Miners look to asset sales for relief
The mining industry is set for further pain this week, as Glencore and Fresnillo report preliminary results for 2015 tomorrow.
Analysts are expecting a fall in pre-tax profit at Glencore of up to 80 per cent, as well as details of how the Switzerland based FTSE 100 miner will go about cutting its $13bn (£9.4bn) debt pile.
Glencore announced in December last year it would begin aggressive debt reduction plans.
Meanwhile, rival miner Anglo American is moving ahead with previously announced plans to sell its $1bn nickel division, appointing Goldman Sachs and Morgan Stanley to manage the process, City PM understands. The sale is part of cuts announced by Anglo American earlier this month, slashing 60 per cent of jobs, and selling off swathes of assets.
Anglo is planning to shed between $5bn and $6bn worth of assets by the end of 2016, following $2.1bn worth being jettisoned in 2015. Anglo American’s share price is down over 70 per cent since May last year.
The rush to unload assets comes as China begins to shift its economy away from production and emerging market growth falters, causing a shortfall in demand.