Diamond glut sees London-listed miner Anglo American cut gem production
Copper gains at London-listed miner Anglo American have been offset by a sharp cut to its diamond output as demand still fails to pick up.
The company’s De Beers division was left battered and bruised at the hands of a near-total bottom-out in consumer demand for diamonds at the end of last year, causing a massive inventory over-supply.
In an effort to fight the glut, the company said it decreased diamond production through the first quarter by almost one quarter (23 per cent).
Anglo said that De Beers will now aim to produce 26-29m carats of diamonds this year, down from the previous target of up to 32m carats, and unit costs have been altered to $90 per carat (£72.81).
Platinum Group metals production also fell seven per cent through the period as a result of lower yield from two key sites.
Copper production rose 11 per cent as the company’s flagship Quellaveco mine picked up steam, while steel-making coal production leapt seven per cent and iron ore and nickel production were mostly flat.
“We are driving operational excellence across our assets, focusing on stability and effective cost management as levers to deliver significant value through the cycle,” said Anglo American chief executive Duncan Wanblad.
“We are progressing through our asset review to optimise value by simplifying and improving the overall quality of the portfolio,” he continued.
Wanblad added that copper now makes up 30 per cent of the firm’s total production and that it would look to “grow the business into the major demand themes” such as the impending global shortage of the orange metal.
A bounce-back on the wave of a copper crisis could be just the tonic for the struggling group, which has fallen 15 per cent in the last 12 months, almost half of the duration of Wanblad’s tenure.