Two months after avoiding BHP (ASX:BHP), Anglo American has started cleaning up its confused businesses by taking a fresh $1.6 billion write-down on its Yorkshire fertiliser mine in the UK.
This is the second write-down on the project in a year. Last year, the cut was $1.7 billion as Anglo looked for a partner for the troubled project.
In its June half-year report, Anglo American said it expects to reach a deal for the sale of its coal assets by early 2025, despite a fire at one of its mines, the Grosvenor underground operation in central Queensland.
Revenues in the half-year to June 2024 dropped by 8% to $14.5 billion, while underlying profits were down 23% to $1.29 billion. Net losses were $672 million on a statutory basis.
EBITDA was $5 billion, down slightly from $5.1 billion a year ago but higher than market forecasts of around $4.6 billion.
The miner had already announced it would slow down the development of the fertiliser (polyhalite) mine pending a final investment decision as part of a restructuring of its businesses.
Cutting costs by $1.7 billion was another part of its defense against BHP’s offers, with capital spending also reduced by $1.6 billion.
“Our focus on operational performance is delivering results, most notably in our Copper and Premium Iron Ore businesses, with EBITDA margins of 53% and 43% respectively,” said CEO Duncan Wanblad.
He added that the coal sale would proceed even after the fire at Grosvenor.
The costs associated with the fire and getting the mine back to production are not yet known. A similar fire at Peabody's North Blackwater mine is expected to cost more than a billion dollars by the time it resumes production later this year, effectively creating a whole new mine with production not reaching full capacity until 2026.
On Thursday, Anglo announced plans to conduct a two-stage auction process for its coal assets, including Grosvenor, and added that the mine would likely resume operations under a new owner.
“There are so many interested potential buyers for this set of assets,” Wanblad told the media at a briefing.
“Our expectation is that hopefully by the end of this year, very early next year…we will have a deal,” he added.
Anglo also reported that its nickel assets in Brazil have attracted interest from potential buyers.
“We have had inbound interest from a number of credible parties and we will be starting a formal process later this year,” a spokesperson told Reuters.
This interest comes despite BHP putting its WA nickel business on a care and maintenance basis for the next three years and taking an impairment of more than $3.5 billion.
