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Anglo American CEO Mark Cutifani speaks at the 2020 Investing in African Mining Indaba conference in Cape Town, South Africa, on Feb. 3, 2020.

Sumaya Hisham/Reuters

Diversified miner Anglo American on Thursday told its investors it was on track for a second-half rebound after a 39-per-cent dive in profits in the first six months when lockdowns paralyzed production.

The London-listed miner, with its extensive African exposure, has been the hardest hit of its peers by lockdowns that halted mining in South Africa, Botswana and Namibia. The company also suffered operational issues.

“The year has been like nothing I have ever seen in my 43 years in the industry,” chief executive Mark Cutifani said on a call.

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But he said the company was operating at nearly full capacity and expected a recovery in prices and sales of its products.

“We have done the right things in the first six months and I think we have laid the foundation for the recovery in the second half of the year,” Mr. Cutifani said.

Anglo posted underlying earnings before interest, tax, depreciation and amortization (EBITDA) of US$3.4-billion for the six months to June 30, beating a consensus of US$3-billion from nine analysts compiled by Vuma.

It declared an interim dividend of 28 US cents a share, down 55 per cent from a year earlier, but in line with its 40-per-cent payout policy and beating consensus estimates for a 20 US cent payout.

Net debt rose by US$3-billion to US$7.6-billion in the first half as it continued to spend on mines and projects.

The share price fell 4.5 per cent versus a 2.4-per-cent fall in the wider sector as metals markets dipped on Thursday.

Analysts said the shares were pricing in this year’s weakness, but they said Anglo was well placed for recovery.

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“We believe Anglo will benefit from a continued cyclical recovery in most commodity prices, ongoing strength in iron ore prices, and operational improvements after the very difficult first half,” Jefferies analysts said in a note.

Earlier this month, Anglo maintained most of the full-year production targets it set in April.

Apart from the impact of lockdowns, Anglo had operational incidents at its platinum unit in South Africa and at its Australian metallurgical coal mine, which were to an extent offset by performances at its Brazilian iron ore and Chilean copper operations.

The diamond sector faced weak demand even before the pandemic and a collapse in sales in the first half cut profits at Anglo’s De Beers unit to US$2-million from US$518-million a year ago.

Mr. Cutifani said De Beers will begin a consultation process and inform employees on how they plan to transform the business on Monday.

He said, however, diamond sales were beginning to rise in China and also predicted a recovery in the leading U.S. diamond market in the second half.

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Other miners are also banking on China, the world’s biggest commodity market.

Larger rival Rio Tinto on Wednesday declared a first-half dividend in line with expectation and said it saw a V-shaped recovery in China.

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