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Anglo American Announces 2020 Interim Results

Mining News - Published on Fri, 31 Jul 2020

Image Source: Anglo American
Anglo American Chief Executive Mark Cutifani said “The first half of 2020 has tested society to its limits and I am encouraged by, and proud of, how our people have pulled together to do what’s right for each other, our business and for society as a whole. Anglo American acted quickly at the onset of the pandemic to protect both the health of our people and host communities through our global “WeCare” lives and livelihoods programme. At the same time, we secured the continuity and integrity of our operations. The pandemic did materially impact production, with varying degrees of lockdown being the main driver for our 11% overall reduction in output and 16% decrease in revenue, alongside operational incidents at PGMs and Met Coal. These reductions were partially offset by strong performances from our Brazilian iron ore and Chilean copper operations. By the end of June, we were back at c.90% capacity across the portfolio and the significant transformation of our underlying operational capabilities that has made the business more resilient helped to deliver $3.4 billion of underlying EBITDA*.

Financial highlights – six months ended 30 June 2020
US$ million, unless otherwise stated30-Jun-2030-Jun-19Change
Underlying EBITDA*3,3505,451-39%
Mining EBITDA margin*38%46%

(1) On a copper equivalent basis.

Continued strong performances from our Minas-Rio iron ore operation in Brazil and the Collahuasi copper operation in Chile helped mitigate our overall decrease in production to 11% on a copper equivalent basis. The Covid-19 lockdowns across southern Africa affected production at PGMs, De Beers, Kumba and Thermal Coal, with production also affected by operational issues at Metallurgical Coal and PGMs. Ramping up from a production level of around 60% of capacity in April, operations across the Group continued to increase to around 90% of production capacity by the end of June.

De Beers' rough diamond production decreased by 27% to 11.3 million carats (30 June 2019: 15.6 million carats), primarily as a result of the impact of Covid-19 lockdowns on production at its southern African operations.

Copper production decreased by 2% to 313,900 tonnes (30 June 2019: 320,200 tonnes). At Los Bronces, production decreased by 18% to 149,400 tonnes (30 June 2019: 182,900 tonnes) due to expected lower water availability impacting plant throughput, partly offset by planned higher grades. Attributable production from Collahuasi increased by 27% to a record of 142,200 tonnes (30 June 2019: 112,000 tonnes) on the back of higher throughput and record copper recovery, reflecting plant improvement projects implemented in 2019. Disruption to operations from Covid-19 has been limited, with measures in place to help safeguard the workforce and local communities.

At our PGMs business, platinum and palladium production (metal in concentrate) decreased by 25% to 748,300 ounces (30 June 2019: 992,200 ounces), and by 21% to 531,600 ounces (30 June 2019: 673,800 ounces), respectively. The decrease in production was primarily due to the Covid-19 related lockdowns in southern Africa which reduced operating capacity for most of the second quarter, although Mogalakwena had ramped up towards normal levels by the end of June 2020, with Amandelbult expected to reach 85% production levels by the end of the year.

At Kumba, iron ore production decreased by 11% to 17.9 Mt (30 June 2019: 20.1 Mt), mainly due to lower workforce levels in response to the Covid-19 lockdown. Both Sishen and Kolomela had ramped up to normal run rates by the end of June 2020.

Minas-Rio production increased by 17% to 12.6 Mt (30 June 2019: 10.8 Mt), reflecting a continued strong performance, with P101 productivity initiatives supported by sustained operational stability. The Covid-19 measures put in place to safeguard the workforce and communities did not significantly affect production in the period.

Metallurgical coal production decreased by 22% to 7.8 Mt (30 June 2019: 10.0 Mt), principally as a result of two incidents underground that affected Moranbah and Grosvenor, as well as longwall moves at Grosvenor and Grasstree. Disruption to operations from Covid-19 has been limited, with measures in place to help safeguard the workforce and local communities. Open cut operations have been scaled back at Dawson and Capcoal in response to reduced demand for lower quality metallurgical coal.

Thermal coal total export production decreased by 20% to 10.5 Mt (30 June 2019: 13.2 Mt), largely due to the impact of Covid-19 lockdown restrictions. In South Africa, operations operated at 50% throughout the lockdown period and have ramped up to operate at c.80% since June. In Colombia, operations restarted in May and are progressively ramping up towards normal levels in the third quarter.

He added “During the second half, I expect our product diversification and Operating Model to continue to serve us well. As the global economy recovers, PGMs, copper and iron ore are all particularly well positioned, while De Beers, as the world's leading diamond business, is taking all appropriate steps to address the effects of acute disruption. As a company, we are continuing to invest and grow, with our products increasingly geared towards a fast-growing population and a cleaner, greener, more sustainable world.”

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Posted By : Yogender Pancholi on Fri, 31 Jul 2020
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