A string of miners have warned of a production crunch in recent days as costs continue to rise for the global mining industry as inflation bites.
Mining giant Anglo American Plc said Friday that its mining operations will produce less than expected in the coming years.
Anglo's business has been hit by everything from logistical problems to extreme weather to the impact of the pandemic.
Anglo wrote in a statement on Friday that it had revised down its near-term production growth plans, expecting production to fall by about 3 percent in 2022 before rebounding in 2023 and 2024.
Anglo American expects total production to grow by 5 per cent next year and in 2024, with output in 2025 at the same level as in 2024.
The company said costs would rise 16 per cent this year due to supply chain disruptions and foreign exchange volatility, while capital expenditure fell to $5.7bn. Separately, the company said it may write down potash mines it is developing in the north of England.
Anglo's products cover diamonds, copper, platinum group metals, high-quality iron ore and coking coal, as well as nickel. Although headquartered in London, UK, the company has mining operations in southern Africa, North and South America and Australia, and its shares are listed on the London and Johannesburg Stock Exchanges.
Downturn in mining sector
While high commodity prices have been a boon to miners' profits, the headwinds have kept the industry from producing as much as expected.
The mining industry's failure to meet production targets will no doubt further exacerbate the already tight global supply and demand relationship.
On Tuesday, Glencore Plc, the world's largest copper miner, cut its 2023 production guidance for all the commodities it mines. Glencore expects to produce 1.04 million tonnes of copper next year, down from 1.06 million tonnes this year and well below analysts' consensus forecast of 1.24 million tonnes.
Codelco, Chile's national copper company, also cut its full-year mine production forecast in its previous quarterly results, citing in part higher supply costs.
