Interim Management Statement

RNS Number : 4181R

Anglo American PLC

30 April 2009

 



News Release

30 April 2009

Anglo American plc Interim Management Statement Production Report for the first quarter ended 31 March 2009

Overview

• Platinum equivalent refined production in line with full year target; planned higher rates of smelting for the balance of 2009 are in line with expected refined platinum production of 2.4 million ounces for the year

• Iron ore production in line with previous quarter and up 22% on the first quarter of 2008 as Sishen jig plant continues to ramp up

• Coal and diamond production reduced in response to lower anticipated demand

• Copper production decreased due to lower ore grades at Los Bronces, partly offset by higher production at Collahuasi

• Balance sheet strengthened through series of measures to provide financial flexibility:

o               $4.7 billion of new financing secured

 

§           $2 billion bond issued - strong demand and priced at bottom of range

§           $1.7 billion convertible bond issued – strong demand, 35% conversion premium and priced below indicative range at 4% coupon

§           $1 billion BNDES loan finalised to finance Minas-Rio iron ore project

 

o               $1.8 billion of total cash proceeds from sale of residual stake in AngloGold Ashanti – sold at a strong price

 

o               Undrawn committed bank facilities and cash increased to over $9 billion

Anglo American has taken a series of proactive measures in response to the current economic environment and is positioned strongly to weather those conditions and to deliver long term shareholder value through its existing operations and its well funded growth pipeline of world class development projects.

Results for the half year to 30 June 2009 will be announced on 3 August 2009.

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

PLATINUM		Mar	Mar	Mar Q09	Mar Q09
		2009	2008	vs.	vs.
		QTR	QTR	Mar Q08	Dec Q08
Refined
Platinum	000 oz	404	429	-5.8%	-52.0%
Palladium	000 oz	235	246	-4.5%	-47.9%
Rhodium	000 oz	74	58	27.6%	-30.8%
Nickel	t	3,300	3,700	-10.8%	-19.5%
Equivalent refined
Platinum	000 oz	613	517	18.6%	-6.1%

Platinum - Mining operations performed in line with the full year production target during the first quarter, with equivalent refined platinum ounces from mining and purchase of concentrate activities attributable to Anglo Platinum increasing 18.6% to 613,000 ounces compared to the first quarter of 2008.

Refined production of 404,000 ounces in the first quarter decreased by 5.8% compared to the first quarter of 2008. Refined production was reduced by shutdowns for furnace maintenance at the Waterval and Polokwane smelters. At the Polokwane smelter, the complete set of furnace lower copper coolers, in service since 2005, was replaced. Higher than normal refined metal stocks at the start of the quarter avoided any disruption of supply to the market.  

Rhodium production, which was higher than the first quarter of 2008, was not impacted by the shutdown at the Waterval smelter due to rhodium's longer processing time. Palladium and nickel production were lower in the period relative to the first quarter of 2008 for the same reasons associated with platinum production.

Following the decision in December 2008 to produce 2.4 million ounces of refined platinum in 2009, a number of cost and value management initiatives were implemented. Headcount has been reduced by 4,195 since December 2008, in line with the announced reduction of 10,000 employees by the end of 2009. Mining output at Mogalakwena has been reduced by 50%, with full concentrating throughput being maintained from surface ore stockpiles. At Siphumelele Mine's Bleskop shaft in Rustenburg, the process to suspend mining operations has been initiated and unions are being consulted.  

Good progress was made in the period with the efficiency enhancing operational restructuring at the Rustenburg and Amandelbult operations. The restructuring was undertaken to establish separate entities that are more easily manageable with an increased focus on costs and productivity.

BASE METALS		Mar	Mar	Mar Q09	Mar Q09
		2009	2008	vs.	vs.
		QTR	QTR	Mar Q08	Dec Q08
Copper	t	151,000	159,700	-5.4%	-12.2%
Nickel	t	4,500	4,600	-2.2%	-6.3%
Zinc	t	82,800	82,900	-0.1%	-0.1%

Copper - Production for the quarter was lower than Q1 2008 due to lower production at Los Bronces as a result of the new mining plan which included lower grade areas. This was partly offset by increased production at Collahuasi due to higher operational stability at the concentrator plant and improved SAG mill utilisation.

Production was lower than Q4 2008 due to the lower grades and recoveries at Los Bronces and, at Collahuasi, due to a failure at the Coposa Norte water pipeline, climate related energy cuts and lower primary crusher availability.

Nickel - Production for the quarter was lower than Q1 2008 due to maintenance stoppages at the reduction furnace and lower grades at Codemin. 

Production for the quarter was lower than Q4 2008, due to the suspension of operations from 23rd December 2008 to 28th January 2009 at Loma de Níquel, following the expiration of the slag deposition permit on 23rd November 2008, which has still not been renewed. A temporary alternative operating and deposition approach was developed which enabled operations to restart on 28th January.

Zinc - Year to date production is broadly in line with the previous quarter and prior year. 

