Anglo American announces 3Q21 production report

Mark Cutifani, Chief Executive of Anglo American, said: “Production is up 2% compared to 3Q20, with our operating levels generally maintained at approximately 95% of normal capacity. The increase in production is led by planned higher rough diamond production at De Beers, increased production from our Minas-Rio iron ore operation in Brazil, reflecting the planned pipeline maintenance in 3Q20, and improved plant performance at our Kumba iron ore operations in South Africa.

“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. Our copper operations in Chile continue to work hard on mitigating the risk of water availability due 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.”

3Q21 highlights

• Rough diamond production increased by 28%, principally from the Jwaneng and Venetia mines, reflecting planned higher production in response to the ongoing consumer demand recovery led by the key US and China markets.
• Copper production decreased by 6% due to planned maintenance at Collahuasi, while total year to date (YTD) production across all copper operations increased marginally by 1% despite ongoing water availability constraints caused by record drought conditions in Chile.
• The company’s Platinum Group Metals (PGMs) operations delivered a 39% increase in refined output, reflecting stable performance from the ACP Phase A unit.
• Iron ore production increased by 15%, driven primarily by a 22% uplift from Minas-Rio, reflecting the planned maintenance period in 3Q20 for routine internal scanning of the pipeline. Kumba production also performed strongly, increasing by 11% due to improved plant performance.
• At its longwall metallurgical coal operations in Australia, Moranbah has steadily improved as they mined through challenging geological zones this quarter, and development work at Grosvenor continues to progress, with longwall mining expected to restart towards the end of the year.
• Primary nickel production increased by 2% over the period and by-product nickel from our PGMs business increased by 20% to 6000 t.

De Beers

Rough diamond production increased by 28% to 9.2 million carats, reflecting planned higher production to meet stronger demand for rough diamonds.

In Botswana, production increased by 33% to 6.4 million carats primarily driven by to the planned treatment of higher grade ore at Jwaneng, partly offset by lower production at Orapa due to the planned closure of Plant 1.

Namibia production increased by 65% to 0.4 million carats reflecting the suspension of the marine fleet during 3Q20, as part of the response to lower demand at that time.

South Africa production increased by 34% to 1.6 million carats due to planned treatment of higher grade ore from the final cut of the Venetia opencast and an improvement in plant performance.

Production in Canada decreased by 13% to 0.8 million carats due to lower grade ore being processed.

Demand for rough diamonds continued to be robust, with positive midstream sentiment reflecting strong demand for polished diamond jewellery, particularly in the key markets of the US and China. Rough diamond sales totalled 7.8 million carats (7 million carats on a consolidated basis) from two Sights, compared with 6.6 million carats (6.5 million carats on a consolidated basis) from three Sights in 3Q20, and 7.3 million carats (6.5 million carats on a consolidated basis) from two Sights in 2Q21.

Full year guidance

Production guidance is tightened to ~32 million carats (previously 32 – 33 million carats) (100% basis), due to continuing operational challenges, subject to the extent of any further COVID-19 related disruptions.

Copper

Copper production decreased by 6% to 156 500 t due to planned plant maintenance at Collahuasi.

Production from Los Bronces of 79 600 t was in line with prior year. An increase in plant throughput was fully offset by planned lower grade (0.7% vs 0.73%) and lower copper recovery (79.7% vs 80.9%).

At Collahuasi, attributable production decreased by 14% to 65 300 t due to planned major plant maintenance.

Production from El Soldado increased by 7% to 11 600 t reflecting strong plant performance, partially offset by planned lower grade (0.73% vs. 0.78%).

The YTD average realised price of 434 c/lb, includes 171 661 t of copper that as at 30 September was provisionally priced at an average price of 413c/lb.

Chile´s central zone continues to face challenging climate conditions with a continuation of the longest drought recorded. These conditions are placing significant pressure on water availability and pose an ongoing risk to production at Los Bronces in 4Q21 and 2022.

Full year guidance

Production guidance is tightened to 650 000 – 660 000 t (previously 650 000 680 000 t), due to plant performance challenges at Los Bronces, subject to water availability and the extent of any COVID-19 related disruption.

Iron ore

Iron ore production increased by 15% to 16.9 million t, due to a 22% increase at Minas-Rio and an 11% increase at Kumba.

Kumba: Total production increased by 11% to 10.8 million t, due to an increase at Sishen of 14% to 7.5 million t and 6% at Kolomela to 3.3 million t. The increase reflects improved processing plant availability and reliability.

Total sales of 10.0 million t decreased by 10% due to unplanned maintenance and weather-related delays at the Saldanha port.

Year to date, Kumba product iron (Fe) content averaged 64.1% (YTD 3Q20: 64.3%), while the average lump:fines ratio was 69:31 (YTD 3Q20: 67:33).

The YTD average realised price of $181/tonne (FOB South Africa, wet basis) was higher than the 62% Fe benchmark price of US$154/t (FOB South Africa, adjusted for freight and moisture) due to the lump and iron content quality premiums that the Kumba products attract, partially offset by the timing on provisionally priced volumes.

Minas-Rio: Production increased by 22% to 6.1 million t reflecting the planned stoppage in 3Q20, when routine internal scanning of the pipeline was carried out. The YTD average realised price of US$167/t (FOB Brazil, wet basis) was higher than the Metal Bulletin 66 price of US$159/t (FOB Brazil, adjusted for freight and moisture), reflecting the premium quality of the product, including higher (~67%) iron content, partially offset by the timing on provisionally priced volumes.

Full year guidance

Production guidance (wet basis) is tightened to ~64.5 million t (previously 64.5 – 66.5 million t) (Kumba ~40.5 million t [previously 40.5 – 41.5 million t] owing to rail in South Africa performing below planned levels; MinasRio ~24 million t [previously 24 – 25 million t) owing to lower plant availability). Both are subject to the extent of further COVID-19 related disruption and Kumba is subject to rail performance.

Metallurgical coal

Export metallurgical coal production decreased by 11% to 4.3 million t due to operations at Moranbah being impacted by challenging geological conditions for most of the quarter. This was partly offset by Dawson and Capcoal increasing 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 2021, 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 3Q20 (82:18), due to solid performance at Grasstree and the mine sequence at Dawson and Capcoal.

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

Full year guidance

Production guidance is unchanged at 14 – 16 million t, subject to the extent of any COVID-19 related disruption.

Nickel

Nickel production increased by 2% to 10 400 t, reflecting the planned annual maintenance at Codemin in 3Q20, partially offset by planned lower ore grade.

Full year guidance

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

Read the article online at: https://www.globalminingreview.com/finance-business/25102021/anglo-american-announces-3q21-production-report/