Anglo American Q3 2018 Production Report

RNS Number : 8215E
Anglo American PLC
23 October 2018
 

Anglo American plc

Production Report for the third quarter ended 30 September 2018

 

Anglo American reports a 1% increase in total production on a copper equivalent basis in the third quarter of 2018, compared to the same period of 2017, excluding the Minas-Rio stoppage(1).

 

Mark Cutifani, Chief Executive of Anglo American, said: "Our focus on driving efficiency and productivity across the business resulted in another strong quarter, with volumes 1% higher than the solid operational performance seen in Q3 2017. Production per employee has increased by 5% in 2018, compared to 2017, as we maintain relentless discipline on controllable costs. Strong operational performance at our Copper assets delivered a 17% increase in production, more than offsetting planned lower volumes at De Beers and the impact of rail infrastructure constraints at Kumba in the first half of the year."

 

Highlights

·    De Beers production decreased by 5% to 8.7 million carats due to expected lower grades at Jwaneng and lower volumes at Venetia, due to a shutdown to upgrade its processing plant ahead of its transition from open cut to underground operations.

·    Copper production increased by 17% to 171,800 tonnes reflecting continued strong operational performance across all operations and planned higher grades.

·     Platinum and palladium production increased by 4% to 649,000 ounces and 1% to 411,000 ounces respectively driven by an improved performance at Amandelbult and the joint venture operations.

·    Kumba's iron ore production decreased by 9% to 10.5 million tonnes as planned, to offset elevated stock levels arising from Transnet rail constraints in H1 2018.

·      Metallurgical coal production decreased by 3% to 5.4 million tonnes with the timing of longwall moves.

·     Thermal coal export production increased by 13% to 7.7 million tonnes reflecting solid operational improvements at our coal assets.

 

Production Summary

 

 

Q3 2018

Q3 2017

% vs. Q3 2017

YTD 2018

YTD 2017

% vs. YTD 2017

Diamonds (Mct)(2)

8.7

9.2

(5)%

26.2

25.3

3%

Copper (kt)(3)

172

147

17%

485

431

13%

Platinum (koz)(4)

649

621

4%

1,882

1,810

4%

Palladium (koz)(4)

411

408

1%

1,224

1,183

4%

Iron ore - Kumba (Mt)

10.5

11.5

(9)%

32.9

33.3

(1)%

Iron ore - Minas-Rio (Mt)(5)

-

4.2

-

3.2

12.8

(75)%

Metallurgical coal (Mt)

5.4

5.5

(3)%

16.2

14.7

10%

Thermal coal (Mt)(6)

7.7

6.8

13%

21.7

21.7

-

Nickel (kt)(7)

11.5

11.2

3%

30.9

32.4

(5)%

Manganese ore (kt)

888

840

6%

2,635

2,506

5%

 

(1)     Copper equivalent production is normalised for Bokoni being placed on care and maintenance in Q3 2017 and the Minas-Rio production stoppage in 2018. Including the Minas-Rio stoppage, production decreased by 3% compared to Q3 2017.

(2)     De Beers production is on a 100% basis, except for the Gahcho Kué joint venture which is on an attributable 51% basis.

(3)     Contained metal basis. Reflects copper production from the Copper business unit only (excludes copper production from the Platinum Group Metals business unit).

(4)     Produced ounces. Reflects own mine production and purchases of metal in concentrate.

(5)     Wet basis.

(6)     Reflects export production from South Africa and Colombia.

(7)     Reflects nickel production from the Nickel business unit only (i.e. excludes nickel production from the Platinum Group Metals business unit).

 

DE BEERS

 

De Beers(1)

Q3

2018

Q3

2017

Q3 2018

vs.

Q3 2017

Q2 2018

Q3 2018 vs.

Q2 2018

YTD 2018

YTD

2017

YTD 2018

vs.

YTD 2017

Botswana (Debswana)

000 carats

5,699

6,056

(6)%

6,279

(9)%

17,786

17,180

4%

Namibia

(Namdeb Holdings)

000 carats

460

454

1%

515

(11)%

1,503

1,317

14%

South Africa (DBCM)

000 carats

1,337

1,548

(14)%

1,018

31%

3,448

4,059

(15)%

Canada

000 carats

1,178

1,120

5%

1,185

(1)%

3,432

2,764

24%

Total carats recovered

000 carats

8,674

9,178

(5)%

8,997

(4)%

26,169

25,320

3%

 

Rough diamond production decreased by 5% to 8.7 million carats due to planned volume reductions in Botswana (Debswana) and South Africa (DBCM).

 

Botswana (Debswana) production decreased by 6% to 5.7 million carats due to the planned processing of lower grade material at Jwaneng. Production at Orapa(2) remained in line with Q3 2017 at 2.6 million carats.

 

Namibia (Namdeb Holdings) production was flat at 0.5 million carats.

 

South Africa (DBCM) production decreased by 14% to 1.3 million carats due to a planned shut down at Venetia to upgrade the processing plant ahead of the transition from open cut to underground operations.

 

Canada production increased by 5% to 1.2 million carats, driven by higher grades at Victor, which is approaching the end of its life. Gahcho Kué production was in line with Q3 2017.

 

Rough sales volumes amounted to 5.0 million carats (4.6 million carats on a consolidated basis(3)) from two sales cycles in Q3 2018, compared with 6.9 million carats (6.5 million carats on a consolidated basis(3)) from two sales cycles in Q3 2017. Rough sales volumes were down as a result of Sightholders being given the opportunity during the seventh Sight of 2018 to re-phase the allocation of some smaller, lower value rough diamonds. Rough sales revenues were broadly in line with Q3 2017.

 

Full Year Guidance

 

Full year production guidance(1) remains at 34-36 million carats but is expected to be at the higher end of the range.

 

(1)     De Beers production is on a 100% basis, except for the Gahcho Kué joint venture which is on an attributable 51% basis.

(2)     Orapa constitutes the Orapa Regime which includes Orapa, Letlhakane and Damtshaa.

