Anglo American (LON:AAL) has made further progress with its deleveraging programme, selling its niobium and phosphates businesses for US$1.5bn to China Molybdenum. The key assets are located in Brazil and include mining and processing facilities as well as undeveloped mineral deposits.
Although there have been rumours of a sale for some time the niobium mine is one of the top three globally and represents a key strategic purchase by the Chinese, in our view. AAL is targeting net debt of below US$10bn for the end of 2016 from US$12.9bn at year end 2015.
KAZ Minerals (KAZ LN)
Kaz Mineral (KAZ LN) has released solid Q1 2016 production results despite the seasonal weakness. Copper cathode production of 21.5kt was up 13% YoY although down 5% QoQ. Overall average ore grades fell sharply due to the commencement of ore extraction at Bozshakol and Aktogay with the former contributing 1.1kt Cu since February. Consequently ore mined was up tenfold YoY and 32% QoQ. Copper grades meanwhile were down 26% QoQ and 72% YoY to 0.65%.
The impact of the increased mining is likely to be a negative impact on costs and KAZ remains the UK listed copper play with the highest operational leverage to copper prices.