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Anglo American revises iron ore output targets

Diversified miner Anglo American plc has shaved its output forecast for iron ore for the coming three years, according to its latest update to investors on December 10.
The company lowered the annual output guidance at its Kumba iron ore asset – the subsidiary in South Africa – to 42-43 million tonnes for 2020-2022, down from the previous 43-44 million tonnes range. For 2019, the output forecast remains unchanged in the range of 42-43 million tonnes.

Anglo said that achieving the output targets would be “subject to rail performance”, adding that “domestic offtake volumes” had led the company to decrease its guidance for 2020 forward from the previous range. 

“We have adjusted Kumba down by 1 mtpa due to the announced closure of Arcelor Mittal’s steel plant in South Africa, it being one of our domestic steel customers,” an Anglo official said in an emailed comment to Mysteel Global.

Kumba’s core products are iron ore lumps of Fe content around 64-65.2% and iron ore fines with an Fe content in the range of 63.2-64.6%. The capacity of the former is put at about 30 million t/y and around 15 million t/y for the latter, according to the company.

Over this year’s first nine months, Kumba’s total iron ore production reached 30.6 million tonnes, according to its third quarter production report.

For Anglo’s other iron ore mining operation, its Minas-Rio mine in Brazil, the miner expected higher output in the current year at around 23 million wet tonnes, it told investors. Its production guidance for the period 2020-2022 remains unchanged at 22-24 million wet tonnes, 24-26 million wet tonnes and 23-25 wet million tonnes per year respectively.

Indeed, prior to this, continued strong performance at Minas-Rio had encouraged Anglo to boost its iron ore production guidance for the mine for 2019 to 20-22 million tonnes from the previous 19-21 million tonnes, according to the third quarter report.

The investors were told that the current guidance assumed receipt of a final tailings license by end of this year. Operations at Minas-Rio were suspended for most of 2018 following two leaks in an iron ore pipeline, as Mysteel Global reported.

Over this year’s January-September period, total iron ore output at Minas-Rio reached around 17 million wet tonnes.

Minas-Rio’s core products are primarily Direct Reduction Pellet Feed with Fe content around 68% and Blast Furnace Pellet Feed with Fe content around 66-67%, both of which contain low silica and alumina, according to Anglo American.

Written by Victoria Zou, zyongjia@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com