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Anglo American to Lower Production, Cut Cost by $1 Billion Next Year — 2nd Update

By Christian Moess Laursen


Shares in Anglo American fell sharply after it said it would lower production next year as part of a move to save $1 billion, becoming the latest miner to be hit by a price rout ripping through the platinum sector.

The multinational diversified miner said Friday that its output for 2023 increased by around 3% on year, driven by a ramp-up of operations at its Peruvian copper project Quellaveco and solid iron ore production, which offset lower platinum metals and diamonds production.

However, for the year ahead, the mining giant expects production to decrease by around 4%, including reducing production at its Kumba iron ore operations in South Africa and its key copper mine Los Bronces in Chile.

The operational reshape comes amid continuing market volatility, especially seen in the platinum metals market. The miner, one of the world's largest by revenue, expects to reduce costs by a further $500 million in 2024, additional to the $500 million savings already guided for.

Platinum prices have plummeted, with futures down 15% in the year to date. This is mostly due to low demand from the automotive sector and concerns demand could fall further as electric vehicles increase their share of the automotive market.

Platinum, palladium and rhodium are used in devices that remove pollutants from exhaust fumes in diesel and petrol engines.

In recent months, Johannesburg-based PGM miner Sibanye-Stillwater also took measures to cut costs by restructuring operations in South Africa, citing a lower price environment and continuing inflationary cost pressures. Up to 4,000 jobs could be affected, it said in October.

Anglo American Chief Executive Duncan Wanblad said in a call that the company will halt investments into expanding its Amandelbult platinum-metals mine in South Africa. The African country, the world's biggest platinum-producing country, has been particularly hit by the platinum-price slump and higher costs, with the rand being one of the weakest performing currencies this year.

Anglo American said it expects to deliver 2% lower cost per unit in 2024 compared with this year--mainly driven by 6% and 5% lower costs per unit from copper and platinum operations--and to lower capital expenditure by $1.8 billion in 2023-26.

"We are focused on what we can control - safety, operational discipline and capital allocation," Wanblad said in statement ahead of the call.

"Looking ahead, the fundamental supply and demand picture for many metals and minerals is ever more attractive," Wanblad added.

Anglo American's majority-owned platinum-miner Anglo American Platinum said in a separate statement that it expects to deploy a series measures to reduce costs annually by around 5 billion South African rand ($266.5 million) amid the price rout and persistent cost inflation.

Anglo American Platinum said these include embedding efficiencies, stepping up cost-saving initiatives and re-prioritizing its capital allocation. Anglo American Platinum will host calls with media and investors later on Friday.

At 1047 GMT, shares in Anglo American are down 7.3% at 2,063.00 pence.


Write to Christian Moess Laursen at


Anglo American to Lower Production, Cut Cost by $1 Bln Next Year

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December 08, 2023 06:10 ET (11:10 GMT)

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