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Iron ore production increases for Anglo American

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Dry Bulk,

Anglo American plc has reported increases in iron ore in its Production Report for the third quarter ended 30 September 2016 (3Q16).

Anglo’s Kumba iron ore production increased by 3% to 11.8 million t.

Sishen production increased by 9% (46% against 2Q16) to 8.3 million t underpinned by higher quality feedstock material and improved plant yields. The restructuring has been completed and the mine successfully transitioned to a 3-shift roster system in September 2016, which is expected to result in further improvements in equipment efficiencies over the medium term. Consistent with the mine's lower cost pit configuration, waste removal decreased to 35 million t compared to 60 million t in 3Q15. Waste run rates remain in line with the full year guidance.

Kolomela production was broadly unchanged at 3.4 million t.

Export sales increased by 5% to 10.3 million t, reflecting higher production. Total finished product stocks were 3.1 million t, compared with 2.3 million t at 30 June 2016.

Anglo’s full-year production guidance for Sishen remains unchanged at ~27 million t and waste volumes of between 135 – 150 million t. Kolomela is expected to marginally exceed its full year guided production of ~12 million t, with a commensurate increase in waste, which has previously been guided at 46 – 48 million t.

The company’s Brazilian iron ore production, Minas-Rio production increased to 4.5 million t (wet basis) during 3Q16, a 28% increase compared to 2Q16, as the operation continues its ramp-up.

In July 2016, a provisional licence approval was granted and allowed immediate access to the next tranche of reserves, which brought forward an increase in availability and reduction in variability of ROM material, leading to overall improved operational performance in 3Q16. The final approval of this licence was obtained in October 2016.

Full-year production guidance for Anglo’s Brazilian iron ore remains unchanged at 15 – 17 million t (wet basis).

Manganese ore production decreased by 17% from 3Q15 due to revised production levels in response to market conditions. The mines are now running at the optimised rate following the decision to stop work at the South African Wessels underground mine following a fatality in June 2016.

Manganese alloy production decreased by 11% as the South African manganese operations continue to only operate one of its four furnaces due to market conditions.

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