Some Anglo-American units in South Africa could be a fit for Glencore

17th Feb 2014 17:32

Market speculation continues to surround big miner Glencore Xstrata's intentions after its decision to list its shares in Johannesburg last November. Glencore, which is the world's biggest listed commodities supplier, has been touted as a potential suitor for Anglo-American, a name inextricably linked to the South African mining industry. The Financial Times reported that some of Anglo's assets in South Africa could make a natural fit for Glencore, especially after the former's strong full-year results posted last week. Despite a 7% fall in earnings to $2.7bn, pre-tax profits at Anglo were $1.7bn compared with a loss of $171 in 2012. Underlying operating profits rose 6% to $6.6bn with half of that coming from the iron ore-producing unit Kumba. However, the newspaper said other Anglo operations in the country such as platinum need restructure and labour and power costs are on the increase. It added that eight of Anglo's top 10 operations were on budget in the second half of last year compared with only two in the first six months, although it was unclear how quickly spending could fall in 2015 and 2016. In addition, Anglo's net debt rose by more than $2bn to $10bn last year and its dividend was held.FPAB