Low diamond prices push Anglo American to cut output
Weaker diamond prices has prompted Anglo American (LON:AAL), which owns 85% of De Beers, to cut its forecast for this year’s gems production by 6%.
However, the company said output jumped by 2% to 7.7 million carats between January and March, which is typically the weakest quarter. Higher quality stones from the Venetia mine in South Africa mostly drove such increase, it added.
Diamonds have been a bright spot for the company since it took over De Beers, the world’s largest diamond miner, in 2011. Last year, the division generated a 36% increase in underlying earnings and helped mitigate the impact of falling prices for the commodities Anglo mines.
The London-listed company saw its copper production affected by Chile’s drought and later torrential rains and floods, which caused output to fall 15% to 171,800 tonnes.
Like its competitors Rio Tinto (LON:RIO) and BHP Billiton (ASX:BHP), Anglo also logged increased iron ore output for the first quarter of 2015 compared with the same period last year.
Anglo’s Kumba division output climbed 7% in the quarter from the same 2014 period to 12.2 million. And its Minas Rio in Brazil produced 1.2m tonnes, a 71% increase on 2014, which Anglo said was “broadly in line with ramp-up plans”.
Anglo also said it continues trying to divest its most labour-intensive platinum mines in South Africa, while boosting production at its newer Mogalakwena mine.