Wrap Text
Production report for the second quarter ended 30 June 2017
Anglo American plc
Incorporated in the United Kingdom
(Registration number: 3564138)
Short name: Anglo
JSE Share code: AGL
NSX Share code: ANM
ISIN number: GB00B1XZS820
20 July 2017
ANGLO AMERICAN PLC
PRODUCTION REPORT FOR THE SECOND QUARTER ENDED 30 JUNE 2017
Anglo American reports an 8% increase in copper equivalent production in the second quarter of 2017, compared to the same period of 2016. For the
half year as a whole, copper equivalent production increased by 9%.
Mark Cutifani, Anglo American Chief Executive, said: “We have delivered another strong production quarter across most of our businesses. Through
the improvements we have made to our portfolio and the efficiencies we are driving, we continue to unlock the potential of our world class
assets. The production ramps at Gahcho Kué, Minas-Rio and Grosvenor are also contributing to these ongoing positive performance trends. We have
increased the full year production guidance for Kumba Iron Ore and are on track to deliver full year guidance across the rest of our products.”
HIGHLIGHTS
- At De Beers, the ramp-up of Gahcho Kué and stable trading conditions supported a 36% increase in rough diamond production.
- Copper production, while broadly unchanged, was impacted by the temporary mine stoppage at El Soldado, partially offset by higher production
at Los Bronces.
- Platinum’s Mogalakwena mine production increased by 15% due to higher grades and increased throughput.
- Iron ore volumes from Sishen increased by 38% due to operational improvements.
- Metallurgical coal production from Australia was impacted by Cyclone Debbie, two longwall moves in Q2 and the ongoing geological issues at
Grosvenor; improvements are expected in H2.
PRODUCTION SUMMARY
% vs. % vs.
Q2 2017 Q2 2016 Q2 2016 H1 2017 H1 2016 H1 2016
Diamonds (Mct)(1) 8.7 6.4 36% 16.1 13.3 21%
Copper (t)(2)(3) 140,800 144,200 (2)% 283,400 290,700 (3)%
Platinum (produced ounces) (koz)(4) 617 586 5% 1,189 1,153 3%
Iron ore – Kumba (Mt) 11.4 8.9 28% 21.9 17.8 23%
Iron ore – Minas-Rio (Mt)(5) 4.3 3.5 24% 8.7 6.8 27%
Export metallurgical coal (Mt) 4.0 4.9 (19)% 9.2 9.0 2%
Export thermal coal (Mt)(6) 6.5 6.8 (4)% 13.4 13.2 1%
Nickel (t)(7) 11,300 11,100 2% 21,200 22,300 (5)%
(1) De Beers production on 100% basis except the Gahcho Kué joint venture which is on an attributable 51% basis;
(2) Copper production from the Copper business unit;
(3) Copper production shown on a contained metal basis;
(4) Reflects own mine production and purchases of metal in concentrate;
(5) Wet basis;
(6) Export thermal coal includes export primary production from South Africa and Colombia, and excludes secondary South African
production that may be sold into either the export or domestic markets;
(7) Nickel production from the Nickel business unit;
(8) Copper equivalent production is normalised for, Kimberley, Niobium & Phosphates, Foxleigh and Callide, and to reflect Snap Lake
being placed on care and maintenance, and the closure of Drayton.
DE BEERS
Q2 2017 Q2 2017 H1 2017
vs. vs. vs.
Diamonds(1) Q2 2017 Q2 2016 Q2 2016 Q1 2017 Q1 2017 H1 2017 H1 2016 H1 2016
Debswana 000 carats 5,933 5,184 14% 5,191 14% 11,124 10,512 6%
Namdeb Holdings 000 carats 391 296 32% 472 (17)% 863 740 17%
DBCM 000 carats 1,405 821 71% 1,106 27% 2,511 1,753 43%
De Beers Canada 000 carats 1,013 147 nm 631 61% 1,644 309 nm
Total carats recovered 000 carats 8,742 6,448 36% 7,400 18% 16,142 13,314 21%
De Beers – Rough diamond production increased by 36% to 8.7 million carats in line with the higher production forecast for 2017, reflecting
stable trading conditions as well as the contribution from the ramp-up of Gahcho Kué in Canada.
Debswana (Botswana) production increased by 14% to 5.9 million carats. Orapa’s production increased by 44% driven by the ramp-up of Plant 1
which was previously on partial care and maintenance in response to trading conditions in late 2015. This was marginally offset by Jwaneng where
production decreased by 3%.
Namdeb Holdings (Namibia) production increased by 32% to 0.4 million carats as a result of Debmarine Namibia’s Mafuta vessel being on planned
extended in-port maintenance in Q2 2016.
DBCM (South Africa) production increased by 71% to 1.4 million carats largely as a result of higher grades at Venetia.
Production in Canada increased almost six-fold to 1.0 million carats due to the ramp-up of Gahcho Kué to nameplate capacity.
Consolidated rough diamond sales volumes(2) in Q2 2017 were 5.4 million carats (5.9 million carats on a total 100% basis) from two Sights,
compared with 9.6 million carats (10.2 million carats on a total 100% basis) from three Sights in Q2 2016. Apart from the additional Sight in
Q2 2016, the decrease was expected given the strong levels of midstream restocking in H1 2016.
For H1 2017, consolidated sales volumes(2) were 19.1 million carats (20.0 million carats on a total 100% basis), compared with 17.2 million
carats (18.3 million carats on a total 100% basis) in H1 2016.
The average realised price of $156/ct in H1 2017 was 12% lower than in H1 2016. This reflected strong demand in Sight 1 2017 for lower value
goods held in stock at 31 December 2016, following a recovery from the initial impact of India’s demonetisation programme in late 2016. The
lower value mix was partially offset by a higher average rough price index, up 4%.
