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Anglo American

A requiem for Anglo American, the octopus of South Africa – by John Gapper (Financial Times – February 18, 2016)

http://www.ft.com/

A corporate culture skilled at dominating apartheid nation was outmatched by global capital markets

It is a short walk from the imposing former headquarters of Anglo American at 44 Main Street, Johannesburg, to the small office in which Nelson Mandela and Oliver Tambo defied the authorities to set up a law partnership in 1952.

The moral is that the magnificence of a building is not a reliable guide to the enduring influence of those inside. Ernest Oppenheimer founded Anglo American in 1917 and laid the cornerstone of 44 Main Street in 1938. By the 1980s, his son Harry pulled the strings of several mining and financial conglomerates controlling 30 per cent of the country’s stock exchange.

Mandela and Tambo went on to lead the African National Congress and to transform the country. After Mandela became president, Anglo shifted its primary listing and head office to London in 1999. Julian Ogilvie Thompson, then executive chairman, celebrated “the end of the financial structures that were imposed on us by apartheid”.

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The Great Iron-Ore Flood Claims Anglo as Biggest Victim – by Jesse Riseborough and Thomas Biesheuvel (Bloomberg News – February 17, 2016)

http://www.bloomberg.com/

The giants of the iron-ore industry have claimed their biggest victim yet: Anglo American Plc.

The 99-year-old mining company, reeling from a $5.6 billion loss last year, is pulling out of iron ore and Chief Executive Officer Mark Cutifani described a bleak outlook for the material. The exit marks the result of a strategy, employed by the world’s largest producers, of continuing to expand output in the face of plunging prices. BHP Billiton Ltd. has described the tactic as ‘‘squeezing the lemon.”

“We’ve watched competitors in iron ore flood the market,” Cutifani, who’s been at the helm of Anglo for three years, said in an interview with Bloomberg Television on Tuesday. “It will be tough on the supply side for some time.”

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Miners’ Window Display Gathers Dust – by David Fickling (Bloomberg News – February 17, 2016)

http://www.bloomberg.com/

Putting a `For Sale’ label on a product and displaying it in your store window is pretty easy. Replacing it with a `Sold’ sticker is much harder.

That’s not likely to be news to Anglo American, which Tuesday fleshed out plans to sell coal, iron ore, nickel, niobium, phosphate and platinum mines to cut its $13 billion in debt. But it’s good reason to question whether Chief Executive Officer Mark Cutifani will hit his target of raising some $3 billion to $4 billion from the assets this year.

Mines can go unsold for an astonishingly long time. Anglo’s niobium and phosphate assets, which Cutifani now expects to dispose of within two to three months, were first earmarked for sale all the way back in 2009. A suite of Rio Tinto’s aluminum operations in Australia and New Zealand were put to market in October 2011.

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Turning from the past, Anglo American targets era of ‘capital discipline’ – by Geoffrey York (Globe and Mail – February 16, 2016)

http://www.theglobeandmail.com/

As he unveiled a staggering loss of $5.6-billion (U.S.) in his company’s latest results, Anglo American chief executive Mark Cutifani couldn’t resist a few bitter potshots at the grandiose expansion dreams of the global mining industry.

“This industry has destroyed value again and again,” he told his audience of investment analysts in a blunt and scathing commentary on Tuesday. “We spent money on stupid things.”

Minutes earlier, Mr. Cutifani and his executives had been forced to defend Anglo American from questions about its latest credit downgrade. Embarrassingly, the company’s credit rating has just been pushing into “junk” status in a new assessment by Moody’s Investor Service this week, and the analysts wanted to know why.

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The new Anglo American – by Bloomberg News and Warren Dick (Mineweb.com – February 16, 2016)

http://www.mineweb.com/

Company announces plans to exit Kumba in move away from iron ore. Anglo American announced on Tuesday long-awaited plans to restructure its portfolio and address its debt.

The mining group is looking to exit its controlling stake in Kumba Iron Ore, Africa’s largest producer of the steelmaking ingredient, after it said it will build its future around copper, platinum and diamonds.

“We’re looking at either a selldown in our position in Kumba as well as a potential demerger,” Rene Medori, the chief financial officer of London-based Anglo, which owns a 69.7% stake in Kumba, said on a conference call Tuesday. Anglo “will not expect to complete the transaction until sometime in 2017,” Medori said.

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Mick Davis’ X2 Said to Consider Bid for Anglo Mines in Brazil Cristiane Lucchesi, Juan Pablo Spinetto and Thomas Biesheuvel (Bloomberg News – February 10, 2016)

http://www.bloomberg.com/

X2 Resources, the private-equity firm founded by former Xstrata Ltd. chief Mick Davis, is among companies considering a bid for Anglo American Plc’s Brazilian niobium and phosphate mines, said two people with knowledge of the matter.

Anglo hired Goldman Sachs Group Inc. and Morgan Stanley to sell the assets as a package valued at $1 billion, and is expecting to receive bids next week, the people said, asking not to be identified because discussions are private.

Anglo American, X2, Goldman Sachs and Morgan Stanley declined to comment.

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It’s Existential for Anglo American as CEO Faces His Investors – by Thomas Biesheuvel, Andre Janse Van Vuuren and Jesse Riseborough (Bloomberg News – February 8, 2016)

http://www.bloomberg.com/

When Mark Cutifani took over running Anglo American Plc in April 2013, things were already going from bad to worse. Now, they’re existential.

While the Australian chief executive officer talked of “grim” markets, job losses and abandoning businesses for years, it’s turned into a question of survival as he tries to salvage a century-old company from the wreckage of over-expansion funded by billions of dollars of debt.

