Broker snap: Anglo American 'under review'

21st Oct 2010 11:05

Panmure Gordon is reviewing its forecasts and 'buy' recommendation for Anglo American after the mining giant released mixed production figures in its interim statement today.In the third quarter, Anglo Platinum's output increased 11% from the same period previously to 0.70 million ounces, with an expected 2.5 million ounces to be produced for the full year. However, the broker notes that "cash costs in the period rose to just over £1,085/ounce from £1,058/ounce in the first half. Given this, Anglo Platinum's target to keep nominal cash costs flat at 'around £1,013/ounce' both this year and next looks increasingly unachievable".Analyst Alison Turner has drawn attention to the absence of an update on the group's Minas Rio project, located in Brazil. "Discussion with company investor relations suggest that the company is positive on the progress made, however until outstanding permits are received the uncertainty over capex and timing which existed at the half remains," said Turner.Additionally, the group's South African-based iron ore company Kumba saw production and sales impacted by planned rail maintenance in August and three separate train derailments during the quarter.As a result, the broker is placing its 2,871p target price and 'buy' recommendation under review.