FERROUS METALS & INDUSTRIES		Mar	Mar	Mar Q09	Mar Q09
		2009	2008	vs.	vs.
		QTR	QTR	Mar Q08	Dec Q08
Iron ore	000 t	9,992	8,190	22.0%	-1.0%
Manganese Ore	000 t	293	666	-56.0%	-48.1%
Manganese Alloys	000 t	42	77	-45.5%	-41.7%
Scaw Metals
South Africa products	000 t	179	206	-13.1%	+7.2%
International products	000 t	219	213	+2.8%	+1.9%

Iron ore - Total iron ore production increased 22% in the first quarter compared to the previous year, to 10 million tonnes. This was mainly due to the additional production delivered by the Sishen Mine's jig plant, which continues to ramp up. Kumba remains on schedule to achieve an annualised rate of 13Mtpa from the Jig plant during the fourth quarter of 2009. Finished product stockpiles have increased to 7.5Mt due to domestic iron ore sales falling below contractual volumes and difficult export market conditions. Kumba continues to monitor stock levels and market developments and, should conditions deteriorate, production cuts will be considered.

Manganese - Production of both manganese ore and alloy decreased versus all comparative periods, as previously announced production cuts were implemented in response to weak market demand.

Scaw Metals - Production of South African steel products decreased 13.1% compared to Q1 2008 due to lower demand for rolled, cast and wire rod products, and increased 7.2% versus Q4 2008 due to the December seasonal plant shutdowns. Production of International steel products increased 2.8% versus Q1 2008 and 1.9% versus Q4 2008.

COAL		Mar	Mar	Mar Q09	Mar Q09
		2009	2008	vs.	vs.
		QTR	QTR	Mar Q08	Dec Q08
Total
Eskom	000 t	8,438	8,363	+0.9%	-10.9%
Thermal (1)	000 t	11,071	11,163	-0.8%	-9.6%
Metallurgical	000 t	2,713	2,773	-2.2%	-31.4%
South Africa
Eskom	000 t	8,438	8,363	+0.9%	-10.9%
Thermal	000 t	5,112	4,798	+6.5%	-10.4%
Metallurgical	000 t	220	216	+1.9%	-3.9%
Australia
Thermal	000 t	3,211	3,374	-4.8%	-20.7%
Metallurgical	000 t	2,315	2,468	-6.2%	-32.1%
South America
Thermal	000 t	2,748	2,828	-2.8%	+3.6%
Canada
Metallurgical	000 t	178	89	100.0%	-43.6%

(1) Q1 2008 includes contribution from Peace River Coal in Canada which produced 163,000 t of thermal coal in the period

Coal - Demand for metallurgical and thermal coal weakened across many markets. In order to align production with demand, production was reduced in Q1 2009 versus the previous quarter, but is in line with production for Q1 2008.

Eskom coal - Production was 10.9% lower than Q4 2008, in line with Eskom demand, with power station stock levels approaching their relative capacities.

Thermal coal - Production was 9.6% lower than Q4 2008 due to reduced demand for both domestic and export thermal coal. In Australia, this reduced demand has been accommodated through selective stock building of premium grade coals and opportunistic maintenance of key equipment at mining operations.

Metallurgical coal - Production was 31.4% lower than Q4 2008 in response to lower demand from steel customers. This production cut was achieved through closure of higher cost mines in Australia and selective restructuring of mining activities at core operations.

DIAMONDS - Carats recovered		Mar	Mar	Mar Q09	Mar Q09
		2009	2008	vs.	vs.
		QTR	QTR	Mar Q08	Dec Q08
Total	000 Carats	1,082	11,774	-90.8%	-90.0%

In light of lower market demand, De Beers reduced production at all its mines through a combination of production holidays and reducing shifts worked, allowing sales from existing inventories in order that sales demand was met. Second quarter 2009 production will increase as the major Debswana mines, which accounted for over 65% of total De Beers production in 2008, recommenced production in April 2009.

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 Ended			% Change
						Mar Q09	Mar Q09
			Mar	Dec	Mar	vs.	vs.
			2009	2008	2008	Dec Q08	Mar Q08
Platinum (refined)		000 oz	404	842	429	-52.0%	-5.8%
Platinum (eq. refined) (1)		000 oz	613	653	517	-6.1%	18.6%
Palladium		000 oz	235	451	246	-47.9%	-4.5%
Rhodium		000 oz	74	107	58	-30.8%	27.6%
Nickel (Platinum)		t	3,300	4,100	3,700	-19.5%	-10.8%
Coal - Eskom		000 t	8,438	9,466	8,363	-10.9%	0.9%
Coal - thermal		000 t	11,071	12,247	11,163	-9.6%	-0.8%
Coal - metallurgical		000 t	2,713	3,955	2,773	-31.4%	-2.2%
Copper		t	151,000	172,000	159,700	-12.2%	-5.4%
Nickel		t	4,500	4,800	4,600	-6.3%	-2.2%
Zinc		t	82,800	82,900	82,900	-0.1%	-0.1%
Lead		t	14,600	14,400	17,100	1.4%	-14.6%
Iron ore (2)		000 t	9,992	10,098	8,190	-1.0%	22.0%
Manganese Ore (3)		000 t	293	565	666	-48.1%	-56.0%
Manganese Alloys (3) (4)		000 t	42	72	77	-41.7%	-45.5%
South Africa Steel products		000 t	179	167	206	7.2%	-13.1%
International Steel products		000 t	219	215	213	1.9%	2.8%
Diamonds recovered		000 cts	1,082	10,795	11,774	-90.0%	-90.8%

(1) Equivalent refined platinum production

(2) Includes contribution of production of 669,000 tonnes from the Amapá iron ore system in Brazil in Q1 2009 and 546,000 tonnes in Q4 2008.

(3) Saleable production

(4) Production includes Medium Carbon Ferro manganese

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]

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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