CAPE TOWN, Feb 8 (Reuters) - Anglo American’s chief executive said on Monday the mining industry had itself to blame for oversupply in the market and cannot rely on a reversal of the commodities price slump anytime soon.
Mark Cutifani told a mining conference that for some producers, adjusting supply to align with decreasing demand growth may not make sense as they seek to maintain market share and drive competitors out of business.
“This strategy generally has a net negative effect,” Cutifani said.
“Moreover, we can’t rely on a reversal of this price slump any time soon. 2016 is already shaping up to be the most challenging yet. Opinions are divided on whether we have reached the bottom of the cycle ... So things may still get worse before they get better.
Anglo announced plans in December to whittle down its business to cope with severe falls in commodity prices. The plan involves offloading three-fifths of its assets.
“We will be making the appropriate commercial decisions to exit a number of our mines in several countries around the world - but let’s not see that as a negative step,” Cutifani told the gathering.
“For the assets that we choose to exit, it is about giving many of them and their employees a more sustainable future under new ownership that is better suited to focus attention and capital on those assets.”
Anglo American is expected to give more details about its future portfolio alongside its annual results next week. (Edting by James Macharia)
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