London, England — 19 July 2013 – Global mining giant Anglo American plc says its second-quarter iron-ore output fell 1% from a year ago as its biggest production site recovers from strikes.
“Iron-ore volumes were 11.3Mt,” the company revealed in a statement released here. “Meanwhile copper rose 14% to 182,900t and platinum-equivalent refined production advanced 2 % to 594,000oz, reports Bloomberg News.
“Weakish iron ore sales are the main concern, and an area to be monitored,” Investec plc said in an e-mailed note to clients. Iron-ore production was 2% below its estimate, the bank added.
CEO Mark Cutifani, who is scrutinising every aspect of the company’s business after taking over from Cynthia Carroll in April, will announce the outcome of his review next week. The evaluation focuses on the performance of Anglo’s divisions, allocation of capital and the importance of South Africa to its portfolio, he said last month.
Production of export metallurgical coal, used in steelmaking, fell 9% to 4.4Mt. Output of export thermal coal from South Africa declined 5% to 4Mt and from Colombia fell 3% to
Anglo may report a 31% plunge in underlying profit to US$1.17 billion when it releases interim results on July 26, according to the average estimate of four analysts surveyed by Bloomberg News. The stock was little changed at 1,356 pence at 10:33 a.m. in London trading.
Anglo also mines diamonds in southern Africa and Canada. Production at De Beers, the gem producer owned by Anglo, jumped 10% in the second quarter to 7.9 million carats because of “favourable ore grades” at the Orapa and Jwaneng mines in Botswana, Anglo said. While output at the Venetia mine in South Africa declined 60%, full operations will be restored in the second half, it explained.
The company’s copper output at Los Bronces in Chile increased 13% to 101,700t. Production from the country’s Collahuasi mine jumped 25% to 37,700t.
Anglo booked a negative provisional pricing adjustment of US$189 million in the first half after selling copper at 318 cents a pound, compared with 370 cents the previous year, it said.
The Kumba Iron Ore unit said second-quarter production at Sishen in South Africa decreased by 9% to 8.6Mt from a year earlier as its biggest mine continued to recover from strikes late last year. The Kolomela mine increased output 49% to 2.6Mt, countering the output loss from Sishen, Kumba added.
Anglo American Platinum, the biggest producer of the metal, said on July 15 that first-half profit almost doubled after the rand weakened, curbing the impact of cost increases in South Africa. Earnings excluding one-time items may have risen as high as 54 U.S. cents a share from R2.73 a year earlier. Amplats, as the company is known, will release full results next week.
“Overall, not a great set of results, especially when compared to the better results from the other majors,” Numis Securities Limited said in a note. Anglo stock is expected to remain less attractive “with exposure to the weaker commodities and ongoing issues in South Africa, especially upcoming labour negotiations and power-price increases,” it said.
Source: Bloomberg News. For more information, click here.