(3)     Consolidated sales volumes exclude De Beers' JV partners' 50% proportionate share of sales to entities outside De Beers from Diamond Trading Company Botswana and the Namibia Diamond Trading Company, which are included in total sales volume (100% basis). 2017 includes pre-commercial production sales volumes from Gahcho Kué.

 

  

 

De Beers(1)

Q3

2018

Q2

2018

Q1

2018

Q4

2017

Q3

2017

Q3 2018 vs.

Q2 2018

Q3 2018

vs.

Q3 2017

YTD

2018

YTD

2017

YTD 2018

vs.

YTD 2017

Carats recovered (000 carats)

 

 

 

 

 

 

 

 

 

 

100% basis (unless otherwise stated)

 

 

 

 

 

 

 

 

 

 

Jwaneng

3,143

3,025

2,984

2,512

3,477

4%

(10)%

9,152

9,345

(2)%

Orapa(2)

2,556

3,254

2,824

2,992

2,579

(21)%

(1)%

8,634

7,835

10%

Botswana (Debswana)

5,699

6,279

5,808

5,504

6,056

(9%)

(6%)

17,786

17,180

4%

 

 

 

 

 

 

 

 

 

 

 

Debmarine Namibia

322

349

365

328

353

(8)%

(9%)

1,036

1,050

(1%)

Namdeb (land operations)

138

166

163

160

101

(17%)

37%

467

267

75%

Namibia (Namdeb Holdings)

460

515

528

488

454

(11%)

1%

1,503

1,317

14%

 

 

 

 

 

 

 

 

 

 

 

Venetia

1,178

922

1,008

1,023

1,401

28%

(16%)

3,108

3,579

(13%)

Voorspoed

159

96

85

126

147

66%

8%

340

480

(29%)

South Africa (DBCM)

1,337

1,018

1,093

1,149

1,548

31%

(14%)

3,448

4,059

(15%)

 

 

 

 

 

 

 

 

 

 

 

Gahcho Kué (51% basis)

927

985

838

830

930

(6%)

(0%)

2,750

2,203

25%

Victor

251

200

231

163

190

26%

32%

682

561

22%

Canada

1,178

1,185

1,069

993

1,120

(1%)

5%

3,432

2,764

24%

Total carats recovered

8,674

8,997

8,498

8,134

9,178

(4%)

(5%)

26,169

25,320

3%

Sales volumes

 

 

 

 

 

 

 

 

 

 

Total sales volume (100%) (Mct)(3)

5.0

10.0

8.8

8.2

6.9

(50%)

(28%)

23.9

26.9

(11%)

Consolidated sales volume (Mct)(3)

4.6

9.4

8.4

7.5

6.5

(51%)

(29%)

22.4

25.6

(13%)

Number of Sights
(sales cycles)

2

3

2

3

2

 

 

7

7

 

 

(1)     De Beers production is on a 100% basis, except for the Gahcho Kué joint venture which is on an attributable 51% basis.

(2)     Orapa constitutes the Orapa Regime which includes Orapa, Letlhakane and Damtshaa.

(3)     Consolidated sales volumes exclude De Beers' JV partners' 50% proportionate share of sales to entities outside De Beers from Diamond Trading Company Botswana and the Namibia Diamond Trading Company, which are included in total sales volume (100% basis). 2017 includes pre-commercial production sales volumes from Gahcho Kué.

 

 

 

 

COPPER

 

Copper(1)

Q3

2018

Q3

2017

Q3 2018

vs.

Q3 2017

Q2

2018

Q3 2018 vs.

Q2 2018

YTD

2018

YTD

2017

YTD 2018

vs.

YTD 2017

Los Bronces

t

95,800

78,100

23%

89,700

7%

270,600

232,900

16%

Collahuasi

(44% share)

t

61,500

58,300

5%

54,700

12%

176,800

167,000

6%

El Soldado

t

14,500

10,900

33%

13,600

7%

37,400

30,800

21%

Total Copper

t

171,800

147,300

17%

158,000

9%

484,800

430,700

13%

 

(1)     Copper production shown on a contained metal basis.

 

Copper production increased by 17% to 171,800 tonnes, with production increases at all operations.

 

Production from Los Bronces increased by 23% to 95,800 tonnes, driven by continued strong mine and plant performance, supported by significantly lower than usual winter snowfall and planned higher grades (0.76% vs. 0.69%).

 

At Collahuasi, attributable production increased by 5% to 61,500 tonnes reflecting planned higher grades (1.33% vs. 1.24%). Production increased by 12% compared with Q2 2018 owing to the completion of planned three-month major maintenance on 8 July.

 

El Soldado production increased by 33% to 14,500 tonnes due to a combination of strong mine and plant performance and planned higher grades.

 

Full Year Guidance

 

Full year production guidance is unchanged at 630,000 - 660,000 tonnes.

 

 

Copper(1)

Q3

2018

Q2

2018

Q1

2018

Q4

2017

Q3

2017

Q3 2018 vs.

Q2 2018

Q3 2018

vs.

Q3 2017

YTD

2018

YTD

2017

YTD 2018

vs.

YTD 2017

Collahuasi 100% basis

(Anglo American share 44%)

 

 

 

 

 

 

 

 

 

 

Ore mined

13,791,400

11,454,400

11,859,300

17,478,300

18,467,800

20%

(25)%

37,105,100

47,255,200

(21)%

Ore processed - Sulphide

12,332,800

10,605,100

12,894,200

13,658,400

13,084,900

16%

(6)%

35,832,100

36,228,400

(1)%

Ore grade processed - Sulphide (% TCu)(2)

1.33

1.34

1.24

1.28

1.24

(1)%

7%

1.30

1.24

5%

Production - Copper cathode

 -

 -

 -

 -

-

-

-

 -

100

-

Production - Copper in concentrate

139,700

124,500

137,600

144,400

132,600

12%

5%

401,800

379,500

6%

Total copper production for Collahuasi

139,700

124,500

137,600

144,400

132,600

12%

5%

401,800

379,600

6%

Anglo American's share of copper production for Collahuasi(3)

