Anglo Rises After Platinum, Iron Ore Output Increase 25%Andre Janse van Vuuren
Anglo American Plc, the company that runs the world’s biggest platinum producer and Africa’s largest iron ore miner, rose the most in five months in London trading after both units posted 25 percent gains in output.
Anglo advanced 5.7 percent to 1,420.5 pence by the close, the most since Aug. 9. The volume of shares traded was more than triple the three-month daily average.
South Africa, where strikes have disrupted production at both Anglo’s platinum and iron ore operations, accounts for about 45 percent of the London-based company’s revenue. The rand has lost almost a quarter of its value against the dollar since the beginning of last year, helping to bolster earnings from production sold in the U.S. currency.
While today’s fourth-quarter figures were in line with forecasts, investors “wanted it to be delivered,” Aneek Haq, an analyst at Exane Ltd., said from London. “The fact they are delivering it plus the benefit that comes through the rand is leading to a much more positive view on the stock.”
Anglo American Platinum Ltd. said today it produced 520,000 equivalent platinum ounces in the three months ended Dec. 31, compared with 416,000 ounces a year earlier when walkouts closed mines for as many as eight weeks. Kumba Iron Ore’s output climbed to 11.3 million metric tons from 9 million tons.
Amplats, as Anglo’s Johannesburg-based platinum unit is known, closed shafts and cut jobs in South Africa last year as it sought to return to profit. Pretoria-based Kumba recovered from a two-week walkout in 2012 at its Sishen operation, Africa’s largest mine for the steelmaking ingredient, even as it struggled to overcome depleting resources.
Amplats rose as much as 5.2 percent to 458 rand by the close in Johannesburg, the most since Sept. 19. The stock advanced even as a strike over wages called by the Association of Mineworkers and Construction Union that started Jan. 23 continued to paralyze production. Kumba gained 3.5 percent to 450 rand.
The South African rand dropped 1.5 percent to 11.2052 per dollar, extending its slump since Jan. 1 to 6.8 percent. A weaker rand benefits South African mining companies, which earn their revenue in dollars and incur expenses in the local currency.
Anglo also mines diamonds in southern Africa and Canada. Production at De Beers, a gem producer owned by Anglo, jumped 13 percent in the fourth quarter to 9.1 million carats.
Production of export metallurgical coal, used in steelmaking, increased 3 percent to 4.7 million tons. Output for export markets of the variety burned in power plants increased 8 percent to 7.9 million tons.
Copper production climbed 24 percent to a record 214,400 tons as output at the Los Bronces mine in Chile increased 16 percent to 110,000 tons. Production from the Collahuasi mine doubled to 64,800 tons.
Anglo may report underlying earnings of $2.16 billion for 2013 on Feb. 14, according to the average estimate in a Bloomberg survey of analysts. Profit by that measure fell 54 percent to $2.84 billion in 2012 following a decline in commodity prices and an increase in operating costs.
The fourth-quarter production update “will drive 2013 earnings upgrades,” Nomura Bank International Plc said in an e-mailed note to clients. “Whether this translates into 2014 earnings upgrades will remain to be seen.”