Dec. 17 (Bloomberg) -- Anglo American Plc, the mining company that controls the world’s biggest platinum producer, cut planned investment by more than half as a rout in metals prices thwarted its $45 billion expansion program.

“We have taken decisive action as a result of the fast changing economic climate,” Cynthia Carroll, chief executive officer of London-based Anglo American, said in a statement to the Regulatory News Service today. “Capital expenditure for 2009 has been capped at $4.5 billion.”

Metals from platinum to nickel are headed for record annual declines, forcing companies from BHP Billiton Ltd. to Cia. Vale do Rio Doce to reduce output and cancel mergers. Rio Tinto Group is also cutting 14,000 jobs and spending by $5 billion. The LMEX London Metal Index of industrial metals fell 36 percent in the month to Oct. 23, when Anglo said it was reviewing projects, and has since slumped another 22 percent.

“Anglo is basically saying that for two years we’re going to see a weak commodities market,” said Cape Town-based Johan de Kock, head of research at Metropolitan Asset Managers, which oversees about $5.7 billion in assets.

After rising for six straight years, copper has slumped 54 percent in 2008, while platinum has declined from a record to a four-year low. By July this year, Anglo American had approved $15 billion of projects and planned $30 billion more to boost production of copper and other metals.

Anglo Platinum

Anglo Platinum Ltd., 75 percent-owned by Anglo American and the world’s biggest producer of the precious metal, today cut next year’s capital expenditure plan to 9.1 billion rand ($910 million) because of plunging prices.

The producer joins Impala Platinum Holdings Ltd., whose Chief Executive Officer David Brown said today in an interview that his company is already cutting spending and is now “looking at production.” Impala may make an announcement in January detailing the spending reductions, he said.

Anglo American today delayed its Amandelbult No. 4 Shaft platinum expansion in South Africa and the Los Bronces copper project in Chile by eight months. In Brazil, commissioning of the Minas-Rio iron-ore project and the Barro Alto nickel project were deferred by as long as a year. The company wasn’t yet able to assess the effect on jobs, spokesman James Wyatt-Tilby said by phone from London.

‘Negative Signal’

“It’s quite a safe thing to do from company point of view,” said Patrice Rassou, a senior portfolio manager at Sanlam Investment Management, which oversees about $25 billion. “But it sends quite a negative signal in terms of what expectations are of commodities markets going forward.”

Kumba Iron Ore Ltd., controlled by Anglo American, will curb output “marginally” in the fourth quarter and cut 2009 capital expenditure by a fifth to $425 million, the Pretoria, South Africa-based company said in a separate statement.

While the Minas Rio delay was a surprise, it is positive “given the significant capex and state of the iron ore market,” Citigroup Inc., which rates Anglo a “medium risk,” wrote in a note today.

Anglo American, which has declined 48 percent in London trading this year, rose 43 pence to 1,608 pence as of 1:05 p.m. local time, giving the company a market value of 21.1 billion pounds ($32 billion). BHP, the world’s largest mining company, has dropped 19 percent this year and Rio by 72 percent.

“Capital preservation has become the buzzword,” Deutsche Bank AG wrote in a note on Dec. 9.

Anglo American “continues to believe in the medium to long term fundamentals of its core commodities,” the company said, adding demand will be “driven primarily by the ongoing industrialization of the major developing markets and the economic recovery of the OECD member countries.”

To contact the reporter on this story: Carli Lourens in Johannesburg at clourens@bloomberg.net

Last Updated: December 17, 2008 08:50 EST