Anglo American reports strong rise in copper, coal production

The FTSE 100 company said its De Beers subsidiary had reached an agreement in principle with the government of Botswana for a new 10-year sales agreement for Debswana's rough diamond production, extending until 2033.

It said the agreement also included a 25-year extension of the Debswana mining licences, ensuring operations until 2054.

Copper production meanwhile increased 56% during the second quarter, which the board put down to the ramp-up to commercial production levels at the new Quellaveco mine in Peru.

However, copper production from operations in Chile experienced a slight decline of 2%.

Steelmaking coal production expanded by 28% in the quarter, which Anglo American said was mainly due to higher production levels at its open-cut operations, which were impacted by unseasonal wet weather in the corresponding period of the previous year.

Iron ore production experienced a healthy increase of 9% during the second quarter, driven by a strong operational performance at the Minas-Rio mine, where production increased by 29%.

Nickel production, however, decreased 4% in the second quarter, which was attributed to lower grades, impacting overall output.

Rough diamond production meanwhile experienced a marginal decrease of 5% in the second quarter.

While a strong operational performance contributed to the result, it was offset by expected lower production from the Venetia mine, as it transitioned to underground operations.

Production from Anglo American's platinum group metals operations recorded a decline of 9%, primarily driven by short-term operational challenges and planned infrastructure closures at Amandelbult, as well as the planned ramp-down of Kroondal.

“Production increased by 11% compared to the second quarter in 2022, reflecting the ramp-up of our new Quellaveco copper mine in Peru, which has now reached commercial production levels,” said chief executive officer Duncan Wanblad.

“We also delivered a strong performance at our Minas-Rio iron ore operation in Brazil, as well as higher production from our open cut operations in steelmaking coal in Australia.

“These were offset by temporary lower production from De Beers' Venetia mine, as it transitions from open pit to underground, and expected lower platinum group metals production, as well as the impact of lower copper throughput and grades in Chile.”

Wanblad said the company’s focus remained on safely achieving our full-year production guidance through the seasonally-stronger second half.

“The recent changes to our executive leadership team, coupled with re-organising how we manage our production businesses and the functional expertise that supports them, better positions us to drive safe and consistent operational performance and strategic delivery over the longer term.”

At 0925 BST, shares in Anglo American were up 5.32% at 2,425.5p.

Reporting by Josh White for Sharecast.com.