Anglo American to slash production and expenses amid challenges

[Nat Quinn]

Anglo American will lower production across nearly all commodities next year in a bid to cut costs amid logistical and operational snarls in its portfolio.

The miner will reduce expenditure by another R9.3 billion ($500 million) next year, doubling an existing target, it said in a trading update on Friday.

That means the output of copper, iron, platinum and other raw materials will fall from previously targeted levels.

Anglo’s recently appointed CEO, Duncan Wanblad, has faced a tough start to his tenure. He stepped into the role with most commodity prices at a record, but prices have declined steadily since then.

The company’s operations have also been hampered by issues from extreme weather to a breakdown in crucial infrastructure in South Africa.

Overall, production will be about 4% lower next year, the firm said. It cut the output target for copper to between 730,000 tons and 790,000 tons from as much as 1 million tons while also lowering forecasts for platinum group metals, iron ore, nickel and coal.

The company also plans to cut its capital spending by $1.8 billion through 2026.

Bloomberg News reported last month that the company was also cutting jobs at two units in South Africa because of declining platinum-group metal prices and bottlenecks curbing iron ore exports.

 

SOURCE:Anglo American to slash production and expenses amid challenges – Daily Investor

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