Anglo American, Q2 2022 PRODUCTION REPORT.

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Overig advies 22/07/2022 06:17
Anglo American plc Production Report for the second quarter ended 30 June 2022

Duncan Wanblad, Chief Executive of Anglo American, said: “Our production performance started to pick up in the second quarter of 2022, with operational momentum and our focus on asset resilience positioning us well for a stronger second half of the year. Full year production guidance is unchanged for PGMs, copper and iron ore, increased for diamonds and decreased for steelmaking coal due to longwall ramp-up timing. Overall for the second quarter, production was 9%(1) lower compared with the same quarter in 2021, primarily due to expected lower grades and water availability in Copper, ramp-up of the Aquila longwall in Steelmaking Coal and planned maintenance at the Minas-Rio iron ore operation.

“Our newly commissioned Quellaveco project in Peru delivered first copper concentrate at the start of July and will contribute to our copper production in the second half. This marks a major milestone in our delivery of this world-class long life asset, on time and on budget - testament to the incredible efforts of our workforce and wider stakeholders through the effects of a global pandemic. Quellaveco is expected to add around 10% to our global output once fully operational, central to the margin-enhancing organic growth we are delivering in future-enabling metals and minerals over the next decade.

“As we strive to further enhance Anglo American's investment case, we are committed to delivering many of the raw materials that are critical to the decarbonisation of global energy and transport systems and to do so sustainably, in line with the evolving expectations of our stakeholders. We are progressing towards our stretching sustainability targets on all fronts. During the quarter, we unveiled the world’s largest hydrogen-powered haul truck, part of our nuGen™ Zero Emission Haulage Solution. This world-first technology at such scale is a vital step towards our commitment to carbon neutrality across our operations by 2040. Our agreement to combine nuGenTM with our engineering partner, First Mode, is designed to accelerate the commercialisation and deployment of this technology across the mining industry and other transport applications.”

Q2 2022 highlights

Rough diamond production decreased by 4%, reflecting lower grades in Canada and Botswana. Production guidance is increased to 32–34 million carats (previously 30-33 million carats) due to robust demand and strong year-to-date operational performance.
Metal in concentrate production from our Platinum Group Metals (PGMs) operations was broadly flat, with strong performances at Unki and Mototolo offsetting planned lower grades at Mogalakwena. Unit cost guidance is reduced to c.$950/PGM ounce (previously c.$970/PGM ounce), reflecting the weaker South African rand.
Copper production decreased by 21% due to planned lower grades and water availability.
Iron ore production decreased by 8% after a safety intervention at Kumba’s Kolomela mine, as well as planned maintenance at Minas-Rio.
Steelmaking coal production decreased by 12% as the replacement Aquila longwall ramped up following the planned end of production from Grasstree, as well as high rainfall impacting the open pit operations. Full year guidance is revised to 15–17 million tonnes (previously 17-19 million tonnes) and unit cost revised to c.$110/tonne (previously c.$105/tonne).
Production Q2 2022 Q2 2021 % vs. Q2 2021 H1 2022 H1 2021 % vs. H1 2021
Diamonds (Mct)(2) 7.9 8.2 (4)% 16.9 15.4 10%
Copper (kt)(3) 134 170 (21)% 273 330 (17)%
Nickel (kt)(4) 10.3 10.6 (3)% 19.6 20.7 (5)%
Platinum group metals (koz)(5) 1,032 1,058 (2)% 1,988 2,079 (4)%
Iron ore (Mt)(6) 14.4 15.7 (8)% 27.5 31.9 (14)%
Steelmaking coal (Mt) 2.6 3.0 (12)% 4.8 6.2 (22)%
Manganese ore (kt) 980 941 4% 1,783 1,845 (3)%
(1) Copper equivalent production is normalised to reflect the demerger of the South Africa thermal coal operations and the sale of our shareholding in Cerrejón.
(2) De Beers Group production is on a 100% basis, except for the Gahcho Kué joint venture which is on an attributable 51% basis.
(3) Contained metal basis. Reflects copper production from the Copper operations in Chile only (excludes copper production from the Platinum Group Metals business unit).
(4) Reflects nickel production from the Nickel operations in Brazil only (excludes nickel production from the Platinum Group Metals business unit).
(5) Produced ounces of metal in concentrate. 5E+Au (platinum, palladium, rhodium, ruthenium and iridium plus gold). Reflects own mine production and purchase of concentrate.
(6) Wet basis.

