Goldman recommends "buy" for Anglo American

Goldman Sachs Group Inc. recommended buying Anglo American Plc call options on speculation the mining company's shares will extend a two-month rally as economic uncertainty subsides and its recent suspension of dividend payments help to bolster the company's finances, a newswire service reported.

The brokerage advised buying calls expiring in December with a strike price of 1,900 pence. Shares in the mining company have gained 81 percent since reaching a five-year low on March 2.

Anglo American, based in London, announced in February that it would suspend its dividend and only resume payments "as soon as market conditions allow." The company also sold $2 billion worth of bonds last month after its finances were hit by a decline in commodity prices.

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Alloy battles: billions at stake

This week's announcement by Johannesburg-listed Metmar that Finland's Ruukki Group is to pay ZAR 2bn for an 84.9% interest in Mogale Alloys further entrenches the battle by the low profile Kermas group in taking on Xstrata, and its controlling shareholder, Glencore, which operates primarily as a global trader and logistics outfit. Xstrata, a diversified miner, ranks as the world's leading producer of ferrochrome, of which 80% of global primary production goes into the making of stainless steel.

South Africa, the world's dominant producer of ferrochrome, sits at the centre of the battle; Kermas is already the controlling shareholder in Samancor Chrome, world's No 3 in production, after ENRC, which produces in the Eurasian area. World No 4 Hernic operates in South Africa, and is controlled by Mitsubishi Corporation, followed by No 5 in the form of South Africa's Assore. Kermas previously had links with Russia's Kluchevsky Ferroalloys, and its very aged plant and facilities.

The production (and pricing) of ferrochrome can be volatile; on 5 May, Johannesburg-listed Merafe, one of Xstrata's black economic empowerment partners in South Africa, announced that ferrochrome production for the Xstrata-Merafe venture for the first quarter of 2009 was 76% lower compared to the same period in 2008. Seventeen out of twenty furnaces, equivalent to some 80% of annual production capacity, remained suspended during the first quarter "as destocking continued in response to weak demand".

For a diversified miner, ferrochrome can have its uses. Xstrata posted EBITDA (earnings before interest, tax, depreciation and amortisation) of USD 234m for 2006, for its alloys division, which also includes certain other alloys. The number soared to USD 389m for 2007, and then positively exploded in 2008 to USD 1bn.

But not even Samancor Chrome, which possibly holds 70% of global ferrochrome deposits, was attractive to two of the world's biggest miners. Samancor Chrome was previously owned 60% by BHP Billiton and 40% by Anglo American, and was sold, excluding The Wonderkop joint venture (with Xstrata) and Palmiet Ferrochrome plant, to Kermas in February 2005 for USD 469m.

BHP Billiton has long held, however, 60% of Samancor Manganese, where Anglo American again holds 40%. Samancor Manganese, which operates in South Africa and Australia, earned BHP Billiton underlying EBIT of USD 132m in 2006, nearly doubling to USD 253m for 2007. The number positively soared in 2008 to USD 1.6bn.

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Anglo American appoints Ms Hunter as head of Government and Social Affairs

Anglo American plc announced that the appointment of Ms Anji Hunter as Group Head of Government and Social Affairs, in succession to Mr Edward Bickham.

Ms Anji will take up her position with effect from June 1st 2009 with a view to achieving a seamless transfer of responsibilities by the end of August. She will be responsible for government relations and community and social development and will report to Mr Russell King Chief Strategy Officer of Anglo American.

Ms Anji Hunter brings her considerable public and private sector experience gained over 6 years at BP plc as Director of Communications and 5 years as Director of Government Relations at No.10 Downing Street.

Mr Russell King said that “I am delighted that Ms Anji will be joining Anglo American to build upon the strong progress made with our key stakeholders over the last nine years. Anglo American is widely recognized as a leader in the mining industry for its commitment to responsible, safe and sustainable mining. Our relationships with host governments and local communities around the world are critical to the future success of our operations and the delivery of our considerable strategic growth plans. I look forward to working with Ms Anji.”

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Anglo 'vulnerable to takeover'

miningmx.com -- Mining group Anglo American Plc may be vulnerable to a potential takeover from rival Xstrata, the Japanese bank Nomura said.

Anglo has ditched its previous conservative strategy, but the fruits of a new high-growth approach will not be seen for around two to three years since it has postponed three flagship projects, a research note said.

"Anglo may be facing an identity crisis that could leave the company vulnerable to takeover," analyst Paul Cliff said.

"While BHP/Rio and Vale/Xstrata have attracted most of the M&A headlines in the sector recently, we would not rule out an Xstrata all-share offer or merger of equals with Anglo over the next 12 months."

Assuming a 30% takeover premium, a deal would be accretive to Xstrata in terms of earnings per share by 10 percent in 2010 and 13 percent in 2011, he added.

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Blair's minder joins Anglo American

The move, due to be announced on Tuesday, follows her departure 18 months ago from her role as BP's communications director under its former chief executive Lord Browne.

Miss Hunter, who is married to Sky's political editor Adam Boulton, will be London-based and take charge of Anglo American's relationships with governments in southern Africa, South America and Australia – where the majority of its mining operations are based.

She will also lead the miner's corporate social responsibility programmes.

But it is understood that she will not play any role in representing De Beers, the world's largest diamond miner, which is 45pc owned by Anglo American.

Miss Hunter replaces Edward Bickham, who is leaving the company. She is to report to Russell King, Anglo's chief strategy officer. Under Tony Blair, Miss Hunter was director of government relations at Number 10. She left in November 2001.

The daughter of a Scottish rubber plantation manager and born in Malaya, Miss Hunter was seen as the former Prime Minister's most influential 'minder' and 'gatekeeper' to Number 10, having worked with Mr Blair for 15 years.

She left BP at the end of 2007 following Lord Browne's departure.

Anglo American declined to comment.

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Wuhan Steel May Buy MMX Stake, Build Mill in Brazil

(Bloomberg) -- Wuhan Iron & Steel Co., China’s third-largest steelmaker, may buy a stake in MMX Mineracao e Metalicos SA or the Brazilian mining company’s Sudeste unit.

