Against a backdrop of industrial strife and lower prices for bulk commodities, Anglo American (AAL) turned in a creditable first-half performance. Underlying earnings rose 2 per cent year on year, while reported operating profits were up a third to $2.97bn (£1.75bn). This result was broadly in line with consensus estimates, but Anglo's current rate of progress does cast doubt over whether it can drive up its current return on capital of 10 per cent to the targeted rate of 15 per cent by 2016.
The five-month strike at the group's platinum mines reduced production by 40 per cent, trimming $385m off the bottom line. But it was lower commodity prices that really kept underlying earnings in check: the aggregate impact amounted to about $1bn. Prices for Anglo's Australian coking coal were down by nearly a quarter, while those received for the group's Kumba iron ore output were 17 per cent adrift of the 2013 equivalent. As a result, the underlying contribution from the iron ore division - the group's key earnings generator - was down by a quarter from a year ago.