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Anglo American's New Survival Strategy: What Do Investors Think? (Continued from Prior Part) Lower Diamond production
Anglo American’s (AAUKY) management mentioned during a conference call that the company will pull back its production of diamonds in 2016. This is mainly in response to midstream challenges.
Anglo American will reduce its production in Botswana by 20 million karats in 2016. It will also put Snap Lake on care and maintenance and curtail production at its Venetia tailings plant. In Namibia also, Anglo and its partner have decided to reassign mining vessels to lower-grade areas to curtail production.
As a result of all of these actions, Anglo’s Diamond production for 2016 is now expected to be 29 million karats, down from 32–34 million karats at the beginning of the year.
On the demand side, AAUKY’s management commented that a stronger US dollar (UUP) and the macroeconomic slowdown in China (FXI) (MCHI) have been impacting the Diamond jewelry market. However, management was hopeful about demand from the US (SPY) (DIA) market.
Revised mine plan at the Sishen iron ore mine
Anglo American is also revising its mine plan at the Sishen iron ore mine, which will lower production to 26 million tons per year. Waste movement of 135 million tons is also below its previous guidance of 230 million tons. This would mean a ~40% reduction in material moved and only a 15% reduction in saleable tons.
Slower ramp at Minas-Rio
Anglo has reduced its production guidance for 2016 from 24–26 million tons to 18–21 million tons. The company mentioned that its production outlook at Minas-Rio has been affected by a confined mining area resulting from licensing constraints.
The company’s management mentioned that the permitting process in Brazil could take longer now due to the Samarco incident. Samarco is jointly owned by BHP Billiton (BHP) (BBL) and Vale (VALE).
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Anglo American plc
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PRODUCER |
CODE : AAL.L |
ISIN : GB00B1XZS820 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Anglo American is a nickel and zinc producing company based in United kingdom. Anglo American produces nickel, zinc, chromium, copper, gold, manganese, molybdenum, platinum, silver, uranium and zircon in Australia, in Brazil, in Canada, in Chile, in Namibia, in Peru, in South Africa and in Venezuela, develops coal, copper, gold and molybdenum in South Africa, and holds various exploration projects in Brazil. Its main assets in production are RUSTENBURG SECTION, MAMATWAN, MPONENG (WESTERN DEEP NO. 1 SHAFT), TAUTONA (WESTERN DEEP NO.3 SHAFT), MARIKANA, WESSELS and PALABORA MINE AND SMELTER in South Africa, COLLAHUASI MINE, MANTOS BLANCOS and MARICUNGA in Chile, CODEMIN in Brazil, NAVACHAB MINE and SKORPION MINE in Namibia, LOMA DE NIQUEL in Venezuela, GEMCO in Australia, QUELLAVECO in Peru and CALLINAN MINE in Canada, its main assets in development are ZONDAGSFONTEIN and PEBBLE in South Africa and its main exploration properties are LISHEEN and RATHDOWNEY TREND / MOATE in Ireland, SAN FERNANDO and PINABETE in Mexico, 777 PROJECT, BAY PAINE, NUVILIK, MUSKOX, RIVER VALLEY, RAGLAN / BELANGER and WEST RAGLAN in Canada, BOYONGAN (NORTH) in Philippines, RAKKURIJARVI in Sweden, ATASPACA and ANTAY in Peru, KOLWEZI in Congo Dem. Rep. of, SALOBO and ARIPUANA / AREX in Brazil, PLATREEF and SPITZKOP ZINC in South Africa and ZAMBEZI in Zambia. Anglo American is listed in Germany, in United Kingdom and in United States of America. Its market capitalisation is GBX 3 619.1 billions as of today (US$ 4 225.6 billions, € 3 948.0 billions). Its stock quote reached its lowest recent point on May 12, 2017 at GBX 1 001.00, and its highest recent level on April 26, 2024 at GBX 2 575.00. Anglo American has 1 405 465 000 shares outstanding. |