ANGLO AMERICAN PLC (LON:AAL) Anglo American Q2 Production Report 2017

Transparency directive : regulatory news

20/07/2017 07:00
Anglo American PLC  -  AAL   

Anglo American Q2 Production Report 2017


Released 07:00 20-Jul-2017


Click on, or paste the following link into your web browser, to view the associated PDF document.


http://www.rns-pdf.londonstockexchange.com/rns/5656L_-2017-7-19.pdf 



 


 


 


20 July 2017


 


Anglo American plc


Production Report for the second quarter ended 30 June 2017


 


Anglo American reports an 8% increase in copper equivalent production in the second quarter of 2017, compared to the same period of 2016. For the half year as a whole, copper equivalent production increased by 9%.


 


Mark Cutifani, Anglo American Chief Executive, said: "We have delivered another strong production quarter across most of our businesses. Through the improvements we have made to our portfolio and the efficiencies we are driving, we continue to unlock the potential of our world class assets. The production ramps at Gahcho Kué, Minas-Rio and Grosvenor are also contributing to these ongoing positive performance trends. We have increased the full year production guidance for Kumba Iron Ore and are on track to deliver full year guidance across the rest of our products."


 


 


Highlights


 


·      At De Beers, the ramp-up of Gahcho Kué and stable trading conditions supported a 36% increase in rough diamond production.


·      Copper production, while broadly unchanged, was impacted by the temporary mine stoppage at El Soldado, partially offset by higher production at Los Bronces.


·      Platinum's Mogalakwena mine production increased by 15% due to higher grades and increased throughput.


·      Iron ore volumes from Sishen increased by 38% due to operational improvements.


·      Metallurgical coal production from Australia was impacted by Cyclone Debbie, two longwall moves in Q2 and the ongoing geological issues at Grosvenor; improvements are expected in H2.


 


 


Production Summary


 























































































 



Q2 2017



Q2 2016



% vs. Q2 2016



H1 2017



H1 2016



% vs. H1 2016



Diamonds (Mct)(1)



8.7



6.4



36%



16.1



13.3



21%



Copper (t)(2)(3)



140,800



144,200



(2)%



283,400



290,700



(3)%



Platinum (produced ounces) (koz)(4)



617



586



5%



1,189



1,153



3%



Iron ore - Kumba (Mt)



11.4



8.9



28%



21.9



17.8



23%



Iron ore - Minas-Rio (Mt)(5)



4.3



3.5



24%



8.7



6.8



27%



Export metallurgical coal (Mt)



4.0



4.9



(19)%



9.2



9.0



2%



Export thermal coal (Mt)(6)



6.5



6.8



(4)%



13.4



13.2



1%



Nickel (t)(7)



11,300



11,100



2%



21,200



22,300



(5)%



 


 (1) De Beers production on 100% basis except the Gahcho Kué joint venture which is on an attributable 51% basis; (2) Copper production from the Copper business unit; (3) Copper production shown on a contained metal basis; (4) Reflects own mine production and purchases of metal in concentrate; (5) Wet basis; (6) Export thermal coal includes export primary production from South Africa and Colombia, and excludes secondary South African production that may be sold into either the export or domestic markets; (7) Nickel production from the Nickel business unit; (8) Copper equivalent production is normalised for, Kimberley, Niobium & Phosphates, Foxleigh and Callide, and to reflect Snap Lake being placed on care and maintenance, and the closure of Drayton.



 DE BEERS


 













































































Diamonds(1)



Q2


 2017



Q2


2016



Q2 2017


vs.


Q2 2016



Q1


2017



Q2 2017


vs.


Q1 2017



H1


2017



H1


2016



H1 2017 vs.  


H1 2016



Debswana



000 carats



5,933



5,184



14%



5,191



14%



11,124



10,512



6%



Namdeb Holdings



000 carats



391



296



32%



472



(17)%



863



740



17%



DBCM



000 carats



1,405



821



71%



1,106



27%



2,511



1,753



43%



De Beers Canada



000 carats



1,013



147



nm



631



61%



1,644



309



nm



Total carats recovered



000 carats



8,742



6,448



36%



7,400



18%



16,142



13,314



21%



 


De Beers - Rough diamond production increased by 36% to 8.7 million carats in line with the higher production forecast for 2017, reflecting stable trading conditions as well as the contribution from the ramp-up of Gahcho Kué in Canada.


 


Debswana (Botswana) production increased by 14% to 5.9 million carats. Orapa's production increased by 44% driven by the ramp-up of Plant 1 which was previously on partial care and maintenance in response to trading conditions in late 2015. This was marginally offset by Jwaneng where production decreased by 3%.


 


Namdeb Holdings (Namibia) production increased by 32% to 0.4 million carats as a result of Debmarine Namibia's Mafuta vessel being on planned extended in-port maintenance in Q2 2016.


 


DBCM (South Africa) production increased by 71% to 1.4 million carats largely as a result of higher grades at Venetia.


 


Production in Canada increased almost six-fold to 1.0 million carats due to the ramp-up of Gahcho Kué to nameplate capacity.


 


Consolidated rough diamond sales volumes(2) in Q2 2017 were 5.4 million carats (5.9 million carats on a total 100% basis) from two Sights, compared with 9.6 million carats (10.2 million carats on a total 100% basis) from three Sights in Q2 2016. Apart from the additional Sight in Q2 2016, the decrease was expected given the strong levels of midstream restocking in H1 2016.


 


For H1 2017, consolidated sales volumes(2) were 19.1 million carats (20.0 million carats on a total 100% basis), compared with 17.2 million carats (18.3 million carats on a total 100% basis) in H1 2016.


 


The average realised price of $156/ct in H1 2017 was 12% lower than in H1 2016. This reflected strong demand in Sight 1 2017 for lower value goods held in stock at 31 December 2016, following a recovery from the initial impact of India's demonetisation programme in late 2016.  The lower value mix was partially offset by a higher average rough price index, up 4%.


 


Full Year Guidance


Full year production guidance(1) remains unchanged at 31-33 million carats, subject to trading conditions.


 


 


(1)    De Beers production is on a 100% basis, except for the Gahcho Kué joint venture which is on an attributable 51% basis.


