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Anglo American shows recovery in its second-half production

Anglo American shows recovery in its second-half production

Anglo American shows recovery in its second-half production

By Dineo Faku Time of article published 24m ago

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Diversified mining giant, Anglo American plc, said that the combination of the Covid-19 pandemic’s economic fallout and operational challenges had weighed heavily on annual production in most commodities in 2020 compared to a year earlier.

Production in diamonds, platinum group metals (PGMs), iron ore, nickel, metallurgical coal and thermal coal took a knock in 2020, while only the copper and nickel portfolios recorded growth, and manganese ore’s production remained unchanged.

However, chief executive Mark Cutifani said there had been a strong performance recovery in the second half, which had continued through the fourth quarter, following the Covid-19 disruptions earlier in the year.

“As expected, second half production returned to 95 percent of 2019 rates, benefiting from strong performances in copper at Los Bronces in

Chile and in iron ore at Minas-Rio in Brazil.

The recovery was all the more credible given planned maintenance at both the Collahuasi copper and Kumba iron ore operations and the suspension of operations at the Grosvenor metallurgical coal mine,” said Cutifani.

Highlights included the 6 percent rise in copper production during the December quarter following the improvement at Los Bronces, which secured access to industrial water.

Anglo, which owns 85 percent of De Beers, said rough diamond production had declined by 18 percent in 2020 to 25.1 million carats compared with 30.7 million carats a year earlier.

The group said diamond production for 2021 would be lower than its previous estimates, citing operational challenges and lower than expected production from the final cut at Venetia.

The lower production resulted in the slashing of the production guidance to between 32 million and 34 million carats from a previous estimate of between 33 million and 35 million carats subject to trading conditions.

Anglo, however, said there were green-shoots during the fourth quarter of 2020. “Demand for rough diamonds showed positive trends in the fourth quarter of 2020, and the indications are that encouraging levels of consumer demand for diamond jewellery continued during the holiday season in the US, while China also performed well,” said Anglo.

PGM production at Anglo American Platinum’s own-managed mines fell by 13 percent in 2020 compared to a year earlier and by 8 percent to 617 800 ounces in the December quarter due to the closure of mined-out infrastructure at the Amandelbult mine and community-related disruptions at the Mogalakwena mine. Refined PGM production fell by 42 percent in 2020 to 2.7 million ounces compared to 4.6 million ounces in 2019.

During the December quarter, refined PGM production from own material excluding toll-treated material decreased by 49 percent to 673 100 ounces. Export thermal coal production in South Africa fell by 7 percent in 2020 to 16.4 million tons compared to 2019 and by 10 percent to 4.1 million tons in the December quarter.

Anglo American shares closed 3.81 percent higher at R507.18 on the JSE yesterday.

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