Anglo resumes dividend payments

Brendan Ryan | Fri, 30 Jul 2010 08:59

[miningmx.com] -- ANGLO American has reinstated dividend payments declaring a US$0.25c per share interim dividend on the back of a doubling in operating profit for the six months to end-June.

Operating profit including associates from core operations rose 114% to $4bn (previous comparable six months - $1.9bn).

However, attributable profit dropped 31% to $2.1bn ($3bn) while basic earnings a share were also 31% down at $1.71 ($2.47). The $3bn attributable profit for the six months to end-June 2009 included $1.1bn from the sale of the group's stake in AngloGold Ashanti.

CEO Cynthia Carroll commented the restructuring of both platinum and De Beers had generated a new level of operational performance in both businesses.

She added, “our near term production growth is a clear differentiator for Anglo American and will be delivered by four major strategic projects that we are developing.”

These are the Barro Alto nickel project in Brazil, the Los Bronces copper operation in Chile, the Kolomela iron ore project in South Africa and the Minas Rio iron ore project in Brazil.

Carroll added Anglo’s four largest, near-term strategic growth projects “ are well placed on their respective industry cost curves, have long resource lives and are set to enter production from early 2011 onwards, in what is expected to be a growing commodity demand environment.”

However, she confirmed that the earliest the Minas Rio project could get into production would be 2013 following delays on the permitting process.

She commented, “a number of key approvals remain outstanding and these are on the critical path of the project therefore impacting the time and cost to complete.

“We have considerable resource deployed to resolve these issues, including constructive high level dialogue with the authorities in Brazil.

“Once the remaining initial approvals are granted, we believe it will take 27 to 30 months to construct and commission the mine and plant and to deliver the first ore on ship.”

Turning to the outlook Carroll commented, “the near term outlook for the world economy has become more uncertain in recent months.

“In 2009, there was a rapid bounce in global industrial activity in response to the unprecedented policy stimulus and a turn in the inventory cycle.

“More recently, leading indicators have indicated less favourable conditions. Inevitably, there will be some consolidation after the initial bounce-back as the positive effects from the stimulus and inventory cycle fade.

“Anglo American remains confident about the outlook for the industry in the medium to long term with the process of industrialisation and urbanisation in China, India, Brazil and other emerging countries continuing to drive demand for its key commodities.”