Logo of Anglo American is seen on a jacket of an employee of the Los Bronces copper mine, in the outskirts of Santiago
Logo of Anglo American is seen on a jacket of an employee of the Los Bronces copper mine, in the outskirts of Santiago

WATCH: Anglo American shares slide on disappointing production figures

By Dineo Faku Time of article published Jan 24, 2020

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JOHANNESBURG - Anglo American plc yesterday said that the drought in Chile had hurt copper production as it reported a decline in diamond production during the quarter ended December.

The group said rough diamond production fell 15percent to 7.8million carats driven by lower production levels in South Africa and Botswana.

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Video by: Chelsea Lotz, Business Report Plus, BR+

It said South African diamond production fell 65percent to 400000 carats due to lower volumes of ore mined at Venetia, which was in the process of transitioning from open pit to an underground mine.

Anglo American plc shares fell by 3.06percent on the JSE yesterday to close at R401.43.

Botswana production decreased by 7percent to 5.9million carats. Orapa production decreased by 29percent, caused by a delay in an infrastructure project and expected lower grades.

“This was partially offset by a 21 percent increase at Jwaneng driven by planned increases in both tons treated and grade,” the company said, adding that Namibia’s production eased by 10percent to 500000 carats.

The global diversified mining company said full year rough diamond sales volumes declined by 8percent to 30.9million carats compared with 33.7 million carats in 2018, while copper production decreased by 13percent to 158800 tons, largely impacted by a reduction at Los Bronces, driven by the continued drought conditions in central Chile.

It said production from Los Bronces fell by 28percent, to 71700 tons with a 44percent reduction in plant throughput resulting from lower water availability.

“Chile´s central zone continues to face unprecedented climate conditions, with 2019 being one of the driest years on record and the driest since the start of the current decade-long drought,” it said.

Meanwhile, the group said Kumba Iron Ore’s total production was 2percent lower at 42.4million tons in the year ended 2019 from 43million tons in 2018 due to the temporary closure of Kolomela’s dense media separation (DMS) plant for infrastructure upgrade from the first quarter of the year.

Anglo said Kumba's fourth quarter in 2019 increased 12percent to 11.8 million tons compared to 10.5 million tons in the third quarter of 2019.

“This reflects continued improvements in operational performance at Sishen following unscheduled maintenance on the DMS plant in the third quarter of 2019, as well as the ramp-up in production at Kolomela with the re-opening of the DMS plant in the fourth quarter of 2019 as scheduled,” the company said.

Kumba closed 6.7percent lower at R390 on the JSE yesterday after reporting yesterday that it expected headline earnings per share of between R48.93 and R52.47, in the year to December.

It said it expected basic earnings for the period to be between R48.79 and R52.34, an increase of between 62 and 74percent.

“The increase in earnings for the period is largely attributable to the higher average realised FOB export ore price and a weaker rand/dollar exchange rate, relative to the comparative period,” the company said.

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