Despite warning of a tough 12 months ahead and announcing its intention to cut over 6 000 jobs across its international asset portfolio, global miner Anglo American has maintained an interim dividend of $0.32 a share for the six months ended June 30.

The diversified miner said last month that the first six months of the year saw “considerable” further price decreases for its products amid a volatile market environment and economic uncertainty in certain key markets, such as China, which CEO Mark Cutifani warned was likely to continue well into next year.

Falling prices were seen across most products, with the realised price of iron-ore down 41%, platinum down 19% and copper 18%, which was partially mitigated by a “solid” cost performance and favourable exchange rates.

“I expect the current period of volatile markets and economic uncertainty, fuelled in part by pockets of geopolitical tension, to continue. We’re hoping things will improve in 2016, but we’re not banking on it,” he said on a media conference call.

Noting “significant” further weakness and ongoing volatility in the prices of bulk commodities, particularly iron-ore and metallurgical coal, in the six months under review, the miner said it had reviewed its near- and longer-term commodity price assumptions midyear, while also noting the gradual and ongoing reduction of consensus prices within what remains a range of forecasts.

“As a result, Anglo American has recorded noncash impairments within special items relating to the Minas-Rio operation, in Brazil, and coal assets of $3.5-billion after tax,” noted Cutifani.

The group reported underlying earnings of $900-million, with underlying earnings before interest and taxation (Ebit) decreasing by 36% to $1.9-billion.

The group’s overall cash costs decreased in real terms, which Cutifani attributed to cost-reduction initiatives across the group and falling input costs, such as for diesel, rubber and steel.

The free-on-board cash costs of the group’s Australian coal business decreased by 13% owing to increased productivity at underground mines and cost reductions, while copper unit costs across its international portfolio increased by 4% – with lower volumes at the Los Bronces copper mine, in Chile, owing to water conservation measures being the primary driver.

Anglo American, meanwhile, continued to experience falling mining inflation, with Chile, Australia and South Africa experiencing below-consumer-price-index cost inflation, compared with the first half of the prior year.

“Our work to drive yet greater operational performance and productivity has continued, with a 14% decrease in copper equivalent unit costs in dollar terms.

“Cash costs were down by $600-million, partially offsetting the $1.9-billion underlying Ebit impact of sharply weaker commodity prices,” he held.

Describing operational performance across the majority of the businesses as “encouraging”, the group reported a 4% increase in coal production from its Australian and Canadian operations, despite Peace River, in Canada, being placed on care and maintenance in December.

Minas-Rio produced three-million tons over the six months after starting operations in the fourth quarter of last year and reaching first ore-on-ship in October.

In addition, total equivalent refined platinum production increased by 55%, primarily owing to the nonrecurrence of the industrial action that took place in South Africa in 2014.

In contrast, nickel production decreased by 34%, as a result of the furnace rebuild at Barro Alto, in Brazil, while copper production decreased by 10%, largely as a result of the shutdowns of the processing plants at Chile-based Los Bronces to manage water reserve levels.

“Overall [operational] performance for the half-year was solid and largely in line with our expectations, reflecting a number of planned or otherwise expected impacts, such as the rebuild of the nickel furnaces in Brazil and the water shortage at our copper business in Chile.

“Of particular note was the performance of the platinum business following last year’s strike, with the Mogalakwena openpit, in Limpopo, delivering strong volume, productivity and unit cost improvements, while the Rustenburg operation, in the North West, also showed greater productivity with its now optimised mine plan,” the mining head commented.

The underlying Ebit of Anglo American’s iron-ore division, Kumba, decreased by 57% to $513-million over the six months, mainly as a result of a 46% fall in the iron-ore benchmark price to an average of $60/t.

Total cash costs, however, declined by 4%, with costs associated with the 12% increase in waste mined being offset by an 11% weakening of the rand against the dollar.

Record export sales of 23.2-million tons were achieved – an increase of 18% – on the back of an improved logistics performance and the shipment of 2.3-million tons through the multipurpose terminal at the Port of Saldanha Bay, in the Western Cape.

Meanwhile, Samancor – Anglo American’s manganese arm – narrowed its underlying Ebit by 64% to $36-million, driven primarily by lower manganese prices, combined with an 8% decrease in ore sales.

Anglo American Platinum’s underlying Ebit increased by about $273-million for the six months, owing to improved operational performance following the 2014 strike, higher sales volumes than in the first half of the prior year, the weakening of the rand against the dollar and a yearly stock adjustment.

Year-on-year cash operating costs per equivalent refined platinum ounce decreased by 30% to R19 386/oz, owing primarily to the impact of the industrial action on costs in the first half of last year.

Total equivalent refined platinum production rose 55% to 1.1-million ounces owing to a “strong” mining performance at Mogalakwena and Rustenburg, as well as a return to normal production.

Diamond business De Beers’ underlying Ebit decreased by 25% to $576-million over the first half of the year, primarily owing to softer rough diamond demand, resulting in weaker revenue, which was partially offset by lower operating costs and favourable exchange rates.

Total sales decreased by 21% to $3-billion, with rough diamond sales decreasing by 21% to $2.7-billion.

Average realised diamond prices increased by 7% to $206/ct .

Cutifani, meanwhile, reported that the “transformation” of the global mining group – initiated in November – was progressing, despite “considerable” external challenges.

He expected the operational turnaround, which would see the company offloading noncore assets, to generate $1.2-billion in underlying Ebit upside over the next 18 months, in addition to the $1.7-billion delivered to date.

“Structurally, we are focusing the portfolio around those assets that are of the scale and quality to generate the most value for the group. We expect to generate proceeds of at least $3-billion from asset sales, including the $1.6-billion received from the sale of our 50% interest in Lafarge Tarmac,” he noted.

Combined with planned capital expenditure reductions of up to $1-billion by the end of 2016, he said, the group was on track to deliver its long-term net debt target of between $10-billion and $12-billion, with net debt after the Lafarge Tarmac proceeds at $11.9-billion.

“Having defined the group’s portfolio and improved operational performance, now is the right time to accelerate the rightsizing of the organisation that supports the future business,” he added.

The group was now targeting a $500-million total cost saving, of which $300-million would be realised from its ongoing core business through the reduction of 6 000 overhead and other indirect roles – including those that would transfer with the businesses it was divesting.