Anglo American slashes capex as Q1 production falls

Mining giant Anglo American slashed full year capital expenditure guidance by about $1bn as the coronavirus pandemic led to a fall in first quarter production due to lockdown measures.

The company on Thursday said some projects would be delayed as government shutdowns and economic uncertainty affected approvals and commissioning. It also confirmed payment of its interim dividend.

Anglo said it had found $500m in costs savings as well as to benefiting from weaker producer currencies and low oil prices. Capital expenditure would be reduced by about $1bn to $4bn - $4.5bn and the lower revisions may hit spending in future years.

Overall first quarter production fell by 4% mainly due to lockdown measures. Anglo cut 2020 diamond production guidance by 7m carats, platinum 500,000 ounces, and palladium group metals by 200,000 - 400,000 ounces.

Forecasts for the Kumba iron ore mine were cut by 3.5m - 4.5m metric tons and thermal coal guidance by 4m metric tons. The company held guidance for copper, Minas-Rio iron ore, metallurgical coal and nickel production remain unchanged.