Anglo American plc Production Report for the second quarter ended 30 June 2018

Anglo American reports a 6% increase in total production on a copper equivalent basis in the second quarter of 2018, compared to the same period of 2017, excluding the Minas-Rio stoppage(1).

Mark Cutifani, Chief Executive of Anglo American, said: "We have delivered another strong performance, with Copper and Metallurgical Coal in particular driving a 6% increase in production. This reflects our consistent and relentless focus on driving efficiency and productivity from our existing world class asset base."

Highlights

•  De Beers production increased by 3% to 9.0 million carats reflecting sustained healthy trading conditions.

•  Copper production increased by 12% to 158,000 tonnes despite major planned maintenance at

  Collahuasi, with strong operational performance as well as higher grades.

•  Platinum and palladium production was broadly unchanged despite Bokoni having been placed on care

  and maintenance in Q3 2017. Platinum guidance increased to 2.4-2.45 million ounces following strong

  operational performance.

•  Kumba iron ore production increased by 2% to 11.6 million tonnes, driven by good performance at

  Kolomela. Guidance marginally decreased to 43-44 million tonnes to align production to rail availability.

•  Metallurgical coal production increased by 33% to 5.3 million tonnes driven by strong performance at

  Moranbah and Grosvenor.

•  Thermal coal export production decreased by 1% to 7.2 million tonnes due to challenging geology.

  Guidance revised to 28-30 million tonnes.

•  Minas-Rio iron ore production in the quarter was immaterial as operations remain suspended.

Rough diamond production increased by 3% to 9.0 million carats, reflecting production increases to meet stronger demand as well as the contribution from the ramp-up at Gahcho Kué.

Botswana (Debswana) production increased by 6% to 6.3 million carats in response to stronger trading conditions. Jwaneng production increased by 4% to 3.0 million carats due to an increase in tonnes mined and treated. Similarly at Orapa(2), production increased by 8% to 3.3 million carats due to the ramp up of additional processing capacity in response to stronger trading conditions.

Namibia (Namdeb Holdings) production increased by 32% to 0.5 million carats driven by access to consistently higher grades at the land operations and technology-led optimisation of the marine drill fleet.

South Africa (DBCM) production decreased by 28% to 1.0 million carats, primarily owing to a period of suspended production at Venetia following a fatal incident in March.

Canada production increased by 17% to 1.2 million carats due to the completion of the ramp-up at Gahcho Kué.

Rough sales volumes were 10.0 million carats (9.4 million carats on a consolidated basis(3)) from three sales cycles in Q2 2018, compared with 5.9 million carats (5.4 million carats on a consolidated basis(3)) from two sales cycles in Q2 2017. In addition to the different number of sales cycles over the period, sales volumes benefited from positive sentiment in the midstream following growth in consumer demand for diamond jewellery in late 2017, and a continuing positive outlook.

The H1 2018 average realised rough diamond price increased by 4% to $162/carat (H1 2017: $156/carat) due to a 1.6% increase in the average rough price index and an improvement in the sales mix, driven by the substantial volumes of lower value goods sold in H1 2017, following the Indian demonetisation programme in late 2016. Excluding this impact, the average value of the production mix was lower in H1 2018 as a higher proportion of lower value carats was delivered from Orapa and Gahcho Kué.

Full Year Guidance

Full year production guidance(1) remains unchanged at 34-36 million carats, subject to trading conditions.

Production from Los Bronces increased by 14% to 89,700 tonnes, driven by a combination of strong mine and plant performance, as well as an increase in ore grade (0.76% vs. 0.70%).

At Collahuasi, attributable production increased by 7% to 54,700 tonnes due to planned higher grades and strong plant performance, offset partially by planned major maintenance. Production decreased compared with Q1 2018 owing to the impact of the planned major maintenance which was successfully completed on 8 July.

El Soldado production increased by 26% to 13,600 tonnes due to the temporary mine stoppage in 2017.

Sales volumes in H1 2018 were 306,000 tonnes, an increase of 18%, reflecting the strong production performance in the period. At the end of H1 2018, Anglo American had 120,300 tonnes of copper provisionally priced at 301 c/lb.

Full Year Guidance

Full year production guidance remains unchanged at 630,000 - 660,000 tonnes.