[miningmx.com] – ANGLO American should cut its interim dividend in order to minimise the financial effects of a collapse in commodity prices, said Bloomberg News citing a report from Investec Securities.
“It would be sensible for Anglo American to cut its dividend,’ Investec said in a note to investors. “At current commodity prices, management has little choice but to focus on balance-sheet preservation in order to navigate a sustained downturn,’ it said.
Mark Cutifani, CEO of Anglo American, told Miningmx in June that there was pressure on the group’s business.
Referring to its South African business, he said: “We are rebuilding our business and its competitive position. Our tough reality is South Africa has a very high inflation and so to compete we have to continue to reduce our overheads and others costs’.
“Yes, as we do reshape the portfolio, there will be implications for the support structures required to support those mining operations, so an element of “right-sizing’ will be required,’ he said. “Of course, any changes to the shape of the organisation will be undertaken in full consultation with all relevant stakeholders.’
Miningmx reported in April that Anglo may consider paying a dividend out in shares which would save it $1bn in cash. The group’s net debt may be as high as $13bn which it is hoping to cut through divestments of assets.
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