Anglo American posted a rise in quarterly output for its key commodities, with iron ore up and copper boosted by a ramped-up Los Bronces mine, while diamonds tumbled as weaker prices prompted a drop in production.

Platinum was another weak spot for the global miner, with output hit by safety stoppages affecting the entire South African sector. Anglo's own stoppages were more than double those of the fourth quarter of 2010.

The major trend you have seen across the majors has been increasing iron ore production -- it is where the margins are -- and they (Anglo) are following suit with that, Collins Stewart analyst Tim Dudley said.

Another positive was (metallurgical) coal which has also got strong margins. That should help offset weakness in platinum, which was well flagged and expected.

Iron ore, a key plank of Anglo's growth strategy, was up 5 percent at 12.4 million tonnes as the $1 billion (636 million pounds) Kolomela mine was brought in ahead of schedule during the quarter and, along with further improvements at Amapa in Brazil, helped offset a tougher quarter at Sishen in South Africa.

Stronger iron ore has been a feature across production numbers for the last quarter of 2011, as miners take advantage of good margins. BHP Billiton , the world's largest miner, has said it expected record iron ore production this year, shrugging off worries about Chinese demand.

While copper production across the sector has missed expectations for much of a poor 2011, Anglo, for whom copper represents roughly a third of profit, posted fourth-quarter output of 170,000 tonnes, 10 percent year-on-year and 22 percent higher than the third quarter when production was hit by blizzards and lower grades.

The Los Bronces mine, at the heart of the miner's tangled legal dispute with Chilean state copper producer Codelco , helped the recovery and, along with higher grades helped to offset the impact of stoppages at the Collahuasi mine.

Anglo has been battling Codelco in Chile's courts over a disputed option that could allow the world's largest copper producer to take a stake in Anglo's southern Chilean properties, including Los Bronces, into which the miner has already invested $2.8 billion. It provided no update on the dispute on Thursday.

Output of metallurgical coal, used in steelmaking, was up 4 percent at 4.1 million tonnes in the quarter, helped by Australian operations now recovered from the floods that hit production at the start of 2011. South African thermal coal production was in line with a year ago.

Anglo American shares were up 1.8 percent at 2,702 pence at 9:19 a.m., compared with a 2.5 percent rise in a sector lifted by U.S. promises of rock-bottom interest rates.


The picture was less positive for Anglo's platinum and diamond production, with diamonds down 24 percent year-on-year at 6.5 million carats and down 30 percent on the previous quarter, as De Beers increased maintenance in the light of what it said was short term global macro economic volatility.

Diamonds were one of the top performing commodities in the first half of 2011, but prices have since eased, affecting even producers like De Beers, one of the world's largest. Anglo struck a deal to acquire majority control of De Beers in November, buying out the Oppenheimer family for $5.1 billion.

Platinum was hit by safety stoppages that were more than double those a year ago, sending refined production down 19 percent and refined platinum production 9 percent lower.

Platinum producers in South Africa have been battered by power concerns and safety issues. Rival Lonmin warned on Thursday it could see sales and unit costs affected if stoppages continue at the current rate.

Anglo's Anglo Platinum unit said last week 2011 profit likely fell about a third, due to a black empowerment deal but also a high number of safety stoppages and higher costs for labour and electricity.

(Editing by Kate Kelland and Dan lalor)