(2)    Consolidated sales volume excludes De Beers' JV partners' 50% proportionate share of sales to entities outside the De Beers Group of Companies from the Diamond Trading Company Botswana and the Namibia Diamond Trading Company, and includes pre-commercial production sales volumes from Gahcho Kué.


 


 


 
























































































































































































































































































































































De Beers



Q2 2017



Q1 2017



Q4 2016



Q3 2016



Q2 2016



Q2 2017


vs.


Q1 2017



Q2 2017


vs.


Q2 2016



H1 2017



H1 2016



H1 2017


vs.


H1 2016



Carats recovered


(000 carats)



 



 



 



 



 



 



 



 



 



 



100% basis


(unless otherwise stated)



 



 



 



 



 



 



 



 



 



 



Orapa



2,918



2,106



2,366



1,536



2,028



39%



44%



5,024



4,029



25%



Letlhakane



102



130



135



176



159



(22)%



(36)%



232



284



(18)%



Jwaneng



2,913



2,955



2,939



2,837



2,997



(1)%



(3)%



5,868



6,199



(5)%



Debswana



5,933



5,191



5,440



4,549



5,184



14%



14%



11,124



10,512



6%



 



 



 



 



 



 



 



 



 



 



 



Namdeb



72



94



118



120



94



(23)%



(23)%



166



166



-



Debmarine Namibia



319



378



310



285



202



(16)%



58%



697



574



21%



Namdeb Holdings



391



472



428



405



296



(17)%



32%



863



740



17%



 



 



 



 



 



 



 



 



 



 



 



Kimberley(1)



-



-



-



-



-



-



-



-



68



(100)%



Venetia



1,239



939



1,218



898



695



32%



78%



2,178



1,401



55%



Voorspoed



166



167



169



196



126



(1)%



32%



333



284



17%



DBCM



1,405



1,106



1,387



1,094



821



27%



71%



2,511



1,753



43%



 



 



 



 



 



 



 



 



 



 



 



Snap Lake(1)



-



-



-



-



-



-



-



-



3



(100)%



Victor



182



189



148



142



147



(4)%



24%



371



306



21%



Gahcho Kué


(51% basis)



831



442



349



83



-



88%



-



1,273



-



-



De Beers Canada



1,013



631



497



225



147



61%



589%



1,644



309



432%



Total carats recovered



  8,742



  7,400



  7,752



  6,273



 6,448



18%



36%



 16,142



 13,314



21%



Sales volumes



 



 



 



 



 



 



 



 



 



 



Total sales volume        


(100%) (Mct)(2)



5.9



14.1



8.0



5.7



10.2



(58)%



(42)%



20.0



18.3



9%



Consolidated sales volume (Mct)(2)(3)



5.4



13.7



7.5



5.3



9.6



(61)%



(44)%



19.1



17.2



11%



Number of Sights

(sales cycles)



2



3



3



2



3



 



 



5



5



 



 


(1)     Snap Lake was placed on care and maintenance from December 2015. Kimberley mines was sold in January 2016.


(2)     Consolidated sales volumes exclude De Beers' JV partners' 50% proportionate share of sales to entities outside the De Beers Group of Companies from the Diamond Trading Company Botswana and the Namibia Diamond Trading Company, which are included in total sales volume.


(3)     Consolidated sales volume includes pre-commercial production sales volumes from Gahcho Kué. Excluding Gahcho Kué's capitalised pre-commercial production sales volumes results in a consolidated sales volume of 18.4Mct for H1 2017.


 


 


 


 

 


COPPER


 

































































Copper(1)



Q2


 2017



Q2


2016



Q2 2017


vs.


Q2 2016



Q1


2017



Q2 2017


vs.


Q1 2017



H1


2017



H1


2016



H1 2017 vs.  


H1 2016



Los Bronces



t



79,000



75,600



4%



75,800



4%



154,800



160,800



(4)%



Collahuasi (44% share)



t



51,000



56,200



(9)%



57,700



(12)%



108,700



107,300



1%



El Soldado



t



10,800



12,400



(13)%



9,100



19%



19,900



22,600



(12)%



t



140,800



144,200



(2)%



142,600



(1)%



283,400



290,700



(3)%



 


(1)       Copper production shown on a contained metal basis.


 


Copper production decreased by 2% to 140,800 tonnes.


 


Production from Los Bronces increased by 4% to 79,000 tonnes. Production benefited from higher ore grades (0.70% vs. 0.62%) and strong plant performance, partly offset by an expected increase in ore hardness.


 


At Collahuasi, attributable production decreased by 9% to 51,000 tonnes. Higher ore grades were offset by lower throughput driven by the planned electrical overhaul of Line 1 of the processing plant, lasting 65 days and successfully completed in June.


 


El Soldado production decreased by 13% to 10,800 tonnes, reflecting the temporary suspension of mine operations from 18 February, which restarted on 28 April following approval of the updated mine plan. Production during the mine stoppage was sustained by feeding low-grade stockpile material to the plant, however the delay in receiving the mine plan permit resulted in ~6,000 tonnes of lost production in H1 2017 (of which ~3,000 tonnes were in Q2 2017).


 


Sales volumes in H1 2017 were impacted by temporary port closures in Chile due to poor weather conditions and heavy tidal swells limiting vessel availability, as well as by higher arsenic content in copper concentrate from Collahuasi which restricted sales into China. At the end of H1 2017, Anglo American had 105,000 tonnes of copper provisionally priced at 269c/lb.


 


Full Year Guidance


Full year production guidance remains unchanged at 570,000 - 600,000 tonnes. 

 

























































































































































































































































































































































































































Copper (tonnes) on a contained metal basis unless stated otherwise(1)



Q2 2017



Q1 2017



Q4 2016



Q3 2016



Q2 2016



Q2 2017


vs.


Q1 2017



Q2 2017


vs.


Q2 2016



H1


2017



H1


2016



H1 2017 vs.


