Anglo American cuts annual copper target after heavy snowfall in Chile

Bloomberg

Anglo American Plc, the second-best performer on the FTSE 100 Index this year, cut its annual target for copper output after heavy snow at operations in Chile. The shares slumped the most in more than three weeks.
Production will be 570,000 to 600,000 metric tons this year, down from a forecast of as much as 630,000 tons, as heavy snow hit mining at higher altitudes at the Los Bronces mines, London-based Anglo said in a statement Wednesday. The outlook for 2017 was also cut. Anglo trimmed its target for Brazilian iron ore.
Anglo shares fell as much as 8 percent in London. Citigroup Inc., with a sell rating on the stock, said in a note that the results were “mostly lower than our expectations” and it sees low single-digit percentage downgrades to analysts’ earnings estimates for 2016.
The century-old company’s stock is still up more than 150 percent this year as it seeks to turnaround its business amid weak commodity prices. It plans to sell more than half of its mines and exit iron ore and coal to focus on top assets, diamonds, platinum and copper.

Pretty Weak
“There were some guidance downgrades and production was pretty weak, but some of this was due to seasonal impacts so there may be some catch-up,” Ben Davis, a London-based analyst at Liberum Capital Ltd., said.
For the second quarter, Anglo said copper output from retained operations fell 8 percent to 144,200 tons from a year earlier. Diamond production dropped 19 percent as unit De Beers sought to tighten supply after prices last year sank the most since the 2008 financial crisis. Anglo mined 6.4 million carats in the quarter, from 8 million carats a year earlier.
The miner, scheduled to report earnings next week, is seeking to raise at least $3 billion in asset sales to help reduce debt. In April, it agreed to sell its Brazilian niobium and phosphate unit to China Molybdenum Co. for $1.5 billion and is in talks to offload coal mines in Australia.

The company also reported:
Platinum production rose 1 percent to 586,000 ounces in the second quarter. Nickel output surged 76 percent to 11,100 tons as it rebuilds its Brazilian furnaces. Iron ore output from South Africa fell 15 percent in line with a reduced mining plan at its Sishen operation. Iron ore output increased 91 percent at Minas-Rio in Brazil, which is in ramp up mode. The company lowered its full-year target for the mine to 15 million tons to 17 million tons from as much as 18 million tons due to pit constraints.