Anglo American reports mixed Q3 2023 performance

Anglo American (LSE: AAL), the London-based mining giant, released its third-quarter 2023 production report on Tuesday, highlighting a robust 42% increase in copper production. The surge, reaching 209,000 tonnes, was attributed in part to the progressive rise in production from Quellaveco in Peru. However, challenges arising from maintenance, low grades, and mining issues at other operations led to a downward revision of its copper output guidance for 2023.

Anglo American’s Chief Executive, Duncan Wanblad, stated that overall production in Q3 2023 remained consistent with the same period in 2022. Notably, copper production experienced a remarkable 42% growth, totalling 209,000 tonnes, compared to 147,000 tonnes in the previous year. This surge was primarily a result of the increasing production levels at Quellaveco in Peru. For the first nine months of the year, copper output also witnessed a 42% spike, reaching 596,000 tonnes from 420,000 tonnes in the corresponding period last year.

However, despite the positive momentum, the company revised down its copper output guidance for 2023. The new range stands between 830,000 tonnes and 870,000 tonnes, down from the previous estimate of 840,000 tonnes to 930,000 tonnes. The revision was necessitated by unfavourable ore characteristics, an electrical substation fire at Los Bronces in Chile, and the impact of a geotechnical fault line on El Soldado’s production, also in Chile.

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Anglo American reported a 2% decrease in platinum group metal (PGM) production, dropping to 1.03 million ounces from 1.05 million ounces in the third quarter. The PGM output for the nine months also dipped by 5%, reaching 2.9 million ounces compared to 3.0 million ounces in the same period last year.

In addition to copper and PGM, the company disclosed data on iron ore, steelmaking coal, nickel, manganese ore, and rough diamond production. Iron ore production saw a 4% decline in the third quarter to 15.4 million tonnes due to planned maintenance at Minas-Rio in Brazil. However, the overall nine-month output rose by 6% to 46.1 million tonnes from 43.6 million tonnes. Steelmaking coal production slumped by 21% in Q3, reaching 4.4 million tonnes, attributed to challenging strata conditions at Moranbah and the ramp-up of Grosvenor in July. Nickel production declined by 7% to 9,300 tonnes in the third quarter, and rough diamond production dropped by 23% to 7.4 million carats due to planned reductions at Venetia mine in Limpopo.

Despite these challenges, Anglo American maintained its 2023 annual guidance for operations other than copper. The company’s shares remained relatively stable, trading at 2,032.00 pence in London and showing a slight increase to R 472.19 in Johannesburg.