Anglo American’s chief executive said he is still feeling confident, despite weak commodity prices and a lengthy mining strike in South Africa which hit its first-half profit.
Shares in Anglo, the smallest of the leading diversified miners, have lagged those of its peers for years, but under CEO Mark Cutifani, Anglo has vowed to turn the business around by cutting costs and selling underperforming assets.
The miner is aiming to boost its return on capital employed (ROCE) – a measure of the value a company gets out of its assets – to at least 15 per cent by 2016, from 11 per cent last year.
The company however, said ROCE had fallen by one percentage point to 10 per cent, under pressure from lower prices for some of the products it mines, particularly iron ore, its biggest earner, and from a five-month strike in South Africa which cut its platinum output by 40 per cent.
“This was never going to be a linear improvement,” Mr Cutifani said.
“I am actually more confident today about hitting our target in 2016 than I was 12 months ago, given the underlying operating performance and the potential we see.”
Brokerage Liberum maintained a sell recommendation on Anglo’s stock.