Mining giant Anglo American lowered its 2023 production guidance for copper due to curtailments at its Chilean operations on Tuesday.
The decision comes despite company’s copper output rising 42% in the third quarter.
Anglo American expects to produce between 830,000 and 870,000 metric tonnes (t) of copper this year, lower than the previous forecast which was between 840,000t and 930,000t.
The downgrade was prompted by weak third-quarter production at its Los Bronces mine, which is located 40 miles northeast of Santiago. The company said that “due to a combination of continued higher ore hardness and a substation fire that interrupted plant facilities’ power supply for 16 days” production had fallen at the site by a fifth to 45,800t .
Nonetheless, in the first nine months of 2023, its copper output rose to 596,000t as production rose at its Quellaveco mine in Peru.
Anglo’s share price has fallen 37% this year but opened up 1.6% in London. Commenting on this Tyler Borda of RBC Capital Markets said: “Anglo shares have been very weak versus peers recently and we continue to see the portfolio, bolstered by the Quellaveco cash flow flip as the mine ramps up and potentially less downside from platinum group metals and diamond prices from here.”
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Copper prices reached their lowest level since November 2022, as stuttering Chinese industrial recovery and the tenuous situation in the Middle East dampened sentiment towards the metals market.
However, copper is still considered a key metal in the energy transition for its applications in the production of solar panels and electric cars. According to Energy Monitor, global demand for copper will therefore outstrip production leading up to 2030.
Elsewhere in Anglo- American’s operations, production of rough diamonds fell 23% year-on-year to 7.4 million carats. Diamond demand in China has also fallen due to weaker economic conditions which have curbed appetites for luxury items.
Iron ore production fell by 4% in the third quarter as sales at its South African unit Kumba were weighed down by lack of transport options to ship materials to ports.
At Kumba, stockpiles of iron ore rose to 9 million tonnes (mt) in the third quarter of 2023, compared with 4.6mt in the same period last year.