* Dividends for 2019 total $1.09 per share
* Water shortages hurt output in Chile
* Coronavirus could hurt short term diamond demand- CEO
(Updates with detail, graphic, iron ore impact, diamond market)
By Zandi Shabalala
JOHANNESBURG, Feb 20 (Reuters) - 7Surging prices for iron
ore and precious metals boosted 2019 profits for Anglo American
, outweighing weakness in diamonds and coal.
The London-listed miner has led rivals in a recovery from a
2015-16 commodities crash through operational improvements
helped by new technologies, investing modestly in high return
projects and exposure to a range of commodities.
Chief Executive Mark Cutifani said: "We have ... benefited
from product and market diversification, with strong precious
metals and iron ore prices offsetting weakness in diamonds and
coal."
Anglo's shares, which gained 25% last year, were up 1.8% by
1128 GMT, outpacing a 0.6% rise in the wider FTSE350 mining
index
Anglo's underlying earnings before interest, tax,
depreciation and amortisation (EBITDA), a measure closely
watched by analysts, rose 9% to $10 billion in the year to
December.
This was in line with analysts' average estimate of $9.97
billion, according to Refinitiv IBES data.
Anglo produces platinum, palladium and rhodium which are
used to reduce emissions in automobiles. More stringent
environmental regulations is forcing auto makers to increase
their use.
Palladium and rhodium <RHOD-LON> prices have hit
records levels this year as supply has failed to keep pace with
demand.
Platinum is also used to reduce emissions but is preferred
for diesel vehicles, sales of which have fallen in recent years,
leaving prices near ten-year-lows.
Iron ore prices soared following a disaster at a tailings
dam owned by then top iron ore producer Vale SA in
January last year. Dalian Commodity Exchange's front-month iron
ore futures contract gained 28% in 2019.
In diamonds, the closure of some U.S. retail stores, growth
in online purchasing and destocking dented demand in 2019.
"The star division was (platinum group metals), reflecting
record palladium and rhodium prices, which could raise 2020
expectations," said Edward Sterck, analyst at BMO Capital
Markets.
BMO, Jefferies and RBC Capital Markets said Anglo remained
their top pick among global miners.
Anglo declared a final dividend of $0.47 a share, bringing
total dividends for the year to $1.09 per share versus $1 paid
out in 2018.
This was in line with its pledge to pay out 40% of
underlying earnings.
Anglo did not launch a new share buy-back programme as it
approaches is peak spending on the Quellaveco mine in Peru,
finance director Stephen Pearce said.
Cutifani said he expected short-term impact from the
coronavirus in China on its diamond business and minor impact on
iron ore but added Anglo was less reliant on the country
compared to its peers.
In January, Anglo made a 405 million pound ($523 million)
cash bid to buy a British fertiliser project from Sirius
Minerals.
On Wednesday, Sirius Minerals shareholder Odey Asset
Management said Anglo's offer was too low.
Cutifani said: "Our offer takes into account future
investment and project needs and consistent with that we believe
our offer is fair and reasonable."
He added that Anglo would bring certainty to the project
that was not currently there.
($1 = 0.7766 pounds)
(Reporting by Zandi Shabalala; Editing by Edmund Blair/Jan
Harvey/Jane Merriman)
