- Anglo American (OTCQX:AAUKF, OTCPK:AAUKY) fell to its lowest level since its 1999 London listing, as the miner continues to buckle under slumping natural resource prices.
- HSBC on Wednesday downgraded its rating on the stock to Reduce and cut its price estimate to 410 pence, saying Anglo will continue to burn through cash even after cutting costs and potentially scrapping its payout to shareholders.
- HSBC anticipates "more near-term pain" and no "clarity on a long-term resolution to reverse potential cash burn," and adds to speculation that the company may follow rival Glencore (OTCPK:GLCNF, OTCPK:GLNCY) in cutting its dividend.
- HSBC also says that while Anglo’s niobium and phosphate business in Brazil and parts of its South African coal operations were viable candidates for sale, the company may struggle to raise significant funds in the current market.
- Separately, Anglo is denied permission by New South Wales planning authorities to expand its Drayton coal mine, ruling that an expansion would pose a risk to nearby horse stud farms; Anglo says it likely will close the mine, which would put 500 miners out of work.