Mining giant Anglo sinks to £3.8bn loss

Anglo is desperately attempting to weather a commodities market rout.

Anglo American is the world’s largest platinum producer (Getty Images)

Anglo American boss Mark Cutifani put even more of the struggling miner’s assets on the sales block yesterday as the FTSE 100 company racked up eye-watering losses of $5.5bn (£3.8bn).

Anglo, which last year shelved its dividend and announced plans to cut about 80,000 staff through sell-offs and redundancies, is desperately attempting to weather a commodities market rout.

The miner’s losses for 2015, its worst for a decade and driven by $3.8bn in writedowns, have prompted Mr Cutifani to raise the firm’s target for disposals from the originally planned $3bn-$4bn to $5bn- $6bn.

This is to help reduce debts to below $10bn.

Concerns over the balance sheet and lingering low prices prompted ratings agency Moody’s to cut its debt to junk status overnight.

Anglo’s iron-ore unit is up for sale, with Mr Cutifani ready to listen to offers for its 70 per cent stake in Kumba Iron Ore (KIO), Africa’s biggest miner of the steel-making ingredient.

“The company has initiated a review to consider options to exit from KIO at the appropriate time, including a potential spin-out,” it said.

The division’s profits slumped 61 per cent to $739m last year, largely down to the 42 per cent China-driven plummet in iron ore prices to an average $56 a tonne.

Mr Cutifani also confirmed that Anglo plans to completely pull out of its coal business as part of its strategic review, “at the right time, for the right value”.

The latest moves will leave the miner focused on three areas.

These are diamonds, through its 85 per cent stake in the world’s biggest producer, De Beers; platinum, through its major interests in South Africa and Zimbabwe; and copper, through its interests in two of the world’s largest copper mines, based in Chile. Anglo was the worst performer in the FTSE 100 last year, losing around three quarters of its value.

The shares rose 4.9p yesterday to 397.95p, continuing a rally since the start of the year.

Yuen Low, an analyst at Shore Capital, said the results were “dire, if slightly ahead of expectations”.