ANGLO American production rebounded in the third quarter after the Covid-19 hit interruptions of the previous three-month period.
The stand-out features were Anglo American Platinum (Amplats) which said its platinum group metal (PGM) production would be towards the high end of guidance, whilst Kumba Iron Ore drew down on stocks as maintenance at the state-owned logistics firm, Transnet, was moved to the fourth quarter.
The overall year-on-year production decrease was limited to -3% owing to a strong performance at Anglo’s Collahuasi copper mine in Chile. It offset a month’s of maintenance at Minas Rio, an iron ore mine in Brazil, and minimal production at Grosvenor in Australia which was suspended following an accident that injured employees.
“Anglo American has continued its strong operational recovery with a 24% increase in production compared to Q2,” said Mark Cutifani, CEO of Anglo American in a statement. The group was currently at about 95% of normal capacity.
Amplats reported sustained high average prices for palladium and rhodium but on the production front there was evidence of it continuing to work through the effects of the smelter failures from earlier this year. Anglo Converter Plant B (ACP B) had been recommissioned, but checks on its stability resulted in interruptions. Repairs to the damaged ACP A were on schedule for year-end, the company said.
“The stoppages have resulted in a slight increase in the work-in-progress inventory between Q2 2020 and Q3 2020,” Amplats said. “Furthermore, the mix of metals refined was impact by the strong recovery of mining activities at Mogalakwena, which is palladium-rich.”
The platinum producer’s output guidance for 2020 was revised to between 1.7 and 1.8 million ounces of platinum (previously 1.5 to 1.7 moz), and 1.1 to 1.2 million oz of palladium (1.0 to 1.2 moz).
Anglo’s iron ore production was unchanged at 37 to 39 million tons (Mt) for Kumba Iron Ore and between 22Mt and 24Mt for Minas Rio. Kumba production fell in the three months 9% to 9.5Mt comprising of 9% lower production from Sishen and 10% lower production at Kolomela to some 6.5Mt and 3Mt respectively.
Production was reduced in response to both elevated finished stock levels at the end of the second quarter due to Covid-related rail and port constraints, and in anticipation of the annual rail and port maintenance scheduled for the fourth quarter, Anglo said. “Consequently, stock levels were drawn down to 5.4Mt from 6.2Mt as at June 30. Reduced levels of production supported additional focus on scheduled maintenance and operational improvement,” it said.
Thermal coal production guidance was reduced 10% owing to an ongoing strike at Cerrejon, the Colombian operations in which Anglo American is a shareholder.
As reported previously, Anglo’s 85%-owned De Beers said it had noted a return to market of rough diamond purchasing. Rough diamond sales totalled 6.6 million carats from three sights compared with 0.3 million carats from two sights in the second quarter. Sales from three sights in the third quarter of 2019 totalled 7.4 million carats. It was still too early on to comment on the timing or scale of any recovery, the group said.