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Anglo increasingly focused on future-enabling decarbonising metals

Anglo increasingly focused on future-enabling decarbonising metals
Mining News Pro - The portfolio and growth investments of diversified mining company Anglo American are increasingly focused on future-enabling metals and minerals that are critical to decarbonising energy and transport and to meeting consumers' growing needs, from luxury to everyday life.
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This was stated by Anglo American CEO Mark Cutifani on Tuesday, when he reported 20% higher overall production and a transition out of thermal coal that is ahead of schedule.

"We have delivered a solid operational performance supported by comprehensive Covid-19 measures to help safeguard the lives and livelihoods of our workforce and host communities,” said Cutifani in a media release to Mining Weekly.

In the three months to June 30, De Beers’ rough diamond production soared by 134% to 8.2-million carats, platinum group metals (PGMs) production leapt 59%, iron-ore production was up 6%, and copper production lifted 2% higher.

Diamond production in Botswana soared 214% to 5.7-million carats but fell by 6% to 0.3-million carats in Namibia on planned maintenance of the Mafuta vessel and the demobilisation of another vessel.

South Africa diamond production increased by 130% to 1.3-million carats on the treatment of higher grade ore from the final cut of the Venetia opencast mine.

Production in Canada rose 14% to 0.9-million carats, primarily reflecting the impact of the Covid-19 measures implemented in the second quarter of last year.

Consumer demand for polished diamonds continued to recover, leading to strong demand for rough diamonds from midstream cutting and polishing centres, despite the impact on capacity from the severe Covid-19 wave in India during April and May. Rough diamond sales totalled 7.3-million carats from two sights, reflecting the impact of the reduced Indian midstream capacity.

The consolidated average realised price in the first half of this year increased by 13% to $135/ct compared with the first-half of last year, driven by an increased proportion of higher value rough diamonds sold. While the average price index remained broadly flat, the closing index increased 14% compared to the start of 2021, reflecting tightness in inventories across the diamond value chain as well as positive consumer demand for polished diamonds.

Full-year production guidance has been tightened to 32-million to 33-million carats compared with the previous 32-million to 34-million carats.

De Beers is on a 100% basis, except for the Gahcho Kue joint venture in Canada, which is on an attributable 51% basis.

COPPER PRODUCTION
The 2% uplift of copper production to 169 700 t was the result of a strong plant performance at Los Bronces, partly offset by lower grade at Collahuasi, which are both in Chile.

Production from Los Bronces increased by 5% to 84 400 t, with higher water availability as a result of water-management initiatives resulting in a 32% increase in plant throughput.

At Collahuasi, attributable production fell 2% to 74 300 t on slightly lower grade and copper recovery. El Soldado’s output in Chile rose 6% to 11 000 t.

First-half copper sales volumes were impacted by temporary port closures in Chile owing to heavy tidal swells limiting vessel availability in the last two weeks of June. First-half prices averaged 460c/lb.

Production guidance has been tightened to 650 000 t to 680 000 t subject to water availability and the extent of any Covid-related disruption.

PLATINUM GROUP METALS
Own-mined PGMs production increased by 65% to 709 200 oz, following a recovery from the Covid lockdowns. In addition to Mogalakwena’s 11% production lift, Amandelbult’s 185 300 oz was 270% higher and the 107 800 oz of the joint ventures was 112% higher. The purchase of concentrate was 48% higher at 348 700 oz.

Refined production was 233% higher at 1 353 700 oz on the Anglo Converter Plant (ACP) Phase A unit’s November 2020 start-up. ACP Phase B’s rebuild is on schedule for completion in the second-half of this year.

Sales volumes increased by 162% at the average strong realised basket price of $2 884 per PGM ounce boosted by rhodium and the minor metals, partly offset by higher than normal sales volumes of lower priced ruthenium.

Production guidance of metal in concentrate has been tightened to a maximum of 4.4-million ounces, as has refined production to a maximum of five-million ounces.

