(Alliance News) - Anglo American PLC said on Friday it remains focused on cost-controls and plans to trim capital expenditure over the medium term to cope with "elevated macro volatility".

The London-based mining company indicated that it has already reduced its business support costs by USD500 million by mid-2024. It expects an additional USD500 million in annual cost savings identified across its global businesses in 2024.

Anglo American shares slumped 5.5% to 2,102.50 pence in London on Friday morning. They lost 5.4% at ZAR497.39 in Johannesburg.

In Johannesburg, Anglo American Platinum Ltd shares rose 1.8% to ZAR784.65, while Kumba Iron Ore Ltd shares fell 0.3% to ZAR598.00.

Anglo America's cost-reduction efforts come as the miner faced ongoing economic and geopolitical volatility, and the cyclical weakness in platinum group metals and diamonds.

"In the near term, given continuing elevated macro volatility, we are being deliberate in reducing our costs and prioritising our capital to drive more profitable production on a sustainable basis," Anglo American Chief Executive Officer Duncan Wanblad said.

Wanblad said its subsidiary Kumba had slashed production in line with prolonged logistics constraints in South Africa. It also focused on higher margin own-production through its PGMs processing facilities. It moved to one plant at the Los Bronces copper operation in Chile.

Anglo American expects to deliver lower unit costs in 2024, despite high inflation, and USD1.8 billion lower capital expenditure in the 2023 to 2026 period.

Kumba separately cut its 2023 production estimate to between 35 million tonnes and 36 million tonnes, from 35 million tonnes to 37 million tonnes predicted previously. For 2024, output is also revised down to between 35 million tonnes and 37 million tonnes from 37 million tonnes and 39 million tonnes.

Iron ore production guidance is marked down to between 37 million tonnes and 39 million tonnes, compared to 39 million tonnes and 41 million tonnes. Kumba projects output at between 35 million tonnes and 37 million tonnes for 2026.

In another separate filing, Anglo American Platinum said it expects to meet 2023 production guidance, estimating output at 3.8 million ounces.

For 2024, PGM production is guided to between 3.3 million ounces and 3.7 million ounces, from 3.6 million ounces and 4.0 million ounces predicted previously. Production for 2025 is likely between 3.0 million ounces and 3.4 million ounces, from between 3.3 million ounces and 3.7 million ounces. Output for 2026 is set at between 3.0 million ounces and 3.4 million ounces.

Anglo American expects production for 2023 to increase by 3%, thanks Quellaveco copper ramp-up in Peru and solid iron ore production, which offset by ore grades in Chile, and lower PGMs and diamonds production.

Unit costs for this year is likely to rise 5%, due to inflationary pressure. For 2023, capex is estimated at USD5.8 billion, revised down from between USD6.0 billion and USD6.5 billion predicted in the 2022 financial year due to prioritisation. In 2022, capex was USD5.7 billion.

For 2024, production is expected to decrease by 4%, with unit costs falling by 2%. Capex of USD5.7 billion is estimated.

Production for 2025 is expected to decline a further by 3% and capex projection is at USD5.7 billion.

Output is seen rising by 4% in 2026, benefiting from higher volumes in copper, iron ore, steelmaking coal and diamonds. Capex is set to fall to USD5.3 billion.

By Artwell Dlamini, Alliance News reporter

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