Anglo American in $1bn share buyback as interim earnings rise

Anglo American said it would return $1bn (£800m) to shareholders through a share buyback as half-year core earnings increased 19% to $5.5bn.

Production fell 2% on a copper equivalent basis, as increases in copper and iron ore were offset by operational changes in the coal division, lower production at DeBeers' Venetia mine as it changed from open pit to underground; and unscheduled plant maintenance at the Kumba iron ore mine.

DeBeers' rough diamond production fell by 11% to 15.6m carats, primarily as additional production was not ramped up to compensate for Venetia's transition, as a result of weaker demand experienced in the period.

Copper production increased by 2% to 320,200 tonnes, largely due to strong mine and plant performance.

“The group expects to deliver $0.4bn of cost and volume benefit to underlying earnings before interest, tax, depreciation and amortisation for 2019,” Anglo said in a statement.

“The second quarter saw a recovery in metallurgical coal from the impact of longwall moves and refined production at platinum group metals is also expected to recover during the second half.”

“A further contribution to productivity is anticipated from the continued successful restart at Minas-Rio.”

Anglo also said it had agreed to extend the life of the Capcoal undergroundhard coking coal operations in Queensland, Australia by six years, to 2028.

"With an expected attributable capital cost of $226m, development work is expected to begin in September 2019, with first longwall production of premium quality hard coking coal in early 2022," the company said.