Full Year Guidance
Full year production guidance(1) remains unchanged at 31-33 million carats, subject to trading conditions.
(1) De Beers production is on a 100% basis, except for the Gahcho Kué joint venture which is on an attributable 51% basis.
(2) Consolidated sales volume excludes De Beers’ JV partners’ 50% proportionate share of sales to entities outside the De Beers Group of
Companies from the Diamond Trading Company Botswana and the Namibia Diamond Trading Company, and includes pre-commercial production sales
volumes from Gahcho Kué.
Q2 2017 Q2 2017 H1 2017
vs. vs. vs.
De Beers Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2017 Q2 2016 H1 2017 H1 2016 H1 2016
Carats recovered
(000 carats)
100% basis
(unless otherwise stated)
Orapa 2,918 2,106 2,366 1,536 2,028 39% 44% 5,024 4,029 25%
Letlhakane 102 130 135 176 159 (22)% (36)% 232 284 (18)%
Jwaneng 2,913 2,955 2,939 2,837 2,997 (1)% (3)% 5,868 6,199 (5)%
Debswana 5,933 5,191 5,440 4,549 5,184 14% 14% 11,124 10,512 6%
Namdeb 72 94 118 120 94 (23)% (23)% 166 166 -
Debmarine Namibia 319 378 310 285 202 (16)% 58% 697 574 21%
Namdeb Holdings 391 472 428 405 296 (17)% 32% 863 740 17%
Kimberley(1) - - - - - - - - 68 (100)%
Venetia 1,239 939 1,218 898 695 32% 78% 2,178 1,401 55%
Voorspoed 166 167 169 196 126 (1)% 32% 333 284 17%
DBCM 1,405 1,106 1,387 1,094 821 27% 71% 2,511 1,753 43%
Snap Lake(1) - - - - - - - - 3 (100)%
Victor 182 189 148 142 147 (4)% 24% 371 306 21%
Gahcho Kué (51% basis) 831 442 349 83 - 88% - 1,273 - -
De Beers Canada 1,013 631 497 225 147 61% 589% 1,644 309 432%
Total carats recovered 8,742 7,400 7,752 6,273 6,448 18% 36% 16,142 13,314 21%
Sales volumes
Total sales volume
(100%) (Mct)(2) 5.9 14.1 8.0 5.7 10.2 (58)% (42)% 20.0 18.3 9%
Consolidated sales volume
(Mct)(2)(3) 5.4 13.7 7.5 5.3 9.6 (61)% (44)% 19.1 17.2 11%
Number of Sights
(sales cycles) 2 3 3 2 3 5 5
(1) Snap Lake was placed on care and maintenance from December 2015. Kimberley mines was sold in January 2016.
(2) Consolidated sales volumes exclude De Beers’ JV partners’ 50% proportionate share of sales to entities outside the De Beers Group of
Companies from the Diamond Trading Company Botswana and the Namibia Diamond Trading Company, which are included in total sales volume.
(3) Consolidated sales volume includes pre-commercial production sales volumes from Gahcho Kué. Excluding Gahcho Kué’s capitalised
pre-commercial production sales volumes results in a consolidated sales volume of 18.4Mct for H1 2017.
COPPER
Q2 2017 Q2 2017 H1 2017
vs. vs. vs.
Copper(1) Q2 2017 Q2 2016 Q2 2016 Q1 2017 Q1 2017 H1 2017 H1 2016 H1 2016
Los Bronces t 79,000 75,600 4% 75,800 4% 154,800 160,800 (4)%
Collahuasi (44% share) t 51,000 56,200 (9)% 57,700 (12)% 108,700 107,300 1%
El Soldado t 10,800 12,400 (13)% 9,100 19% 19,900 22,600 (12)%
Total Copper t 140,800 144,200 (2)% 142,600 (1)% 283,400 290,700 (3)%
(1) Copper production shown on a contained metal basis.
Copper production decreased by 2% to 140,800 tonnes.
Production from Los Bronces increased by 4% to 79,000 tonnes. Production benefited from higher ore grades (0.70% vs. 0.62%) and strong plant
performance, partly offset by an expected increase in ore hardness.
At Collahuasi, attributable production decreased by 9% to 51,000 tonnes. Higher ore grades were offset by lower throughput driven by the planned
electrical overhaul of Line 1 of the processing plant, lasting 65 days and successfully completed in June.
El Soldado production decreased by 13% to 10,800 tonnes, reflecting the temporary suspension of mine operations from 18 February, which restarted
on 28 April following approval of the updated mine plan. Production during the mine stoppage was sustained by feeding low-grade stockpile
material to the plant, however the delay in receiving the mine plan permit resulted in ~6,000 tonnes of lost production in H1 2017 (of which
~3,000 tonnes were in Q2 2017).
Sales volumes in H1 2017 were impacted by temporary port closures in Chile due to poor weather conditions and heavy tidal swells limiting vessel
availability, as well as by higher arsenic content in copper concentrate from Collahuasi which restricted sales into China. At the end of
H1 2017, Anglo American had 105,000 tonnes of copper provisionally priced at 269c/lb.
Full Year Guidance
Full year production guidance remains unchanged at 570,000 – 600,000 tonnes.
Q2 2017 Q2 2017 H1 2017
vs. vs. vs.
