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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