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The De Beers Group faced off tricky macro-economic conditions to record first-half earnings before interest tax depreciation and amortisation (Ebitda) of $0.3-billion, with the diamond company's 50% mining margin the highest within the Anglo American stable.

"Operational performance at De Beers has been really good," Anglo CE Duncan Wanblad told investment analysts and journalists at this week's half-year results presentation, at which Anglo's overall half-year Ebitda was reported to be a 49%-lower $5.1-billion.

"The macro-economic conditions have indeed impacted on rough diamond demand, as they always do, and we are likely, given what's happening in China, to remain challenged during the second half of this year. The consequent result of that is there will be a little bit of build-up in midstream inventory levels," said Wanblad.

In producing 16.5-million carats in the half-year, De Beers achieved increases across most assets.

An exception was South Africa's Venetia in Limpopo province, which, as planned, transitioned from open pit to underground, in what is described as "a really hard-earned milestone". (Also watch attached Creamer Media video.)

Regarding the macro headwinds faced, De Beers Group CFO Sarah Kuijlaars told Mining Weekly in a Teams interview: "The macro-economic conditions have been tougher than we would like. It's easy to forget, but 2021/2022 were outstanding for the diamond industry, and we've come off that a bit. You'll recall there was fiscal stimulus in the US and as that's unwound, it has provided softer conditions in the diamond market.

"India demand has been strong and then if you look across to China, where we all hoped for the pent-up demand to come through, as it had in the US, that's been a bit slower than we expected, so overall tough macro environments for us in the first half," said Kuijlaars.

Diamonds are a discretionary purchase and consumers have got to feel confident to go out and purchase their diamonds.

"We're looking for signals, particularly in the US and China, to see how that flows through to the end of this year. If we take a step back, we still remain confident of the long-term supply/demand fundamentals. We know demand is going to grow. We know more middle-class income people are going to aspire to buy diamonds, and supply is going to support that demand growth in the longer term."

Mining Weekly: What benefits are on the way from the Venetia Underground Project now that first production has been achieved?

Kuijlaars: I think we've got to be very conscious that we've got a quite an extensive ramp-up coming through the system, but I'm really proud of how the team has worked together and delivered this key milestone.

When will all the i's be dotted and the t's crossed in the extension of the Botswana agreement to 2043?

The agreement with the government of Botswana is a really important agreement. I'm delighted that we reached agreement in principle at the end of June, but, as you say, that was an agreement in principle, and we have to work through the long form agreements, which will take months, not weeks, and then ultimately will go to both shareholders for support.

Why is the new 25-year Debswana mining licence so important to De Beers?

It secures our access to real tier-one assets, some of the best diamond mines in the world. We've been a partner with the government of Botswana for 50-odd years and we look forward to the next 50 with the people of Botswana.

When will all the details be sorted out in the new sales arrangement to 2033?

For us, it's been very much a negotiation of two halves, of the sales agreement and the mining licence, and they were both being progressed in parallel, but it was great that at the end of June, we did agree to maintain the sales agreement on the previous terms until the new sales agreement is fully signed.

Regarding the Diamonds for Development Fund, and the benefits that will accrue to the people of Botswana from De Beers' initial $75-million, one b...

Southern Africa is now the only region in the Anglo American business fold that is not on renewable energy because the company cannot go to a market and acquire that energy in the same way that it has been able to do in many of the other jurisdictions in which it does business, the mining and marketing company reported on Thursday.

"So Southern Africa needs a different solution," Anglo CE Duncan Wanblad told the half-year results presentation covered by Mining Weekly. (Also watch attached Creamer Media video.)

"You've heard me speaking about Envusa quite a lot, which is our joint venture with EDF Renewables, and the purpose of that joint venture is to stand up somewhere between 3 GW and 5 GW of energy in Southern Africa," said Wanblad after reporting a 49% decrease in half-year earnings to $5.1-billion.

The London- and Johannesburg-listed company has now reached the point in Southern Africa where it is almost ready to financially close on the first of its renewables projects, which involves three sites for solar and wind energy generation in the Northern Cape.

It is about to also commence work on two large solar sites in Sishen, where Anglo's Kumba Iron Ore is operational, and at the Mogalakwena platinum group metals mine in Limpopo.

"These projects don't only remove up to two-million tons of carbon from our operations, but they also have a very meaningful and financially positive benefit to the business, particularly our South African business," Wanblad revealed.

