TIDMAAL
RNS Number : 9959T
Anglo American PLC
28 July 2022
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HALF YEAR FINANCIAL REPORT
for the six months ended 30 June 2022
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28 July 2022
Anglo American Interim Results 2022
Portfolio quality supports underlying EBITDA of $8.7 billion
Financial highlights for the six months ended 30 June 2022
-- Underlying EBITDA* of $8.7 billion
-- Profit attributable to equity shareholders of $3.7 billion
-- Net debt* of $4.9 billion (0.3 x annualised underlying
EBITDA): cash generation partially offset by investment in asset
resilience and growth
-- $1.5 billion interim dividend, equal to $1.24 per share,
consistent with our 40% payout policy
-- Quellaveco commissioned on time and on budget: multi-decade
new copper operation expected to produce 300,000 copper equivalent
tonnes per year on average over first 10 years
Duncan Wanblad, Chief Executive of Anglo American , said: "Anglo
American's differentiated combination of portfolio quality and
growth optionality, underpinned by our operating model and
innovation track record, continues to position us strongly through
the current market volatility and longer term cycle. Our unwavering
focus is on driving consistent performance across our operations -
which starts with the safety and health of our employees - and
progress towards our full suite of sustainability ambitions. As we
progressed through the first half, we began to regain operational
momentum while also adjusting to the considerable challenges posed
by Covid-19 related absenteeism, disrupted supply chains and
logistics corridors, weather extremes and geopolitically-led
economic volatility .
"Against that backdrop, we generated underlying EBITDA of $8.7
billion in the first six months, our second highest for a half
year, albeit a 28% decrease compared to the record first half of
2021. Attributable free cash flow of $1.6 billion was driven
largely by strong prices in the first quarter that declined towards
the end of the period in tandem with increasing cost inflation.
Despite those headwinds and our operational challenges, in
steelmaking coal and iron ore in particular, that reduced our
planned production output, our return on capital employed of 36%
stayed well above our targeted 15% through-the-cycle return and our
mining EBITDA margin remained at a healthy 52%. Our commitment to
capital discipline and to a strong and flexible balance sheet is
paramount to remain resilient to the external environment and
retain optionality for value-adding growth. At the end of June, net
debt of $4.9 billion, or 0.3 x annualised underlying EBITDA,
reflects the cash generation of the business, partially offset by
our investments in our existing assets and future growth. Our $1.5
billion interim dividend of $1.24 per share is in line with our 40%
payout policy.
"We continue to make progress on our long term safety journey.
There is no doubt, however, that the operational changes necessary
to help protect the health of our employees during the last two
years require us to apply additional targeted effort to regain our
momentum of continuous improvement . I am also sad to report that
we lost one colleague in March in an equipment lifting incident in
Australia. It is simply unacceptable to lose a life at work and we
are determined to eliminate workplace fatalities once and for all.
This is my number one priority.
"Looking ahead, growing the value of our business by progressing
asset development options is the foundation of our organic
margin-enhancing volume growth potential of 30%(1) over the next
decade. More than a third of this growth comes from our newly
commissioned Quellaveco copper operation. With our customer
proposition almost entirely oriented around future-enabling metals
and minerals, we are well positioned to play a critical role in the
decarbonisation of global energy and transport systems, alongside
good progress in meeting our own ambitious emissions targets,
thereby delivering enhanced value for our shareholders and
stakeholders across society."
Six months ended 30 June 2022 30 June 2021 Change
============= ============= =======
US$ million, unless otherwise stated
============================================ ============= ============= =======
Revenue 18,111 21,779 (17) %
============================================ ============= ============= =======
Underlying EBITDA* 8,701 12,140 (28)%
Mining EBITDA margin* 52% 61%
============================================ ============= ============= =======
Attributable free cash flow* 1,564 5,641 (72)%
============================================ ============= ============= =======
Profit attributable to equity shareholders
of the Company 3,680 5,188 (29)%
============================================ ============= ============= =======
Basic underlying earnings per share*
($) 3.11 4.30 (28)%
Basic earnings per share ($) 3.03 4.18 (28)%
============================================ ============= ============= =======
Interim dividend per share ($) 1.24 1.71 (27)%
Additional returns per share ($) - 1.60
============================================ ============= ============= =======
Total dividend and buyback per share
($) 1.24 3.31 (47)%
============================================ ============= ============= =======
Group attributable ROCE* 36% 49%
============================================ ============= ============= =======
Terms with this symbol * are defined as Alternative Performance
Measures (APMs). For more information, refer to page 86.
(1) Copper equivalent volume growth vs. 2021 copper equivalent
production .
