StockMarketWire.com - Anglo American's [LON:AAL] shares were down by more than 11.4% in late trading after it announced it was suspending dividends as part of a radical restructuring programme to redefine the focus of its asset portfolio to transform the company's competitive position and create a more resilient business.

Chief executive Mark Cutifani said: "Together with the additional material capital, cost saving and productivity measures announced today, we are setting out an accelerated and more aggressive strategic restructuring of the portfolio to focus it around our 'Priority 1' assets, being those assets that are best placed to deliver free cash flow through the cycle and that constitute the core long term value proposition of Anglo American.

"While we have continued to deliver our business restructuring and performance objectives across the board, the severity of commodity price deterioration requires bolder action. We will set out the detail of the future portfolio in February, with the aim of delivering a resilient Anglo American and a step change in the transformation of the company."

Radical portfolio restructuring:

· Focus on Priority 1 assets to deliver free cash flow and greater returns through the cycle - number of assets to be reduced by ~60%

· Corporate structures and overhead to be aligned to future portfolio

- Consolidate from six to three businesses: De Beers, Industrial Metals, Bulk Commodities

- London office co-locating with De Beers in 2017

Driving operational discipline:

· $3.7 billion of cost and productivity improvements targeted from 2013 to 2017:

- $1.6 billion delivered by end 2015(1), including $0.3 billion in 2H15

- $1.1 billion in 2016

-$1.0 billion in 2017, with potential to accelerate in part into 2016

· Care & maintenance / closure of cash negative assets - Snap Lake C&M, Thabazimbi closure

Protecting the balance sheet:

· Capex reductions expected of a further c.$1 billion to the end of 2016

- $2.9 billion aggregate capex reduction vs. original guidance for 2015-2017

- $2.5 billion capex in 2017, a c.55% reduction vs. 2014

- SIB & capitalised stripping capex reduction of 30% from 2014 to $2.0 billion in 2016

· Disposals target increased to $4.0 billion - Phosphates and Niobium confirmed for sale

- c.$2.0 billion asset disposals agreed to date

· Dividend suspended in respect of 2H15 and 2016 - upon resumption, policy will change to pay-out ratio to provide flexibility through the cycle and clarity for shareholders

· Net debt guidance at end 2015 unchanged at $13.0 - 13.5 billion, despite price deterioration

· c.$15 billion of liquidity maintained and limited refinancing required in 2016 of $1.6 billion

· Expected impairments of $3.7 - $4.7 billion, largely due to weaker prices and asset closures

Cutifani added: "As we redefine our operational footprint, we are aligning our organisation to ensure optimal efficiency and effectiveness. As a next step and as we determine the future portfolio, we will be consolidating our six business unit structures into three - De Beers, Industrial Metals and Bulk Commodities - providing further opportunity to reduce the cost burden on our business.

"Our work to drive out costs and increase productivity will have delivered $1.6 billion of benefit by the end of 2015, following our volume reductions in De Beers and Kumba. By the end of 2017, we expect to have delivered a total of $3.7 billion of such efficiency improvements, made up of productivity, operating costs and indirect costs.

"We are taking further steps to protect the balance sheet and reduce leverage. We are reducing 2015 and 2016 capex by an additional c.$1 billion and have reduced our 2017 capex to $2.5 billion, a c.55% reduction versus our 2014 expenditure. SIB and capitalised stripping capex is also reduced substantially to reflect the prioritised allocation of capital, while ensuring the ongoing integrity of our assets.

"We are increasing our targeted disposal proceeds to $4 billion and will be progressing the sale process for the Phosphates and Niobium businesses during 2016. The Board has also taken the decision to suspend dividend payments in respect of the balance of 2015 and 2016. Upon their resumption, the dividend policy will reflect a pay-out ratio to provide flexibility through the cycle and clarity for shareholders."

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Rio Tinto [LON:RIO] said by the end of 2015 its Aluminium product group will have delivered around USD300m of cash cost improvements, a reduction of USD45m in sustaining capex and cut working capital by about USD400m versus 2014.

Cash remains a key focus, and the momentum in operating cost reductions continues through a broad range of initiatives that should remove around $300 million in additional cash costs from the product group in 2016, excluding any impact from currency or oil.

Further improvements will also be made in productivity in 2016, with anticipated increases in output from bauxite (up four per cent to 45 million tonnes), alumina (up three per cent to eight million tonnes) and aluminium (up ten per cent to 3.6 million tonnes).

