Anglo chief warns of challenging year ahead

 
Suzie Neuwirth
FTSE 100 miner Anglo American’s chief executive yesterday reaffirmed that the company’s turnaround was in motion, but warned that headwinds would continue to impact performance in 2014.

Mark Cutifani, who took over at the helm of Anglo earlier this year, told investors that he is targeting a return on capital of over 15 per cent by 2016, to be achieved by increasing profits to $3.5bn (£2bn).

He said he had already identified ways to achieve around 85 per cent of the extra earnings needed to meet the level of return he expects.

“While I expect headwinds to continue in 2014 as we reset the business, the benefits of much improved operational processes and performance will flow through largely in 2015 and 2016,” he said.

Like its peers, Anglo has been struggling to maintain profitability at a lull in the commodities cycle, with a slowdown in demand from China, the world’s second largest economy, dragging down metal prices. Production in its South African mines has been hindered by ongoing labour tensions.

Shares fell 1.4 per cent.