Copper (tonnes) Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2017 Q2 2016 H1 2017 H1 2016 H1 2016
on a contained
metal basis
unless stated otherwise(1)
Collahuasi 100% basis
(Anglo American share 44%)
Ore mined 14,984,100 13,803,300 20,335,200 17,131,800 15,277,400 9% (2)% 28,787,400 30,135,600 (4)%
Ore processed - Sulphide 10,807,100 12,336,400 12,302,700 12,522,100 12,479,200 (12)% (13)% 23,143,500 24,582,000 (6)%
Ore grade processed -
Sulphide (% TCu)(2) 1.27 1.24 1.29 1.23 1.21 3% 5% 1.25 1.18 6%
Production - Copper cathode - 100 700 800 1,400 (100)% (100)% 100 3,300 (97)%
Production - Copper in
concentrate 115,900 131,000 132,400 128,900 126,300 (12)% (8)% 246,900 240,500 3%
Total copper production
for Collahuasi 115,900 131,100 133,100 129,700 127,700 (12)% (9)% 247,000 243,800 1%
Anglo American’s share of
copper production for
Collahuasi(3) 51,000 57,700 58,600 57,000 56,200 (12)% (9)% 108,700 107,300 1%
Anglo American Sur 89,800 84,900 88,000 82,800 88,000 6% 2% 174,700 183,400 (5)%
Los Bronces mine(4) 79,000 75,800 74,300 72,100 75,600 4% 4% 154,800 160,800 (4)%
Ore mined 11,630,200 13,448,400 13,196,500 13,947,400 13,477,900 (14)% (14)% 25,078,600 23,965,800 5%
Marginal ore mined 7,764,700 11,461,400 8,445,700 6,192,800 6,148,500 (32)% 26% 19,226,100 19,550,800 (2)%
Ore processed – Sulphide 11,876,300 11,877,400 11,562,500 11,511,700 12,567,500 (0)% (5)% 23,753,700 24,622,800 (4)%
Ore grade processed -
Sulphide (% TCu) 0.70 0.69 0.69 0.65 0.62 2% 13% 0.69 0.68 2%
Production - Copper cathode 9,800 8,900 8,600 8,800 8,900 10% 10% 18,700 18,600 1%
Production - Copper in
concentrate 69,200 66,900 65,700 63,300 66,700 3% 4% 136,100 142,200 (4)%
El Soldado mine(4) 10,800 9,100 13,700 10,700 12,400 19% (13)% 19,900 22,600 (12)%
Ore mined 1,272,200 905,500 2,069,800 1,678,300 2,143,000 40% (41)% 2,177,700 3,591,000 (39)%
Ore processed - Sulphide 1,899,200 1,797,600 1,833,900 1,553,200 1,741,200 6% 9% 3,696,800 3,577,300 3%
Ore grade processed -
Sulphide (% TCu) 0.72 0.65 0.90 0.86 0.89 11% (19)% 0.69 0.82 (16)%
Production - Copper in
concentrate 10,800 9,100 13,700 10,700 12,400 19% (13)% 19,900 22,600 (12)%
Chagres Smelter(4)
Ore smelted 31,500 31,300 25,900 35,500 36,500 1% (14)% 62,800 72,400 (13)%
Production 30,600 30,300 25,400 34,700 35,500 1% (14)% 60,900 70,700 (14)%
Total Copper segment
copper production 205,700 216,000 221,100 212,500 215,700 (5)% (5)% 421,700 427,200 (1)%
Total Attributable
copper production(5) 140,800 142,600 146,600 139,800 144,200 (1)% (2)% 283,400 290,700 (3)%
Total Attributable
payable copper production 135,800 137,500 141,300 135,000 139,200 (1)% (2)% 273,300 280,800 (3)%
Total Attributable
sales volumes 144,100 115,300 161,400 135,400 143,500 25% - 259,400 281,000 (8)%
Total Attributable
payable sales volumes 138,900 111,200 155,700 130,700 138,500 25% - 250,100 271,500 (8)%
Third party sales(6) 27,400 9,800 20,100 26,000 6,700 180% 309% 37,200 15,900 134%
(1) Excludes Anglo American Platinum’s copper production.
(2) TCu = total copper.
(3) Anglo American’s share of Collahuasi production is 44%.
(4) Anglo American ownership interest of Anglo American Sur is 50.1%. Production is stated at 100% as Anglo American consolidates
Anglo American Sur.
(5) Difference between total copper production and attributable copper production arises from Anglo American’s 44% interest in Collahuasi.
(6) Relates to sales of copper not produced by Anglo American operations.
PLATINUM
Q2 2017 Q2 2017 H1 2017
vs. vs. vs.
Platinum Q2 2017 Q2 2016 Q2 2016 Q1 2017 Q1 2017 H1 2017 H1 2016 H1 2016
Produced ounces 000 oz 617 586 5% 572 8% 1,189 1,153 3%
Own mined production 000 oz 348 444 (22)% 325 7% 673 883 (24)%
Managed 000 oz 284 377 (25)% 266 7% 549 755 (27)%
Joint ventures(1) 000 oz 64 67 (4)% 59 9% 123 128 (3)%
Purchase of concentrate 000 oz 269 142 89% 247 9% 516 270 91%
Joint ventures(1) 000 oz 64 67 (4)% 59 9% 123 128 (3)%
Associates(2) 000 oz 72 70 4% 65 12% 137 133 3%
Third party 000 oz 132 6 nm 124 7% 256 9 nm
Refined
Platinum 000 oz 529 748 (29)% 577 (8)% 1,106 1,008 10%
Palladium 000 oz 373 472 (21)% 353 6% 726 654 11%
Rhodium 000 oz 83 91 (9)% 74 12% 156 138 13%
Gold 000 oz 29 22 31% 25 19% 54 50 8%
Nickel t 6,000 6,400 (6)% 5,100 17% 11,200 12,100 (8)%
Copper t 3,500 3,700 (6)% 3,200 7% 6,700 7,000 (4)%
(1) The joint venture operations are Mototolo, Modikwa and Kroondal. Platinum owns 50% of each of these operations, which is presented under
‘Own mined’ production, and purchases the remaining 50% of production, which is presented under ‘Purchase of concentrate’.
(2) Associates are Platinum’s 49% interest in Bokoni and 33% interest in BPRM.
