The breakdown of the impairments was not revealed in the recent Q2 production report although Anglo will post its interim financial results on July 24.
Anglo said it expected to record non-cash impairments of $3-4 billion for the recently ended financial year relating to its Minas-Rio iron ore mine in Brazil and “certain Australian coal assets”.
On the Aussie coal portfolio front, Anglo has long sought to sell its power station-feeding Callide open cut coal mine in Queensland and the closed (in 2007) Dartbrook underground coal mine in the Hunter Valley of New South Wales.
There has also been previous press speculation that Anglo’s Dawson and Foxleigh mines in Queensland were put on the market.
While the Aussie coal assets are evidently yet to lure any buyers as the severe coal downturn continues the costs associated with the Minas-Rio mine, a pet project of former Anglo CEO Cynthia Carroll who was rumoured to have been “forced out” in 2013, keep stacking up over the years.
“Licensing problems, construction challenges and navigating the many political and social challenges in Brazil have pushed the cost to $8.4-billion, more than double the initial $3.6-billion budget,” South Africa’s Sunday Times commented in May.
“Anglo's shareholders also had to stomach two big write-downs on the project, the latest one of $3.5-billion put through by Carroll's replacement, Mark Cutifani, this year. This made it one of the priciest projects to be built in recent years, and at the low iron ore prices it is unclear when shareholders will receive a return.”
Production results
Anglo produced 5.25 million tonnes of export met coal in the recent quarter which was 5% up from the Q1 and 9% higher year-on-year.
The Moranbah North longwall mine in Queensland and development coal from the nearby Grosvenor longwall project played a role while the Grasstree underground coal mine in the state also performed well.
“Moranbah production was higher due to a longwall move in Q2 2014, and first development coal was delivered from Grosvenor, more than offsetting Peace River Coal [Canada] being placed on care and maintenance in December 2014,” Anglo said.
“Strong productivity at Grasstree resulted in only marginally lower production despite a longwall move in Q2 2015.”
Export thermal coal output reached 1.33Mt – 7% higher than the March quarter yet 38% higher year-on-year.
Weather impacts to the Callide and Dawson mines in Queensland and the Drayton mine in NSW were behind the differing production swings.
“Australian export thermal coal production increased by 38% [year-on-year] to 1.3 million tonnes due to Callide producing an export coal product and a change in mix (to thermal coal) at Dawson due to the impact of Cyclone Marcia on the mine sequencing,” Anglo said.
“Export thermal volumes decreased by 7% compared to Q1 2015 as Drayton production was impacted by severe weather in April.”
Anglo said that export thermal coal production in South Africa was broadly flat at 4.3Mt while production from the Cerrejon thermal coal mine in Colombia was slightly higher with Anglo’s 33% stake resulting in 2.9Mt for the recent quarter.
