Coal hurts Anglo American’s Q1 production, 2019 guidance unchanged
Anglo American (LON: AAL) released its first quarter production results on Thursday, reporting decreased production numbers, mostly because of planned disruptions at its metallurgical coal
division, where production dropped 25%.
“Production is 6% lower in the quarter, with two planned longwall moves at metallurgical coal accounting for 80% of the reduction,” chief executive Mark Cutifani said in a statement.
“Isolated production issues at Venetia (De Beers), Kumba Iron Ore and Platinum Group Metals made up the balance, mitigated by stronger operational performance from copper, with a 4% production increase, and the ramp-up at Minas-Rio, which is ahead of plan following the restart of operations in December 2018,” said Cutifani.
De Beers’ diamond production decreased by 8% to 7.9 million carats driven by lower production at the Venetia mine as it transitions from open pit to underground.
Platinum and palladium production decreased by 5% to 471,900 ounces and by 6% to 326,600 ounces, respectively, due to operational challenges as well as one-off benefits in Q1 2018.
Kumba’s iron ore production decreased by 12% to 9.5 million tonnes due to plant maintenance while Minas-Rio’s iron ore production increased by 61% as its ramp-up progresses well, facilitated by access to higher grade ore in the step 3 licence area.
Metallurgical coal production decreased by 25% to 4.2 million tonnes with two longwall moves in the period compared to only one in Q1 2018.
Thermal coal export production decreased by 2% to 6.6 million tonnes, with solid operational performance across the South African mines offset by lower production at Cerrejón due to dust management.
Cutifani added that by the end of the quarter Anglo had increased its production run-rate and are on track to deliver this year’s production targets.
“Our guidance is unchanged,” Cutifani said.
Late Thursday, Anglo American’s stock was down 2.24%, with shares priced at 2,034p on the London stock exchange. The company has a £28.6 billion ($37 billion) market capitalization.