July 31 (Bloomberg) -- Anglo American Plc, the world's fourth-biggest diversified mining company, forecast a ``strong'' second half on higher platinum, coal and copper production and sustained Chinese demand.

``We expect commodity market fundamentals to remain strong,'' Chief Executive Officer Cynthia Carroll said today at a presentation in London. Chinese demand ``will create the potential for a sustained commodity up-cycle.''

Carroll, who was appointed CEO in March last year, is selling non-mining assets to focus on metals and minerals needed by the expanding Asian economies. Copper, platinum and coal traded at records in the first half because of disruption to supplies in Australia and South Africa.

``The company is benefiting from higher aggregate metal prices across the board,'' Craig Pheiffer, a general manager at Absa Asset Management Private Clients, said by telephone from Johannesburg today. ``We'll probably see some good numbers still going forward.''

The London-based company posted a 27 percent gain in first- half net income to $4.28 billion. Per-share profit before one- time items of $2.90 missed the $2.94 median of four analyst estimates in a July 25 Bloomberg survey. Sales slid 9.7 percent to $17.9 billion, the company said today in a statement.

Anglo rose 11 pence, or 0.4 percent, to 2,921 pence on the London Stock Exchange after falling 5.2 percent this year, giving a market value of 38.6 billion pounds ($76.5 billion).

Iron Ore Growth

Kumba Iron Ore Ltd., 64 percent owned by Anglo, said today said it approved a $1.15 billion expansion at its Sishen South mine in South Africa. Anglo said its Dawson and Lake Lindsay coal projects in Australia will reach full output this year.

Anglo has $15 billion of developments under way and is considering more. It aims to complete the $5.5 billion purchase of two Brazilian iron-ore mines by Aug. 5.

``Our project pipeline is expected to result in rapid production growth,'' Carroll said. Copper output will double and iron ore rise fivefold in the next five years, she said. Nickel output will double in the next three years.

Anglo said today it's still looking at options to sell its Tarmac building materials unit. The $230 million sale of Tarmac Iberia to Holcim Ltd. will be completed in the third quarter.

The sale of all of Tarmac could raise as much as $5 billion, said John Meyer, an analyst at Fairfax I.S. Plc in London.

Share Buyback

Anglo will accelerate a share buyback program in the second half, Chief Financial Officer Rene Medori told reporters on the conference call.

The company owns about 78 percent of South Africa's Anglo Platinum, the world's biggest producer of the metal. Platinum averaged $1,949.22 an ounce in the first half, 57 percent more than a year earlier, and reached a record $2,301.50 on March 4. Copper rose to a record $8,880 a pound on April 17.

Anglo also owns 45 percent of De Beers, the world's biggest diamond supplier, whose first-half sales increased by 10 percent to $3.3 billion. De Beers is ``more cautious'' on its performance in the second half.

Since starting at Anglo last year, Carroll has reorganized management of several units to improve safety and boost earnings. She appointed Neville Nicolau as CEO of Anglo Platinum, Ian Cockerill as CEO of Anglo Coal and Chris Griffith as CEO of Kumba. Kuseni Dlamini was appointed Head of Anglo American South Africa.

``Significant safety incidents'' were halved year on year as the company changed practices, Anglo said.

To contact the reporters on this story: Carli Lourens in Johannesburg at clourens@bloomberg.net

Last Updated: July 31, 2008 12:53 EDT