Commodities trader Glencore has been at pains to defend its $46 billion takeover of Xstrata, a blockbuster for the mining sector that came just as the commodities cycle turned.

The increase in the deal's headline benefits was expected, given Glencore's conservative targets. But the company's promise of more to come, plus a commitment to capital discipline in a sector that squandered billions during the mining boom was taken positively by the market.

Glencore's shares, which have underperformed the UK mining sector by around 7 percent since the merger completed in May, were up 2.4 percent in London at 1500 GMT at 329 pence.

The commodities trader had forecast $500 million of synergies when the acquisition was first announced last year - but that included only the benefit of channeling more of Xstrata's output through Glencore's marketing machine.

In its first detailed presentation since closing the deal, Glencore said it now planned for synergies to exceed $2 billion for 2014, including marketing and financing benefits but also $1.4 billion through cost savings alone, more than many analysts had forecast.

"As we delve deeper into the assets ... I am sure there is more to go - to pinpoint what that number is, is difficult," Chief Executive Ivan Glasenberg said on Tuesday, adding the additional cuts would come from both trading and operations.

"We have to get mine managers to understand what Glencore needs, and how many people it needs to implement it. By the end of this year, we will have that in place."

Glencore did not say how much it expected to squeeze from the next phase of cost saving and synergies, to be outlined in the next six months, though analysts at Sanford Bernstein said it could be as high as another $1 billion.

Much of the savings so far came from cutting corporate costs - Glencore has closed 33 offices in three months and slashed almost half Xstrata staff in headquarters or divisional offices.

But up to $576 million of the $2 billion total - the largest slice of the current savings - has already come from the coal division, where Glencore like other miners is struggling with weak prices and oversupply. Glencore said almost a third of global thermal coal production is now loss-making.

Glencore's coal division has made the steepest cost cuts so far, because of the pressure on margins from weaker prices. The group is now digging into other key divisions from copper to nickel. Productivity in coal has already improved by more than a fifth per employee, Glencore said.

It has put operations on hold and shut others, including the Wandoan project and the Collinsville mine in Australia, and more could be frozen, Glencore's co-head of coal, Peter Freyberg said, adding the group would not "cross-subsidies".

PROJECTS ON HOLD

Glencore Xstrata sees itself as a proponent of a new culture in mining that focuses on shareholder returns and careful spending. It plans to cut capital expenditure by $3.5 billion by 2015 and hold spending to sustain operations at $4 billion, at the lower end of previous guidance.

Much of that cut is due to Glencore's assumption that it will sell the $5.9 billion Las Bambas copper project next year, therefore removing what would be $2.7 billion of spending.

Glencore also said some of its cuts in metals would be channeled into oil, where it sees higher returns.

The group has not been shy of criticizing rivals for pursuing costly greenfield projects - mines built from scratch where cost overruns and delays have been rife. Its Koniambo nickel mine in New Caledonia, inherited from Xstrata, has seen costs escalate from under $4 billion to $6.3 billion.

Glencore said it had cut back an Xstrata project pipeline that would have cost some $21 billion to build. Out of a total of 88 Xstrata projects, 44 have been suspended and 7 cut back.

"Will we develop (the greenfield projects)? We will be more pragmatic than others," Glasenberg said.

Glencore gave little detail on sales and divestments, which include the Las Bambas mine in Peru, in which it expects first bids next week and Chinese suitors. It said a 25 percent stake in platinum miner Lonmin remained non-core, though there was "no rush" to sell.

Glencore, which listed in London and Hong Kong in 2011, plans to apply for a secondary listing in Johannesburg, to begin trading before the end of the year.

(Reporting by Clara Ferreira-Marques; Editing by Keith Weir and Jane Merriman)

By Clara Ferreira-Marques