Collahuasi

Apr 25, 2023

Anglo American Q1 production increased by 9% Sharing Link : https://1lo.co/pgtNL Anglo American plc ( LON:AAL ) has announced its production report for the first quarter ended 31 March 2023. Duncan Wanblad, Chief Executive of Anglo American, said: “Our production in the first quarter increased by 9% compared to the same period in 2022, driven by the ramp-up of copper production from our new Quellaveco mine in Peru(1). Performance also benefited from the ongoing improvement at our Steelmaking Coal longwall operations, as well as at Kumba and Minas-Rio, our iron ore businesses. These were offset by planned lower copper grades in Chile, lower PGMs production and the transition of De Beers’ Venetia mine from open pit to the new underground section, which results in temporary lower production until the underground operation fully ramps up. “This improved performance reflects our focus on safe and stable operational momentum through the seasonally slower first quarter of the year which also coincides with the wet season in much of the southern hemisphere. “We continue to make progress towards our suite of sustainability ambitions and organic growth options in future-enabling products and we welcome the recent approval of the environmental permit application for our Los Bronces Integrated Project, which sets up the next phase of development for one of the world’s largest copper mines.” Q1 2023 highlights • Copper production increased by 28%, reflecting the ramp-up of production from our new Quellaveco copper mine in Peru, while production from our operations in Chile decreased by 15%, primarily due to planned lower grades at both Los Bronces and Collahuasi. • Steelmaking coal production increased by 59%, primarily due to all three underground longwall operations running during the quarter. • Iron ore production increased by 15%, driven by improved operational performance at both Kumba and Minas-Rio, as well as improved rain readiness plans. • Nickel production increased by 4%, reflecting improved operational performance. • Rough diamond production was flat, as planned higher grade ore and strong operational performance across most of the assets was offset by the planned completion of Venetia’s open pit in December 2022, as it transitions to underground operations during 2023. • Metal in concentrate production from our Platinum Group Metals (PGMs) operations decreased by 6% due to the impact of unplanned plant maintenance and lower grades at Mogalakwena, as well as planned infrastructure closures at Amandelbult in Q4 2022. • Partnering with H2 Green Steel, the Swedish hydrogen and steel producer, to study and trial the use of premium quality iron ore products from Kumba and Minas-Rio as feedstock for H2 Green Steel’s direct reduced iron production process. • 2023 production and unit cost guidance is unchanged across all business units. Production 5% (1) Total production across Anglo American’s products is calculated on a copper equivalent basis, including the equity share of De Beers’ production and using long-term consensus parameters. (2) De Beers Group production is on a 100% basis, except for the Gahcho Kué joint operation which is on an attributable 51% basis. (3) Contained metal basis. Reflects copper production from the Copper operations in Chile and Peru only (excludes copper production from the Platinum Group Metals business unit). (4) Reflects nickel production from the Nickel operations in Brazil only (excludes 3.3 kt of Q1 2023 nickel production from the Platinum Group Metals business unit). (5) Produced ounces of metal in concentrate. 5E+Au (platinum, palladium, rhodium, ruthenium and iridium plus gold). Reflects own mine production and purchase of concentrate. (6) Wet basis. c.$105/t (1) Unit costs exclude royalties, depreciation and include direct support costs only. FX rates used for 2023 costs: ~17 ZAR:USD, ~1.5 AUD:USD, ~5.3 BRL:USD, ~900 CLP:USD, ~3.8 PEN:USD. (2) Production on a 100% basis, except for the Gahcho Kué joint operation, which is on an attributable 51% basis, subject to trading conditions. Venetia continues to transition to underground operations – first production is expected in 2023. Unit cost is based on De Beers’ share of production and is impacted by the Venetia transition to underground during 2023. (3) Copper business unit only. On a contained-metal basis. Total copper production is the sum of Chile and Peru: Chile: 530-580 kt and Peru: 310-350 kt. Production in Chile is subject to water availability, and in Peru is subject to completion of ramp-up, expected around mid-2023. Unit cost total is a weighted average based on the mid-point of production guidance. Chile: c.190 c/lb and Peru: c.100 c/lb. (4) Nickel operations in Brazil only. The Group also produces approximately 20 kt of nickel on an annual basis as a co-product from the PGM operations. (5) 5E + gold produced metal in concentrate ounces. Includes own mined production (~65%) and purchased concentrate volumes (~35%). The split of metals differs for own mined and purchased concentrate, refer to FY2022 results presentation slide 42 for indicative split of own mined volumes. 