Notwithstanding that, all the renewables contracts that Anglo has swopped out across the world have all had a very positive net present value benefit to the business so far.

"The team is continuing to work very hard on delivering these projects into Envusa and getting the work done to complete the stability of our energy supply situation, particularly in South Africa, and renew our focus on carbon reduction across the portfolio," Wanblad said.

"We remain committed to delivering our products to our customers in the most sustainable way that we possibly can," he added.

Anglo's copper operation in Peru, Quellaveco, is now 100% on renewable energy and with the coal business in Australia converting its energy supply contracts to renewables by 2025, that will put 60% of the whole of Anglo's portfolio on clean forms of energy, a great step forward given where the company was just a few years ago.

As the only outstanding region in business that is not on renewable energy, Southern Africa also paid the biggest combined taxes in the half-year, totalling $9-billion.

During Anglo's sustainability performance report covered by Engineering News & Mining Weekly last month, getting the first wave of 680 MW of renewable energy ecosystem projects under way in South Africa was cited as a 2023 priority.

It was said at the time that construction of the 130 MW behind-the-meter on-site project at Mogalakwena is expected in the last quarter of this year.

At Sishen, a 70 MW photovoltaic installation is being put in place, with site stabilisation and construction activity predevelopment under way.

MACRO HEADWINDS

Macro headwinds - principally, weaker prices for products and input cost inflation - have weighed on Anglo's first-half financial performance in the six months to the end of June.

Lower earnings reflect a 19% lower product basket price and a 1% unit cost increase, partially offset by a 10% volume increase compared with the first half of 2022.

Net debt increasing to $8.8-billion reflects the growth investments that Anglo is making through the cycle in line with its belief in the strong long-term fundamentals.

A $0.7-billion half-year dividend of $0.55 a share is in line with the company's 40% payout policy.

While the nearer term macro picture presents challenges, the longer term demand outlook for future-enabling metals and minerals is seen by Anglo as being compelling.

As most major economies accelerate their decarbonisation programmes and as the global population grows by up to t...

The challenge of being able to produce green hydrogen economically is now home and dry.

"That box has been ticked," Anglo American Platinum CEO Natascha Viljoen assured Mining Weekly in a Zoom interview. (Also watch attached Creamer Media video.)

"With measures like the Inflation Reduction Act coming in from the US and with some of the Euro environmental support, we've seen that the debate around our ability to produce green hydrogen economically has broadly gone away," says Viljoen.

The conversation is now around infrastructure and end-use development amid the required technologies for green hydrogen generation and hydrogen-powered fuel cell electric vehicle being there for the taking to protect Mother Earth from climate catastrophe.

On the fuel cell electric vehicle front, there are more than 400 light vehicle models on the market, "so there's definitely end-use availability as we speak today", says Viljoen.

Much now centres on how the system is set up and, in that system, an outpouring of capital commitment has already taken place globally, with many projects going through the final stage of approval.

"Momentum in the hydrogen economy has been kickstarted and is really going at pace," Viljoen points out.

For current platinum group metals (PGMs) demand to be matched, all that is needed, she adds, is for 10% of the car park to be made up of fuel cell electric vehicles.

Whatever the market brings, and however the PGM industry develops the market, Viljoen is confident that the Anglo Platinum she is leaving will be able to play a role in creating a cleaner and a greener future.

Mining Weekly: What can be done to ensure greater appreciation of the benefits that PGM-using proton exchange membrane, or PEM electrolysis, to help PEM technology to gain a bigger share of the green hydrogen electrolysis market?

Viljoen: The benefit of PEM when compared with alkaline electrolysis is because of the PGM component in PEM electrolysis. Because of the catalytic characteristics of PGM metals, the process stabilises faster at start-up, and then the efficiency of the process throughout is much higher than in alkaline electrolysis. When you think specifically of PEM matching renewables, and we all know that renewables are cyclic, that is where PEM plays a very specific role and where the efficiency of PEM electrolysis totally surpasses alkaline electrolysis, specifically in the application around renewable energy, which is required for green hydrogen production.

Mining Weekly is of the view that far more momentum needs to be given to the South African government-led Hydrogen Valley project and the Project Rainbow, which contain a number of multi-partner platinum-using fuel cell electric vehicle opportunities and green hydrogen generation projects. How can this be done?

