ANGLO American disappointed the market with weaker than expected interim results on Friday when it said output at its Brazilian iron ore project would be delayed by at least a year because of regulatory hurdles, and that it had cut spending plans by $1,5bn because of weak commodity markets.

Anglo American, the first major diversified miner to release its results, reflected the weakness in the global commodities market, which offset good performances at the bulk of its operations.

Anglo reported a 38% drop in operating profit to $3,7bn. Attributable profit fell 70% to $1,2bn. It posted a dividend of $0,32 a share, a 14% increase on a year earlier. About $2bn of the fall in operating profit stemmed from weak prices, CEO Cynthia Carroll said.

A key disappointment was the year-long delay in first iron ore deliveries from Minas Rio in Brazil. Anglo needed to secure dozens of permits and comply with 1000 conditions - of which 60% had so far been met.

"Until these hurdles are cleared we cannot determine with confidence the date of first production. If we manage to clear all current bottlenecks by the end of the year and experience no further unexpected interventions, we expect to be in a position to ship the first ore in the second half of 2014," Ms Carroll said.

"The project budget is being reviewed following a detailed assessment of the schedule by third parties and I'll provide an update by the end of the year," she said.

Jason Fairclough, of Merrill Lynch, questioned the uncertain guidance. "On Minas Rio, how is it that your level of certainty has gone backwards here? For a while you couldn't tell us, then you could, now you can't tell us again," he said.

The market is also awaiting results from a review of Anglo's 80%-held Anglo American Platinum, the world's largest producer of the metal, which Ms Carroll said would be made public at year-end. "We will retain platinum as a part of Anglo American. That is the start of the review," she said.

Goldman Sachs said : "Anglo's exposure to late-cycle commodities through platinum and diamonds is more a relative weakness versus peers than a strength."

Anglo does not expect the commodities market to improve soon and has trimmed spending.

"As far as the markets go, it's tough. We are not going to try predicting what's going to happen in the second half. That's why we are looking very hard at our capex. As far as the near-term markets go, do we see a substantial change? No, we do not," Ms Carroll said.

Anglo lowered its capex guidance to $5,5bn, down from $7bn. It cut $200m from exploration and early study expenses.

seccombea@bdfm.co.za