| Thu 23 Oct 2008, 8:25 | | AGL - Anglo American Plc - Interim Management Statement Production Report for |
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AGL
ANAAL
AGL - Anglo American Plc - Interim Management Statement Production Report for
the third quarter ended 30 September 2008
News Release
Anglo American Plc
(the "Company")
Short name: Anglo
Share code: AGL
ISIN number: GB00B1XZS820
Registered office: 20 Carlton House Terrace, London, SW1Y 5AN
Registered number: 356413
Interim Management Statement
Production Report for the third quarter ended 30 September 2008
Overview
Production increases in iron ore, metallurgical coal, Eskom thermal coal, South
American thermal coal, manganese ore, manganese alloys and steel products
compared with the third quarter of 2007.
Platinum remains on target for full year refined production of 2.4 million
ounces.
Strong performance from Kumba Iron Ore`s Sishen expansion, with production ramp
up continuing at the jig plant.
Kumba Iron Ore`s benchmark export price expected to increase by an average of
100-110% on a rand per tonne basis for the 2008/09 iron ore contract year.
Transaction to acquire control of the Minas-Rio and Amap? iron ore projects
completed in August for $3.5 billion.
Sale of Namakwa Sands and a 26% interest in the Black Mountain zinc mine and
Gamsberg zinc project to Exxaro Resources.
Memorandum of Understanding signed with Eskom to identify and implement
solutions to guarantee the integrity of South Africa`s electricity supply.
Anglo American believes that its strong strategic position and the market
fundamentals of its core commodities will continue to drive growth over the
medium and long term, with constrained supply and growing demand led by the
secular trend of urbanisation and industrialisation in China and other
developing countries.
The current volatility and uncertainty in global markets, coupled with the
slowdown in the world`s major economies, has had a significant impact on
commodity prices. The mining industry has already seen the curtailment of some
high cost operations and the credit environment is expected to limit the funding
and expansion capabilities of many of the junior mining companies.
Against this economic background, Anglo American is conducting a review of its
project pipeline to assess capital expenditure profiles on a project by project
basis, as well as intensively driving its asset optimisation programme and
related cost discipline across the businesses.
There have been no material events, transactions or changes in the financial
position of the Group since 30 June 2008 other than as outlined in this
statement.
Results for the full year to 31 December 2008 will be announced on 20 February
2009.
This report forms Anglo American plc`s Interim Management Statement for the
purpose of the UK Listing Authority`s Disclosure and Transparency Rules.
Production report
PLATINUM - Refined Sep Sep Sep Q08 Sep Q08
production
2008 2007 vs. vs.
QTR QTR Sep Q07 Jun Q08
Platinum 000 oz 543 611 -11.1% -5.1%
Palladium 000 oz 322 343 -6.2% +6.9%
Rhodium 000 oz 75 81 -6.6% +26.8%
Nickel tonnes 4,000 4,000 0.0% +8.1%
Platinum - Refined production was lower than Q3 2007 and Q2 2008 due to the
planned downtime for maintenance at Waterval of the Number 2 Furnace, the slag
cleaning furnace and the ACP plant, including the acid plant. Lower grade ore
and safety stoppages also contributed to the reduced refined output. The trend
in refined platinum production increased significantly, as expected, towards the
end of the third quarter, with output exceeding forecasts as all furnaces were
run at full capacity.
Rhodium - Refined production was lower than Q3 2007 for the same reasons that
reduced platinum output. The slag run-out at the Polokwane smelter in Q2 2008
reduced rhodium production in that quarter, accounting for the 27% increase in
production between Q3 2008 and Q2 2008.
BASE METALS Sep Sep Sep Q08 Sep Q08
2008 2007 vs. vs.
QTR QTR Sep Q07 Jun Q08
Copper tonnes 148,600 170,300 -12.7% -7.7%
Nickel tonnes 5,600 6,200 -9.7% +12.0%
Zinc tonnes 86,500 86,800 -0.3% -1.9%
Copper - Copper production for the quarter was lower than Q3 2007 and Q2 2008
primarily due to lower production at Collahuasi, following pipeline and filter
constraints and a mill motor stator failure on SAG mill 3. The stator failure
occurred as a result of an electrical fault and was repaired in situ between 19
September and 2 October. Production has returned to normal.
Nickel - Production for the quarter was lower than Q3 2007 due to a number of
technical issues experienced at Loma de N?quel following the unplanned shutdown
associated with the strike at that operation in the first quarter. However,
production was 12% higher than Q2 2008 as these issues are resolved.
Zinc - Production was broadly in line with the previous quarter and Q3 2007.
