Glencore Looks To Mine $10bn To Cut Debt Pile

The mining to commodities trader Glencore (Xetra: A1JAGV - news) has announced a plan to cut its $30bn debt pile by almost a third in just over a year, aiding a recovery in its battered share price.

The FTSE 100 firm said the measures, including the issuance of $2.5bn in new shares, would reduce net debt to just above $20bn by the end of 2016.

Its market value has been savaged - by 60% this year ahead of Monday's announcement - amid concerns over its debt load and the collapse of commodity prices - linked to China's economic slowdown .

Prices for its key products, copper and coal, have sunk to lows not seen for more than six years.

Glencore said on Monday that it was suspending dividends and moving to sell non-core assets in an action that represented an expansion of its previously announced plans to slash debt.

It (Other OTC: ITGL - news) confirmed the move in the wake of a warning from a credit ratings agency last week that it might cut the company's ratings.

Standard & Poor's said: "We would likely lower the rating on Glencore if we perceive reduced commitment to defending the rating or if commodity prices persist below our price deck or fall further."

Glencore shares surged more than 12% when the FTSE 100 opened for business on Monday morning - an hour after the company confirmed its debt reduction measures.

The wider mining sector enjoyed a rally on the back of the announcement, with Antofagasta (Other OTC: ANFGF - news) rising 7% in early trading and Anglo American (LSE: AAL.L - news) , BHP Billiton and Rio Tinto (LSE: RIO.L - news) all up more than 2%.