Anglo Cost Cutting 2014 to 2017 for selling out of Australian Coal. Did Mark Cutifani, Seamus French and Glenn Britton cut the methane drainage budget?
Anglo was engaged in a process of selling off its Australian Coal starting it seems in December 2014.
Anglo Coal boasts at the start of the sale process how it has cut its Australian costs by 21%.
By the time Grosvenor, Moranbah North are taken off the market in February 2017 Anglo’s Mark Cutifani is boasting of further cost cutting.
Did they cut the Methane Drainage Budget?
Methane drainage can and often does takes years.
The company states that some of the cost reductions have come from staff cuts from its no doubt bloated Brisbane Office.
Well as highly paid as some of the people in the Brisbane Office no doubt are and were, that is not a great deal of savings out of Billions.
Cost Cuts from actual Mining Operations are hard to achieve.
The costs to advance a metre in development are pretty fixed.
About the only way to achieve that is to cut the amount of roof support installed.
Not even Anglo would do that would they,
By February 2016 Anglos credit rating had been cut to JUNK by Moodys.
The reason appearing to be that
The miner’s net debt was flat at $12.9 billion in calendar 2015 on the year-earlier period, but gearing rose to 37.7 per cent.
Anglo, the world’s fifth biggest miner by market capitalisation, first announced its radical restructure in December. On Thursday it upped the ante on it amid criticism that Mr Cutifani was not acting with enough urgency. The company sold $US2.1 billion of assets in 2015.
Anglo’s credit rating was cut to junk by Moody’s on Monday ahead of the results
Grosvenor and Moranbah North are now on the market as well.
In February 2017 after a quadrupling of Coking Coal prices from US $80 to US $300 Anglo decides to retain Grosvenor, Moranbah North and Middlemount Complex (Grasstree and potential Aquila Mines).
In the same announcement Mr Cutifani boats about the further cost cutting that the company had undergone over the last few years.
The company states that some of the cost reductions have come from staff cuts from its no doubt bloated Brisbane Office
The decision to retain the mines means Anglo will need to rebuild its Australian staff, particularly in Brisbane where the headcount had been reduced.
Anglo’s Australian-born chief executive Mark Cutifani said cost reductions, $US1.8 billion worth of asset sales and surging prices for bulk commodities had allowed the company to reduce debt to a level where it did not have to sell any further assets.
By February 2017 Grosvenor, Moranbah North and Grasstree are no longer on the market and Anglo made the decision to retain these Mines.
The reason being coking coal prices have quadrupled from $80 to $300
“We do not need to sell assets to address the balance sheet issues, it is done,” he said.
Anglo had planned to shrink to a core portfolio of diamonds, copper and platinum group metals, and while those commodities remain the priority, Mr Cutifani said the company was happy to own quality assets in any commodity, including coking coal.
He also said the process was complicated by the quadrupling of coking coal prices during 2016, which changed estimates for what the assets were worth.
https://www.abc.net.au/news/rural/2014-12-10/anglo-american-job-cuts-mine-sales/5956684
The company has already cut costs in its Australian coal division by 21 per cent, and productivity has increased 120 per cent in mines which have switched to long wall mining techniques.
https://australia.angloamerican.com/media/press-releases/pr-2015/13-02-2015
The sale of these two assets is in addition to the already announced sales of Callide mine in Queensland and Dartbrook mine in New South Wales, bringing the total sale portfolio to an annual 12.2 million tonnes of export production and 8.4 million tonnes of domestic production, and a combined resource base of over two billion1 tonnes.
https://www.smh.com.au/business/companies/australian-mines-on-block-in-anglo-americans-fire-sale-20160216-gmvrlu.html
Among the assets Anglo has been trying to sell are a cluster of marginal Australian coal mines, and the company confirmed that its best Australian coal assets, Grosvenor and Moranbah, were now on the market as well.
“We have deemed all of the coal assets in Australia as non-core,” said Anglo chief executive Mark Cutifani.
Anglo said the sale processes were underway and an update could come within weeks.
https://www.smh.com.au/business/companies/anglo-american-paves-way-for-australian-coal-exit-20160216-gmvm3l.html
Anglo has been keen to hold onto the Moranbah North coking coal mine, in the Bowen Basin, and at least part of the coking coal Capcoal complex, in central Queensland, its joint venture with Japanese conglomerate Mitsui.
But Moranbah is now on the sale block too.
The miner’s net debt was flat at $12.9 billion in calendar 2015 on the year-earlier period, but gearing rose to 37.7 per cent.
Anglo, the world’s fifth biggest miner by market capitalisation, first announced its radical restructure in December. On Thursday it upped the ante on it amid criticism that Mr Cutifani was not acting with enough urgency. The company sold $US2.1 billion of assets in 2015.
Anglo’s credit rating was cut to junk by Moody’s on Monday ahead of the results
https://www.afr.com/street-talk/apollo-global-management-in-exclusive-talks-to-buy-anglo-americans-coal-assets-20161003-grtnnh
https://www.afr.com/companies/mining/anglo-american-keeps-australian-coal-amid-backflip-20170222-gui7w7
Anglo American has confirmed it will retain many of the Australian assets it had slated for divestment after sensationally axing a one-year-old strategy to reduce debt by selling the vast majority of its assets.
The backflip means Anglo will not sell Queensland’s Moranbah North and Grosvenor coking coal mines, despite soliciting bids for the assets in 2016 from the likes of BHP Billiton and Apollo Global Management.
Anglo’s Australian-born chief executive Mark Cutifani said cost reductions, $US1.8 billion worth of asset sales and surging prices for bulk commodities had allowed the company to reduce debt to a level where it did not have to sell any further assets.
“We do not need to sell assets to address the balance sheet issues, it is done,” he said.
Anglo had planned to shrink to a core portfolio of diamonds, copper and platinum group metals, and while those commodities remain the priority, Mr Cutifani said the company was happy to own quality assets in any commodity, including coking coal.
He also said the process was complicated by the quadrupling of coking coal prices during 2016, which changed estimates for what the assets were worth.
“Did our view on a go forward basis change over time? Well, given we were at $US80 per tonne and then $US300 per tonne or something, yes it did, as did theirs,” said Mr Cutifani.
“How do you value a coal asset at $US300 per tonne? Is it going to be there three months or six months?
“We said no when the price was $US100 per tonne and we said no when the price was much higher.”
The decision to retain the mines means Anglo will need to rebuild its Australian staff, particularly in Brisbane where the headcount had been reduced.
“There is no doubt we have lost some good people, but at the same time we have kept the core of the leadership of the coal business, and on a global basis I think it would be fair to say we needed to streamline the business to get ourselves into fighting shape,” Mr Cutifani said.
The company is already advertising for engineers, purchasing managers and contract officers at its Brisbane and Bowen Basin workplaces.
