Anglo American: Kumba Iron Ore Production Falls 4% in CY18

Kumba iron ore production down 13% in Q4 CY18 amidst rail constraints.

The Anglo American Kumba iron ore production for CY18 witnessed at 43.1 MnT, down 4% Y-o-Y as against CY17 production at 45 MnT. For the last quarter CY18, the total production recorded at 10.2 MnT, down 3% Q-o-Q as against 10.5 MnT in Q3 CY18. On yearly basis, production in Q4CY18 dropped 13% as against 11.6 MnT in Q4 CY17.

The production was on lower side to offset stock piles so developed due to Transnet rail constraint. Towards the beginning of Dec'18, the miner had declared force majeure to some of its buyers due to Transnet (Transport Company) closing the iron ore export channel railway as a result of structural damage to railway line owing to truck collision. Besides, low production is also attributed to focus on higher quality products.

Kumba iron ore Export drop 4%; domestic sales stable in CY18

o The Kumba iron ore exports in CY'18 reduced by 4% to 39.9 MnT as against 41.6 MnT in CY17. The drop in exports is due to reduced loading capacity at Saldanha port due to maintenance shut towards end of Sep'18 along with Transnet rail accident resulting in reduced material loading capacity.

o The Kumba iron ore domestic sales witnessed at 3.29 MnT in CY18, in line with CY17 at 3.28 MnT .

Minas-Rio mine resumed operations post nine months in Dec'18

Minas Rio mines, pellet production for the quarter witnessed at 3.4 MnT, down 80% against 16.8 MnT in CY17. The production at mine dropped amidst suspension of operation at mine in Mar'18 following discovery of two leakage in iron ore pipeline from mine to Acu port. However the mine resumed operations in Dec'18 and recorded production at 0.2 MnT for Q4 CY18.

Minas Rio pellet sales down 81% in CY18

Minas Rio pellet sales recorded at 3.2 MnT in CY18, down sharply against 16.5 MnT in CY17. The pellet sales for the last two quarter CY18 recorded nil.

Anglo American: 2019 Guidance

o The 2019 production guidance for Kumba iron ore mine is at 43-44 MnT
o Minas Rio pellet production guidance for 2019 is at 18-20 MnT (wet MT basis). Also, 2019 unit cost guidance reduced to USD 28-31/MT against previous cost of USD 30-33/MT.