3rd Quarter Production Report

RNS Number : 1951B

Anglo American PLC

22 October 2009

 



News Release

22 October 2009

Anglo American plc Interim Management Statement Production Report for the third quarter ended 30 September 2009

Overview

• Copper production increased 13.4% to 168,500 tonnes, compared to the third quarter of 2008, due to higher throughput and recoveries at Los Bronces and improved grades, recoveries and performance at Collahuasi

• Iron ore production increased 15.7% to 11.9 million tonnes as the Sishen jig plant continued to ramp up to full production. The jig plant achieved production of 996kt in September, equating to annualised production of 12Mtpa, on track to achieve its planned annualised rate of 13Mtpa during the fourth quarter

• Platinum refined production increased 15.8% to 629koz, on track to meet full year target of 2.4 million ounces.

  • Two additional high cost shafts placed on care and maintenance

  • Labour reduction of 11,715, exceeding full year plan

  • Further 4% productivity improvement achieved since June 2009

• Thermal coal production declined by 1.0% and metallurgical coal production declined by 2.6%, as production was matched to demand in export markets. Coal production at Eskom mines improved, with demand increasing by 7.3%

• Continued improvement in the demand for rough diamonds. Third quarter production 43% higher than second quarter and on track for full year production at 50% of 2008 levels

• Further strategic progress to focus on core mining portfolio:

• $671 million raised in the third quarter:

  • Tongaat Hulett stake sold for total consideration of $523 million

  • Hulamin stake sold for total consideration of $148 million

• Undrawn committed bank facilities and cash increased to over $10 billion

Results for the full year to 31 December 2009 will be announced on 19 February 2010.

This report forms Anglo American plc's Interim Management Statement for the purpose of the UK Listing Authority's Disclosure and Transparency Rules.

PLATINUM		Q3	Sep	Q3 2009	Sep YTD 09
		2009	2009	vs.	vs.
			YTD	Q3 2008	Sep YTD 08
Refined
Platinum	000 oz	629	1,686	15.8%	9.2%
Palladium	000 oz	338	934	5.0%	7.6%
Rhodium	000 oz	92	256	22.7%	33.3%
Nickel	t	5,500	14,200	37.5%	24.6%
Equivalent refined
Platinum	000 oz	617	1,860	-9.9%	2.6%

Platinum - Refined production of 629,000 ounces increased by 15.8% compared to Q3 2008. Production levels achieved their target for the quarter, whereas prior year production was impacted by planned maintenance at the Waterval smelter. Anglo Platinum continues to target full year production of 2.4 million ounces of refined platinum.

Equivalent refined platinum ounces from mining and purchase of concentrate activities attributable to Anglo Platinum decreased 9.9% to 617,000 ounces compared to Q3 2008, primarily due to the placing of three high-cost shafts onto care and maintenance (Bleskop, Brakspruit and Boschfontein shafts). 

Palladium, Rhodium & Nickel - Refined production of palladium, rhodium and nickel was higher than Q3 2008. The increases vary due to a different source mix from operations and different pipeline processing times per metal.

Anglo Platinum is taking action to mitigate the effect of wage and electricity price escalations through:

• labour reduction - 11,715 reductions achieved in the year-to-date, compared with the original plan for 10,000 by year end;

• productivity improvements - a further 4% improvement (following a 12% improvement at the half year) was achieved in Q3 2009 of 6.28m2 mined per employee per month; and

• energy efficiency.

In addition, any overhead costs not associated with keeping the Bleskop, Brakspruit and Boschfontein shafts on care and maintenance are being removed.

BASE METALS		Q3	Sep	Q3 2009	Sep YTD 09
		2009	2009	vs.	vs.
			YTD	Q3 2008	Sep YTD 08
Copper	t	168,500	485,500	13.4%	3.5%
Nickel	t	4,900	14,900	-12.5%	-2.0%
Zinc	t	94,000	263,900	8.7%	2.4%

Copper - Production for the quarter was 13.4% higher than Q3 2008 following increased production at Collahuasi as a result of improved grades and recoveries, resolving pipeline and port filter plant constraints, higher operational stability at the concentrator plant and improved SAG mill utilisation. Higher production at Los Bronces was due to increased throughput resulting from lower ore hardness, and improved recoveries.

Nickel - Production for the quarter was 12.5% lower than Q3 2008 due to a break-out at furnace No.2 at Loma de Níquel earlier in the year which has resulted in only furnace No.1 presently being operational.

Zinc - Production was 8.7% higher than Q3 2008 due to improved grades and operational practices at Lisheen.

