Anglo American has lowered its copper production cost forecast for 2026 despite growing inflationary pressures from geopolitical tensions in the Middle East, while maintaining stable production across its major mining operations, including Kumba Iron Ore.
The mining giant said on Thursday that strong cost control, favourable foreign exchange movements and higher by-product credits had enabled it to reduce its copper unit cost guidance for the year, even as higher fuel prices and mining consumable costs begin to weigh on the industry.
Another solid quarter in copper, iron ore production
Duncan Wanblad, Anglo American chief executive, said the company had delivered another solid quarter in copper and premium iron ore production, with operations performing broadly in line with expectations.
Copper production remained flat at 173 200 tonnes during the second quarter, matching the same period last year and rising 2% from the first quarter.
Anglo American has kept its full-year copper production guidance unchanged at between 700 000 and 760 000 tonnes.
The company reduced its overall copper unit cost guidance to about 145 cents per pound from the previous estimate of around 172 cents per pound.
In Chile, expected costs were lowered to about 210 cents per pound from 230 cents, while Peru’s guidance was cut sharply to about 65 cents per pound from 100 cents.
Stronger by-product credits helped offset inflation pressures
Wanblad said stronger by-product credits, particularly during the first half of the year, together with disciplined cost management, had helped offset mounting inflationary pressures.
However, he warned that the ongoing conflict in the Middle East is beginning to affect the mining sector through rising fuel prices and higher costs for essential mining supplies.
“As the conflict in the Middle East continues to cause global market volatility, we are beginning to see some inflationary pressures primarily through higher fuel and other mining consumables,” said Wanblad.
He added that Anglo’s supply chain teams were actively managing these cost pressures to limit their impact on the business.
The warning reflects growing concern across the global mining industry that geopolitical instability could increase operating costs, squeeze profit margins and place additional pressure on supply chains if tensions persist.
Kumba Iron ore stable performance
In South Africa, Anglo’s premium iron ore business, Kumba Iron Ore, continued to deliver a stable operational performance despite planned maintenance work.
Premium iron ore production fell 3% to 15.4-million tonnes during the quarter, mainly because of scheduled plant maintenance at Kumba and lower ore grades and mass recovery at the Minas-Rio operation in Brazil.
Despite the slight decline, Anglo said Kumba remained on track and contributed to another steady quarter for its premium iron ore business.
In other areas, manganese ore production increased by 22% to 908 300 tonnes as operations recovered from the impact of a tropical cyclone that affected Australian production during the same period last year.
Steelmaking coal production remained broadly unchanged at 2-million tonnes, while nickel output declined 4% to 9 100 tonnes because of maintenance work at the Barro Alto and Codemin operations.
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- Anglo American reduced its 2026 copper production cost forecast, citing strong cost control, favorable foreign exchange, and higher by-product credits despite inflationary pressures from Middle East tensions.
- Copper production remained stable at 173,200 tonnes in Q2, with full-year guidance unchanged at 700,000 to 760,000 tonnes.
- Copper unit cost guidance was cut from 172 to about 145 cents per pound, with significant cost reductions in Chile and Peru.
- Ongoing Middle East conflict is causing rising fuel and mining consumable costs, but Anglo's supply chain management is mitigating impacts.
- Kumba Iron Ore showed stable output despite a slight 3% production dip due to maintenance, while manganese ore rose 22%, steelmaking coal was steady, and nickel output fell 4% because of maintenance.
Duncan Wanblad,
Copper production remained flat at 173 200 tonnes during the second quarter, matching the same period last year and rising 2% from the first quarter.
In Chile, expected costs were lowered to about 210 cents per pound from 230 cents, while Peru's guidance was cut sharply to about 65 cents per pound from 100 cents.
Wanblad said stronger by-product credits, particularly during the first half of the year, together with disciplined cost management, had helped offset mounting inflationary pressures.
However, he warned that the ongoing conflict in the
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Premium iron ore production fell 3% to 15.4-million tonnes during the quarter, mainly because of scheduled plant maintenance at
Despite the slight decline,
In other areas, manganese ore production increased by 22% to 908 300 tonnes as operations recovered from the impact of a tropical cyclone that affected Australian production during the same period last year.
ALSO READ: Patrice Motsepe eyes $5bn copper investment in Papua New Guinea
