Anglo American 2013 loss narrows despite writedown

Global miner Anglo American said Friday that 2013 net losses improved, but it was weighed down by a vast impairment charge on assets, soft demand and strikes in South Africa. Losses after taxation narrowed to $961 million (702 million euros) last year, from $1.470 billion in 2012, it said in a results statement. Anglo took a huge $1.9-billion impairment charge on South American mining assets, particularly its Brazilian Barro Alto nickel project, and a re-assessment of the value of its southern African platinum businesses. Revenues grew by one percent to $33.1 billion last year, it added. "Against a backdrop of weaker growth in the world economy in 2013, particularly in the emerging and developing economies, commodity demand remained soft with a decline in average realised prices for most of the commodities Anglo American produces," said chief executive Mark Cutifani. "For our business, the effects of such a difficult macro-economic environment were exacerbated by operating challenges at key operations and adversarial labour relations in South Africa. "Despite the challenges, significant operating improvements in copper, metallurgical coal and diamonds in the second half of the year and the sharp fall in the South African rand in the final quarter, drove a 6.0-percent increase in underlying operating profit to $6.6 billion." Underlying operating profit was also boosted by the first full-year contribution from diamond division De Beers, in which Anglo took a controlling stake in 2012, lifting its holding from 45 percent to 85 percent. Anglo expressed confidence in the outlook for this year and beyond, boosted by cost-cutting and the strengthening global economy. "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," Cutifani added. "In the immediate-term, we have already delivered significant sustainable improvements, including early operational improvements, overhead reduction and reducing early-stage project expenditure. "The world economy should also strengthen in 2014 and 2015 as we continue to emerge from the challenges of the global financial crisis. "China should continue to grow by around 7.0 percent and the diminishing effects of fiscal tightening should support a firmer recovery in the US and beyond."