LONDON Anglo American Plc
has reported a "solid operational performance" in the third
quarter of 2012, with production increases across five of its
seven commodities despite continuing disruptions at its
platinum operations in South Africa.
Refined platinum production was
flat at 649,000 ounces, while equivalent refined platinum
production fell 6 percent to 626,300 ounces.
"Production and costs were
adversely affected by illegal industrial action (at the South
African platinum operations), which caused production loss of
42,000 ounces of equivalent refined platinum in the quarter,"
the London-based miner said.
Production was down at the Union
North and South, Mogalakwena, Tumela and Siphumelele mines,
Anglo said. Amandelbult and Union North and South have also
been hit by strikes.
Production was down 23 percent
at Union North and down 26 percent at Union South as a result
of lower grades and other factors.
Mogalakwena production fell as a
result of the breakdown of the primary crusher at the North
concentrator, as well as lower head grade.
Platinum production at
Rustenburg, meanwhilewhich was heavily affected by the
strikes between July and Septembercame to 148,100 ounces
for the three months ended Sept. 30, down just 0.3 percent, and
up 2 percent quarter on quarter despite the loss of 42,000
ounces of output.
"Anglo American Platinum (Ltd.)
has been experiencing illegal industrial strike action at its
Rustenburg, Union and Amandelbult mining operations since
September 18," the company said. "This followed an initial
safety suspension on September 12. The strike was initially
contained to the Rustenburg mining operations, but has since
commenced at Union and Amandelbult operations as of the first
week of October."
After the end of the quarter,
equivalent refined platinum production losses came to 96,300
ounces during the Oct. 1-24 period.
The production losses have also
led to an 8-percent increase in unit costs for the third
quarter due to the retained fixed cost base.
The average loss of platinum
production stands at 4,500 ounces per day; as a result, the
expected refined platinum production for 2012 has been reduced
to between 2.2 million and 2.4 million ounces.
"Given the retained fixed cost
base, and as result of the reduction in production, the 2012
unit cost is expected to be (15,500 South African rand, or
$1,790) to R16,000 ($1,848) per equivalent refined platinum
ounces," the company said. "In line with the lower production
levels and in light of continued adverse market conditions,
planned total capital expenditure for 2012 has been reduced
further to R6.5 billion ($750.7 million)."
Anglos copper production,
meanwhile, was up 12 percent year on year to 157,300 tonnes in
the three months ended Sept. 30 as a result of the full ramp-up
of the expansion of the Los Bronces project in Chile, the
Production at Los Bronces was 84
percent higher, it added, despite lower ore grades and
recoveries; the expansion project contributed 48,900
The new processing plant is
still ramping up and affected design throughput capacity in
August and September.
Production at Collahuasi,
meanwhile, was down by 40 percent as a consequence of planned
lower ore grades from current phases in the mine plan. This was
exacerbated by lower recoveries, a lengthy ball mill outage and
"a number of other plant reliability challenges," Anglo
The joint shareholder
intervention that began in July to address these issues is
expected to start providing improvements in the fourth
During the quarter, the company
also issued corporate bonds with a value of $2.3 billion in the
U.S. and European markets.
Nickel production was up 38
percent to 9,000 tonnes, as production from Barro Alto, Brazil,
offset the lack of production from Loma de Níquel in
Venezuela. Barro Alto produced 4,700 tonnes of nickel in the
third quarter and 16,700 tonnes in the year to date.
The three remaining concessions
at Loma de Níquel, Venezuela, after the cancellation of
13 other concessions, are due to expire Nov. 10.
"If there is no development in
this situation in the coming weeks, then there will be no
further production contribution from this operation. Anglo
American is continuing to engage with stakeholders in
Venezuela," the company said.
Refined production of palladium
was up by 4 percent and rhodium was up 20 percent, while
refined nickel was down 24 percent following technical issues
in the new tank house at the base metal refinery.
Anglo also reported strong
operating performance in manganese ore as a result of improved
plant availability at its Groote Eylandt Mining Co. (Gemco)
mine in Australia, which contributed to record ore production
in the third quarter of 858,000 tonnes. The mine is a joint
venture between Anglo and London-based BHP Billiton Plc.
The resumption of manganese
alloys production at Tasmanian Electro Metallurgical Co.
(Temco), also in Australia, in July led to a major rise in
alloy production quarter on quarter to 52,000 tonnes.
On Aug. 24, Anglo completed the
sale of a 25.4-percent stake in Anglo American Sur, Chile, to a
joint venture between Corporación del Cobre de Chile
(Codelco) and Mitsui & Co. Ltd., for a cash consideration
of $2 billion.
Combined exploration and
evaluation operating expenditure for the nine months ended
Sept. 30 was $526 million, 47 percent higher than in the same
period of 2011.
Spending was focused on
opportunities in Africa, Australia, Brazil, Canada, Chile,
Finland and Peru.
"Anglo American recognizes the longer-term value of
exploration and evaluation activities. However, in light of the
current macroeconomic environment and following recent
successes, expenditure is being moderated in 2012 and 2013,"
the company said.