SANTIAGO Global miner Anglo American (AAL.L) will produce about 650,000 tonnes of copper this year, CEO Cynthia Carroll told Reuters on Tuesday, an 8.5 percent increase from 2011 as its ramped-up Chilean Los Bronces mine takes off.
Anglo does not publish official forecasts. Surging output at Los Bronces this year is seen helping offset a dramatic drop in production from world No. 3 copper mine Collahuasi, which Anglo operates with global miner Xstrata XTA.L.
"In total, we're going to produce about 650,000 tonnes of copper," Carroll told Reuters as she left a meeting with Chile's mining minister ahead of a conference on mining security in Santiago.
"It's going very, very well," Carroll said when asked what production was expected from Los Bronces this year.
The Anglo Sur complex, home to Los Bronces, saw its production soar 72.7 percent to 306,700 tonnes between January and September, according to data from Chile's state copper commission Cochilco. Collahuasi, however, clocked a 38.5 percent tumble in output to 208,300 tonnes in the same period.
"They're coming in weak. They spent a lot of money to expand, so 8.5 percent is not huge in terms of gain," said John Tumazos, analyst with Very Independent Research in New Jersey. "It's a matter of time until they get into the better ores at Collahuasi. We think that their production should increase over time."
Carroll declined to comment on the state of a potential stake sale of Brazil's Amapa. She also declined to comment on Brazil's Minas Rio project, which the company said earlier on Tuesday is now expected to cost at least three times the original estimate. Anglo on Tuesday also warned of lower profits from South African iron ore.
The double-whammy took Anglo's underperforming shares more than 4 percent lower in morning trade. Shares closed 3.15 percent lower.
A geologist by training, New Jersey-born Carroll announced last month she was quitting after more than five years in the job. Anglo is starting the search for a new chief executive to replace her and take on what analysts and investors say is one of the toughest jobs in the resources sector.
LOS BRONCES SEEN OFFSETTING COLLAHUASI FALL
Collahuasi's second half production will be impacted by the repair of a ball mill and continued lower grades, Anglo said in a report in July.
And while Los Bronces, perched high up in the foothills of central Chile, is experiencing a jump in production, the project has also faced some setbacks.
"Constrained mine conditions" and lower grades were expected to continue to impact Los Bronces in the last six months of 2012, Anglo said in the same report.
Chilean state miner Codelco CODEL.UL and Japanese trading houses Mitsubishi (8058.T) and Mitsui (8031.T) also have stakes in the coveted Anglo Sur complex, following a bitter contract dispute that was settled in August.
Ageing mines in Chile, the world's No.1 copper producer, are reeling from stubbornly dwindling ore grades as well as severe weather, accidents and operational difficulties. Los Bronces is one of the few bright spots in terms of Chilean copper output this year.
(Reporting and writing by Alexandra Ulmer. Additional reporting by Clara Ferreira-Marques in London; editing by John Wallace and Jim Marshall)
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