Anglo American production guidance unchanged

Diversified miner Anglo American reiterated its full-year production guidance on Thursday as it reported lower first-quarter output for diamonds, iron ore and export coal, but higher output in platinum and nickel.

Diamond production fell 10% from the first quarter of 2015 to 6.9m carats, reflecting the decision to cut output in response to trading conditions last year.

Meanwhile, iron ore production from Kumba was down 27% to 8.9m tonnes as the Sishen mine was being transitioned to a lower cost pit configuration.

Iron ore production from Minas-Rio, however, rose to 3.3m tonnes as the operation continues to ramp up.

Platinum production increased by 4% to 567,000 ounces, mainly thanks to increases at Amandelbult and Mogalakwena, while nickel output rose 67% to 11,200 tonnes following the successful completion of the Barro Alto furnace rebuilds.

Chief executive Mark Cutifani said: “The Q1 2016 operating results are in line with the equivalent period of 2015 on a copper equivalent basis and reflect the major restructuring programme under way and our ongoing efficiency and cost reduction strategy.

“They also demonstrate the market discipline we continue to show in our key markets, particularly diamonds and platinum, and are consistent with our restructuring plans as we focus on lower cost and higher margin assets. We are encouraged that the actions we have taken in diamonds are continuing to have a positive effect, while operational productivity continues on an upward trajectory. As a consequence of our solid progress, our production guidance for 2016 remains unchanged."

Canaccord Genuity said: “Overall, this is a weak production report, across most key commodities - production volumes for iron ore, metallurgical and thermal coal, copper, nickel and platinum were all below our estimate - typically 5-7% below expectation, with only diamonds higher than forecast.”

Canaccord had estimated diamond production of 6.7m tonnes.

At 0922 BST, Anglo shares were down 0.4% to 789.10p.