Q3 2023 Production Report
24 October, 2023
Production Report for the third quarter ended 30 September 2023
Duncan Wanblad, Chief Executive of Anglo American, said: “Production in the third quarter overall was consistent with the same period in 2022. A 42% increase in copper production as Quellaveco's contribution ramps up was offset primarily by De Beers, as Venetia transitions to underground operations, and by performance at Moranbah and the Grosvenor ramp-up at the underground Steelmaking Coal operations.
"Our focus is on delivering our full year production guidance in line with a planned stronger second half of the year. Our production volumes increased by 4%(1) quarter-on-quarter, reflecting a step-up from our Steelmaking Coal operations driven by Aquila and at Grosvenor following the Q2 longwall move, operational improvements in the PGMs business and a progressive increase in volumes from Quellaveco. This was partially offset by planned maintenance programs at some operations and a planned reduction from Venetia, which continues to transition to underground operations. Copper production from Chile decreased due to ongoing ore hardness and an electrical substation fire at Los Bronces, resulting in a minor revision to guidance for our Chile operations. We are on track to deliver our full year guidance across all other products."
Q3 2023 highlights
- Copper production increased by 42%, reflecting the progressive increase in production from Quellaveco in Peru, while production from our operations in Chile decreased by 4%.
- Production from our Platinum Group Metals (PGMs) operations was broadly flat despite planned mining in a lower grade area at Mogalakwena.
- Iron ore production decreased by 4%, principally driven by planned plant maintenance at Minas-Rio.
- Nickel production decreased by 7%, mainly reflecting the impact of lower grades.
- Steelmaking coal production decreased by 21%, reflecting challenging strata conditions at Moranbah and the ramp-up of Grosvenor during July following the longwall move in Q2.
- Rough diamond production decreased by 23%, primarily due to the planned reduction as Venetia transitions to underground operations.
| Production | Q3 2023 | Q3 2022 | % vs. Q3 2022 | YTD 2023 | YTD 2022 | % vs. YTD 2022 |
|---|---|---|---|---|---|---|
| Copper (kt)(2) | 209 | 147 | 42% | 596 | 420 | 42% |
| Nickel (kt)(3) | 9.3 | 10.0 | (7)% | 28.9 | 29.6 | (2)% |
| Platinum group metals (koz)(4) | 1,030 | 1,046 | (2)% | 2,874 | 3,034 | (5)% |
| Diamonds (Mct)(5) | 7.4 | 9.6 | (23)% | 23.9 | 26.5 | (10)% |
| Iron ore (Mt)(6) | 15.4 | 16.1 | (4)% | 46.1 | 43.6 | 6% |
| Steelmaking coal (Mt) | 4.4 | 5.5 | (21)% | 11.2 | 10.4 | 9% |
| Manganese ore (kt) | 1,012 | 973 | 4% | 2,823 | 2,756 | 2% |
(1) Total production across Anglo American’s products is calculated on a copper equivalent basis, including the equity share of De Beers’ production and using long-term consensus parameters. Copper equivalent production decreased by 1% compared to Q3 2022.
(2) Contained metal basis. Reflects copper production from the Copper operations in Chile and Peru only (excludes copper production from the Platinum Group Metals business).
(3) Reflects nickel production from the Nickel operations in Brazil only (excludes 5.4 kt of Q3 2023 nickel production from the Platinum Group Metals business).
(4) Produced ounces of metal in concentrate. 5E+Au (platinum, palladium, rhodium, ruthenium and iridium plus gold). Reflects own mined production and purchase of concentrate.
(5) De Beers Group production is on a 100% basis, except for the Gahcho Kué joint operation which is on an attributable 51% basis.
(6) Wet basis.
Production and unit cost guidance summary
| 2023 production guidance | 2023 unit cost guidance(1) | |
|---|---|---|
| Copper(2) | 830-870 kt (previously 840-930 kt) |
c.166 c/lb |
| Nickel(3) | 38–40 kt | c.560 c/lb |
| Platinum Group Metals(4) | 3.6–4.0 Moz | c.$1,000/oz |
| Diamonds(5) | 30–33 Mct | c.$75/ct |
| Iron Ore(6) | 57–61 Mt | c.$39/t |
| Steelmaking Coal(7) | 16–19 Mt | c.$105/t |
(1) Unit costs exclude royalties and depreciation and include direct support costs only. FX rates used for Q4 2023 costs: ~900 CLP:USD, ~3.9 PEN:USD, ~5.0 BRL:USD, ~19 ZAR:USD, ~1.6 AUD:USD (previously ~800 CLP:USD, ~3.7 PEN:USD, ~4.8 BRL:USD, ~18 ZAR:USD, ~1.5 AUD:USD).
(2) Copper business only. On a contained-metal basis. Total copper production is the sum of Chile and Peru: Chile: c.520 kt (previously 530-580 kt) and Peru: 310-350 kt. Unit cost for Chile: c.205 c/lb and Peru: c.100 c/lb.
(3) Nickel operations in Brazil only. The Group also produces approximately 20 kt of nickel on an annual basis as a co-product from the PGM operations.