FERROUS METALS AND INDUSTRIES Sep Sep Sep Q08 Sep Q08
2008 2007 vs. vs.
QTR QTR Sep Q07 Jun Q08
Iron ore
Lump 000 t 5,965 4,661 +27.9% +12.7%
Fines 000 t 4,119 3,152 +30.7% +15.0%
Total 000 t 10,084 7,813 +29.1% +13.6%
Manganese
Manganese Ore 000 t 732 578 +26.6% -1.2%
Manganese Alloys 000 t 81 74 +9.5% +6.6%
Scaw Metals
South African products 000 t 187 170 +10.0% -11.4%
International products 000 t 230 197 +16.8% +4.1%
Total 000 t 417 367 +13.6% -3.5%
Iron ore - Total production from Kumba Iron Ore increased 29.1% in the third
quarter from a year earlier to 10.1 million metric tonnes (Mt). This was mainly
due to the additional 1.8 Mt produced in the third quarter by the newly
commissioned jig plant which continues to ramp up production and is expected to
produce some 5 Mt for the full year 2008. Full production of 13 Mtpa on an
annualised basis is anticipated in the second half of 2009.
In July, the 9 Mtpa Sishen South project was approved and an agreement was
concluded with Transnet in respect of the expansion of the Sishen-Saldanha
export railway line. First production is expected in 2012.
Manganese ore - Production for the quarter was 26.6% higher than Q3 2007 due to
increased production rates at GEMCO and the Hotazel mines and increased
availability of rail and port capacity in South Africa. Production for the
quarter was in line with Q2 2008, with the South African operations achieving a
fourth consecutive quarterly record, while GEMCO, the Australian operation, was
impacted by maintenance and activities related to the expansion project.
Manganese alloys - Higher production volumes were achieved at TEMCO, the
Tasmanian business, and Metalloys in South Africa, mainly due to improved
efficiency and stability of the furnaces.
Scaw Metals - Production of South African steel products increased 10% versus Q3
2007 due to improved performance from the grinding media and rolled product
operations, and was 11.4% lower versus Q2 2008 due to lower demand in rolled
products. International steel products increased 16.8% versus Q3 2007 due to
higher off-take from the grinding media operations in Chile and Canada, and up
4.1% versus Q2 2008 due to increased demand for steel products in Canada.
COAL - Total Sep Sep Sep Q08 Sep Q08
2008 2007 vs. vs.
QTR QTR Sep Q07 Jun Q08
Eskom 000 t 9,692 8,908 +8.8% +12.2%
Thermal 000 t 12,378 13,597 -9.0% -2.6%
Metallurgical 000 t 3,632 3,188 +13.9% -19.2%
COAL - South Africa Sep Sep Sep Q08 Sep Q08
2008 2007 vs. vs.
QTR QTR Sep Q07 Jun Q08
Eskom 000 t 9,692 8,908 +8.8% +12.2%
Thermal 000 t 6,090 6,448 -5.6% +7.0%
Metallurgical 000 t 280 278 +0.7% +13.4%
Eskom coal - Production increased 8.8% on Q3 2007 due to the allocation of
additional thermal coal to Eskom, following national power shortages in Q1 2008.
Volumes increased over Q2 2008, predominantly due to improved performance at New
Vaal following a tip outage in April-May which reduced production in Q2.
Thermal coal - Production decreased 5.6% on Q3 2007, mainly due to reduced
production at Goedehoop caused by adverse geological conditions. In addition,
the reallocation of thermal coal to Eskom, to alleviate the power shortages,
further impacted thermal coal production. Volumes increased on Q2 2008 primarily
as a result of increased production at Isibonelo.
COAL - Australia Sep Sep Sep Q08 Sep Q08
2008 2007 vs. vs.
QTR QTR Sep Q07 Jun Q08
Thermal 000 t 3,222 4,271 -24.6% -20.5%
Metallurgical 000 t 3,158 2,910 +8.5% -23.1%
Thermal coal - The decrease of 24.6% against Q3 2007 and 20.5% against the
previous quarter was driven by a fall in domestic demand from the power
utilities.
Metallurgical coal - Production in Q3 2008 was 8.5% higher than Q3 2007, aided
by the purchase of Foxleigh in Q1 2008 and the removal of production constraints
by securing alternative and additional port entitlements. The decrease of 23.1%
against the record prior quarter was caused by rain delays and loss of
underground production due to adverse mining conditions.
COAL - South America Sep Sep Sep Q08 Sep Q08
2008 2007 vs. vs.
