Publications
Partners
ANGLO American [JSE:AGL], smarting from a five-month strike at its platinum mines, reported a sharp drop in quarterly output of the precious metal that overshadowed higher copper and iron ore production.
Anglo's shares fell as much as 1.8% in early trading after the miner reported a 40% drop in platinum output for the second quarter, the result of lost production at its key mines in South Africa.
The decline, which is expected to damage first-half earnings, masked a slight increase in production of iron ore, the biggest money earner for Anglo last year.
Iron ore production rose 2% to 11.5 million tonnes for the three months ended June 30. Copper output, which contributed about a quarter of the company's earnings last year, rose 6% to 194 400 tonnes.
Numis Securities analyst Cailey Barker said Thursday's production update was "not an awful set of results". He said production of nickel, copper and metallurgical coal was better than had been expected.
"However, the results are dominated by platinum pain," Barker wrote in a note.
Tens of thousands of miners returned to work in June after wage deals ended the longest and most damaging strike in South Africa's history, a dispute that also hit Lonmin [JSE:LON] and Impala Platinum Holdings [JSE:IMP].
Anglo American Platinum [JSE:AMS], a subsidiary of Anglo American and the largest primary platinum producer in the world, warned this week that its first-half earnings would fall by as much as 96%.
Platinum production fell to 358 000 ounces in the second quarter. For the first six months of the year, output of the metal fell 39% to 715 000 ounces.
A painful restructuring has been expected in South Africa's platinum sector, which is struggling with rising costs and depressed prices for the precious metal used for catalytic converters in automobiles.
Anglo American Platinum is reviewing its older and more capital-intensive platinum mines in Rustenburg, with Sibanye Gold [JSE:SGL] seen as a likely buyer.
Anglo American did not provide any details about the possible sale of these mines in its production statement on Thursday. The company declined to comment on the matter when contacted by Reuters.
While platinum output fell sharply, production of Anglo's other precious commodity - diamonds - jumped 7% to 8.5 million carats at its De Beers unit, the world's largest diamond miner by market value.
Anglo said its diamond operations in southern Africa were affected by high seasonal rainfall in first, but recovered in the second quarter.
Anglo's shares were down 1.5% at 1 541 pence at 11:00 on the London Stock Exchange, and 1.81% at R279.95 on the Johannesburg Stock Exchange.
