Anglo American to cut thousands of jobs and sell off assets

Anglo American will cut 6000 jobs and sell a number of assets in a bid to right-size the company after posting a $US3 billion writedown for the first half of 2015.

The miner reported a half-year profit before tax of $1.9 billion, or 36 per cent less than in the same period last year, blaming weaker commodity prices.

Commodity price-driven impairments totalled $US3.5 billion after tax, including $US2.9 billion at the Minas-Rio ironore project in Brazil.

Anglo says it is now focused on accelerated cost and capex reductions to mitigate price weakness.

The company is targeting a saving of $US500 million through the reduction of 6,000 overhead and other indirect roles.

It also expects to generate at least $US3 billion in proceeds from the sale of assets, reducing its assets from 55 to 40.

Anglo said once these assets are sold, total employment will be reduced by 35 per cent, or 53,000 roles.

Capital expenditure is also under the spotlight, with Anglo targeting additional capital expenditure reductions of $US1 billion by the end of 2016.

Anglo CEO Mark Cutifani said the first six months of 2015 saw considerable further price decreases for its products amidst a volatile market environment and economic uncertainty in certain key markets.

“Looking to the balance of this year and into next, I expect the current period of volatile markets and economic uncertainty, fuelled in part by pockets of geopolitical tension, to continue,” Cutifani said.

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