Anglo American PLC's (LSE:AAL) update on Tuesday was broadly in line with expectations, but investors will note a little less shine on its copper outlook for next year.
The miner kept all 2025 production and cost guidance unchanged across its divisions, though flagged downside risk to 2026 copper volumes because of lower grades at Collahuasi in Chile.
UBS said Anglo plans to offset some of that weakness by restarting an older concentrator at Los Bronces, with full details expected alongside full-year results in February.
The bank has trimmed its 2026 copper production estimate by 25,000 tonnes to 764,000 tonnes and cut its EBITDA forecast by 8%.
Even so, the Swiss bank expects the lower output from Collahuasi to tighten the global copper market, keeping prices supported.
It remains positive on both copper fundamentals and the broader Anglo-Teck investment case, reiterating a 'buy' rating with a 3,500p target price.
Copper production rose 9% quarter-on-quarter, helped by stronger performance from Quellaveco and Los Bronces. Collahuasi, where Anglo is a joint venture partner, continued to face lower ore grades but is benefiting from improved water availability, with a new desalination plant now fully operational.
The group expects output there to remain flat in 2026, before a significant recovery in 2027 once access to higher-grade ore resumes.
Elsewhere, the picture was steadier. Iron ore operations performed well, with Minas-Rio completing a key pipeline inspection ahead of schedule and Kumba seeing better rail logistics.
That allowed Anglo to lift its 2025 production target by one million tonnes to as much as 62 million. Pricing also improved, with average realised prices at about $100 a tonne for Kumba and $92 for Minas-Rio.
In diamonds, the company is pushing ahead with plans to sell De Beers. UBS noted that Anglo is “making good progress with the dual-track separation” and that a structured sale process is underway.
Angola’s state diamond company Endiama is reported to have lodged a formal bid, alongside interest from several international groups. The diamond market remains subdued, but Anglo’s realised prices have held up better than headline indices, helped by a shift toward higher-quality stones.
Jefferies adds that the upcoming shareholder votes on the Anglo-Teck transaction, scheduled for 9 December, could provide another boost. It expects Anglo’s shares to perform well if, as anticipated, the votes pass and the deal reaches completion.
While the likelihood of a rival bidder emerging appears low, Jefferies does not rule out the possibility of a third party making a move ahead of the vote.
On its latest numbers, Anglo trades on a 2026 estimated enterprise value to EBITDA multiple of 6.9 times and a free cash flow yield of 3.8%.
With a 2025 production target of 20 to 23 million carats intact, Anglo looks to be managing a complex transition.
For now, UBS and Jefferies agree on the direction of travel: steady operations, a disciplined copper plan and the finalisation of the Teck deal should keep the stock in investors’ good books.