Anglo reports strong third quarter production

| Monday October 25, 2010 00:00

Anglo American subsidiary Anglo Platinum (Angloplat) reported an 11 percent increase in refined platinum production to 697, 000 oz in the quarter ended September, compared with last year, which was also a 26 percent improvement on production figures for the previous quarter.

This was mainly due to some higher-grade ounces being recovered and a 4 percent increase in labour productivity.All the company's platinum operations are located in South Africa, which was plagued by labour-related issues and safety stoppages during the June quarter.

Angloplat expected to achieve its full-year target of 2,5-million ounces

'Platinum demand remains firm as vehicle production continues to increase, while the platinum price has also been sustained well above the company's average forecast,' said the miner.

But the strength of the South African rand had mitigated the positive effects of rising dollar-based prices on the basket of platinum group metals.

'If the rand continues to strengthen for a sustained period of time, Anglo Platinum's revenue generation and cash generation ability will be negatively impacted,' the company warned. Refined production of palladium increased by 20%, while rhodium was slightly down by 3%.

Further, Anglo reported that while the overall iron-ore production of 11,8-million tons was flat compared to last year, its South African iron-ore subsidiary Kumba Iron Ore was able to increase production from its Thabazimbi mine by 84% compared with the second quarter's 700, 000 t. This was inline with the expected increase in demand from the steel giant ArcelorMittal South Africa, which lost its right to a 26% stake in the Sishen mine earlier this year.

Meanwhile, the Sishen mine was only able to produce 10,1-million tons, which was 600, 000 t lower than the third quarter of last year, owing to unexpected crusher maintenance that needed to be done at the DMS plant.

However, production from the mine's jig plant continued to increase and the ramp-up of the plant, planned to produce up to 13-million tons, was progressing well. The jig plant accounted for 35% of Sishen's production during the third quarter.

'Demand for iron-ore continues to be strong in China, as well as Kumba Iron Ore's traditional markets of Europe, Japan and South Korea. However, the company's export sales in the quarter were 8,3-million tons, a decrease of 12 percent compared to 2009 and 13 percent compared to the prior quarter, largely as a result of lower volumes shipped due to rail logistics difficulties. 'Production of manganese ore increased by 84 percent and manganese alloys increased by 220 percent, as market conditions continued to recover.

Meanwhile, Anglo said that it had boosted diamond production in an effort to cater for the holiday season. Production increased to nine-million carats during the third quarter.

Anglo's subsidiary, De Beers, said that the higher production was mainly owing to improved recoveries by the company's South African and Botswana operations.

Nickel production for the three months ended September 30, 2010, was up 16 percent to 5 700 t, while additional production from the 36, 000 t/y Barro Alto project was expected to more than double the company's nickel production. The project was 98% complete at the end of the third quarter 2010, while first production was expected by the first quarter 2011.

Anglo's Australian operations did well during the period, producing four-million tons of metallurgical coal, an increase of 26 percent compared with the same quarter last year. Thermal coal production, mainly generated from South Africa, was slightly down by 2 percent to 22,2-million tons.

Copper production decreased by 9 percent to 153 400 t for the three months ended September 30, 2010-(Reuters)