H1 2016



Collahuasi 100% basis


(Anglo American share 44%)



 



 



 



 



 



 



 



 



 



 



Ore mined



14,984,100



13,803,300



20,335,200



17,131,800



15,277,400



9%



(2)%



28,787,400



30,135,600



(4)%



Ore processed - Sulphide



10,807,100



12,336,400



12,302,700



12,522,100



12,479,200



(12)%



(13)%



23,143,500



24,582,000



(6)%



Ore grade processed - Sulphide (% TCu)(2)



1.27



1.24



1.29



1.23



1.21



3%



5%



1.25



1.18



6%



Production - Copper cathode



 -



100



700



800



1,400



(100)%



(100)%



100



3,300



(97)%



Production - Copper in concentrate



115,900



131,000



132,400



128,900



126,300



(12)%



(8)%



246,900



240,500



3%



Total copper production for Collahuasi



115,900



131,100



133,100



129,700



127,700



(12)%



(9)%



247,000



243,800



1%



Anglo American's share of copper production for Collahuasi(3)



51,000



57,700



58,600



57,000



56,200



(12)%



(9)%



108,700



107,300



1%



Anglo American Sur



89,800



84,900



88,000



82,800



88,000



6%



2%



174,700



183,400



(5)%



Los Bronces mine(4)



79,000



75,800



74,300



72,100



75,600



4%



4%



154,800



160,800



(4)%



Ore mined



11,630,200



13,448,400



13,196,500



13,947,400



13,477,900



(14)%



(14)%



25,078,600



23,965,800



5%



Marginal ore mined



7,764,700



11,461,400



8,445,700



6,192,800



6,148,500



(32)%



26%



19,226,100



19,550,800



(2)%



Ore processed - Sulphide



11,876,300



11,877,400



11,562,500



11,511,700



12,567,500



(0)%



(5)%



23,753,700



24,622,800



(4)%



Ore grade processed - Sulphide (% TCu)



0.70



0.69



0.69



0.65



0.62



2%



13%



0.69



0.68



2%



Production - Copper cathode



9,800



8,900



8,600



8,800



8,900



10%



10%



18,700



18,600



1%



 


Production - Copper in concentrate



69,200



66,900



65,700



63,300



66,700



3%



4%



136,100



142,200



(4)%



El Soldado mine(4)



10,800



9,100



13,700



10,700



12,400



19%



(13)%



19,900



22,600



(12)%



Ore mined



1,272,200



905,500



2,069,800



1,678,300



2,143,000



40%



(41)%



2,177,700



3,591,000



(39)%



Ore processed - Sulphide



1,899,200



1,797,600



1,833,900



1,553,200



1,741,200



6%



9%



3,696,800



3,577,300



3%



Ore grade processed - Sulphide (% TCu)



0.72



0.65



0.90



0.86



0.89



11%



(19)%



0.69



0.82



(16)%



Production - Copper in concentrate



10,800



9,100



13,700



10,700



12,400



19%



(13)%



19,900



22,600



(12)%



Chagres Smelter(4)



 



 



 



 



 



 



 



 



 



 



Ore smelted



31,500



31,300



25,900



35,500



36,500



1%



(14)%



62,800



72,400



(13)%



Production



30,600



30,300



25,400



34,700



35,500



1%



(14)%



60,900



70,700



(14)%



Total Copper segment copper production



205,700



216,000



221,100



212,500



215,700



(5)%



(5)%



421,700



427,200



(1)%



Total Attributable copper production(5)



140,800



142,600



146,600



139,800



144,200



(1)%



(2)%



283,400



290,700



(3)%



Total Attributable payable copper production



135,800



137,500



141,300



135,000



139,200



(1)%



(2)%



273,300



280,800



(3)%



Total Attributable sales volumes



144,100



115,300



161,400



135,400



143,500



25%



-



259,400



281,000



(8)%



Total Attributable payable sales volumes



138,900



111,200



155,700



130,700



138,500



25%



-



250,100



271,500



(8)%



Third party sales(6)



27,400



9,800



20,100



26,000



6,700



180%



309%



37,200



15,900



134%



 


(1)         Excludes Anglo American Platinum's copper production.


(2)         TCu = total copper.


(3)         Anglo American's share of Collahuasi production is 44%.


(4)         Anglo American ownership interest of Anglo American Sur is 50.1%. Production is stated at 100% as Anglo American consolidates Anglo American Sur.


(5)         Difference between total copper production and attributable copper production arises from Anglo American's 44% interest in Collahuasi.


(6)         Relates to sales of copper not produced by Anglo American operations.


 


 

 


PLATINUM


 






































































































































































































Platinum



 



Q2


2017



Q2


2016



Q2 2017


vs.


Q2 2016



Q1


2017



Q2 2017


vs.


Q1 2017



H1


2017



H1


2016



H1 2017 vs.


H1 2016



Produced ounces



000 oz



617



586



5%



572



8%



1,189



1,153



3%



   Own mined production



000 oz



348



444



(22)%



325



7%



673



883



(24)%



      Managed



000 oz



284



377



(25)%



266



7%



549



755



(27)%



      Joint ventures(1)



000 oz



64



67



(4)%



59



9%



123



128



(3)%



   Purchase of concentrate



000 oz



269



142



89%



247



9%



516



270



91%



      Joint ventures(1)



000 oz



64



67



(4)%



59



9%



123



128



(3)%



       Associates(2)



000 oz



72



70



4%



65



12%



137



133



3%



      Third party



000 oz



132



6



nm



124



7%



256



9



nm



Refined



 



 



 



 



 



 



 



 



 



   Platinum



000 oz



529



748



(29)%



577



(8)%



1,106



1,008



10%



   Palladium



000 oz



373



472



(21)%



353



6%



726



654



11%



   Rhodium



000 oz



83



91



(9)%



74



12%



156



138



13%



   Gold



000 oz



29



22



31%



25



19%



54



50



8%



 Nickel



t



6,000



6,400



(6)%



5,100



17%



11,200



12,100



(8)%



   Copper



t



3,500



3,700



(6)%



3,200



7%



6,700



7,000



(4)%



(1)       The joint venture operations are Mototolo, Modikwa and Kroondal. Platinum owns 50% of each of these operations, which is presented under 'Own mined' production, and purchases the remaining 50% of production, which is presented under 'Purchase of concentrate'.


(2)       Associates are Platinum's 49% interest in Bokoni and 33% interest in BPRM.


 


Platinum - Platinum production (metal in concentrate) increased by 5% to 617,100 ounces.


