Sat Oct 22 07:20:40 SAST 2016

Anglo hit hard

By unknown | Apr 30, 2008 | COMMENTS [ 0 ]

Robert Laing

Robert Laing

Anglo American's share price dived more than 5percent to an intraday low of R484 after it released a production update revealing how badly Eskom knocked its mines during the first three months of this year.

Five days of no power in January followed by electricity supply constraints hit metallurgical coal mining hardest with output plunging over 35percent to 216000 tons during the quarter to end March from the same period last year. Thermal coal production fell 19percent to 4,8million tons.

Though coal mining for Eskom power stations was excluded from electricity rationing, heavy rainfall caused this to fall 3,5percent to 8,4million tons.

AngloCoal's Australian operations, on the other hand, raised metallurgical coal output 7percent to nearly 2,5million tons despite severe flooding in Central Queensland.

Geographic diversification helped the mining giant post an overall increase in metallurgical coal. But when it came to platinum group metals where 80percent of the planet's resources are in South Africa, output from Anglo Platinum and its joint venture partners tumbled 19percent. Production of platinum itself fell 24percent, palladium 25percent and nickel 26percent.

Anglo Ferrous Metals, which owns 63percent of Kumba and 49percent of Brazil's MMX Minas-Rio, boosted iron ore production by 7percent to more than 8million tons thanks to the completion of the Sishen expansion project last year.

Manganese ore was the group's star performer, increasing ouput 14,6percent with 10percent less electricity as mandated by Eskom.

Venezuelan miners at Anglo's Loma de Niquel went on strike during March, causing nickel production to dive over 28percent.

Yesterday's trading update coincided with a press conference at which Anglo American chief executive Cynthia Carrol and Minerals and Energy Minister Buyelwa Sonjica announced the conversion of all of Anglo's coal, base and ferrous metals old order mining rights into new order.

Negotiations are still under way with Royal Bafokeng Holdings and African Rainbow Minerals Limited to convert Angloplat's mining rights.


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