Anglo American becomes latest London-listed miner to report weak Q1 production figures

Anglo American has pointed to COVID-19 and weather-related disruptions at its operations around the world, after reporting a disappointing production performance in the first quarter of the year.

The diversified mining giant is the latest London-listed outfit to publish a weaker-than-expected start to the year, with Rio Tinto, Vale and Antofagsta all making similar statements in Q1 trading updates this week.

Anglo shares, which recently touched record highs as part of a broader commodities price boom, fell 8% on the news of a 10% decrease to the firm’s total production, compared to the first quarter of 2021.

Copper production declined by 13% to 140,000 tonnes from the 160,000 tonnes produced in Q1 2021, although Anglo said this was due to planned lower grades. The company maintained its 2022 copper production guidance at a range of between 660-750,000 tonnes.

Meanwhile, iron ore production fell by 19% to 13.2 million tonnes as high rainfall and plant issues affected both Anglo’s 65%-owned Kumba Iron Ore and Minas-Rio in Brazil. Consequently, full-year iron ore production guidance has been lowered to 60-64 million tonnes (Mt), from 63-67 Mt previously.

Anglo also increased its costs guidance by 9%, citing currency fluctuations and broader inflationary pressures.

“Today’s result, although in line with the apparent operating challenges facing the miners as an industry, were much weaker than we had anticipated and we expect meaningful consensus [earnings] downgrades,” said Tyler Broda, analyst at RBC Capital Markets.

The weak trading update will serve as a baptism of fire for Duncan Wanblad, who officially takes charge of the company this week following long-serving CEO Mark Cutifani’s retirement.

@RGNonline