Anglo Platinum meets sales contracts even as strike cuts output
The platinum mining giant was able to fulfill its contracts despite a devastating five-month long strike which wiped out its profits.
Anglo American Platinum, the world’s largest producer of the metal, said it met all deliveries in the second quarter even as a strike cut output by 40%.
Amplats, as the Anglo American unit is known, drew on stockpiles to offset the effect of a five-month stoppage by the largest union at its South African operations, it said in a statement on Thursday. Mined output decreased to 358 000 equivalent platinum ounces for the three months ended June 30, while production at refineries fell 28% to 421 000 ounces. Anglo’s output of iron ore, copper, diamonds and nickel rose, the London-based company said separately.
“Sales to both contractual and non-contractual customers continued at normal levels, supplemented by refined platinum stock,” Amplats said.
The Association of Mineworkers and Construction Union won increases in basic pay of as much as 20%, ending the stoppage at Amplats, Impala Platinum and Lonmin, the world’s three largest producers, on June 24. Anglo is reviewing its operations worldwide, including the strike-hit assets in South Africa, to increase earnings after chief executive Mark Cutifani took over last year amid cost overruns and delays in developing projects.
Cutifani set a goal of improving Anglo’s return on capital employed to at least 15% by 2016 from 8% last year and plans to sell assets that fail to achieve the target.
Anglo forfeited 239 000 ounces of platinum production in the second quarter, which brought the total lost to 424 000 ounces for the first half. It missed out on a further 16 000 ounces of output as operations at the mines in Rustenburg, about 120 kilometers northwest of Johannesburg, came back on line. The strike didn’t affect the Unki mine in Zimbabwe and the open-pit Mogalakwena operations, where output rose 23% to 96 000 ounces, it said.
Amplats last week said first-half profit fell as much as 96% because of the strike.
Anglo’s iron-ore volumes were 11.5-million metric tonnes, compared with 11.3-million tonnes a year earlier, it said. Copper rose 6% to 194 400 tonnes. Production of export metallurgical coal, used in steelmaking, jumped 10% in the second quarter to 4.8-million tonnes. Output of export thermal coal declined 5% to 8.1-million tonnes because of lower production from Drayton in Australia.
Anglo also mines diamonds in southern Africa and Canada. Production at De Beers, the gem producer it owns, gained 7% in the second quarter to 8.5-million carats after a recovery from last year’s pit flooding at its Venetia mine in South Africa.
Nickel production surged 25% to 10 600 tonnes, mainly because of “operational stability” at the Barro Alto mine in Brazil, Anglo said. Production at Barro Alto climbed 41% to 8 600 tonnes.– Bloomberg