A couple of things are at work together here. For starters, ourselves and Sasol are part of the global Hydrogen Council and in that council, there's a big advocacy drive, along with helping to shape policy and standards around safety, infrastructure and end-use. A big portion of this is how we make this Hydrogen Council material available and get it incorporated into the way that we think strategically and also systemically around how we set up South Africa for hydrogen. The second need includes finding the right level of investment to get the Hydrogen Valley project going, because it can showcase hydrogen end-use. The last is to recognise ourselves as being uppermost in three items. The one is the technology that Sasol has. It is unique technology that belongs to South Africa for hydrogen production. Secondly, we've got the biggest resource of PGMs in the world, and we need to work out how we use that to strategic advantage. Then lastly, a focus is need on how we use the enormous renewable potential that we have as a country. I know that's a little bit further out, and it feels a little bit far-fetched, but the reality is that we are one of only five countries that have enough ...

The official sod-turning ceremony for the Mogale Tailings Retreatment project on Gauteng's West Rand took place on Tuesday, July 25.

The R2.5-billion project, near Krugersdorp and Kagiso, received a eyes-on-the-prize send off from the London- and Johannesburg-listed Africa-focused mid-tier gold producer.

"Where we stand today, 12 months from today, we'll have a brand new processing plant," Pan African Resources CEO Cobus Loots told Mining Weekly in an interview on site. (Also watch attached Creamer Media video.)

This is Pan African's fourth large-scale tailings plant in a project that is scheduled to be fully commissioned by December next year.

"With the support of government, the communities surrounding this area and all of you, Pan African has the opportunity of transforming this site into a shining example of what modern mining can be," said Pan African chairperson Keith Spencer in his address.

"The West Rand has produced over 2 000 tons of gold from the numerous deep underground shafts and tunnels, with some mines in this area over three and a half kilometres deep," Spencer added.

Largely the same internal teams that completed Pan African's previous three quick-return tailings retreatment projects are undertaking the Mogale project, characterised by fast payback, low costs, big production uplift, long life and high ungeared return.

"We estimate an all-in sustaining cost of $1 000/oz, which is world-class," Loots added.

The proven technology that will be deployed involves low unit cost hydro mining with low project execution risk at 800 000 t a month through a carbon-in-leach plant, which translates into roughly 50 000 oz a year boost for a company with a 200 000 oz/y asset portfolio.

Loots estimates a payback of three to four years.

Mogale will consume some 10 MW to 20 MW of electricity, which has been allocated from State power utility Eskom at this point. But with significant success in generating renewable energy at its Evander and Barberton operations, the company will be looking to generate solar power for Mogale on site as quickly as it can.

As material from the dumps is processed, the land beneath them will be cleaned up and rehabilitated of the 20-year life-of-mine.

On the benefit the mine will bring to the people of Krugersdorp and Kagiso, Loots said: "We believe the project is going to change this area for the better. Certainly, it will create economic opportunity, employment and uplift the environment."

The engineering procurement construction management contractor is SGS Bateman.

"The project now enjoys full support of all of our stakeholders, and we will not let them down," Loots affirmed.

Platinum group metals (PGMs) mining and marketing company Anglo American Platinum (Amplats) is finalising the permitting process for the future opencast Middelaagte mine, one of three areas of the company's Amandelbult complex.

Located in Limpopo, within the municipality of Thabazimbi, the Amandelbult mine will consist of three main areas. Firstly, the modernisation of the existing mining areas that have started to deliver safety and efficiency. Secondly, the start of the Middelaagte through the opencast operation, and thirdly, mining studies to shape the future of Middelaagte and Tumela 1 Sub Shaft.

"We are focusing on continuing the rollout of modernisation cycle elements. We are staggering implementation to manage change and truly embed the modernised mining cycle," outgoing Amplats CEO Natascha Viljoen said during the company's half-year presentation on July 24, covered by Mining Weekly. (Also watch attached Creamer Media video.)

"This has enabled us to start capturing value through a safer and higher productivity mining cycle and lowering cost.

"We are finalising the permitting process and expect to start production at Middelaagte with an opencast mine at the end of this year," Viljoen added.

Production will ramp up to a maximum expected rate of between 110 000 t and 180 000 t a month.

Furthermore, three studies are currently under way that will provide optionality for either life extension or growth of the Amandelbult complex.

The objectives of the Amandelbult studies are to find the optimal mining strategy, volume and timing of various new mining areas and applied mining systems that could be both modernised, conventional, mechanised mining and/or hybrid mining opportunities within the portfolio.