2023 metal in concentrate production is expected to be 1.6-1.8 Moz of platinum, 1.2-1.3 Moz of palladium and 0.8-0.9 Moz of other PGMs and gold. 5E + gold refined production is expected to be 3.6-4.0 Moz, subject to the impact of Eskom load-curtailment. Unit cost is per own mined 5E + gold PGMs metal in concentrate ounce. (6) Wet basis. Total iron ore is the sum of operations at Kumba in South Africa and Minas-Rio in Brazil. Kumba: 35-37 Mt and Minas-Rio: 22-24 Mt. Kumba production is subject to the third party rail and port performance. Unit cost total is a weighted average based on the mid-point of production guidance. Kumba: c.$44/t and Minas-Rio: c.$32/t . (7) Production excludes thermal coal by-product from Australia. FOB unit cost comprises managed operations and excludes royalties and study costs.Realised prices 271 (1) Average realised total copper price is a weighted average of the Copper Chile and Copper Peru realised prices. (2) Realised price for Copper Chile excludes third party sales volumes. (3) Realised price excludes trading. (4) Price for a basket of goods per PGM oz. The dollar basket price is the net sales revenue from all metals (PGMs, base metals and other metals), excluding trading, per 5E + gold sold ounces (own mined and purchased concentrate). (5) Average realised total iron ore price is a weighted average of the Kumba and Minas-Rio realised prices. (6) Average realised export basket price (FOB Saldanha) (wet basis as product is shipped with ~1.6% moisture). The realised prices differ to Kumba’s standalone results due to sales to other Group companies. Average realised export basket price (FOB Saldanha) on a dry basis is $123/t (Q1 2022: $172/t), higher than the dry 62% Fe benchmark price of $112/t (FOB South Africa, adjusted for freight). (7) Average realised export basket price (FOB Açu) (wet basis as product is shipped with ~9% moisture). (8) Weighted average coal sales price achieved at managed operations. Australian thermal coal by-product in Q1 2023, a 16% decrease to US$194/t (Q1 2022 US$230/t). FY 2022 was $310/t. De Beers    10  % Rough diamond production was flat at 8.9 million carats, as the planned treatment of higher grade ore and strong operational performance across most of the assets was offset by the planned end of operations in Venetia’s open pit in December 2022 as the mine transitions to underground operations during 2023. In Botswana, production increased by 12% to 6.9 million carats, primarily driven by the planned treatment of higher grade ore and continued strong plant performance at Orapa. Namibia production increased by 37% to 0.6 million carats, primarily driven by the contribution from the Benguela Gem vessel, which commenced production in March 2022. South Africa production decreased by 56% to 0.7 million carats, due to the planned completion of the Venetia open pit in December 2022. Venetia continues to process lower grade surface stockpiles, which will result in temporary lower production levels as it transitions to underground operations. Production in Canada increased by 11% to 0.7 million carats, despite unplanned maintenance challenges. Sales were in line with expectations given that Sightholders have taken a more cautious approach in planning their 2023 allocation schedule in light of the current uncertain macroeconomic outlook, with a greater weighting of goods expected to be purchased as the year progresses. Rough diamond sales totalled 9.7 million carats (8.9 million carats on a consolidated basis)(2) from three Sights, compared with 7.9 million carats (7.0 million carats on a consolidated basis)(2) from two Sights in Q1 2022, and 7.3 million carats (6.6 million carats on a consolidated basis)(2) from two Sights in Q4 2022. 2023 Guidance Unit cost guidance for 2023 is unchanged at c.