Anglo American joined rivals in reporting a weak start to the year after grappling with the effects of the coronavirus pandemic and weather-related disruptions to its operations.
Production in the three months to March was 10% lower than a year earlier due to Covid-related absenteeism and heavy rainfall in South Africa and Brazil, the London-listed miner said on Thursday. in a commercial update.
“As a result, we are updating our volume guidance for platinum group metals, iron ore and metallurgical coal for the full year,” said Mark Cutifani, outgoing chief executive.
The company raised its cost forecast by 9%, citing currency fluctuations and broader inflationary pressures, particularly the price of diesel, which it uses to power trucks at its sites.
Anglo said operations at its Moranbah coking coal mine in Australia had been suspended following an accident in March and had consequently lowered its production forecast to 17 million to 19 million tonnes from 20 to 22 million previously.
The statement, however, was more positive on the outlook for De Beers’ diamond division, saying rough diamond production had jumped 25% and demand was strong. Analysts believe that De Beers could benefit from Western sanctions imposed on Russian producer Alrosa.
Anglo’s update came just hours after BHP, the world’s biggest miner, warned of a hit to copper and nickel production due to pandemic-related absenteeism and social unrest in Chile. Rio Tinto and Vale also released weak first quarter trade updates this week.
“This challenging start to the year underscores the importance of adhering to our operating model to stabilize performance after the necessary disruptions of the past two years as we have adapted – and are now learning to live with – Covid,” Cutifani said. , which is replaced. by Duncan Wanblad, Head of Strategy and Business Development at Anglo.