Anglo American’s shares suffered their biggest one-day fall since the financial crisis in 2008 after the company revealed plans to slash mineral production to cut costs and boost profitability.
Shares tumbled 19 per cent to £18.02 by the market close on Friday — the lowest level in three years and a 44 per cent drop since the start of the year.
The fall compounded the company’s woes as the worst-performing stock of the large diversified mining groups including BHP, Rio Tinto and Vale.
The FTSE 100 group said the production cuts would help lower capital expenditure by $1.8bn between 2023 and 2026 and reduce costs next year.
Its plans include cutting production at its Kumba iron ore operations in South Africa and going down to one plant at its Los Bronces copper operation in Chile.
Anglo American’s chief executive Duncan Wanblad has encountered difficulties including commodity prices slipping from record highs and production snarls since he took over from Mark Cutifani in April 2022.
“A lot has changed in the past 18 months,” Wanblad told investors. “We are live to these near-term challenges and we are responding accordingly. We’ve experienced a period of high and prolonged inflationary pressure that continues to impact costs across the whole of the industry.”
The company has yet to reveal what the production cuts will mean for jobs but other platinum producers in South Africa, such as Sibanye-Stillwater, have unveiled plans to shed thousands of employees.
Anglo American has fared worse than rivals as prices for key commodities in its portfolio such as platinum and palladium — primarily used in catalytic converters that control emissions in cars — and diamonds have been hit particularly hard