Platinum – Platinum production (metal in concentrate) increased by 5% to 617,100 ounces.
Own mined production from managed mines
Own mined production from managed mines decreased by 25% to 283,700 ounces primarily due to the sale of Rustenburg in November 2016, which has
subsequently been reported as purchase of concentrate from third parties. Excluding Rustenburg, own mined production increased by 7%.
Mogalakwena mine production increased by 15% to 113,900 ounces due to a 7% increase in grade in line with the mine plan, and a 9% increase in
concentrator throughput due to North Concentrator Plant optimisations which increased the run-time.
Amandelbult mine production increased by 4% to 110,500 ounces due to improved plant recoveries and increased throughput.
Production from Unki mine in Zimbabwe increased by 10% to 19,500 ounces, as efforts continued to improve mining height control, which has reduced
mining waste and increased grade resulting in higher production.
Union mine production decreased by 3% to 39,800 ounces due to lower grade. The sale of Union to Siyanda Resources was announced on
15 February 2017 and is expected to complete in H2 2017, after which production from Union will be treated as purchase of concentrate from third
parties.
Joint venture own mined production and purchase of concentrate
Total joint venture production of 128,600 ounces (of which 64,300 ounces is own mined and 64,300 ounces is purchase of concentrate) decreased by
4%. Mototolo decreased by 7% to 29,500 ounces as a result of lower grade. Kroondal decreased by 5% to 67,100 ounces primarily due to lower grade
and a plant shutdown which impacted production for seven days. This was partly offset by Modikwa which increased by 2% to 32,000 ounces due to
productivity improvements.
Purchase of concentrate from associates
Purchase of concentrate from associates increased by 4% to 72,500 ounces. Production from BRPM increased by 10% to 52,900 ounces from project
ramp-ups, but was partly offset by Bokoni which decreased by 10% to 19,500 ounces as a result of the closure of the opencast operations.
Purchase of concentrate from third parties
Purchase of concentrate from third parties increased by 126,400 ounces to 132,300 ounces mainly due to the inclusion of Rustenburg, which has
been reported as third party purchase of concentrate since November 2016.
Refined production
Refined platinum production decreased by 29% to 528,700 ounces primarily due to the Waterval smelter run-out and a high pressure water leak at
the Converter Plant.
Following the Waterval smelter run-out in Q3 2016, the Number 1 furnace was successfully rebuilt in Q4 2016 and is running at steady-state.
The Number 2 furnace underwent planned maintenance and has successfully ramped up to steady-state. The backlog in processing pipeline material of
65,000 platinum ounces following the run-out in 2016 is expected to be made up during H2 2017.
In addition, a high pressure water leak at the Converter Plant ("ACP") on 4 June 2017 impacted a converter plant. The second converter plant was
heated up and began steady-state production on 14 June 2017. The total impact on refined platinum production of c.90,000 ounces was deferred from
Q2 2017 into H2 2017.
Full Year Guidance
Production guidance (metal in concentrate) remains unchanged at 2.35 – 2.40 million ounces.
Q2 2017 Q2 2017 H1 2017
vs. vs. vs.
Platinum Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2017 Q2 2016 H1 2017 H1 2016 H1 2016
Produced platinum
(000 troy oz) 617.1 571.9 610.0 619.1 585.7 8% 5% 1,189.1 1,152.7 3%
Owned mined 348.0 324.6 386.8 468.3 443.5 7% (22)% 672.7 882.6 (24)%
Mogalakwena 113.9 111.9 103.4 100.7 98.8 2% 15% 225.8 207.8 9%
Amandelbult 110.5 97.1 121.1 128.3 106.2 14% 4% 207.7 217.1 (4)%
Unki 19.5 18.9 19.9 18.2 17.8 3% 10% 38.4 36.4 5%
Joint ventures(1) 64.3 59.0 60.1 64.9 66.8 9% (4)% 123.3 127.7 (3)%
Union 39.8 37.7 38.1 37.7 41.2 6% (3)% 77.5 75.5 3%
Rustenburg(2) - - 44.2 118.1 110.8 nm nm - 215.1 nm
Other(3) - - - 0.4 1.9 nm nm - 3.0 nm
Purchase of concentrate 269.1 247.3 223.2 150.8 142.3 9% 89% 516.4 270.1 91%
Joint ventures(1) 64.3 59.0 60.1 65.0 66.8 9% (4)% 123.3 127.7 (3)%
Associates(4) 72.5 64.7 69.2 77.2 69.6 12% 4% 137.2 132.9 3%
Third party purchase of
concentrate(2) 132.3 123.6 93.9 8.6 5.8 7% nm 255.9 9.5 nm
Refined production
Platinum (000 troy oz) 528.7 576.9 631.6 694.6 747.6 (8)% (29)% 1,105.6 1,008.4 10%
Palladium (000 troy oz) 373.1 353.4 397.4 412.9 472.3 6% (21)% 726.5 653.9 11%
Rhodium (000 troy oz) 82.8 73.7 92.2 86.8 90.7 12% (9)% 156.4 138.4 13%
Gold (000 troy oz) 29.3 24.7 33.9 24.1 22.3 19% 31% 54.0 50.2 8%
Nickel (000 tonnes) 6.0 5.1 6.2 7.1 6.4 17% (6)% 11.2 12.1 (8)%
Copper (000 tonnes) 3.5 3.2 3.3 3.8 3.7 7% (6)% 6.7 7.0 (4)%
4E Head grade
(g/tonne milled)(5) 3.41 3.47 3.41 3.19 3.00 (2)% 14% 3.44 3.05 13%
Platinum sales volumes -
own mined and purchase of
concentrate 600.5 518.8 606.5 588.0 808.4 16% (26)% 1,119.3 1,221.2 (8)%
(1) The joint venture operations are Mototolo, 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’.
