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Anglo American cuts diamond output forecast on weaker market

Global mining company Anglo American trimmed its forecast for diamond production this year due to weaker market conditions and said its iron ore output rose in the first quarter while copper production fell.

The company, which has lagged peers for much of the past decade, is restructuring to improve its mining operations and is selling less profitable assets.

Raw diamonds
Photo Researchers | Getty Images
Raw diamonds

Its turnaround efforts, however, have so far clashed with a rout in prices of metals such as copper and iron ore, which make up almost half and about a quarter of its earnings respectively.

Some help came last year from higher margins at its diamond subsidiary De Beers, which became the second-largest earner for the company after iron ore.

In the first quarter, iron ore output from its Kumba division rose 7 percent from the same period a year ago to 12.2 million, thanks to some operational improvements.

However, copper output fell 15 percent to 171,800 tonnes due to water supply constraints which pushed the company to temporarily shut a processing plant in Chile.

In diamonds, a bright spot for Anglo last year, production increased 2 percent to 7.7 million carats, thanks primarily to higher grades at the Venetia mine in South Africa.

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The company, however, reduced this year's diamond production forecast to 30 to 32 million carats from 32 to 34 million carats, in light of weaker trading conditions.

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