‘Fitter’ Anglo and BHP back in black after prices recover

DIGGERS Anglo-American and BHP Billiton mined a rich vein of success today after improving commodity prices and drastic cost cuts led to a surprise swing into profits.

The two companies, which dig up everything from copper to iron ore, were in the doldrums 12 months ago but a resurgence in raw materials prices plus an effort to squeeze higher productivity out of far-flung mines has paid off. Thermal coal and iron ore prices have doubled over the past year.

Anglo, best known for its De Beers diamonds, climbed back into the black after higher sales of the precious stones and better earnings from coal. Full-year underlying earnings moved to $6.1 billion (£4.9 billion), reversing a $5.6 billion loss last year.

That was bolstered by a 50% jump in De Beers sales volumes to nearly 30 million carats.

Chief executive Mark Cutifani said Anglo was in “fighting shape” as he planned to restart the dividend by December and regain the 100-year-old company’s investment grade debt rating after cutting debt to $8.5 billion from $13 billion.

“This is not the company you knew three years ago,” he said. “We’ve streamlined and we are a lot fitter. I make no apologies for turning Anglo into the machine it is today.”

BHP, which is still dealing with fallout from the Samarco mine disaster, saw half-year profits move to $3.2 billion from a $5.7 billion loss last year. The dividend was upped 10 cents to 40 cents.

The miner’s Scottish-born chief executive Andrew Mackenzie warned “ill winds” of protectionism blowing from US were a threat.

@signorbow