Anglo American (LON:AAL) announced Friday it lost $3 billion during the first half of 2015 and that it would cut 53,000 jobs in the coming years, as a deep rout in commodity prices continue to add strain to battered miners everywhere.
Chief Executive Mark Cutifani said in a presentation to investors that the company is also considering further asset sales as a way of deepening cost cuts. Additionally, the miner will slash about 35% of its total workforce over the next several years, including positions in operations it plans to sell.
The job cuts include the expected loss of 6,000 jobs at overhead operations, including 4,000 jobs in corporate-office operations. The overhead cuts should result in $500 million in cost savings, Cutifani said while announcing the firm was taking a one-time charge of $3.5 billion, including $2.9 billion from a write-down on the value of its massive Minas-Rio iron ore project in Brazil.
However, Anglo maintained its interim dividend of 32 cents per share, something that was under scrutiny since its Kumba Iron Ore unit passed on its own dividend a few days ago.
“Pretty tough” market
The company, which reported half-year profit before tax of $1.9 billion, or 36% less than in the same period last year, said it didn’t expect the commodity price rout to be so dramatic.
“It is a pretty tough market,” said Cutifani, “and in all likelihood the next six months are going to be even tougher.”
Anglo’s operating profits from iron ore more than halved in the period; diamonds dropped 25%; and copper was down 77%.
None of the big diversified miners has suffered as much as Anglo. The stock is trading at its lowest in more than a decade, closing down 3.5% in London Friday.
Mark Cutifani delivering a speech at Mining Indaba 2013, via YouTube.