Glencore will cut costs, shelve projects and squeeze more than expected from its record-breaking purchase of mining group Xstrata, lifting benefits from the deal to at least $2 billion in 2014.

In an update on the $46 billion tie-up four months after taking control, Glencore Xstrata said there could be more cost savings and synergies ahead.

"We believe there is still more to come," chief executive Ivan Glasenberg said, in a presentation to investors on Tuesday, adding that would be from both marketing and savings at mines. The additional benefits will be clear in 6 months, he said.

"There is certain low-hanging fruit which is easy to capture, as we delve deeper into the assets ... I am sure there is more to go - to pinpoint what that number is difficult."

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.

The increase in the deal's benefits was not unexpected given the conservative nature of Glencore's original targets. Glencore's shares were up 3.3 percent in London at 1000 GMT to almost 332 pence.

The shares have underperformed a volatile UK mining sector by around 7 percent since the merger completed.

In the first day of presentations to show the success of the deal, Glencore said it now planned for synergies to exceed $2 billion for 2014, of which $450 million amounted to confirmed synergies in marketing, but to which Glencore added $175 million from financing and $1.4 billion through cost savings alone, more than many analysts had forecast.

Much of the savings came from cutting corporate costs - Glencore has closed 33 offices in three months and slashed almost half Xstrata staff in headquarters or divisional offices.

But up to $576 million of the total - the largest slice - has come from the coal division, where Glencore like other miners is struggling with weak prices and oversupply. Glencore said almost a third of the world's thermal coal production is loss making, an "unsustainable" prospect.

Glencore's coal division has made the steepest cost cuts so far, not least because of the pressure on margins from weaker prices. Productivity there has already improved by more than a fifth per employee, Glencore said.

It could also put more operations on hold, Glencore's co-head of coal, Peter Freyberg said, adding some mines were struggling and the group would not "cross-subsidise".

PROJECTS ON HOLD

Glencore Xstrata, which prides itself on a culture of cautious allocation of cash, plans to cut capital expenditure by $3.5 billion by 2015 and hold spending to sustain operations at $4 billion, at the lower end of previous guidance.

Some of the cuts in copper, nickel and coal among others, will be channelled into oil, where Glencore sees higher returns.

Glencore also said it had cut Xstrata's pipeline of greenfield projects - mines to be built from scratch that would have meant spending some $21 billion. Out of a total of 88 Xstrata projects, 44 have been suspended and 7 cut back.

"We will first attack brownfields, those are the easy ones - but in 10, 15 years time we will run out of projects. Will we develop (the greenfield projects)? We will be more pragmatic than others," Glasenberg said.

Those on hold include the Wandoan mine, a 30 million tonne per year mine in Australia's Queensland state, which Xstrata had planned prior to the deal. It has long been seen as challenging.

Glencore did not provide fresh details on asset sales including the divestment of its Las Bambas mine in Peru. It said a 25 percent stake in platinum miner Lonmin remained non-core, though there was "no rush" to sell.

Glencore, which listed in London and Hong Kong in 2011, also said it now plans to apply for a secondary listing in Johannesburg, to begin trading before the end of the year.

The company had come under fire last month after it wrote $7.7 billion off the value of Xstrata's assets. This was a paper hit, but raised questions over the deal, sealed just as the commodity cycle turns. – Reuters