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Pin to quick picksAnglo American Share News (AAL)

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Miners' profits face an unusual foe: extreme weather

Fri, 29th Jul 2022 17:01

July 29 (Reuters) - Heavy rainfalls, withering droughts and other extreme weather patterns across the globe are denting miners' profits and crimping supply of iron ore, copper and other widely-used minerals as climate change roils yet another industry.

It is an unusual situation for companies that have experience operating anywhere in the world, include miles underground and at the tops of mountains and in places where temperatures often range from 100 degrees Fahrenheit (38°C) to 0F (minus 18°C).

But the first part of 2022 saw the mining industry - parts of which have long faced criticism for how coal production affects climate patterns - contend with a raft of weather-related incidents entirely outside its playbook. Executives detailed their weather-related troubles in earnings reports this week and warned they are likely to continue.

"We are reviewing a few different scenarios to adjust to the likelihood that there are further strange weather patterns," said Lundin Mining Corp Chief Executive Peter Rockandel.

Lundin cut its 2022 copper production forecast after heavy rains dented production at its Chapada mine in Brazil, a facility that as recently as 2019 was contending with drought.

Anglo American Plc slashed its dividend nL1N2Z90D4 after torrid rains hurt its iron ore production in Brazil during the first half of the year, coal mining in Australia and platinum mining in South Africa.

"The extremes that we saw in quarter one of this year outpaced all reasonable forecasting ability that we had," said Anglo CEO Duncan Wanbald.

Rio Tinto Ltd's iron ore shipments from Australia's Pilbara region fell 2% in the first half of the year nL4N2Z819P compared with the same period in 2021, partly due to "significantly higher than average rainfall in May."

Rio also said titanium dioxide production slipped in Madagascar amid one of the worst cyclone seasons in that country since 2008.

With inflation and high energy costs already biting into companies' cash reserves, the disruptions caused by extreme weather are even more evident.

"When markets are tight, these things just become a lot more material ... but there is not a lot you can do," analyst Ben Davis at broker Liberum said.

The cost of weather extremes is also measured in human lives. In Burkina Faso, unexpectedly heavy rains during the dry season caused flash floods at Trevali Mining Corp's zinc mine in April nL1N2Y71IL, killing eight miners who were trapped underground.

Brazil's Vale SA, one of the world's largest iron ore miners, said its output nL1N2Z93CO of the steel-producing mineral dropped in the first three months of the year due to torrential rains. Glencore warned nL1N2ZA0CB that flooding could dent its Australian coal production this year.

Sibanye Stillwater Ltd shuttered its Montana platinum mines last month after mountain snow rapidly melted amid unusually warm weather, causing runoff that took out several key roads and bridges.

ArcelorMittal SA said steel production at its South Africa's unit fell nearly a third during the first half after severe flooding in the KwaZulu-Natal province damaged rail lines.

DROUGHT

In Chile, the world's largest copper producer, miners have faced an ongoing water crisis due to historic drought that has lasted more than a decade and only grown worse this year. Antofagasta Plc, one of the country's largest copper miners, expects its production of the red metal to fall this year due to that drought.

Water is essential in copper production, used abundantly to separate the mineral from its ore and in subsequent steps. To counter water shortages, many mining companies desalinate ocean water and use it in their processes.

Earthworks, an environmental group that tracks the mining industry, said mining companies must do more to fund infrastructure improvements amid the changing climate.

"Mining companies have been prioritizing their bottom line over investing in safety and resiliency for too long," said Jan Morrill of Earthworks.

More News
23 Apr 2024 08:20

Anglo American boosts copper output, slashes diamonds forecast

LONDON, April 23 (Reuters) - Anglo American on Tuesday reported an 11% increase in its copper output for the first quarter of the year, but slashed its 2024 production guidance for diamonds.

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23 Apr 2024 08:03

Kumba quarterly sales fall 10% as port challenges curb exports

April 23 (Reuters) - Kumba Iron Ore on Tuesday reported a 10% fall in first quarter sales due to port equipment challenges, as South Africa's logistical problems continue to throttle commodity exports.

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23 Apr 2024 07:14

Copper production rises but diamond output falls at Anglo American

(Sharecast News) - Anglo American reported relatively flat group production in the first quarter on Tuesday as rising copper production was offset by sliding diamond output.

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22 Apr 2024 09:07

IN BRIEF: Anglo American says Kabwe claimants granted right to appeal

Anglo American PLC - London-based mining company - Says High Court of South Africa on Friday granted claimants the right to appeal against its prior judgement in favour of Anglo American South Africa Ltd. Judgement in mid-December dismissed what the company calls a "misconceived" class action certification application by law firms on behalf of residents of Kabwe, Zambia. According to Human Rights Watch, zinc and lead mined at Kabwe from 1904 to 1994 produced extremely high toxic lead levels which continue to affect the health of local residents.

