LONDON (ShareCast) – (ShareCast News) – Mining giant Anglo American (LSE: AAL.L – news) said it expects writedowns of around $ 3bn-$ 4bn in the first half of this year relating to its Minas-Rio iron ore operations in Brazil and certain Australian coal assets. The company said the first six months of 2015 have seen significant further weakness and ongoing volatility in the prices of bulk commodities, particularly iron ore and metallurgical coal.
Its production report for the second quarter was mixed.
Diamond production, which makes up the biggest part of the miner’s earnings, was down 6% on the year to 8m carats.
Meanwhile, refined platinum output rose significantly, copper and nickel production fell and iron ore output rose 6% on the year to 12.2 million tonnes, reflecting the ongoing ramp-up at the Minas Rio iron ore project.
Panmure Gordon said that on the production side, the numbers look slightly better than expected, except for iron ore which is below its forecast at both Kumba and Minas Rio.
As for the writedowns, it said: “A further impairment of this magnitude will be a negative surprise for the market today.” At 09:57, shares were down 0.5% at 870.40p.