Production and unit cost guidance summary

2022 production guidance(1) 2022 unit cost guidance(1)
Diamonds(2) 32–34 Mct
(previously 30-33 Mct) c.$65/ct
Copper(3) 660–750 kt c.147c/lb
Nickel(4) 40–42 kt c.495c/lb
Platinum Group Metals(5) 3.9–4.3 Moz c.$950/oz
(previously c.$970/PGM oz)
Iron Ore(6) 60–64 Mt c.$40/t
Steelmaking Coal(7) 15–17 Mt
(previously 17-19 Mt) c.$110/t
(previously c.$105/t)
(1) Subject to the extent of further Covid-19 related disruption. Unit costs exclude royalties, depreciation and include direct support costs only. FX rates for H2 2022 unit costs: ~17 ZAR:USD, ~1.5 AUD:USD, ~5.5 BRL:USD, ~1,000 CLP:USD, ~4 PEN:USD (previously ~15 ZAR:USD, ~1.3 AUD:USD, ~5.0 BRL:USD, ~800 CLP:USD, ~4 PEN:USD).
(2) Production on a 100% basis, except for the Gahcho Kué joint venture, which is on an attributable 51% basis, subject to trading conditions. Venetia continues to transition to underground operations during 2022, with ramp-up expected from 2023. Unit cost is based on De Beers' share of production.
(3) Copper business unit only. On a contained-metal basis. Total copper production is the sum of Chile and Peru: Chile: 560–600 kt and Peru: 100–150 kt. Copper Chile subject to water availability. Peru subject to progress on ramp-up of operations. Unit cost total is a weighted average based on the mid-point of production guidance. Chile: c.150c/lb, subject to the impact of water availability on production volumes. Peru: c.135c/lb, based on progressing the ramp-up of production volumes.
(4) Nickel operations in Brazil only. The Group also produces approximately 20 kt of nickel on an annual basis as a co-product from the PGM operations.
(5) 5E + gold produced metal in concentrate ounces. Includes own mined production (~65%) and purchased concentrate volumes (~35%). The split of metals differs for own mined and purchased concentrate, refer to FY2021 results presentation slide 38 for indicative split of own mined volumes. 2022 metal in concentrate production is expected to be 1.8–2.0 Moz of platinum, 1.2–1.3 Moz of palladium and 0.9–1.0 Moz of other PGMs and gold. 5E + gold refined production is expected to be 4.0–4.4 Moz, subject to the potential impact of Eskom load-shedding. Unit cost is per own mined 5E + gold PGMs metal in concentrate ounce.
(6) Wet basis. Total iron ore is the sum of operations at Minas-Rio in Brazil and Kumba in South Africa. Minas-Rio: 22–24 Mt and Kumba: 38–40 Mt. Kumba is subject to the third party rail and port performance, as well as weather-related disruptions. Unit cost total is a weighted average based on the mid-point of production guidance. Minas-Rio: c.$32/t and Kumba: c.$44/t.
(7) Production excludes thermal coal by-product from Australia. FOB unit cost comprises managed operations and excludes royalties and study costs.

Realised prices

H1 2022 H1 2021 H1 2022 vs H1 2021
De Beers
Consolidated average realised price ($/ct)(1) 213 135 58 %
Average price index(2) 140 109 28 %
Copper (USc/lb)(3) 401 460 (13)%
Nickel (USc/lb) 1,159 721 61 %
Platinum Group Metals
Platinum (US$/oz)(4) 964 1,170 (18)%
Palladium (US$/oz)(4) 2,147 2,641 (19)%
Rhodium (US$/oz)(4) 17,131 24,377 (30)%
Basket price (US$/PGM oz)(5) 2,671 2,884 (7)%
Iron Ore – FOB prices(6) 135 210 (36)%
Kumba Export (US$/wmt)(7) 135 216 (38)%
Minas-Rio (US$/wmt)(8) 134 200 (33)%
Steelmaking Coal - HCC (US$/t)(9) 407 117 248 %
Steelmaking Coal - PCI (US$/t)(9) 322 103 213 %
(1) Consolidated average realised price based on 100% selling value post-aggregation.
(2) Average of the De Beers price index for the Sights within the 6-month period. The De Beers price index is relative to 100 as at December 2006.
(3) The realised price for Copper excludes third party sales volumes.
(4) The realised price excludes trading.
(5) Price for a basket of goods per PGM oz. The dollar basket price is the net sales revenue from all metals (PGMs, base metals and other metals), excluding trading, per 5E + gold sold ounces (own mined and purchased concentrate).
(6) Average realised total iron ore price is a weighted average of the Kumba and Minas-Rio realised prices.
(7) Average realised export basket price (FOB Saldanha) (wet basis as product is shipped with ~1.6% moisture). The realised prices differ to Kumba's standalone results due to sales to other Group companies. Average realised export basket price (FOB Saldanha) on a dry basis is $137/t (H1 2021: $220/t) and this was higher than the dry 62% Fe benchmark price of $120/t (FOB South Africa, adjusted for freight).
(8) Average realised export basket price (FOB Açu) (wet basis as product is shipped with ~9% moisture).
(9) Weighted average coal sales price achieved at managed operations. Australian thermal coal by-product is US$280/t and H1 2021 was US$87/t, resulting in a 222% increase.


This Production Report for the quarter ended 30 June 2022 is unaudited.
Production figures are sometimes more precise than the rounded numbers shown in this Production Report.
Copper equivalent production shows changes in underlying production volume. It is calculated by expressing each product’s volume as revenue, subsequently converting the revenue into copper equivalent units by dividing by the copper price (per tonne). Long-term forecast prices are used, in order that period-on-period comparisons exclude any impact for movements in price.
Please refer to page 16 for information on forward-looking statements.
In this document, references to “Anglo American”, the “Anglo American Group”, the “Group”, “we”, “us”, and “our” are to refer to either Anglo American plc and its subsidiaries and/or those who work for them generally, or where it is not necessary to refer to a particular entity, entities or persons. The use of those generic terms herein is for convenience only, and is in no way indicative of how the Anglo American Group or any entity within it is structured, managed or controlled. Anglo American subsidiaries, and their management, are responsible for their own day-to-day operations, including but not limited to securing and maintaining all relevant licences and permits, operational adaptation and implementation of Group policies, management, training and any applicable local grievance mechanisms. Anglo American produces group-wide policies and procedures to ensure best uniform practices and standardisation across the Anglo American Group but is not responsible for the day to day implementation of such policies. Such policies and procedures constitute prescribed minimum standards only. Group operating subsidiaries are responsible for adapting those policies and procedures to reflect local conditions where appropriate, and for implementation, oversight and monitoring within their specific businesses.

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