The journey Amplats has been undertaking is to try a fully mechanised solution in Tumela 15 East, which has proven valuable in understanding the successes and current limitations of mechanisation for Amandelbult.

"These learnings form part of the studies as we map out our optimal pathway for Amandelbult," said Viljoen.

Depicted on a slide that was displayed during the presentation was an image of the extra low-profile fleet being trialed, which was shown to be a fraction of the size of conventional mining equipment currently being worked.

A marked improvement in safety has been seen at Amandelbult, which is a critical success factor for the future of Amandelbult.

The modernisation programme at the mine utilises new technologies to continuously improve safety, mine productivity and simplify operational logistics.

This was described as being a positive journey, with focus continuing on the delivery of the programme to enhance the work and to improve operating conditions.

Second-quarter performance within the Amandelbult complex was lowered by continued poor ground conditions at Dishaba and short-term operational challenges at Tumela, with underground rail maintenance stoppages impacted. The redevelopment impacted development buffers at Dishaba and an additional labour skills mix has been introduced to restore the mining buffers and to provide flexibility to implement the full benefits of cycle mining across the operations.

Half-year capital expenditure (capex) of the Johannesburg Stock Exchange-listed Amplats was R8.5-billion, with R4.5-billion on stay-in-business capital and R1-billion on growth capex, the growth capex being predominantly linked to the future of the Mogalakwena mine, where exploration decline work is being undertaken as well as progressing studies associated with the future of Mogalakwena work.

Capital was also spent on the Mototolo/De Brochen life extension project, on which around R3-billion is expected to be spent this year.

Guidance for the year remains unchanged, with between 3.6-million and 4-million PGM ounces, subject to the impact of Eskom load curtailment. Unit cost guidance for 2023 remains between R16 800 and R17 800 per PGM oz and is expected to be at the upper range of guidance. In 2023, total c...

Momentum is building in the hydrogen economy, which is important for the planet and for platinum group metals (PGMs), Anglo American Platinum FD Craig Miller said on Monday.

"There have been over 1 000 hydrogen project proposals announced globally for full or partial deployment by 2030," Miller highlighted.

He spoke of direct investments of 10% of the $320-billion made into hydrogen project passing the final investment decision stages during the half-year results presentation of the Johannesburg Stock Exchange-listed company that has kept 2023 production guidance unchanged at between 3.6-million to 4-million PGM ounces, subject to the impact of Eskom load curtailment. (Also watch attached Creamer Media video.)

"I know we've spoken a lot about hydrogen over the years and you're probably wondering why. After all, the hydrogen sector is currently a very small proportion of total PGM demand. Put simply, we've spoken about it a lot over the years because hydrogen matters. It matters for our planet but it matters for PGMs," Miller stated in the half-year dividend-yielding presentation covered by Mining Weekly.

Miller drew attention to prominence being gained by the PGM-using proton electron membrane (PEM) electrolysers that produce the green hydrogen that protects the planet from deleterious carbon emissions.

"We all know the potential for PGMs from PEM electrolysers to make green hydrogen and PEM fuel cells to convert hydrogen into electricity," he said, displaying a slide which illustrated that PGMs are used, or have the potential to be used, in a whole host hydrogen applications from production and conversion through transportation and storage to end-use, with end-uses that included green chemicals, gas turbines, synthetic fuels, purification, sensing and emissions abatement.

"We're certainly seeing the momentum build in the hydrogen economy," he added.

"We, as Anglo Platinum, continue to invest in the development of a diverse range of existing and new opportunity for our metals.

"Our opportunity areas tap into key global trends such as decarbonisation of difficult-to-abate industries and mobility.

"For example, in Germany, H2 Moves Berlin, our fuel cell electric vehicle partnership with Toyota Germany, and the SafeDriver Group, now has more than 100 Toyota Mirai deployed as taxis on the streets of the German capital.

"Initiatives like these are helping the uptake of fuel cell electric vehicles by aligning end-use demand with the supply of vehicles and infrastructure access, made by influencing new audiences by proactive marketing and education activities," Miller said.

FUEL CELL ELECTRIC VEHICLES

For PGMs to hold on to their current volume of sales into the automotive market, they need to gain a tenth of the electric vehicle market, which will create demand for five-million to six-million ounces of incremental platinum group metals (PGMs) a year,

We're certainly seeing the momentum build in the hydrogen economy. There have been over 1 000 hydrogen project proposals announced globally for full or partial deployment by 2030.