Rio Tinto has an unrivalled portfolio of high-margin, tier one bauxite assets that are well positioned to capitalise on the growing seaborne market. The recently announced Amrun project in Australia is one of the highest quality mining projects in the world and will be crucial in meeting future demand from China.

Amrun will require capital investment of $1.9 billion, with most of the spending scheduled for 2017 and 2018, ahead of expected production in the first half of 2019. The project offers a return in excess of 20 per cent1 and over half its future output is already committed under off-take agreements.

The Aluminium product group's smelting business continues to improve its cost position through portfolio rationalisation, modernisation and performance enhancements.

The Kitimat aluminium smelter in Canada is now ramping up, with 60 per cent of its pots energised. When Kitimat reaches full production next year, Rio Tinto's smelting capacity will be firmly positioned in the industry's first cost quartile.

* * *

Landore Resources [LON:LND] has started a drilling and geophysics campaign on the Junior Lake nickel-copper-PGE property in Ontario, Canada.

Landore has started the programme to follow up on the recommendations from the independent geophysicist's review, published 19 September, and the independent engineers mineral potential report, published 13 October. The programme consists of:

· A 2,500 metre, nine-hole diamond NQ, drilling programme on the B4-7 deposit and along the trend to the west and to the east to test targets identified in the above reports. All three drill-holes completed to date have successfully intersected mineralisation. Assay results are awaited and will be reported as received.

· In conjunction with the drilling, Abitibi Geophysics of Thunder Bay, Ontario, has been engaged to complete Bore-hole Time-Domain Electro-Magnetic (BHEM) surveys on new and existing drill-holes to determine the three dimensional extension of mineralisation and to locate possible outlying anomalies. Landore's independent geophysicist, Alan King from Sudbury, Ontario, will be receiving and interpreting the data generated.

Landore has also engaged WSP Canada Inc. from Sudbury, Ontario to complete a 'geotechnical study and report to pre-feasibility standard pit design parameters' on the proposed B4-7 open pit located between local grid lines 25m West and 525m East on the B4-7 NI 43-101 compliant resource. WSP's geotechnical engineer has completed a site visit to carry out a project review, geotechnical logging and to take core samples for materials testing. The final report is scheduled for completion in Q1 2016 after which the results will be used to design the B4-7 open pit.

* * *

Jubilee [LON:JLP] has made the third and final tranche payment to conclude the acquisition of 100% of the company's subsidiary, Pollux Investment Holdings Proprietary Limited for R1.0m from Lipsoset Proprietary.

Pollux holds the exclusive rights to beneficiate the platinum group metals from the platinum-containing surface material at ASA Metals Proprietary Limited ('DCM platinum project, processing agreement').

* * *

The sector's biggest riser was Amur Minerals [LON:AMC] - up by more than 45.4% in late trading. The biggest faller was Regency Mines [LON:RGM] - down by 40%.





At 4:03pm:

[LON:AAL] Anglo American PLC share price was -42.27p at 326.73p

[LON:AMC] Amur Minerals Corporation share price was +3.38p at 11.63p

[LON:AQP] Aquarius Platinum Ltd share price was -0.62p at 10.63p

[LON:BEM] Beowulf Mining PLC share price was -0.45p at 5.35p

[LON:BKY] Berkeley Resources Ltd share price was -1.75p at 23.75p

[LON:CEY] Centamin PLC share price was -2.4p at 60.65p

[LON:CHL] Churchill Mining PLC share price was -0.38p at 17.25p

[LON:CZA] Coal of Africa Ltd share price was +0.13p at 2.7p

[LON:FDI] Firestone Diamonds PLC share price was -0.13p at 17.25p

[LON:FRES] Fresnillo PLC share price was -21p at 669.5p

[LON:GEMD] Gem Diamonds Ltd share price was -1.25p at 101.75p

[LON:HOC] Hochschild Mining PLC share price was -1.75p at 50.25p

[LON:JLP] Jubilee Platinum PLC share price was -0.05p at 3.15p

[LON:KMR] Kenmare Resources PLC share price was -0.01p at 0.57p

[LON:LND] Landore Resources Ltd share price was -0.03p at 0.73p

[LON:RIO] Rio Tinto PLC share price was -153.25p at 1912.75p

[LON:VED] Vedanta Resources PLC share price was -9p at 325.5p



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