Chile dispute overshadows Anglo

Abnormally high rainfall and snow were partially to blame for a 13 per cent operating profit fall at Anglo’s copper operation - although Chilean labour disputes and falling grades also played their part. But, while those factors cancelled-out a 6 per cent rise in realised copper prices, they were easily overshadowed by a dispute with Chile’s state-owned copper miner, Codelco, over Anglo’s legal right to sell a $5.4bn stake in its Chilean business to Japan’s Mitsubishi Corp.

Anglo’s copper unit, however, was the only part of its mining operation to suffer a reversal. In contrast, Anglo’s iron ore, metallurgical coal and diamond segments grew operating profits by 23 per cent, 52 per cent and 33 per cent, respectively. Even the troubled platinum business made headway in 2011, with operating profit up 6 per cent. This all helped boost net cash inflows by a fifth to $9.36bn which, along with disposal proceeds, enabled Anglo to cut net debt by $6.01bn to $1.37bn.

Anglo also spent $5.1bn in the period buying the Oppenheimer family’s interest in the De Beers diamond business - which extended Anglo’s stake to 85 per cent. That diamond dominance looks timely - in the coming months the group's ability to compete effectively in industrial resource markets could come under pressure should the proposed merger of Glencore and Xstrata go ahead. Nevertheless, Anglo remains confident that it can deliver a 35 per cent organic production growth by 2014.

Prior to these figures RBC Capital anticipated 2012 EPS of $5.04 (2011: $5.51).