Mining giant Anglo-American cuts copper and iron production to cut costs
Anglo American Plc plans to cut iron ore and copper production in the near term to lower costs, one of the world's top mining companies said on Friday , as it struggles to revive its share price, which has fallen more than 30% this year, as you can see from the following graph:
After indications on production, investments and costs, shares of Anglo American – which produces, among other things, copper, nickel, platinum group metals and diamonds – fell 6.5% on the London Stock Exchange in the first quarter on Friday. morning.
For a year now, Anglo American shares have lost 36%, compared to an 11% increase in the share price of Rio Tinto and a 5% increase in the price of BHP shares, its main competitors.
Markets for some of Anglo American's key mining products fell, due to weak demand in China and the overall economic slowdown. Critical infrastructure issues in South Africa have also impacted Anglo American's iron ore mining operations, and iron doesn't seem to be going anywhere of late
“In the near term, given continued high macroeconomic volatility, we are deliberately reducing costs and prioritizing capital to achieve more profitable production on a sustainable basis,” said Duncan Wanblad, CEO of Anglo American, in a statement.
The company expects to reduce capital expenditures by $1.8 billion between 2023 and 2026.
“Operationally, we are improving cost performance and cash generation by reconfiguring a number of activities to adapt the production profile to short-term market constraints and conditions, thereby also protecting long-term value,” Wanblad said.
The production cuts will include reducing output at the Kumba iron ore mining site in South Africa “in line with prolonged logistical constraints” as well as moving the Los Bronces copper plant to a single plant. , in Chile.
Anglo American expects total production to fall 4% next year and unit costs to fall about 2%. Production is expected to decline another 3% in 2025, before increasing about 4% in 2026.
Anglo American remains optimistic for the medium to long term. “The outlook for mining products has never been better,” Wanblad said. The problem for Anglo American is in its investments it sees South Africa as central, whose mining sector, between energy and transport shortages, is experiencing an extremely difficult moment.
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The article Anglo-American mining giant cuts copper and iron production to cut costs comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/il-colosso-minerario-anglo-american-riduce-la-produzione-di-rame-e-ferro-per-taliare-i-costi/ on Fri, 08 Dec 2023 17:01:43 +0000.