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Anglo American chief executive Mark Cutifani said the company’s restructuring efforts have left it in a stronger competitive position, as he praised “strong” first quarter production efforts despite sluggish growth in some of the company’s key areas.
Last year Anglo announced plans to streamline its operations to focus on three key products – diamonds, platinum and copper – down from nine previously. However, a rebound in commodity prices led the company to end its asset sale programme earlier this year.
Those non-core areas enjoyed the biggest production increases in the first three months of this year, with iron ore production from its South African Kumba business up 17 per cent compared to the same period last year, while production from Minas-Rio in Brazil rose 30 per cent. Metallurgical coal output rose 28 per cent.
A recent slump in the price of iron ore, a key ingredient in steelmaking, hit Anglo’s shares in recent weeks, as concerns grow about a supply glut.
In the company’s core areas, its diamond business saw the strongest growth, with “improved trading conditions” in the wider market helping it to an 8 per cent increase in rough diamond production. Platinum production, in contrast, was “broadly flat”, while copper output fell by 3 per cent.
Nickel production was hit by “unplanned maintenance” to the electric furnaces at one of Anglo’s mines, falling 12 per cent compared to the previous year. The company lowered its full-year production guidance to between 43,000 and 45,000 tonnes, down from its previous estimate of around 45,000 tonnes. Full-year estimates for all its other products were maintained.
Mr Cutifani said the company had delivered a “strong operational performance”, and said its portfolio changes, along with improvements at its Sishen iron ore mine, “are further strengthening Anglo American’s resilience and competitive position”.