Anglo Warns of Tight Commodities Supply
Commodities supplies may not be able to keep pace with demand in the future mining giant Anglo American wanred on Friday as it reported first half profits which smashed expectations.
Cynthia Carroll, chief executive of Anglo American told CNBC prices and demand for commodities had risen and that industrial output across Anglo’s core commodities had increased by 27 percent in emerging markets alone.
“Twenty million people – the size of the population of Australia - are moving to cities on an annual basis in China. The Chinese have now committed to a five year social housing project where they are going to be building 10 million houses and all of the commodities we produce will go into those projects. it’s not just China, it’s India and Brazil, Iron ore and Copper demand is gong to be very high,” she added.
Carroll said she expected continuing demand to for commodities such as iron, copper and nickel to be very high but she warned the supply demand equation would be “very tight” in the future as labour shortages and regulations conspired to hamper production progress
Anglo reported first-half net profit of $3.99 billion versus a Dow Jones estimate of just $3.03 billion.
The company said it also expected demand for commodities to remain healthy despite the problems being caused for the global economy by the debt crisis in the US and Europe.
But the miner said stronger currencies in countries where it produces commodities are impacting its cost base.