Will Anglo American Profit From Its Management Shake-Up?

Anglo American (LSE: AAL.L  ) is one of the most diverse mining businesses in the world, with major interests in iron ore, copper, coal, diamonds, and platinum. Yet, valued at a mere 28 billion pounds, it attracts far less attention than the likes of BHP Billiton and Rio Tinto.

Because of a glut of supply, platinum is now trading below the price of gold, which is very unusual (as Roland Head explained in this recent article on platinum miners). This lead to a slump in earnings, and Anglo American has now installed Chris Griffith, who previously ran its iron ore profit, as Amplats new chief executive. Norman Mbazima, head of thermal coal, will takes the reins at iron ore, which is currently Anglo's most profitable division.

Diamonds are also proving to be an issue, with profits falling at De Beers, where Anglo holds a 45% stake.

So perhaps it's just as well that the remainder of Anglo's businesses are progressing well. In its latest production report, released today, iron ore production was 12% ahead and copper production, Anglo's second-largest profit center, increased by 7%. Record production levels were seen in both thermal and metallurgical coal.

Anglo's interim results are due to be released next week, so investors won't need to wait long to see how much in the way of profits have been generated in the last six months.

The shares, at 2,050 pence, are down some 30% over the last 12 months, although most of the major miners have posted similar decreases. Anglo trades on a prospective price-to-earnings ratio of just over 8, and a forecast yield of 2.5%. While that looks cheap at face value, it's pretty much in line with the rest of the sector.

Are you looking to profit from this uncertain economy? "10 Steps to Making a Million in the Market" is the very latest Motley Fool guide to help Britain invest. Better. We urge you to read the report today -- it's free.

Further Motley Fool investment opportunities:

Stuart does not own any of the shares listed above. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1951001, ~/Articles/ArticleHandler.aspx, 9/22/2014 4:38:16 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement