July 24, 2015 / 6:47 AM / 5 years ago

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

LONDON (Reuters) - Global mining company Anglo American (AAL.L) will shed about 6,000 jobs in the next couple of years as it battles a plunge in metals prices that has dragged its shares down to a 13-year low this week.

An aerial view of Anglo American's Los Bronces copper mine at Los Andes Mountain range, near Santiago city, November 17, 2014 REUTERS/Ivan Alvarado

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 about 6,000 of its almost 13,000 office-based and other non-production roles globally, 2,000 of which will be transferred through the sale of some assets.

Sources close to the matter told Reuters earlier this month that Anglo, which employs around 151,000 staff worldwide, 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 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.

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 0850 GMT, the stock was up 2.5 percent at 826 pence.

In a letter sent on Friday to employees and seen by Reuters, the company said 1,000 jobs would be cut by the end of this year; 1,500 by the end of 2016 and a further 3,000 later on.

“This is a significant change and I know it will be unsettling for many, but it is the minimum that we need to do to compete with our major competitors and ensure the sustainability of our business,” Cutifani said in the letter.

“This will be another tough few months, but it is the right call to accelerate our plans now to create the Anglo American that we all want to see — effective, efficient and robust.”

After receiving earlier this month $1.6 billion (1.03 billion pounds) 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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