Copper, diamonds boost Anglo's results ahead of strategy review
Anglo American (LON:AAL) logged Thursday quarterly production figures comparatively less favourable than those of rivals, yet surprisingly higher in the copper and diamond divisions.
As CEO Mark Cutifani readies to unveil a strategy review for the underperforming mining group next week, the company said copper and diamonds output rose in the second quarter ending June 30, compared to the same period last year.
Production of the red metal, the main earner for Anglo last year after iron ore, increased 14% to 182,900 tonnes, thanks mainly to a 25% improvement at the troubled Chile’s Collahuasi mine and the ramp-up of its Los Bronces mine.
Diamond output jumped 10% to 7.9 million carats, largely reflecting improved grades at Africa’s Orapa and Jwaneng mines, offset by lower recoveries at South Africa’s Venetia following flooding in January this year.
However Anglo’s output for its key coal, iron ore and platinum divisions fell considerably.
Steel-making coal dropped 9% to 4.4 million tons, while export thermal coal from South Africa sank 5% to 4 million tons and from Colombia went down 3% to 3 million tons.
Top 2012 earner iron ore, which made up almost half of the miner’s profit last year, slid down hill. The Kumba Iron Ore unit dipped 1% to 11.3 million tonnes, against an expected modest climb, as its Sishen mine struggles to recover from a strike at the end of last year.
Labour issues also affected Anglo’s platinum, as the miner battles to return the lossmaking South African mines to profit in the face of weak demand, high costs, demanding unions and political pressure to avoid job cuts.
Cutifani is expected to give his first public presentation next week, to release interim results and address the labour issues affecting the platinum division as well as other challenges the company is facing, including the huge cost overruns at its Brazilian iron ore project.
According to the average estimate of four analysts surveyed by Bloomberg News, Anglo American is likely to report a 31% drop in underlying profit to $1.17 billion next week.