Diamonds are Anglo American's best friend as output rise beats forecasts

Diamonds are Anglo Americans best friend as output rise beats forecasts
Aside from diamonds, Anglo American's production also benefitted from iron ore.

London - Ramp-up of Gahcho Kue mine in Canada increases production of precious gem by 22%

By Reuters

Published: Thu 25 Jan 2018, 7:26 PM

Last updated: Thu 25 Jan 2018, 9:29 PM

Anglo American beat expectations on Thursday with a five per cent increase in production in 2017, driven by increases in diamond and iron ore output, while base metal copper stagnated.
Many miners have struggled to maintain output as ore bodies have aged and exploration budgets collapsed as a result of the commodity markets downturn of 2015-16.
Copper is particularly in demand because of its use for both old and new technology, such as electric vehicles.
Anglo's platinum and palladium, iron ore and coking coal output fell between four and eight per cent in the fourth quarter and were flat or higher for the full year. But the ramp-up of its Gahcho Kue mine in Canada increased Anglo's diamond production by 22 per cent.
Anglo chief executive Mark Cutifani said in a statement the rise in overall output "was achieved despite the removal of unprofitable and higher cost platinum and metallurgical coal".
BMO Capital Markets in a note said the results were solid and it expected the company to continue focusing on incremental improvements to drive productivity.
South Africa, Anglo's central focus, has had particular issues with efficiency at deep, old mines and platinum prices have suffered from falling demand because of the shift away from diesel cars, which use the metal to reduce emissions.
Anglo mothballed its Bokoni mine, which contributed to a four per cent fall in platinum output in the last quarter.
Platinum prices peaked at above $2,000 an ounce a decade ago and hit seven-year lows at the start of 2016. Since then they have recovered by around 25 per cent.
Productivity improvements boosted iron ore output at South Africa's Kumba by eight per cent for the full year, but in Brazil, where annual output fell four per cent, Anglo is still negotiating for a licence to increase iron ore production.
The perception that copper is one of the most sought-after minerals has pushed prices more than 50 per cent higher since the lows of late 2015/early 2016.
Kazakh-focused copper miner Kaz Minerals is among those bringing on new production and announced an 80 percent full-year increase in output to 259,000 tonnes.
Analysts said the results were below expectations following maintenance and the realisation some of its copper ore was lower grade than previously thought.
Kaz Minerals share price was down more than three per cent by 0900 GMT, while Anglo American was trading around flat, in line with the broader index.

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