Anglo American (LON: AAL) Reports 95% Recovery in Production During H2 2020

Summary

  • In 2020, blue-chip miner’s production was down in most of the categories, only nickel & copper did well in comparison to the previous year.
  • The production returned to 95 per cent of 2019 levels during the second half of 2020.

Coming out of the Covid-19 disruptions earlier in 2020, FTSE 100-listed miner, Anglo American Plc (LON: AAL) witnessed strong recovery during the second half, which continued through the fourth quarter. The blue-chip miner benefitted from strong performances in iron ore at Minas-Rio in Brazil and copper at Los Bronces in Chile.

The production got back to 95 per cent of 2019 levels during the H2 2020. The recovery was aided by the proactive decision made by the company to suspend operations at the Grosvenor metallurgical coal mine along with planned maintenance at both the Collahuasi (copper) and Kumba (iron ore) operations.

    

(Source - © Kalkine Group 2021)

Also read: Anglo American Plc acquires Sirius Minerals Plc

The company anticipates strong demand and sustained recovery for rough diamonds in 2021 as sales of diamond jewellery picked up steam during the holiday season. Despite the disruptions caused by Covid-19, the demand for rough diamonds is expected to be resilient.

In 2020, blue-chip miner’s production was down in most of the categories, only nickel and copper did well in comparison to the previous year. Diamond production plunged by 18 per cent, from 30.8 million carats per year to 25.1 million carats per year. 

Also read: Anglo American Plc reports 24% production increase for Q3 2020

During the fourth quarter ended 31 December 2020, the production of copper increased by 1.4 per cent to 647,000 tonnes from 638,000 tonnes. Anglo American Plc leveraged upon secured access to industrial water at Los Bronces in Chile that resulted in an increase of 5.7 per cent year-on-year to 168,000 tonnes from 159,000 tonnes during the fourth quarter of 2020.

The production of Platinum group metals shrunk from 4.4 million ounces to 3.8 million ounces, down by 14 per cent in comparison to 2019. The production of Iron ore sunk from 65.5 million tonnes to 61.1 million tonnes, down by 6.7 per cent. The thermal coal production stood at 20.6 million tonnes, down by 22 per cent from 26.4 million tonnes. Also, metallurgical coal production stood at 16.8 million tonnes, which is down by 26 per cent from 22.9 million tonnes.

Nickel production increased from 42,600 tonnes to 43,500 tonnes, up by 2.1 per cent year-on-year. In the near term, diamond production is expected to be in the range of 32-34 million carats in 2021. The copper production is expected to be in the range of 640-680 thousand tonnes in 2021.

Shares of Anglo American ended at GBX 2,446.00 on 28 January 2021 and has given a return of 19.46 per cent in the last one year.

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