More iron ore comes to the market as Anglo’s output soars in Q1
Anglo American’s (LON:AAL) iron ore output climbed more than 20% in the quarter ended in March thanks to improved productivity rates at its South Africa’s Kumba division and the continued ramping-up of its massive Minas Rio in Brazil.
The world's number five diversified miner revealed Monday it produced 14.8 million tonnes of iron ore in the first quarter, up from the 12.3 million tonnes it reported a year earlier, adding to an ongoing supply glut that is once again dragging prices down.
Prices for the steelmaking raw material plummeted another 5% last week on the back of lower prices for Chinese steel and concern about a supply glut.
The increased production, while lower than the 16.8 million tonnes it logged in the fourth quarter of 2016, was due mainly thanks to a 17% output surge at Kumba Iron Ore operations, on the back of improved mining productivity at Sishen, and higher throughput at Kolomela.
Output at the company’s Minas-Rio climbed by 30% to 4.3 million tonnes, as Anglo began the last phase of a key expansion at its Minas Gerais state-based mine.
Prices for the steelmaking raw material plummeted another 5% last week on the back of lower prices for Chinese steel and concern about a supply glut. Iron ore has now fallen by a third since hitting $94.5 a tonne two months ago
When it comes to Anglo’s main commodities —copper, diamonds and platinum — the miner said production of the red metal dropped 3% due to poorer quality ore in Chile, combined with the halting of mining operations at El Soldado from Feb. 18 following the regulator's decision to not approve a plan to update the mine.
For the full-year, however, the company maintained its copper production guidance of 570,000 to 600,000 tonnes.
Anglo’s diamond output climbed 8% while sales of rough stones reached 14.1 million carats, compared to 8.1 million carats its unit De Beers sold a year ago.
Anglo American Platinum, the top producer of the metal, said refined platinum production rose 121% to 576,900 ounces compared to the same period of 2016, when output was curtailed by a government-imposed safety stoppage at the South African unit’s refinery.
After a rough couple of years, Anglo American is showing growth. In February, it posted its first annual net profit in five years, and announced it was no longer in need to offload any more assets, even the iron ore, coal and nickel operations it had declared non-core assets last year.