Anglo American takes $3.9bn charge on sliding iron ore

Anglo American on Friday announced a write-down of $3.9 billion caused by sliding price of iron ore that has slashed the value of its Minas-Rio mining project in Brazil.
In an annual earnings update, mining giant Anglo American announced "commodity price-driven impairments of $3.9 billion (3.4 billion euros), including $3.5 billion at Minas-Rio".
The Anglo-South African company had purchased the Brazilian project around the time of the financial crisis for $4.8 billion to secure key supplies of iron ore -- a metal used to make steel.
Two years ago, it announced a $4.0 billion hit on the value of the project owing to delays that sent costs soaring.
Although the company managed last year to ship its first ore from the Minas-Rio project, "the steep drop in the iron ore price has resulted in a $3.5 billion post-tax write down", Anglo American chief executive Mark Cutifani said in Friday's results statement.
Consequently, the miner posted a net loss of $2.51 billion for 2014 compared with a loss post tax of $961 million in 2013.
Iron ore prices slumped 47 percent in 2014, pulled lower by a global supply glut and weaker demand from a slowing China.