Anglo American (LSE:AAL) announced on Thursday that its underlying earnings for the first half of 2025 fell 20% to $3 billion, compared to $3.7 billion in the same period last year. This drop was primarily driven by softer demand for rough diamonds and a decrease in copper production, which also caused the group’s EBITDA margin to contract from 37% to 32%.
The downturn was mainly attributed to De Beers, which swung to a $189 million loss, down from a $30 million profit in H1 2024. Diamond output declined 23% to 10.2 million carats, with rough diamond sales volumes falling 13%. Meanwhile, the average price per carat decreased by 5% to $155, and unit costs edged up slightly from $85 to $87 per carat.
Copper EBITDA shrank 14% to $1.76 billion, reflecting a 13% drop in production influenced by lower ore grades and water restrictions in Chile. Production from Chile fell sharply by 25%, although Quellaveco in Peru saw a 6% rise in output. Iron ore earnings remained steady at $1.41 billion, supported by a 2% increase in total production. Minas-Rio in Brazil boosted production by 7%, offsetting a 2% dip at South Africa’s Kumba mine.
Group revenue from continuing operations reached $8.95 billion. Underlying earnings per share halved to $0.32 from $0.64. Anglo American held its interim dividend steady at $0.07 per share, amounting to $0.1 billion, consistent with its 40% payout ratio.
Return on capital employed dropped to 9% from 12%, while net debt inched up slightly to $10.8 billion from $10.6 billion at the end of last year. Operating cash flow fell to $3.3 billion from $4 billion, with capital expenditures decreasing to $1.6 billion from $2.1 billion. However, free cash flow from continuing operations improved to $322 million from $214 million.
The company reported $300 million in cost savings during the period and remains on track to achieve $500 million by the end of the year. Anglo American also completed the spin-off of Valterra Platinum and confirmed ongoing asset sales as part of its simplification strategy.
Tax and royalty expenses dropped to $1.99 billion from $2.48 billion, while local procurement spending declined to $5.1 billion from $6.2 billion.
Safety performance included two workplace fatalities—one in Brazil and one in Zimbabwe. The total recordable injury frequency rate improved to 1.20 per million hours worked from 1.69, and occupational disease cases decreased from nine to four.
Production guidance for 2025 remains unchanged: copper output is expected between 380,000 and 410,000 tonnes in Chile and 310,000 to 340,000 tonnes in Peru. Iron ore production guidance is set at 35–37 million tonnes for Kumba, with similar volumes expected at Minas-Rio. De Beers anticipates diamond production between 20 and 23 million carats.
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