Anglo American Cuts 85,000 Jobs, to Sell Mines

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GALWAY, IRELAND--December 11, 2015--Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)-- One of the world's largest mining companies, Anglo American PLC (LSE:AAL) (London, England), has announced radical restructuring that will involve cutting its workforce by 85,000 employees.

Industrial Info is tracking 73 Anglo American-related projects worth $20.68 billion.

Click the image at right to view a graph detailing Anglo American projects by country.

The U.K.-based mining company has suspended its dividend for the next 18 months and plans to reduce its workforce from 135,000 worldwide to 50,000 as it struggles to deal with plunging iron ore and metals prices. In 2014, its workforce stood at 151,000.

The firm, which mines iron ore, manganese, coal, copper and nickel, said that the restructuring will see it cut its mining operations from around 55 to 20. It will also reduce its internal business divisions from six to three: the De Beers diamond operation, industrial metals and bulk commodities.

Mark Cutifani, chief executive of Anglo American, said: "While we have continued to deliver our business restructuring and performance objectives across the board, the severity of commodity price deterioration requires bolder action. We will set out the detail of the future portfolio in February, with the aim of delivering a resilient Anglo American and a step change in the transformation of the company. Our work to drive out costs and increase productivity will have delivered $1.6 billion of benefit by the end of 2015, following our volume reductions in De Beers and Kumba. By the end of 2017, we expect to have delivered a total of $3.7 billion of such efficiency improvements, made up of productivity, operating costs and indirect costs."

As Chinese demand has fallen, the price of iron ore has dropped by 40% in the past year. This, along with increased competition and the oversupply of other metals and minerals, has forced many of the leading global mining companies to undertake severe cost-cutting and restructuring exercises in the past year. Earlier this year Industrial Info reported that Barrick Gold Corporation (NYSE:ABX) (Toronto, Ontario) announced steep losses for 2014, along with plans to sell mines and shed staff. In August, mining and commodities giant Glencore plc (LSE:GLEN) (Baar, Switzerland), saw the value of almost all the commodities it trades continue to fall, and the company now faces about $30 billion in net debt, the largest of any mining major. For additional information, see February 20, 2015, article - Barrick Gold Cuts Staff, Sells Mines Amid Steep 2014 Losses, Puts 2015 Capex at About $2 Billion and the August 20, 2015, article - Glencore Slashes Full-Year Capex to $6 Billion as Prices, Market Conditions Pummel Bottom Line.

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