Wuhan may also build a steel plant at LLX Logistica SA’s Port of Acu in Brazil as part of a possible partnership with MMX and LLX, Rio de Janeiro-based MMX said in a regulatory filing. Brazilian billionaire Eike Batista controls both LLX and MMX.

Batista on March 31 said he hired an adviser to help sell all or part of MMX as part of a strategy to “get the assets on their feet, then put them up for sale.” LLX on April 1 said it also hired an adviser to study the sale of a stake in its $740 million Sudeste port project, in southeast Brazil.

China, the world’s third-biggest economy, became Brazil’s leading trade partner this year after the global recession choked sales to the U.S. A deal between MMX and Wuhan would “likely represent the single most important Chinese investment in Brazil,” Batista said in today’s statement.

The steel mill that Wuhan may build at Acu would be able to produce 5 million metric tons a year and be controlled by the Chinese steelmaker. Batista’s holding company EBX may have a minority stake, MMX said in the statement.

LLX and Ternium SA, Latin America’s second-largest steelmaker, previously signed a memorandum of understanding on a possible investment in a 5 million tons-a-year steel plant at Acu. Yesterday, LLX Chief Executive Officer Ricardo Antunes said the company plans to push for the development of two steel mills at the site.

Supply Contract

The accord signed today may also include a long-term supply contract for almost all Sudeste’s iron-ore exports to Wuhan at benchmark prices, an agreement on use of services at Sudeste port and the supply of Wuhan steel products to Batista’s shipbuilding unit Brasil Estaleiros SA, the statement said.

MMX fell 58 centavos, or 7.84 percent to 6.82 reais in Sao Paulo trading. LLX declined 33 centavos, or 8.15 percent to 3.72 reais.

The stocks have gained 138 percent and 148 percent, respectively, since the start of the year, more than a 28 percent gain in the Bovespa index of traded companies.

“They’ve gained since late last year when Eike first signaled a sale,” Galdi said in a telephone interview. “Batista is sticking to his strategy of selling off MMX’s best assets and then rebuilding the company.”

MMX has the capacity to produce 10.8 million tons annually of iron-ore from its Sudeste and Corumba mines, with the potential to expand to 40 million tons a year, it said.

This year it will produce 6 million tons, Sales Director Chequer Hanna Bou-Habib said yesterday on a conference call.

The company has reserves of more than 2 billion tons in Brazil and Chile.

In March 2008 the company agreed to sell its biggest assets, the 26.6 million tons-a-year MMX Minas-Rio iron-ore mine project and a 70 percent stake in the MMX Amapa iron-ore mine, to Anglo American Plc as part of a $5.5 billion deal. Cleveland Cliffs Inc. previously bought 30 percent of MMX-Amapa.

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De Beers Diamond Company Woos Safe Haven Investors

De Beers has launched a global campaign to convince investors that diamonds are an alternative to gold as a safe-haven investment, writes The Financial Times.

Below is the full article published yesterday by The Financial Times:

The move is a sign of the pressure on the world's biggest diamond miner to find new markets following the collapse of traditional sales. Stephen Lussier, De Beers' executive director for corporate affairs, told the Financial Times the group had been approached in the past two months by ‘half-a- dozen’ brokers linked to sovereign wealth funds and wealthy individuals. He refused to identify them but said talks were in early stages.

But analysts and investors said that the closed nature of the diamond market made them a much less attractive option than gold. Chaim Even-Zohar, an industry expert who runs Tacy, an Israeli diamond consultancy, said De Beers, which is weighed down by $3.6bn of bank debt, has been scouting for new sources of sales because of a collapse in demand which is expected to force the company to cut production by 40 per cent this year.

"De Beers are leaving no stone unturned to find buyers," he said.

The privately-held company, whose biggest shareholders are mining giant Anglo American, the government of Botswana and South Africa's Oppenheimer family, had sales last year of $6.89bn.

One emerging markets fund manager, who invests in commodities, said: "When you have people asking questions about gold's intrinsic value, it's difficult to see a bankable case for diamonds as a store of value."

Brock Salier, mining analyst at Ambrian, a London-based resources investment bank, said the uncertainty that has gripped equity and currency markets had sparked demand for "hundreds of millions of dollars of something they can stick in a vault," such as diamonds. An anonymous private buyer at a Geneva auction this week paid a record $9.5m for a rare blue diamond from Petra Diamonds' Cullinan mine in South Africa.

But Mr Salier added that diamonds represent a much riskier investment than gold. Unlike the yellow metal the stones, traded through auctions and private tenders, have no public market price and there is no instrument investors can use to hedge against fluctuations. One Johannesburg mining executive suggested De Beers was targeting Saudi Arabia, which is in the process of creating what could be the world's biggest sovereign wealth fund.

But De Beers said Gareth Penny, its chief executive, had not had any meetings with the Saudis during a recent visit to the Gulf, "nor are we aware that anyone has made a presentation to them on our ideas". State-backed funds in oil-rich Middle Eastern nations and Asian exporters flush with foreign exchange cash have been investing huge sums in western assets in recent years but have suffered losses of late, notably in US financial stocks.

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Anglo American iron ore production in January to March

Anglo American plc announced that it’s Production Report for the January to March quarter of 2009, which shows iron ore production during the period totalled 9.992 million tonnes an increase of 1.802 million or 22% from 8.190 million tonnes produced in the previous corresponding period.

The increase was mainly due to the additional production delivered by the Sishen Mine's jig plant, which continues to ramp up. The jig plant was introduced by Anglo American's South African iron ore mining subsidiary Kumba Iron Ore and can process contaminated ore into commercially valuable one. Kumba remains on schedule to achieve an annualized rate of 13 million tonnes per annum from the jig plant during the Q4 of 2009.

Finished product stockpiles have increased to 7.5 million tonnes due to domestic iron ore sales falling below contractual volumes and difficult export market conditions. Kumba continues to monitor stock levels and market developments and, should conditions deteriorate, production cuts will be considered.

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Wage negotiations to commence next week

(Reuters) - South Africa's gold producers and unions kick off wage negotiations next week, in talks both sides expect to be tough because workers have demanded pay increases nearly double the inflation rate.

Jabu Maphalala, the spokesman for the Chamber of Mines, which negotiates on behalf of big South African mining firms, told Reuters on Tuesday the talks will start on Wednesday and Thursday next week for the coal and gold sectors respectively.

