By Samantha James
ABOUT 85,000 Anglo American employees around the world will lose their jobs across the next three years as part of a planned “radical” company restructure.
Anglo American chief executive Mark Cutifani told investors on 9 December 2015 that the company would reduce its 55 assets by about 60 per cent, cutting the work force from 135,000 employees to less than 50,000.
By the end of 2015 Anglo expected to cut 11,500 direct employees and contractors from its workforce across operations in Australia, Africa, Canada, South America and the UK. A further 8500 employees would be let go in 2016 and 7000 in 2017.
The company’s negative cash flow assets would either be closed, placed on care and maintenance or sold in an effort to counteract the sustained “deteriorating” market conditions.
Projects classes as priority 1 assets – meeting resource, margin and cost margin criteria – would remain a focus for Anglo American.
The company’s disposals target increased to $4 billion, confirming its phosphates and niobium assets in Brazil would be put up for sale, along with select Australian thermal coal assets.
As part of the process, Anglo American would consolidate six separate businesses into three operating areas – De Beers, Industrial Metals and Bulk Commodities – and combine offices and resources.
“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 Iron Ore [in South Africa],” Mr Cutifani stated.
“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.”
Anglo American planned to reduce its 2015 and 2016 capital expenditure by a further US$1 billion and its 2017 expenditure to US$2.5 billion – a 55 per cent reduction compared to 2014.
Reports claimed Anglo American would press ahead with the sale of four Australian coal assets – Dawson, Foxleigh, Callide and Dartbrook – however the Grosvenor, Grasstree and Moranbah mines were pegged to remain as key assets.