JOHANNESBURG (miningweekly.com) – Global mining major Anglo American saw an across-the-board swell in production across its minerals portfolio for the first three months of the year, marred only by a hefty drop in output from its platinum business, which continues to confront persistent industrial action across its South African operations.

Platinum equivalent refined production decreased by 39% to 357 000 oz as a result of strikes at the Rustenburg, Amandelbult and Union mines.

As a consequence of the ongoing industrial action, the 2014 platinum production guidance was revised downwards to some 2.1-million ounces.

IRON-ORE

Production from the group’s iron-ore business, Kumba Iron Ore, grew by 10% to 11.3-million tonnes in the quarter ended March 31, following solid performances at both the Sishen and Kolomela mines, in the Northern Cape.

COAL

Export metallurgical coal production increased by 31% to 6.1-million tonnes; a record quarter, primarily as a result of continuing productivity improvements.

Export thermal coal production from South Africa increased by 6% to 4.1-million tonnes, while output from the openpit Cerrejón mine, in Colombia, increased by 95%, reflecting the strike-affected first quarter of 2013.

Production going to power utility Eskom was 9% lower at 7.4-million tonnes, owing to excessive rainfall at New Vaal, in the Free State, and a delayed start-up after the longwall move at New Denmark, in Mpumalanga.

Domestic non-Eskom production decreased by 10% to 1.4-million tonnes as a result of excessive rainfall at the Landau coal mine, in Mpumalanga.

Australian export thermal coal production decreased by 49% to 800 000 t, owing largely to a product mix change with an increase in metallurgical coal production, while lower production from Drayton was due to the mine nearing the end of its life.

Construction work on the greenfield Grosvenor metallurgical coal project, in Queensland, was nearing 50% completion.

Critical engineering and procurement activities had been completed and the majority of the project budget had been contracted and committed.

Longwall production remained scheduled to start at the end of 2016 and within the $1.95-billion budget.

COPPER

Meanwhile, Anglo American’s copper production increased by 19% to 202 000 t, with improved performance from the Los Bronces and Collahuasi mines, in Chile, primarily the result of higher ore grades.

Los Bronces’ production increased by 17% to 115 600 t, with higher grades and continued throughput improvement at both plants.

Higher grades reflected adjustments to the sequencing of extraction from the mine, which saw higher grade areas being mined sooner. As the year progressed, lower grades were expected to offset these early gains.

Meanwhile, production at Collahuasi increased during the period under review by 78% as a result of continuing higher grades and the mill shutdown in the first quarter of 2013. Higher grades reflected the current phase of mining and the accelerated ore extraction of the phase to increase productivity.

Lower grades were expected later in the year as ore supply increased from the next phase.

The copper production guidance for the 2014 financial year had been revised upwards from between 700 000 t and 720 000 t to between 710 000 t and 730 000 t, reflecting the mining of higher grade phases at Los Bronces and Collahuasi at the beginning of the year.

BASE METALS

Over the three months, the group’s nickel production increased by 48% to 9 200 t, driven by improved operational stability at Barro Alto, in Brazil.

Barro Alto produced 6 900 t of nickel over the three months, an increase of 68%, reflecting continued operational stability, as well as the impact from the 2013 planned stoppage of Line 2 for the electric furnace sidewall rebuild, followed by the metal run-out during the start-up.

The first full furnace rebuild at Barro Alto was expected to start, as planned, later this year.

Production from Codemin, in Brazil, increased by 10% to 2 300 t, mainly owing to the rephasing of yearly maintenance from the first quarter to the second quarter of the year.

Production guidance for the year remained unchanged at between 30 000 t and 35 000 t.

Niobium production, meanwhile, remained flat at 1 100 t, as higher recoveries were offset by lower ore grades.

Development of the Fresh Rock project to extend the life of the Boa Vista mine, in Brazil, was ongoing, reaching 85% completion and was expected to achieve first production in the second half of the year.

Phosphates concentrate production for the first three months of the year was flat at 347 900 t, while fertiliser production decreased by 2% owing to unplanned maintenance stoppages and throughput constraints.

Phosphoric acid production decreased by 31% to 53 800 t and dicalcium phosphate production decreased by 17% to 31 600 t, owing to a biyearly maintenance stoppage at Catalão, in Brazil.

DIAMONDS

Production from diamond company De Beers, in which Anglo American has a 85% shareholding, increased by 18% to 7.5-million carats, owing largely to the impact of planned plant maintenance at Orapa, in Botswana, in the first quarter of 2013 and recovery from the 2012 sidewall failure at Jwaneng, also in Botswana.

Anglo American’s Southern African operations were again hampered by heavy rainfall, resulting in lower production than the fourth quarter of last year.

However, owing to improved preparations in the first quarter of 2014, the impact of heavy rains was lower than that in the first quarter of 2013.

Production guidance for 2014 remained unchanged at between 30-million carats and 32-million carats.

EXPLORATION AND EVALUATION

Exploration and evaluation expenditure for the first three months totalled $82-million, a decrease of 21%, with exploration expenditure during the period decreasing by $13-million to $35-million.

Evaluation expenditure for the quarter was $47-million, a decrease of 15%, and was primarily focused on the copper business.

Commenting on Anglo American’s first-quarter results, Investec said on Thursday that, while production was slightly below its expectations, this did not materially change its view on the company.

“Thermal coal fell short of our forecast of 11.3-million tonnes, with export output at 7.9-million tonnes, although this was up 6% year-on-year. Nickel was close to our numbers, while platinum output is being impacted by the protracted strike action and remains difficult to predict,” the bank stated.