Chilean Drought Hits Copper Output at Anglo American -- Commodity Comment

By Joe Wallace

Production at Anglo American PLC (AAL.LN) rose in the third quarter, the miner said Tuesday, as increasing coal output offset the impact of dry weather on its copper mines.

Here's a summary of Anglo's third-quarter production and its guidance for the rest of the year.

Copper:

Copper production fell 8% to 158,900 metric tons in the third quarter from the same period in 2018, Anglo said, "driven by unprecedented drought conditions in central Chile."

"To date, 2019 has been the driest year of the longest drought ever recorded in central Chile," the miner added.

The company cut its guidance for copper production this year to 630,000 tons to 650,000 tons, and said the drought "remains a risk for 2020 production."

Coal:

Metallurgical coal production rose 22% to 6.6 million tons, partly because a longwall was moved at the Moranbah mine in Australia in the third quarter of 2018. Anglo said it doesn't expect longwall moves to affect production in the fourth quarter, and left its forecast for metallurgical coal production in 2019 unchanged at 22 million tons to 24 million tons.

Thermal coal output in South Africa fell by 15% to 4.3 million tons as some sections of Anglo's operations there reach the end of their production life. The company cut its guidance for overall thermal coal output this year to 26 million tons, down from 26 million tons to 28 million tons previously, reflecting falling output in Colombia.

Iron Ore:

Kumba in South Africa produced 10.5 million tons of iron ore in the third quarter, broadly unchanged from last year, and is expected to produce 42 million tons to 43 million tons in 2019.

Minas-Rio in Brazil, which was closed from March to December last year, produced 6.1 million tons and is forecast to produce 20 million tons to 22 million tons in 2019 as a whole. That is up from Anglo's previous forecast of 19 million tons to 21 million tons.

Write to Joe Wallace at [e-mail]

(END) Dow Jones Newswires

October 22, 2019 05:59 ET (09:59 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.