Source: Sharecast
The company had already targeted $500m in savings, and started by axing corporate jobs and costs at head offices in Johannesburg and London among other locations. It now forecasts $1.8bn in capital expenditure cuts between 2023 and 2026.
Shares in the mining giant fell 7.24% in London trade on the announcement.
"We are building a platform for strengthened and sustainable operational and financial performance. We took early action in 2023 to increase business resilience in the face of ongoing economic and geopolitical volatility and the current cyclical weakness in platinum group metals (PGM) and diamonds," said chief executive Duncan Wanblad.
"As a result, we have already gone a long way towards reducing our business support costs by $0.5bn by mid-2024, with an additional $0.bn in annual cost efficiencies identified across our global businesses that we expect to deliver in 2024."
PGM metals - platinum, palladium and rhodium - are used in diesel and petrol engines to cut exhaust emissions but are falling out of favour as the market shifts towards electric vehicles.
Anglo said it expected group production expected to fall by 4%, including cuts at its Kumba iron ore operation in South Africa and moving to one plant at its Los Bronces copper operation in Chile.
Unit costs are forecast to decline by 2% - with cost discipline "more than offsetting inflation" - and capital expenditure by $800m to $5.7bn, including the UK Woodsmith fertiliser project on which it took a $1.7bn writedown in February.
AJ Bell investment director Russ Mould said Anglo’s actions "demonstrate some discipline, matched elsewhere in the sector, and on the other (hand) constrained production could support higher prices in 2024".
“However, the lower output also means lower earnings and cash flow and potentially less generous returns to shareholders too. The scale of Anglo American’s cuts may also have come as a bit of a shock to the market, and they suggest incoming finance director John Heasley may look to keep a tight rein on the purse strings when he takes over from Stephen Pearce at the end of the year."
“The company also faces the challenge of a mounting debt pile and its somewhat patchy operational performance means it may not be awarded a huge amount of patience by the market.”
Reporting by Frank Prenesti for Sharecast.com