61,500

54,700

60,600

63,500

58,300

12%

5%

176,800

167,000

6%

Los Bronces(4)

95,800

89,700

85,000

75,400

78,100

7%

23%

270,600

232,900

16%

Ore mined

13,019,000

17,837,300

15,675,300

11,553,900

12,707,100

(27)%

2%

46,531,600

37,785,700

23%

Ore processed - Sulphide

13,089,300

12,346,700

12,477,100

10,610,600

11,675,700

6%

12%

37,913,100

35,429,400

7%

Ore grade processed - Sulphide (% TCu)(2)

0.76

0.76

0.71

0.76

0.69

0%

10%

0.74

0.69

7%

Production - Copper cathode

10,300

10,000

8,500

9,800

9,800

3%

5%

28,800

28,500

1%

Production - Copper in concentrate

85,500

79,700

76,600

65,600

68,300

7%

25%

241,800

204,400

18%

El Soldado(4)

14,500

13,600

9,300

9,700

10,900

7%

33%

37,400

30,800

21%

Ore mined

3,361,000

2,905,800

2,112,500

1,698,500

1,462,200

16%

130%

8,379,300

3,639,900

130%

Ore processed - Sulphide

2,036,000

1,825,000

1,785,600

1,846,600

1,851,700

12%

10%

5,646,600

5,548,500

2%

Ore grade processed - Sulphide (% TCu)(2)

0.87

0.90

0.67

0.65

0.73

(3)%

19%

0.82

0.70

17%

Production - Copper in concentrate

14,500

13,600

9,300

9,700

10,900

7%

33%

37,400

30,800

21%

Chagres Smelter(4)

 

 

 

 

 

 

 

 

 

 

Ore smelted

37,700

39,300

34,700

35,600

35,400

(4)%

6%

111,700

98,200

14%

Production

36,900

38,400

33,800

34,700

34,400

(4)%

7%

109,100

95,300

14%

Total copper production(5)

171,800

158,000

154,900

148,600

147,300

9%

17%

484,800

430,700

13%

Total payable copper production

165,700

152,600

149,100

143,100

141,900

9%

17%

467,400

415,200

13%

Total sales volumes

159,900

174,400

131,600

156,400

163,900

(8)%

(2)%

465,900

423,300

10%

Total payable sales volumes

154,200

168,400

126,700

150,600

158,000

(8)%

(2)%

449,300

408,100

10%

Third party sales(6)

51,800

40,700

30,800

40,500

33,700

27%

54%

123,300

70,900

74%

 

(1)     Excludes copper production from the Platinum Group Metals business unit. Units shown are tonnes unless stated.

(2)     TCu = total copper.

(3)     Anglo American's share of Collahuasi production is 44%.

(4)     Anglo American ownership interest of Los Bronces, El Soldado and the Chagres Smelter is 50.1%. Production is stated at 100% as Anglo American consolidates these operations.

(5)     Total copper production includes Anglo American's 44% interest in Collahuasi.

(6)     Relates to sales of copper not produced by Anglo American operations.

 

  

 

 PLATINUM GROUP METALS

 

Platinum

 

Q3

2018

Q3

2017

Q3 2018

vs.

Q3 2017

Q2

2018

Q3 2018 vs.

Q2 2018

YTD 2018

YTD

2017

YTD 2018

vs.

YTD 2017

Produced M&C(1) ounces

000 oz

649.0

621.5

4%

619.6

5%

1,882.4

1,810.4

4%

Own mined(2)

000 oz

332.9

357.8

(7)%

340.2

(2)%

1,016.1

1,026.4

(1)%

Purchase of concentrate(3)

000 oz

316.1

263.7

20%

279.4

13%

866.3

784.0

10%

Palladium

 

 

 

 

 

 

 

 

Produced M&C(1) ounces

000 oz

410.8

407.5

1%

406.0

1%

1,224.2

1,182.6

4%

Own mined(2)

000 oz

250.2

262.7

(5)%

260.8

(4)%

778.7

757.3

3%

Purchase of concentrate(3)

000 oz

160.6

144.8

11%

145.2

11%

445.5

425.3

5%

Refined production

 

 

 

 

 

 

 

 

 

Platinum

000 oz

556.2

684.1

(19)%

572.7

(3)%

1,631.5

1,789.7

(9)%

Palladium

000 oz

321.5

450.6

(29)%

366.7

(12)%

1,008.0

1,177.0

(14)%

Rhodium

000 oz

65.2

79.4

(18)%

73.8

(12)%

201.5

235.8

(15)%

Gold

000 oz

27.4

31.1

(12)%

27.3

0%

77.6

85.0

(9)%

Nickel

t

5,600

7,000

(20)%

5,700

(2)%

16,400

18,200

(10)%

Copper

t

2,900

4,300

(33)%

4,000

(28)%

10,100

11,000

(8)%

 

(1)     Mined and purchase of concentrate.

(2)     Includes managed operations and 50% of joint venture production.

(3)     Purchase of concentrate includes 50% of joint venture production, and the purchase of concentrate from associates (Bokoni and BRPM) and third parties.

 

 

Platinum production increased by 4% to 649,000 ounces and palladium production increased by 1% to 410,800 ounces due to improved operational performances across the majority of the portfolio, despite the placing of unprofitable production from Bokoni on care and maintenance in Q3 2017.

 

Own mined production

 

Own mined platinum production decreased by 7% to 332,900 ounces and palladium production decreased by 5% to 250,200 ounces due to the sale of Union mine to Siyanda Resources on 1 February 2018, after which its production was purchased as concentrate. Excluding Union, own mined platinum production increased by 5% and palladium production increased by 2%.

 

Mogalakwena platinum production decreased by 2% to 113,900 ounces and palladium production decreased by 2% to 127,100 ounces. This was the result of lower concentrator throughput and lower recovery due to concentrator maintenance, partially offset by higher grades. Grades of material processed are expected to be lower in Q4 2018, with an impact on production volume.

