The London-based mining giant Anglo American, half-owner of the Pebble project, is being hit hard by the global recession and collapse of metals prices. According to an article in the Guardian, on July 30 Anglo announced a 69 percent decline in underlying profits (The Business Times explains this as “earnings per share.”) in the first six months of this year. Profits from subsidiaries Anglo Platinum and diamond producer De Beers virtually disappeared.
In an effort to deliver on a promised savings of $2 billion by 2011, the company already has cut 15,405 jobs worldwide, heading toward a total workforce reduction of 19,000 by the end of 2009.
This has hit South Africa hard. The nation is suffering its worst recession in 17 years. The Guardian reports that according to S.A. trade unions, a fifth of all South Africa’s recession-linked job losses are at Anglo Platinum.
Earlier this year, Anglo shed the last 11.3 percent sharehold in AngloGold Ashanti, fueling concerns that the company is losing touch with its African roots.
It is not clear whether Anglo’s current financial problems will ultimately affect its participation in the Pebble project where it is partnered with Canada-based Northern Dynasty. But even as it’s problems are wreaking havoc in Africa, Anglo itself continues its efforts to fight off a “merger-of-equals” bid by Swiss-based mining giant Xstrata, a merger some shareholders favor. That fact has put Anglo CEO Cynthia Carroll at odds with some sectors of the shareholder base.

Hal Spence
Homer

Tags: bristol bay, gold mining, pebble mine

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