Global resources group Anglo American is confident about the prospects for its 2005 financial year as reflected by the strong 30% increase in its total dividend per share for the 2004 year, Anglo Financial Director Tony Lea said during a conference call on Wednesday.
However, Lea said the group’s outlook was dependent on the OECD countries, which were slowing down, and China, which remained strong.
Regarding South African diversified mining group, Kumba Resources, Lead said Anglo remained in discussions with a variety of empowerment groupings and the outcome of these talks would determine whether Anglo’s stake in Kumba remained at 66,6% or declined to 49%, the level previously agreed with the South African government.
In December, Kumba got an unfavourable outcome from an arbitration ruling regarding the Hope Downs iron ore joint venture in Western Australia.
Lea indicated that irrespective of the ruling, Anglo, which has a 66,6% stake in Kumba, was confident about Kumba’s prospects in South Africa and Hope Downs.
Kumba’s recent result was a very pleasing one, Lea said.
Regarding platinum miner Anglo Platinum, Lea said Anglo had noted the increase in AngloPlat’s operations cost and changes in the group’s production outlook.
The rand has been very important in determining AngloPlat’s performance, Lea added.
Anglo is confident that AngloPlat will show an improvement during its 2005
financial year, Lea said.
In 2005, Anglo is targeting cost savings and efficiencies of $350-million from the $554-million achieved in 2004.
Anglo’s target for 2004 had been $250-million.
Some analysts have criticised Anglo for having the wrong product mix.
However, Lea said this surprised him as Anglo’s exposure to diamonds, gold and platinum had been an advantage over the past few years.
Regarding iron ore, Lea said Anglo had gained exposure to iron ore via Kumba and had been trying to get into the iron ore mining sector over a couple of years.
Regarding sugar and industrial group Tongaat-Hulett, Lea said that Tongaat-Hulett remained a non-core asset and that Anglo remained in talks with the group’s management.
At this stage there was no sign yet of a fall off in the commodity cycle with supply not meeting demand, Lea said.
“These [commodity] prices will result in an increase in supply,” Lea said. – I-Net Bridge