 


Own mined production from managed mines


 


Own mined production from managed mines decreased by 25% to 283,700 ounces primarily due to the sale of Rustenburg in November 2016, which has subsequently been reported as purchase of concentrate from third parties. Excluding Rustenburg, own mined production increased by 7%.


 


Mogalakwena mine production increased by 15% to 113,900 ounces due to a 7% increase in grade in line with the mine plan, and a 9% increase in concentrator throughput due to North Concentrator Plant optimisations which increased the run-time.


 


Amandelbult mine production increased by 4% to 110,500 ounces due to improved plant recoveries and increased throughput.


 


Production from Unki mine in Zimbabwe increased by 10% to 19,500 ounces, as efforts continued to improve mining height control, which has reduced mining waste and increased grade resulting in higher production.


 


Union mine production decreased by 3% to 39,800 ounces due to lower grade. The sale of Union to Siyanda Resources was announced on 15 February 2017 and is expected to complete in H2 2017, after which production from Union will be treated as purchase of concentrate from third parties.


 


Joint venture own mined production and purchase of concentrate


 


Total joint venture production of 128,600 ounces (of which 64,300 ounces is own mined and 64,300 ounces is purchase of concentrate) decreased by 4%. Mototolo decreased by 7% to 29,500 ounces as a result of lower grade. Kroondal decreased by 5% to 67,100 ounces primarily due to lower grade and a plant shutdown which impacted production for seven days. This was partly offset by Modikwa which increased by 2% to 32,000 ounces due to productivity improvements.


 


 


Purchase of concentrate from associates


 


Purchase of concentrate from associates increased by 4% to 72,500 ounces. Production from BRPM increased by 10% to 52,900 ounces from project ramp-ups, but was partly offset by Bokoni which decreased by 10% to 19,500 ounces as a result of the closure of the opencast operations.


 


Purchase of concentrate from third parties


 


Purchase of concentrate from third parties increased by 126,400 ounces to 132,300 ounces mainly due to the inclusion of Rustenburg, which has been reported as third party purchase of concentrate since November 2016.


 


Refined production


 


Refined platinum production decreased by 29% to 528,700 ounces primarily due to the Waterval smelter run-out and a high pressure water leak at the Converter Plant.


 


Following the Waterval smelter run-out in Q3 2016, the Number 1 furnace was successfully rebuilt in Q4 2016 and is running at steady-state. The Number 2 furnace underwent planned maintenance and has successfully ramped up to steady-state. The backlog in processing pipeline material of 65,000 platinum ounces following the run-out in 2016 is expected to be made up during H2 2017.


 


In addition, a high pressure water leak at the Converter Plant ("ACP") on 4 June 2017 impacted a converter plant. The second converter plant was heated up and began steady-state production on 14 June 2017. The total impact on refined platinum production of c.90,000 ounces was deferred from Q2 2017 into H2 2017.


 


Full Year Guidance


Production guidance (metal in concentrate) remains unchanged at 2.35 - 2.40 million ounces.


 






























































































































































































































































































































Platinum



Q2 2017



Q1


2017



Q4


2016



Q3


2016



Q2


2016



Q2 2017


vs.


Q1 2017



Q2 2017


vs.


Q2 2016



H1


2017



H1


2016



H1 2017 vs.


H1 2016



Produced platinum


(000 troy oz)



617.1



571.9



610.0



619.1



585.7



8%



5%



1,189.1



1,152.7



3%



Owned mined



348.0



324.6



386.8



468.3



443.5



7%



(22)%



672.7



882.6



(24)%



Mogalakwena



113.9



111.9



103.4



100.7



98.8



2%



15%



225.8



207.8



9%



Amandelbult



110.5



97.1



121.1



128.3



106.2



14%



4%



207.7



217.1



(4)%



Unki



19.5



18.9



19.9



18.2



17.8



3%



10%



38.4



36.4



5%



Joint ventures(1)



64.3



59.0



60.1



64.9



66.8



9%



(4)%



123.3



127.7



(3)%



Union



39.8



37.7



38.1



37.7



41.2



6%



(3)%



77.5



75.5



3%



Rustenburg(2)



-



-                  



44.2



118.1



110.8



nm



nm



-



215.1



nm



Other(3)



-



-



-



0.4



1.9



nm



nm



-



3.0



nm



Purchase of concentrate



269.1



247.3



223.2



150.8



142.3



9%



89%



516.4



270.1



91%



Joint ventures(1)



64.3



59.0



60.1



65.0



66.8



9%



(4)%



123.3



127.7



(3)%



Associates(4)



72.5



64.7



69.2



77.2



69.6



12%



4%



137.2



132.9



3%



Third party purchase of concentrate(2)



132.3



123.6



93.9



8.6



5.8



7%



nm



255.9



9.5



nm



 



 



 



 



 



 



 



 



 



 



 



Refined production



 



 



 



 



 



 



 



 



 



 



Platinum (000 troy oz)



528.7



576.9



631.6



694.6



747.6



(8)%



(29)%



1,105.6



1,008.4



10%



Palladium (000 troy oz)



373.1



353.4



397.4



412.9



472.3



6%



(21)%



726.5



653.9



11%



Rhodium (000 troy oz)



82.8



73.7



92.2



86.8



90.7



12%



(9)%



156.4



138.4



13%



Gold (000 troy oz)



29.3



24.7



33.9



24.1



22.3



19%



31%



54.0



50.2



8%



Nickel (000 tonnes)



6.0



5.1



6.2



7.1



6.4



17%



(6)%



11.2



12.1



(8)%



Copper (000 tonnes)



3.5



3.2



3.3



3.8



3.7



7%



(6)%



6.7



7.0



(4)%



4E Head grade


(g/tonne milled)(5)



3.41



3.47



3.41



3.19



3.00



(2)%



14%



3.44



3.05



13%



Platinum sales volumes - own mined and purchase of concentrate



600.5



518.8



606.5



588.0



808.4



16%



(26)%



1,119.3



1,221.2



(8)%



(1)     The joint venture operations are Mototolo, Modikwa and Kroondal. Platinum owns 50% of these operations, which is presented under 'Own mined' production, and purchases the remaining 50% of production, which is presented under 'Purchase of concentrate'.


(2)     Sale of Rustenburg to Sibanye completed on 1 November 2016, after which production from Rustenburg is included within third party purchase of concentrate.