The National Union of Mineworkers (NUM), which represents some 190,000 workers in the two sectors, and two other smaller unions, have asked for a 15 percent wage increase from gold and coal producers, compared with inflation at 8.5 percent.

"We shall go into the talks with a sober mind, and hope to come to an agreement that will be beneficial for the industry," he told Reuters.

"The 15 percent demand is on the wages alone, there are also other increases that have been asked for and all these have huge cost implications."

The NUM has also asked for improved medical cover, and higher allowances for workers living outside company hostels.

A wage deal will take effect in July 2009 for two years.

Wage negotiations in the gold sector are watched closely by markets because there is a chance of disruption in output, as experienced in 2005 when about 100,000 workers went on strike for days in the country's largest gold mining strike in nearly two decades, costing gold firms about $20 million a day.

The 2007 wage talks hit deadlock and required arbitration to reach an agreement, which was below inflation at the time.

"Wage negotiations in the coal and gold sectors are likely to be extremely difficult; breakdowns can be expected and strikes are possible," said Mike Davies, Middle East & Africa analyst at political risk consulting firm Eurasia Group.

The NUM has said its demand is meant to ensure workers enjoy the benefits of the robust gold price, which has withstood the shocks of global economic turmoil and weaker commodity prices better than other metals, and to shield members from inflation.

Any wage hikes are likely to boost production costs for mining companies. Already about half of total costs for gold producers, who sell for dollars and pay costs in the local currency, is taken up by wages.

Among the gold producers represented by the Chamber of Mines, are AngloGold Ashanti, Gold Fields, and Harmony. The Chamber also represents coal producers, including Anglo American Plc and rival Xstrata.


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Anglo, Rio wary about commodities recovery

Mining groups Anglo American Plc and Rio Tinto are wary about when hard-hit commodity markets might recover, but are confident about the long-term health of the sector, they said on Tuesday.

Rival Xstrata, which along with its rivals gave presentations at Merrill Lynch's mining conference in Barcelona, said early signs pointed to China driving a rebound in commodities demand, but did not say when recovery might take hold.

Anglo Chief Executive Cynthia Carroll said there was scant signs of an early rebound in demand.

"Demand is likely to remain weak in the near term and timing for recovery remains uncertain," said a presentation on Anglo's website for Carroll's speech at the conference, to which media were not invited.

A chart showed demand for copper was expected to fall 7 percent this year, iron ore by 8 percent and platinum by 9 percent. At the same time, Chinese steel inventories have shot up by 56 percent, another graph showed.

Rio CEO Tom Albanese told the conference that the outlook remained uncertain despite some signs of recovery.


WORST OVER FOR CHINA

"For China the worst may be over, but downside risks remain," a Rio presentation said, referring to signs of improvement in most recent Chinese data.

"The long-term story remains intact. Urbanisation in developing countries will not be derailed by the current downturn," Albanese's presentation added.

Xstrata's CEO Mick Davis also held up China as a positive sign, pointing out that the speed of recovery in emerging so-called BRIC (Brazil, Russia, India and China) nations would be different than for OECD countries.

"Key Chinese growth drivers of domestic consumption and fixed asset investment remains resilient," the presentation said.

The "stronger for longer" thesis -- which argued that resilient demand emerging nations would keep metals prices above long-term historic levels -- was still intact, he added.


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Sub-Saharan Africa Needs $563 Billion Spent on Power Generation

(Bloomberg) -- Sub-Saharan Africa needs to spend $563 billion during the next 25 years to increase generation capacity by 270 gigawatts and avoid a “looming power crisis,” Frost & Sullivan, a market research company, said.

The “long-term growth rate in power demand is expected to be 4.4 percent per annum” during the next quarter of a century, energy analyst Moses Duma said in an e-mailed report today.

Less than a quarter of Africa’s population has access to electricity, and the average retail price of about 13 U.S. cents per kilowatt-hour is twice that of other emerging market regions, the International Finance Corp., a branch of the World Bank that lends to businesses, said on April 22.

South Africa’s state-owned power utility, Eskom Holdings Ltd., halted supplies to mines for five days in January 2008 because of capacity constraints in the continent’s largest economy. Mines including those belonging to BHP Billiton and Anglo American Plc. were affected by the cuts.

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Anglo sees weak demand, uncertain recovery

(Reuters) - Mining group Anglo American Plc expects demand for key products to remain soft in the near term and is wary about when commodity markets might improve.

Chief Executive Cynthia Carroll also said on Tuesday that Anglo was well-positioned after strengthening its balance sheet.

"Demand is likely to remain weak in the near term and timing for recovery remains uncertain," said a presentation on Anglo's website for Carroll's speech at the Merrill Lynch mining conference in Barcelona.

A chart showed demand for copper was expected to fall 7 percent this year, iron ore by 8 percent and platinum by 9 percent.

At the same time, Chinese steel inventorites have shot up by 56 percent, another graph showed.

Carroll also said Anglo's debt situation was under control after the gruop raised $3.7 billion in bond issues, got $1.8 billion by selling its remaining stake in AngloGold Ashanti (ANGJ.J: Quote, Profile, Research) and saved $1.6 billion by suspending its dividend.

"No further refinancing required over the medium term," the presentation said.

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DJ Anglo American: Near-Term Commodity Demand Likely Weak

Demand for key commodities such as copper, iron ore and coal is likely to remain weak in the near term and the timing for a recovery is uncertain, global diversified miner Anglo American PLC (AAUK) said Tuesday in a presentation posted on its website.

"Fundamentals of our industry remain solid," CEO Cynthia Carroll said in the presentation.

Anglo American has responded to the downturn with measures to conserve cash, cut production and boost efficiency while strengthening the corporate balance sheet through asset sales and two bond issues, Carroll said.

"No further refinancing (is) required over the medium term," Carroll said.

Company Web site: http://www.angloamerican.co.uk

South African Manufacturing Probably Fell: Week Ahead

Last week, the benchmark FTSE/JSE Africa All Share Index rose for the first time in a month, adding 5.8 percent, with Exxaro Resources Ltd., a miner of coal and zinc, gaining 20 percent, the biggest increase of the top 40 companies in the index. Kumba Iron Ore Ltd., a unit of Anglo American Plc, climbed 16 percent.

