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Anglo jumps most since ’08 as mining shares gain with metals

Gains 14% in London.
Anglo American Plc surged the most in seven years and Glencore Plc rallied at the end of the London trading day as metals and oil prices recovered.

Anglo, last year’s worst performer in the U.K.’s benchmark stock index, jumped 14 percent to close at 262.95 pence in London. Glencore rose 9.4 percent, the most since October, as the Swiss miner and trader rebounded from a six-day losing streak. The FTSE 350 Mining Index, which this week touched an 11-year low, climbed 4.9 percent.

The late rally followed gains in oil and metals, with aluminum climbing as much as 1.6 percent and nickel 3 percent on the London Metal Exchange. U.S. equities also advanced. Mining companies, already hurting from slumping commodity prices as slowing growth in China exacerbated oversupplies, declined this month as more turmoil in the Asian country roiled global markets.

“This sector is so short that any good news at all, or change in sentiment, will whipsaw anyone who is short,” said Jeremy Wrathall, head of global natural resources in London at Investec Plc. “These companies are leveraged to good news.”

Anglo and Glencore had both tumbled more than 20 percent this year before Thursday’s recovery. The Bloomberg Commodity Index, a measure of returns for 22 raw materials, is near a record low. The companies entered the commodity downturn carrying large amounts of debt that spooked investors. Both lost more than two thirds of their value in 2015.

Company Plans

Anglo, based in London, is seeking to turnaround its fortunes with a drastic downsizing plan. The company said last month it will reduce by more than half the number of mines it owns and eventually lower employee numbers to 50,000, from 135,000.

Glencore is seeking to trim its $30 billion debt load to as low as $18 billion by the end of the year. The Baar, Switzerland-based firm on Thursday said it has started talks with lenders to refinance a $8.45 billion one-year revolving credit facility.

BHP Billiton Ltd., the world’s largest mining company, rose 6 percent to 657 pence in London. ArcelorMittal, the biggest steelmaker, rose 5.8 percent in Amsterdam.


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