QTR QTR Sep Q07 Jun Q08
Thermal 000 t 3,066 2,878 +6.5% +4.3%
Thermal coal - South American production was 6.5% higher than Q3 2007 due to
improved mining recovery at Cerrejon, more favourable weather conditions and
increased management focus on productivity. This offset CDG`s lower production
which was caused by the lack of availability of equipment spares and ongoing
political and labour disruptions. Production was 4.3% higher than Q2 2008 due
to better in-pit performance and productivity.
COAL - Canada Sep Sep Sep Q08 Sep Q08
2008 2007 vs. vs.
QTR QTR Sep Q07 Jun Q08
Metallurgical 000 t 194 - - +40.1%
Peace River Coal commenced commercial production at the Trend Mine in January.
Trend Mine is predominantly a metallurgical coal operation, with limited thermal
coal production. Metallurgical coal output for the Trend Mine in the third
quarter showed a significant improvement over the second quarter, largely due to
accelerated mining activities following the commencement of a second mining
contractor and commissioning of the first owner-operated waste fleet.
DIAMONDS - carats Sep Sep Sep Q08 Sep Q08
recovered
2008 2007 vs. vs.
QTR QTR Sep Q07 Jun Q08
Total 000 carats 13,111 13,696 -4.3% +5.3%
Production in Q3 2008 was lower than Q3 2007 following a reduction in carats
recovered at Orapa in Botswana and the Venetia mine in South Africa. This
offset higher recovery at Jwaneng and production starting at the Canadian mines
(Victor and Snap Lake) and at Voorspoed (South Africa).
A production increase at Jwaneng led the increase in recovery in Q3 2008
compared with Q2 2008. The third quarter also saw increased recoveries from
Victor and Namaqualand and the start of production at Voorspoed in September.
Production summary
The figures below include the entire output of consolidated entities and the
Group`s share of joint ventures, joint arrangements and associates where
applicable, except for De Beers, which is quoted on a 100% basis.
Quarter Ended % Change
Sep Q08 Sep Q08
Sep Jun Sep vs. vs.
2008 2008 2007 Sep Q07 Jun Q08
Platinum
Platinum oz 543,200 572,500 611,300 -11.1% -5.1%
Palladium oz 321,700 300,800 342,800 -6.2% +6.9%
Rhodium oz 75,300 59,400 80,600 -6.6% +26.8%
Nickel (Platinum) t 4,000 3,700 4,000 0.0% +8.1%
Base Metals
Copper t 148,600 161,000 170,300 -12.7% -7.7%
Nickel t 5,600 5,000 6,200 -9.7% +12.0%
Zinc t 86,500 88,200 86,800 -0.3% -1.9%
Lead t 16,700 14,700 13,500 +23.7% +13.6%
Ferrous Metals
Iron ore t 10,084,000 8,873,000 7,813,000 +29.1% +13.6%
Manganese Ore t 732,000 741,000 578,000 +26.6% -1.2%
Manganese Alloys t 81,000 76,000 74,000 +9.5% +6.6%
Steel Products t 417,000 432,000 367,000 +13.6% -3.5%
Coal
Coal - Eskom t 9,692,200 8,637,000 8,908,300 +8.8% +12.2%
Coal - thermal t 12,377,600 12,714,300 13,597,100 -9.0% -2.6%
Coal - t 3,631,600 4,494,400 3,188,200 +13.9% -19.2%
metallurgical
De Beers
Diamonds cts 13,111,000 12,452,000 13,696,000 -4.3% +5.3%
recovered
Note: In the table above and throughout this document, oz refers to troy ounces,
t to tonnes and cts to carats.
Forward looking statements:
This Interim Management Statement contains certain forward looking statements
which involve risk and uncertainty because they relate to events and depend on
circumstances that occur in the future. There are a number of factors that
could cause actual results or developments to differ materially from those
expressed or implied by these forward looking statements.
For further information, please contact:
United Kingdom
James Wyatt-Tilby, Media Relations
Tel: +44 (0)20 7968 8759
Anna Poulter, Investor Relations
Tel: +44 (0)20 7968 2155
Caroline Metcalfe, Investor Relations
Tel : +44 (0)20 7968 2192
South Africa
Pranill Ramchander, Media Relations
Tel: +27 (0)11 638 2592
Notes to Editors:
Anglo American plc is one of the world`s largest mining and natural resource
groups. With its subsidiaries, joint ventures and associates, it is a global
leader in platinum group metals and diamonds, with significant interests in
coal, base and ferrous metals, as well as an industrial minerals business. The
Group is geographically diverse, with operations in Africa, Europe, South and
North America, Australia and Asia. (www.angloamerican.co.uk)
23 October 2008
Sponsor: UBS Warburg
Date: 23/10/2008 08:25:40 Produced by the JSE SENS Department.
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