Anglo American (LON: AAL) reported an 11% increase in its copper output for the first three months of the year, but cut its 2024 production guidance for diamonds, as its inventory levels remain high in slow recovery market.

The mining giant said it produced 198,000 tonnes of copper in the period, thanks mainly to the Quellaveco mine in Peru achieving its highest throughput rate.

In Chile, where the company has the bulk of it copper operations, production rose 6%, with Collahuasi and El Soldado mines more than compensating for a weaker quarter at Los Bronces.

Anglo’s copper output for the year remained unchanged 730,000-790,000 tonnes, but totals from its operations in Chile, the world’s top producing nation, are likely to be affected as the Los Bronces plant closes from the middle of the year. 

Production in Peru will be weighted to the second half of the year, as a result of the copper grades temporarily declining to between 0.6%-0.7% in the first half of the yea, the company said.

Not bright enough

Anglo’s diamond unit De Beers saw output drop 23% in the first quarter as a slow recovery in the market triggered production cuts.

The world’s largest diamond producer by value revised down its full-year production forecast to 26 million-29 millions carats from the previously guided 29 million to 32 million.  The company, which in February announced a $1.6 billion writedown at its diamond operations, also lifted expected average costs to $90 per carat, from $80.

Anglo American noted diamond prices continue to decline due to an oversupply of inventory, something that De Beers has previously acknowledged as being partially caused by lab-grown diamonds competing with mined stones for demand. 

The company also mentioned that the ongoing economic growth uncertainty has led to a cautious purchasing behaviour. It anticipates a slow recovery in rough diamond demand for the remainder of the year as a result.

“Overall Anglo American has delivered a more positive start for what is expected to be a challenging year for the company, BMO analyst Alexander Pearce wrote in a note to investors.

The company’s production of platinum-group metals fell 7% to 834,000 ounces. While sales volumes remained unchanged, the average realized price dropped by 30%.

Source: MINING.COM – Read More