Anglo American sinks to $5.5bn loss

Anglo American has reported a pre-tax loss of $5.5bn (£3.8bn) for 2015 as sinking commodity prices hit the mining giant.

That was more than double the loss reported in 2014 as the company took charges of $3.8bn due to falls in commodity prices.

Chief executive Mark Cutifani said the global economy had presented the mining industry with “significant challenges”.

Anglo plans to sell assets worth $3bn to $4bn to repair its finances.

The disposals will include Kumba Iron Ore, 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,” Anglo said.

Mr Cutifani said that Anglo would sell its coal mining operations as well “at the right time, for the right value.”

It said it was building its future around around copper, platinum and diamonds.

Anglo’s diamond mining subsidiary De Beers plans to cut 189 positions in South Africa to reduce costs as demand for gems dips, the company said on Tuesday.

Image copyrightGetty Images

The company posted impairments of $5.7bn to reflect the impact of weaker prices on the value of its assets.

Shares opened more than 6% higher in London before losing ground to be down about 1% at 389.6p in afternoon trading. The stock has fluctuated wildly in recent weeks and has fallen more than two thirds over the past 12 months.

The results were better than expected but many analysts nevertheless said the underlying performance was not impressive.

Anglo is also suspending its dividend to conserve cash.

It has joined other mining groups including Rio Tinto, Glencore and Brazil’s Vale in cutting dividend payouts to shareholders.

On Monday, Moody’s cut Anglo’s credit rating to junk status, marking a new low for the big global mining companies that are all grappling with plunging commodity prices.

[Source:- BBC]