Anglo American will be a company of just 16 assets within four years‚ shedding dozens of mines and reducing head count by 78000 to focus on diamonds‚ platinum and copper.The radical overhaul will set it on a course well away from the giant diversified miners
It will retain platinum mines through its 78% stake in JSE-listed Anglo American Platinum‚ its 85% stake in De Beers‚ and a number of copper mines. But it will shed Kumba Iron Ore‚ its South African coal businesses‚ and manganese stakes.
Anglo‚ which was formed in 1917 by Ernest Oppenheimer‚ was for decades SA’s largest company.
Since 2013‚ when Mark Cutifani took over as chief executive‚ the company has been shrinking rapidly as it tried to rein in debt by cutting costs and selling or shutting mines.
In the latest iteration of its restructuring‚ Cutifani and chief financial officer René Médori outlined a strategy focusing on just the three mineral groups and a cutback from the 55 mines it held at the end of last year.
Anglo will remove 68000 employees from its payroll through asset sales‚ and cut another 10000 internal jobs‚ leaving it with 50000 employees. It employed 162000 people three years ago.
“We will work with our stakeholders and our employees as we go through the most significant restructure this organisation has seen in 99 years‚” Cutifani said.
Analysts remained sceptical on Tuesday‚ echoing concerns raised by rating agency Moody’s on Monday‚ which downgraded Anglo American’s credit rating to below investment grade or junk status.
Fraser Jamieson from JP Morgan Cazenove said: “We remain sceptical on execution‚ not least since disposals are unlikely to be coveted by peers and deals to date have been underwhelming.”
The three asset classes Anglo would retain were largely consumer focused and set it apart from its peers such as BHP Billiton‚ Rio Tinto and Vale‚ Cutifani said.
“We are looking at our natural advantages with the assets we have in those three spaces and making sure we do those really well‚” he said.
Anglo was getting out of iron ore and was considering exit strategies for its 69.7% stake in SA’s largest iron ore miner‚ Kumba Iron Ore‚ said Médori.
Anglo will also sell all its South African coal assets‚ including its mines that provide Eskom with coal‚ as well as its export thermal coal mines.
Sibanye Gold has declared its interest in Anglo’s South African coal sales‚ with the inclusion of the export-focused mines sure to make the offering more attractive to the gold producer‚ which wants to add coal to its portfolio to drive an energy strategy that would make it less dependent on Eskom’s increasingly expensive electricity. — BDLive
Anglo facing radical overhaul
The radical overhaul will set it on a course well away from the giant diversified miners
It will retain platinum mines through its 78% stake in JSE-listed Anglo American Platinum‚ its 85% stake in De Beers‚ and a number of copper mines. But it will shed Kumba Iron Ore‚ its South African coal businesses‚ and manganese stakes.
Anglo‚ which was formed in 1917 by Ernest Oppenheimer‚ was for decades SA’s largest company.
Since 2013‚ when Mark Cutifani took over as chief executive‚ the company has been shrinking rapidly as it tried to rein in debt by cutting costs and selling or shutting mines.
In the latest iteration of its restructuring‚ Cutifani and chief financial officer René Médori outlined a strategy focusing on just the three mineral groups and a cutback from the 55 mines it held at the end of last year.
Anglo will remove 68000 employees from its payroll through asset sales‚ and cut another 10000 internal jobs‚ leaving it with 50000 employees. It employed 162000 people three years ago.
“We will work with our stakeholders and our employees as we go through the most significant restructure this organisation has seen in 99 years‚” Cutifani said.
Analysts remained sceptical on Tuesday‚ echoing concerns raised by rating agency Moody’s on Monday‚ which downgraded Anglo American’s credit rating to below investment grade or junk status.
Fraser Jamieson from JP Morgan Cazenove said: “We remain sceptical on execution‚ not least since disposals are unlikely to be coveted by peers and deals to date have been underwhelming.”
The three asset classes Anglo would retain were largely consumer focused and set it apart from its peers such as BHP Billiton‚ Rio Tinto and Vale‚ Cutifani said.
“We are looking at our natural advantages with the assets we have in those three spaces and making sure we do those really well‚” he said.
Anglo was getting out of iron ore and was considering exit strategies for its 69.7% stake in SA’s largest iron ore miner‚ Kumba Iron Ore‚ said Médori.
Anglo will also sell all its South African coal assets‚ including its mines that provide Eskom with coal‚ as well as its export thermal coal mines.
Sibanye Gold has declared its interest in Anglo’s South African coal sales‚ with the inclusion of the export-focused mines sure to make the offering more attractive to the gold producer‚ which wants to add coal to its portfolio to drive an energy strategy that would make it less dependent on Eskom’s increasingly expensive electricity. — BDLive
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