Glencore and Anglo try to dig themselves out of trouble – by James Wilson and Neil Hume (Financial Times – December 22, 2015)

http://www.ft.com/

When Glencore presented its latest debt reduction plans earlier this month, almost 1,000 phone lines were needed to let anxious investors listen in to chief executive Ivan Glasenberg. They had good reason to dial in: amid the crunching commodities downturn, shares in the mining and trading group have fallen 70 per cent this year.

News that Glencore had met 85 per cent of the debt cut target it set itself in September led one of its largest institutional shareholders, Evy Hambro of BlackRock, to say: “Thank you for a . . . call that is actually delivering on its plan, unlike some of the other things we have seen recently.”

Listeners knew exactly what he meant. Just two days earlier, Anglo American, another laggard among large-cap mining groups, had delivered a strategy that was much less well received.

Both companies’ shares have plunged almost in parallel in 2015, following the collapse in commodity markets. Glencore is heavily exposed to copper and nickel that have fallen in price 25 per cent and 41 per cent respectively this year. Similarly, Anglo’s exposure to platinum, which is down 27 per cent, has hit revenues hard.

But the companies’ response — and the market’s reaction to them — makes them a study in contrasts.

Rob Clifford, analyst at Deutsche Bank, says the distinctions are clearest in their financial strength and strategic plans.

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