Sustainability performance
Key sustainability performance indicators(1)
Anglo American tracks its strategic progress using KPIs that are
based on our seven pillars of value: safety and health,
environment, socio-political, people, production, cost, and
financial. In addition to the financial performance set out above
and our operational performance on pages 6-39, our performance for
the first four pillars is set out below:
Pillar 30 June 30 June Target
of value Metric 2022 2021(2) Target achieved
================= ========================= ============ ============ ========================= =============
Safety Work-related fatal
and health injuries(3) 1 0 Zero Not achieved
Total recordable
injury frequency
rate per million
hours(3) 2.36 2.34 Year-on-year reduction Not achieved
New cases of occupational
disease 0 8 Year-on-year reduction On track
Employees potentially
exposed to noise
over 85 dBA(4)(5) 17,944 18,983 Year-on-year reduction On track
Employees potentially
exposed to inhalable
hazards over the
occupational exposure 5% reduction
limit (4)(5) 1,090 827 year-on-year Not achieved
=========================================== ============ ============ ========================= =============
Improve energy
Energy consumption efficiency by
Environment (million GJ)(5) 32.7 35.3 30% by 2030 On track
Reduce absolute
GHG emissions - GHG emissions
Scopes 1 & 2 5.0 6.3 by 30% by 2030 On track
(Mt CO(2) e)(5)
Reduce freshwater
abstraction in
Freshwater withdrawals water scarce areas
(million m(3) )(5)(6) 12.5 15.7 by 50% by 2030 On track
Level 4-5 environmental
incidents(5) 0 0 Zero On track
=========================================== ============ ============ ========================= =============
Full compliance
Social Way 3.0 with Social Way Behind
Socio-political implementation(7)(8) 49 % 23 % 3.0 by end 2022 schedule
Local procurement
spend ($bn)(9) 6.1 5.9
Taxes and royalties
($m)(10) 3,491 3,303
Jobs supported by
Enterprise and Supplier
Development (ESD)
initiatives(7)(11) 147,374 137,777
=========================================== ============ ============ ========================= =============
To achieve 33%
People Women in management 31 % 28 % by 2023 On track
Women in the workforce 24 % 23 %
Voluntary labour
turnover 2.3 % 2.5 % < 5% On track
=========================================== ============ ============ ========================= =============
(1) Sustainability performance indicators for the six months to
30 June 2022, and the comparative period, are not externally
assured, unless otherwise stated.
(2) 2021 data includes Thermal Coal South Africa until the date
of the Thungela demerger on 4 June 2021, unless otherwise
stated.
(3) Prior period safety data is externally assured and includes
data for the six months to 30 June 2021. The TRIFR presented for H1
2021 has been restated to reflect the final 2021 externally assured
safety statistics.
(4) Reflects the number of employees who work in environments
where there is potential for exposure above the exposure limit. All
employees working in such environments are issued with protective
equipment to prevent occupational illness. Prior period data
excludes Thermal Coal South Africa.
(5) Energy, GHG emissions and water-withdrawal data for the
current period and prior period is shown to end of May.
Occupational exposure data for the current period is to the end of
May 2022, and to the end of June for the prior period. Energy, GHG
emissions, occupational exposure, and Level 4-5 environmental
incidents data for the prior period is externally assured.
(6) Water metric and data have been revised in line with our
freshwater definition. Data represents total Group water
withdrawals.
(7) Data presented for the years ended 31 December 2021 and 2020.
(8) While sites are assessed annually against all requirements
applicable to their context, for consistency during the transition
period, the metric reflects performance against the Social Way
foundational requirements. For further information on progress, see
page 4.
(9) Local procurement spend relates to spend within the country
where an operation is located. The basis of calculation has been
amended to more closely reflect the Group's financial accounting
consolidation, i.e. 100% of subsidiaries and a proportionate share
of joint operations, based on Anglo American's shareholding. The
prior period comparative has been restated to reflect the new basis
of preparation.
(10) Taxes and royalties include all taxes and royalties both
borne and collected by the Group. This includes corporate income
taxes, withholding taxes, mining taxes and royalties, employee
taxes and social security contributions and other taxes, levies and
duties directly incurred by the Group, as well as taxes incurred by
other parties (e.g. customers and employees) but collected and paid
by the Group on their behalf. Figures disclosed are based on cash
remitted, net of entities consolidated for accounting purposes,
plus a proportionate share, based on the percentage shareholding,
of joint operations. Taxes borne and collected by associates and
joint ventures are not included. Prior year comparatives have been
restated.
(11) Includes the following enterprise development programmes:
Crescer (Brazil), Emerge Chile (Chile), Emerge Peru (Peru), Takura
(Zimbabwe), Tokafala (Botswana) and Zimele (South Africa). Data
refers to the cumulative number of businesses and jobs supported
since programme inception.