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Mondi says earnings for March quarter similar to Q4

(Reuters) - Mondi, the biggest producer of office paper in Europe, said on Thursday the difficult trading conditions experienced in the latter part of 2008 had continued to impact its first quarter of this year.

Mondi, which was spun off from mining group Anglo American Plc in 2007, said in a statement its underlying operating profit for the three months to the end of March was similar to that of the final quarter of 2008.

Mondi said an improvement in the results from the Europe & International Division were offset by a decline in the South Africa division.

"Results were significantly below the comparable period for the prior year," the company said without giving figures.

The global paper industry has struggled for six years to climb out of a slump, burdened by overcapacity and soft prices, and the global economic crisis has further dimmed its prospects for 2009 with demand falling even lower.

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Pebble Project Preparing For Permitting

Northern Dynasty Minerals Ltd. Reported that the Pebble Limited Partnership Board of Directors has approved a US $59 million budget and work plan for 2009, with the potential for supplemental spending up to a total of US $70 million, to be spent towards completing a Prefeasibility Study and preparing the Pebble Project, located in Southwest Alaska, for permitting in 2010.

Pending the outcome of engineering trade-off studies currently underway, the PLP Board is expected to meet in August 2009 to finalize the Prefeasibility Study schedule and authorize additional program expenditures this year.

"The primary focus of the Pebble Partnership team in 2009 will be to produce the optimal project design, from an environmental, social and economic perspective," said Northern Dynasty President & CEO Ron Thiessen. "Not only does PLP expect to finalize a Prefeasibility Study, it will also be preparing to enter the state and federal permitting process under NEPA (National Environmental Policy Act) in 2010.
"These are significant project goals and milestones, and the PLP Board of Directors has approved an equally ambitious budget and work program for 2009."

The Pebble Partnership was established in July 2007 as a 50:50 partnership between a wholly-owned affiliate of Northern Dynasty and a wholly owned subsidiary of Anglo American plc. To retain its 50% interest, Anglo American is required to provide $1.425 billion to advance the Pebble Project toward permitting and operations - including those funds authorized for expenditure in 2009. Northern Dynasty and Anglo American have equal representation on the PLP Board of Directors.


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publication of offering circular

The offering circular has been approved by the UK listing authority and is available for viewing:
Offering Circular dated 30 April 2009 relating to the issue of USD1 700 000 000 4.00 per cent.
To view the offering circular, please paste the following URL into the address bar of your browser. http://www.rns-pdf.londonstockexchange.com/rns/5199R_-2009-4-30.pdf

Richards Bay Coal Shipments Fall Most in 9 Months

(Bloomberg) -- Richards Bay Coal Terminal Ltd., Africa’s largest coal-export facility, said shipments fell 24 percent last month, the biggest drop in nine months.

Shipments fell to 4.55 million metric tons in April from 5.97 million tons in the same month a year earlier, the terminal said in an e-mailed response to questions today. That’s the biggest drop since July last year, when they declined 26 percent. Stockpiles at the terminal climbed to 4.19 million tons, the highest since March 2007.

“It’s the market, its terrible,” Xavier Prevost, a coal analyst in South Africa, said in an interview from his mobile phone today. “With the prices most of the producers are not keen on actually exporting or selling too much coal.”

Prices of coal shipped from the terminal fell 44 percent Over the last year and traded at an average of $58.50 a ton in the week ended May 1, according to Petersfield, England-based McCloskey Group.

The terminal in north eastern South Africa is owned by South Africa’s largest coal exporters, including Anglo American Plc, BHP Billiton Ltd. and Xstrata Plc. It is the biggest source of coal for European power plants.

Sixty-eight ships were loaded during the month and 572 trains arrived at the facility, RBCT said. It received 5.27 million tons of the fuel by rail.

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total voting rights update

News Type : Official Announcement

Anglo -- total voting rights update

In accordance with the FSA's Disclosure and Transparency Rules, the company announces that, at 6pm on 30 April 2009:
* it had 1 342 924 336 issued ordinary shares of USD0.54945 each admitted to trading. Each ordinary share carries the right to one vote in relation to all circumstances at general meetings of the company;
* it held 26 433 510 ordinary shares in treasury. The voting rights of treasury shares are automatically suspended;
* accordingly, it had total voting rights of 1 316 490 826.
The total voting rights figure (1 316 490 826) may be used by shareholders (and others with notification obligations) as the denominator for the calculations by which they will determine whether they are required to notify their interest in, or a change to their interest in, the company under the FSA's Disclosure and Transparency Rules.

technical director appointed

David Weston has been appointed as Technical Director. David will continue as a member of the Executive Committee of Anglo American and will take up his new role with immediate effect, succeeding Tony Redman, who has retired from the group

SACMH - No earnings report, no listing, says JSE

South African Coal Mining Holdings (SACMH), controlled by black investor group Royal Bafokeng Capital, had its JSE listing suspended after failing to submit a provisional earnings report. "The listing of its securities has been suspended with immediate effect," the JSE said yesterday. SACMH said in March that it had suspended operations for three months because of lower coal prices and "difficult operational conditions". Coal mining houses including Cambrian Mining and Anglo American's coking coal unit have cut production as the deepening global recession curbs demand for the fuel. SACMH posted a loss of R94.2 million for the year to December, compared with net income of R111.9m a year earlier. The stock closed unchanged at 41c last Thursday

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Anglo American announce production Report for Q1

Anglo American plc Interim management statement production Report for the Q1 ended March 31st 2009.

Overview

1. Platinum equivalent refined production in line with full year target; planned higher rates of smelting for the balance of 2009 are in line with expected refined platinum production of 2.4 million ounces for the year

2. Iron ore production in line with previous quarter and up 22% on the Q1 of 2008 as Sishen jig plant continues to ramp up

3. Coal and diamond production reduced in response to lower anticipated demand

4. Copper production decreased due to lower ore grades at Los Bronces, partly offset by higher production at Collahuasi

5. Balance sheet strengthened through series of measures to provide financial flexibility:

I. USD 4.7 billion of new financing secured

A. USD 2 billion bond issued strong demand and priced at bottom of range

B. USD 1.7 billion convertible bond issued strong demand, 35% conversion premium and priced below indicative range at 4% coupon

C. USD 1 billion BNDES loan finalised to finance Minas-Rio iron ore project

II. USD 1.8 billion of Total cash proceeds from sale of residual stake in AngloGold Ashanti sold at a strong price

III. Undrawn committed bank facilities and cash increased to over USD 9 billion

Anglo American has taken a series of proactive measures in response to the current economic environment and is positioned strongly to weather those conditions and to deliver long term shareholder value through its existing operations and its well funded growth pipeline of world class development projects.

