Shares in Anglo American dropped sharply Friday after the mining group reported a 29 per cent drop in profit, halted payouts to investors by suspending dividends and share buybacks, and said it would slash 19,000 jobs to counter the global economic slowdown.

Anglo, which controls the world's biggest platinum producer, reported so-called underlying profit in 2008 fell to $4.36 a share, the company said today in a statement, missing the $4.82 average expected by analysts. Full-year net income fell to $5.2 billion from $7.3 billion a year earlier, the company said today.

Anglo fell 141 pence, or 12.5 per cent, to 1,082 pence by 10:05 a.m. in London, where the company is based. The stock has dropped 30 per cent this year, valuing Anglo at £14.2 billion ($20 billion).

Operating profit in the base metals division - including copper, nickel and zinc - were down 42 per cent in 2008, the company said. Base metals contributed 45 per cent of Anglo American's operating profit in 2007. Operating profit for platinum declined 17 per cent,

The ferrous metals division, however, posted a 135 per cent gain because of increased sales and higher prices in the early part of the year. Operating profit from coal was up 265 per cent, and diamond sales rose 5 per cent.

CEO Cynthia Carroll aims to weather a slump in demand as the global economy contracts. Tumbling commodity prices have led mining companies around the world to curb investment, fire workers and seek extra funding. Xstrata Plc, which competes with Anglo in zinc and copper output, also said last month it suspended dividend payments.

To counter the downturn, Anglo American will cut 19,000 jobs by the end of 2009 and look for further cost-cutting opportunities. Anglo American employed about 100,000 people in 2007, with three-quarters in South Africa. Carroll declined say where other job cuts would be made on a conference call with reporters.

It also won't pay a final dividend for 2008 and has suspended its $4 billion share buyback program, having repurchased around $1.7 billion of shares under the scheme. That should help the group manage its debt, which jumped by $5.8 billion the year to around $11 billion following the acquisition of Anglo Ferrous Brazil and a further stake in Anglo Platinum.

"The breadth and severity of the global economic downturn and its impact on growth rates in key sectors and economies are difficult to overstate," said Carroll. "As we begin 2009, the economic outlook remains weak, with limited visibility and we are continuing to experience volatility and downward pressure on commodity prices.''

Anglo American said the outlook for its business remains poor in the near term, but said it believes the fundamentals of its core commodities business remain attractive over the medium- and long-term.

"The economic recovery of the OECD member countries and the ongoing industrialization of the world's major developing markets are expected to drive long term demand for commodities, stimulated further by government spending programs in many major economies, including the US and China," the group said