 

Amandelbult platinum production increased by 5% to 126,000 ounces and palladium production increased by 4% to 57,300 ounces. This was driven by continued operational improvement, supported by increased development at Dishaba, as mining activities transitioned to this section.

 

Unki platinum production increased by 13% to 22,400 ounces and palladium production increased by 15% to 19,700 ounces as a result of an increase in tonnes milled, improvements in recovery and higher grade.

 

Joint venture platinum production (Mototolo, Modikwa and Kroondal) increased by 14% to 141,200 ounces (of which 70,600 ounces is own mined production and 70,600 ounces is purchased concentrate). Palladium production increased by 10% to 92,200 ounces (of which 46,100 ounces is own mined production and 46,100 ounces is purchased concentrate). This was largely due to lower production in Q3 2017 when the Mototolo concentrator was temporarily stopped to carry out remedial work at a tailings facility.                                                                         

 

Purchase of concentrate

 

Purchase of concentrate from joint ventures increased by 14% for platinum and 10% for palladium for the reasons outlined above.

 

Purchase of concentrate from associates decreased by 9% for platinum and 25% for palladium due to the removal of unprofitable ounces from Bokoni which was placed on care and maintenance in Q3 2017.

 

Purchase of concentrate from third parties increased by 40% for platinum and 31% for palladium due to concentrate purchased from Union mine following its sale.

 

Refined production and sales volumes

 

Refined platinum production decreased by 19% to 556,200 ounces and refined palladium production decreased by 29% to 321,500 ounces due to a rebuild of the Mortimer smelter in Q2 2018 and its progressive ramp up in Q3 2018 as well as the Polokwane smelter furnace repair that required a full shutdown for 35 days.

 

Platinum sales volumes (excluding refined metal purchased from third parties) decreased by 20% to 530,100 ounces and palladium sales volumes decreased by 30% to 324,300 ounces due to lower refined production.

 

Full year guidance

 

Due to strong operational performance across the portfolio, 2018 platinum production guidance has been revised upwards to 2.45-2.50 million ounces (previously 2.40-2.45 million ounces) and palladium production guidance has been tightened to 1.55-1.60 million ounces (previously 1.50-1.60 million ounces).

 

As a result of scheduled smelter rebuilds and maintenance at both Mortimer smelter and Polokwane smelter, there has been a build-up of work-in-progress inventory at the end of the third quarter, with platinum and palladium at ~270,000 ounces and ~160,000 ounces respectively, over and above targeted levels. The work-in-progress inventory is unlikely to be refined in full by year-end, and therefore full year refined production is expected to be lower than production of concentrate. Full year refined platinum production guidance is maintained at 2.40-2.45 million ounces and palladium refined production at the lower end of guidance of 1.50-1.60 million ounces. The remaining build-up in work-in-progress inventory will be processed and is expected to return to targeted levels in H1 2019. Platinum and palladium sales volumes are expected to remain in line with refined production.

 

 

 

Platinum

Q3

2018

Q2

2018

Q1

2018

Q4

2017

Q3

2017

Q3 2018

vs.

Q2 2018

Q3 2018

vs.

Q3 2017

YTD

2018

YTD

2017

YTD 2018

vs.

YTD 2017

Produced platinum

(000 troy oz)

649.0

619.6

613.8

587.0

621.5

5%

4%

1,882.4

1,810.4

4%

Own mined

332.9

340.2

343.0

349.8

357.8

(2)%

(7)%

1,016.1

1,026.4

(1)%

Mogalakwena

113.9

133.4

(2)%

386.7

342.1

13%

Amandelbult

126.0

116.3

5%

346.2

323.2

7%

Unki

22.4

20.9

13%

63.9

58.2

10%

Joint ventures(1)

70.6

69.6

14%

207.7

185.5

12%

Union

-

-

-

(100)%

11.6

117.4

(90)%

Purchase of concentrate

316.1

279.4

270.8

237.2

263.7

13%

20%

866.3

784.0

10%

Joint ventures(1)

70.6

69.6

14%

207.7

185.5

12%

Associates(2)

66.7

54.3

(9)%

173.3

210.7

(18)%

Third parties

178.8

155.5

15%

40%

485.3

387.8

25%

Palladium

 

 

 

 

 

 

 

 

 

 

Produced palladium

(000 troy oz)

410.8

406.0

407.4

374.9

407.5

1%

1%

1,224.2

1,182.6

4%

Own mined

250.2

260.8

267.7

251.5

262.7

(4)%

(5)%

778.7

757.3

3%

Mogalakwena

127.1

145.1

(2)%

422.7

381.1

11%

Amandelbult

57.3

52.2

4%

160.2

148.7

8%

Unki

19.7

18.4

15%

55.9

50.2

11%

Joint ventures(1)

46.1

45.1

10%

134.7

122.9

10%

Union

-

-

-

(100)%

5.2

54.4

(90)%

Purchase of concentrate

160.6

145.2

139.7

123.4

144.8

11%

11%

445.5

425.3

5%

Joint ventures(1)

46.1

45.1

10%

134.7

122.9

10%

Associates(2)

27.2

22.0

(25)%

70.9

105.7

(33)%

Third parties

87.3

78.1

12%

31%

239.9

196.7

22%

Refined production

 

 

 

 

 

 

 

 

 

 

Platinum (000 troy oz)

556.2

572.7

1,631.5

1,789.7

Palladium (000 troy oz)

321.5

366.7

1,008.0

1,177.0

Rhodium (000 troy oz)

65.2

73.8

201.5

235.8

Gold (000 troy oz)

27.4

27.3

77.6

85.0

Nickel (tonnes)

5,600

5,700

16,400

18,200

Copper (tonnes)

2,900

4,000

10,100

11,000

4E Head grade

(g/tonne milled)(3)

3.58

3.60

3.51

3.44

 

 

 

 

 

 

 

 

 

 

 

Platinum sales volumes

(000 troy oz)(4)

530.1

636.4

480.8

721.7

663.6

(17)%

(20)%

1,647.3

1,782.9

(8)%

 

 

 

 

 

 

 

 

 

 

 

Palladium sales volumes

(000 troy oz)(4)

324.3

405.3

328.2

473.5

462.0

(20)%

(30)%

1,057.8

1,098.2

(4)%

 

 

 

 

 

 

 

 

 

 

 

Platinum third party sales volumes (000 troy oz)(5)

26.9

45.8

19.8

-

-

(41)%

-

92.5

-

-

 

 

 

 

 

 

 

 

 

 

 

Palladium third party sales volumes (000 troy oz)(5)

55.0

45.0

8.0

-

-

22%

-

108.0

-

-

 

(1)     The joint venture operations are Mototolo, Modikwa and Kroondal. Platinum Group Metals owns 50% of these operations, which is presented under 'Own mined' production, and purchases the remaining 50% of production, which is presented under 'Purchase of concentrate'.

