ANGLO AMERICAN is preparing a massive clear-out of its stable of businesses, including part of its stake in AngloGold Ashanti, in a shake-up that could return several billion dollars to Anglo shareholders over the coming year.

The restructuring includes a possible spin-off of Mondi, the paper and packaging group, a partial disposal of Tarmac and the sale of Highveld Steel and Vanadium.

It will leave Anglo American stripped down to a nuts-and- bolts mining group and a keener competitor to its rivals Rio Tinto and BHP Billiton.

News of the long-awaited restructuring plan and a commitment to return $1 billion (£564 million) to investors sent Anglo stock climbing yesterday by 6 per cent to £16.58.

In Johannesburg, the signal that Anglo would sell its 79 per cent shareholding in Highveld, the largest producer of vanadium, the steel additive, prompted a quick response from Mittal Steel, global leader in the metal. “We would be interested, We will consider what’s on offer,” Mittal said.

Anglo’s decision to slim drew an enthusiastic response from the City, tempered with concern that cash generated from disposals might be spent on overpriced mining assets in a hot metals market.

Tony Trahar, Anglo’s chief executive, said that surplus capital up to $1 billion be returned to shareholders via share buybacks or special dividends next year.

“We are creating a more focused mining group, better positioned to take advantage of opportunities in our main mining business,” he said.

However, Anglo-watchers in the City speculated that as much as $6 billion could be generated from selling down half of the AngloGold stake, a third of Mondi, Highveld and bits of Tarmac. “That would leave them with net cash by the end of 2006,” a leading mining analyst said.

Mr Trahar said that Mondi’s packaging operations were not a natural fit in a mining group.

“We would consider all the options — spin-off, IPO or merger,” he said. He added that no firm decision had been taken. “While values are depressed, it is not a good time to sell,” he admitted.

Key to Anglo’s strategy is the desire to extract more value from its quoted subsidiary, AngloGold. Typically, goldmining companies attract much higher valuations than base-metals miners and some analysts calculate that on a sum-of-the-parts valuation Anglo is worth almost £19 per share compared with yesterday’s price of just over £16.

Valued at $5.8 billion, Anglo’s stake in AngloGold represents about 14 per cent of the group’s total market value, but accounts for less than 4 per cent of Anglo’s profits.

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