JOHANNESBURG (Reuters) - Global miner Anglo American (L:AAL) (J:AGLJ) said on Tuesday it plans to sell its iron ore unit, as part of a sweeping strategic overhaul to cope with commodities rout that has triggered a fight for survival even among heavyweights.
The global commodity rout, which has seen crude oil and copper prices hit multi-year lows this year, has forced Anglo and its peers to sell assets and cut dividends and capital spending to preserve cash and reduce debt.
Anglo, which reported a 55 percent drop in underlying core profit, or EBIT, owns about 70 percent of Kumba Iron Ore (KIO) (J:KIOJ), Africa's biggest miner of the steel-making ingredient.
"The company has initiated a review to consider options to exit from KIO at the appropriate time, including a potential spin-out," Anglo said in statement.
Johannesburg-listed shares in the Anglo, the world No. 5 mining company by value, jumped more than 7 percent, reversing earlier losses, to 96.14 rand by 0926 GMT.
Anglo said underlying earnings before interest and tax fell 55 percent to $2.2 billion from $4.9 billion a year earlier.
The firm had been expected to post annual earnings before interest and tax of $1.5 billion, according to Thomson Reuters analysts' forecasts, down 70 percent year-on-year.
Ratings agency Moody's on Monday downgraded Anglo, citing expected lower commodity prices and doubts over how long it would take the company to pay down debt.
Rival Rio Tinto (AX:RIO) (L:RIO) on Thursday scrapped its generous payout policy in the face of a bleak outlook for the global economy after it slumped to a net loss for 2015 and posted its worst underlying earnings in 11 years.