(4) 5E + gold produced metal in concentrate ounces. Includes own mined production (~65%) and purchased concentrate volumes (~35%). The split of metals differs for own mined and purchased concentrate, refer to FY2022 results presentation slide 42 for indicative split of own mined volumes. 2023 metal in concentrate production is expected to be 1.6–1.8 Moz of platinum, 1.2–1.3 Moz of palladium and 0.8–0.9 Moz of other PGMs and gold. 5E + gold refined production is expected to be 3.6–4.0 Moz, subject to the impact of Eskom load-curtailment. Unit cost is per own mined 5E + gold PGMs metal in concentrate ounce.
(5) Production on a 100% basis, except for the Gahcho Kué joint operation, which is on an attributable 51% basis. Venetia continues to transition to underground operations. Unit cost is based on De Beers' share of production.
(6) Wet basis. Total iron ore is the sum of operations at Kumba in South Africa and Minas-Rio in Brazil. Kumba: 35–37 Mt and Minas-Rio: 22–24 Mt. Kumba production is subject to the third-party rail and port performance. Unit cost for Kumba: c.$43/t and Minas-Rio: c.$33/t.
(7) Production excludes thermal coal by-product. FOB unit cost comprises managed operations and excludes royalties and study costs.
Realised prices
| Q3 YTD 2023 | Q3 YTD 2022 | Q3 YTD 2023 vs Q3 YTD 2022 | |
|---|---|---|---|
| Copper (USc/lb)(1) | 387 | 377 | 3 % |
| Copper Chile (USc/lb)(2) | 388 | 377 | 3 % |
| Copper Peru (USc/lb) | 386 | 341 | 13 % |
| Nickel (US$/lb) | 8.29 | 10.68 | (22) % |
| Platinum Group Metals | |||
| Platinum (US$/oz)(3) | 981 | 937 | 5 % |
| Palladium (US$/oz)(3) | 1,437 | 2,107 | (32) % |
| Rhodium (US$/oz)(3) | 7,366 | 16,139 | (54) % |
| Basket price (US$/PGM oz)(4) | 1,766 | 2,627 | (33) % |
| Iron Ore – FOB prices(5) | 108 | 115 | (6) % |
| Kumba Export (US$/wmt)(6) | 110 | 115 | (4) % |
| Minas-Rio (US$/wmt)(7) | 106 | 114 | (7) % |
| Steelmaking Coal – HCC (US$/t)(8) | 264 | 324 | (19) % |
| Steelmaking Coal – PCI (US$/t)(8) | 215 | 279 | (23) % |
(1) Average realised total copper price is a weighted average of the Copper Chile and Copper Peru realised prices.
(2) Realised price for Copper Chile excludes third-party sales volumes.
(3) Realised price excludes trading.
(4) Price for a basket of goods per PGM oz. The dollar basket price is the net sales revenue from all metals sold (PGMs, base metals and other metals) excluding trading, per PGM 5E + gold ounces sold (own mined and purchased concentrate) excluding trading.
(5) Average realised total iron ore price is a weighted average of the Kumba and Minas-Rio realised prices.
(6) Average realised export basket price (FOB Saldanha) (wet basis as product is shipped with ~1.6% moisture). The realised prices could differ to Kumba's stand-alone results due to sales to other Group companies. Average realised export basket price (FOB Saldanha) on a dry basis is $112/t (Q3 YTD 2022: $117/t), higher than the dry 62% Fe benchmark price of $102/t (FOB South Africa, adjusted for freight).
(7) Average realised export basket price (FOB Açu) (wet basis as product is shipped with ~9% moisture).
(8) Weighted average coal sales price achieved at managed operations. Australian thermal coal by-product for Q3 YTD 2023, decreased by 50% to $156/t (Q3 YTD 2022: $309/t).
Notes
- This Production Report for the third quarter ended 30 September 2023 is unaudited.
- Production figures are sometimes more precise than the rounded numbers shown in this Production Report.
- Copper equivalent production shows changes in underlying production volume, and includes the equity share of De Beers’ production. It is calculated by expressing each product’s volume as revenue, subsequently converting the revenue into copper equivalent units by dividing by the copper price (per tonne). Long-term forecast prices are used, in order that period-on-period comparisons exclude any impact for movements in price.
- Please refer to page 16 for information on forward-looking statements.
In this document, references to “Anglo American”, the “Anglo American Group”, the “Group”, “we”, “us”, and “our” are to refer to either Anglo American plc and its subsidiaries and/or those who work for them generally, or where it is not necessary to refer to a particular entity, entities or persons. The use of those generic terms herein is for convenience only, and is in no way indicative of how the Anglo American Group or any entity within it is structured, managed or controlled. Anglo American subsidiaries, and their management, are responsible for their own day-to-day operations, including but not limited to securing and maintaining all relevant licences and permits, operational adaptation and implementation of Group policies, management, training and any applicable local grievance mechanisms. Anglo American produces Group-wide policies and procedures to ensure best uniform practices and standardisation across the Anglo American Group but is not responsible for the day to day implementation of such policies. Such policies and procedures constitute prescribed minimum standards only. Group operating subsidiaries are responsible for adapting those policies and procedures to reflect local conditions where appropriate, and for implementation, oversight and monitoring within their specific businesses.
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