Anglo American's write down - not quite as bad as Rio Tinto's
Seems like all the mining giants are suffering write-downs at the moment. Earlier this month it was Rio Tinto, and now it's Anglo American, which has written down the value of its Minas-Rio iron ore project in Brazil by $4bn.
This looks odd against the positive production figures that both companies posted in the last quarter - but the mining industry is cyclical - and the move anticipates a bit of a tougher season.
So far only Rio Tinto have had to get rid of their chief exec though: their mistake - a $3bn writedown on an African coal project - was just too big.
Cynthia Carroll of Anglo American is unlikely to see the same fate as Tom Albanese. Here's the FT:
Ms Carroll’s mistake over Minas Rio in Brazil was more forgivable than Mr Albanese’s. She underestimated the ability of Brazilian bureaucracy to delay development work. But the mine remains a valuable asset, expected to produce ore at a cash cost of $30 a tonne compared with a forecast 2013 average sale price of $120. Mr Albanese overestimated the quality of Rio’s coal reserve in Mozambique. That undercut his credibility as a miner.
But it's the season to be cautious. BHP have written down asset values, and there is speculation that Xtrata could be on its way.