Anglo American defers platinum investment decisions, cuts diamond output

Mining group Anglo American said on Thursday it was postponing major project investment decisions at its platinum unit until at least 2017 and had cut diamond production in the face of soft demand.

In its production report for the three months to the end of September, the company said Anglo American Platinum's output rose 14 percent to 614,300 ounces compared with 541,000 ounces in the same period last year, when many of its mines were rebooting after a five-month strike.

The decision to defer any major project plans for platinum until at least 2017 comes after the company reached an agreement to sell its labour-intensive South African assets to Sibanye Gold and as the white metal's price remains at depressed levels.

Amplats has said its future lies in mechanised mining, which will require big investments in equipment and technology.

Amplats and its major South African peers are recovering from last year's strike, and an oversupply and low demand has pushed the price of the metal used in autocatalysts and jewelry down almost 40 percent from 2014's peak.

This month it slid to seven-year lows below $900 an ounce on worries about a drop in demand for diesel cars after carmaker Volkswagen admitted rigging diesel emissions tests.

Anglo American, like its global peers, is grappling with sliding commodity prices across the board, and exploration and evaluation spend for the quarter was down 34 percent to $70 million.

"Diamond production decreased by 27 percent to 6.0 million carats, following the decision to reduce production to better reflect current trading conditions," the company said.

Anglo's iron ore unit Kumba, which has also been hit by falling prices triggered by slowing economic growth in its main market China, said production fell by 12 percent to 11.4 million tonnes compared to the same period last year, though it was up 10 percent on the previous quarter.

Kumba also said 2015 production at its main Sishen mine was now likely to be 31 million tonnes, down from a previous guidance of 33 million tonnes.