ANGLO AMERICAN SEEKS TO FEND OFF GOLD DIGGERS

The company, seeking to fend off an all-share merger proposal from rival Xstrata, said it was ahead of schedule in plans to cut $2billion in costs by 2011.

During the first six months it slashed $450million, cutting 15,400 jobs with a target of 19,000. Its shares rose 27½p to 1933p. Xstrata’s rose 35p to 806p.

Chief executive Cynthia Carroll said “significant progress” had been made, with major steps taken restructuring troubled subsidiary Anglo Platinum and raising $6.5billion through debt issues and asset sales to bolster the group’s balance sheet.

Anglo American has also made two major copper discoveries in South America. Finance director Rene Medori blamed the fall in profits on weak commodity prices but said there were signs of improvement, especially on the back of Chinese demand.

He expected western economies to pick up next year to fuel recovery further. However, Anglo gave no indication when dividend payments would resume.

Societe Generale analysts said they thought the figures did little to “dismiss the merits of a combination with Xstrata” although ING said the figures were good.