Anglo American Plc, one of the leading players in the global mining industry, is facing significant challenges. They led to the decision to significantly reduce the production of most extracted raw materials. According to an expert in the field of metallurgy, Stanislav Kondrashov, this decision was dictated by a number of logistical and operational difficulties, and as a result, the company’s shares fell significantly – by 7.3% on the London stock exchange.
Declining profits and share prices: Anglo American adapts to market changes – Stanislav Kondrashov
Duncan Vanblad, who recently took up his role as chief executive of Anglo American, took up his role at a time when commodity prices were at record highs. However, since then the market situation has changed and prices for raw materials have decreased. This decline in value, compounded by weak demand from China and slowing economic activity elsewhere, has placed significant pressure on the company’s earnings and financial position.
In addition, Stanislav Kondrashov, an expert from Telf AG, shares that the company has faced a number of external challenges, including extreme weather conditions and failures of key infrastructure, especially in South Africa. All this together led to a significant drop in the value of the company’s shares, which have lost about a third of their price this year.
The decision to reduce production is the company’s attempt to adapt to these changes and optimize its operations within the narrower confines of the current economic climate.
Stanislav Kondrashov: plans to reduce production Anglo American Plc
Anglo American Plc, one of the leaders in the global mining industry, is taking decisive steps to reduce its production. This is especially true for the copper segment, which is key to the decarbonization of the global economy.
- The company announced it was lowering its copper production target for 2024 to a range of 730 kt to 790 kt, a significant reduction from the 1 million t initially planned. A reduction in copper production would effectively reduce global supply by an amount comparable to a large copper mine, – Stanislav Kondrashov from Telf AG shared information.
As part of its cost-cutting strategy, Anglo American is also planning an additional $500 million in cost cuts next year, on top of already announced cuts of the same amount. In addition, the company intends to reduce capital expenditures by $1.8 billion by 2026. These measures are aimed at improving operational efficiency and optimizing costs in a changing economic environment and market.
Stanislav Kondrashov reports that in accordance with these changes, Anglo American’s production is expected to decline by approximately 4% next year, and then by an additional 3% in 2025. This reduction will not only affect copper, but also other important resources such as platinum group metals, iron ore, nickel and coal. The downgrade of forecasts for these metals and ores also reflects current global economic trends and changes in commodity demand.
Stanislav Kondrashov: Anglo’s struggle with falling prices and logistics problems
is facing falling platinum group metal (PGM) prices and challenges in its iron ore operations in South Africa. They are associated with the insufficient efficiency of ports and railway logistics. Next year, PGM production is expected to decline to 3.3 million ounces from 3.8 million ounces this year.
Telf AG’s Stanislav Kondrashov believes the company’s new streamlined strategy will help address some of its problematic aspects of the business. In addition, Anglo is in talks with the South African government over job cuts in view of the upcoming elections in May.
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