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22 Apr 2024 08:29

Anglo American to oppose any Kabwe claim appeal

(Sharecast News) - Anglo American said in an update on Monday that it would oppose any appeal related to the Kabwe claim, which it considers "misconceived".

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17 Apr 2024 16:57

LONDON MARKET CLOSE: FTSE 100 shrugs off UK inflation, hawkish US Fed

(Alliance News) - Stock prices in London closed largely up on Wednesday, despite hotter-than-expected UK inflation data and more hawkish words from the US Federal Reserve.

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17 Apr 2024 16:34

London close: Stocks mixed as bargain hunters pick over FTSE 100

(Sharecast News) - London stocks showed a mixed performance by the close on Wednesday, with the top-flight index in the green as investors hunted for bargains after its four-week low on Tuesday.

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17 Apr 2024 12:05

LONDON MARKET MIDDAY: Stocks rediscover poise after UK inflation data

(Alliance News) - Stock prices in London were higher on Wednesday, shaking off a hotter-than-expected UK consumer price index reading, and a warning from Federal Reserve Chair Jerome Powell on the fight to contain inflation in the US.

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17 Apr 2024 09:33

LONDON BROKER RATINGS: BofA cuts Ashmore; JPMorgan lifts Fresnillo

(Alliance News) - The following London-listed shares received analyst recommendations Wednesday morning and Tuesday:

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17 Apr 2024 08:53

LONDON MARKET OPEN: Stocks mixed as UK data douses BoE cut hope

(Alliance News) - Stock prices in London opened mixed on Wednesday, with the FTSE 100 underperforming European peers, with a hotter than expected UK inflation reading lifting the pound.

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17 Apr 2024 07:44

TOP NEWS: Anglo American rough diamond sales deliver further uptick

(Alliance News) - Anglo American PLC on Wednesday said the latest rough diamond sales by De Beers were up against the second sales round of 2024, but they remained below a year before, as dealers stayed cautious.

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17 Apr 2024 07:31

De Beers diamond sales fall in cautious market

(Sharecast News) - Provisional rough diamond sales from Anglo-American's De Beers' unit fell to $445m in the third sales cycle compared with $542m a year ago amid a subdued market.

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16 Apr 2024 17:14

Peru copper production growth near 13% in February

LIMA, April 16 (Reuters) - Peru's copper production grew 12.7% in February to reach 216,752 metric tons, the country's energy and mining ministry said on Tuesday.

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16 Apr 2024 13:45

UK earnings, trading statements calendar - next 7 days

Wednesday 17 April 
Antofagasta PLCTrading Statement
Brooks Macdonald Group PLCTrading Statement
Entain PLCTrading Statement
Hays PLCTrading Statement
Inspecs Group PLCFull Year Results
Liontrust Asset Management PLCTrading Statement
M Winkworth PLCFull Year Results
Menhaden Resource Efficiency PLCFull Year Results
Rio Tinto PLCTrading Statement
Saga PLCFull Year Results
Thursday 18 April 
AJ Bell PLCTrading Statement
BHP Group LtdTrading Statement
Devolver Digital IncFull Year Results
Dunelm Group PLCTrading Statement
easyJet PLCTrading Statement
Foxtons Group PLCTrading Statement
HydrogenOne Capital Growth PLCFull Year Results
Keystone Law Group PLCFull Year Results
LBG Media PLCFull Year Results
Pod Point Group Holdings PLCFull Year Results
Rentokil Initial PLCTrading Statement
Segro PLCTrading Statement
Friday 19 April 
888 Holdings PLCTrading Statement
Man Group PLCTrading Statement
Monday 22 April 
Brave Bison Group PLCFull Year Results
Elixirr International PLCFull Year Results
Frenkel Topping Group PLCFull Year Results
South32 LtdQ3 Results
Ten Lifestyle Group PLCHalf Year Results
Tuesday 23 April 
Alliance Pharma PLCFull Year Results
Alphawave IP Group PLCFull Year Results
Anglo American PLCTrading Statement
ASA International Group PLCFull Year Results
Associated British Foods PLCHalf Year Results
Eleco PLCFull Year Results
GB Group PLCTrading Statement
Jupiter Fund Management PLCTrading Statement
Maintel Holdings PLCFull Year Results
Property Franchise Group PLCFull Year Results
Taylor Wimpey PLCTrading Statement
tinyBuild IncFull Year Results
Trellus Health PLCFull Year Results
  
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16 Apr 2024 09:48

LONDON BROKER RATINGS: RBC raises Admiral; Barclays cuts Phoenix Group

(Alliance News) - The following London-listed shares received analyst recommendations Tuesday morning and Monday:

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