Anglo American exposes the wounds inflicted by the commodities rout - results show a 55 per cent drop in underlying profits. As Hayley Platt reports, the global miner plans to sell its iron ore unit as part of a sweeping overhaul.
It's not been a good year for Anglo American. The global miner reported a 55 percent drop in core profit for 2015. And now it's digging deep to stay afloat. It plans to sell its iron ore unit as part of a strategic overhaul to help cope with falling commodity prices. Joe Rundle is from ETX Capital. (SOUNDBITE) (English) ETX CAPITAL, HEAD OF TRADING, JOE RUNDLE, SAYING: "I think we're in era of low commodity prices. Miners have already spent a lot of CAPEX and are now mothballing projects fairly quickly in order to reserve cash should they need it further down the line because capital raising is becoming incredibly expensive." The prolonged commodities rout has forced Anglo and its peers to sell assets, cut dividends and capital spending to preserve cash and reduce debt. (SOUNDBITE) (English) ETX CAPITAL, HEAD OF TRADING, JOE RUNDLE, SAYING: "Anglo is being prudent by cutting its dividend. It's realising that the mining slowdown is here for some considerable time so they are reacting a lot more aggressively than other sectors but preparing for the worst for some time to come." Anglo aims to raise $4 billion in asset sales in 2016 to repair its finances. One of the casualties could be the Kumba Iron Ore mine, which Anglo owns a 70 percent stake - worth an estimated $4.6 billion. Anglo is also looking at ditching projects in Brazil and selling off its nickel and coal assets. The world's number five mining company by value, also plans to trim its capital expenditure this year to less than $3.0 billion. Twenty-five percent lower than last year.