Anglo American profit hit by strikes, logs $1.9 billion writedown
Mining giant Anglo American (LON:AAL) reported its second annual loss in a row Friday amid labour turmoil in its South African platinum operations, and a $1.9 billion writedown of its mining assets, though it also delivered some signs of improvement.
Anglo, the world's fifth largest diversified mining company, said it had a net loss of $961 million in 2013, though this was narrower than the $1.47 billion loss logged in 2012.
Net debt at the group also rose 26% to $10.6 billion. The figure contrasts sharply with Rio Tinto’s results yesterday, which cut debt and reported a return to profits driven by lower operational costs and capital spending.
Impairments on a string of South American mining projects and a reassessment of the value of its southern African platinum businesses were the main reason for the loss, taking the shine off a surge in iron-ore and copper production at the end of last year.
Anglo’s operating profit was $6.6 billion, ahead of analyst expectations of $5.6 billion, and total revenue was $33.1 billion. The group also reported improvements in most of its key divisions.
CEO Mark Cutifani acknowledged the firm is lagging behind rival diversified miners in coming out of a cycle of high capital expenditure, with its Minas Rio iron ore project in Brazil to be completed this year.
"We're pleased with the progress, but it's not anywhere where we need to be," he said in a statement Friday. “While I expect headwinds to continue in 2014 as we reset the business, the benefits of much-improved operational processes and performance will flow through largely in 2015 and 2016.”
Chile’s mine lifts copper output
Last month Anglo reported a rise in fourth-quarter output of all its main metals, a sign measures taken to improve performance are beginning to pay off.
Today, the miner said production of copper, the second-most important contributor to Anglo’s balance sheet after iron ore, jumped 24% to a company-record 214,400 tons in the same period. The figure was lifted by a turnaround in Chile's Collahuasi mine, which suffered from a breakdown last year, and a strong performance at its other Chilean Los Bronces mine.