(2)     Associates are Platinum Group Metals' 33% interest in BRPM and, also in 2017, its 49% interest in Bokoni, which was placed on care and maintenance in Q3 2017.

(3)     4E: the grade measured as the combined content of: platinum, palladium, rhodium and gold.

(4)     Sales from own mined and purchased concentrate, excludes refined metal purchased from third parties.

(5)     Relates to sales of metal not produced by Anglo American operations.

 

 

  

IRON ORE

 

Iron Ore

Q3

2018

Q3

2017

Q3 2018

vs.

Q3 2017

Q2

2018

Q3 2018 vs.

Q2 2018

YTD

2018

YTD

2017

YTD 2018

vs.

YTD 2017

Kumba

000 t

10,508

11,486

(9)%

11,572

(9)%

32,936

33,340

(1)%

Minas-Rio(1)

000 t

-

-

106

-

3,155

(75)%

 

(1)       Wet basis.

 

Kumba - Iron ore production volumes decreased by 9% to 10.5 million tonnes, as planned, following rail constraints in H1 2018, and a small decrease in plant yields as Kumba produced higher quality products to maximise the value of tonnes railed to port.

 

Sishen's production decreased by 10% to 7 million tonnes, while waste movement increased by 7% to 45 million tonnes (Q3 2017: 42 million tonnes).

 

Kolomela's production decreased by 6% to 3.5 million tonnes of ore, while waste movement remained flat at 16 million tonnes.

 

Export sales decreased by 10% to 9.7 million tonnes due to the scheduled refurbishment of a ship loader at the Saldanha Port that reduced loading capacity during the quarter. Total finished product stocks increased from 6.2 million tonnes at 30 June 2018 to 6.6 million tonnes at 30 September 2018, representing ~$175 million of working capital.

 

Minas-Rio - As previously indicated, there was no production in Q3 2018 (Q3 2017: 4.2 million tonnes) as a result of the suspension of operations since March 2018 following two leaks in the iron ore slurry pipeline.

 

The detailed pipeline inspection work is on track, as well as the precautionary replacement of a 4 kilometre section of the pipeline where the leaks occurred. Both the inspection and replacement work are expected to be completed in Q4 2018, followed by the restart of the operation, subject to required clearance from the authorities. There is no change to the expected earnings impact of the pipeline incident from the guidance previously provided, with a 2018 loss of $300-$400 million in EBITDA.

 

Full Year Guidance

 

Full year production guidance for Kumba is unchanged at 43-44 million tonnes. Waste guidance for 2018 is unchanged at 170-180 million tonnes for Sishen and 55-57 million tonnes for Kolomela.

 

Full year production guidance for Minas-Rio is unchanged at 3 million tonnes, reflecting production delivered to date in 2018. 

 

Iron Ore (tonnes)

Q3

2018

Q2

2018

Q1

2018

Q4

2017

Q3

2017

Q3 2018 vs.

Q2 2018

Q3 2018

vs.

Q3 2017

YTD

2018

YTD

2017

YTD 2018

vs.

YTD 2017

Kumba production

10,508,400

11,572,000

10,855,100

11,642,600

11,485,700

(9)%

(9)%

32,935,500

33,339,900

(1)%

Lump

7,159,800

7,889,600

7,243,500

7,719,100

7,609,200

(9)%

(6)%

22,292,900

22,092,200

Fines

3,348,600

3,682,400

3,611,600

3,923,500

3,876,500

(9)%

(14)%

10,642,600

11,247,700

Kumba production by mine

 

 

 

 

 

 

 

 

 

 

Sishen

7,030,600

22,285,500

Kolomela

3,477,800

10,650,000

Kumba sales volumes

 

 

 

 

 

 

 

 

 

 

Export iron ore

9,736,700

9,560,100

9,945,700

11,354,800

10,783,200

2%

(10)%

29,242,500

30,259,800

(3)%

Domestic iron ore

755,600

781,900

885,400

875,700

644,100

(3)%

17%

2,422,900

2,401,400

1%

Minas-Rio production

 

 

 

 

 

 

 

 

 

 

Pellet feed (wet basis)

-

105,800

3,049,400

3,949,900

4,171,500

-

-

3,155,200

12,837,300

(75)%

Minas-Rio sales volumes

 

 

 

 

 

 

 

 

 

 

Export - pellet feed (wet basis)

-

320,800

2,896,100

4,140,700

3,739,800

-

-

3,216,800

12,367,300

(74)%

 

COAL

 

Coal(1)

Q3

2018

Q3

2017

Q3 2018

vs.

Q3 2017

Q2

2018

Q3 2018 vs.

Q2 2018

YTD 2018

YTD

2017

YTD 2018

vs.

YTD 2017

Metallurgical Coal (Australia)

000 t

5,382

5,532

(3)%

5,262

2%

16,183

14,737

10%

Export Thermal Coal (Australia)

000 t

455

421

8%

290

57%

954

1,205

(21)%

Export Thermal Coal

(South Africa)(2)

000 t

5,054

4,352

16%

4,440

14%

13,822

13,945

(1)%

Export Thermal Coal (Colombia)

000 t

2,658

2,497

6%

2,762

(4)%

7,863

7,728

2%

Domestic Thermal Coal

(South Africa)

000 t

2,650

8,367

(68)%

2,780

(5)%

10,400

24,110

(57)%

 

(1)       Anglo American's attributable share of production.