(3)     Other includes Twickenham.


(4)     Associates are Platinum's 49% interest in Bokoni and 33% interest in BRPM.


(5)     4E: the grade measured as the combined content of: platinum, palladium, rhodium and gold.


 


IRON ORE AND MANGANESE


 













































































Iron Ore and Manganese



Q2


 2017



Q2


2016



Q2 2017


vs.


Q2 2016



Q1


2017



Q2 2017


vs.


Q1 2017



H1


2017



H1


2016



H1 2017 vs.  


H1 2016



Iron ore - Kumba



000 t



11,382



8,864



28%



         10,473



9%



21,854



17,788



23%



Iron ore - Minas-Rio(1)



000 t



4,324



3,484



24%



4,342



0%



8,666



6,833



27%



Iron ore - Total



000 t



15,706



12,348



27%



14,815



6%



30,520



24,621



24%



Manganese ore(2)



000 t



843



791



7%



823



2%



1,666



1,567



6%



Manganese alloys(3)



000 t



39



30



32%



31



25%



71



62



15%



 


(1)  Wet basis


(2)  Saleable production


(3)  Production includes medium carbon ferro-manganese


 


Kumba Iron Ore - Iron ore production increased by 28% to 11.4 million tonnes.


 


Sishen production increased by 38% to 7.9 million tonnes as a result of improved mining productivity, driven by fleet efficiencies and higher plant yields. Waste removal increased to 43 million tonnes compared to 31 million tonnes in Q2 2016 (H1 2017: 77 million tonnes).


 


Kolomela production increased by 11% to 3.5 million tonnes, underpinned by productivity improvements. Waste removal increased by 22% to 15 million tonnes (H1 2017: 25 million tonnes).


 


Export sales increased by 8% to 9.4 million tonnes. Total finished product stocks were 4.4 million tonnes (3.5 million tonnes at 31 December 2016) as a result of higher production at Sishen and sales volumes delayed to H2 2017 due to unfavourable weather conditions at Saldanha port.


 


Full Year Guidance


Full year production guidance has been increased to 41 - 43 million tonnes (previously 40 - 42 million tonnes) as a result of the improved performance at Sishen.


 


 


Iron Ore Brazil - Iron ore production from Minas-Rio increased by 24% to 4.3 million tonnes as the operation continued to ramp-up to its current operating capacity.


 


The focus remains obtaining the Step 3 licences required for the operation to access the full range of run-of-mine grades and target the operation's nameplate capacity of 26.5 Mt (wet basis).


 


Full Year Guidance


Full year production guidance remains unchanged at 16-18 million tonnes (wet basis).


 


 


Manganese ore - Manganese ore production increased by 7% to 843,300 tonnes. Production from the Australian operations increased by 5% and by 9% from the South African operations.


 


Manganese alloy - Manganese alloy production increased by 32% to 39,300 tonnes. The South African Manganese operations continue to operate only one of four furnaces.


 

 


 




































































































































































































































































































Iron Ore and Manganese (tonnes)



Q2 2017



Q1 2017



Q4 2016



Q3 2016



Q2 2016



Q2 2017


vs.


Q1 2017



Q2 2017


vs.


Q2 2016



H1


2017



H1


2016



H1 2017 vs.


H1 2016



Kumba Iron Ore



11,381,600



10,472,600



11,927,900



11,759,900



8,863,600



9%



28%



21,584,200



17,788,100



23%



By product:



 



 



 



 



 



 



 



 



 



 



Lump



7,504,200



6,978,800



7,812,000



7,598,500



5,721,300



8%



31%



14,483,000



11,391,000



27%



Fines



3,877,400



3,493,800



4,115,900



4,161,400



3,142,300



11%



23%



7,371,200



6,397,100



15%



By mine:



 



 



 



 



 



 



 



 



 



 



Sishen



7,871,900



7,678,900



8,489,900



8,348,700



5,699,600



3%



38%



15,550,800



11,541,400



35%



Kolomela



3,509,700



2,793,700



3,438,000



3,411,200



3,164,000



26%



11%



6,303,400



5,877,100



7%



Thabazimbi



-



-



-



-



-



-



-



-



369,600



(100)%



Kumba sales volumes



 



 



 



 



 



 



 



 



 



 



Export iron ore



9,423,600



10,053,000



10,611,400



10,343,200



8,729,700



(6)%



8%



19,476,600



18,105,800



8%



Domestic iron ore



924,600



832,700



612,700



706,900



936,000



11%



(1)%



1,757,300



2,103,700



(16)%



Minas-Rio production



 



 



 



 



 



 



 



 



 



 



Pellet feed (wet basis)



4,324,100



4,341,700



4,855,300



4,452,400



3,483,800



0%



24%



8,665,900



6,833,200



27%



Minas-Rio sales volumes



 



 



 



 



 



 



 



 



 



 



Export - pellet feed


(wet basis)



4,371,000



4,256,500



4,761,800



4,510,400



3,223,900



3%



36%



8,627,500



6,938,300



24%



Samancor



 



 



 



 



 



 



 



 



 



 



Manganese ore(1)



843,300



823,100



804,200



761,700



791,300



2%



7%



1,666,400



1,567,200



6%



Manganese alloys(1)(2)



39,300



31,500



37,100



38,900



29,700



25%



32%



70,800



61,800



15%



Samancor sales volumes



 



 



 



 



 



 



 



 



 



 



Manganese ore(3)



887,600



836,000



805,000



757,400



813,300



6%



9%



1,723,600



1,664,000



4%



Manganese alloys



37,200



34,400



31,600



49,200



46,400



8%



(20)%



71,600



89,200



(20)%



 


 


 

 


COAL


 












































































































































































Coal 



 



Q2



Q2



Q2 2017



Q1



Q2 2017



H1



H1



H1 2017



 



2017



2016



vs.



2017



vs.



