Anglo American production up 4% despite drought impacting key mine in Chile

Global mining giant Anglo American [JSE:AGL] says total production increased by 4% in the fourth quarter, despite drought affecting water supplies at one of its key mines in Chile, and decreased global demand for some if its minerals.  

The overall increase was largely thanks to a boost from its Minas-Rio iron ore operation mine in Brazil, it said in its production report for the three months to December 31. It also received a license to raise the mine's tailings dam in December. 

Anglo said the group's copper business unit was impacted by continued drought conditions in Chile, where a lack of water slowed production at Los Bronces mine. This lead to a 13% drop in copper production. A bigger drop was partially offset by strong plant performance at the Collahuasi copper mine, which reported a 4% increase in attributable production.

The group also reported increased metallurgical coal production, which increased 11% overall to 6.3 million tonnes. Platinum and palladium volumes increased by 10%, with own mined platinum production rising by 18% and palladium seeing a 17% increase.

Diamond company De Beers, however, endured a few punches, as rough diamond production suffered a 15% drop to 7.8 million carats due to lower production levels in South Africa and Botswana.

Although trading conditions showed improvement since the third quarter of 2019, production had to slow down due to low demand for rough diamonds, it said. The reduction in demand was caused by "challenges in the midstream, with higher polished inventories and caution due to macro-economic uncertainty". 

In South Africa, production decreased by 65% due to the decreased volume of ore extracted from Venetia diamond mine in Limpopo, and its transitions from an open pit mine to an underground mine.  At Voorspoed, production stopped in the fourth quarter due to maintenance for closure.

In Botswana, meanwhile, rough diamond production went down 7% with Opara, the diamond company’s oldest operating mine, enduring a 29% decrease due to delays in an infrastructure project. Rough diamond sales volumes decreased by 8% for the full year.

Group chief executive Mark Cutifani said the group delivered on its full year production targets across the business.

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