Mines in Covid-19 trouble spots kept Anglo American’s (AAL) year on track in the June quarter, with copper and iron ore production beating last year’s efforts. The miner had major year-on-year declines in platinum group metal (PGM), diamond and coal production in the quarter.
The positive copper numbers were led by a record quarter at the Collahuasi mine in Chile, with 75,700 tonnes (t), a 38 per cent year-on-year increase. Fellow major operation Los Bronces saw a 12 per cent year-on-year drop to 80,700t because of water shortages. Unions in Chile have raised concerns at other major copper mines over workers being exposed to Covid-19.
The Minas Rio iron ore mine in Brazil, which is having its own Covid-19 struggles saw a 5 per cent increase in production, to 6.2mt.
The average iron ore price of $88(£69)/t for the half will be important for Anglo’s earnings, with platinum group metals (PGM) and diamond production and sales well down because of Covid-19. The copper price has also recovered in recent weeks, hitting $6,500/t for the first time in over a year this week over the Chile supply concerns and Chinese demand.
Anglo’s PGM division had the additional challenge of production problems in South Africa, on top of the pandemic shutdown. This, and the slowdown of world diamond sales, contributed to a $1.3bn working capital build in the June quarter. BMO said refined palladium production of 147,400 ounces (oz) was 109 per cent ahead of its forecast, despite being falling two-thirds year-on-year in the June quarter.
Despite these issues, Anglo has maintained 2020 guidance for all materials except metallurgical coal, which it has reduced to 16-18mt from 19-21mt.