(2) Sale of Rustenburg to Sibanye completed on 1 November 2016, after which production from Rustenburg is included within third party purchase of
concentrate.
(3) Other includes Twickenham.
(4) Associates are Platinum’s 49% interest in Bokoni and 33% interest in BRPM.
(5) 4E: the grade measured as the combined content of: platinum, palladium, rhodium and gold.
IRON ORE AND MANGANESE
Q2 2017 Q2 2017 H1 2017
vs. vs. vs.
Iron Ore and Manganese Q2 2017 Q2 2016 Q2 2016 Q1 2017 Q1 2017 H1 2017 H1 2016 H1 2016
Iron ore – Kumba 000 t 11,382 8,864 28% 10,473 9% 21,854 17,788 23%
Iron ore – Minas-Rio(1) 000 t 4,324 3,484 24% 4,342 0% 8,666 6,833 27%
Iron ore – Total 000 t 15,706 12,348 27% 14,815 6% 30,520 24,621 24%
Manganese ore(2) 000 t 843 791 7% 823 2% 1,666 1,567 6%
Manganese alloys(3) 000 t 39 30 32% 31 25% 71 62 15%
(1) Wet basis
(2) Saleable production
(3) Production includes medium carbon ferro-manganese
Kumba Iron Ore – Iron ore production increased by 28% to 11.4 million tonnes.
Sishen production increased by 38% to 7.9 million tonnes as a result of improved mining productivity, driven by fleet efficiencies and higher
plant yields. Waste removal increased to 43 million tonnes compared to 31 million tonnes in Q2 2016 (H1 2017: 77 million tonnes).
Kolomela production increased by 11% to 3.5 million tonnes, underpinned by productivity improvements. Waste removal increased by 22% to
15 million tonnes (H1 2017: 25 million tonnes).
Export sales increased by 8% to 9.4 million tonnes. Total finished product stocks were 4.4 million tonnes (3.5 million tonnes at 31 December
2016) as a result of higher production at Sishen and sales volumes delayed to H2 2017 due to unfavourable weather conditions at Saldanha port.
Full Year Guidance
Full year production guidance has been increased to 41 – 43 million tonnes (previously 40 – 42 million tonnes) as a result of the improved
performance at Sishen.
Iron Ore Brazil – Iron ore production from Minas-Rio increased by 24% to 4.3 million tonnes as the operation continued to ramp-up to its current
operating capacity.
The focus remains obtaining the Step 3 licences required for the operation to access the full range of run-of-mine grades and target the
operation’s nameplate capacity of 26.5 Mt (wet basis).
Full Year Guidance
Full year production guidance remains unchanged at 16-18 million tonnes (wet basis).
Manganese ore – Manganese ore production increased by 7% to 843,300 tonnes. Production from the Australian operations increased by 5% and by 9%
from the South African operations.
Manganese alloy – Manganese alloy production increased by 32% to 39,300 tonnes. The South African Manganese operations continue to operate only
one of four furnaces.
Q2 2017 Q2 2017 H1 2017
vs. vs. vs.
Iron Ore and Manganese (tonnes) Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2017 Q2 2016 H1 2017 H1 2016 H1 2016
Kumba Iron Ore 11,381,600 10,472,600 11,927,900 11,759,900 8,863,600 9% 28% 21,584,200 17,788,100 23%
By product:
Lump 7,504,200 6,978,800 7,812,000 7,598,500 5,721,300 8% 31% 14,483,000 11,391,000 27%
Fines 3,877,400 3,493,800 4,115,900 4,161,400 3,142,300 11% 23% 7,371,200 6,397,100 15%
By mine:
Sishen 7,871,900 7,678,900 8,489,900 8,348,700 5,699,600 3% 38% 15,550,800 11,541,400 35%
Kolomela 3,509,700 2,793,700 3,438,000 3,411,200 3,164,000 26% 11% 6,303,400 5,877,100 7%
Thabazimbi - - - - - - - - 369,600 (100)%
Kumba sales volumes
Export iron ore 9,423,600 10,053,000 10,611,400 10,343,200 8,729,700 (6)% 8% 19,476,600 18,105,800 8%
Domestic iron ore 924,600 832,700 612,700 706,900 936,000 11% (1)% 1,757,300 2,103,700 (16)%
Minas-Rio production
Pellet feed (wet basis) 4,324,100 4,341,700 4,855,300 4,452,400 3,483,800 0% 24% 8,665,900 6,833,200 27%
Minas-Rio sales volumes
Export – pellet feed
(wet basis) 4,371,000 4,256,500 4,761,800 4,510,400 3,223,900 3% 36% 8,627,500 6,938,300 24%
Samancor
Manganese ore(1) 843,300 823,100 804,200 761,700 791,300 2% 7% 1,666,400 1,567,200 6%
Manganese alloys(1)(2) 39,300 31,500 37,100 38,900 29,700 25% 32% 70,800 61,800 15%
Samancor sales volumes
Manganese ore(3) 887,600 836,000 805,000 757,400 813,300 6% 9% 1,723,600 1,664,000 4%
Manganese alloys 37,200 34,400 31,600 49,200 46,400 8% (20)% 71,600 89,200 (20)%
COAL
Q2 2017 Q2 2017 H1 2017
vs. vs. vs.
