--Anglo American said group production in the third quarter rose 4% on a copper-equivalent basis

--The company's 3Q production increase was driven by strong performances at its Minas Rio operations in Brazil, and from its metallurgical coal projects

--Copper production fell due to drought in Chile, which could threaten output next year

 

By Oliver Griffin

 

Diversified mining company Anglo American PLC (AAL.LN) saw its shares rise on Tuesday after publishing a broadly positive set of third-quarter production results where copper-equivalent total output rose by 4%.

The mining company said that rising production levels in the three months ended Sept. 30 were driven by continued ramp up at its Minas Rio iron-ore operation in Brazil and a strong performance in metallurgical coal.

Production at Minas Rio, which started ramping up operations in December after a pipeline leak prompted a shutdown of operations last April, came in at 6.1 million metric tons, Anglo American said. Following the strong performance, it raised its full-year guidance range to between 20 million tons and 22 million tons, up from a previous range of 19 million tons to 21 million tons.

Metallurgical-coal production in the third quarter rose 22% to 6.6 million tons, the company said, citing improvements in throughput and equipment productivity. It maintained 2019 production guidance for metallurgical coal in a range of 22 million tons to 24 million tons.

Output at the company's Kumba iron-ore operations in South Africa was flat at 10.5 million tons.

Shares at 0928 GMT traded up 0.7% a 1953.80 pence, having hit highs of 1971.80 pence earlier in the session.

Despite some strong performances, it wasn't all good news for the miner. Ignoring the contribution from Minas Rio, third-quarter production fell 2%, it said, adding that copper output fell 8% to 158,900 tons, due to "unprecedented drought" hitting its Los Bronces operation in Chile.

As a result of the negative impact from the drought, the company lowered the top end of its full-year copper guidance so that the range now stands at 630,000 tons to 650,000 tons. Previously the top end of Anglo American's copper guidance had been 660,000 tons. The company warned that continued drought would also put 2020 copper production at risk.

While metallurgical-coal production shone, the same couldn't be said for the company's other carbon-based production. Output from De Beers, the company's majority-owned diamond business, fell 14% in the third quarter to 7.4 million carats due to planned reductions in output, while production of thermal coal fell 18% due to lower than expected production from Cerrejon in Colombia.

Anglo American maintained its full-year diamond-production guidance at around 31 million carats, subject to trading conditions, and said it expects thermal coal output for the year at the bottom of its range of 26 million tons to 28 million tons, due to the lower performance at Cerrejon.

Anglo American Platinum Ltd. (AMS.JO), in which Anglo American holds a 77.3% stake, said total production of 6E platinum-group metals--which includes platinum, palladium, rhodium, ruthenium, osmium and gold--fell 15% to 1.14 million ounces.

It backed its full-year production guidance at a range of 4.2 million ounces to 4.5 million ounces.

 

Write to Oliver Griffin at oliver.griffin@dowjones.com; @OliGGriffin

 

(END) Dow Jones Newswires

October 22, 2019 06:03 ET (10:03 GMT)

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