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Friday, May 20, 2022

Anglo American to shed thousands of jobs to counter metal price slump

By Silvia Antonioli

LONDON (Reuters) – Global mining company Anglo American (AAL.L) will shed about 6,000 jobs in the next couple of years as it fights rapidly deteriorating market conditions that have dragged its shares down to a 13-year low this week.

The company, which posted a steep fall in first-half profit hurt by a rout in prices of metals from platinum to iron ore, said on Friday it would cut 6,000 office-based and other non-production roles, 2,000 of which will be transferred through the sale of some non-core assets.

Sources close to the matter told Reuters earlier this month that Anglo, which employs around 151,000 staff globally, was planning big cutbacks.

The company, in the middle of a turnaround effort launched in 2013 by CEO Mark Cutifani, has suffered more than peers from a plunge in metals prices, mostly due to higher cost iron ore operations than its larger competitors and a platinum division afflicted by rising costs and falling prices.

The fifth-biggest diversified global mining group by stock market capitalisation has seen its shares price shed about a third so far this year as investors worry about the slow pace of Cutifani’s revamp, focused on improving the productivity of its mines and divesting non-core assets.

At 0745 GMT, the stock was up 0.7 percent at 812 pence.

“Now that we have got the operations under control … we have got to go back to phase two with the overhead restructuring,” Cutifani said in a call with journalists, detailing the number of jobs reductions planned.

After receiving earlier this month $ 1.6 billion from the sale of its stake in building materials company Lafarge Tarmac, the company expects to raise a further $ 1.4 billion from the sale of non-core assets including some copper, coal and platinum ones over the next couple of years.

London-listed Anglo, the first of the largest global miners to post results for the six months to June, reported a 36 percent drop in underlying earnings before taxation (EBIT), in line with analysts’ expectations, according to Reuters I/B/E/S.

It maintained its interim dividend of $ 0.32 per share even though many analysts suggested it should cut it to shore up its balance sheet.

In line with a warning issued earlier this month, Anglo took a non-cash impairment charge of $ 3.5 billion after tax.

It is the second multi-billion charge announced this year, mostly related to its recently launched Minas Rio iron ore mine in Brazil, which has been plagued by delays and cost overruns since Anglo bought it in 2007-2008 for about $ 5.5 billion.

(Editing by David Evans and Mark Potter)

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