Coal Q2 2017 Q2 2016 Q2 2016 Q1 2017 Q1 2017 H1 2017 H1 2016 H1 2016
Met Coal (Australia) –
excl. 2016 divestments(1)
Metallurgical – Export 000 t 3,964 4,921 (19)% 5,242 (24)% 9,206 9,019 2%
Thermal – Export 000 t 305 1,015 (70)% 479 (36)% 784 1,820 (57)%
South Africa
Thermal export – Primary(2) 000 t 4,064 4,426 (8)% 4,059 - 8,123 8,268 (2)%
Thermal export and domestic –
Secondary(3) 000 t 1,023 973 5% 978 5% 2,001 1,752 14%
Thermal domestic – Eskom 000 t 6,889 6,709 3% 6,374 8% 13,263 13,101 1%
Thermal domestic – Isibonelo(4) 000 t 1,052 1,082 (3)% 896 17% 1,948 2,242 (13)%
Cerrejón
Thermal – Export 000 t 2,450 2,330 5% 2,782 (12)% 5,231 4,940 6%
Thermal Export South Africa
and Cerrejón 6,514 6,756 (4)% 6,841 (5)% 13,354 13,208 1%
(1) Excludes production from Foxleigh, which was sold on 30 August 2016, and Callide, which was sold on 31 October 2016.
(2) Thermal export – Primary is export quality product. Comparatives have been restated to align with current presentation.
(3) Thermal export and domestic – Secondary is lower quality product that can be sold into either the export or domestic markets.
Comparatives have been restated to align with current presentation. In 2016, ~60% of secondary production was sold into the export market.
(4) Restated to exclude domestic secondary coal production from mines other than Isibonelo.
Metallurgical Coal (Australia) – Export metallurgical coal production decreased by 19% to 4.0 million tonnes. Longwall moves took place at both
Moranbah and Grasstree during the quarter. The impact of Cyclone Debbie on the Queensland rail network resulted in operational delays with a net
impact on saleable production of ~0.6 million tonnes in the quarter. Run-of-mine production was not materially impacted and the stock build
continues to be unwound in H2 2017.
Grosvenor production continues to be affected by geological issues, which are typically more challenging for the first longwall panel. In
addition, a major belt tear occurred in the main conveyor drift. The focus remains on managing geological issues to deliver improved operational
performance and stability.
Export thermal coal production decreased by 70% to 0.3 million tonnes following the cessation of mining activities at Drayton. Furthermore, in
reaction to the rail outage in Q2 2017, thermal coal volumes were substituted for higher margin metallurgical coal production at Capcoal
(Grasstree).
South Africa – Primary export thermal coal production decreased by 8% to 4.1 million tonnes, due to operational challenges at Khwezela associated
with the integration of the Kleinkopje and Landau mines. In addition, there was an expected and temporary reduction at Mafube as the mine
transitions to a new pit.
Eskom related production increased by 3% to 6.9 million tonnes, with higher production at New Denmark due to a longwall move in Q2 2016. The sale
of the Eskom-tied operating mines (New Vaal, New Denmark and Kriel) to Seriti Resources was announced on 10 April 2017, and is expected to
complete by the end of 2017.
Cerrejón – Cerrejón’s attributable production increased by 5% to 2.4 million tonnes, reflecting productivity gains.
Full Year Guidance
Full year production guidance for export metallurgical coal remains unchanged at 19 – 21 million tonnes, but is expected to be at the lower end
of this range due to the geological issues at Grosvenor.
Full year production guidance for export thermal coal from South Africa and Cerrejón remains unchanged at 29 – 31 million tonnes, but is expected
to be at the lower end of this range primarily due to the operational challenges at Khwezela.
Q2 2017 Q2 2017 H1 2017
vs. vs. vs.
Coal (tonnes) Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2017 Q2 2016 H1 2017 H1 2016 H1 2016
Met Coal (Australia)(1) 4,268,200 5,721,400 5,955,100 5,923,500 5,935,700 (25)% (28)% 9,989,600 10,837,900 (8)%
Metallurgical export –
Coking 3,237,000 4,747,300 4,496,900 4,326,600 3,997,500 (32)% (19)% 7,984,300 7,376,400 8%
Metallurgical export – PCI 726,500 495,100 862,900 741,300 923,300 47% (21)% 1,221,600 1,642,100 (26)%
Thermal export 304,700 479,000 595,300 855,600 1,014,900 (36)% (70)% 783,700 1,819,400 (57)%
South Africa 13,028,200 12,307,300 13,708,600 14,690,700 13,188,800 6% (1)% 25,335,500 25,360,600 -
Thermal export – Primary(2) 4,064,100 4,058,500 4,229,400 4,480,800 4,425,600 0% (8)% 8,122,600 8,267,200 (2)%
Thermal export and
domestic – Secondary(3) 1,022,600 978,200 926,900 1,009,900 972,700 5% 5% 2,000,800 1,751,300 14%
Thermal domestic – Eskom 6,889,100 6,374,300 7,514,700 8,083,900 6,708,700 8% 3% 13,263,400 13,100,700 1%
Thermal domestic –
Isibonelo(4) 1,052,400 896,300 1,037,600 1,116,100 1,081,800 17% (3)% 1,948,700 2,241,400 (13)%
Colombia
Thermal – Export 2,449,600 2,781,700 2,800,600 2,927,800 2,329,500 (12)% 5% 5,231,300 4,939,500 6%
Total coal production 19,746,000 20,810,400 22,464,300 23,542,000 21,454,000 (5)% (8)% 40,556,400 41,138,000 (1)%
Sales volumes
Met Coal (Australia)
Metallurgical – Export(5) 4,155,000 4,947,400 4,926,900 5,223,100 4,836,700 (16)% (14)% 9,102,400 9,065,600 -
Thermal – Export 422,800 473,200 699,000 862,000 1,118,800 (11)% (62)% 896,000 1,816,700 (51)%
South Africa
Thermal – Export 4,153,900 4,693,300 5,825,200 4,159,300 4,744,000 (11)% (12)% 8,847,200 9,087,200 (3)%
Thermal – Other domestic 513,700 394,300 485,100 389,700 341,600 30% 50% 908,000 710,100 28%
Thermal domestic – Eskom 6,841,100 6,359,200 7,288,500 7,871,900 6,577,500 8% 4% 13,200,300 12,823,900 3%
Thermal domestic - Isibonelo 1,030,600 964,600 1,168,900 1,260,800 1,268,100 7% (19)% 1,995,200 2,481,700 (20)%
Third party sales 1,835,400 1,567,800 694,600 2,181,800 1,608,600 17% 14% 3,403,200 3,175,400 7%
Cerrejón
Thermal – Export 2,770,500 2,646,300 2,722,300 2,905,100 2,843,800 5% (3)% 5,416,800 5,182,800 5%
(1) Comparatives have been restated to exclude production from Foxleigh, which was sold on 30 August 2016, and Callide, which was sold on
31 October 2016.
(2) Thermal export – Primary is export quality product. Comparatives have been restated to align with current presentation.
