Rand eats into strong Anglo profit

SOUTH African mining giant, Anglo American, lifted its net profit by 52% in the six months to June 30 thanks largely to a strong performance from its base metals division and record prices for coking and thermal coal.

Tim Treadgold

Higher prices for copper, nickel and zinc helped the diversified miner and paper producer report a profit of US$1.3 billion before exceptional items.

The latest result compared with US$856 million in the previous corresponding half year.

Anglo American chief executive, Tony Trahar, said the result could have been even better if the South African currency had not risen so rapidly against the U.S. dollar.

Trahar said the rand knocked US$170 million off the profit and was such a worry that Anglo American was considering some of its expansion plans.

Expansion plans in South Africa include the memorandum of understanding between Anglo American and BHP Billiton announced in May. The two giants will investigate a proposed expansion of adjacent coal resources in the Western Complex.

Should the proposed expansion prove viable, the establishment of the Western Complex would be an important development for the South African coal industry.