- Anglo American plans to reduce production at its iron ore operations in Kumba
- The London-listed mining giant is the world's largest platinum producer
- Shares in the group were the biggest fallers on the FTSE 100 on Friday morning
Anglo American plans to cut mineral production to reduce costs and boost cash flow after a challenging year.
The London-listed mining giant and the world's largest platinum producer said it would reduce production at its Kumba iron ore operations in South Africa and use just one plant at the Los Bronces copper mine in Chile.
At the former factory, the company's production continues to be seriously disrupted by industrial action involving employees of railway and port company Transnet.
Cut: Anglo American said it would reduce production from its iron ore operations in Kumba
The problems have been exacerbated by cable thefts, train derailments and even locust swarms, leading to increased supplies of iron ore in the mines.
Anglo American said shrinking production at Kumba would help the company focus on higher-margin production at its platinum group metals business.
Copper production The company's Chilean operations were hit by a substation fire earlier this year, disrupting power supplies to the Los Blonces mine for more than a fortnight.
It expects the planned cuts next year to lead to lower unit costs and a $1.8 billion reduction in capital expenditure from 2023 to 2026.
Duncan Wanblad, CEO of Anglo American, said: 'In the near term, given continued high macro volatility, we are purposefully reducing our costs and prioritizing our capital to drive more profitable production on a sustainable basis .'
Anglo-American stocks By midday they were down 7.8 percent the biggest faller on the FTSE 100 Index.
The company's shares have fallen by more than a third this year as falling commodity prices and rising inflation have hit revenues and profits.
Anglo American's underlying profit before nasties totaled $5.1 billion in the first half of 2023, compared with $8.7 billion in the same period last year, while revenue fell by $2.4 billion to $15.7 billion.
Since publishing these results, the group has lowered guidance on copper production and warned of job losses in corporate offices in several countries.
Sophie Lund-Yates, chief equity analyst at Hargreaves Lansdown, said: 'Miners are at the mercy of cyclical material costs, and the wheel is turning against new CEO Duncan Wanblad – with problems also exacerbated by operational headaches.
'Anglo's overall position is still strengthened by its exposure to consumer products, meaning it is partly protected from the worst of the industry downturns, but there is clearly work to be done to keep the ship afloat over the next twelve months.