3 Min Read
* Second-quarter platinum output falls 40 pct
* Iron ore, copper production rises
* Shares fall as much as 1.8 pct (Adds details, analyst comment, share price)
By Karen Rebelo
July 17 (Reuters) - Anglo American Plc, smarting from a five-month strike at its platinum mines, reported a sharp drop in quarterly output of the precious metal that overshadowed higher copper and iron ore production.
Anglo's shares fell as much as 1.8 percent in early trading after the miner reported a 40 percent drop in platinum output for the second quarter, the result of lost production at its key mines in South Africa.
The decline, which is expected to damage first-half earnings, masked a slight increase in production of iron ore, the biggest money earner for Anglo last year.
Iron ore production rose 2 percent to 11.5 million tonnes for the three months ended June 30. Output of copper, which contributed about a quarter of the company's earnings last year, rose 6 percent to 194,400 tonnes.
Numis Securities analyst Cailey Barker said Thursday's production update was "not an awful set of results". He said production of nickel, copper and metallurgical coal was better than had been expected.
"However, the results are dominated by platinum pain," Barker wrote in a note.
Tens of thousands of miners returned to work in June after wage deals ended the longest and most damaging strike in South Africa's history, a dispute that also hit Lonmin Plc and Impala Platinum Holdings Ltd.
Anglo American Platinum, a subsidiary of Anglo American and the largest primary platinum producer in the world, warned this week that its first-half earnings would fall by as much as 96 percent.
Platinum production fell to 358,000 ounces in the second quarter. For the first six months of the year, output of the metal fell 39 percent to 715,000 ounces.
A painful restructuring has been expected in South Africa's platinum sector, which is struggling with rising costs and depressed prices for the precious metal used for catalytic converters in automobiles.
Anglo American Platinum is reviewing its older and more capital-intensive platinum mines in Rustenburg in South Africa, with Sibanye Gold seen as a likely buyer.
Anglo American did not provide any details about the possible sale of these mines in its production statement on Thursday. The company declined to comment on the matter when contacted by Reuters.
While output of platinum fell sharply, production of Anglo's other precious commodity - diamonds - jumped 7 percent to 8.5 million carats at its De Beers unit, the world's largest diamond miner by market value.
Anglo said its diamond operations in southern Africa were affected by high seasonal rainfall in first, but recovered in the second quarter.
Anglo's shares were down 1.5 percent at 1541 pence at 0900 GMT on the London Stock Exchange. (Additional reporting by Silvia Antonioli in London; Editing by Robin Paxton and Gopakumar Warrier)