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REPORT: Anglo American Boosts Iron Ore Output Production in Q3

The third quarter of 2014 was a good one for mining company Anglo American(LSE:AAL) (JSE:AGL).The London-listed company increased its iron ore productio...

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|Oct 27|magazine5 min read

The third quarter of 2014 was a good one for mining company Anglo American (LSE:AAL) (JSE:AGL).

The London-listed company increased its iron ore production significantly in Q3, producing roughly 13 million tons of the steel ingredient. The 37 percent rise in output puts Anglo American on the same page as BHP Billiton and Rio Tinto, both of which recently released figures showing their continued increase in iron ore output.

The rise in production is thanks in part to Anglo’s Kumba Iron Ore Ltd., which implemented a turnaround plan after falling grades at its Sishen mine in South Africa. The mine is the continent’s largest producer for iron ore.

"The iron ore increase shows the redesign of the Sishen mine is taking place and is happening a bit faster that we thought," said Macquarie analyst Jeff Largey.

According to a statement by Anglo American, the company’s Minas-Rio iron ore mine in Brazil continues to make progress in delivering production.

“Work on the Minas Rio project continues, with significant progress made to deliver first ore on ship. Commissioning and testing activities are ongoing, ore stockpiles are being built at the Port of Acu and first ore loading has begun.”

Iron ore accounted for nearly 40 percent of Anglo’s operating profit in the first half.

"It's a good performance. They lifted guidance across most commodities so it is a pretty solid result," said Investec analyst Marc Elliott.

Despite lifting production numbers, the company remains skeptical on whether increases in iron ore will affect the market. In an interview with The Wall Street Journal last month, Anglo’s Chief Executive Mark Cutifani confessed his fears about the outlook for the iron ore market amid signs the global supply glut won’t subside any time soon.