ANGLO American, the global diversified mining company, on Friday forecast production to be down by 3% in overall output in 2022.
This as the Quellaveco mine in Peru copper ramps up, and strong diamond production has been offset by ore grades in Chile and lower production from Kumba and platinum group metals (PGMs) miners.
It lowered its copper production outlook for next year due to lower grades at its Chilean mines.
In its update on its performance during 2022, the group said it now expected its copper mines to produce between 840 000 and 930 000 tons in 2023, compared with a prior estimate of 910 000 tons to 1.02 million tons.
However, it expected production to grow by 5% in 2023 from 2022 levels, led by copper, iron ore and steel-making coal.
Anglo American CEO Duncan Wanblad said: “This year has seen us focus on our immediate priorities of safety and restoring normal operational disciplines given the pandemic-related disruptions of the last few years. In 2022, these have been added to by geopolitically-led economic volatility, extreme weather, and other localised disruptions at our operations.”
Anglo said it expected to spend $5 billion (R86bn) to $6.5bn annually for the next three years and grow output until 2024, after which it predicted some levelling off in 2025.
The group said De Beers, which mines diamonds, had a strong operating performance, while PGMs had a stable operating performance. It said its Polokwane smelter rebuild had been completed.
Anglo American owns 85% of De Beers.
It said Minas-Rio in Brazil had a stable production, and Kumba Iron ore improved mining stability.
Anglo American finance director Stephen Pearce said: “We have set up Anglo American as a resilient business through the cycle, both through the quality of the portfolio and our balanced approach to capital allocation.
“That balance supports investment in business improvement and value accretive growth, while also providing attractive shareholder returns through the cycle, translating into $7.5 billion in cash returns to shareholders in 2021 and 2022 to date.”
Pearce said the company's resilience also relied on having a highly competitive cost base – and Anglo was acting to reduce the impact of inflation across its cost base and limiting the extent to which it was entrenched on the balance sheet through capex.
The group said it was developing the Woodsmith fertiliser nutrients deposit in Britain's North York Moors National Park, and it would require an investment of $500 million in 2022 and $800m next year.
Wanblad said: “I think the attractiveness of Woodsmith has only just improved quite significantly. So from the time that we acquired, prices today clearly are pretty high.
"We realise of course that this is partly a result of the effects of the war.“
Anglo American’s shares closed 2.01% lower on Friday at R680.82.
BUSINESS REPORT