(2)       Includes export primary production, secondary production sold into export markets and production sold domestically at export parity pricing.

 

 

Metallurgical Coal - Export metallurgical coal production decreased by 3% to 5.4 million tonnes, with the Grosvenor ramp up being offset by a longwall move at Moranbah, anticipated challenging geological conditions at Grasstree and lower production at Dawson.

 

Thermal Coal South Africa - Export thermal coal production increased by 16% to 5.1 million tonnes, following operational improvements in the quarter and the impact of a 100-hour safety stoppage in Q3 2017, partly offset by conveyor issues at Zibulo.

 

Domestic thermal coal production decreased by 68% to 2.7 million tonnes due to the completion of the sale of the Eskom-tied operations (New Vaal, New Denmark and Kriel) to Seriti on 1 March 2018.

 

Thermal Coal Colombia - Attributable export thermal coal production from Cerrejón increased by 6% to        2.7 million tonnes. 

 

Full Year Guidance

 

Full year production guidance for Metallurgical Coal is unchanged at 20-22 million tonnes.

 

Full year production guidance for Export Thermal Coal is unchanged from Q2 at 28-30 million tonnes.

 

 

 

 

Coal, by product (tonnes)(1)

Q3

2018

Q2

2018

Q1

2018

Q4

2017

Q3

2017

Q3 2018 vs.

Q2 2018

Q3 2018

vs.

Q3 2017

YTD

2018

YTD

2017

YTD 2018

vs.

YTD 2017

Metallurgical Coal (Australia)

5,382,300

5,261,900

5,539,100

4,923,900

5,531,500

2%

(3)%

16,183,300

14,737,400

10%

Hard Coking Coal

4,545,800

4,534,800

4,853,200

4,300,300

4,696,200

-

(3)%

13,933,800

12,680,500

10%

PCI / SSCC

836,500

727,100

685,900

623,600

835,300

15%

-

2,249,500

2,056,900

9%

Thermal Coal

10,816,800

10,271,300

11,950,300

15,172,700

15,637,100

5%

(31)%

33,038,400

46,987,500

(30)%

Export (Australia)

455,100

289,900

208,700

408,600

421,400

57%

8%

953,700

1,205,100

(21)%

Export (South Africa)(2)

5,054,400

4,439,600

4,327,500

4,647,800

4,352,000

14%

16%

13,821,500

13,944,700

(1)%

Export (Colombia)

2,657,600

2,761,500

2,444,300

2,913,600

2,496,700

(4)%

6%

7,863,400

7,728,000

2%

Domestic (South Africa)

2,649,700

2,780,300

4,969,800

7,202,700

8,367,000

(5)%

(68)%

10,399,800

24,109,700

(57)%

Total coal production

16,199,100

15,533,200

17,489,400

20,096,600

21,168,600

4%

(23)%

49,221,700

61,725,000

(20)%

Sales volumes

 

 

 

 

 

 

 

 

 

 

Metallurgical Coal (Australia)

5,442,800

5,094,500

5,632,900

5,323,600

5,341,700

7%

2%

16,170,200

14,446,900

12%

Hard Coking Coal

4,834,100

4,402,800

4,885,500

4,653,000

4,707,600

10%

3%

14,122,500

12,834,400

10%

PCI / SSCC

608,700

691,700

747,400

670,600

634,100

(12)%

(4)%

2,047,700

1,612,500

27%

Thermal Coal

11,782,900

12,904,300

14,227,800

17,079,500

18,892,600

(9)%

(38)%

38,914,800

53,556,200

(27)%

Export (Australia)

331,600

357,800

293,800

466,900

468,500

(7)%

(29)%

983,100

1,364,500

(28)%

Export (South Africa)(2)

3,679,600

4,092,700

4,615,700

4,843,500

4,921,200

(10)%

(25)%

12,387,900

13,765,300

(10)%

Export (Colombia)

2,589,100

2,762,900

2,480,200

2,619,400

2,517,500

(6)%

3%

7,832,200

7,934,300

(1)%

Domestic (South Africa)

3,305,800

3,146,500

4,711,000

7,370,300

8,549,300

5%

(61)%

11,163,300

24,652,800

(55)%

Third party sales

1,876,800

2,544,400

2,127,100

1,779,400

2,436,100

(26)%

(23)%

6,548,300

5,839,300

12%

(1)     Anglo American's attributable share of production and sales.

(2)     Includes export primary production, secondary production sold into export markets and production sold domestically at export parity pricing.

 

Coal, by operation (tonnes)(1)

Q3

2018

Q2

2018

Q1

2018

Q4

2017

Q3

2017

Q3 2018

vs.

Q2 2018

Q3 2018

vs.

Q3 2017

YTD

2018

YTD

2017

YTD 2018

vs.

YTD 2017

Metallurgical Coal (Australia)

5,382,300

5,261,900

5,539,100

4,923,900

5,531,500

2%

(3)%

16,183,300

14,737,400

10%

Moranbah North

1,275,800

1,064,300

1,936,700

1,979,800

1,316,800

20%

(3)%

4,276,800

3,421,500

25%

Grosvenor

1,239,800

1,342,000

825,600

161,300

1,012,500

(8)%

22%

3,407,400

1,905,900

79%

Capcoal (incl. Grasstree)

1,564,700

1,324,200

1,396,000

1,604,900

1,712,100

18%

(9)%

4,284,900

4,881,500

(12)%

Dawson

478,700

714,100

534,500

319,700

670,300

(33)%

(29)%

1,727,300

2,163,000

(20)%

Jellinbah

823,300

817,300

846,300

858,200

819,800

1%

-

2,486,900

2,365,500

5%

Thermal Coal (Australia)

455,100

289,900

208,700

408,600

421,400

57%

8%

953,700

1,205,100

(21)%

Capcoal (incl. Grasstree)

