The London-based miner will continue strengthening its finances with a view to reinstating dividends before evaluating project options by the end of the year, Hennie Faul, head of copper, said.
A possible new mine in Peru is high on the list of priorities.
Quellaveco, in southern Peru, would require a $5 billion (R68.48 billion) to $6 billion spend over four to five years, a burden Anglo is looking to share. It’s getting “a lot of interest” from would-be partners, including Southern Copper, he said. Permitting is in place and the feasibility study should be ready by year-end.
“For Anglo American, copper is one of the three key commodities and our key project there is Quellaveco,” Faul said. “We will evaluate that decision by the end of this year for a possible start in 2018 for that project.”
Pulling the trigger on a new copper mine would mark the culmination of Anglo’s turnaround. A year ago its shares had slumped to a record low and its credit rating was cut to junk.
Chief executive Mark Cutifani announced a plan to radically shrink the company through asset sales, but reversed the strategy earlier this year after recovering prices revived profits.
Just five weeks ago, chief financial officer Rene Medori said a decision on Quellaveco wouldn’t be made until late 2018. Last month, Peru Energy and Mines Minister Gonzalo Tamayo said there were positive signs that the project’s go-ahead would be brought forward as prices recover.
While China remains “an uncertain area for everyone,” the supply and demand outlook for copper is supportive amid supply disruptions and investment cutbacks, Faul said.
The end of the commodities super-cycle has left just one new major copper mine on the verge of production - First Quantum Minerals' Cobre Panama.
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Producers emerging from a global glut probably will focus on investing in existing operations rather than building new mines, Antofagasta chief executive Ivan Arriagada said.
The price of copper has retreated in the past two months, but it’s still up about 20 percent in the past year, enough to reignite earnings for miners that made deep cost cuts in the downturn.
In the meantime, Anglo will continue optimising the feasibility study for Quellaveco as it talks to prospective partners.
The company would retain 51 percent of the project.
Mitsubishi already owns a stake.
At its biggest copper mine, Los Bronces in Chile, Anglo continues to undertake exploration work and look into a possible underground project as ore quality deteriorates.
For now, Los Bronces is focused on productivity improvements and stabilisation after a severe winter and strikes exacerbated the effect of lower grades.
Production this year will be similar to last year at Los Bronces, with the first quarter meeting targets, Faul said.
“We’re not going to have any April Fool’s surprise,” he said. “We were in line with our expected production - even slightly ahead.”