Anglo logs upbeat results, but Minas Rio, Amplats still a thorn in Cutifani's side
Shares of Anglo American (LON:AAL) rose 2.5% in London after the miner said first-quarter output was higher across most commodities including copper, iron ore and diamonds.
However the miner’s platinum output dropped partly because of the several strikes affecting its operations in South Africa and the recent volatility of the sector.
The diversified miner, the world's biggest platinum producer, said production of the metal fell 2% to 583,000 ounces in the three months to the end of March, compared with the same period a year earlier.
According to industry experts, the platinum division (Amplats) and the much over budget Minas Rio iron-ore project in Brazil, will continue to give the company’s new CEO, Mark Cutifani, a few headaches.
Amplats posted its first operating loss —$715 million— in 2012 and saw cost increases of over 15% a year, as it counted the cost of two months of wildcat strikes at several mines.
Cutifani, who replaced Cynthia Carroll on April 3, will also has to deal with the several times delayed Minas Rio iron-ore project in Brazil, considered the most expensive iron ore project on the planet. The project, Anglo’s major capital allocation fiascos of recent years, forced the company to take a $4 billion writedown early this year and it was largely responsible for Carroll's deteriorating image.
Iron ore, copper come to rescue
Anglo’s iron-ore output increased 2.3% to 10.3 million metric tons thanks to higher output from its South African Kolomela mine. Iron ore and manganese accounted for 37% of the company's underlying earnings before interest, taxes, depreciation and amortization, or Ebitda, last year.
Copper was the company's second-largest contributor to earnings after iron ore, accounting for 25% of underlying Ebitda in 2012.
Production jumped 1.2% to 170,400 tons in the first quarter, as Chile’s Los Bronces mine production more than offset lower output from the country’s Collahuasi, after a scheduled 45-day shutdown of a key mill from March 21.
The company also introduced today its sustainable development report 2012, "Creating Value with the Future in Mind.” Last year Anglo achieved the highest score in the mining industry in the Dow Jones Sustainability Index and was commended by the Carbon Disclosure Project and entered the Carbon Disclosure Leadership Index for carbon disclosure information and actions to reduce carbon emissions.