October 24, 2017 / 6:30 AM / a month ago

Anglo American third quarter output up 6 percent, platinum cut

LONDON (Reuters) - Anglo American (AAL.L) on Tuesday reported a 6 percent rise in output for the third quarter and raised its guidance on iron ore for a second time, but said it had removed “unprofitable ounces” from its platinum mines.

The Anglo American logo is seen in Rusternburg October 5, 2015. Picture taken October 5, 2015. REUTERS/Siphiwe Sibeko/File Photo

Platinum miners in South Africa face an array of obstacles, including very deep, narrow seams along with a stubbornly low platinum price of around $930 an ounce XPT=.

Union leaders on Monday said platinum miner Lonmin (LMI.L) planned to cut more than 1,000 jobs before Christmas because of persistently low commodity prices and rising costs.

Anglo American lowered its production guidance for platinum to 2.30-to-2.35 million from 2.35-to-2.40 million ounces following the closure of unprofitable production at the Bokoni mine, which was placed on care and maintenance in the quarter.

CEO Mark Cutifani said the reduction in platinum guidance signalled the company’s determination to remove “unprofitable ounces from production as we focus on value over volume”.

Analysts said the results overall were positive and earnings forecasts could also be exceeded.

“Good result all up with production generally in-line to moderately ahead of our forecasts,” Hunter Hillcoat, analyst at Investec, said.

Citing productivity gains, Anglo American raised guidance for iron ore output at South African’s Kumba unit again to 42 to 44 million tonnes following a previous update in July.

Copper production increased by 5 percent in the third quarter to 147,300 tonnes, reflecting higher grades.

Reporting by Barbara Lewis in London and Sanjeeban Sarkar in Bengaluru; editing by Jason Neely and John Stonestreet

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