Anglo American cuts output guidance for diamonds, platinum due to Covid-19

Anglo American chief executive Mark Cutifani. File photo: Anglo American website

Anglo American chief executive Mark Cutifani. File photo: Anglo American website

Published Apr 23, 2020

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JOHANNESBURG  - Mining conglomerate Anglo American on Thursday revised full year production guidance for diamonds down to 25-27 million carats from the previous 32-34 million carats, citing the negative impact of the Covid-19 pandemic on operations.

It also cut the platinum output forecast to 1.5-1.7 million ounces from 2.0-2.2 million ounces and that for palladium to 1.0-1.2 million ounces from the 1.4 million ounces predicted earlier.

Mining companies were not spared when Southa Africa's government imposed a lockdown for all but essential services from March 27 to curb transmission of the coronavirus which has spread rapidly across the globe from the first case in China last December.

The regulations have since been relaxed to allow mining operations to partially resume.

"Our overwhelming priority is the safety of our people, their families and our host communities," Anglo American chief executive Mark Cutifani said in the company's production report for the first quarter ended March 31.

"We have taken extensive measures across our business to help safeguard against the spread of Covid-19, while also protecting the integrity of our assets to enable a swift return to normal levels of operation when appropriate."

Cutifani said the onset of varying degrees of lockdown or physical distancing measures in a number of the company's operating countries towards the end of the quarter, combined with the impact of longwall moves in its metallurgical coal business, led to four percent lower production compared to the same period in 2019, despite continued strong iron ore production at its Minas-Rio operation in Brazil.

He said Anglo American was also implementing a number of cash improvement measures, including operating cost reductions of at least $500 million and an approximately $1 billion reduction to its 2020 capital expenditure guidance. 

"This further builds on our already robust current liquidity position of $14.5 billion," said Cutifani.

"We are acting to protect our optionality through this uncertain period and will continue to act in the best interests of our shareholders, our employees, customers and our broad range of stakeholders across society."

- African News Agency (ANA) 

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