Anglo American to cut 6,000 jobs to counter low commodity prices

London-listed mining major Anglo American said it is cutting 6,000 jobs and selling more assets in a right-sizing initiative intended to save $500m (£320.8m, €455.9m) in costs, as the company reported a huge loss for the first half of 2015 amid plunging commodity prices.

The company employs 151,200 people across the globe.

"We are targeting a $500 million total cost saving, of which $300 million 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," CEO Mark Cutifani said in a statement.

"Post asset sales, we expect to have reduced our number of assets from 55 to 40 and reduced total employees by 35%, while maintaining copper equivalent production."

The company noted that the initiatives would help improve its underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) margin to 35% from 25% in the first half of 2015.

Anglo American expects to generate proceeds of at least $3bn from asset sales, including the $1.6bn received from the sale of its 50% interest in Lafarge Tarmac.

It earlier announced a reduction in planned capital expenditures, given lower commodity prices. It plans to save $1bn by end 2016 on reduced capital expenditures.

With the cost savings, the company is on track to deliver its long-term net debt target of $10bn to $12bn, Cutifani added.

"The first six months of 2015 saw considerable further price decreases for our products amidst a volatile market environment and economic uncertainty in certain key markets," he said.

"Looking to the balance of this year and into next, I expect the current period of volatile markets and economic uncertainty, fuelled in part by pockets of geopolitical tension, to continue."

For the six months ended in June, the company reported a net loss of $3.02bn, compared to a $1.46bn profit during the same period in 2014. Meanwhile, revenues declined by 17% to $13.3bn.

Shares in Anglo fell to a 13-year low on 23 July as investors speculated a dividend cut due to lower commodity prices. The shares are trading up 1.64% at £8.196 as at 9.31am GMT.