Safety
Anglo American's most important priority is always safety -
keeping our colleagues safe and well. Making sure every employee
returns home at the end of each day, better for having worked at
Anglo American, is our vision for safety and health across the
business. We continue to make progress on our long term safety
journey, including further developing our broader safety processes
and procedures. Sadly, however, we lost one colleague at a managed
operation in a fatal incident in Australia and one colleague at an
independently managed joint venture operation in South Africa in
the first half of the year. We are unconditional about safety, and
we will not rest until zero harm is achieved and sustained across
our business. We have shown it can be done for long stretches of
time and now we must make it permanent. Everyone is a leader in
safety and has a role to play in delivering an injury-free and
fatality-free workplace.
Our Elimination of Fatalities Taskforce has, since 2018,
supported a 93% reduction in fatal incidents over the last decade.
The core programme is 82% complete with a material focus on Supply
Chain Safety, Contractor Management, and Fatigue Management.
Our total injury frequency rate tracked up marginally again,
after multiple years of progressive improvement, reflecting the
changed operating configurations necessary to manage Covid-19 that
tend to disrupt planned work routines. To stop, reflect and stand
up for safety, all business units participated in a people-focused
Global Safety Reset during April and May, led by supervisors.
Significant focus is also being placed on leading indicators,
specifically, increased high potential hazard (HPH) reporting,
on-time investigations and action management, rigorous
critical-control monitoring, and people-centric technology
implementation.
Health
Our health focus remains on helping keep our people protected
from Covid-19, while sustaining our work to continuously improve
our key health measures. The pandemic is continuing to challenge us
but, encouragingly, although case rates remain high in many places,
a combination of less severe variants and much higher levels of
vaccination (particularly in our organisation) has helped to keep
hospitalisation and death rates far lower than in previous phases.
We have also provided significant monetary and other support to
accelerate vaccination rates, using our own health facilities and
encouraging vaccination at the earliest opportunity, including in
many host communities.
Recognising the link between employee health and broader
community well-being, last year we completed community health
improvement strategies for our operations in support of our
Sustainable Mining Plan targets. Building on our extensive Covid-19
support, implementation of these strategies will start later this
year.
We tackle the threats to health and well-being wherever we find
them, with separate programmes for physical and mental health -
including our Living with Dignity programme to help tackle
gender-based and domestic violence; for creating a healthier
working environment; and for encouraging healthy lifestyles. We are
paying greater attention to psychological safety, intrinsic to
embedding a safety-conscious mindset, establishing a steering group
to investigate psychological safety issues, while also introducing
the thinking into an array of other programmes.
People
Tightly linked to our safety imperative and our Values, we
strive to create a workplace that places people even more at its
heart. People are central to everything we do, and each individual
has expectations of us. Workforce engagement is a priority for
every leader at Anglo American and we aim to create safe, inclusive
and diverse workplaces that encourage high performance and
innovative thinking. We have zero tolerance for any form of
bullying, harassment or victimisation and we know there is no room
for complacency when it comes to culture in any organisation. To
that end, we have extensive training, systems and processes in
place to keep improving both physical and psychological safety. We
will continue to embed and launch initiatives that will allow us to
realise our vision of a truly inclusive workplace where every
employee can reach their full potential.
We also continue to make progress against our diversity goals,
including to achieve 33% female representation in management by
2023. The proportion of women at this level increased to 31% (30
June 2021: 28%), while female employees across the company
represent 24% of our workforce.
Living with Dignity - building a safe and inclusive culture
Building a safe and inclusive culture has been a focus for us
for a number of years and this is constant work for any company or
society. We are committed to listening to our people and other
stakeholders that are close to our business every day.
We have long understood the role of our business in society, and
we believe that this extends beyond our own mine gates. We launched
our Living with Dignity programme in 2019, founded on the belief
that everyone has the right to dignity - in our homes, schools, at
work and everywhere in between. Through this programme, Anglo
American is working collaboratively with our partners in government
and civil society to build sustainable partnerships aimed at
providing direct employee and community support to combat
gender-based and domestic violence.
We continue to build on this important work and we have now
established our Living with Dignity Hub in South Africa that brings
together our policies and its mandates to provide ongoing and
committed support to our employees, contractors and their families.
The hub handles all formal complaints of sexual harassment and
gender-based violence and bullying, harassment and victimisation
across our South African footprint and is overseen by an
independent Ambassador to ensure we stand by our policies and
remain committed to amplifying our efforts.
