Anglo profits up 28% – thanks to platinum

Roadwin Chirara

BOOSTED by the increased demand for platinum group metals and reduced operational expenditure, Anglo American plc’s operating profit increased by 28% to close its half-year at US$2,9 billion.


“The significant growth in operating profit in the first half reflects the ongoing favourable trading environment for many of the group’s commodities, as well as the progress made over the past few years in improving the operating efficiency of Anglo American’s assets, growing the assets base and leveraging procurement spend,” the company said.


“Prices for platinum, gold, diamonds, coal and base and ferrous metals remained healthy on the back of robust growth in China and the US, coupled with limited growth in productive capacity,” said Anglo.


The Chinese market currently accounts for over 20% of world demand for platinum group metals.


Anglo’s profit attributable to shareholders however declined by 17,4% to close at US$1,8 billion.


Anglo attributed the decrease in attributable profits to the reduction in net profit on disposals.


“The decrease in profit attributable to equity shareholders to US$1,838 million is due to a reduction in net profit on disposal compared with the prior period,” the company.


The conglomerate headline earnings jumped 42,5% to close the half-year at US$1,2 billion compared to last year’s figure of US$870 million.


The company’s net operating assets at the half-year-end closed at US$36,6 billion, a registered decline of 0,8% from the previous levels of US$36,9 billion the same period last year.


Net cash inflows generated by the company increased by 37,3% to US$2,9 billion compared to previous levels of US$2,1 billion.


The company said it had approved projects worth US$5,1 billion of which US$8 billion worth of investment projects were still to be approved.


“Anglo American has spent $15 billion on acquisitions and its growth profile is one of the strongest in the industry, with $5,1 billion of approved projects and $8 billion of unapproved projects across a range of commodities,” the company said.


Anglo American plc through its platinum subsidiary, Angloplat, is currently developing the US$90 million Unki Platinum project in the Great Dyke in conjunction with Anglo American Zimbabwe (Amzim).


The project, when complete, is expected to increase the conglomerate platinum production levels in line with increased demand on the world market.


The initial phase of the project is expected to produce about 85 000 tonnes of ore per month and 58 000 ounces of platinum a year.


Mining in the first phase of the project is scheduled to start in 2007/8.