Anglo American and Lonmin to cut thousands of jobs
UK-based mining firms Anglo American and Lonmin have announced plans to cut thousands of jobs amid a slump in commodity prices.
Anglo American is planning to cut 6,000 employees engaged in office works and other areas. The firm reported a pre-tax loss of $1.9bn during six months ending June.
The planned job cuts are not related to employees engaged in production, reported BBC.
Anglo American chief executive Mark Cutifani said: "Having defined our portfolio and significantly improved operational performance, now is the right time to accelerate the right-sizing of the organisation that supports the future business; we are targeting a $500m total cost saving, of which $300m will be realised from our ongoing core business, through the reduction of 6,000 overhead and other indirect roles, a 46% decrease, including those that will transfer with the businesses we are divesting."
The company plans to cut $1.5bn in operating and indirect cost by second half of 2016, and additional capital expenditure reductions of up to $1bn.
It also plans to generate $3bn from asset sales, including the $1.6bn from the sale of 50% interest in Lafarge Tarmac.
Cutifani added: "The transformation of Anglo American that I set out 18 months ago is progressing, despite considerable external challenges. I expect the operational turnaround to generate $1.2bn of underlying EBIT upside over the next 18 months, in addition to the $1.7bn delivered to date.
"Combined with planned capital expenditure reductions of up to $1bn by end 2016, we are on track to deliver our long-term net debt target of $10bn to $12bn, with net debt after the Lafarge Tarmac proceeds at $11.9bn."
Similarly, Lonmin has also announced to cut 6,000 jobs following drop in platinum prices and close some mines reduce cost.
The company said in a statement that the company plans for orderly closure of carrying out the orderly closure of Hossy and Newman shafts in South Africa to reduce cost, especially in a oversupplied market.
It also plans to put a number of Generation 1 shafts under care and maintenance which include W1, E1 and 1B shaft, which are managed by contractors.
The company said in a statement: "We expect normalised annual production over the next two fiscal years to be reduced by some 100,000 platinum ounces.
"These actions will protect the majority of the workforce but a total of 6,000 employees including contractors are likely to be affected by these closures. This figure includes those who have already applied for the voluntary separation packages we announced in May.
Lonmin chief executive Ben Magara said: "Lonmin is defending value for all stakeholders in responding to the platinum pricing crisis by taking swift, decisive even though difficult measures.
"Losing jobs is not pleasant but everyone is having to take significant short-term pain to preserve optionality for the long-term. All costs have to be reduced including labour and I hope our formal consultation process will come up with mitigations to minimise job losses."