REPORT: Anglo American Boosts Iron Ore Output Production in Q3
The third quarter of 2014 was a good one for mining company Anglo American (LSE:AAL) (JSE:AGL).
The London-listed company increased its iron ore production significantly in Q3, producing roughly 13 million tons of the steel ingredient. The 37 percent rise in output puts Anglo American on the same page as BHP Billiton and Rio Tinto, both of which recently released figures showing their continued increase in iron ore output.
The rise in production is thanks in part to Anglo’s Kumba Iron Ore Ltd., which implemented a turnaround plan after falling grades at its Sishen mine in South Africa. The mine is the continent’s largest producer for iron ore.
"The iron ore increase shows the redesign of the Sishen mine is taking place and is happening a bit faster that we thought," said Macquarie analyst Jeff Largey.
According to a statement by Anglo American, the company’s Minas-Rio iron ore mine in Brazil continues to make progress in delivering production.
“Work on the Minas Rio project continues, with significant progress made to deliver first ore on ship. Commissioning and testing activities are ongoing, ore stockpiles are being built at the Port of Acu and first ore loading has begun.”
Iron ore accounted for nearly 40 percent of Anglo’s operating profit in the first half.
"It's a good performance. They lifted guidance across most commodities so it is a pretty solid result," said Investec analyst Marc Elliott.
Despite lifting production numbers, the company remains skeptical on whether increases in iron ore will affect the market. In an interview with The Wall Street Journal last month, Anglo’s Chief Executive Mark Cutifani confessed his fears about the outlook for the iron ore market amid signs the global supply glut won’t subside any time soon.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.