File picture: Phil Noble

London - Anglo American has overtaken Glencore in a race neither wants to win.

Radical cuts across Anglo American’s operations that CEO Mark Cutifani says are aimed at delivering a “resilient” business, have so far turned the company into the year’s worst performer on the FTSE 100 index of major UK shares.

“Alarm bells will be ringing at Anglo headquarters this morning,” Yuen Low, a mining analyst at Shore Capital Stockbrokers, said in London. “They have taken drastic action but it may not be enough.”

Anglo has sunk 76 percent this year, narrowly beating Glencore’s 74 percent drop. While the broader industry has tumbled this year in the face of a Chinese economic slowdown, the two producers’ debt piles have drawn the greatest concerns among investors.

Anglo fell as much as 14 percent in London on Wednesday to a record low and is set for the biggest two-day drop since 2008. The stock fell 12 percent Tuesday after the company accelerated turnaround plans to include 85,000 job cuts and a scrapping of its dividend.

No confidence

“The downside risk to commodity prices is still significant, and further action, including an equity issuance, may still be necessary in 2016,” Jefferies said in a note to investors Wednesday. “We have confidence that operational improvements are coming, but we do not have confidence that commodity prices will stabilize in the near future.”

Jefferies cut it’s rating on Anglo to sell from hold. Banks including HSBC Holdings said even the extended cutbacks may be insufficient should weak commodity prices prevail.

Glencore, weighed down by a $30 billion debt load, has edged higher from a record low on September 28 after the company moved to alleviate investor concerns about its ability to curb its borrowings. The commodity trader has sold $2.5 billion of new stock, scrapped its dividends and put assets up for sale as part of a $10 billion debt-reduction plan.

Anglo fell 10 percent to 291.15 pence by 11:08 a.m. in London, while Glencore declined 1.6 percent to 78.15 pence. The 13-member FTSE 350 Mining Index fell 0.5 percent.