2017



2016



vs



 



 



 



Q2 2016



 



Q1 2017



 



 



H1 2016



Met Coal (Australia) -


excl. 2016 divestments(1)



 



 



 



 



 



 



 



 



 



Metallurgical - Export



000 t



3,964



4,921



(19)%



5,242



(24)%



9,206



9,019



2%



Thermal - Export



000 t



305



1,015



(70)%



479



(36)%



784



1,820



(57)%



South Africa



 



 



 



 



 



 



 



 



 



Thermal export - Primary(2)



000 t



4,064



4,426



(8)%



4,059



-



8,123



8,268



(2)%



Thermal export and domestic - Secondary(3)



000 t



1,023



973



5%



978



5%



2,001



1,752



14%



Thermal domestic - Eskom



000 t



6,889



6,709



3%



6,374



8%



13,263



13,101



1%



Thermal domestic - Isibonelo(4)



000 t



1,052



1,082



(3)%



896



17%



1,948



2,242



(13)%



Cerrejón



 



 



 



 



 



 



 



 



 



Thermal - Export



000 t



2,450



2,330



5%



2,782



(12)%



5,231



4,940



6%



Thermal Export South Africa and Cerrejón



 



6,514



6,756



(4)%



6,841



(5)%



13,354



13,208



1%



(1)       Excludes production from Foxleigh, which was sold on 30 August 2016, and Callide, which was sold on 31 October 2016.


(2)       Thermal export - Primary is export quality product. Comparatives have been restated to align with current presentation.


(3)       Thermal export and domestic - Secondary is lower quality product that can be sold into either the export or domestic markets. Comparatives have been restated to align with current presentation. In 2016, ~60% of secondary production was sold into the export market.


(4)       Restated to exclude domestic secondary coal production from mines other than Isibonelo.


 


Metallurgical Coal (Australia) - Export metallurgical coal production decreased by 19% to 4.0 million tonnes. Longwall moves took place at both Moranbah and Grasstree during the quarter. The impact of Cyclone Debbie on the Queensland rail network resulted in operational delays with a net impact on saleable production of ~0.6 million tonnes in the quarter. Run-of-mine production was not materially impacted and the stock build continues to be unwound in H2 2017.


 


Grosvenor production continues to be affected by geological issues, which are typically more challenging for the first longwall panel. In addition, a major belt tear occurred in the main conveyor drift. The focus remains on managing geological issues to deliver improved operational performance and stability.


 


Export thermal coal production decreased by 70% to 0.3 million tonnes following the cessation of mining activities at Drayton.  Furthermore, in reaction to the rail outage in Q2 2017, thermal coal volumes were substituted for higher margin metallurgical coal production at Capcoal (Grasstree).


 


South Africa - Primary export thermal coal production decreased by 8% to 4.1 million tonnes, due to operational challenges at Khwezela associated with the integration of the Kleinkopje and Landau mines. In addition, there was an expected and temporary reduction at Mafube as the mine transitions to a new pit.


Eskom related production increased by 3% to 6.9 million tonnes, with higher production at New Denmark due to a longwall move in Q2 2016. The sale of the Eskom-tied operating mines (New Vaal, New Denmark and Kriel) to Seriti Resources was announced on 10 April 2017, and is expected to complete by the end of 2017.


 


Cerrejón - Cerrejón's attributable production increased by 5% to 2.4 million tonnes, reflecting productivity gains.


 


Full Year Guidance


Full year production guidance for export metallurgical coal remains unchanged at 19 - 21 million tonnes, but is expected to be at the lower end of this range due to the geological issues at Grosvenor.


 


Full year production guidance for export thermal coal from South Africa and Cerrejón remains unchanged at 29 - 31 million tonnes, but is expected to be at the lower end of this range primarily due to the operational challenges at Khwezela.

























































































































































































































































































































































Coal (tonnes)



Q2 2017



Q1 2017



Q4 2016



Q3 2016



Q2 2016



Q2 2017



Q2 2017



H1



H1



H1 2017



vs.



vs.



2017



2016



vs.



Q1 2017



Q2 2016



 



 



H1 2016



Met Coal (Australia)(1)



4,268,200



5,721,400



5,955,100



5,923,500



5,935,700



(25)%



(28)%



9,989,600



10,837,900



(8)%



Metallurgical export - Coking



3,237,000



4,747,300



4,496,900



4,326,600



3,997,500



(32)%



(19)%



7,984,300



7,376,400



8%



Metallurgical export - PCI



726,500



495,100



862,900



741,300



923,300



47%



(21)%



1,221,600



1,642,100



(26)%



Thermal export



304,700



479,000



595,300



855,600



1,014,900



(36)%



(70)%



783,700



1,819,400



(57)%



South Africa



13,028,200



12,307,300



13,708,600



14,690,700



13,188,800



6%



(1)%



25,335,500



25,360,600



-



Thermal export - Primary(2)



4,064,100



4,058,500



4,229,400



4,480,800



4,425,600



0%



(8)%



8,122,600



8,267,200



(2)%



Thermal export and domestic - Secondary(3)



1,022,600



978,200



926,900



1,009,900



972,700



5%



5%



2,000,800



1,751,300



14%



Thermal domestic - Eskom



6,889,100



6,374,300



7,514,700



8,083,900



6,708,700



8%



3%



13,263,400



13,100,700



1%



Thermal domestic - Isibonelo(4)



1,052,400



896,300



1,037,600



1,116,100



1,081,800



17%



(3)%



1,948,700



2,241,400



(13)%



Colombia



 



 



 



 



 



 



 



 



 



Thermal - Export



2,449,600



2,781,700



2,800,600



2,927,800



2,329,500



(12)%



5%



5,231,300



4,939,500



6%



Total coal production



19,746,000



20,810,400



22,464,300



23,542,000



21,454,000



(5)%



(8)%



40,556,400



41,138,000



(1)%



Sales volumes



 



 



 



 



 



 



 



 



 



Met Coal (Australia)



 



 



 



 



 



 



 



 



 



 



Metallurgical - Export(5)



4,155,000



4,947,400



4,926,900



5,223,100



4,836,700



(16)%



(14)%



9,102,400



9,065,600



-



Thermal - Export



422,800



473,200



699,000



862,000



1,118,800



(11)%



(62)%



896,000



1,816,700



(51)%



South Africa



 



 



 



 



 



 



 



 



 



 



Thermal - Export



4,153,900



4,693,300



5,825,200



4,159,300



4,744,000



(11)%



(12)%



8,847,200



9,087,200



(3)%



Thermal - Other domestic



513,700



394,300



485,100



389,700



341,600



30%



50%



908,000



710,100



28%



Thermal domestic - Eskom



6,841,100



6,359,200



7,288,500



7,871,900



6,577,500



8%



4%



13,200,300



12,823,900



3%



Thermal domestic - Isibonelo



1,030,600



964,600



1,168,900



1,260,800



1,268,100



7%



(19)%



1,995,200



2,481,700



(20)%



Third party sales



1,835,400



1,567,800



694,600



2,181,800



1,608,600



17%



14%



3,403,200



3,175,400



7%



Cerrejón



 



 



 



 



 



 



 



 



 



 



    Thermal - Export



2,770,500



2,646,300



2,722,300



2,905,100



2,843,800



5%



(3)%



5,416,800



5,182,800



5%



 


(1)       Comparatives have been restated to exclude production from Foxleigh, which was sold on 30 August 2016, and Callide, which was sold on 31 October 2016.


