Summary Anglo's performance mirrored a strong showing across the commodities sector on Friday.
LONDON (AFP) - Anglo American on Friday announced a write-down of $3.9 billion caused by the sliding price of iron ore which has slashed the value of its Minas-Rio mining project in Brazil.
In an annual earnings update, mining giant Anglo American announced "commodity price-driven impairments of $3.9 billion (3.4 billion euros), including $3.5 billion at Minas-Rio".
The Anglo-South African company had purchased the Brazilian project around the time of the financial crisis for $4.8 billion to secure key supplies of iron ore -- a metal used to make steel.
Two years ago, it announced a $4.0 billion hit on the value of the project owing to delays that sent costs soaring.
Although the company managed last year to ship its first ore from the Minas-Rio project, "the steep drop in the iron ore price has resulted in a $3.5 billion post-tax write-down", Anglo American chief executive Mark Cutifani said in Friday s results statement.
Consequently, the miner posted a net loss of $2.51 billion for 2014 compared with a post-tax loss of $961 million in 2013.
Iron ore prices slumped 47 percent in 2014, pulled lower by a global supply glut and weaker demand from a slowing China.
Shares in Anglo American Friday rallied 3.43 percent to 1,205.50 pence on London s benchmark FTSE 100 index, which was up 0.57 percent to 6,867.16 points around midday in the British capital.
Anglo s performance mirrored a strong showing across the commodities sector on Friday.
"A three-week high for the FTSE 100 finds the index on the cusp of 6,900 once again, as a general resurgence in mining shares comes despite hefty write-downs from Anglo American," said Chris Beauchamp, senior market analyst at IG trading group.
He added that although "the mining sector is not for the faint-hearted. . . monetary stimulus from China could reignite enthusiasm for commodities and lift them from their current doldrums".
Anglo American s platinum unit Amplats said this week that a lengthy strike at its South African mines squeezed earnings last year, but it still managed to achieve a net profit thanks to fewer write-downs.
