Anglo report its higher first-quarter results in diamond sales

Anglo American reported sharply higher first-quarter diamond sales from its subsidiary De Beers along with improved production performances from all of its divisions apart from copper and nickel.

Anglo American, which has told the market its core focus is platinum, diamonds and copper, reported a solid first-quarter operating performance compared with the same period a year earlier, with the standout performance being diamond sales.

De Beers, the world’s largest diamond producer by value, increased its sales in the first three months of this year to 14.1-million carats in three sales events called sights compared with 8.1-million carats in two sights a year earlier.
"De Beers’s total sales volumes of 14.1-million carats reflected improved demand for lower value goods in stock at December 31 2016," said Anglo CEO Mark Cutifani.

 

Analysts said the sales performance meant De Beers had cleared stocked diamonds after a very difficult 2015 and that this was "good for cash generation".
De Beers increased diamond output by 8% to 7.4-million carats, with its new 51%-owned Gahcho Kue mine in northern Canada coming into production. A slight decrease in Botswana production to 5.2-million carats was offset by large increases from Venetia in SA, Canada and Namibia.
Full-year guidance remained at between 31-million and 33-million carats.

Platinum production was flat year on year, rising 1% to 572,000oz. Refined output shot up 121% to 577,000oz when compared with the first quarter a year ago when Anglo American Platinum’s refinery was closed in a temporary safety stoppage.
Platinum from Anglo American Platinum’s own mines was 26% lower at 325,000oz, reflecting the sale of Rustenburg mines to Sibanye Gold. Purchases of ore from third parties was 96% higher at 247,000oz, reflecting the Sibanye deal.
Platinum output for the year was unchanged at between 2.35-million and 2.4-million ounces.
Copper production was 3% lower compared with a year ago, coming in at 142,600 tonnes. A 13% increase at the 44%-owned Collahuasi mine was offset by 11% falls in output at Los Bronces and El Soldado.

While Los Bronces had lower output caused by operational issues, the El Soldado mine was grappling with a temporary suspension of its mining operations in February after the mine plan update was not accepted by regulators, stripping out 3,000 tonnes of production.
Full-year copper production was kept unchanged at between 570,000 and 600,000 tonnes, with El Soldado contributing up to 60,000 tonnes.
At the Minas Rio iron ore mine in Brazil output increased by 30% to 4.3-million tonnes as the operation continued to ramp up. Anglo spent $13bn buying and building the mine and it has not put it up for sale as part of the company-wide restructuring it is undertaking.

 

Anglo has opted to hold onto its metallurgical coal operations in Australia. These mines generated 5.2-million tonnes in the first quarter, a 28% increase year on year.
Anglo warned the consequences of Cyclone Debbie in the closing week of March on its Australian coal business would be felt in the second quarter.
In SA, where Anglo has put its coal mines up for sale, the division improved output of export and local coal sales by 9% to 5-million tonnes.

Coal for use by Eskom, the state-owned power company, was flat at 6.37-million tonnes. Anglo has agreed the sale of mines dedicated to supplying Eskom to Seriti Resources. The Kriel, New Denmark and New Vaal mines produced 5.7-million tonnes in the first quarter.
Full-year nickel production was lowered to between 43,000 and 45,000 tonnes from 45,000 tonnes before because of a 12% fall in first-quarter production to 9,900 tonnes because of unplanned maintenance of electric furnaces at the Barro Alto operation in Brazil.

Anglo has also opted to retain its nickel operations after earlier putting them up for sale