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Anglo shrugs off lower production figures

Shares climb despite diamond output down 90%, a big fall in refined platinum, and less coal and copper
Resources Editor

SHARES in global metals producer Anglo American and 79%-held subsidiary Anglo Platinum shrugged off Thursday’s reports showing lower quarterly production across almost all operations, ending last week higher on rising metals prices.

Anglo added 4,4% to R188,51 on the JSE, its highest level in two weeks, while Angloplat gained 3,5% to R458, its highest in 10 days’ trading. Anglo’s 63%-held Kumba Iron Ore rose 2,2% to R163,29.

Bloomberg reported equity and metals prices surged on Thursday on better than expected economic data from the US, leading investors to hope that the downturn had passed its lowest point.

Three-month copper rose 3,3% on the London Metals Exchange and platinum rose to $1108/oz from $1094/oz.

Although Anglo American said in February there would be job cuts and production cutbacks across its platinum, coal and diamond operations, the latest quarterly report showed an unexpectedly large drop in output from De Beers. Anglo owns 45% of De Beers.

De Beers produced 90% less diamond carats in the March quarter at 1,1-million from 10,8-million carats in the December quarter. It had not quantified previously how much quarterly output would fall as a result of planned production holidays and fewer shifts. De Beers’ production is expected to rise in the June quarter as the major Debswana mines resumed operations last month .

In its other operations, Anglo reported copper production dropped 12,2% in the March quarter to 151 000 tons compared with December because of lower grades and recoveries at Los Bronces and operational issues at Collahuasi.

Thermal coal production fell 9,6% to 11,1-million tons because of lower demand, while metallurgical coal output fell almost a third to 2,7-million tons as production was cut to meet reduced demand from the steel industry. Supplies of coal to Eskom slipped 10,9% to 8,4-million tons as Eskom’s power station stockpiles reached capacity.

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Production report

Company : Anglo American plc
News Type : Official Announcement

Anglo - production report

Overview
Platinum equivalent refined production in line with full year target;
*Planned higher rates of smelting for the balance of 2009 are in line with expected refined platinum production of 2.4 million ounces for the year. Iron ore production in line with previous quarter and up 22% on the first quarter of 2008 as Sishen jig plant continues to ramp up.
Coal and diamond production reduced in response to lower anticipated demand Copper production decreased due to lower ore grades at Los Bronces.

Balance sheet strengthened through series of measures to provide financial flexibility:
*USD4.7 billion of new financing secured
*USD2 billion bond issued - strong demand and priced at bottom of range
*USD1.7 billion convertible bond issued - strong demand, 35% conversion premium and priced below indicative range at 4% coupon
*USD1 billion BNDES loan finalised to finance Minas-Rio iron ore project
*USD1.8 billion of total cash proceeds from sale of residual stake in AngloGold Ashanti - sold at a strong price

Undrawn committed bank facilities and cash increased to over USD9 billion Anglo American has taken a series of proactive measures in response to the current economic environment and is positioned strongly to weather those conditions and to deliver long term shareholder value through its existing operations and its well funded growth pipeline of world class development projects.
Results for the half year to 30 June 2009 will be announced on 3 August 2009.

Nomura ups Anglo American to buy, cuts BHP to reduce

(Reuters) - European Metals & Mining:

* Nomura raises Anglo American to buy from neutral

* Nomura cuts BHP Billiton to reduce from neutral

* Nomura raises Xstrata price target to 770P from 630P; rating buy

Finger-pointing at Anglo AGM

Among the unhappy shareholders firing questions at CEO Cynthia Carroll and chairperson Mark Moody-Stuart at the recent Anglo American annual general meeting (AGM) was none other than Barry Davison - former CEO and chairperson of Anglo Platinum (AngloPlat) and former executive director of Anglo American.

He was given short shrift by both executives, although Anglo spokesperson James Wyatt-Tilby described the exchanges as "polite".

Davison wanted to know the reasons for AngloPlat's poor performance. He cited a drop in output of 559 000 ounces of platinum between 2006 and 2009, as well as a 31% annual rise in costs for the three-year period.

Carroll retorted that AngloPlat had "serially" failed to meet production and cost forecasts for years, and reminded Davison there was a stated production target of 3.5 million oz which was not met when he "was involved".

That target was set by Davison as part of AngloPlat's strategy to grow the overall platinum business and expand its share of the market. He maintained for years that it would be met, despite growing analyst scepticism.

Carroll also pointed out to Davison that AngloPlat met its 2008 production targets despite floods and power problems, and was a safer business for its employees to work in.

It's unprecedented for a retired senior Anglo executive of Davison's stature to quiz current management in such a manner in a public forum like the AGM.

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Spectacular drilling results for Canadian pgms project

Gauged interest indicates Magma Metals Ltd (ASX: MMB) may be oversubscribed in its planned raising of $A16 million ($US M) through issuing 50 M new shares at A32 cents - a placement which Anglo American plc participated in to maintain its 12% stake in the company.

The raising, with Perth stockbroker Hartleys Ltd as lead manager, was being taken up by domestic and international investors to provide fresh capital for the Thunder Bay North platinum-palladium-copper-nickel prospect in Ontario.

Interest in Magma was sharpened by the release this week of a spectacular round of drilling results form the Current Lake-Beaver Lake area at Thunder Bay North, where drilling has been on a 3 kilometre strike.

Latest results included hole TBND134 which had 37 metres grading 4.55 grams/tonne combined platinum-palladium, 0.49% copper and 0.26% nickel, including 22m @ 6.52 g/t Pt-Pd, 0.69% Cu and 0.33% Ni; and hole TBND171 with 40.45m @ 7.12 g/t Pt-Pd, 0.84% Cu and 0.41% Ni, including 9m @ 10.68 g/t Pt-Pd, 1.21% Cu and 0.5% Ni.

