By Christian Moess Laursen


Anglo American cut its coal-production target for the year after a fire incident at a major mine is set to suspend production for the rest of the year, while backing guidance for its key metals copper and iron ore.

The diversified mining major said Thursday that it dug out 6% less copper in the second quarter, with 196,000 metric tons versus 209,000 tons in the same period a year before, due to lower throughput and grades at key mines.

Anglo recently outlined a reorganization of its business to focus on the red metal that is one of its main profit drivers, representing nearly a third of the group's total output.

Its prized copper assets made it a takeover target of Australian mining giant BHP, which launched a nearly $50-billion bid in May. Anglo rebuffed the offer after weeks of talks.

Anglo American's Quellaveco mine in Peru--one of the world's largest undeveloped copper deposits--decreased production by 4% in the three months to June, while output from its Chilean operations fell 8%.

Prices for the metal, key for the global transition toward low-carbon energy, have surged this year, hitting an all-time high in May, on the back of an expected rise in demand mixed with supply tightness.

Anglo's iron-ore output was stable on quarter at 15.6 million tons, driven by a strong performance at its Minas-Rio mine in Brazil offsetting a planned decrease at its Kumba operations in South Africa. Together with copper and crop-nutrients, the iron-ore assets are set to form Anglo American's business operations after the streamlining is completed late next year.

The FTSE 100-listed miner backed guidance for both metals, still expecting to produce between 730,000 and 790,000 tons of copper and 58 million and 62 million tons of iron ore in 2024, at around 157 cents a pound and $37 a ton in cost per unit, respectively.

As part of the restructure, which was announced in May to fend off BHP's bid and the potential of other suitors emerging, Anglo is planning to offload its platinum-metals subsidiary Anglo American Platinum and divest or demerge its storied diamond unit De Beers.

Production from the platinum unit fell 2% to 921,000 ounces, while diamond output dropped 15% to 6.4 million carats.

Anglo's steelmaking coal and nickel operations--both set for sale as part of the restructure--saw production rise 26% to 4.2 million tons and 1% to 10,000 tons, respectively.

Earlier this month, Anglo's coal mine Grosvenor in Queensland, Australia, suffered an underground coal gas ignition incident.

The company said Thursday that it has excluded the mine's expected second half-year output in its full-year forecast, now seeing 14 million-15.5 million tons instead of 15 million-17 million tons previously, with cost guidance raised to $130-$140 a ton from around $115 a ton before.

The mine has been stabilized and the procedures preceding a safe re-entry into the mine are expected to take several months, the company said. Grosvenor was set to contribute at least nearly a fourth of coal output this year.

Full-year targets for nickel, platinum and diamond production were kept at 36,000-38,000 tons, 3.3 million-3.7 million ounces and 26 million-29 million carats, respectively.

Anglo American is scheduled to report financial results on July 25.


Write to Christian Moess Laursen at christian.moess@wsj.com


(END) Dow Jones Newswires

07-18-24 0308ET