Anglo American chief executive Mark Cutifani warns miners bracing for most challenging year yet
Anglo American's chief executive, Mark Cutifani, has warned miners to brace for the most challenging year yet, as he forecast no immediate end to the commodity price rout which has hammered their balance sheets over the last 18 months.
Speaking at a mining conference in Cape Town, Cutifani said some producers' refusal to cut production despite weak demand, a strategy used to maintain market share, was having a "net negative" effect on the industry.
"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," he added.
Metal prices have been trending low for months, even years in the case of copper. However, some analysts have recently speculated that they may have found a floor, contributing to a recent rally in London.
Anglo has embarked on a drastic turnaround plan to weather the commodity price rout. This includes scrapping its dividend, cutting assets by 50 per cent and whittling its employee count to 50,000 from 135,000.
"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 said.
"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 due to report its annual results next week.
[charts-share-price id="71"]