FERROUS METALS		Q3	Sep	Q3 2009	Sep YTD 09
		2009	2009	vs.	vs.
			YTD	Q3 2008	Sep YTD 08
Iron ore	000 t	11,861	32,190	15.7%	17.9%
Manganese Ore	000 t	462	955	-36.9%	-55.4%
Manganese Alloys	000 t	25	77	-69.1%	-67.1%
Scaw Metals
South Africa products	000 t	183	526	-14.5%	-16.6%
International products	000 t	164	541	-28.7%	-18.5%

Iron ore - Total iron ore production increased 15.7% to 11.9Mt in the third quarter compared to the previous year. This was mainly due to the additional production delivered by the Sishen Mine's jig plant, which continues to ramp up to full production.

The jig plant achieved production of 996kt in September, equating to annualised production of 12Mtpa. The ramp up of the jig plant to an annualised rate of 13Mtpa during the fourth quarter continues as planned.

Manganese Ore - Production increased by 131% versus Q2 2009, as market conditions progressively recovered during the quarter. However, Q3 2009 production was limited due to larger than optimal stockpiles at the start of the quarter. As a result of the improved demand and depletion of stockpiles, Samancor expects its manganese ore business to be operating near full capacity towards the end of the fourth quarter.

Manganese Alloy - Production increased by 150% versus Q2 2009, as demand conditions improved, stockpiles were drawn down and furnaces were restarted during the quarter. Samancor expects its manganese alloy business to be operating at about 65% of capacity towards the end of the fourth quarter.

Scaw Metals - Production of South African steel products decreased 14.5% compared to Q3 2008 due to lower demand for rolled, cast and wire rod products, though increased 11.6% versus Q2 2009. Production of International steel products decreased 28.7% versus Q3 2008 and increased 3.8% versus Q2 2009.

COAL		Q3	Sep	Q3 2009	Sep YTD 09
		2009	2009	vs.	vs.
			YTD	Q3 2008	Sep YTD 08
Total
Eskom	000 t	10,400	27,777	7.3%	4.1%
Thermal	000 t	12,260	35,668	-1.0%	-1.4%
Metallurgical	000 t	3,537	9,929	-2.6%	-9.5%
South Africa
Eskom	000 t	10,400	27,777	7.3%	4.1%
Thermal	000 t	5,806	16,613	-4.7%	0.2%
Metallurgical	000 t	224	616	-20.0%	-17.1%
Australia
Thermal	000 t	3,614	10,564	12.2%	-0.8%
Metallurgical	000 t	3,148	8,817	-0.3%	-9.4%
South America
Thermal	000 t	2,840	8,491	-7.4%	-3.9%
Canada
Metallurgical	000 t	165	496	-15.0%	0.0%

Coal - Following the global economic slowdown earlier in the year, demand for metallurgical coal and thermal coal in the Indo-Pacific market improved during Q3 2009 and production was accordingly matched to demand. Improvements in production were achieved through the ongoing asset optimisation programme. In Australia, rail constraints limited further production and sales opportunities in Q3 2009.

Eskom coal - Production was 7.3% higher than Q3 2008, with increased production from the Kriel and New Vaal collieries, in line with Eskom demand.

Thermal coal - Production was 1.0% lower than Q3 2008. In South Africa, Q3 2009 was lower than Q3 2008 due to less favourable geological conditions and lower yields at the Goedehoop and Kleinkopje collieries, partially offset by a strong build up at Mafube. Lower market demand from European and North American customers was due to high customer stock levels and low coal burn rates which affected primarily the South American coals but also displaced South African production into the growing Indian thermal market. Production at Venezuela's Carbones del Guasare continues to be adversely impacted by operational, foreign exchange and labour related issues. Australian production was 12.2% higher, reflecting the relative strength of Indo-Pacific thermal coal markets. The ramp-up of production commenced on schedule at the Zibulo (previously known as Zondagsfontein) open cast coal mine at the end of the third quarter.

Metallurgical coal - Production was 2.6% lower than Q3 2008 as a result of lower production from South Africa and Canada. Lower production in South Africa was due to the low ash coal product reserve being fully depleted during Q2 2009. In Canada, mine phasing and geotechnical issues constrained coal release.  Australian metallurgical coal production was only marginally lower than the comparative period, benefiting from favourable metallurgical coal demand from Indo-Pacific customers. 

DIAMONDS - Carats recovered		Q3	Sep	Q3 2009	Sep YTD 09
		2009	2009	vs.	vs.
			YTD	Q3 2008	Sep YTD 08
Total	000 Carats	7,885	14,476	-39.9%	-61.2%

Diamonds - In Q1 2009, in light of lower market demand, De Beers reduced production at all of its mines through a combination of production holidays and shift reductions.

Since Q2 2009, production has restarted at Orapa and Jwaneng in Botswana and operations have resumed in South Africa. Production from the Canadian operations was impacted in Q3 2009 as a result of a production holiday taken in August.

