Anglo American has raised production forecasts for 2018 as the miner continues to sweat its assets harder.

Ahead of a briefing to analysts and investors on Tuesday, Anglo said it expected 2018 output to be 2 per cent above previous guidance and costs 5 per cent below.

“We are also confident about the outlook, with production expected to increase by 3 per cent in 2019, with cost inflation fully absorbed by our productivity and cost improvements,” said chief executive Mark Cutifani. “We expect a further 5 per cent production increase in both 2020 and 2021.”

Anglo also flagged an increase in sustaining capital expenditure, which it expects to average $2.8bn to $3.1bn over the long term as

Since Mr Cutifani took the helm in 2013, Anglo has streamlined its portfolio, slashed costs and improved its productivity. It has also reduced its net debt, which now stands at $4bn and is one of the lowest in the sector.

Yet, Anglo remains the only one of the big diversified mining companies not to have launched a share buyback programme, much to the puzzlement of some shareholders.

While not addressing that question directly in Tuesday’s statement, Mr Cutifani said the company was now well positioned to “drive enhanced returns”, while maintaining a strong balance sheet and the capital needed to invest in the expansion of existing mines and new projects.

“We have a well sequenced range of high returning, quick payback growth options, from life extensions in diamonds and metallurgical coal, to growth across our copper, diamonds and met coal businesses in particular”, he said.

Anglo also said it expected its Minas-Rio iron ore mine to come back on line before the end of the year and to produce between 16m tonnes and 19m tonnes next year.

Anglo was up 4 per cent on Tuesday at 1,637p, taking its shares into positive territory for the year.

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