Diamonds, iron-ore drive 2% rise in Anglo American's third-quarter output

21st October 2021 By: Simone Liedtke - Writer

Diamonds, iron-ore drive 2% rise in Anglo American's third-quarter output

Anglo American CEO Mark Cutifani
Photo by: Bloomberg

Diversified miner Anglo American achieved a 2% increase in production for the third quarter, ended September 30, which CEO Mark Cutifani largely attributed to planned higher rough diamond production at its De Beers subsidiary, as well as increased production from the Minas-Rio iron-ore project, in Brazil, and improved plant performance at Kumba Iron Ore's operations, in South Africa.

Operating levels were also generally maintained at about 95% of normal capacity during the period.

"We are broadly on track to deliver our full-year production guidance across all products, while taking the opportunity to tighten up the guidance for diamonds, copper and iron-ore within our current range as we approach the end of the year,” Cutifani said on October 21.

Anglo’s copper operations, in Chile, meanwhile, continue to work hard on mitigating the risk of water availability owing to the challenges presented by the longest drought on record for the region, including through sourcing water that is not suitable for use elsewhere and further increasing water recycling.

Copper production decreased by 6% year-on-year to 156 500 t owing to planned plant maintenance at the Collahuasi mine.

Attributable production at Collahuasi decreased by 14% to 65 300 t owing to planned major plant maintenance.

Production from Los Bronces of 79 600 t was in line with production in the third quarter of 2020, as an increase in plant throughput was fully offset by planned lower grades and lower copper recovery.

Production from El Soldado increased by 7% to 11 600 t, which Anglo said reflected a "strong plant performance, partially offset by planned lower grades”.

The year-to-date average realised price of $4.34/lb, includes 171 661 t of copper that as at September 30 was provisionally priced at an average price of $4.13/lb.

Chile´s central zone continues to face challenging climate conditions with a continuation of the longest drought recorded, Anglo reiterated, lamenting that “these conditions are placing significant pressure on water availability and pose an ongoing risk to production at Los Bronces” in the fourth quarter of the year and into 2022.

The full-year production guidance is tightened to between 650 000 t and 660 000 t, compared with the previously guided 650 000 t to 680 000 t, owing to plant performance challenges at Los Bronces. Guidance is subject to water availability and the extent of any Covid-19 related disruption.

De Beers' rough diamond production increased by 28% year-on-year to 9.2-million carats in the third quarter, reflecting planned higher production to meet stronger demand for rough diamonds.

Production was mainly driven by the Jwaneng mine, in Botswana, and the Venetia mine, in South Africa, reflecting planned higher production in response to the ongoing consumer demand recovery led by the key US and China markets.

The production guidance for the full-year has been tightened to about 32-million carats, from the previous guidance of 32-million to 33-million carats, owing to continuing operational challenges, subject to the extent of any further Covid-19 related disruptions, the miner said.

Subsidiary Anglo American Platinum's (Amplats') own mined platinum group metals (PGMs) production decreased by 4% to 720 000 oz, mainly owing to a decrease of 12% at Mogalakwena from planned maintenance at the Mogalakwena North concentrator and lower-grade material.

Refined PGMs production increased by 39% to more than 1.4-million ounces, and reflects continued strong performance from the Anglo Converter Plant (ACP) Phase A unit following its successful start-up in November 2020.

The ACP Phase B rebuild is on schedule for completion in the fourth quarter of this year.

Sales volumes, meanwhile, increased by 54%, driven by higher refined production.

The year-to-date average realised basket price of $2 868/oz of PGMs reflects strong prices for rhodium and the minor metals, partly offset by higher-than-normal sales volumes of lower-priced ruthenium.

Overall, the production guidance for metal in concentrate is unchanged at between 4.2–million and 4.4-million ounces.

Group iron-ore production increased by 15% year-on-year to 16.9-million tonnes in the third quarter, owing to a 22% increase in output at Minas-Rio and an 11% increase at Kumba Iron Ore's operations.

The 22% increase in production at Minas-Rio reflected the planned stoppage in the third quarter of 2020, when routine internal scanning of the pipeline was carried out, Anglo reported.

The group's full-year production guidance for iron-ore (wet basis) has been tightened to about 64.5-million tonnes, compared with the previously guided 64.5-million to 66.5-million tonnes, owing to railway challenges in South Africa and lower plant availability at Minas-Rio.

Export metallurgical coal production in Australia decreased by 11% to 4.3-million tonnes owing to operations at Moranbah having been impacted on by challenging geological conditions for most of the quarter.

This was partly offset by Dawson and Capcoal having increased production levels after having scaled back production volumes since mid-2020 in response to reduced demand for their particular products.

Development activities at Grosvenor continue as part of the mine’s staged approach to restarting longwall mining operations towards the end of this year, which Anglo said was subject to the approval of the Queensland Mines Inspectorate, with the first development coal washed in September.

The ratio of hard coking coal production to PCI/semi-soft coking coal was 83:17, slightly higher than in the third quarter of 2020, owing to a solid performance at Grasstree and the mine sequence at Dawson and Capcoal.

The year-to-date average realised price for hard coking coal was $149/t, lower than the benchmark price of $177/t as sales for the year have consisted of a lower proportion of premium-quality hard coking coal from Moranbah and Grosvenor.

Overall, production guidance is unchanged at between 14-million and 16-million tonnes, subject to the extent of any Covid-19 related disruption.

Nickel production increased by 2% to 10 400 t, which Anglo said reflects the planned yearly maintenance at Codemin, in Brazil, in the third quarter of 2020, and which was partially offset by planned lower ore grades.

Production guidance is unchanged at between 42 000 t and 44 000 t, subject to the extent of further Covid-19 related disruption.

Manganese ore production increased by 7% to just over one-million tonnes, and was benefiting from improved productivity at the South African operations.

Anglo said there was no manganese alloy production during the quarter under review as the South African smelter has been on care and maintenance since a Covid-19 lockdown started in late March 2020.

Exploration and evaluation expenditure increased by 22% to $72-million, with exploration expenditure having increased by 42% to $37-million, driven by increased activity in copper and PGMs, reflecting the impact of Covid-19 in the third quarter of 2020.

Evaluation expenditure, meanwhile, increased by 6% to $35-million, with increased spend on PGMs and diamonds.