$80/ct(3). (1) De Beers Group production is on a 100% basis, except for the Gahcho Kué joint operation which is on an attributable 51% basis. (2) Consolidated sales volumes exclude De Beers Group’s JV partners’ 50% proportionate share of sales to entities outside De Beers Group from the Diamond Trading Company Botswana and the Namibia Diamond Trading Company, which are included in total sales volume (100% basis). (3) FX assumption of ~17 ZAR:USD. De Beers(1)    (27)       % (1) Copper production shown on a contained metal basis. Reflects copper production from the Copper operations in Chile and Peru only (excludes copper production from the Platinum Group Metals business unit). Copper production increased by 28% to 178,100 tonnes, due to the ramp-up of production from our new Quellaveco mine in Peru, while Chile’s production decreased by 15%. Chile – Copper production decreased by 15% to 118,600 tonnes, due to planned lower grades at both Los Bronces and Collahuasi. Production from Los Bronces decreased by 19% to 52,700 tonnes, due to planned lower grades (0.52% vs. 0.62%), plant maintenance and expected higher ore hardness, partially offset by higher copper recovery (84% vs 80%). At Collahuasi, attributable production decreased by 13% to 57,100 tonnes, due to planned lower grades (1.05% vs 1.18%). Production from El Soldado increased by 5% to 8,800 tonnes, driven by planned higher grades (0.72% vs 0.57%), reflecting production from a new phase of the mine. Chile´s central zone continues to face severe drought conditions and these conditions place pressure on water availability. In the short term, various management initiatives to improve water efficiency and secure alternative sources of water continue to partly mitigate the impact on production. From 2025, more than 45% of Los Bronces’ needs will be met through a desalinated water supply. Despite the fire at the third party Ventanas port, Los Bronces’ sales of copper concentrate were in line with production, as alternative export routes were successfully secured. Sales will remain dependent on alternative port availability and any potential impact is expected to be recovered by the end of the year. The average realised price of 455c/lb, includes 125,100 tonnes of copper provisionally priced on 31 March at an average of 408c/lb. Peru – Quellaveco produced 59,500 tonnes, reflecting an expected slow-down in its ramp-up profile for planned plant maintenance, following the successful testing of the plant to confirm completion of construction, as well as a managed reduction in throughput as the tailings dam goes through a particular phase of its construction and as the country experienced some socio-political tension during the period. Quellaveco is expected to ramp-up fully around mid-2023. In addition, the molybdenum plant successfully reached first production on 3 April and is currently in its ramp-up phase. The average realised price of 433c/lb, includes 135,000 tonnes of copper provisionally priced on 31 March at an average of 406c/lb. 2023 Guidance Production guidance for 2023 is unchanged at 840,000-930,000 tonnes (Chile 530,000-580,000 tonnes; Peru 310,000-350,000 tonnes). Production in Chile is subject to water availability and in Peru is subject to completion of ramp-up, expected around mid-2023. Unit cost guidance for 2023 is unchanged at c.156 c/lb(1) (Chile c.190 c/lb(1); Peru c.100 c/lb(1)). (1) FX assumption of ~900 CLP:USD and ~3.8 PEN:USD. Copper(1)    (29)       % (1) Ounces refer to troy ounces. PGMs consists of 5E+Au (platinum, palladium, rhodium, ruthenium and iridium plus gold). (2) Includes managed operations and 50% of joint operation production. (3) Includes the other 50% of joint operation production, as well as the purchase of concentrate from third parties. (4) Refined production excludes toll refined material. Metal in concentrate production Own mined production decreased by 6% to 586,000 ounces, primarily due to lower production from Mogalakwena and Amandelbult, partially offset by a strong production performance from Unki. Mogalakwena production decreased by 12% to 219,000 ounces as a result of unplanned plant maintenance and mining in a lower grade area. Production at Amandelbult decreased by 5% to 151,500 ounces, primarily due to planned infrastructure closures and the closure of the Merensky Concentrator in Q4 2022. Joint operations decreased by 10% to 84,300 ounces, due to the ramp-down of the Kroondal complex. These were partially offset by a 17% increase in production from Unki, reflecting improvements in throughput, grade and recoveries. Purchase of concentrate was 5% lower at 315,200 ounces, due to lower volumes from the Kroondal joint operation as well as lower third party receipts. Refined production Refined production decreased by 13% to 626,000 ounces, primarily due to the ramp-up of the Polokwane smelter at the end of January 2023 following its rebuild, and asset integrity work at Waterval smelter as well as the impact of Eskom load-curtailment (reductions in electricity availability). Sales Sales volumes decreased by 17% in line with lower refined production. The average realised basket price was $2,131/PGM ounce, reflecting lower market prices compared to Q1 2022. 2023 Guidance Production guidance (metal in concentrate) for 2023 is unchanged at 3.6-4.0 million ounces(1). Refined production guidance for 2023 is 3.6-4.0 million ounces, subject to the impact of Eskom load-curtailment. Unit cost guidance for 2023 is unchanged at c.