Johannesburg - Shares in Anglo American, which owns the biggest platinum producer and Africa’s largest iron ore supplier, surged as much as 8.7 percent in Johannesburg yesterday after both units posted 25 percent gains in fourth-quarter output.
Anglo hit a high of R269, before closing at R258.50, which was 4.45 percent ahead of Tuesday’s close.
South African operations account for about 45 percent of the London-based company’s revenue. The rand has lost almost a quarter of its value against the dollar since the beginning of last year, helping to bolster earnings from South African production sold in the US currency.
The quarterly figures were in line with analyst forecasts.
Aneek Haq, an analyst at Exane, said from London: “The fact they are delivering [on expectations], plus the benefit that comes through the rand, is leading to a much more positive view on the stock.”
Anglo American Platinum (Amplats) said it produced 520 000 platinum equivalent ounces in the three months to December, compared with 416 000 ounces a year earlier when walkouts closed mines for as much as eight weeks.
Kumba Iron Ore’s output climbed to 11.3 million tons from 9 million tons.
Amplats closed shafts and cut jobs last year as it sought to return to profit. Kumba recovered from a two-week walkout in 2012 at its Sishen operation, Africa’s largest iron ore mine.
Amplats shares rose to a high of R465.50 and closed at R458, which was 5.17 percent higher than Tuesday’s close. The shares advanced even as the wage strike that started on January 23 continued to paralyse production.
Kumba shares jumped to R463 before closing at R450, for a rise of 3.45 percent on the day.
Production at De Beers, the gem producer owned by Anglo, jumped 13 percent in the fourth quarter to 9.1 million carats.
Production of export metallurgical coal, which is used in steel making, increased 3 percent to 4.7 million tons.
Output for export markets of the variety of coal burned in power plants increased by 8 percent to 7.9 million tons.
Output of copper climbed by 24 percent to a record 214 400 tons as production at the Los Bronces mine in Chile rose 16 percent to 110 000 tons.
Production from the Collahuasi mine, also in Chile, doubled to 64 800 tons.
Analysts expect that on February 14 Anglo will report underlying earnings of $2.16 billion (R24bn) for the full year. Profit by that measure fell 54 percent to $2.84bn in 2012 following a decline in commodity prices and an increase in operating costs.
The fourth-quarter production update “will drive 2013 earnings upgrades”, Nomura Bank International said in a note to clients. “Whether this translates into 2014 earnings upgrades will remain to be seen,” it said. - Bloomberg