Mining giant to shed 19,000 jobs

Mining giant Anglo American warned today it will shed 19,000 jobs this year as it looks to cut costs in the face of weaker global demand.

London-based Anglo also reported a 29 per cent slide in annual profits after a sharp deterioration in market conditions over the second half of 2008.

It has suspended dividend payments to shareholders and set a $2bn (£1.4bn) target from cost savings and efficiency initiatives, including the planned 10% cut to its global headcount this year.

Anglo, which owns aggregates and asphalt firm Tarmac in the UK, said it expected job cuts through layoffs, normal staff turnover and the scaling back of contractor arrangements.

Chief executive Cynthia Carroll said the company continued to experience volatility and downward pressure on commodity prices.

She added: "The breadth and severity of the global economic downturn and its impact on growth rates in key sectors and economies are difficult to overstate."

Net profits fell by 29 per cent to $5.21bn (£3.64bn), although operating profits from core activities grew by 10 per cent to $9.8bn (£6.85bn).

Anglo shares slid 12 per cent in London today as investors reacted to the suspension in dividend payments. The company said the move was necessary to safeguard balance sheet flexibility should growth opportunities arise.

It has committed to resume dividend payments as soon as market conditions allow. Anglo has already announced it is slashing capital expenditure this year by more than half, to $4.5bn (£3.15bn).

In today's results, Anglo said Tarmac's operating profits fell by 52 per cent to $228m (£159.4m), mainly due to significant cost increases and a decline in UK volumes of around 20 per cent in the second half of the year.

Anglo reported reduced demand for aggregates and concrete products from the housing and commercial sectors, while asphalt volumes showed more resilience.

The company postponed the sale of Tarmac last year due to poor market conditions.