(3) Thermal export and domestic – Secondary is lower quality product that can be sold into either the export or domestic markets.
Comparatives have been restated to align with current presentation. In 2016, ~60% of secondary production was sold into the export market.
(4) Restated to exclude domestic secondary coal production from mines other than Isibonelo.
(5) Includes both hard coking coal and PCI sales volumes.
Q2 2017 Q2 2017 H1 2017
vs. vs. vs.
Coal by mine (tonnes) Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2017 Q2 2016 H1 2017 H1 2016 H1 2016
Met Coal (Australia)
Capcoal (incl. Grasstree) 1,508,900 1,785,400 1,230,200 1,637,300 2,205,400 (15)% (32)% 3,294,300 3,965,400 (17)%
Dawson 1,046,800 1,092,100 1,273,000 1,185,900 1,143,800 (4)% (8)% 2,138,900 2,149,800 (1)%
Drayton - - 82,300 317,100 418,200 n/a n/a - 768,100 n/a
Grosvenor 183,600 709,800 539,100 685,700 331,200 (74)% (45)% 893,400 534,200 67%
Jellinbah 840,300 718,000 882,100 820,200 821,600 17% 2% 1,558,300 1,580,000 (1)%
Moranbah North 688,600 1,416,100 1,948,400 1,277,300 1,015,500 (51)% (32)% 2,104,700 1,840,400 14%
4,268,200 5,721,400 5,955,100 5,923,500 5,935,700 (25)% (28)% 9,989,600 10,837,900 (8%)
South Africa
Goedehoop 1,230,800 1,222,100 1,134,200 1,286,500 1,266,600 1% (3)% 2,452,900 2,267,900 8%
Greenside 877,700 1,004,800 1,036,900 1,111,400 990,700 (13)% (11)% 1,882,500 1,797,000 5%
Zibulo 1,672,900 1,439,400 1,407,200 1,571,800 1,638,600 16% 2% 3,112,300 3,028,600 3%
Khwezela(1) 1,475,000 1,596,100 2,230,000 2,137,100 1,849,000 (8)% (20)% 3,071,100 3,818,600 (20)%
Mafube 407,600 441,400 435,400 506,000 438,500 (8)% (7)% 849,000 817,600 4%
New Vaal 4,121,900 3,414,300 3,994,800 4,350,500 4,027,700 21% 2% 7,536,200 7,549,500 0%
New Denmark 769,600 954,400 773,200 777,300 392,600 (19)% 96% 1,724,000 996,900 73%
Kriel 1,420,300 1,338,500 1,659,400 1,834,000 1,503,300 6% (6)% 2,758,800 2,843,100 (3)%
Isibonelo 1,052,400 896,300 1,037,500 1,116,100 1,081,800 17% (3)% 1,948,700 2,241,400 (13)%
13,028,200 12,307,300 13,708,600 14,690,700 13,188,800 6% (1)% 25,335,500 25,360,600 -
Cerrejón
Carbones del Cerrejón 2,449,600 2,781,700 2,800,600 2,927,800 2,329,500 (12)% 5% 5,231,300 4,939,500 6%
Total Coal production 19,746,000 20,810,400 22,464,300 23,542,000 21,454,000 (5)% (8)% 40,556,400 41,138,000 (1)%
(1) The merger of Kleinkopje and Landau.
NICKEL
Q2 2017 Q2 2017 H1 2017
vs. vs. vs.
Nickel Q2 2017 Q2 2016 Q2 2016 Q1 2017 Q1 2017 H1 2017 H1 2016 H1 2016
Nickel t 11,300 11,100 2% 9,900 14% 21,200 22,300 (5)%
Nickel production increased by 2% as result of a stable performance in both smelting operations at Barro Alto, running slightly above nominal
capacity during the second quarter. Production from Codemin decreased by 4% to 2,200 tonnes due to maintenance in May 2017.
Full Year Guidance
Full year production guidance remains unchanged at 43,000 – 45,000 tonnes.
Q2 2017 Q2 2017 H1 2017
vs. vs. vs.
Nickel (tonnes) Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2017 Q2 2016 H1 2017 H1 2016 H1 2016
unless stated otherwise(1)
Barro Alto
Ore mined 2,375,700 1,023,500 364,300 974,100 835,300 132% 184% 3,399,200 1,292,300 163%
Ore processed 615,700 523,900 579,800 610,000 569,200 18% 8% 1,139,600 1,167,300 (2)%
Ore grade processed - %Ni 1.71 1.70 1.77 1.76 1.76 1% (3)% 1.71 1.76 (3)%
Production 9,100 7,800 8,800 9,000 8,800 17% 3% 16,900 17,700 (5)%
Codemin
Ore mined 7,500 - - - 6,800 - 10% 7,500 6,800 10%
Ore processed 144,000 143,600 142,900 144,000 151,300 - (5)% 287,600 302,700 (5)%
Ore grade processed - %Ni 1.69 1.65 1.73 1.72 1.72 2% (2)% 1.67 1.70 (2)%
Production 2,200 2,100 2,100 2,300 2,300 5% (4)% 4,300 4,600 (7)%
Total Nickel segment
nickel production 11,300 9,900 10,900 11,300 11,100 14% 2% 21,200 22,300 (5)%
Sales volumes 10,400 10,400 11,400 11,600 11,100 - (6)% 20,800 21,900 (5)%
(1) Excludes Anglo American Platinum’s nickel production.