Metal-in-concentrate production is expected to be up to two-million ounces of platinum, a maximum of 1.40-million ounces of palladium and a maximum of one-million ounces of other PGMs and gold. Refined production is expected to be up to 2.3-million ounces of platinum, up 1.60-million ounces of palladium and not more than 1.1-million ounces of other PGMs and gold.

IRON-ORE
Iron-ore production in the three months to June 30 rose 6% to 15.7-million tonnes, driven by a 14% increase at Kumba Iron Ore in the Northern Cape but partly offset by a 5% fall at Minas-Rio in Brazil.

Kumba’s 14% production increase totalled 9.8-million tonnes, with Sishen’s output rising 17% to 6.9-million tonnes and Kolomela’s lifting 7% to 2.9-million tonnes. Export sales were up 14% to 9.4-million tonnes.

The average lump-to-fines ratio in the Kumba product was up at 69:31 with iron (Fe) content averaging 64.1%.

The average half-year price of $216/t– free on board (FOB) wet – was higher than the 62% Fe benchmark price of $163/t adjusted for freight and moisture owing to the lump and Fe content quality premiums that the Kumba products attract in the market, as well as timing on provisionally priced volumes.

Minas-Rio’s 5% production fall to 5.9-million tonnes was the result of further unplanned maintenance at the beneficiation plant, which is now complete.

The H1 2021 average realised price of $200/t – FOB wet – was higher than the Metal Bulletin 66 price of $165/t, reflecting the quality of the product, including higher (~67%) Fe content.

Iron-ore production wet-basis guidance has been tightened to a maximum of 66.5-million tonnes, down from the previous 67.5-million tonnes, with Kumba not expected to produce more than 41.5-million tonnes and Minas-Rio not more than 25-million tonnes.

METALLURGICAL COAL

Export of metallurgical coal production was 25% down at three-million tonnes, owing to the continued suspension of operations at Grosvenor in Australia, following the underground incident in May last year, as well as the suspension of Moranbah for most of the quarter.

Development at Grosvenor began in early June as part of the mine's staged approach to restarting longwall mining operations towards the end of this year, while longwall mining restarted at Moranbah in June 3, following the suspension from February in response to elevated gas levels. As a result of the lower volumes, the unit cost in the half-year is expected to be about $124/t. The average realised half-year price for hard coking coal was $117/t.

Production guidance for metallurgical coal has been kept at 14-million tonnes to 16-million tonnes.

NICKEL
Nickel production fell 2% to 10 600 t, reflecting planned lower ore grade, with production guidance unchanged at up to 44 000 t.

MANGANESE

Manganese-ore production rose 18% to 940 500 t and there was no manganese alloy production owing the Meyerton smelter, in Gauteng, being on care and maintenance since the Covid lockdown. The Temco smelter in Australia was sold at the start of this year..

THERMAL COAL
Export thermal coal production decreased by 29% to 2.5-million tonnes, primarily owing to the demerger of the South Africa thermal coal operations in June.

The half-year weighted average realised price for export thermal coal from South Africa and Colombia was $72/t, with South Africa at $77/t and Colombia at $65/t. This was 16% lower than the weighted average quoted FOB price, largely owing to energy content adjustments relative to the industry benchmark.

Following the demerger of the South Africa thermal coal operations, no further production will be reported by Anglo. Product purchased from Thungela under the offtake agreement will be reported as third party.

The sale of Anglo American's 33% interest in Cerrejon is expected to complete in the first half of next year.

EXPLORATION
Exploration and evaluation expenditure increased by 56% to $67-million. Exploration expenditure increased by 39% to $25-million driven by increased drilling for copper and PGMs at Sakatti in Finland and iron-ore. Evaluation expenditure increased by 68% to $42-million, with increased spend at Sakatti, metallurgical coal and diamonds.

As a producer of diamonds, copper, PGMs, premium quality iron-ore and metallurgical coal for steelmaking, and nickel - with crop nutrients in development, Anglo is committed to being carbon neutral across its operations by 2040.


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