London - Miner Anglo American [JSE:AGL] reported increased
volumes in five of its seven key commodities while bracing for the full impact
of strikes on platinum and iron ore output.
Anglo’s labour woes - compounded by nagging concerns over
its Minas Rio iron ore project in Brazil and operational trouble in Chile -
have revived long-standing concerns among some investors over the group’s
exposure to South Africa.
Its management is already under fire over the group’s
underperforming share price.
Labour troubles across the mining sector
spread to Anglo Platinum [JSE:AMS], the world’s top producer of the precious metal, last
month, just before the end of the current reporting period.
Weeks later, they hit Anglo’s Kumba Iron Ore [JSE:KIO] unit, which
alone accounted for almost half the group’s operating profit in the first half.
Kumba’s Sishen mine has since begun to ramp up operations,
but Amplats workers have not yet returned to Amplats’ Rustenburg, Union and
Amandelbult mining operations.
Anglo said iron ore production for the three months to the
end of September rose 14% to 12.5 million tonnes. The illegal strike at its
Sishen began only at the start of October.
Over the month so far, though, the key miner
has lost 2.2 million tonnes of finished product.
Platinum production, meanwhile, was flat, again in line with
forecasts, at 649,000 ounces, though Anglo cut its production target for the
year, trimmed planned spending and warned unit costs increased by 8% in
he third quarter.
The strike caused the loss of 42,000 ounces of equivalent
refined platinum in the third quarter, and an additional 96,300 ounces from
disruption so far this month.
Copper, however, was a brighter spot for Anglo, despite
ongoing operational trouble at Chile’s Collahuasi, where it has now intervened
with partner Xstrata to resolve operational, management and safety concerns.
The miner produced 157,300 tonnes of copper, up 12% and
broadly in line with analysts’ expectations, helped by the ramp-up of Los
Bronces and despite a 40% drop in its share of production Collahuasi.
On the coal side, export metallurgical coal production
increased by 12% to 4.5 million tonnes, and export thermal coal production from
South Africa rose 10% to 4.6 million tonnes.
Diamond production, as expected, dropped by almost a third
on last year to 6.4 million carats, largely due to poor market conditions as a
lack of credit holds back buyers of rough diamonds and the polished market
Anglo shares were up 1% after the results, which
analysts were broadly in line with expectations, changing hands at 1,896 pence
at 07:05 GMT, against a flat FTSE 100 and a 0.6% rise in the broader mining