ROBERT BARRLONDON (AP) ¿ Mining company Anglo American PLC said Thursday it plans to streamline its operations and sell noncore assets, including its zinc operations, representing 11 percent of its earning base. The announcement came a week after Anglo American saw off a merger approach by Anglo-Swiss mining company Xstrata PLC, which decided not to make a formal bid. "Anglo has six months before Xstrata can rebid and management appears to have a renewed sense of urgency to display to shareholders that it is better placed as a stand-alone group," said Jonathan Jackson, head of equities at Killik & Co. in London. The assets marked for sale include Scaw Metals Group, producer of rolled steel and other steel products; Brazilian phosphate miner Copebras Ltda., Brazilian ferroniubium producer Catalao, and Tarmac, Britain's largest supplier of aggregates to the construction industry. These assets represented 11 percent of group earnings before interest, taxes, depreciation and amortization in 2008, Anglo American said. The company announced no timetable for sales. Anglo American also said it plans to remove a layer of its global management structure and make other efficiency measures which are forecast to yield savings of 25 percent in overheads with annual savings of $120 million.
The company's complicated structure is inherited "The portfolio changes we have announced are the logical next step in focusing the group on our core mining activities, enabling us to strengthen our balance sheet further," said Chief Executive Cynthia Carroll. Anglo American shares were up 0.7 percent at 2,292 pence on the London Stock Exchange. Evolution Securities analyst Charles Kernot, who rated Anglo shares a "buy," said it was the most attractive investment among the four major mining companies. In May, Anglo American rejected a merger overture from Xstrata. The proposed combination would have created a group worth $68 billion, ranking the combined company behind BHP Billiton and Rio Tinto. Xstrata, facing a "put up or shut deadline" set by London's Takeover Panel, announced on Thursday last week that it was walking away. Anglo American raised $671 million in the third quarter from sales of two assets: its stake in South African sugar and starch producer Tongaat Hulett for $523 million and its stake in South African aluminum processor Hulamin Ltd. for $148 million.
Anglo American reported Thursday that third-quarter production of copper rose 13 percent, iron ore output went up 16, refined platinum production rose 16 percent, all compared to the same period a year ago. Rough diamond production was up 43 percent compared to the second quarter. ___ On the Net: http://www.angloamerican.co.uk