Anglo American’s overall output is up, but copper production continues to struggle
Anglo American said overall output had increased across its mines in the fourth quarter, but lagging copper production continued to drag the mining giant down.
Shares initially fell in morning trading but now remain broadly flat.
Copper production decreased by 19 per cent to 146,600 tonnes for the fourth quarter ended 31 December, mostly at its Los Bronces mine due to expected lower grades, bad weather and illegal industrial action by contractor unions, the miner said.
At Los Bronces, quarterly production fell 33 per cent to 74,300 tonnes.
Diamonds and platinum are two of the mining giant's other main focuses.
Rough diamond production from its De Beers business increased by 10 per cent to 7.8m carats compared with the same period in 2015, when production was reduced in response to trading conditions. This week De Beers reported its first diamond sales of 2017, which produced $720m (£576m) from its rough diamonds, up from $422m at its last sale and $545m a year ago.
Platinum production was up two per cent to 610,100 ounces, as chief executive Mark Cutifani said he maintained discipline by "mining to demand".
Bernstein analysts said the news was positive: "Today's results do not materially change our view on the stock," it said, adding it maintained its "outperform" rating.
However, S&P Global's Jit Hoong Chan said it's hard to get excited with Anglo American's outlook as headwinds, like oversupply issues, remain apparent in the global mining and metals sector.
"Also, the slowdown in China's economy may be a further hit to demand, in our view – the country makes up ~30% of its sales," Chan said.
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