Anglo American to cut 19,000 jobs as mining boom endsPublished by MAC on 2009-02-23
Source: Daily Telegraph
Anglo American, the world's biggest platinum producer, plans to cut 19,000 jobs by the end of the year as the boom in commodities comes crashing down.
The company, which owns a 45pc stake in Diamond producer De Beers and employs about 100,000 people around the world, made the announcement after revealing profits dropped to $5.2bn last year from $7.3bn.
Chief executive Cynthia Carroll told shareholders that "the breadth and severity of the global economic downturn and its impact on growth rates in key sectors and economies are difficult to overstate."
Shares in Anglo American tumbled 8pc in early trading and are down 61pc in the past 12 months. The price peaked at £36.80 in May last year.
Mining companies are cutting costs, scaling back investments and, in the case of Rio Tinto and Xstrata, seeking to raise cash as prices for metals tumble. Anglo American has delayed a copper project at Los Bronces in Chile and an iron-ore project in Brazil. Overall, the company is cutting its planned spending by 50pc for 2009.
The results were hit by declines in metal prices across the board. Operating profits at its base metals business - which includes copper, nickel, zinc and lead - were down 42pc to $2.5bn. Meanwhile its profits from mining platinum - used in jewellery and catalytic converters in cars - slid 17pc to $2.26bn.
Ms Carroll, who joined the company from American miner Alcan in 2007, cautioned that the global economy "faces an unprecedented level of uncertainty and the outlook remains poor."
With little immediate prospect of metal prices rebounding, Anglo American said it's suspending its dividend payments and will not pay a full-year dividend for 2008.