Anglo American struggles on as Chinese growth slows

ANGLO American, the second-worst performer in the UK’s benchmark stock index this year, fell the most in three weeks in London trading as metal prices weakened.

The mining producer of copper, iron ore, platinum and diamonds slid as much as 7.1 percent to 627.4p (R127) and traded at 635.7p by 2:56pm in London. It has slumped 47 percent this year, making it the worst performer after Glencore in the FTSE 100 index. Anglo closed at its lowest since at least 1999 on September 29.

In Johannesburg, it closed down 5.73 percent at R128.67.

The rout in commodities has undermined the efforts of chief executive Mark Cutifani to reverse the fortunes of the London-based company.

He wants to raise $3 billion (R39bn) by selling assets and is cutting jobs to rein in costs amid speculation that the company will reduce its dividend.

“Anglo American has been a turnaround story for too long,” Andrew Keen, an analyst at Haitong Securities UK, wrote yesterday. “It has some very high-quality assets and a unique product portfolio, but in the near term it is difficult to see an improvement in news flow. We expect Anglo to cut its dividend.”

Anglo surprised investors in July by maintaining its 32 cents-a-share dividend. Cutifani said at the time it was always under review.

Copper fell to the lowest in more than a week on the London Metal Exchange, after data earlier yesterday showed economic growth in China, the biggest metals user, expanded at the lowest pace in six years. Nickel slipped as much as 2.5 percent.

Other miners also dropped. Glencore fell 3.4 percent in London. BHP Billiton lost 2 percent and Rio Tinto dropped 1.3 percent. – Bloomberg