Source - Alliance News

Anglo American PLC reported on Thursday it had downgraded its full-year production guidance for its major commodities and indicated that its first-quarter performance was ‘challenging’.

In Johannesburg, Anglo American shares shed 5.4% to R 748.87 on Thursday morning, and they slumped by 6.4% to 3,776.00 pence in London.

Anglo American said copper production declined by 13% to 140,000 tonnes for the first quarter ended March, from 160,000 tonnes in the same quarter last year due to planned lower grades.

The miner maintained its 2022 copper production guidance at a range of between 660,000 tonnes and 750,000 tonnes, up from 647,200 tonnes in 2021.

Iron ore production dropped 19% yearly to 13.2 million tonnes on the quarter, from 16.2 million tonnes as high rainfall and plant issues affected both Kumba Iron Ore Ltd and Minas-Rio. This group production figure includes input from Kumba, in which Anglo American has a 65% stake.

Full-year iron ore production guidance was lowered to between 60 million tonnes and 64 million tonnes, from 63 million tonnes to 67 million tonnes previously. Again, this guidance includes Kumba’s operations. Output had amounted to 63.8 million tonnes in 2021.

Meanwhile, Kumba reported on Thursday its production slipped by 21% to 8.3 million tonnes in the first quarter ended March 31 from 10.6 million tonnes in the similar quarter last year. This decrease was due to high rainfall and equipment reliability caused by continued spares supply challenges, both of which impacted the availability of plant feedstock.

Total sales at Kumba reduced by 8% to 9.5 million tonnes from 10.3 million tonnes, as a result of rail constraints and low levels of available stock at Saldanha Port.

Kumba trimmed its full-year guidance to a range of between 38 million tonnes and 40 million tonnes, from the previous estimate of 39 million tonnes and 41 million tonnes.

Anglo American, meanwhile, said metallurgical coal production slumped by 32% to 2.2 million tonnes in the first quarter, compared to 3.3 million tonnes in the prior year due to the delayed longwall move at Moranbah and the end of production from Grasstree. The suspended Grosvenor operation and Aquila life-extension project both started operations in mid-February. Operations at Moranbah had been suspended following a fatal underground incident in late March.

For 2022, the coal production estimate was marked down to within a range of 17 million tonnes and 19 million tonnes, down from the previous prediction of 20 million tonnes and 22 million tonnes. Coal output was 14.9 million tonnes in 2021.

In the first quarter, rough diamond production sparked, rising by 25% to 8.9 million carats from 7.2 million carats, reflecting a strong operational performance and lower rainfall impact, primarily in Botswana.

Full-year diamond production guidance was kept at a range within 30 million carats and 33 million carats, compared to 32.3 million carats in 2021.

Anglo American Chief Executive Mark Cutifani said production in the normally slower first quarter was 10% lower than the same period in 2021, taking a hit from peak Covid-related absenteeism, high rainfall affecting operations in South Africa and Brazil, and safety and other operational challenges at metallurgical coal and iron ore operations.

‘This challenging start to the year highlights the importance of adhering to our Operating Model to stabilise performance after the necessary disruptions of the last two years as we adapted to - and now learn to live with - Covid,’ Cutifani said.

‘As a result, we are updating our platinum group metals, iron ore and metallurgical coal volume guidance for the full year, and our unit cost guidance for most product groups to also reflect up to date exchange rates and the inflationary pressure on many input prices, particularly diesel,’ he said.

In a separate filing on Thursday, Anglo American Platinum Ltd, a subsidiary of Anglo American, reported that production from its platinum group petals operations decreased by 6% to 956,000 ounces for the first quarter ended March, from 1.0 million ounces in the same quarter last year primarily due to high rainfall at Mogalakwena.

Amplats revised down its full-year PGM production forecast to between 3.9 million ounces and 4.3 million ounces, down from 4.1 million ounces and 4.5 million ounces in the previous estimate. In 2021, PGM output was at 4.3 million ounces.

PGMs sales volumes fell by 26% to 838,200 ounces in the first quarter, in line with lower refined production, from 1.3 million ounces last year.

Amplats shares were down 1.4% to R 1,982.14 on Thursday in Johannesburg.

Kumba’s stock lost 8.1% to R 608.50 in Johannesburg.

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