First loss in a decade hits Anglo

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Anglo American slid to its first net loss for more than a decade in 2012 after profits fell across all units and the global miner wrote $4bn (£2.58bn) off the value of its flagship Minas Rio iron ore project in Brazil.

Anglo, like rival Rio Tinto a day earlier, promised caution in future spending. Its 44 per cent drop in operating profit to $6.2bn was expected, but the impairments linked to Minas Rio and Anglo’s bruised platinum unit resulted in a net loss, or loss attributable to shareholders, of $1.5bn.

Minas Rio, where delays and permit troubles have driven costs to more than three times original estimates, has been seen as Anglo’s most significant failure of recent years. Anglo had already said last month that it would write $4.6bn off the value of both Minas Rio and platinum projects.

The miner sought to pacify investors with a 15 per cent increase in its dividend which helped lift its shares yesterday, though it cautioned future increases would be tempered by its spending plans.

Anglo’s spending is expected to peak this year at between $7.5bn and $8bn, thanks to costs at Minas Rio and Australian coking coal project Grosvenor. That will ease to between $6.5 and $7bn in 2014 as the miner progresses to new projects including copper operation Quellaveco in Peru.

Departing chief executive Cynthia Carroll, one of several mining executives to have fallen foul of investors angry over perceived errors and poor returns, said she had no regrets.

“We did not go after a huge acquisition, or an enormous company. We did not have attempted acquisitions and then failed acquisitions, like some of our competitors,” she said.