Anglo American PLC on Thursday reported that its interim dividend more than halved as profit tumbled due to sluggish commodity prices and higher input costs thanks to inflationary pressures.

For the six months that ended June 30, the London-based mining company posted a 55% drop in pretax profit to $3.03 billion from $6.80 billion in the corresponding period last year.

For the January-June period, revenue fell by 13% to $15.67 billion from $18.11 billion.

Underlying earnings before interest, taxes, depreciation and amortisation of $5.1 billion was 41% lower than $8.70 billion, largely due to weaker product prices due to lower commodity prices and global cost inflationary pressures, which increased its input costs.

Average market prices for the group’s basket of products decreased by 19% compared with the first half of 2022.

The platinum group metals basket price decreased by 29%, primarily driven by rhodium and palladium, which decreased by 47% and 29% respectively. The realised price for hard coking coal slumped by 31% and the iron ore price fell by 22%.

Anglo American declared an interim dividend of $0.55, down 56% from $1.24, following sharply lower earnings. Earnings per share declined by 66% to $1.04 from $3.03.

‘Macro headwinds - principally, weaker prices for our products and input cost inflation - certainly weighed on our first half financial performance,’ Anglo American Chief Executive Duncan Wanblad said.

The mining group said production volumes increased by 10% on a copper equivalent basis, primarily driven by the ramp-up of its new Quellaveco copper mine in Peru, strong operational performances at its iron ore assets in Brazil and South Africa, as well as higher production from its steelmaking coal underground and open cut operations in Australia.

But lower grades hurt production at Los Bronces and Collahuasi in Chile, as well as Mogalakwena in South Africa and nickel.

Output was marginally lower at De Beers as the Venetia mine transitions from open pit to underground operations.

Anglo American said it had appointed John Heasley as finance director, after announcing in May that Stephen Pearce had decided to retire.

Heasley is expected to join Anglo American by no later than the end of 2023.

Anglo American also said its subsidiary Anglo American Platinum Ltd had picked Craig Miller as its new CEO, with effect from October 1.

Going forward, Wanblad said the diversified miner is on track to deliver on its full-year production guidance, which includes a significant anticipated step-up in volumes in the second half.

Its PGM estimate ranges between 3.6 million ounces and 4.0 million ounces, compared to 4.02 million ounces in 2022.

Iron ore output is projected to be between 57 million tonnes and 61 million tonnes from 59.3 million tonnes.

Copper is guided for growth to between 840,000 tonnes and 930,000 tonnes from 664,000 tonnes, while steelmaking coal is likely to rise to between 16 million and 19 million tonnes from 15.0 million tonnes.

Diamond production is seen slowing to between 30 million and 33 million carats from 34.6 million carats, and nickel is expected at between 38,000 tonnes and 40,000 tonnes from 39,800 tonnes.

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