SPARKLING TAILWIND

27th February 2015 By: Darlene Creamer

SPARKLING TAILWIND

While Anglo American is being forced to fend off strong price headwinds across most of its diversified portfolio, at least one tailwind propelled it forward in 2014 – diamonds. Anglo subsidiary De Beers managed to sell 34.4-million diamond carats, which delivered earnings before interest and taxes (Ebit) of $1.4-billion, 36% more than the $1-billion Ebit of 2013. However, Anglo’s overall iron-ore, coal and copper bedraggle went on to blacken diamond’s dazzle. In fact, with iron-ore turning full turtle, Anglo saw fit to rip $3.5-billion out of the carrying value of Minas-Rio, its nemesis iron-ore project in Brazil, previously valued at $5.6-billion. How things change! Only a couple of years ago, it was iron-ore that was contributing the 47% lion’s share to Anglo earnings and De Beers was down at 15%.