71,600

66,000

65,500

95,400

62,000

8%

15%

203,100

186,900

9%

Dawson

357,700

193,400

114,500

310,800

342,500

85%

4%

665,600

988,700

(33)%

Jellinbah

25,800

30,500

28,700

2,400

16,900

(15)%

53%

85,000

29,500

188%

Total Australia production

5,837,400

5,551,800

5,747,800

5,332,500

5,952,900

5%

(2)%

17,137,000

15,942,500

7%

Thermal (South Africa)(2)

 

 

 

 

 

 

 

 

 

 

Goedehoop

1,527,000

1,185,900

1,138,000

1,114,300

1,085,400

29%

41%

3,850,800

3,538,400

9%

Greenside

1,264,300

941,500

1,043,600

1,041,200

906,700

34%

39%

3,249,400

2,789,200

16%

Zibulo

1,468,700

1,553,500

1,673,100

1,587,900

1,534,600

(5)%

(4)%

4,695,300

4,646,900

1%

Khwezela

1,468,800

1,297,200

1,244,000

1,371,300

1,265,300

13%

16%

4,010,000

4,336,300

(8)%

Mafube

402,700

172,100

105,600

350,900

361,200

134%

11%

680,500

1,210,300

(44)%

Other(3)

604,100

1,076,700

-

-

-

(44)%

n/a

1,680,700

-

n/a

New Vaal(4)

-

-

1,560,500

3,218,500

4,354,300

n/a

n/a

1,560,500

11,890,500

(87)%

New Denmark(4)

-

-

560,100

963,300

673,700

n/a

n/a

560,200

2,397,600

(77)%

Kriel(4)

-

-

704,900

1,237,400

1,392,700

n/a

n/a

704,900

4,151,400

(83)%

Isibonelo

968,500

993,000

1,267,500

965,700

1,145,100

(2)%

(15)%

3,229,000

3,093,800

4%

Total South Africa production

7,704,100

7,219,900

9,297,300

11,850,500

12,719,000

7%

(39)%

24,221,300

38,054,400

(36)%

Colombia (Cerrejón)

2,657,600

2,761,500

2,444,300

2,913,600

2,496,700

(4)%

6%

7,863,400

7,728,000

2%

Total Coal production

16,199,100

15,533,200

17,489,400

20,096,600

21,168,600

4%

(23)%

49,221,700

61,725,000

(20)%

 

(1)     Anglo American's attributable share of production.

(2)     Export and domestic production; New Vaal, New Denmark, Kriel and Isibonelo produce exclusively domestic volumes.

(3)     Other production comes from the recovery of saleable product from mineral residue deposits.

(4)     The sale of the Eskom-tied operations was completed on 1 March 2018.

 

NICKEL

 

Nickel

Q3

2018

Q3

2017

Q3 2018

vs.

Q3 2017

Q2

2018

Q3 2018 vs.

Q2 2018

YTD 2018

YTD

2017

YTD 2018

vs.

YTD 2017

Nickel

t

11,500

11,200

3%

10,800

6%

30,900

32,400

          (5%)

                   

 

Nickel output increased by 3% to 11,500 tonnes driven by enhanced stability arising from operational improvements implemented at Barro Alto during 2018.

 

Full year production guidance is unchanged at 42,000-44,000 tonnes.

 

Nickel(1)

Q3

2018

Q2

2018

Q1

2018

Q4

2017

Q3

2017

Q3 2018 vs.

Q2 2018

Q3 2018

vs.

Q3 2017

YTD

2018

YTD

2017

YTD 2018

vs.

YTD 2017

Barro Alto

 

 

 

 

 

 

 

 

 

 

Ore mined

1,640,400

 

1,208,800

 

1,001,500

978,600

1,895,000

36%

(13%)

3,850,700

5,294,200

(27%)

Ore processed

620,900

588,200

447,600

591,500

578,200

6%

7%

1,656,800

1,717,800

(4%)

Ore grade processed - %Ni

1.73

1.67

1.68

1.71

1.72

4%

0%

1.69

1.71

(1%)

Production

9,400

8,600

6,500

9,100

8,900

9%

6%

24,500

25,800

(5%)

Codemin

 

 

 

 

 

 

 

 

 

 

Ore mined

-

-

-

-

-

-

-

-

7,500

-

Ore processed

139,100

150,600

141,100

147,200

152,200

(8%)

(9%)

430,900

439,800

(2%)

Ore grade processed - %Ni

1.69

1.62

1.66

1.70

1.70

4%

(1%)

1.65

1.68

(2%)

Production

2,100

2,200

2,100

2,300

2,300

(5%)

(9%)

6,400

6,600

(3%)

Total Nickel segment nickel production

11,500

10,800

8,600

11,400

11,200

6%

3%

30,900

32,400

(5%)

Sales volumes

10,400

10,800

9,200

10,900

11,300

(4%)

(8%)

30,500

32,100

(5%)

 

(1)     Excludes nickel production from the Platinum Group Metals business unit.

 

MANGANESE

 

Manganese

Q3

2018

Q3

2017

Q3 2018

vs.

Q3 2017

Q2

2018

Q3 2018 vs.

Q2 2018

YTD 2018

YTD

2017

YTD 2018

vs.

YTD 2017

Manganese ore (1)

000 t

888

840

6%

866

2%

2,635

2,506

5%

Manganese alloys(1)(2)

000 t

35

37

(7)%

43

(19)%

119

108

10%

 

(1)     Saleable production.

(2)     Production includes medium carbon ferro-manganese.

 

Manganese ore - Manganese ore production increased by 6% to 887,600 tonnes, a record production quarter.

 

Manganese alloy - Manganese alloy production decreased by 7% to 34,800 tonnes due to a planned maintenance shutdown of the furnace during the quarter.

 

Manganese (tonnes)

Q3

2018

Q2

2018

Q1

2018

Q4

2017

Q3

2017

Q3 2018 vs.

Q2 2018

Q3 2018

vs.

Q3 2017

YTD

2018

YTD

2017

YTD 2018

vs.