The initial resource was expected to be completed in the September quarter.

Magma has now completed 26,500m of drilling at Thunder Bay North.

Managing director Keith Watkins said the new capital would be sued to complete definition drilling and resource estimates as well as step-out drilling to extend the resource to the south east.

Read more here

South African mine group awaits pay demands for talks

Bloomberg reported that the Chamber of Mines of South Africa will start talks about a national two year wage deal once it receives filings from all worker organizations.

Mr Elize Strydom the chamber’s industrial relations adviser said that a date will be set for talks once the chamber, which represents companies including Anglo American Plc, BHP Billiton Limited and Xstrata Plc, gets outstanding submissions from unions.

Mr Strydom said that South Africa is the world’s third largest gold producer and the biggest coal supplier for European power plants. About 160,000 gold miners and 30,000 coal workers will be affected by the talks. Mr Strydom said that the chamber will approach the process mindful of the challenges faced by the industry, with sustainability playing an important role in informing the decisions we are likely to take.”

The National Union of Mineworkers said that it’s seeking a 15% pay increase from gold and coal producers.

Read more here

Convertibles Re-Emerge

April has been a sweet month for European convertible bond deals. Some $3.21 billion has been raised, snapping a seven-month drought, according to data provider Dealogic, amid a number of positive signs for European share sales.

Bankers predict convertible issuance will remain lively for the rest of the quarter as long as stock markets remain relatively stable.

Convertible bonds, which let investors convert debt into shares, are attractive for issuers because it is a cheaper way to raise debt than by issuing a traditional bond. But issuance dried up after hedge funds dumped existing convertible bonds to offset losses elsewhere and raise cash to meet redemptions, sending prices tumbling.

The biggest convertible bond this month has been the $1.7 billion offering by U.K.-listed miner Anglo American PLC on April 16, managed by Goldman Sachs Group Inc. and Morgan Stanley. Other recent issuers include steel maker Arcelor Mittal SA, consultancy Capgemini SA and property company Unibail-Rodamco SA.

Several signs point to greater stability in European stock markets. That could mean that convertible bonds will account for a substantial portion of the activity in Europe's equity-capital markets this quarter.

One positive has been the opportunities for placing large blocks of stock. J.P. Morgan Cazenove sold shares in U.K. retailer J Sainsbury PLC worth £90 million ($132.5 million) this month for administrators of Icelandic bank Kaupthing Bank hf. It also completed a £68 million share sale by Dutch electronics group Philips Electronics NV of a 17% stake in Pace, which makes set-top boxes for televisions.

"The first trade was to offload a block of equity for an administrator, while the second was a disposal off the back of a stock price rally," said Laurence Hollingworth, co-head of capital markets at J.P. Morgan Cazenove. "The fact that it was possible to execute trades in these different situations is a positive sign for the market."

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Anglo American, don’t mine near Bristol Bay

The London-based mining company Anglo American has recently invested in a proposed open-pit mine known as the Pebble project in the watershed of Bristol Bay. Through its Pebble Limited Partnership with Canada-based Northern Dynasty Minerals, Anglo is preparing to apply for state and federal permits to proceed.

Our delegation, representing Alaska Natives and the people of Bristol Bay, has journeyed to London to meet with Anglo American executives and shareholders and express our very deep concerns with, and our steadfast opposition to, the proposed Pebble mine, which if built, would ruin our watershed.

Over thousands of years, Alaska Native peoples have relied on the land that now includes the Pebble mining district. It has sustained our culture and lifestyle for countless generations and must for years to come. The rivers and creeks that feed into Bristol Bay from the mining area help produce the largest wild commercial sockeye salmon fishery on Earth. This sustainable and renewable resource is vitally important to our local economy and subsistence livelihoods.

Indeed, part of the income derived from the annual sockeye harvest ultimately comes from the United Kingdom. Most of the canned sockeye salmon consumed in the U.K. is caught in Bristol Bay. The proposed Pebble mine will certainly damage and permanently harm this treasure. As fishing families and as stewards for future generations, we cannot allow this to happen.

The Pebble Limited Partnership proposes holding billons of tons of mine waste behind massive earthen dams in one of the most seismically active areas on the planet. We know this as we have personally witnessed earthquakes, volcanic eruptions and violent storms here. We believe that there is simply no way the partnership can guarantee those structures would remain intact forever. Even if it could, the watersheds that support our fisheries, and thus our peoples’ culture and way of life would certainly be damaged from other mining activities. Please keep in mind the unique wet and cold environment and the sensitive habitat that this area provides for fish and other animals on which we subsist.

Read more here

Anglo says commodity prices stabilising, Rio sees Chinese steel rise in second half, De Beers sees diamond improvement signs

The prices of most commodities appear to have stabilised, says Anglo American CEO Cynthia Carroll. Read on page 5 of this edition of Mining Weekly of the copper price increasing by more than 50% off its December low, platinum going above $1 200/oz from its sub-$800/oz October lows, nickel going to $12 000/t and zinc to $1 455/t.

Anglo expects the economic recovery of the industrialised countries and the ongoing industrialisation of the major developing countries to drive long-term demand for commodities, stimulated by government spending programmes in many major economies, including the US and China. The company says that commodities supply is likely to be hit later by the lack of new projects coming through.

Rio Tinto sees Chinese demand for steel recovering in the second half of 2009. Rio CE Tom Albanese is keeping his global iron-ore guidance for 2009 at 200-million tons. He has also kept Rio’s iron-ore production in Q1 2009 at the level of Q4 2008. Also, Rio’s net debt position is stable and Anglo says it is able to manage sustainably with an ongoing net debt of $11-billion.

Read more here

Long Term Incentive Plan

News Type : Official Announcement

Anglo - Long Term Incentive Plan

The company announces that share awards granted under the LTIP in 2006 vested on 20 April 2009. These shares will be transferred to the undernoted directors / PDMRs subject to the deduction of ordinary shares to meet appropriate income tax and national insurance liabilities. Following those deductions, the net increases in share interests are:
R Medori - (Director) - 13 706 shares
P M Baum - (PDMR) - 3 951 shares
B R Beamish - (PDMR) - 3 687 shares
R J King - (PDMR) - 8 972 shares
The notification of these transactions is to satisfy the company's obligations under the Financial services authority disclosure rules 3.1.2 to 3.1.4.

