Anglo American to axe 19,000 jobs worldwide after slump in demand

Mining giant suspends dividend payments

Anglo American is to slash its global workforce by 19,000 and scrap its dividend, as it targets cost savings of $2bn (£1.4bn) amid a global slump in demand for the industrial use of minerals and metals.

The mining giant yesterday said it would axe a further 9,000 jobs in 2009, in addition to the 10,000 previously unveiled at AngloPlatinum in South Africa, to bring it in line with lower production and growth plans. But Anglo American declined to comment on where the 9,000 job cuts would fall.

The group’s pre-tax profit fell by 2.8 per cent to $8.6bn for the year ended 31 December. Anglo American warned of a sharp fall in demand in the second half from the accelerating global industrial downturn.

The results from Anglo American followed similarly gloomy updates from other mining companies this year, including Xstrata and Rio Tinto, which have both unveiled different plans to raise capital to pay down debts.

Cynthia Carroll, the chief executive of Anglo American, said: “From global automotive production to construction activity in emerging markets, there was a marked contrast between the first and second halves of 2008, when commodity prices fell sharply. As we begin 2009, the economic outlook remains weak, with limited visibility, and we are continuing to experience volatility and downward pressure on commodity prices.”

Of its core divisions, base metals, platinum and industrial minerals were the worst performers. Its platinum operation, AngloPlatinum, posted a 17 per cent fall in operating profit to $2.5bn. The world’s largest producer of the metal is being hit by higher input costs and a fall in demand for platinum, which is used in cars’ catalytic converters. Last week, AngloPlatinum said it was cutting 10,000 jobs in South Africa.

Anglo American’s base metals business delivered a 17 per cent fall in operating profit to $2.2bn, due to “sharply lower” copper, nickel, zinc and lead prices, lower overall sales volumes and a rise in input costs.

Operating profit at Anglo American’s UK industrial minerals’ business, Tarmac, tumbled by 52 per cent to $228m, as demand for materials, such as sand and gravel, suffered from the slump in the UK housing market. But its ferrous metals and coal operations generated stronger performances, boosted by record production of coal and iron ore.

The mining giant’s coal operation reported a record operating profit of $2.2bn, up 105 per cent, over the year, primarily driven by high prices for thermal and metallurgical export coals and higher production.

Following its full-year results and dividend cut, 16.9 per cent was wiped off Anglo American’s market value, as its shares fell by 209p to 1,090.5p.

Of the $2bn cost savings it hopes to produce by 2011, Anglo American said it plans to deliver $1bn from its asset optimisation programme and the remainder from its procurement and shared services initiatives.

To preserve cash in other areas, Anglo American has halted its share buy-back programme. It is also slashing its capital expenditure for 2009 by more than 50 per cent to $4.5bn. Ms Carroll said: “We have taken decisive action to position Anglo American through the downturn.”

Anglo American is suspending dividend payments, which means its full-year dividend will be entirely made up of the interim dividend of 44 cents a share. Johan Rode, an analyst at Citi, said: “We believe this [final dividend cut] was expected by the market, but may be taken as a sign of cash-flow weakness. Net debt was slightly higher than forecast of $10.3bn at $11bn.”

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Guru Careers: Communications Exec / PR Exec

£25 - £30K: Guru Careers: We are seeking a highly-motivated and ambitious Comm...

Guru Careers: Pricing Analyst

£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

Day In a Page

On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific
In this the person to restore our trust in the banks?

In this the person to restore our trust in the banks?

Dame Colette Bowe - interview
When do the creative juices dry up?

When do the creative juices dry up?

David Lodge thinks he knows
The 'Cher moment' happening across fashion just now

Fashion's Cher moment

Ageing beauty will always be more classy than all that booty
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination

Health fears over school cancer jab

Shock new Freedom of Information figures show how thousands of girls have suffered serious symptoms after routine HPV injection
Fifa President Sepp Blatter warns his opponents: 'I forgive everyone, but I don't forget'

'I forgive everyone, but I don't forget'

Fifa president Sepp Blatter issues defiant warning to opponents
Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report

Weather warning

Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report
LSD: Speaking to volunteer users of the drug as trials get underway to see if it cures depression and addiction

High hopes for LSD

Meet the volunteer users helping to see if it cures depression and addiction
German soldier who died fighting for UK in Battle of Waterloo should be removed from museum display and given dignified funeral, say historians

Saving Private Brandt

A Belgian museum's display of the skeleton of a soldier killed at Waterloo prompts calls for him to be given a dignified funeral