YTD 2017

Samancor

 

 

 

 

 

 

 

 

 

 

Manganese ore(1)

887,600

866,200

880,800

979,600

839,500

2%

6%

2,634,600

2,505,900

5%

Manganese alloys(1)(2)

34,800

42,800

41,200

41,100

37,300

(19)%

(7)%

118,800

108,100

10%

Samancor sales volumes

 

 

 

 

 

 

 

 

 

 

Manganese ore

840,400

910,100

824,200

874,900

846,900

(8)%

(1)%

2,574,700

2,570,500

0%

Manganese alloys

30,400

48,400

38,300

37,300

33,500

(37)%

(9)%

117,100

105,100

11%

 

(1)     Saleable production.

(2)     Production includes medium carbon ferro-manganese.

 

EXPLORATION AND EVALUATION

 

Exploration and Evaluation expenditure for the third quarter increased by 25% to $74 million compared to the same period of 2017. Exploration expenditure increased by 24% to $36 million driven by new greenfield opportunities in Brazil (copper-gold), Ecuador (copper-gold) and Canada (diamonds) as well as near-mine drilling. Evaluation expenditure increased by 27% to $38 million driven by increased work at Los Bronces.

 

CORPORATE ACTIVITY AND OTHER ITEMS

 

There were a number of non-operating cashflows that occurred during the quarter or are anticipated prior to year-end. These include:

·     Proceeds of $851 million from the syndication of Quellaveco (that will be used to fund the project's capital expenditure during 2018);

·      De Beers' acquisition of Peregrine Diamonds for $82 million; and

·      the expected completion in Q4 2018 of the acquisition of Glencore's share of the Mototolo platinum joint venture, with an up-front cash payment of approximately $59 million.

In addition, the Group's purchase of shares for employee share schemes continues.

 

Working capital has built up in the quarter and is expected to unwind partially over the remainder of 2018 and be cleared during the first half of 2019. The inventory build-up is driven by:

·      strong mining performance and lower refined volumes due to scheduled smelter rebuilds and maintenance at PGMs;

·      the re-phasing of sales of low value diamonds at De Beers; and

·      rail infrastructure constraints at Kumba Iron Ore.

 

NOTES

·      This Production Report for the third quarter ended 30 September 2018 is unaudited.

·      Production figures are sometimes more precise than the rounded numbers shown in this report.

·     Copper equivalent production shows changes in underlying production volume. It is calculated by expressing each commodity's volume as revenue, subsequently converting the revenue into copper equivalent units by dividing by the copper price (per tonne). Long-term forecast prices (and foreign exchange rates where appropriate) are used, in order that period-on-period comparisons exclude any impact for movements in price.

·      Please refer to page 14 for information on forward-looking statements.

 

For further information, please contact:

 

Media

 

Investors

UK

James Wyatt-Tilby

james.wyatt-tilby@angloamerican.com

Tel: +44 (0)20 7968 8759

 

Marcelo Esquivel

marcelo.esquivel@angloamerican.com

Tel: +44 (0)20 7968 8891

 

South Africa

Pranill Ramchander

pranill.ramchander@angloamerican.com

Tel: +27 (0)11 638 2592

 

Ann Farndell

ann.farndell@angloamerican.com

Tel: +27 (0)11 638 2786

 

UK

Paul Galloway

paul.galloway@angloamerican.com

Tel: +44 (0)20 7968 8718

 

Robert Greenberg

robert.greenberg@angloamerican.com

Tel: +44 (0)20 7968 2124

 

Emma Waterworth

emma.waterworth@angloamerican.com

Tel: +44 (0)20 7968 8574

 

 

 

Forward-looking statements:

 

This announcement includes forward-looking statements. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding Anglo American's financial position, business, acquisition and divestment strategy, dividend policy, plans and objectives of management for future operations (including development plans and objectives relating to Anglo American's products, production forecasts and Ore Reserves and Mineral Resources), are forward-looking statements. By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Anglo American, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

 

Such forward-looking statements are based on numerous assumptions regarding Anglo American's present and future business strategies and the environment in which Anglo American will operate in the future. Important factors that could cause Anglo American's actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, levels of actual production during any period, levels of global demand and commodity market prices, mineral resource exploration and development capabilities, recovery rates and other operational capabilities, the availability of mining and processing equipment, the ability to produce and transport products profitably, the availability of transportation infrastructure, the impact of foreign currency exchange rates on market prices and operating costs, the availability of sufficient credit, the effects of inflation, political uncertainty and economic conditions in relevant areas of the world, the actions of competitors, activities by governmental authorities such as permitting and changes in taxation or safety, health, environmental or other types of regulation in the countries where Anglo American operates, conflicts over land and resource ownership rights and such other risk factors identified in Anglo American's most recent Annual Report. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements.

 

These forward-looking statements speak only as of the date of this announcement. Anglo American expressly disclaims any obligation or undertaking (except as required by applicable law, the City Code on Takeovers and Mergers (the "Takeover Code"), the UK Listing Rules, the Disclosure and Transparency Rules of the Financial Conduct Authority, the Listings Requirements of the securities exchange of the JSE Limited in South Africa, the SWX Swiss Exchange, the Botswana Stock Exchange and the Namibian Stock Exchange and any other applicable regulations) to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in Anglo American's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

 

Notes to editors:

Anglo American is a global diversified mining business and our products are the essential ingredients in almost every aspect of modern life. Our portfolio of world-class competitive mining operations and undeveloped resources provides the metals and minerals to meet the growing consumer-driven demands of the world's developed and maturing economies. With our people at the heart of our business, we use innovative practices and the latest technologies to discover new resources and mine, process, move and market our products to our customers around the world.

 

As a responsible miner - of diamonds (through De Beers), copper, platinum and other precious metals, iron ore, coal and nickel - we are the custodians of what are precious natural resources. We work together with our key partners and stakeholders to unlock the sustainable value that those resources represent for our shareholders, the communities and countries in which we operate and for society at large. Anglo American is re-imagining mining to improve people's lives.

www.angloamerican.com

 

 

 

Legal Entity Identifier: 549300S9XF92D1X8ME43


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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