- The mining giant intends to divest or spin off numerous companies
- Additionally, the company will “slow down development” at Woodsmith
- Anglo American just rejected a £34bn takeover offer from BHP
Anglo American plans to offload much of its business after rejecting a £34bn takeover bid from rival BHP.
The mining giant told investors on Tuesday that it intends to sell or spin off its steelmaking coal segment, the De Beers diamond business and Anglo American Platinum, the world’s largest platinum producer.
In addition, the FTSE 100 company will “slow development” of Woodsmith, its potash mine in Yorkshire, to deleverage its balance sheet.
Restructuring: Anglo American intends to sell or spin off its steelmaking coal segment, De Beers diamond business and Anglo American Platinum.
Instead of spending $1 billion a year on the mine, its capital spending will fall to $200 million in 2025 before falling to zero the following year.
Anglo American said the restructuring would allow it to focus on its premium iron ore, copper and crop nutrients divisions.
The group predicts it would cut costs by $1.7bn (£1.35bn) a year and boost its profits before ugly margins by 15 percentage points to 46 per cent.
Duncan Wanblad, the company’s chief executive, said the moves “represent the most radical changes at Anglo American in decades.”
He added: “I believe these are the right decisions to position Anglo American to capitalize on the excellent resourcing opportunities within our current portfolio.”
Anglo American’s announcement comes a day after it rejected a £34bn takeover offer from BHP, saying it continued to “significantly undervalue” the group and was “very unattractive”.
Last month, the London-listed group rejected a £31bn approach from its much larger Australian rival for similar reasons.
Under the terms of the deal, Anglo American would sell stakes in its Kumba platinum and iron ore businesses to its shareholders.
Meanwhile, BHP would own larger interests in copper, a vital element in artificial intelligence and new green technologies such as electric vehicles, solar panels and wind turbines.
In South America, it operates the world’s largest copper mine, Escondida, located in the Atacama Desert, while Anglo American operates three of the ten highest-producing copper mines on the continent.
Danni Hewson, head of financial analysis at AJ Bell, said: ‘The clock is ticking for BHP to put even more skin in the game or simplify its offering.
“Without any of those measures, Anglo could well persuade shareholders that going it alone is the best option as global demand for copper continues to rise.”
Anglo-American stocks They were down 0.6 per cent to £26.91 on Tuesday morning, but have still expanded around 36 per cent since the year began.