July 26 - New boss of Anglo American, Mark Cutifani has promised to cut spending and halve the number of pipeline projects after the mining giant reported a 15 percent fall in underlying operating profits for the first half of the year. Hayley Platt reports.
Just three months into the job and Anglo American's new boss Mark Cutifani has big plans. He's vowed to cut spending, halve the number of projects in the pipeline, and revive the performance of lagging mines. A one-time miner himself, he joined the company in April from Anglo Gold. And he's certainly got his work cut out - underlying operating profits for the first half of the year were down 15 percent to $3.3 billion dollars. TJ Markets' Manoj Ladwa. SOUNDBITE: Manoj Ladwa, senior trader, TJ Markets, saying (English): "Those first half profit numbers did beat expectations but the new CEO has got a lot to do. Anglo American has underperformed its peers primarily due to the route we've seen in the commodity markets but also unrest in Africa and increased costs in its Brazilian operations as well." The smallest of the major miners, Anglo has underperformed its peers for much of the past decade. Recent labour unrest in South Africa - which accounts for around half the group's earnings, hasn't helped. Cutifani plans to streamline the company's corporate structure and cut this year's spending by $1 billion dollars. He's also promised to continue the cost cutting annually at a rate of $800 million dollars, in an effort to boost cash flow to $1.3 billion a year by 2016. SOUNDBITE: Manoj Ladwa, senior trader, TJ Markets, saying (English): "The new CEO will finish his review in about three months or so, we could see cost cutting coming through, we could see a more disciplined spending plan and potentially asset sales as well but the stock price has had a very big drop in the last year or so and we could start to see a bounce back especially over the next few days." Anglo American's shares were trading slightly higher in afternoon trading.