Overall, Q3 2009 production is trending up from the first and second quarter of 2009 in line with stabilising market demand.

  Production summary

The figures below include the entire output of consolidated entities and the Group's share of joint ventures, joint arrangements and associates where applicable, except for De Beers, which is quoted on a 100% basis.

		Quarter						Year to date			% Change
											Q3 09	YTD09
		Q3	Q2	Q1	Q4	Q3		Sep	Sep		vs.	vs.
		2009	2009	2009	2008	2008		2009	2008		Q3 08	YTD08
Platinum (refined)	000 oz	629	652	404	842	543		1,686	1,544		15.8%	9.2%
Platinum (eq. refined) (1)	000 oz	617	630	613	653	685		1,860	1,813		-9.9%	2.6%
Palladium	000 oz	338	362	235	451	322		934	868		5.0%	7.6%
Rhodium	000 oz	92	90	74	107	75		256	192		22.7%	33.3%
Nickel (Platinum)	000 t	5.5	5.4	3.3	4.1	4.0		14.2	11.4		37.5%	24.6%
Coal - Eskom	000 t	10,400	8,938	8,438	9,466	9,692		27,777	26,692		7.3%	4.1%
Thermal – South Africa	000 t	5,806	5,696	5,111	5,707	6,090		16,613	16,580		-4.7%	0.2%
Thermal – South America	000 t	2,840	2,903	2,748	2,652	3,066		8,491	8,833		-7.4%	-3.9%
Thermal – Australia	000 t	3,614	3,739	3,212	4,051	3,222		10,564	10,646		12.2%	-0.8%
Coal – Total Thermal (2)	000 t	12,260	12,337	11,071	12,427	12,378		35,668	36,181		-1.0%	-1.4%
Metallurgical – Australia	000 t	3,148	3,354	2,315	3,411	3,158		8,817	9,734		-0.3%	-9.4%
Metallurgical – South Africa	000 t	224	172	220	229	280		616	743		-20.0%	-17.1%
Coal – Total Metallurgical (2)	000 t	3,537	3,679	2,713	3,776	3,632		9,929	10,973		-2.6%	-9.5%
Copper	000 t	168.5	165.9	151.0	172.0	148.6		485.5	469.3		13.4%	3.5%
Nickel	000 t	4.9	5.6	4.5	4.8	5.6		14.9	15.2		-12.5%	-2.0%
Zinc	000 t	94.0	87.1	82.8	82.9	86.5		263.9	257.6		8.7%	2.4%
Lead	000 t	18.4	16.4	14.6	14.4	16.7		49.4	48.5		10.2%	1.9%
Iron Ore (3)	000 t	11,861	10,336	9,992	10,098	10,250		32,190	27,313		15.7%	17.9%
Manganese Ore (4)	000 t	462	200	293	565	732		955	2,139		-36.9%	-55.4%
Manganese Alloys (4) (5)	000 t	25	10	42	72	81		77	234		-69.1%	-67.1%
South Africa Steel products	000 t	183	164	179	167	214		526	631		-14.5%	-16.6%
International Steel products	000 t	164	158	219	215	230		541	664		-28.7%	-18.5%
Diamonds recovered	000 cts	7,885	5,509	1,082	10,795	13,111		14,476	37,337		-39.9%	-61.2%

(1) Equivalent refined platinum production.

(2) Coal type by region may not equal total coal production by type due to other production.

 (3) Includes contribution of production from Amapá iron ore system in Brazil of 531,000t in Q3 2009, 512,000t in Q2 2009, 669,000t in Q1 2009, 546,000t in Q4 2008 & 166,000t in Q3 2008.

 (4) Saleable production.

(5) Production includes Medium Carbon Ferro manganese.

As production figures are sometimes more precise than the rounded numbers shown in this report, small differences may arise throughout the report between the summation of quarters and the year to date totals. The percentage change will reflect the percentage change in the rounded production figures shown in this report.

Forward looking statements:

This Interim Management Statement contains certain forward looking statements which involve risk and uncertainty because they relate to events and depend on circumstances that occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements.  

For further information, please contact:

United Kingdom

James Wyatt-Tilby, Media Relations

Tel: [phone]

Caroline Metcalfe, Investor Relations

Tel: [phone]

Leisha Wemyss, Investor Relations

Tel: [phone]

South Africa

Anna Poulter, Investor Relations

Tel: [phone]

Pranill Ramchander, Media Relations

Tel: [phone]

Notes to Editors:

Anglo American plc is one of the world's largest mining groups. With its subsidiaries, joint ventures and associates, it is a global leader in platinum group metals and diamonds, with significant interests in coal, base and ferrous metals, as well as an industrial minerals business. The Group is geographically diverse, with operations in Africa, Europe, South and North America, Australia and Asia.

(www.angloamerican.co.uk)

 

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