Anglo and Cutifani have faced criticism for moving too slowly on an overhaul that’s been derided by some as too vague and lacking the urgency required in the current “doomsday” environment. In his first public appearance since revealing the audacious turnaround plan in December, Cutifani, 57, told a conference in Cape Town on Monday that this year is looking like the “most challenging yet” for the industry.

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Anglo American may fully exit Brazil — report – by Cecilia Jamasmie (Mining.com – February 1, 2016)

http://www.mining.com/

Beleaguered Anglo American (LON:ALL) is said to be planning a complete exit from Brazil, where the company has already put its $1 billion niobium and phosphate business up for sale.

First-round bids for those assets are due on Feb. 15, date that — reports local newspaper O’Globo (in Portuguese) — may bring some major surprises. According to veteran columnist Angelmo Gois, Anglo is also seeking to sell its Barro Alto nickel mine, as well as the vast Minas-Rio iron ore complex, which came into production last year, just as prices for the steelmaking ingredient spiralled toward historic lows.

Last week, Anglo said it was revising its production strategy for Minas-Rio to ensure lower operating costs, without given further details or mentioning any potential plans to sell the asset.

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Anglo American outlines 4,000 job cuts – by James Wilson (Financial Times – January 28, 2016)

http://www.ft.com/

Anglo American has started the restructuring that the miner says it needs to see it through the commodities rout, outlining plans for almost 4,000 job cuts in its South African iron ore unit.

Plans to limit operations at the Sishen mine highlight the way in which the collapse of iron ore prices has hit higher cost producers after a wave of new production in Brazil and Australia.

Kumba Iron Ore, the separately listed South African company majority owned by Anglo, said it was consulting unions over shedding 2,633 jobs from its workforce at Sishen as well as about 1,300 contractors.

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Anglo American boosts iron ore output, shares rise – by Olivia Kumwenda-Mtambo (Reuters U.K. – January 28, 2016)

http://uk.reuters.com/

JOHANNESBURG – Global mining firm Anglo American (AAL.L) plans to lower costs at its iron ore mines in South Africa and Brazil after boosting its total annual output for the steelmaking ingredient, sending its shares up 9 percent.

Anglo American is battling low commodity prices and slowing growth in top copper consumer China that have forced mining companies around the world to cut spending to preserve cash.

The company has suffered more than its rivals as it has higher-cost iron ore operations than larger competitors BHP Billiton (BLT.L) (BHP.AX) and Rio Tinto (RIO.L) (RIO.AX).

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South32 may bid for Anglo American’s $1.4bn Brazil unit – by Paul Garvey (The Australian – January 15, 2016)

http://www.theaustralian.com.au/

South32’s commitment to a steady-as-she-goes strategy and a conservative balance sheet appears to be tested by the array of large mining assets up for sale, with the BHP Billiton spin-off said to be weighing up a bid for Anglo American’s niobium and phosphate business in Brazil.

Bloomberg reported that South32 was looking to hire an adviser to help in the bidding process for the $US1 billion ($1.44bn) business ahead of a deadline for first-round bids next month.

Anglo has put the assets up for sale as part of a far-reaching $US4bn sell-off of non-core assets under chief executive Mark Cutifani. Major miners such as Anglo, Glencore and North America’s Barrick Gold have all sold or been looking to sell various mines around the world as they look to strengthen their balance sheets amid increasingly weak commodity prices.

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Anglo Leads Mining Collapse as China Woes Driving Vicious Spiral – by Agnieszka De Sousa and Jesse Riseborough (Bloomberg News – January 7, 2016)

http://www.bloomberg.com/

Anglo American Plc led a slump in mining stocks to the lowest in more than a decade as market turmoil in China, the biggest consumer of metals, ignites a vicious spiral of tumbling equities and collapsing commodity prices around the world.

The 80-member Bloomberg World Mining Index sank as much as 4.1 percent on Thursday, with Anglo sliding 12 percent at one point to a record low and Glencore Plc down as much as 7.9 percent in London trading.

The Bloomberg Commodity Index, a gauge of returns on raw materials, dropped to its lowest level since 1999 as industrial metals and oil declined.

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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.

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Diamonds are forever; is Anglo American? – by OLIVIA KUMWENDA-MTAMBO AND FREYA BERRY (Reuters U.S. – December 10, 2015)

http://www.reuters.com/

JOHANNESBURG/LONDON – Anglo American’s plans to shut or sell dozens of loss-making mines have failed to halt a dramatic slide in its share price and it may need to sacrifice stronger parts of the business or raise cash from shareholders to pay down its debt.

The company, which grew from gold fields near Johannesburg to dominate diamond, platinum and, to some extent, iron ore markets, is one of many miners struggling with a fall in commodities’ prices driven by lower demand from China.

That makes selling assets that much harder. Anglo’s shares have slumped 11 percent since it announced the biggest restructuring in its nearly 100-year history on Tuesday, leaving it with a market value of $6.7 billion, down from $27 billion a year ago.

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It’s All Gone Wrong for One of World’s Biggest Mining Companies – by Thomas Biesheuvel (Bloomberg News – December 9, 2015)

http://www.bloomberg.com/

Even for a company that once had the global monopoly on diamond production during almost a century of all but constant expansion, the collapse in commodities prices is proving too much.

Anglo American Plc, a conglomerate spanning everything from brewing, publishing and gold mining during its peak in the early 1990s, will shrink beyond recognition after Chief Executive Officer Mark Cutifani on Tuesday announced a package of asset sales, mine closures and job cuts.

Among the potential casualties is Minas Rio, a Brazilian iron-ore mine where spiraling costs and collapsing prices turned a $14 billion project into the epitome of the company’s predicament.

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