SUPPLY NEWS - Anglo American lowers FY copper output guidance, keeps nickel unchanged

print Print this document.  Post this story to Facebook.
Ewa Mantheyewa.manthey@fastmarkets.comCorrespondent+44 (0) 20 7337 2146

London 28/07/2016 - Anglo American has lowered its copper production guidance for 2016 to 570,000-600,000 tonnes from 600,000-630,000 tonnes, it said.

The miner expects full-year output to be below that of 2015 after adjusting for the disposal of Anglo American Norte and the curtailment of oxide production at Collahuasi, together accounting for around 120,000 tonnes, it said in its half-year production report on Thursday.

As well, severe weather at Los Bronces during the second quarter of the year, which hit mine extraction and the ability to mine the higher-altitude, higher-grade areas, prompted the miner to cut its production guidance for this year.

In the first half of the year, Anglo American's copper production fell 18 percent from the prior period to 291,000 tonnes.

Production at Los Bronces was 16 percent lower at 160,800 tonnes, driven by significantly lower grades but partly offset by improved throughput performance following the lifting of water restrictions during the first half of the year.

Severe weather conditions, including significant snowfall, hampered operations at the mine during the second quarter of 2016, interrupting ore extraction and the operation's ability to mine higher-altitude, higher-grade areas. In addition, snow late in 2015 and its subsequent melting have caused dewatering issues in the pit.

At Collahuasi, Anglo American's attributable production increased 13 percent to 107,300 tonnes. Strong plant performance following rectification work in 2015 was supported by higher grades but was offset by reduced cathode production after the closure of the oxide plant at the end of 2015.

Production at El Soldado increased 40 percent to 22,600 tonnes on improved throughput and higher grades.

Still, despite excess capacity in some manufacturing sectors, global copper consumption patterns appear to have stabilised following some weakening in 2015, it said.

"However, despite cuts in spending, mine-through-refined production growth has outpaced demand with a small number of major mine expansions, predominantly in Peru, and additions to smelter-refinery capacity in China, keeping the market well supplied," it added.

Anglo's nickel output increased 72 percent to 22,300 tonnes following the successful rebuild of the Barro Alto furnaces, which are now producing at close to nameplate capacity, it said.

Codemin's production was in line with the previous year at around 4,600 tonnes.

Full-year nickel production in 2016 remains unchanged at an expected 45,000-47,000 tonnes, following the successful Barro Alto furnace rebuilds in 2015, it said.

Despite concerns about world and Chinese economic growth, which put downward pressure on metal prices, second-quarter demand improved markedly and there was "a reduction in LME nickel stocks, which led to increases in the LME nickel price and the ferro-nickel premium", it said.

Anglo American's total platinum production - metal in concentrate - rose two percent to 1,152,700 ounces. Output increases generated by Amandelbult, joint operations, Union and Unki were partially offset by lower production from Rustenburg, it said.

Refined platinum production fell nine percent to 1,008,400 ounces owing to a planned stocktake and the impact of a Section 54 safety stoppage at the precious metal refinery (PMR) in the first quarter of the year, which halted production for 12 days and affected production build-up for a further 37 days.

The PMR has recovered to steady state and made up most of the shortfall in production. The remainder of the shortfall will be caught up in the third quarter of the year, it added.

Anglo American's platinum production guidance (metal in concentrate) is unchanged at 2.3-2.4 million ounces in 2016. The Twickenham project will be placed on care and maintenance in the second half of the year, it also said.

(Editing by Mark Shaw)



Fastmarkets.com
mailto:press@fastmarkets.com
8 Bouverie Street, London, EC4Y 8AX, UK
+44 (0)845 241 9949