Anglo American To Cut Deep On Costs And Capital Expenditure

Finance and Trade
08/12/2015 11:32

Anglo American plc, which owns 85% of De Beers, is to carry out an "accelerated and more radical restructuring program to redefine the focus of its asset portfolio to transform the company’s competitive position and create a more resilient business to deliver sustainable shareholder returns". The firm is facing financial pressures regarding all its mining operations, not least De Beers where it allowed sightholders to defer 100% of their allocations in December. The mining giant already announced back in July that it would slash 53,000 jobs, but the current plans for a sweeping restructuring of its business are pushing that figure up to 85,000 jobs, in what is one of the most drastic restructuring moves by a major mining company as commodity prices plunge amid softening demand from China.

The company is also suspending its dividend payments for the second half of this year and next while cutting its capital expenditure significantly in a bid to strength its balance sheet. “No one likes to suspend a dividend,” Mr. Cutifani said. “We think it’s the right thing to do to make sure the company remains in good shape.” Last week, De Beers Canada announced that the Snap Lake operation would be put on care and maintenance for up to nine months due to lower demand for rough goods. Cutifani did tell the Telegraph that, “Diamonds are much more robust in our view. We’re hopeful on the retail market for diamonds.”