rio iron-ore, which was 38% down, and the PGMs basket price, which was 30% down.

PGM METAL-IN-CONCENTRATE

Anglo’s own mined production decreased by 14% to 504 300 oz on the disposal of Kroondal. Excluding Kroondal, production decreased by 6% owing to lower production from Amandelbult and Mototolo. Mogalakwena produced 219 500 oz, which was flat year-on-year.

Production at Amandelbult decreased by 16% to 127 100 oz on lower recoveries and plant equipment breakdowns.

Production at Mototolo fell 10% to 61 900 oz, caused by mining equipment breakdowns and challenging ground conditions as a section of the mine reaches its end of life.

The Unki PGM mine in Zimbabwe produced 62 800 oz, in line with the same period of last year.

The purchase of concentrate increased by 5% to 329 800 oz, reflecting the transition of Kroondal to a 100% third-party purchase of concentrate arrangement. Normalising the comparative period to include 100% of Kroondal results in a 10% decrease, reflecting lower third-party receipts.

Refined PGM production was flat at 628 000 oz. In the first quarter of every year, refined production is typically at its lowest, owing to the yearly stock count and planned maintenance at processing assets.

KUMBA IRON ORE

Kumba’s quarterly production declined to 9.3-million tonnes, driven by a 12% decrease at Kolomela to 2.7-million tonnes. The operationally-stable Sishen iron-ore mine lifted production by 4% to 6.6-million tonnes.

Kumba’s iron-ore sales fell 12% to 8.4-million tonnes, primarily as a result of equipment reliability challenges at the Saldanha Bay port as well as adverse weather conditions.

Equipment maintenance is now being undertaken in the second quarter by Transnet, with Kumba increasing alternative loading approaches and also working to secure alternative loading options to help mitigate the impact.

As a result of the logistics challenges on rail and at the port, finished stock increased to 8.6-million tonnes, with stock at the mines increasing to 6.9-million tonnes, which remains considerably above desired levels. Stock at the port increased to 1.7-million tonnes.

Kumba's iron content averaged 64.2% while the average lump:fines ratio was 66:34.

The average realised price of $87/t was 16% lower as benchmark prices moved lower in the quarter.

DIAMOND DETAILS

Botswana diamond production decreased by 28% to five-million carats on intentional lower production at the Jwaneng diamond mine and a short-term change in plant feed mix at the Orapa operation to process existing surface stockpiles.

Namibia production was broadly unchanged at 0.6-million carats, South Africa production fell 19% to 0.6-million carats, and Canada production fell 4%, also to 0.6-million carats.

Demand for rough diamonds began to recover in the quarter following improved demand for diamond jewellery.

The flexibility for rough diamond allocations offered by De Beers in 2023, combined with the voluntary import moratorium on rough diamonds into India in the last quarter of 2023, has helped improve the industry's balance between wholesale supply and demand.

However, ongoing uncertainty around economic growth prospects has led to a continued cautious purchasing approach by sightholders and the recovery in rough diamond demand is expected to be gradual through the rest of the year.

First-quarter rough diamond sales were 4.9-million carats from two sights, compared with 9.7-million carats from three sights in the first quarter of 2023.

The consolidated average realised price increased by 23% to $201/ct, reflecting a change in the sales mix towards higher value rough diamonds.

Manganese ore production decreased by 7% to 783 800 t, primarily owing to the impact of tropical cyclone Megan in mid-March, which has temporarily suspended the Australian operations. The tropical cyclone caused widespread flooding and significant damage to critical infrastructure. The operational recovery has focused on re-establishing critical services and dewatering targeted mining pits, and studies are underway on the infrastructure restoration.

EXPLORATION AND EVALUATION

Exploration and evaluation expenditure for the quarter of $66-million was down on the $68-million of the first quarter of last year.

Evaluation expenditure was broadly flat at $39-million and exploration expenditure fell by 10% to $27-million.

Edited by Creamer Media Reporter

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