Direct investments of $320-billion have made into hydrogen project announced through to 2030, of which 10% have passed the final investment decision stages.

We, as Anglo Platinum, continue to invest in the development of a diverse range of existing and new opportunity for our metals.

Our opportunity areas tap into key global trends such as decarbonization of difficult-to-abate industries and mobility.

For example, in Germany our H2 Moves Berlin, our fuel cell electric vehicle partnership with Toyota Germany, and the SafeDriver, now has more than 100 Toyota Mirai deployed as taxis on the streets of the German capital, while also stimulating the demand for a network of hydrogen refuelling stations.

Initiatives like these are helping the uptake of fuel cell electric vehicles by aligning end-use demand with the supply of vehicles and infrastructure access, made by influencing new audiences by proactive marketin...

Platinum group metals (PGM) mining and marketing company Anglo American Platinum on Monday declared an interim dividend after achieving results in line with changed guidance.

An interim dividend of R3.1-billion for the first half of 2023, in line with the company's dividend policy of a 40% payout of headline earnings.

On half-year capital expenditure (capex), Anglo Platinum FD Craig Miller said in response to Mining Weekly that about R4,5-billion was on stay-in-business capital and R1-billion on growth capex, the growth capex being predominantly linked to the future of the Mogalakwena mine, where exploration decline work is being undertaken as well as progressing studies associated with the future of Mogalakwena work.

"We've also spent and we continue to spend on the Mototolo/De Brochen life extension project. That's continuing the life of Mototolo and we're looking at spending around R3-billion this year on that particular investment," Miller added.

Owing to maintenance days being aligned with local curtailment days, the Johannesburg Stock Exchange-listed company reported that its mining operations manged to stave off being impacted by 42 days of first-half load curtailment .

On initiatives and working groups within South Africa's National Energy Crisis Committee (NECOM) to focus on the expedited implementation of the Presidential Energy Action Plan, outgoing CEO Natascha Viljoen said in response to Mining Weekly that Anglo Platinum had done "quite a bit" in that partnering process with NECOM to support Eskom, "and it's a partnership not a support, I think that's really important".

"From that point of view, we feel quite encouraged on the opportunities for us. As South Africans, we're all keen to make an impact and to help in those areas, and that is encouraging," Viljoen added.

Half-year earnings before interest tax depreciation and amortisation (Ebitda) were 69% lower year-on-year at R13.4-billion on lower prices, lower sales volumes, and higher costs, but the mining Ebitda margin generated was a solid 42%.

The Johannesburg Stock Exchange-listed company's balance sheet remains strong, with net cash of R23.9-billion.

Total PGM production decreased by 7% to 1 844 300 PGM ounces and refined PGM production decreased by 13% to 1 699 800 PGM ounces.

PGM sales volumes decreased by 12% to 1 807 300 PGM ounces, in line with lower refined production, and PGM trading volumes increased by 214% to 2 065 200 PGM ounces, in line with the strategy for greater participation in the market.

Guidance for the year remains unchanged, with between 3.6-million to 4-million PGM ounces, subject to the impact of Eskom load curtailment. Unit cost guidance for 2023 remains between R16 800 and R17 800 per PGM ounce and is expected to be at the upper range of guidance. In 2023, total capital expenditure is expected to remain within the market guidance of R22-billion.

In terms of market outlook, platinum is expected to remain in deficit over the next few years, as automotive demand gains from ongoing substitution of palladium in gasoline catalysts. Palladium is expected to move into surplus for the opposite reason, though to what extent will depend on what happens to automotive production and battery electric vehicles' share of it. Rhodium will remain in a small surplus, assuming further disposals from the fibreglass industry.

Emissions legislation around the world, the growing hydrogen economy and demand for PGMs in industrial applications should see global demand grow in future. Invest in assets and market development efforts are described as being well-positioned to take advantage of future demand.

PRICES WEAK

PGM prices were mostly weak in the first half of 2023, as an uncertain macro-economic backdrop was overlaid with metals-specific negative factors. The PGM average realised basket price was $1 885/oz, 29% lower than in the same period of 2022. This weak performance was due to sizeable declines seen in rhodium and palladium, taking both to multi...

Integrated procurement and project management needs to be actively adopted by South Africa's private and public sectors to ensure optimal return on investment, job creation, skills development, and improved service delivery, ECS Associates said on Friday in announcing its agreement with Anglo American Platinum to provide project management support to assist the platinum group metals mining company with the delivery of its extensive capital project pipeline.