EXPLORATION AND EVALUATION
Exploration and Evaluation expenditure for the quarter totalled $52 million, an increase of 17%. Exploration expenditure for the quarter totalled
$23 million, an increase of 2%. Evaluation expenditure for the quarter totalled $29 million, an increase of 31%.
NOTE
This Production Report for the second quarter ended 30 June 2017 is unaudited.
AVERAGE REALISED PRICES SUMMARY
H1 2017 H1 2017
vs. vs.
Average realised prices H1 2017 H2 2016 H1 2016 FY 2016 H2 2016 H1 2016
De Beers
Total sales volume (100%) (Mct) 20.0 13.7 18.3 32.0 46% 9%
Consolidated sales volume (Mct)(1) 19.1 12.8 17.2 30.0 49% 11%
Consolidated average realised
price ($/ct)(2) 156 201 177 187 (22)% (12)%
Average price index(3) 121 119 117 118 2% 4%
Copper (USc/lb) 264 235 215 225 12% 23%
PGMs
Platinum (US$/oz) 957 1,015 971 993 (6)% (1)%
Palladium (US$/oz) 780 670 551 610 16% 42%
Rhodium (US$/oz) 911 682 679 680 34% 34%
Basket price (US$/oz) 1,843 1,877 1,632 1,753 (2)% 13%
Basket price (ZAR/oz) 24,400 26,209 25,100 25,649 (7)% (3)%
Iron Ore – FOB prices
Kumba Export (US$/dmt)(4) 71 67 55 64 6% 29%
Minas-Rio (US$/wmt)(5) 66 61 44 54 8% 50%
Coal
Metallurgical Coal
Metallurgical – Export (U$/t)(6) 195 153 79 119 27% 147%
Metallurgical – PCI (US/t) (6) 124 102 70 77 22% 82%
Thermal – Export (U$/t) 87 65 47 55 34% 85%
South Africa
Thermal - Export (U$/t)(8) 72 69 50 60
Thermal – Domestic (U$/t, FOR) 20 17 16 17
Cerrejón
Thermal – Export (U$/t)(7) 71 65 47 56 9% 51%
Nickel (USc/lb) 442 474 387 431 (7)% 14%
(1) Consolidated sales volume excludes De Beers' JV partners' 50% proportionate share of sales to entities outside the De Beers Group of
Companies from the Diamond Trading Company Botswana and the Namibia Diamond Trading Company, and includes pre-commercial production sales
volumes from Gahcho Kué. Excluding Gahcho Kué’s capitalised pre-commercial production sales volumes results in a consolidated sales volume of
18.4Mct for H1 2017.
(2) Consolidated average realised price based on 100% selling value post-aggregation and excludes pre-commercial production sales from Gahcho
Kué.
(3) Average of the De Beers price index for the Sights within the six month period. The De Beers price index is relative to 100 as at
December 2006.
(4) Average realised export basket price (FOB Saldanha).
(5) Average realised export basket price (FOB Açu) (wet basis).
(6) Weighted average metallurgical coal sales price achieved.
(7) Weighted average export thermal coal price achieved.
Note:
Production figures are sometimes more precise than the rounded numbers shown in the commentary of this report. The percentage change will reflect
the percentage change using the production figures shown in the Production Summary of this report.
Forward-looking statements:
This contains certain forward looking statements which involve risk and uncertainty because they relate to events and depend on circumstances
that occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed
or implied by these forward looking statements.
For further information, please contact:
Media
UK
James Wyatt-Tilby
james.wyatt-tilby@angloamerican.com
Tel: +44 (0)20 7968 8759
Marcelo Esquivel
marcelo.esquivel@angloamerican.com
Tel: +44 (0)20 7968 8891
South Africa
Pranill Ramchander
pranill.ramchander@angloamerican.com
Tel: +27 (0)11 638 2592
Ann Farndell
ann.farndell@angloamerican.com
Tel: +27 (0)11 638 2786
Investors
UK
Paul Galloway
paul.galloway@angloamerican.com
Tel: +44 (0)20 7968 8718
Trevor Dyer
trevor.dyer@angloamerican.com
Tel: +44 (0)20 7968 8992
Sheena Jethwa
sheena.jethwa@angloamerican.com
Tel: +44 (0)20 7968 8680
Notes to editors:
Anglo American is a globally diversified mining business. Our portfolio of world-class competitive mining operations and undeveloped resources
provides the raw materials to meet the growing consumer-driven demands of the world’s developed and maturing economies. Our people are at the
heart of our business. It is our people who use the latest technologies to find new resources, plan and build our mines and who mine, process and
move and market our products to our customers around the world.
As a responsible miner - of diamonds (through De Beers), copper, platinum and other precious metals, iron ore, coal and nickel - we are the
custodians of what are precious natural resources. We work together with our key partners and stakeholders to unlock the long-term value that
those resources represent for our shareholders and for the communities and countries in which we operate – creating sustainable value and making
a real difference.
www.angloamerican.com
Registered office UK Registrars South African Transfer Secretaries
20 Carlton House Terrace Equiniti Link Market Services South Africa (Pty) Limited
London Aspect House 13th Floor, Rennie House
SW1Y 5AN Spencer Road 19 Ameshoff Street
England Lancing Braamfontein 2001
West Sussex South Africa
BN99 6DA (PO Box 4844, Johannesburg 2000)
England
Sponsor: RAND MERCHANT BANK (A division of FirstRand Bank Limited)
20 July 2017
Date: 20/07/2017 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.