Anglo American (AAL.L) on Thursday posted a 2% rise in second quarter output and reaffirmed full-year production targets, boosted by a restart of operations at its Brazilian iron ore mine and higher volumes of coking coal.
Prices of iron ore, used with coking coal to make steel, have outperformed other base metals and hit five-year highs after a Vale (VALE3.SA) dam disaster in Brazil led to production shut-ins.
Anglo American’s iron ore production was helped by the ramp-up of the Minas Rio mine in Brazil and a strong performance from coking coal after plant upgrade work in the first quarter, helping offset the impact of reduced diamond production.
“We remain broadly on track overall to deliver this full year’s production targets,” CEO Mark Cutifani said in a statement.
Diamond production at the company’s De Beers unit fell 14% as work continues at its Venetia mine in South Africa to switch to underground mining from open pit and against a backdrop of weaker demand and lower prices.
The company revised its diamond production forecast down to about 31 million carats, at the lower end of its previous 31-33 million carats range, citing weaker trading conditions.
The weaker market was partly because of “caution due to macro-economic uncertainty, including the U.S.-China trade tensions”, it said, adding De Beers would continue to produce in response to demand for the year.
Copper production increased by 1% and platinum rose 3% year on year.
Minas Rio’s iron ore production climbed to 5.9 million tonnes. Anglo American restarted operations there in December after receiving regulatory approval to step up production following a prolonged outage because of a leak.
Anglo American is still waiting for one more permit needed for work on a tailings dam, which it says is expected before the end of the year.
Metallurgical, or coking, coal production increased by 11% following site improvements, while thermal coal, used for power, fell 8% because of a lack of water.
In a note, analysts at Bernstein reiterated their outperform rating for Anglo American but said the results were mixed.
Anglo American’s share price slipped 1% by 0820 GMT. The stock has risen by nearly 25% since the start of the year.