(2)       Thermal export - Primary is export quality product. Comparatives have been restated to align with current presentation.


(3)       Thermal export and domestic - Secondary is lower quality product that can be sold into either the export or domestic markets. Comparatives have been restated to align with current presentation. In 2016, ~60% of secondary production was sold into the export market.


(4)       Restated to exclude domestic secondary coal production from mines other than Isibonelo.


(5)       Includes both hard coking coal and PCI sales volumes.


 












































































































































































































































































































































Coal by mine (tonnes)



Q2 2017



Q1 2017



Q4 2016



Q3 2016



Q2 2016



Q2 2017



Q2 2017



H1



H1



H1 2017



vs.



vs.



2017



2016



vs.



Q1 2017



Q2 2016



 



 



H1 2016



Met Coal (Australia)



 



 



 



 



 



 



 



 



 



 



Capcoal



1,508,900



1,785,400



1,230,200



1,637,300



2,205,400



(15)%



(32)%



3,294,300



3,965,400



(17)%



(incl. Grasstree)



 



 



 



 



 



 



 



 



 



 



Dawson



1,046,800



1,092,100



1,273,000



1,185,900



1,143,800



(4)%



(8)%



2,138,900



2,149,800



(1)%



Drayton





-



82,300



317,100



418,200



n/a



n/a





768,100



n/a



Grosvenor



183,600



709,800



539,100



685,700



331,200



(74)%



(45)%



893,400



534,200



67%



Jellinbah



840,300



718,000



882,100



820,200



821,600



17%



2%



1,558,300



1,580,000



(1)%



Moranbah North



688,600



1,416,100



1,948,400



1,277,300



1,015,500



(51)%



(32)%



2,104,700



1,840,400



14%



 



4,268,200



5,721,400



5,955,100



5,923,500



5,935,700



(25)%



(28)%



9,989,600



10,837,900



(8%)



South Africa



 



 



 



 



 



 



 



 



 



 



Goedehoop



1,230,800



1,222,100



1,134,200



1,286,500



1,266,600



1%



(3)%



2,452,900



2,267,900



8%



Greenside



877,700



1,004,800



1,036,900



1,111,400



990,700



(13)%



(11)%



1,882,500



1,797,000



5%



Zibulo



1,672,900



1,439,400



1,407,200



1,571,800



1,638,600



16%



2%



3,112,300



3,028,600



3%



Khwezela(1)



1,475,000



1,596,100



2,230,000



2,137,100



1,849,000



(8)%



(20)%



3,071,100



3,818,600



(20)%



Mafube



407,600



441,400



435,400



506,000



438,500



(8)%



(7)%



849,000



817,600



4%



New Vaal



4,121,900



3,414,300



3,994,800



4,350,500



4,027,700



21%



2%



7,536,200



7,549,500



0%



New Denmark



769,600



954,400



773,200



777,300



392,600



(19)%



96%



1,724,000



996,900



73%



Kriel



1,420,300



1,338,500



1,659,400



1,834,000



1,503,300



6%



(6)%



2,758,800



2,843,100



(3)%



Isibonelo



1,052,400



896,300



1,037,500



1,116,100



1,081,800



17%



(3)%



1,948,700



2,241,400



(13)%



 



13,028,200



12,307,300



13,708,600



14,690,700



13,188,800



6%



(1)%



25,335,500



25,360,600



-



Cerrejón



 



 



 



 



 



 



 



 



 



 



Carbones del Cerrejón



2,449,600



2,781,700



2,800,600



2,927,800



2,329,500



(12)%



5%



5,231,300



4,939,500



6%



Total Coal production



19,746,000



20,810,400



22,464,300



23,542,000



21,454,000



(5)%



(8)%



40,556,400



41,138,000



(1)%



(1)       The merger of Kleinkopje and Landau.


 


 


NICKEL


 









































Nickel



Q2


 2017



Q2


2016



Q2 2017


vs.


Q2 2016



Q1


2017



Q2 2017


vs.


Q1 2017



H1


2017



H1


2016



H1 2017 vs.  


H1 2016



Nickel



t



11,300



11,100



2%



9,900



14%



21,200



22,300



(5)%


                   

 


Nickel production increased by 2% as result of a stable performance in both smelting operations at Barro Alto, running slightly above nominal capacity during the second quarter. Production from Codemin decreased by 4% to 2,200 tonnes due to maintenance in May 2017.


 


 


Full Year Guidance


Full year production guidance remains unchanged at 43,000 - 45,000 tonnes.


 















































































































































































Nickel (tonnes)


unless stated otherwise(1)



Q2 2017



Q1 2017



Q4 2016



Q3 2016



Q2 2016



Q2 2017


vs.


Q1 2017



Q2 2017


vs.


Q2 2016



H1


2017



H1


2016



H1 2017 vs.


