Energy and Mining Producers Reeling as Price Collapse Deepens – by Ian Austen and Clifford Krauss (New York Times – December 8, 2015)

http://www.nytimes.com/

The pain among energy and mining producers is growing more acute as prices of global commodities continued their collapse on Tuesday.

The newest victim is the London-based mining firm Anglo American. On Tuesday, the company announced a drastic restructuring, which includes expanding job cuts, suspending its dividend, reducing its business unit and cutting its assets.

Anglo American is far from alone, as scores of oil, natural gas, and mining companies are feeling the pain from low prices. A number of commodity-related businesses have either declared bankruptcy or fallen behind in their debt payments.

Even more frequent have been layoffs — more than 250,000 workers in the oil and gas industry worldwide, with more than a third coming in the United States. The causes for the onslaught are many, but China looms large.

Between 2000 and last year, energy companies invested hundreds of billions of dollars to expand their production capacity to satisfy China, the world’s most populous nation, in a period of rapid economic expansion.

Much of the corporate growth was fueled by debt, which was unsustainable as domestic and Chinese demand waned.

For the rest of this article, click here: http://www.nytimes.com/2015/12/09/business/anglo-american-to-cut-85000-jobs-amid-commodity-slump.html

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