Gold rises most in a month as equities fall

Gold rose the most in a month as a slide in European and US equities boosted demand for precious metals as a store of value. Silver also climbed.

Europe’s Dow Jones Stoxx 600 Index sank as much as 3.9% on prospects for lower profits from metals producers BHP Billiton and Anglo American. Analysts estimate earnings at companies in the Standard & Poor’s 500 Index fell for the seventh-straight quarter through March. Some investors buy gold as an alternative to holding company shares.

"Gold prices today are firmer as European equity markets and US equity futures are in negative territory,” said Bayram Dincer, a Dresdner Bank commodity analyst in Zurich. "Gold’s short-term direction is determined by equities."

Gold futures for June delivery jumped $US19.60, or 2.3%, to $US887.50 an ounce on the Comex division of the New York Mercantile Exchange. That’s the biggest gain since March 19.

Gold may "very likely" rise to as high as $US890 an ounce this week, Dincer said. "Today’s gold price is even more impressive as the US dollar rises."

The US Dollar Index, a six-currency gauge that includes the euro and yen, climbed as much as 1% to 86.871 and has risen for five straight sessions. The index has gained 6.5% this year.

Silver futures for May delivery jumped 31.5 cents, or 2.7%, to $US12.105 an ounce on Comex. The price still has tumbled 32% in the past year.

"Gold will continue to trade inversely to equities," said Tom Pawlicki, a metals analyst at MF Global in Chicago. "A long-term bottom has been made in equities, and therefore, a long-term top has been made in gold. If the equity correction lasts for a couple weeks, it could push gold up to around $US915 and $US930 an ounce, but not much higher."

Last week, the yellow metal slid 1.7%, the fourth- straight drop and the longest stretch of weekly losses since August. The most-active contract still is down 3 percent in the past year and 4.1% this month.

Read more here

European Shares Slip Sharply, Led By Banks on BoA at Close

(Reuters) - European shares closed sharply lower on Monday, with banks taking most points off the index as investors gave the thumbs down to Bank of America results marked by an increase in troubled loans.

The FTSEurofirst 300 index of top European shares closed 3.5 percent lower at 786.12 points, the biggest daily percentage drop since March 30. The index has fallen 5.5 percent so far this year, but is up nearly 22 percent since reaching a record low on March 9.

"This (the slump) is just a logical consequence of what happened over the last six weeks, in which the market has constantly gained," said Philippe Gijsels, senior equity strategist at Fortis.

"This could be the end of the bear market rally," he added.

Banks took the most points off the index, with BNP Paribas, Deutsche Bank and Barclays all down between 6.6 and 8.6 percent.

The DJ STOXX Banks Index was down 5.5 percent.

Bank of America Corp said on Monday its acquisition of Merrill Lynch & Co helped quarterly profit but results included a big increase in troubled loans, sending the company's shares tumbling.

Insurers also fell with Allianz, Aviva, AXA and Prudential down between 4.3 and 8.4 percent.

Across Europe the FTSE index was down 2.5 percent, Germany's DAX was down 4.1 percent and France's CAC fell 4 percent.

"It's been quite a good bounce from the lows," said Philip Lawlor, strategist at Nomura in London.

"A bit of a pullback on a given day isn't a big surprise," he said. "You can't expect the market to go on gaining at that (26 percent) rate. But people still sense there is a bottoming out process in the economic indicators."

Mining stocks slumped, as copper fell 4.3 percent, with Anglo American, Antofagasta and BHP Billiton down between 4.3 and 6.4 percent.

Read more here

increase of convertible bond offering

News Type : Official Announcement

Anglo -- increase of convertible bond offering

Anglo announced the full exercise of the over- allotment option (greenshoe) by Goldman Sachs International and Morgan Stanley & Co International plc, on behalf of the managers (as defined below), following the successful offering of its convertible bonds (the "bonds") on 16 April 2009, increasing the overall size of the offering to USD1.7 billion.

Goldman Sachs International, acting as stabilising manager, has informed Anglo that it has not to date carried out any stabilisation activities.

Application will be made to the Financial Services Authority in its capacity as competent authority under the Financial Services and Markets Act 2000 (the "UKLA") for the bonds to be admitted to the Official List of the UKLA and to be admitted to trading on the London Stock Exchange's Professional Securities Market. Listing particulars will be prepared in connection with the listing of the bonds.

voting results

News Type : Official Announcement

Anglo - voting results

Anglo American plc announces that all resolutions were passed by the requisite majorities at the company's annual general meeting held at The Royal Society at 11.00am on Wednesday 15 April 2009. In line with recommended practice, a poll was conducted on each resolution at the meeting. Electoral Reform Services acted as independent assessors and the result of the polls was as follows. This announcement will be available for viewing on the company's website, www.angloamerican.co.uk, along with a transcript of the annual general meeting,

Anglo gets downgrading

News Type : Media Comment

Anglo gets downgrading

Business Report noted that rating agency DBRS has downgraded the long- and short-term ratings of Anglo. DBRS' reasons were deteriorating commodity prices and higher leverage as a result of acquisitions and robust capital spending.

Anglo eases debt burden

Anglo American, which said its $11bn debt load is "sustainable", has issued convertible bonds to raise between $1.5bn and $1.7bn for general corporate purposes. These will include refinancing borrowings in 2009 and 2010.

Anglo in April issued a $2bn bond in the United States, which was massively oversubscribed and could have prompted the diversified group to issue this second bond, which will mature in 2014.

The $2bn bond issue attracted $7bn worth of demand. It appears Anglo is striking while the iron is hot to raise more capital in the bond market.

"Bear in mind there was a very positive response to that earlier issue, I suppose they're linked in so much as we were aware there was a strong appetite for bonds in the market," said Anglo spokesperson James Wyatt-Tilby.

The $1.5bn convertible bond placed with investors outside the United States could increase to $1.7bn by the end of April if the full over-allotment option is exercised by the joint bookrunners, Goldman Sachs and Morgan Stanley & Co International.

