By Martin Li, Investors chronicle
Disruption from flooding in the first quarter and a planned realignment of mining in the second quarter resulted in coking coal production from the Kestrel mine in Australia, which is Anglo Pacific's key royalty earner, falling by 39 per cent. However, coking coal prices in the six months increased from $220 (£135) per tonne last year to over $310, which offset the lower output.
After a solid performance in a challenging first half, the group is well placed to make progress in the second half, which will be boosted by the first royalties from the El Valle gold-copper mine in Spain. This entered production in June and increases the number of producing royalties in the group's portfolio to five. Reflecting its preference for steelmaking projects, Anglo Pacific has acquired a royalty over chromite deposits in Ontario, Canada, and one over the Isua iron ore project in Greenland being developed by London Mining.
Gains on the sale of investments totalled £7.5m in the six-month period, compared with £17.4m in the first half of last year. Investments are held primarily as a source of future royalties and are sold when the prospect of such royalties appears unlikely. Prior to these results, Liberum Capital was forecasting full-year EPS of 26.5p.