[miningmx.com] – THERE were few surprises in Anglo American’s fourth quarter production report card which showed output losses sustained as its South African mines, especially Anglo American Platinum (Amplats) and Kumba Iron Ore (Kumba).
There were some bright spots, however.
Despite a 34% fourth quarter decline (vs. 2011 Q4) in production at Collahuasi, a copper mine in Chile shared between Anglo (44%), Xstrata (44%) and Mitsui (12%), Anglo’s copper division posted a 2% improvement in production.
De Beers, in which Anglo has an 85% stake, also lifted production following the resumption of full mining activities at the Botswana-based Jwaneng mine, while thermal coal output from South Africa was 5%, aided by Zibulo, a new mine.
There was also a positive operating profit adjustment of $47m at the end of 2012 reflecting provisional pricing of 117,900 tonnes of copper at 359 US cents per pound versus a negative operating profit adjustment of $278m in 2011.
Investec Securities said the figures came in better than forecasts: “The 4Q production results look generally better than our forecasts, while sales volumes may be a lot better than production, especially in platinum. Decent performance from copper, coking coal in line,” it said in a morning note.
Said Macquarie First South Securities: “While this was always going to be a tough quarter for Anglo given the wildcat strikes in platinum and iron ore in South Africa and the ongoing issues with copper in Chile, some of the key numbers were better than we expected”.
Attention, however, is bound to fall on the deficits in production over a period which is likely to be the last over which outgoing CEO, Cynthia Carroll, will preside.
The pain was nearly almost entirely in South Africa where Amplats confirmed it had lost 272,590 ounces of platinum production in the fourth quarter, a 29% decline compared to the fourth quarter of the 2011 financial year. The declines were owing to strike activity at the Rustenburg, Amandelbult and Union mines and include production losses while the mines ramp up to capacity.
Similarly, Kumba’s output declined 19% owing to the unprotected strike at Sishen mine. The loss in production was five million tonnes, partly offset by the continued strong ramp-up at the newly commissioned Kolomela iron ore mine. It exceeded monthly design capacity and contributed 2.8 million tonnes for the quarter and 8.5 million tonnes for the year – in excess of its ramp up schedule, Anglo said.
Sales from the platinum and iron ore operations were not as low as the production declines as stockpiles were used to continue to supply customers.
Of concern to Eskom, no doubt, will be the 7% decline in domestic coal production to 10.2 million tonnes predominantly due to an additional longwall move at New Denmark, Anglo said.
However, the company’s metallurgical assets in Australia had a strong showing with full-year metallurgical sales of 17.7 million tonnes, a record. Nickel production fell in line with the closure of Anglo’s Loma de Niquel project.