H1 2016



Barro Alto



 



 



 



 



 



 



 



 



 



 



Ore mined



2,375,700



1,023,500



364,300



974,100



835,300



132%



184%



3,399,200



1,292,300



163%



Ore processed



615,700



523,900



579,800



610,000



569,200



18%



8%



1,139,600



1,167,300



(2)%



Ore grade processed - %Ni



1.71



1.70



1.77



1.76



1.76



1%



(3)%



1.71



1.76



(3)%



Production



9,100



7,800



8,800



9,000



8,800



17%



3%



16,900



17,700



(5)%



Codemin



 



 



 



 



 



 



 



 



 



 



Ore mined



7,500



-



-



-



6,800



-



10%



7,500



6,800



10%



Ore processed



144,000



143,600



142,900



144,000



151,300



-



(5)%



287,600



302,700



(5)%



Ore grade processed - %Ni



1.69



1.65



1.73



1.72



1.72



2%



(2)%



1.67



1.70



(2)%



Production



2,200



2,100



2,100



2,300



2,300



5%



(4)%



4,300



4,600



(7)%



Total Nickel segment nickel production



11,300



9,900



10,900



11,300



11,100



14%



2%



21,200



22,300



(5)%



Sales volumes



10,400



10,400



11,400



11,600



11,100



-



(6)%



20,800



21,900



(5)%



 


(1)       Excludes Anglo American Platinum's nickel production.


 


 


 

 


 


 


EXPLORATION AND EVALUATION


 


Exploration and Evaluation expenditure for the quarter totalled $52 million, an increase of 17%. Exploration expenditure for the quarter totalled $23 million, an increase of 2%. Evaluation expenditure for the quarter totalled $29 million, an increase of 31%.


 


NOTE


 


This Production Report for the second quarter ended 30 June 2017 is unaudited.


 


AVERAGE REALISED PRICES SUMMARY


 

























































































































































































































































Average realised prices



H1 2017



H2 2016



H1  2016



FY 2016



H1 2017


vs.


H2 2016



H1 2017


vs.


H1 2016



De Beers



 



 



 



 



 



 



     Total sales volume (100%) (Mct)



20.0



13.7



18.3



32.0



46%



9%



Consolidated sales volume (Mct)(1)



19.1



12.8



17.2



30.0



49%



11%



Consolidated average realised price ($/ct)(2)



156



201



177



187



(22)%



(12)%



 Average price index(3)



121



119



117



118



2%



4%



Copper (USc/lb)



264



235



215



225



12%



23%



PGMs



 



 



 



 



 



 



Platinum (US$/oz)



957



1,015



971



993



(6)%



(1)%



Palladium (US$/oz)



780



670



551



610



16%



42%



Rhodium (US$/oz)



911



682



679



680



34%



34%



Basket price (US$/oz)



1,843



         1,877



         1,632



1,753



(2)%



13%



Basket price (ZAR/oz)



24,400



       26,209



       25,100



25,649



(7)%



(3)%



Iron Ore - FOB prices



 



 



 



 



 



 



Kumba Export (US$/dmt)(4)



71



67



55



64



6%



29%



Minas-Rio (US$/wmt)(5)



66



61



44



54



8%



50%



Coal



 



 



 



 



 



 



Metallurgical Coal



 



 



 



 



 



 



Metallurgical - Export (U$/t)(6)



195



153



79



119



27%



147%



Metallurgical - PCI (US/t) (6)



124



102



70



77



22%



82%



Thermal - Export (U$/t)



87



65



47



55



34%



85%



South Africa



 



 



 



 



 



 



Thermal - Export (U$/t)(8)



72



69



50



60



 



 



Thermal - Domestic (U$/t, FOR)



20



17



16



17



 



 



Cerrejón



 



 



 



 



 



 



Thermal - Export (U$/t)(7)



71



65



47



56



9%



51%



Nickel (USc/lb)



442



474



387



431



(7)%



14%



 


(1)       Consolidated sales volume excludes De Beers' JV partners' 50% proportionate share of sales to entities outside the De Beers Group of Companies from the Diamond Trading Company Botswana and the Namibia Diamond Trading Company, and includes pre-commercial production sales volumes from Gahcho Kué. Excluding Gahcho Kué's capitalised pre-commercial production sales volumes results in a consolidated sales volume of 18.4Mct for H1 2017.


(2)       Consolidated average realised price based on 100% selling value post-aggregation and excludes pre-commercial production sales from Gahcho Kué.


(3)       Average of the De Beers price index for the Sights within the six month period. The De Beers price index is relative to 100 as at December 2006.


(4)       Average realised export basket price (FOB Saldanha).


(5)       Average realised export basket price (FOB Açu) (wet basis).


(6)       Weighted average metallurgical coal sales price achieved.


(7)       Weighted average export thermal coal price achieved.


 


 


 


 


 


 


 


 


 


 


 


Note:


 


Production figures are sometimes more precise than the rounded numbers shown in the commentary of this report. The percentage change will reflect the percentage change using the production figures shown in the Production Summary of this report.


 


Forward-looking statements:


 


This contains certain forward looking statements which involve risk and uncertainty because they relate to events and depend on circumstances that occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements.


 


For further information, please contact:


 
















Media



 



Investors



UK


James Wyatt-Tilby


james.wyatt-tilby@angloamerican.com


Tel: +44 (0)20 7968 8759


 


Marcelo Esquivel


marcelo.esquivel@angloamerican.com


Tel: +44 (0)20 7968 8891


 


South Africa


Pranill Ramchander


pranill.ramchander@angloamerican.com


Tel: +27 (0)11 638 2592


 


Ann Farndell


ann.farndell@angloamerican.com


Tel: +27 (0)11 638 2786



 



UK


Paul Galloway


paul.galloway@angloamerican.com


Tel: +44 (0)20 7968 8718


 


Trevor Dyer


trevor.dyer@angloamerican.com


Tel: +44 (0)20 7968 8992


 


Sheena Jethwa


sheena.jethwa@angloamerican.com


Tel: +44 (0)20 7968 8680



 


Notes to editors:


 


Anglo American is a globally diversified mining business. Our portfolio of world-class competitive mining operations and undeveloped resources provides the raw materials to meet the growing consumer-driven demands of the world's developed and maturing economies. Our people are at the heart of our business. It is our people who use the latest technologies to find new resources, plan and build our mines and who mine, process and move and market our products to our customers around the world.


 


As a responsible miner - of diamonds (through De Beers), copper, platinum and other precious metals, iron ore, coal and nickel - we are the custodians of what are precious natural resources. We work together with our key partners and stakeholders to unlock the long-term value that those resources represent for our shareholders and for the communities and countries in which we operate - creating sustainable value and making a real difference.


www.angloamerican.com



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