$1,025/PGM ounce(2). (1) Metal in concentrate production is expected to be 1.6-1.8 million ounces of platinum, 1.2-1.3 million ounces of palladium and 0.8-0.9 million ounces of other PGMs and gold; with own mined output accounting for ~65%. (2) FX assumption of ~17 ZAR:USD. (3)    % (1) M&C refers to metal in concentrate. Ounces refer to troy ounces. PGMs consists of 5E+Au (platinum, palladium, rhodium, ruthenium and iridium plus gold). (2) The joint operations are Modikwa and Kroondal. Platinum owns 50% of these operations, which is presented under ‘Own mined’ production, and purchases the remaining 50% of production, which is presented under ‘Purchase of concentrate’. (3) Refined production excludes toll material. (4) Tolled volume measured as the combined content of: platinum, palladium, rhodium and gold, reflecting the tolling agreements in place. (5) PGMs sales volumes from production are generally ~65% own mined and ~35% purchases of concentrate though this may vary from quarter to quarter. (6) Relates to sales of metal not produced by Anglo American operations, and includes metal lending and borrowing activity. (7) 4E: the grade measured as the combined content of: platinum, palladium, rhodium and gold, excludes tolled material. Minor metals are excluded due to variability. Iron Ore (2) Volumes are reported as wet metric tonnes. Product is shipped with ~1.6% moisture. (3) Volumes are reported as wet metric tonnes. Product is shipped with ~9% moisture. Iron ore production increased by 15% to 15.1 million tonnes, reflecting a 16% increase at Minas-Rio and a 14% increase at Kumba. Kumba – Total production increased to 9.4 million tonnes, primarily driven by a 25% increase at Kolomela to 3.1 million tonnes as well as a 9% increase at Sishen to 6.3 million tonnes, reflecting improved operational performance due to improved rain readiness capability and equipment reliability, as well as the benefit of lower rainfall this quarter. Total sales increased 2% to 9.5 million tonnes(1) but, due to ongoing weak logistics performance from Transnet as the third party rail and port operator, continues to be constrained by low levels of finished stock at the port. As a result, total finished stock increased to 8.0 million tonnes(1) (Q1 2022: 5.1 million tonnes(1)). Kumba’s iron (Fe) content averaged 63.1% (Q1 2022: 64.0%), while the average lump:fines ratio was 67:33 (Q1 2022: 65:35). The Q1 average realised price of $121/tonne(1) (FOB South Africa, wet basis) was 10% higher than the 62% Fe benchmark price of $110/tonne (FOB South Africa, adjusted for freight and moisture), reflecting the lump and Fe content quality premiums that the Kumba products attract, as well as the benefit of provisionally priced sales volumes. Minas-Rio – Production increased by 16% to 5.7 million tonnes, driven by improved mining performance, reflecting improved rain readiness capability as well as increased plant performance due to improvements at the crushing circuit. The Q1 average realised price of $125/tonne (FOB Brazil, wet basis) was higher than the Metal Bulletin 65(2) price of $109/tonne (FOB Brazil, adjusted for freight and moisture), which takes into account the premium for our high quality product, including higher (~67%) Fe content, as well as the benefit of provisionally priced sales volumes. 2023 Guidance Production guidance (wet basis) for 2023 is unchanged at 57-61 million tonnes (Kumba 35-37 million tonnes; Minas-Rio 22-24 million tonnes). Kumba is subject to third party rail and port performance. Unit cost guidance (wet basis) for 2023 is unchanged at c.$39/tonne(3) (Kumba c.$44/tonne(3); Minas-Rio c.$32/tonne(3)). (1) Sales volumes, stock and realised price are reported on a wet basis and differ to Kumba’s standalone results due to sales to other Group companies. (2) Fastmarkets has ceased publication of the Metal Bulletin 66 index, therefore the benchmark price has been switched to Metal Bulletin 65. (3) FX assumption of ~17 ZAR:USD for Kumba and ~5.3 BRL:USD for Minas-Rio. Iron Ore (000 t)    (24)       % (1) Anglo American’s attributable share of production. Includes production relating to processing of third party product. Steelmaking coal production increased by 59% to 3.5 million tonnes, as all three longwalls (Grosvenor, Moranbah and Aquila) were operational during the quarter, reflecting the benefit of the Grosvenor restart and the Aquila mine commissioning, which both occurred in February 2022, and the longwall move at Moranbah in Q1 2022. Grosvenor continued to improve longwall performance throughout the quarter, while Moranbah is safely navigating through challenging strata conditions, which we expect to improve by