Anglo American 2020 Profit Hurt by Coronavirus-Related Disruptions -- Commodity Comment
February 25 2021 - 4:24AM
Dow Jones News
FTSE 100 multinational mining company Anglo American PLC on
Thursday reported a fall in 2020 net profit, blaming
coronavirus-related disruptions to its operations, especially in
the first half of the year, but said the latter months benefited
from strong metal prices.
On production:
"Continued strong performances from our Minas-Rio iron ore
operation in Brazil and the Collahuasi copper joint operation in
Chile helped partly offset the impacts of Covid-19, leading to an
overall decrease in production of 10%, on a copper equivalent
basis."
"Copper production increased by 1% to 647,400 [metric] tons
(2019: 638,000 tons), driven by an 11% increase in attributable
production from Collahuasi to a record 276,900 tons (2019: 248,800
tons) on the back of strong plant performance, reflecting
improvement projects implemented in 2019."
"PGMs' production (metal in concentrate) decreased by 14% to 3.8
million ounces (2019: 4.4 million ounces), due to Covid-19
restrictions, which reduced operating capacity for most of the
second quarter, particularly at underground operations."
"PGM production was 35% higher in the second half of the year
compared with the first, as the operations recovered well from the
initial disruption caused by the pandemic."
"At Kumba, iron ore production decreased by 13% to 37.0 metric
tons (2019: 42.4 Mt), owing to lower workforce levels and logistics
constraints due to Covid-19 restrictions, as well as above average
rainfall and operational issues at the Sishen crusher and Kolomela
plant."
"Metallurgical coal production decreased by 26% to 16.8 Mt
(2019: 22.9 Mt), principally owing to the suspension of operations
at Grosvenor following a gas ignition incident in May, and
challenges at Moranbah North, where a fall of ground in the first
quarter and geotechnical challenges towards the end of the year
limited longwall progress."
"Thermal coal export production decreased by 22% to 20.6 Mt
(2019: 26.4 Mt), primarily due to Covid-19 operational restrictions
and a three-month industrial action at Cerrejon, which ended in the
first week of December."
"Nickel's production increased by 2% to 43,500 [metric] tons
(2019: 42,600 tons) owing to improved operational stability, while
manganese ore production was in line with the prior year at 3.5
Mt."
On diamond demand:
"Consumer desirability for natural diamonds is set to remain
high over the medium to long term despite the economic impact of
the pandemic and increasing supply of lab-grown diamonds."
On prices:
"The average LME copper price in 2020 increased by 3% compared
with 2019."
"PGM prices started the year strongly before Covid-19 impacted
demand; however, prices soon recovered as PGM supply also
faltered."
"The average dollar platinum market price increased by 2%,
supported by robust industrial demand, despite continuing declines
in diesel automotive demand."
"The average LME nickel price was 1% lower than the prior year
as the impact of Covid-19 on demand in the first half was offset by
the subsequent easing of restrictions, notably in China."
"The realized price decreased by 10%, principally owing to the
increased ferronickel discount, driven by the higher LME nickel
price at the end of 2019."
On guidance:
"Production guidance in 2021 for export thermal coal is
unchanged at 24 Mt (Export South Africa 16 Mt; Colombia 8 Mt -
attributable share), subject to the extent of further
Covid-19-related disruption."
"2021 production is expected to be at the lower end of the range
following a suspension of operations at Moranbah North in response
to elevated gas levels on Feb. 20, subject to the timing of a safe
restart at Moranbah North."
Write to Barcelona editors at barcelonaeditors@dowjones.com
(END) Dow Jones Newswires
February 25, 2021 05:09 ET (10:09 GMT)
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