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Anglo American increases production 24% compared to second quarter

The De Beers owner said it has seen “encouraging improvement” in demand for rough diamonds ahead of the holiday selling season

Anglo American PLC -

Anglo American PLC (LON:AAL) has reported a 24% increase in mineral production in the third quarter compared to the second and is currently operating at roughly 95% of its normal mining capacity as some coronavirus (COVID-19) measures still remain in place.

Copper production was even 4% higher than last year as the Collahuasi mine in Chile increased production by 17%.

Iron ore production of 5mln tonnes (mt) at Minas-Rio in Brazil was down 18% year-on-year and 19% on the second quarter, though the pipeline inspection and maintenance was completed successfully with operations restarted in early October. Production at Kumba in South Africa of 9.5mt was down 9% on last year but higher than the second quarter.

Platinum group metals production was broadly flat year-on-year as a strong performance from the open pit Mogalakwena mine in South Africa, with 12% higher palladium production, largely mitigated lower production from the nearby underground Amandelbult.

Anglo American said it has seen “encouraging improvement” in demand for rough diamonds ahead of the holiday selling season, although this did not necessarily represent a sustained recovery.

Chief executive Mark Cutifani hailed the group’s “strong operational recovery” while maintaining “comprehensive measures across our operations” as part of the response to COVID-19.

“Continued strong performance at the Collahuasi copper operation in Chile helped mitigate our overall year-on-year production decrease to 3% compared to Q3 2019, despite planned maintenance at Minas-Rio iron ore in Brazil and excluding the effect of the suspended Grosvenor metallurgical coal operation in Australia,” he said in the production report.

Zambia lawsuit

The announcement came a day after the group's subsidiary Anglo American South Africa Ltd was hit by a class-action lawsuit on behalf of estimated 100,000-plus individuals in the Kabwe District of Zambia who are alleged to be suffering from lead poisoning from the mine formerly known as Broken Hill, which was part-owned by Anglo from 1925 to 1974.

The company said it “will review the claims made and will take all necessary steps to vigorously defend its position.

“By way of context, Anglo American was one of a number of investors in the company that owned the Kabwe mine until the early 1970’s. Anglo American was, however, at all times, far from being a majority owner. Furthermore, in the early 1970’s the company that owned the mine was nationalised by the Government of Zambia and for more than 20 years thereafter the mine was operated by a State-owned body until its closure in 1994.”

Anglo shares were little moved at 1,953.6p in early trading on Thursday.

   --Adds share price and company response--

Quick facts: Anglo American PLC

Price: 2265.5 GBX

LSE:AAL
Market: LSE
Market Cap: £30.88 billion
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