the middle of the second quarter. Aquila successfully completed its first ‘walk-on-walk-off’ longwall move in February 2023, which is a significant step forward in operational performance as no days of longwall production were lost during the move; furthermore, as it is a fully automated and remote longwall operation, it leads to safer and more productive output. The open cut operations recovered from wet weather impacts experienced earlier in the quarter. The ratio of hard coking coal production to PCI/semi-soft coking coal was 80:20, broadly in line with Q1 2022 (79:21), as the higher contribution of premium hard coking coal from Grosvenor and Moranbah in this quarter was offset by higher volumes of PCI/semi-soft coals from the open cuts compared to Q1 2022. The Q1 average realised price for hard coking coal was $301/tonne, lower than the benchmark price of $344/tonne. However, the price realisation increased to 88% (Q1 2022: 76%) driven by larger volumes of premium hard coking coal being produced from the underground longwall operations and the impact of sales timing in Q1 2022. 2023 Guidance Unit cost guidance for 2023 is unchanged at c.$105/tonne(1). (1) FX assumption of ~1.5 AUD:USD. Coal, by product (000 t)(1) Q1 Exploration and evaluation Exploration and evaluation expenditure increased by 13% to $68 million. Exploration expenditure increased by 25% to $30 million, reflecting increased activity, principally in copper. Evaluation expenditure increased by 6% to $38 million, driven by higher spend in iron ore and base metals. Corporate and other activities For more information on Anglo American’s announcements since our previous production report, please find links to our Press Releases below: • 18 April 2023 | Anglo American updates on sustainability progress – carbon neutrality, thriving communities and workplace culture • 18 April 2023 | Anglo American secures environmental approval for Los Bronces Integrated Project • 12 April 2023 | Anglo American rough diamond sales value for De Beers’ third sales cycle of 2023 • 4 April 2023 | Anglo American partners with H2 Green Steel to advance low carbon steelmaking • 8 March 2023 | Anglo American rough diamond sales value for De Beers’ second sales cycle of 2023 • 28 February 2023 | Anglo American appoints Magali Anderson as non-executive director • 23 February 2023 | Anglo American Preliminary Results 2022 • 23 February 2023 | Notice of Final Dividend • 21 February 2023 | Kumba Iron Ore annual results 2022 • 20 February 2023 | Anglo American Platinum Limited year end results 2022 • 15 February 2023 | Anglo American senior leadership change • 8 February 2023 | Anglo American to acquire 9.9% of Canada Nickel, owner of the Crawford nickel project Notes • Production figures are sometimes more precise than the rounded numbers shown in this Production Report. • Copper equivalent production shows changes in underlying production volume. It is calculated by expressing each product’s volume as revenue, subsequently converting the revenue into copper equivalent units by dividing by the copper price (per tonne). Long-term forecast prices are used, in order that period-on-period comparisons exclude any impact for movements in price. • Please refer to page 16 for information on forward-looking statements. In this document, references to “Anglo American”, the “Anglo American Group”, the “Group”, “we”, “us”, and “our” are to refer to either Anglo American plc and its subsidiaries and/or those who work for them generally, or where it is not necessary to refer to a particular entity, entities or persons. The use of those generic terms herein is for convenience only, and is in no way indicative of how the Anglo American Group or any entity within it is structured, managed or controlled. Anglo American subsidiaries, and their management, are responsible for their own day-to-day operations, including but not limited to securing and maintaining all relevant licences and permits, operational adaptation and implementation of Group policies, management, training and any applicable local grievance mechanisms. Anglo American produces group-wide policies and procedures to ensure best uniform practices and standardisation across the Anglo American Group but is not responsible for the day to day implementation of such policies. Such policies and procedures constitute prescribed minimum standards only. Group operating subsidiaries are responsible for adapting those policies and procedures to reflect local conditions where appropriate, and for implementation, oversight and monitoring within their specific businesses. Find more news, interviews, share price & company profile here for: Good news travels fast (but only if you make that happen). 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