Mining giant Anglo American slashing 85,000 jobs

Concerns over the global mining industry grew Tuesday after London-based Anglo American said it will shed 85,000 employees — or 63 percent of its workforce — in a radical restructuring meant to cope with tumbling commodity prices.

Shares in the company and several of its rivals plunged as the industry struggles with a drop in demand for metals and fuels, particularly in China, as global economic growth falters.

Describing it as not a time to talk about business as usual, Anglo said it would create a streamlined and tighter portfolio, going from some 55 mines and smelters to around 20.

CEO Mark Cutifani said in a statement that the drop in commodity prices requires “bolder action,” even though the company has delivered on performance and business restructuring objectives. He pledged to provide more details later.

The company’s share price fell 11 percent in London to close at 327.30 pence.

Other mining companies are also facing challenging times as China’s economic growth slows to below 7 percent a year from double digits in recent years. China accounts for as much as 40 percent to 50 percent of global commodity demand, according to consultants PwC.

“With few exceptions, the commodity price outlook remains dim, forcing miners to keep up their guard,” PwC said in its report. “As the old saying goes, survival will be of the fittest, and for miners also the leanest.”

Shares in Glencore, for example, have been hit recently by concerns over its ability to service sky-high debts at a time of low commodity prices.

Glencore shares were down another 9 percent on Tuesday, while rival BHP Billiton fell 6 percent and Antofagasta 5 percent.

Anglo American will suspend dividend payments and reduce its assets by 60 percent. It will consolidate from six to three businesses. The company will also move its London office to “co-locate” with DeBeers, its majority-owned diamonds business.

Some $3.7 billion of cost and productivity improvements are underway and set to be completed by 2017.