South Africa: Commodities' Covid-19 Conundrum - Miners Have Mixed Results, Oil Majors Sink


A tale of two commodities asset classes has broadly emerged under the Covid-19 pandemic. Big-league miners such as Anglo American have had a hit in profits while weathering the storm. By contrast, oil majors have had to make massive asset write-offs as their earnings sink like stones.

As expected, global miner and South African corporate icon Anglo American reported a decline in profits in its interim results on Thursday, 30 July 2020. Still, the company is paying dividends and its Kumba Iron Ore unit last week announced a R7-billion mine expansion project in the Northern Cape. The Covid-19 pandemic has hit its bottom line, but the company is weathering the storm.

"The pandemic did materially impact production, with varying degrees of lockdown being the main driver for our 11% overall reduction in output and 16% decrease in revenue, alongside operational incidents at platinum group metals (PGMs) and Met Coal. These reductions were partially offset by strong performances from our Brazilian iron ore and Chilean copper operations. By the end of June [2020], we were back at 90% capacity across the portfolio," Anglo CEO Mark Cutifani said in a statement.

Anglo, which has its primary listing in London, posted underlying earnings...

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