Anglo American takes up to $4bn hit on falling commodities
Anglo American revealed Thursday a writedown of up to $4 billion (3.7 billion euros) sparked by sliding commodity prices that cut the value of its Brazilian Minas-Rio iron ore project and Australian coal assets.
“The first six months of 2015 have seen significant further weakness and ongoing volatility in the prices of the bulk commodities, particularly iron ore and metallurgical coal,” the resources giant said in a second-quarter production statement.
“As a result, Anglo American expects to record non-cash impairments within special items at 30 June 2015 relating to Minas-Rio and certain Australian coal assets of approximately $3.0-$4.0 billion on a post-tax basis.”
Anglo American added that it has “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 Anglo-South African firm has made a string of costly writedowns on the value of Minas Rio, which it purchased at around the time of the financial crisis for $4.8 billion to secure key supplies of iron ore.
In February, the group had announced a separate $3.5 billion charge on the value of Minas-Rio, blaming sliding prices for iron ore — a metal used to make steel.
And in its 2012 earnings, Anglo took a $4-billion hit on the value of the project, owing to delays that sent costs soaring.