Anglo boots diamond and iron-ore production

Johannesburg - Anglo American said diamond production rose in the third quarter, as the industry continued to rebound.

The company maintained full-year forecasts for most of the commodities it produces, while saying its Kolomela iron-ore mine will marginally exceed its goal.

Third-quarter output of the gems climbed 4% to 6.3 million carats from 6 million carats a year earlier, the London-based company said in a statement on Tuesday. While the increased output reflects improved market conditions, Anglo remains cautious about the outlook, it said.

The century-old company is trying to engineer a turnaround after a slump in commodity prices sent its stock plummeting 75% last year.

The producer plans to sell more than half its mines and wants to exit the iron-ore and coal business to focus on its best assets - diamonds, platinum and copper.

It’s the best performer in the FTSE 100 Index so far this year, more than tripling in the period.

The diamond industry has rebounded this year after Anglo’s De Beers unit and Russian rival Alrosa PJSC cut supply in 2015. While rough-diamond prices gained 7.4% this year, De Beers’s management and other executives had cautioned that the final six months of 2016 could be more difficult.

The company maintained its full-year goal of 26 million carats to 28 million carats.

Iron-ore output at Minas-Rio rose 53% from a year earlier, while Kumba’s production in South Africa increased 3%.

Sishen is set to produce 27 million tonnes of iron ore as previously forecast while Kolomela may marginally exceed the prediction for about 12 million tonnes.

The Brazilian iron-ore operation is forecast to produce 15 million to 17 million tons, as before.

"Results from Anglo American this morning were broadly positive, as the bulks posted strong performances," Paul Gait, an analyst at Sanford C. Bernstein, said in a note to investors.

Anglo rose as much as 4.7% to the highest closing level since May 2015 and traded at 1 114.50 pence a share by 8:35 a.m. in London. The FTSE 350 Mining Index advanced 2.6%.

Copper production from retained operations fell 9% to 139 800 tonnes after strikes at its Los Bronces mine in Chile. The company maintained its full-year output goal of 570 000 to 600 000 tonnes.

Anglo’s platinum production rose 1% to 619 000 ounces, while nickel output surged 66% to 11 300 tonnes.

The company trimmed it coking-coal target to 20.5 million tonnes to 21.5 million tonne after selling its Foxleigh mine.

Anglo kept the prediction for platinum output at 2.3 million to 2.4 million ounces. The forecast for full-year nickel output was maintained, while the estimate for thermal-coal exports from South Africa and Colombia was kept at 28 million to 30 million tonnes.