Metals News
Anglo American Iron-Ore Output Rises; Platinum Misses Target
industry news

Jan. 29 (Bloomberg) -- Anglo American Plc, a mining company with operations from Australia to Brazil, said fourth-quarter iron-ore output climbed 5 percent, while platinum volumes missed annual targets as South Africa ordered more safety stoppages.

Iron-ore production rose to 12.4 million metric tons in the quarter and copper gained 10 percent to 170,000 tons from a year earlier, the company said today. Anglo American Platinum produced 710,000 ounces in the period, down 19 percent, and 2.53 million ounces over the year, missing a 2.6 million-ounce goal.

Anglo, like BHP Billiton Ltd. and Rio Tinto Group, is expanding iron, copper and coal mines and studying acquisitions on a forecast for long-term growth in Asia. Platinum output has dropped as South Africa, which has the largest deposits of the metal, shut down mines for safety audits, forcing Anglo to process more "lower-grade surface stockpiles," it said.

Anglo lagged behind rivals in London trading today, advancing 2.3 percent to 2,715.5 pence as of 10:42 a.m. local time. The 24-member FTSE 350 Mining Index gained 3.6 percent.

Iron-ore output beat RBC Capital Markets' estimate of 3 percent, while a 24 percent slump in diamond volumes missed projections from RBC and Liberum Capital Markets Ltd. Platinum output "disappointed," SBG Securities Ltd. said in a note.

Mine Stoppages

South Africa's Department of Mineral Resources can suspend mining operations by issuing a so-called Section 54 order, allowing it to investigate accidents or inspect safety. Government-ordered safety stops rose to 81 last year from 36 a year earlier, Anglo American Platinum said in a statement.

Lonmin Plc, a competitor that also reported production today, said an "uncharacteristically high" number of safety halts hurt quarterly platinum volumes.

Anglo more than doubled nickel output to 9,900 tons in the quarter after starting the Barro Alto mine in Brazil. The company also began output last year from expansion projects at the Los Bronces copper mine in Chile and South Africa's Kolomela iron-ore deposit. Anglo said in 2011 that it may spend $85 billion to raise production at 100 projects over the decade.

The London-based company is investing in so-called core assets even as Europe's economic expansion stagnates and Asian growth cools.

Slowing Growth

The ThomReuters/Jefferies CRB index of commodity futures prices fell 8.2 percent in the past six months. The International Monetary Fund this week cut its forecast for global growth in 2012 to 3.3 percent from 4 percent.

Anglo shares slumped 29 percent in London last year as metal prices declined, less than the 35 percent slump of Xstrata Plc, a rival of similar size. BHP, the largest mining company, fell 26 percent. Twenty-three out of 32 analysts tracking Anglo recommend buying the stock, according to a Bloomberg survey.

In November, Anglo bid $5.1 billion to take control of De Beers, the largest diamond miner by sales, in its biggest acquisition since buying Brazil's Minas Rio iron-ore venture for about $5.5 billion in 2008, according to data compiled by Bloomberg.

De Beers's output fell to 6.5 million carats in the fourth quarter from a year earlier as the diamond miner focused on "increasing waste stripping" and carried out maintenance in recognition of "short-term global macro-economic volatility."

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