Anglo American yesterday reported a 9 percent fall in its quarterly group production while it forecast a higher annual output of rough diamonds from its De Beers’ business, bolstered by demand for natural diamonds and recovery from the Covid-19 pandemic.
Its 2022 full-year production guidance was unchanged for platinum group metals, copper, and iron ore and decreased for steelmaking coal due to longwall ramp-up timing.
Anglo American chief executive Duncan Wanblad said: “Our production performance started to pick up in the second quarter of 2022, with operational momentum and our focus on asset resilience positioning us well for a stronger second half of the year.”
However, he flagged that in the second quarter, production was 9 percent lower compared with the same quarter in 2021, due to expected lower grades and water availability in copper, ramp-up of the Aquila longwall in Steelmaking Coal and planned maintenance at the Minas-Rio iron ore operation.
Anglo American said strong demand for rough diamonds continued into the second quarter, with rough diamond sales totalling 9.4 million carats, 8.3 million carats on a consolidated basis, compared with 7.3 million carats (6.5 million carats on a consolidated basis).
“Despite this, the combination of ongoing sanctions against Russia, decisions from a number of US-based jewellery businesses to apply their restrictions on purchases of Russian diamonds, and continued development of provenance initiatives have the potential to underpin continued robust demand for De Beers’ rough diamonds,” the group said.
The Russian sanctions had also given De Beers the opportunity to increase its market share.
South Africa’s production decreased by 4 percent to 1.2 million carats due to lower tonnes treated.
Production in Canada decreased by 28 percent to 0.6 million carats due to treating lower grade ore, unscheduled plant maintenance, and the impact of Covid-19-related absenteeism.
In Botswana, production decreased by 4 percent to 5.5 million carats due to lower-grade ore being processed at both Jwaneng and Orapa.
“Rough diamond production decreased by 4 percent to 7.9 million carats, primarily due to the treatment of lower-grade ore at operations in both Canada and Botswana,” it said.
Namibia production increased by 67 percent to 0.6 million carats, primarily driven by a continued strong performance from the Benguela Gem since the early delivery of the new diamond recovery vessel in the first quarter of 2022.
“Production guidance is increased to 32-34 million carats, previously 30-33 million carats, due to robust demand and strong year-to-date operational performance,” the group said.
Anglo American also saw a 21 percent drop in copper output to 133 900 tonnes in the reporting period due to planned lower grades from the Los Bronces and El Soldado mines in Chile.
For 2022 its copper guidance remained between 660 000 and 750 000 tonnes subject to the extent of further Covid-19 related disruptions, water availability in Chile and, in Peru, progress on ramp-up of operations.
Metal in concentrate production from its platinum group metals (PGM) operations was broadly flat, down 2 percent at 1.032 million ounces with strong performances at Unki and Mototolo offsetting planned lower grades at Mogalakwena.
Unit cost guidance was reduced to $950 (R16 197) per PGM ounce from $970 per PGM ounce, reflecting the weaker South African rand.
Iron ore production decreased by 8 percent to 14.4 million tonnes, due to a 4 percent decrease after a safety intervention at Kumba’s Kolomela mine and a 17 percent decrease at Minas-Rio due to planned maintenance.
Steelmaking coal production decreased by 12 percent to 2.6 million tonnes as the replacement Aquila longwall ramped up following the planned end of production from Grasstree, as well as high rainfall impacting the open pit operations.
Due to the prospect of further unseasonal wet weather, Anglo has lowered its coal guidance to between 15 and 17 million tonnes, from 17 and 19 million tonnes.
BUSINESS REPORT