Anglo American has announced a “radical portfolio restructuring” which includes 85,000 jobs slashed globally.
The massive overhaul will see the workforce shrink from 135,000 to 50,000 as a way to “redefine the focus” of the company’s asset portfolio and create a more resilient business.
“Together with the additional material capital, cost saving and productivity measures announced today, we are setting out an accelerated and more aggressive strategic restructuring of the portfolio to focus it around our ‘Priority 1’ assets, being those assets that are best placed to deliver free cash flow through the cycle and that constitute the core long term value proposition of Anglo American,” Chief Executive Mark Cutifani said to investors today.
“While we have continued to deliver our business restructuring and performance objectives across the board, the severity of commodity price deterioration requires bolder action.
“We will set out the detail of the future portfolio in February, with the aim of delivering a resilient Anglo American and a step change in the transformation of the Company”.
Mr Cutifani also announced they will be reducing their assets by 60 per cent, and consolidating their businesses.
“As we redefine our operational footprint, we are aligning our organisation to ensure optimal efficiency and effectiveness. As a next step and as we determine the future portfolio, we will be consolidating our six business unit structures into three – De Beers, Industrial Metals and Bulk Commodities – providing further opportunity to reduce the cost burden on our business,” Mr Cutifani said.
“Our work to drive out costs and increase productivity will have delivered $1.6 billion of benefit by the end of 2015, following our volume reductions in De Beers and Kumba. By the end of 2017, we expect to have delivered a total of $3.7 billion of such efficiency improvements, made up of productivity, operating costs and indirect costs.”
The company had previously announced it was trying to sell three coal mines in central Queensland — Dawson, Foxleigh and Callide — and one coal mine in the Hunter Valley in New South Wales, Dartbrook, which is currently under care and maintenance. The mines will remain for sale.
A spokeswoman for Anglo American told the ABC that its stakes in manganese operations in the Groote Eylandt Mining Company off the coast of the Northern Territory and the Tasmanian Electro Metallurgical Company in Tasmania were not up for sale.