Anglo American announces multi-billion dollar impairment

Anglo American has announced a writedown of $US4 billion due to its Minas-Rio iron ore project in Brazil and Australian coal assets.

The global miner said the first six months of 2015 had seen significant further weakness and ongoing volatility in the prices of the bulk commodities, particularly iron ore and metallurgical coal.

“Anglo American has therefore reviewed its near and longer term commodity price assumptions at the mid-year, while also noting the gradual and ongoing reduction of consensus prices within what remains a wide range of forecasts,” the company said.

In production, export metallurgical coal production out of Australia and Canada increased by 9 per cent to 5.3 million tonnes.

Anglo said Moranbah production was higher due to a longwall move in Q2 2014, and first development coal was delivered from Grosvenor.

Australian export thermal coal production increased by 38 per cent to 1.3 million tonnes as a result of  Callide producing an export coal product and a change in mix (to thermal coal) at Dawson.

Export thermal volumes decreased by 7 per cent compared to Q1 2015 as Drayton production was impacted by severe weather in April.

Results in iron ore were mixed, with production from Kumba Iron Ore decreasing by 9 per cent to 10.4 million tonnes due to mining feedstock constraints.

However record export sales of 11.7 million tonnes were achieved, an increase of 14 per cent, due to sale of stock at Saldanha and Qingdao.

Anglo said copper production decreased by 5 per cent to 184,500 tonnes in line with expectations.

Nickel production also saw a decrease to 6,300 tonnes, down 4 per cent.

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