Anglo American swings to annual loss after $3.9bn impairment charge

The recent plunge in iron ore prices has prompted mining giant Anglo American to write-down the value of certain assets by $3.9bn, pushing the company into the red for the 2014 financial year.

The company said it had delivered on all its major commitments last year such as operational performance, project delivery and portfolio restructuring targets, but weaker prices across most commodity classes led to a 25% fall in underlying operating profits to $4.9bn.

Falling metal prices had a $2.4bn adverse impact on underlying profits, while a five-month strike at its platinum operations in South Africa hit the bottom line by $0.8bn.

When including write-downs, $3.5bn of which related to its Minas-Rio iron ore project in Brazil, Anglo swung to a pre-tax loss of $259m in 2014, compared with a profit of $1.7bn in 2013.

Strong operational performances resulted in a 4% overall rise in production on a copper equivalent basis, but the fall in commodity prices lowered group revenues by 6% to $30.99bn.

Anglo held on to its dividend payment of 85 cents per share.

"2014 was a year of significant operational improvement against sharp commodity price declines amid generally adverse market conditions,” said chief executive Mark Cutifani.