Anglo to Cut 85,000 Jobs in Bad Market

Anglo American will cut its work force by two-thirds, the mining giant said on Tuesday, a move that is seen to reflect China’s diminishing appetite for commodities, according to news reports.

As part of Anglo’s restructuring, its diamonds business will be run by its De Beers subsidiary, its platinum and base metals operations will come under Industrial Metals, and its Bulk Commodities division will concentrate on coal and iron ore, one report said.

On Wednesday, Anglo’s shares fell to a record low in London, according to news reports. Shares were down 12.9 percent at 281.80 pence, close to a record low of 277.60 pence reached earlier in the session. The stock has fallen by around 75 percent since the start of 2015.

Anglo American is a global company now, but it was started in South Africa by Sir Ernest Oppenheimer. It was not clear from the reports where in the world the jobs would be cut, although Anglo American said some of the jobs would simply be taken over by other companies.

Analysts said markets have been affected by an oversupply of oil, gas, copper and even some grains on world markets. Prices for iron ore have fallen by about 40 percent this year, while Brent crude oil has fallen from $110 a barrel in 2014 to $40 a barrel.

Anglo said it was aiming to reduce the company’s size by 60 percent, according to news reports, which said the company is suspending its dividend, cutting its business units by half and unloading mines and smelters.

Other international companies in the mining and oil sectors have taken similar cost-cutting moves.

In July Anglo announced plans to cut 53,000 jobs after reporting a loss of $3 billion for the first half of 2015. The latest plan is to reduce its work force from 135,000 to 50,000, news reports said.

China looms large in the picture, with its economy seen to be growing far slower than was expected. The country reported this week that exports fell almost 7 percent in November. Its copper imports are down nearly three percent from 2014, and imports of steel products down 12 percent.