Anglo-American To Shed 19000 Jobs

London-based mining company Anglo American PLC, which controls the iconic De Beers diamond business and operates in various mining sectors, plans to cut 19,000 jobs this year - 10 per cent of its workforce - and suspend dividend payments following a 29 per cent drop in annual profit last year.

The company said on Friday that it hoped to cut the jobs through layoffs, natural attrition and scaling back contractor arrangements.

This comes after market conditions deteriorated in the second half of 2008. Of the US$5.2 billion the company earned last year, $4.3 billion came in the first half. The company earned $7.3 billion profit in 2007. The company has already announced it was slashing capital spending this year by more than half, to $4.5 billion.

"The breadth and severity of the global economic downturn and its impact on growth rates in key sectors and economies are difficult to overstate," Anglo American chief executive Cynthia Carroll stated.

"From global automotive production to construction activity in emerging markets, there was a marked contrast between the first and second halves of 2008, when commodity prices fell sharply. As we begin 2009, the economic outlook remains weak, with limited visibility and we are continuing to experience volatility and downward pressure on commodity prices."

Anglo American said operating profit in the base metals division - including copper, nickel and zinc - dropped 42 per cent in 2008. Base metals contributed 45 per cent of Anglo American's operating profit in 2007. Operating profit for platinum fell 17 per cent,

The ferrous metals division posted a 135 per cent gain because of increased sales and higher prices in the early part of the year. Operating profit from coal was up 265 per cent, and diamond sales rose five per cent.

Anglo American operates in 45 countries around the world, with a focus on southern Africa. The company employs 190,000 people and is the world's biggest platinum producer and a major supplier of coal, copper, nickel, zinc, iron ore and other minerals.

It also owns 45 per cent of De Beers, the world's biggest diamond explorer, producer and seller, which has its origins more than century ago in southern Africa.

Like all miners, Anglo American has been hit hard by sharply falling prices of industrial metals and coal because of weaker demand from the steel and related sectors because of the global recession.