Mining trio on strong form

Miners were on strong form on Thursday, after Anglo American (AAL), Lonmin (LMI) and Petropavlovsk (POG) issued upbeat production numbers.

Anglo American

Reporting kicked off with mining giant Anglo American reporting its fourth-quarter production report.

The company appeared to be firing on all cylinders as it announced iron ore production up 5%, due to initial production from Kolomela mine and a continued improvement in performance at Amapá. Metallurgical coal saw "record production" from its Australian open-cut metallurgical coal operations, while copper production increased by 10% "due to the commissioning of the Los Bronces expansion and higher ore grades at Los Bronces, Collahuasi and El Soldado".

However, platinum refined production decreased by 19% due to "a greater number of safety stoppages resulting in lower mine production and increased processing of lower grade surface stockpiles". Additionally, De Beers's deliberate focus on increasing waste stripping resulted in diamond production falling by 24%.

Lonmin

Lonmin added to the joy, announcing year-on-year platinum production up more than 24% for the quarter to 31 December.

However, the company warned that the industry had been subject to "an uncharacteristically high level of safety inspections" from the Department of Mineral Resources (DMR), which had led to "an adverse effect on production".

As a result, underground operations at the platinum producer's Marikana mine produced 2.7 million tonnes during the first quarter of the 2012 financial year, a decrease of 50,000 tonnes or 1.8% on the first quarter of 2011.

Although the company maintained its sales guidance of 750,000 ounces of platinum for 2012, it warned that "platinum sales and unit costs will be adversely impacted should the current trend of production losses from safety persist".

Petropavlovsk

Petropavlovsk surged more than 6% as it boasted of gold production that exceeded the group's full-year production target of 600,000 ounces.

Improvement to mining operations resulted in a 56% increase in production at the group's flagship mine, Pioneer.

676,000 ounces of gold at $1,617 (£1,031) per ounce were sold in 2011, a 56% and 29% increase respectively on last year.

The group's 2012 target is 680,000 ounces, an increase of 11% compared to 2011.

For an understanding of what to look for when considering exposure to the sector, read: Analysing... Miners.