Anglo American posts huge loss for 2012 on impairment charges, strikes
Anglo American has reported a before-tax loss of $239m for 2012, compared to a profit of $10.8bn in 2011.
The 102% loss is primarily attributable to a $4.6bn post tax writedown on the value of the Minas-Rio iron ore project in Brazil, decreased commodity prices and industrial unrest at platinum operations in South Africa.
The writedown, reported last month, was caused by delays and budget increases at the Minas project.
Underlying operating profit fell 44% to $6.2bn for the period, while underlying EBITDA decreased by 35% to $8.7bn.
The decline in operating profits was a result of rising operating costs combined with lower prices across all commodities.
Anglo American chief executive Cynthia Carroll said that the firm came up against a tough macroeconomic environment in 2012, along with several industry-wide and company specific challenges.
"Record volumes of metallurgical coal, achieving benchmark equipment performance levels, and of iron ore and increased volumes of export thermal coal and copper helped to offset the impact of illegal industrial action, declining grades and higher waste stripping," Carroll said.
Carroll added that the company plans to restructure its South African platinum business following a review.
"We, of course, regret the potential impact on jobs and communities and have designed an extensive social plan to more than offset any such impact," Carroll noted.
Looking ahead, Carroll predicts improved economic prospects driven by rising investments in China and India.
Image: Anglo American remains confident about the Minas-Rio project in Brazil despite the recent write down. Photo: Anglo American plc.