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Anglo American posts strong first quarter despite fall in platinum production

Mining giant lost 185,000 ounces of platinum to strikes but raised output of cooper and iron ore

An Anglo American mining operation in Venezuela. The company has rejected a 'merger of equals' approach from rival Xstrata
An Anglo American mining operation in Venezuela. The company has rejected a 'merger of equals' approach from rival Xstrata

Shares in mining giant Anglo American rose more than 3pc after its first quarter report showed increased production across all commodities except platinum.

The company’s platinum mines in South Africa showed a 39pc fall in production to 357,000 ounces following violent strikes, according to Anglo American’s trading update.

Anglo American lost 185,000 ounces of platinum in the first three months of 2014 as a result of the industrial action.

Anglo American downgraded its full year platinum expectations to 2.1m ounces, down from 2.4m ounces, in response to the decline in output and ongoing “industrial action at Rustenburg, Amandelbult and Union mines in South Africa”.

Mark Cutifani, the Anglo American chief executive who took over a year ago, has outlined a strategy that includes selling underperforming assets.

It is thought that the company’s platinum mines in line to be sold, but Anglo American remained silent on the issue in their company update.

But shares climbed by 3.1pc to 1,595p on the back of rising production in Anglo American’s other commodities.

Anglo American’s iron ore output grew by 10pc to 11.3m tonnes in the first quarter of 2013, while copper production increased 18pc to 202,000.

The company upgraded its full-year copper forecasts to 730,000 tonnes in response to the strong results.

Metallurgical coal saw a record quarter, increasing in production by 31pc to 6.1m tonnes, largely as a result of improvements in productivity.

Thermal coal was up by 14pc, mainly due to a 95pc increase in Anglo American’s Cerrejón mine in Colombia following a strike in 2013.

Diamond production was up 18pc, slightly below expectations, but the company kept guidance unchanged and maintained that full year production would be 30m to 32m carats.

“Southern African operations were again hampered by heavy rainfall, resulting in lower production than in the fourth quarter 2013.

“However, improved preparedness in the first quarter of 2014 meant the impact was lower than in the first quarter of 2013”, said the company statement.