LONDON (Reuters) - Glencore Xstrata (LSE:GLEN) promised investors on Tuesday it would slash costs, shelve risky projects and squeeze more benefits from its $46 billion (29.3 billion pounds) takeover of mining group Xstrata, lifting its target to at least $2 billion of synergies by next year.
The commodities trader had promised $500 million of synergies when the acquisition was first announced last year - largely from the benefit of channelling more of Xstrata's metals and minerals through Glencore's marketing machine, not costs to be squeezed out of Xstrata's mines.
Ahead of its first day of presentations to vaunt the success of the deal, the group said it now planned for $450 million of synergies in marketing, $175 million from financing and $1.4 billion through cost savings for 2014, better than many analysts had forecast. And it hinted at more savings ahead.
"A significant portion of the synergies are in overhead costs at head and regional offices. We are only just starting to comprehensively look at the combined mining and metallurgical operations," Chief Executive Ivan Glasenberg said.
Glencore Xstrata plans to reduce capital expenditure by $3.5 billion by 2015 and hold spending to sustain operations at $4 billion, at the lower end of previous guidance.
Greenfield projects inherited from Xstrata - mines to be built from scratch, long unpopular with Glencore - have been "deprioritised" with both scope and cost being brought down. It did not provide specific detail.
Glencore, which listed in London and Hong Kong in 2011, also said it now plans to apply for a secondary listing in Johannesburg to tap a growing African market. It expects the listing to become effective in the fourth quarter.
Glencore, whose shares have underperformed a volatile UK mining sector <.FTNMX1770> by around 7 percent since the merger completed, came under fire last month after it wrote $7.7 billion off the value of Xstrata's assets.
Although this was a paper hit, it raised questions over trading powerhouse Glencore's largest deal to date, sealed just as the commodity cycle turns.
Analysts say a strong performance on Tuesday, when Glencore will present its findings on the deal after four months of ownership, could help perceptions, though the success or otherwise of the merger will take longer to determine.
(Reporting by Clara Ferreira-Marques; Editing by Keith Weir)