UPDATE 1-Anglo American hits output targets but flags writedowns ahead
(Adds production figures, background on recent profit decline warnings)
By Silvia Antonioli
LONDON Jan 28 (Reuters) - Global mining company Anglo American said that a sharp drop in commodity prices would likely result in impairment charges for its 2014 financial year as it posted annual production ahead of its guidance for key commodities.
The company, which has lagged rivals for much of the past decade, is undergoing a restructuring focused on improving mining operations and selling less profitable assets.
Its turnaround efforts however have faced a rout in prices in copper, coal and iron ore, which make up much of its earnings.
"Given the sharply lower commodity price environment, particularly for the bulk commodities, Anglo American expects to record certain non-cash impairment charges as special items for the 2014 financial year," it said in a statement on Wednesday.
Output of iron ore, the biggest earner for the London-listed group, grew 14 percent to more than 48 million tonnes at its Kumba subsidiary, slightly ahead of its 47-million-tonne target. Its large Minas Rio iron ore project in Brazil, which started production late last year, added a further 688,000 tonnes.
In diamonds, which last year became Anglo's second-largest earner, output of 32.6 million carats was also slightly ahead of its target.
Production of copper at 748,100 tonnes was also ahead of target but down 3 percent from 2013 due to lower grades and maintenance stoppages.
Output growth however offers little relief against plunging prices. In December the company warned of a delay in reaching a return on capital target and on Friday, its platinum and iron ore units flagged sharp falls in their full-year earnings.
In platinum, where Anglo was hit by a five-month strike which ended in June, equivalent refined platinum production fell 21 percent to 1.8 million ounces, roughly in line with the company's expectations. (Reporting by Silvia Antonioli; editing by Louise Heavens and Jason Neely)
© Thomson Reuters 2017 All rights reserved.