Anglo American PLC (LON:ANGLO) said iron ore production took a hit in the fourth quarter due to issues at the Minas Rio and Kumba mines but the mining giant expects a return to growth in 2019.
The miner restarted operations at the Brazilian Minas Rio iron ore mine in December after halting production earlier in the year due to two leaks.
READ: Anglo American restarts operations at Minas-Rio iron operation in Brazil after discovery of two pipeline leaks
In the fourth quarter ended December 31, production from Minas Rio amounted to 0.2mln tonnes, down 94% on the previous year. The total output from the mine in 2018 was 3.4mln tonnes, an 80% drop on last year.
Kumba production declined 13% to 10.2mln tonnes due to infrastructure constraints, meaning full year production of 43.1mln tonnes was at the lower end of the guidance range. Anglo said it cut production at Kumba to offset stock levels at the mines resulting from Transnet rail constraints.
For the 2019 financial year, Anglo expects production at Kumba to reach 43-44mln tonnes and output from Minas Rias of 18-20mln.
Total quarterly prodcution up 3%, led by copper
Total production in the fourth quarter on a copper equivalent basis rose 3%. Excluding the impact of halted operations at its Minas Rio project, total production in the fourth quarter increaesd 7%.
The copper business was the strongest performer in the fourth quarter with production up 23% to 183,500 tonnes with growth across the Los Bronces, Collahuasi and El Soldado mines.
Full year copper sales came to 671,000 tonnes at an average price of US$6,239 per tonne, lower than the average London Metal Exchange price of US$6,526 due to the impact of provisional pricing.
Total copper production for the year amounted to 668,300 tonnes, up 15% on the prior year, but Anglo expects output to fall to 630,000-660,000 tonnes in 2019.
RBC Capital Markets said: "The lower realised pricing will likely temper some of the positives from the better production, however our key takeaway remains the solid operating numbers that Anglo has been generating through 2018 which we would expect to continue into 2019 if our visit to the copper operations last November was any indication."
De Beer diamond production at lower end of full year guidance range
The group’s De Beer’s diamonds business delivered a 12% increase in production to 9.1mln carats, boosted by a ramp up at the Orapa mine, but full year output of 35.3mln carats was in the lower end of the production guidance range of 35-36mln carats.
Full year rough diamond sales volumes dropped 4% 33.7mln carats, reflecting less demand for lower value rough diamonds in the second half of 2018.
In 2019, diamond production is forecast to fall to 31-33mln carats due to the decision to exit from the Venetia open pit in order to focus on underground mines.
Elsewhere, metallurgical coal production increased by 15% to 5.6mln tonnes in the quarter, driven by productivity improvements at Moranbah and the continued ramp up at Grosvenor. The total production for the year grew 11% to 21.8mln tonnes.
However, thermal coal production fell 9% to 6.9mln tonnes in the quarter and dropped 2% in the year to 28.6mln tonnes due to the impact of rain at Cerrejon.
The 2019 production guidance for metallurgical coal is 22-24mln tonnes while thermal coal production in 2019 is expected to reach is 26-28mln tonnes.