Anglo American (LON:AAL) faces another round of retrenchment after the recent slump in commodity prices, its chief executive has warned.
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The pretax loss was caused by “commodity price-driven impairments” totalling USD3.5 billion, of which USD2.9 billion was attributable to Minas-Rio mine in Brazil.
It declared an interim dividend of $0.32, in line with the same period past year.
The group also said it would cut some 6,000 overhead indirect jobs, which comes as platinum producer Lonmin also announced that it was planning to shut down several mining facilities, putting 6,000 jobs at risk.
The company, in the middle of a turnaround effort launched in 2013 by CEO Mark Cutifani, has suffered more than peers from the drop 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.
This will include “those that will transfer with the businesses we are divesting”, he added.
Cutifani is seeking to reduce the company’s headcount by 32 percent to 102,000 as he cuts the number of mines by nearly a third to 40 by the end of next year.
Anglo American posts a pre-tax loss of $1,920m for the six months to the end of June – compared with a profit of $2,945m a year ago.
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“We are unrelenting in enforcing strict cost and capital discipline”, Cutifani said in the statement. Combined with planned capital expenditure reductions of up to $1.0 billion by end 2016, we are on track to deliver our long term net debt target of $10 billion to $12 billion, with net debt after the Lafarge Tarmac proceeds at $11.9 billion. “Now is the right time to accelerate the right-sizing of the organisation that supports the future business”.
