Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Anglo American’s (LON: AAL) production rose by 20% in the second quarter, helped by higher output of platinum and diamonds, the miner said on Tuesday, despite operations running at 95% of full capacity because of covid-19 disruptions.
Rough diamond production rose by 134% compared to the same period last year as consumer demand recovered, while platinum group metals production at South African unit Anglo American Platinum increased by 59% to 1.06 million ounces.
Copper output rose by 2% to 170,000 tonnes on higher production at Anglo’s largest mine in Chile, Los Bronces.
Anglo expects copper output to reach between 650,000 tonnes and 680,000 tonnes this year. That compares with previous guidance of 640,000 to 680,000 tonnes.
Anglo tightened its yearly output targets for diamonds to 32-33 million carats from 32-34 million previously
Anglo’s shares were up 1.8% at 0715 GMT.
Iron ore and manganese output also rose, while coal and nickel production fell.
The miner tightened its yearly output targets for diamonds to 32-33 million carats from 32-34 million previously, and for platinum group metal concentrates to 4.2-4.4 million ounces, from 4.2-4.6 million previously.
“All things considered, Anglo appears to be operating relatively well,” Jefferies analysts said.
Metallurgical coal production fell by 25% in the second quarter to 3 million tonnes.
Anglo American restarted underground mining at its Moranbah North metallurgical coal mine in Australia in June after a shutdown due to elevated gas levels.
It said its Grosvenor coal mine, also in Australia and which was suspended after an explosion in May 2020, should restart at the end of this year.
The London-listed miner in June spun off its South African thermal coal business into a new company and agreed to sell its stake in Colombia’s Cerrejon, moving to complete its transition out of assets that mine the most polluting fossil fuel.
(By Clara Denina and Helen Reid; Editing by Mark Potter)