The agreement allows for staged implementation through a gated process from concept to execution and close-out.

ECS has been tasked with deploying its Collaborative Project Strategies© - based on lessons learned from variety of projects in South Africa and around the world - in an integrated manner with Anglo Platinum.

In business since 1993, ECS provides consulting services to the engineering and construction industry, with its service offering focused on strategic advice, dispute resolution and training on the new engineering contract (NEC) platform.

The collaborative approach is described as heralding a new integrated procurement and project management approach to assure predictable project outcomes.

To deliver a successful end product, each project must be strategically aligned, properly planned, optimally staffed, correctly budgeted and have a measurable baseline agreed before work begins.

"Once a project commences underpinned with the right culture of all involved, tight control of scope, quality and costs must be central to the project, with regular, objective and accurate reporting against the baseline," ECS stated in a release to Engineering News & Mining Weekly.

The company expressed the view that South Africa has the opportunity to learn from the ineffective recent project delivery outcomes in weighing out collaborative models and that this can be done while training many people in new skills and uplifting local communities.

Collaborative Project Strategies© developed by ECS and underpinned by NEC is said to provide for effective procurement framework options and project implementation models, with better and more predictable project outcomes creating tangible benefits for all stakeholders.

"Investing in a collaborative approach early in the process of procurement and project implementation can save time and reduce potential risks later in the project, which may otherwise result in considerable negative consequences," said ECS MD Mile Sofijanic.

"Applying collaborative principles, such as relationship management, proactive communications, aligned business objectives, information and knowledge sharing, and value creation help to enable early development of this collaborative environment, prior to commencing formal project implementation. Doing so sets the tone for a more aligned and proactive working approach for predictable and successful contract delivery," Sofijanic added.

Collaborative Project Strategies© coupled with bespoke Agile Project Delivery solutions aim to assist in the delivery of optimum project outcomes and the unlocking of on-going value-adding initiatives.

Mining Weekly Editor Martin Creamer discusses Impala Platinum’s intention to develop a 100 MW-plus solar energy plant in North West province; South Africa's opportunity to recover gold from its mine dump material; and securing future demand for SA's platinum group metals.

Diversified mining and marketing company Glencore expects this year's marketing earnings to exceed the top end of its guidance range, prompting a buy reiteration.

The London- and Johannesburg-listed producer and marketer of more than 60 commodities, said on Friday that it expected adjusted marketing earnings before interest and tax to be in the $3.5-billion to $4-billion range, well above its $2.2-billion to $3.2-billion long-term guidance range.

"Glencore continues to be one of our preferred miners," UK metals and mining analyst Jefferies stated in its 'buy' note.

Copper, coal and zinc assets performed in line with expectations and previously communicated guidance, and first-half output was described as being solid.

"Second half volume weightings in copper, zinc and nickel reflect higher expected production volumes from Collahuasi, Kazzinc, Mount Isa and INO," Glencore CEO Gary Nagle stated in a release to Mining Weekly.

Glencore is due to report overall first-half results on August 8 amid its marketing segment largely normalising. While this will impact profitability, it has allowed for the release of some of the investment made in marketing working capital in 2022.

Regarding own-sourced production, only cobalt and gold production were up in the six months to the end of June, with 488 000 t of copper production 4% down on the corresponding six months of 2022. Copper sales volumes were 11 000 t lower on shipment timing.

Zinc production of 434 700 t was 10% lower reflecting mainly the 2022 disposals of South American zinc operations and the closure of Matagami.

Nickel production of 46 400 t was 20% lower, primarily reflecting higher third-party production, in large part necessitated by last year's strike at Raglan mine in Canada.

Attributable ferrochrome production of 717 000 t was 9% down on planned additional smelter offline days and coal production of 54.2-million tonnes was 2% lower than in the first half of last year.

Cobalt production of 21 700 t was 5% higher on improved recoveries at the Katanga copper mine in the Democratic Republic of Congo and gold output was up 10% at 369 000 oz.

Jefferies noted that Glencore, which has been active in deals as a buyer and a seller this year, has gone quiet on its bid to merge with Teck Resources and its alternative proposal to acquire Teck's coal assets and then subsequently demerge the combined company's coal business through a listing on the New York Stock Exchange.

"We would not consider this lull to be an indication of lack of interest. We expect an update from management when the company reports half-year results," Jefferies stated.