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Anglo’s Platinum Output Falls 24%, Iron Ore Gains 17%

By · April 19, 2012 · 9:08 am · Leave a Comment

 

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By Carli Cooke

Anglo American Plc (AAL), the biggest platinum producer, said output of the metal fell 24 percent in the first quarter from a year earlier after it shut a plant for maintenance, with fewer safety stoppages stemming the drop.

Refined platinum production retreated to 402,800 ounces in the three months through March because of planned annual maintenance at a converting plant in Rustenburg, which was completed last month, Johannesburg-based Anglo American Platinum Ltd., in which Anglo has a 79.9 percent stake, said in a statement today. Safety stops fell to 13 during the quarter from 21 a year earlier and 32 in the prior three months.

“Amplats delivered a decent operational first quarter,” Dominic O’Kane and Richard Knights, London-based analysts at Liberum Capital Ltd., wrote in an e-mailed note. Output was 35 percent lower than BMO Capital Markets Ltd.’s estimate of 621,000 ounces, analyst Edward Sterck said in a note.

Anglo American, which also reported a 17 percent increase in iron-ore production and a 21 percent advance in copper output for the quarter, is reviewing the platinum unit as it isn’t delivering the returns the company expects, Anglo Chief Executive Officer Cynthia Carroll said Feb. 17.

Anglo American Platinum maintained its target of refining and selling 2.5 million ounces to 2.6 million ounces of the metal this year. It plans to stem cash-cost increases to between 14,000 rand ($1,788) and 14,500 rand per ounce produced, the company said.

Safety Stops

Government-imposed safety stops increased at Anglo and other South African platinum mines in the fourth quarter of last year, also cutting output by Impala Platinum Holdings Ltd. (IMP) and Lonmin Plc. Production from the three account for more than two- thirds of global output of the metal used in devices that cut car emissions and in jewelry.

“A lower number of safety-related stoppages is not necessarily representative for the rest of the industry and we are reluctant to jump to the conclusion that Lonmin and Aquarius Platinum will also benefit,” Liberum’s O’Kane and Knights said.

Anglo’s metallurgical coal output rose 73 percent after recovering from floods in Australia a year earlier. Nickel production doubled as the new Barro Alto operation gradually increases production. Diamond output fell 16 percent “mainly reflecting De Beers’ continued scheduled maintenance and waste stripping activities,” Anglo said in a statement.

Industry Output

Anglo on Nov. 4 agreed to buy an additional 40 percent of De Beers, the biggest producer of diamonds, from the Oppenheimer family for $5.1 billion.

The company said in February it might spend $98 billion on more than 85 projects to double output, betting demand for iron ore, copper, coal and other commodities would grow. The LMEX London Metals Index (LMEX) sank 21 percent in the past year.

BHP Billiton Ltd., the world’s largest mining company, reported a 14 percent increase in iron ore during the quarter yesterday, while Rio Tinto Group’s 9 percent increase in production of the steel-making ingredient missed estimates. Anglo’s iron-ore output rose to 11.7 million tons as it gradually starts up its new Kolomela mine in South Africa.

Anglo and Xstrata Plc (XTA) will struggle to achieve output targets this year at the Collahuasi copper mine, the world’s third-largest mine for the metal, after heavy rain in Chile slowed work, the company said April 16.

Anglo gained 0.8 percent to 2,330 pence by 10:18 a.m. in London, paring its decline in the past 12 months to 27 percent. BHP has retreated 22 percent over the same period.

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