Anglo streamlines, to sell more assets

LONDON (Reuters) - Mining group Anglo American Plc, which appointed a new chairman in August amid a takeover approach, announced a restructuring that will shed a quarter of overhead staff and save $120 million a year.

Anglo, criticized by one-time predator Xstrata and some investors for a top-heavy management structure, said on Thursday it would create seven new decentralized business units.

"Today's announcement represents an important step in creating a more streamlined business, with enhanced focus on operational effectiveness and project delivery," chairman John Parker said.

The shake-up will result in Anglo shedding around 2,700 administrative and management jobs out of a total of 11,000, an Anglo spokesman said.

Last week, Xstrata gave up its pursuit of a merger with Anglo last week after it refused demands from Anglo shareholders that it pay a premium.

Anglo also said on Thursday it would divest more assets including Scaw Metals and its zinc operations. Together with road products group Tarmac, which is already on the block, the assets account for about 11 percent of 2008 core earnings.

"Preparatory work for the separation of these businesses from the group's core operations has commenced," it said.

Three of the new business units will be based in South Africa; Anglo Platinum, Kumba Iron Ore, and Thermal Coal, while Copper will be located in Chile, Metallugical Coal in Australia, and Iron Ore Brazil and Nickel will be in Brazil.

"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," chief executive Cynthia Carroll said.

Anglo also posted a 13.4 percent rise in third-quarter copper output and 15.7 percent increase in iron ore, its two most important products.

Anglo, the world's fourth biggest diversified mining group by market value, said it produced 168,500 tons of copper and 11.9 million tons of iron ore during the three months to end-September.

Copper is expected to account for 42 percent of operating profit this year and iron ore for 25 percent, UBS has said.

Anglo said thermal coal production fell 1 percent and metallurgical coal output declined 2.6 percent. Coal is Anglo's third most profitable product, which UBS said would bring in about 20 percent of operating profit.

Refined platinum output at Anglo Platinum fell 9.9 percent year-on-year to 617,000 ounces while diamond production slid 39.9 percent to 7.89 million carats.

In July, Anglo posted a 69 percent drop in underlying first-half earnings per share due to sharp falls in commodity prices and said its cost-cutting program would reach half its eventual $2 billion target this year.

(Reporting by Eric Onstad; Editing by Dan Lalor)