Anglo American PLC (LON:AAL) still plans to pay a dividend next month even though the mining giant cut production guidance as its diamond, iron ore, copper, platinum and coal mines are operating with around 50% of the normal workforce due to coronavirus measures.
The mining giant, which last month bought Sirius Minerals and its Woodsmith potash mine in Yorkshire, revealed first-quarter production numbers that were weaker than expected and slashed guidance.
First-quarter production of diamonds was down 1%, down 9% for copper, down 7% for platinum and palladium, down 7-8% for thermal and metallurgical coal, and of iron ore from the Kumba mine was down 1%. Production of iron ore at Minas-Rio was up 31% after changes last year, while nickel was up 11%.
Subject to no further escalation of coronavirus measures, production guidance for the full year for diamonds was cut to 25-27mln carats from the previous target of 32-34mln carats; platinum and palladium targets were cut to 1.5-1.7mln oz and 1.0-1.2mln oz respectively from 2.0-2.2mln oz and 1.4moz.
Iron ore from Kumba is now forecast to produce 37-39mln tonnes, down from 41.5-42.5mln; thermal coal expectations are for roughly 22mln tonnes, down from 26mln tonnes.
Guidance for copper was unchanged, as for iron ore from Minas-Rio, metallurgical coal and nickel
Anglo, which said it has US$14.5bn of liquidity, including more than US$6bn of cash, is looking to cut US$0.5bn of operating costs and roughly US$1bn of capital expenditure guidance this year.
On top of this, assuming current spot rates, there would be a benefit of US$1.5bn to underlying profits is expected from currency moves and lower oil prices.
The final dividend of US$0.47 per share for 2019 will be paid as planned on 7 May, subject to shareholder approval at the annual meeting, with no mention of its US$1bn share buyback.
Shares in Anglo rose almost 1% to 1,367.6p in early trade on Thursday, where they are still down 38% in the year to date.