Anglo American production slips amid coronavirus lockdown
Anglo American’s production volumes fell four per cent in the first quarter as coronavirus precautions limited the mining giant’s output capacity.
Output fell across the group’s palladium, iron ore, platinum and diamond mining operations, with particular constraints on its assets in South Africa.
Operations in the country, which accounts for roughly half of Anglo’s profits, are running at 50 per cent capacity due to stringent lockdown measures.
The firm’s diamond mining subsidiary De Beers has been especially affected, with production now forecast to fall by 7m carats in 2020 to 25-27m carats.
Nickel and copper were the only two commodities to show an increase in output in the quarter.
A 31 per cent increase at Anglo’s Minas-Rio mine in Brazil saw production of the red metal rise to 6.4m tonnes in the quarter.
The firm said that it would reduce its capital expenditure by $1bn over 2020 in order to increase its liquidity.
With a current liquidity position of $14.5bn, chief executive Mark Cutifani said that Anglo was in a “robust” position to ride out the coronavirus disruption.
He added: “Anglo American is a resilient and diversified metals and minerals business with a portfolio of attractive growth options spanning different products and time horizons.
“We are acting to protect our optionality through this uncertain period and will continue to act in the best interests of our shareholders, our employees, customers and our broad range of stakeholders across society”.
Some of the firm’s projects might face delays due to the restrictions and economic volatility, he warned.
“Anglo appears to be facing more impacts from Covid-19 as compared with peers both operationally, and in the case of diamonds, market based,” said RBC Capital Markets analyst Tyler Broda, but he said the company’s balance sheet remained resilient.
The firm’s shares rose by around one per cent today.