Read more here

places USD1.5 billion convertible bond

News Type : Official Announcement

Anglo - places USD1.5 billion convertible bond

Anglo American plc is pleased to announce the successful placement of its offering of USd1.5 billion principal amount of Convertible bonds due 2014, announced earlier. The proceeds of the offering will be used for general corporate purposes. Under the terms of the offering, there will be a 90-day lock-up period on issuances or sales of shares or equity-linked securities by the company, subject to certain customary exceptions. The principal amount of the bonds is USD1.5 billion.

The offering may be further increased to a maximum of USD1.7 billion if the over-allotment option granted to the Joint bookrunners is exercised in full and by 30 April at the latest. The bonds will be convertible into new ordinary shares of Anglo American plc and will have a coupon of 4% per annum, payable in two semi-annual instalments, and a conversion price of GBP18.6370. The bonds will be issued at 100% of their principal amount and, unless previously redeemed, converted or cancelled, will mature on the fifth anniversary of the issue of the Bonds in 2014. The company will have the option to call the bonds after the first three years should the price of the shares exceed 130% of the then prevailing conversion price over a specified period. Settlement and delivery of the bonds is expected to take place on 7 May 2009.

launch of USD1.5 billion convertible bond

News Type : Official Announcement

Anglo -- launch of USD1.5 billion convertible bond

Anglo (the "company" or the "Issuer") announced that it intends to make an offering of USD1.5 billion principal amount of convertible bonds ("bonds") due 2014 (the "Offering") in order to further strengthen its balance sheet, diversify its sources of funding and lengthen its debt maturity profile. The proceeds of the offering will be used for general corporate purposes. Under the terms of the offering, there will be a 90-day lock-up period on issuances or sales of shares or equity-linked securities by the company, subject to certain customary exceptions.

The aggregate principal amount of the issue is USD1.5 billion which may be increased to USD1.7 billion in the event the over-allotment option granted to the joint bookrunners is exercised in full. The bonds will be convertible into new ordinary shares of Anglo ("shares") and are expected to have a semi-annual coupon in the range of 4.25-4.75% per annum and an expected initial conversion price at a premium of 30-35% above the weighted average price of the Shares during the course of Thursday, 16 April 2009, up to the time of pricing. The bonds will be issued at 100% of their principal amount and, unless previously redeemed, converted or cancelled, will mature on the fifth anniversary of the issue of the bonds in 2014. The company will have the option to call the bonds after the first three years, should the price of the shares exceed 130% of the then prevailing conversion price over a specified period. The final terms of the bonds are expected to be announced on Thursday, 16 April 2009. The bonds are being offered only to qualified investors within the meaning of Directive 2003/71/EC of the European Parliament and the Council of November 4th, 2003, in accordance with the respective regulations of each country in which the bonds are offered. The bonds are not being offered or sold in the United States of America or to, or for the account or benefit of, US persons. Settlement and delivery of the bonds is expected to take place no later than 7 May 2009.

Application will be made to the London Stock Exchange plc (the "London Stock Exchange") for the bonds to be listed on the official list of the London Stock Exchange and to be admitted to trading on the London Stock Exchange's Professional Securities Market. Listing particulars will be prepared in connection with the listing of the bonds.

Anglo's $11bn debt 'sustainable'

Anglo American believes its debt of $11bn is sustainable. It has sold a number of assets, issued a bond and raised debt towards reducing it and funding its projects, executives said at the group's annual general meeting.

Anglo CEO Cynthia Carroll sounded an upbeat note about the commodities market, saying prices appeared to have stabilised recently.

"Indeed, there are even signs of some improvement, most notably in the copper price that has increased by more than 50% from its low point reached in December," she said.

"Looking forward, we are confident that the medium- to long-term fundamentals are firmly in place for strong commodity demand growth," she said.

The massive fiscal packages to stimulate the economies of China and the United States among others as well as delays to other firms' greenfield mining projects fed into Anglo's view of the future commodity market.

Anglo has slowed expenditure on its development projects, but is continuing work on them so it will be ready to take advantage of an upturn in the commodity cycle.

The end of 2011 and 2012 is an important time for Anglo, with its three big projects - the iron ore and nickel projects in Brazil and its copper venture in Chile - all coming into production or reaching expanded output levels.

The diversified mining group's chairperson Mark Moody-Stuart, who said his replacement would be sought during the coming year, told investors that the controversial Pebble copper and gold project in Alaska will not go ahead if it damages the environment.

Read more at Fin24

General text amendment

News Type : Official Announcement

Anglo - general text amendment

The following amendment has been made to the `Issue of USD Senior Notes due 2014/2019' announcement released on 9 April 2009 at 16.46 under RNS No 4717Q.
"USD1 250 000 9.375% Senior Notes due 2014" has been changed to
"USD1 250 000 000 9.375% Senior Notes due 2014."
All other details remain unchanged.
The full amended text is shown below:
Pursuant to DTR 6.1.11, Anglo American plc announces that the USD notes issued by Anglo American Capital plc guaranteed by Anglo American plc listed below were issued on 8 April 2009 and have been admitted to listing on the official List of the U.K. listing authority and to trading on the London Stock Exchange, a regulated market:
USD1 250 000 000 9.375% Senior Notes due 2014
USD750 000 000 9.375% Senior Notes due 2019
The notes were sold in the United States to qualified institutional buyers under rule 144A of the US Securities Act of 1933, as amended, and outside the United States to non-US persons in reliance on regulations of the Securities Act. The notes listed above have not been, and will not be, registered under the Securities Act, or under the securities legislation of any state of the United States, and may not be offered or sold in the United States, other than pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

Issue of debt

News Type : Official Announcement

Anglo - issue of debt

Anglo American plc announces that the USD notes issued by Anglo American Capital plc guaranteed by Anglo American plc listed below were issued on 8 April 2009 and have been admitted to listing on the official list of the U.K. listing authority and to trading on the london stock.
Exchange, a regulated market:
USD1.250.000 9.375% Senior notes due 2014
USD750.000.000 9.375% Senior notes due 2019
The notes were sold in the United States to qualified institutional buyers under rule 144A of the US Securities Act of 1933, as amended, and outside the United States to non-US persons in reliance on regulations of the securities act. The notes listed above have not been, and will not be, registered under the securities act, or under the securities legislation of any state of the United States, and may not be offered or sold in the United States, other than pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.