Mining giant Anglo American reports 29 per cent profit drop, to cut 19,000 jobs

Shares in Anglo American dropped sharply Friday after the mining group reported a 29 per cent drop in profit, halted payouts to investors by suspending dividends and share buybacks, and said it would slash 19,000 jobs to counter the global economic slowdown.

Anglo, which controls the world's biggest platinum producer, reported so-called underlying profit in 2008 fell to $4.36 a share, the company said today in a statement, missing the $4.82 average expected by analysts. Full-year net income fell to $5.2 billion from $7.3 billion a year earlier, the company said today.

Anglo fell 141 pence, or 12.5 per cent, to 1,082 pence by 10:05 a.m. in London, where the company is based. The stock has dropped 30 per cent this year, valuing Anglo at £14.2 billion ($20 billion).

Operating profit in the base metals division - including copper, nickel and zinc - were down 42 per cent in 2008, the company said. Base metals contributed 45 per cent of Anglo American's operating profit in 2007. Operating profit for platinum declined 17 per cent,

The ferrous metals division, however, posted a 135 per cent gain because of increased sales and higher prices in the early part of the year. Operating profit from coal was up 265 per cent, and diamond sales rose 5 per cent.

CEO Cynthia Carroll aims to weather a slump in demand as the global economy contracts. Tumbling commodity prices have led mining companies around the world to curb investment, fire workers and seek extra funding. Xstrata Plc, which competes with Anglo in zinc and copper output, also said last month it suspended dividend payments.