JOHANNESBURG (miningweekly.com) – The production of the London- and Johannesburg-listed Anglo American group increased by 9% in the three months to March 31 compared with the same period in 2022, driven by the ramp-up of copper production from the new Quellaveco mine in Peru.

"This improved performance reflects our focus on safe and stable operational momentum through the seasonally slower first quarter of the year, which also coincides with the wet season in much of the southern hemisphere,” Anglo CE Duncan Wanblad stated in a release to Mining Weekly.

"We continue to make progress towards our suite of sustainability ambitions and organic growth options in future-enabling products and we welcome the recent approval of the environmental permit application for our Los Bronces integrated project, which sets up the next phase of development for one of the world's largest copper mines," Wanblad added.

Production benefited from South Africa’s Kumba Iron Ore in the Northern Cape, Anglo’s Minas-Rio iron-ore business in Brazil and ongoing improvement at steelmaking coal longwall operations in Australia.

Offsetting this were planned lower copper grades in Chile, lower platinum group metals (PGMs) production by Anglo Platinum, and the transition of De Beers' Venetia diamond mine from openpit to the new underground section, which results in temporary lower production until the underground operation fully ramps up.

Copper production increased by 28%, steelmaking coal production was up 59%, iron-ore production rose by 15%, nickel production increased by 4%, and rough diamond production was flat at 8.9-million carats.

Production and unit cost guidance for 2023 is unchanged across all business units.

DIAMONDS

Botswana production increased by 12% to 6.9-million carats on the planned treatment of higher-grade ore and continued strong plant performance at the Orapa diamond mine.

Namibia production increased by 37% to 0.6-million carats on the contribution from the Benguela Gem vessel, which commenced production in March 2022.

South Africa production decreased by 56% to 0.7-million carats owing to Venetia continuing to process lower grade surface stockpiles, which will result in temporary lower production levels as it transitions.

Production in Canada increased by 11% to 0.7-million carats.

Rough diamond sales totalled 9.7-million carats (8.9-million carats on a consolidated basis) from three sights, compared with 7.9-million carats (seven-million carats on a consolidated basis) from two sights in the first quarter of  2022, and 7.3-million carats (6.6-million carats on a consolidated basis) from two sights in the fourth quarter of 2022.

Production guidance for 2023 is unchanged at 30-million carats to 33-million carats and unit cost guidance for 2023 is unchanged at $80/ct.

PLATINUM GROUP METALS

Own-mined first-quarter PGMs production was a 6%-lower 586 000 oz, with Mogalakwena mine production down 12% to 219 000 oz as a result of unplanned plant maintenance and mining in a lower grade area. Production at Amandelbult decreased by 5% to 151 500 oz on planned infrastructure closures and the fourth-quarter closure of the Merensky Concentrator.

Joint operations decreased by 10% to 84 300 oz on the ramp-down of the Kroondal complex, which was partially offset by a 17% increase in production from the Unki PGMs mine in Zimbabwe, reflecting improvements in throughput, grade and recoveries.

Purchase of concentrate was 5% lower at 315 200 oz on lower volumes from the Kroondal joint operation as well as lower third-party receipts.

Refined production decreased by 13% to 626 000 oz on the ramp-up of the Polokwane smelter at the end of January following its rebuild, and asset integrity work at Waterval smelter, as well as the impact of Eskom load-curtailment-induced reductions in electricity availability.

PGM sales volumes decreased by 17% in line with lower refined production. The average realised basket price was $2 131/PGMs ounce, reflecting lower market prices.

Metal-in-concentrate production guidance for 2023 is unchanged at 3.6-million ounces to four-million ounces. Refined production guidance for 2023 is 3.6-million ounces to four-million ounces, subject to the impact of Eskom load-curtailment. Unit cost guidance for 2023 is unchanged at $1 025/PGMs ounce.

IRON-ORE

Iron-ore production increased by 15% to 15.1-million tonnes, reflecting a 14% increase at Kumba and a 16% increase at Minas-Rio.

Kumba’s production increased to 9.4-million tonnes on a 25% increase at Kolomela to 3.1-million tonnes as well as a 9% increase at Sishen to 6.3-million tonnes, reflecting improved operational performance owing to improved rain-readiness capability and equipment reliability, as well as lower rainfall.

Sales increased 2% to 9.5-million tonnes but performance continues to be constrained by low levels of finished stock at the port. As a result, total finished stock increased to eight-million tonnes, compared with 5.1-million tonnes in the corresponding period of last year.

Kumba's iron (Fe) content averaged 63.1%, down on the 64.0% for the corresponding period of last year while the average lump:fines ratio was a higher 67:33 on the 65:35 of first quarter of 2022.

The first-quarter average realised price of $121/t was 10% higher than the 62% Fe benchmark price of $110/t, reflecting the lump and Fe content quality premiums that the Kumba products attract, as well as the benefit of provisionally priced sales volumes.

Minas-Rio’s production increased by 16% to 5.7-million tonnes, reflecting improved rain readiness capability as well as increased plant performance owing to improvements at the crushing circuit.

Minas-Rio’s first-quarter average realised price of $125/t was higher than the Metal Bulletin 65 price of $109/t, reflecting the 67% Fe content.

Production guidance for 2023 is unchanged at 57-million tonnes to 61-million tonnes and unit cost guidance is unchanged at $39/t.

COPPER

Copper production increased by 28% to 178 100 t, owing to the ramp-up of production from the new Quellaveco mine in Peru, while Chile's production decreased by 15% to 118 600 t on planned lower grades at both the Los Bronces and Collahuasi copper mines.

Production from Los Bronces decreased by 19% to 52 700 t, and at Collahuasi, attributable production decreased by 13% to 57 100 t. Production from El Soldado increased by 5% to 8 800 t.

Chile's central zone continues to face severe drought conditions and these conditions place pressure on water availability. In the short term, various management initiatives to improve water efficiency and secure alternative sources of water continue to partly mitigate the impact on production. From 2025, more than 45% of Los Bronces' needs will be met through a desalinated water supply.

Despite the fire at the third-party Ventanas port, Los Bronces' sales of copper concentrate were in line with production, as alternative export routes were successfully secured. Sales will remain dependent on alternative port availability and any potential impact is expected to be recovered by the end of the year.

The average realised price of 455c/lb, includes 125 100 t of copper provisionally priced on 31 March at an average of 408c/lb.

Quellaveco produced 59 500 t and is expected to ramp up fully around mid-2023. In addition, the molybdenum plant successfully reached first production on 3 April and is in its ramp-up phase.

The average realised price of 433c/lb, includes 135 000 t of copper provisionally priced on 31 March at an average of 406c/lb.

Production guidance for copper for 2023 is unchanged at 840 000 t to 930 000 t. Unit cost guidance is unchanged at 156 c/lb.

MANGANESE

Manganese ore production increased by 5% to 840 900 t, primarily reflecting the impact of the planned maintenance at the South African operation in Q1 2022.

EXPLORATION AND EVALUATION

Exploration and evaluation expenditure increased by 13% to $68-million. Exploration expenditure increased by 25% to $30-million, reflecting increased activity, principally in copper. Evaluation expenditure increased by 6% to $38-million, driven by higher spend in iron-ore and base metals.