Anglo wields axe in face of slump

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Anglo American will sell more assets, suspend dividends until the end of 2016 and whittle down its business divisions to three from six in the face of severe commodity price falls, the mining company said.

The overhaul of its business highlights the scale of the commodity slump’s impact on the mining sector. Anglo – the world’s fifth-biggest diversified global mining group by market value – said it would cut its assets by 60 per cent and reduce its workforce to 50,000 from 135,000, the deepest job cuts announced in the sector since the crisis began.

The London-listed company will form three divisions: De Beers for diamonds, Industrial Metals for platinum and base metals, and Bulk Commodities for coal and iron ore.

It also aims to raise $4bn (£2.6bn) through assets sales, up from an earlier target of $3bn, and said it would press ahead with the sale of its phosphates and niobium businesses in 2016.

“You could maybe get even over a billion for those, they’ve got higher multiples – but the question is what do you actually get paid for it today,” a banker for the mining sector said.

Anglo has suffered more than its mining peers from the commodity slump, largely due to higher-cost iron ore operations than its larger competitors BHP Billiton and Rio Tinto.