July 19, 2018 / 6:21 AM / 5 months ago

Anglo American reports 6 percent rise in second quarter output

LONDON (Reuters) - Major diversified miner Anglo American (AAL.L) on Thursday reported a 6 percent year-on-year increase in output in the second quarter, driven by copper and coking coal, and revised upwards its platinum guidance.

FILE PHOTO: The Anglo American logo is seen in Rusternburg October 5, 2015. Picture taken October 5, 2015. REUTERS/Siphiwe Sibeko/File Photo

The figures excluded Minas-Rio in Brazil, where a leak has forced the closure of the iron ore project until late this year.

Copper production rose 12 percent, driven by higher grades, while coking coal increased 33 percent. Thermal coal output slipped one percent compared with a year earlier.

Anglo American, along with the other major miners, has recovered strongly from the commodities slump of 2015-16.

One setback has been the leak at the Minas-Rio project in Brazil, which forced the suspension of operations from March.

On Thursday, Anglo American said inspection work was on track, and a 4 kilometer section of the pipeline where the leak took place was being replaced as a precaution.

It repeated an earlier forecast that production, still in the ramp-up phase, should restart in the final quarter of the year, subject to required clearance from the Brazilian authorities.

Another concern for Anglo American, the world’s biggest platinum producer, is weakening demand for the metal from car manufacturers that use it in autocatalysts.

Platinum accounted for 10 percent of its earnings before interest, tax, depreciation and amortization (EBITDA) last year.

Platinum and palladium output was broadly unchanged so far, but Anglo American shifted upwards full-year platinum guidance to 2.4-2.45 million ounces from the 2.3–2.4 million ounces of platinum guided in April.

The company says it has improved operational efficiency and on Tuesday it announced its unit Anglo American Platinum (AMSJ.J) had spun off an internal fund and invested $100 million in a venture capital fund to stimulate industrial demand for platinum group metals (PGMs).

In a note, Bernstein analysts said Thursday’s results were broadly in line and maintained its “outperform” rating.

Shares slipped around 2.5 percent in London trade by 0800 GMT, slightly more than the broader sector, which was down nearly 2 percent. .FTNMX1770

Reporting by Barbara Lewis; editing by Jason Neely and Jan Harvey

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