Anglo boosts result despite gold setback

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The Independent Online
TIGHT cost control and adept hedging helped Anglo American, the giant South African group, to boost profitability at its mines during the final quarter of last year despite falling gold prices, writes Gail Counsell.

Fourth-quarter after-tax profits at mines operated by Anglo's gold and uranium division were 33 per cent up on the previous quarter at 202.7m rand ( pounds 43m).

Full-year profits at the Vaal Reefs, Elandsrand and Western Deep mines were up 5.3 per cent on 1991 at 357m rand.

Costs rose by only 1 per cent during the quarter while forward selling meant that, despite a dollars 30- an-ounce decline in the gold price to less than dollars 330, Anglo received around dollars 353 an ounce for its gold.

The drop in the price is partly attributable to sales by central banks, which jointly hold around 15 years' world production.

But Clem Sunter, head of the division, said the risk of further sales was minimal. He was confident increased jewellery sales as the US economy recovered would mean higher gold prices in 1994.

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