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Operational improvements continue across Anglo portfolio

Anglo American CEO Mark Cutifani
Photo by Duane Daws
Anglo American CEO Mark Cutifani

25th October 2016

By: Martin Creamer
Creamer Media Editor

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JOHANNESBURG (miningweekly.com) – Operational improvements continue across the portfolio of Anglo American, which delivered an overall superior production performance in the three months to the end of September.

On a copper equivalent basis, the London- and Johannesburg-listed diversified mining company beat previous third-quarter production by 4% and second-quarter production by 12%.

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The sharp third-quarter improvement on the second quarter is largely the result of a 46% production surge at Kumba Iron Ore’s Sishen mine in the Northern Cape.

Anglo’s diamond and platinum businesses continued to mine to demand.

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“The modestly higher production at De Beers is reflective of improved market conditions,” Anglo CEO Mark Cutifani commented in a release to Creamer Media’s Mining Weekly Online.

Full-year diamond production guidance has been kept at 26-million carats to 28-million carats and full-year platinum guidance at 2.3-million ounces to 2.4-million ounces.

Consolidated third-quarter rough diamond sales rocketed 77% to 5.3-million carats on improved trading conditions.

In the three months to September 30, diamond production rose 4% to 6.3-million carats compared with the third quarter of last year, when production was cut owing to poor prevailing trading conditions.

Third-quarter platinum metal-in-concentrate production was 1% up at 619 000 oz and refined platinum production was a 14%-higher 694 700 oz.

Iron-ore production from South Africa rose 33% and export thermal coal production, 4.8-million tonnes of it from South Africa, remained flat at 8.8-million tonnes.

Production increases were also turned in at the ramping-up Minas-Rio iron-ore operation, in Brazil, and Grosvenor coal mine, in Australia, and the Barro Alto nickel plant, in Brazil, reached nameplate capacity.

DIAMOND MINING

In Botswana, third-quarter Debswana production rose 12% to 4.5-million carats, with production at the key Jwaneng mine increasing 47% and production from Orapa falling by a planned 22% to align aggregate production to trading conditions.

In South Africa, production by De Beers Consolidated Mines rose 6% to 1.1-million carats on better grades at the Venetia mine, in Limpopo, and increased throughput at Voorspoed, in the Free State.

In Namibia, production at Namdeb Holdings fell 13% to 0.4-million carats on lower grades at Namdeb Land as well as the Debmar Pacific vessel being kept in port for planned maintenance.

In Canada, production plummeted 48% to 0.2-million carats on the closure of the Snap Lake mine. This was partially offset by first production at the new Gahcho Kué, in Quebec, where a ramp-up is under way.

PLATINUM MINING

Third-quarter platinum production at the flagship Mogalakwena mine, in Limpopo, rose 12% to 100 700 oz on a 19% increase in tonnes milled, partially offset by a return to lower normalised 2.92 g/t grades.

Production rose to a 1% higher 128 300 oz at the Amandelbult mine but fell 3% to 120 900 oz at the Rustenburg operations, while the restructured Union mine chipped in 37 700 oz.

Independently managed production was 1% lower at 207 100 oz on last year’s closure of two shafts at Bokoni, offset by strong performances at the Modikwa, Kroondal and Bafokeng Rasimone mines.

Platinum production at the Unki mine, in Zimbabwe, rose 16% to 18 200 oz on 5% more tonnes milled and a 9% grade improvement.

Refined platinum production rose 14% to 694 600 oz on additional matte material that built up during the Section 54 first-quarter safety stoppage at the Precious Metals Refinery.

The run-out at the Waterval Smelter lowered third-quarter refined production by 6 000 oz and Waterval’s rebuilding will now proceed earlier than originally planned, during the last quarter of this year.

The platinum concentrate that accumulates during Waterval’s rebuilding will be processed by the end of 2017.

IRON-ORE MINING

Iron-ore production by Kumba rose 3% to 11.8-million tonnes on higher Sishen production of 8.3-million tonnes from better quality material and improved plant yield.

Sishen’s transitioning to a three-shift roster system is expected to result in greater equipment efficiencies.

Consistent with the lower cost configuration of the Sishen pit, the removal of waste fell to 35-million tonnes from 60-million tonnes in the third quarter of last year.

Production at the newer Kolomela mine remained unchanged at 3.4-million tonnes.

Export sales rose 5% to 10.3-million tonnes on higher production.

Full-year Sishen production guidance remains at 27-million tonnes and waste removal of between 135-million tonnes and 150-million tonnes is forecast.

Kolomela’s full-year production is expected to exceed the 12-million tonnes guided, with a commensurate increase in waste of 46-million tonnes to 48-million tonnes forecast.

COAL MINING

In South Africa, the production of thermal coal for export fell 3% to 4.8-million tonnes on export production from the Landau and Zibulo mines being diverted into the domestic market for value.

Coal produced for State-owned electricity utility Eskom increased 20% on increased demand and increased production from the Kleinkopje colliery.

In Australia, the production of metallurgical coal increased by 1% to 5.5-million tonnes on Grosvenor’s ramp-up plus a move to longwall mining at Moranbah, but Australian export thermal coal production fell 19% to 1.1-million tonnes on the ramping down to full mining cessation by year-end of the Drayton mine.

In Colombia, attributable production from the Cerrejón mine rose 16% to 2.9-million tonnes on improved productivity and favourable weather.

Anglo’s full-year production guidance for export metallurgical coal has been cut to 20.5-million tonnes at the low end from a high-end 22-million tonnes previously, following the sale of the Foxleigh mine.

Full-year production guidance for export thermal coal from South Africa and Colombia remains at 28-million tonnes to 30-million tonnes.

MANGANESE MINING

Third-quarter production of manganese ore was brought down to 17% in response to poor demand.

Work has ceased at the Wessels underground mine, in the Northern Cape, and South African manganese alloy plants are operating only one of four available furnaces in response to poor market conditions.

COPPER MINING

Third-quarter copper production was 9% lower at 139 800 t, with output from the Los Bronces copper operation, in Chile, falling 27% to 72 100 t on lower grades of 0.65% and a seven-day strike having a 7 000 t negative impact on performance.

Attributable production from the Collahuasi copper mine, in Chile, rose 31% to 57 000 t on higher 1.23% grades and continued strong plant performance, but production at the El Soldado copper mine, in Chile, fell 3% to 10 700 t following a 13-day strike having a 4 000 t negative impact on output.

Anglo has kept its full-year copper production forecast at between 570 000 t and 600 000 t.

EXPLORATION CUT

Third-quarter exploration expenditure was cut by 19% to $26-million and evaluation expenditure by 34% to $25-million.

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