Environment
Our Sustainable Mining Plan includes commitments to be a leader
in environmental stewardship. By 2030, we aim to reduce GHG
emissions (Scopes 1 and 2) by 30%; improve energy efficiency by
30%; achieve a 50% net reduction in freshwater abstraction in water
scarce areas; and deliver net-positive impacts in biodiversity
wherever we operate.
Our environmental performance continues to improve, with no
Level 5 or 4 incidents (or indeed Level 3) in the first half of the
year. This achievement reflects the improvements to our planning
and operating disciplines across the business. We launched a 'no
repeats' challenge last year to help us learn from low level
incidents and prevent repeats of a similar nature across the
business, which has led to improvements in controls, specifically
helping to prevent significant incidents.
Both energy consumption and GHG emissions decreased in the first
half of the year and we remain on track to improve energy
efficiency by 30% and reduce absolute GHG emissions by 30%, by
2030. We have a target to be carbon neutral across our operations
by 2040, and an ambition to reduce our Scope 3 emissions by 50%,
also by 2040. We are making encouraging progress. In 2020, around
one third of the electricity Anglo American used globally was drawn
from renewables. Having secured 100% renewable electricity supply
across our operations in South America, by 2023 we expect to be
drawing 56% of our global grid supply from renewables.
Socio-political
In 2020, we launched a new integrated social performance
management system (Social Way 3.0) which has raised performance
expectations and has resulted in continued improvement in our
social performance. It was expected that additional site and
corporate resourcing would be needed to support the initial plan
for sites to have fully implemented the Social Way 3.0 by the end
of 2022. However, these plans have been delayed through the
considerable work required from our teams to deliver our Covid-19
community response programmes, recruitment challenges during the
pandemic and restrictions impacting our ability to engage with
external and internal stakeholders to support implementation of the
new approach. Several sites are expected to still complete the
transition by the end of 2022, and performance recovery plans are
in place for sites where performance is lagging.
As we grow our business and improve our performance, so our
total tax contribution increases, benefiting host countries. Total
taxes and royalties borne and collected in the first half of the
year amounted to $3.5 billion, a 6% increase compared with the
prior period. We also made further progress with our enterprise and
supplier development initiatives, supporting over 147,000 jobs in
2021 - a key component of our Sustainable Mining Plan goal to
support five jobs offsite for every job onsite by 2030.
During the half year, we signed a $100 million 10-year loan
agreement with the International Finance Corporation. The specific
goals tied to the loan agreement are aimed at supporting community
development in rural communities close to our operations across
South Africa, including by promoting the creation of jobs, as well
as improving the quality of education for more than 73,000
students. In addition, we are rolling out a comprehensive
information and communications technology programme in 109 schools
around our operations in South Africa, to give thousands of
learners and community members the skills they need to enter the
digital job market.
Sustainable Mining Plan - update in progress
We launched Anglo American's Sustainable Mining Plan in 2018,
setting out three sustainability pillars and a number of medium and
longer term stretch goals for each, guided by our Purpose and
supported by six critical foundations that underpin how we do
business. The three pillars of Healthy Environment, Thriving
Communities, and Trusted Corporate Leader encapsulate the holistic
realities of what it means to be a socially responsible and
ultimately sustainable business. We continue to make good progress
towards our 2025 and 2030 goals, as laid out in the table on page
2, in addition to progress towards our 2040 carbon neutral
operations target that we added in 2020.
Our Sustainable Mining Plan is designed to be a living plan and
we will continue to evolve it to ensure it stays relevant and
suitably stretching, in tune with our employees' and stakeholders'
ambitions for our business. We are currently exploring a number of
areas that we feel would benefit from being added into the
Sustainable Mining Plan and will update the plan when we have
developed these options sufficiently.
Operational and financial review of Group results for the six
months ended 30 June 2022
Operational performance
The impact of adverse weather and planned lower grades at many
of our operations contributed to a 9% production decrease on a
copper equivalent basis(1) . Extreme rainfall in Brazil, South
Africa and Australia affected iron ore production at Minas-Rio and
Kumba, steelmaking coal at Capcoal and Dawson, PGMs production at
Mogalakwena and nickel production at Barro Alto. Planned lower
grades at Los Bronces and Collahuasi (Copper), as well as the
effect of expected lower water availability at Los Bronces,
resulted in decreased copper production, while the impact of lower
grade at Mogalakwena (PGMs) was only partially offset by improved
operational performances across the remaining PGMs operations.
Nickel production was also affected by lower ore grades. The
planned end of mining at the Grasstree operation and ramp-up of the
replacement Aquila longwall contributed to lower production volumes
at Steelmaking Coal. De Beers increased production in line with
continued strong demand for rough diamonds.
The suspended Grosvenor operation (Steelmaking Coal) restarted
in February and ramped up well during the period, as did the
Benguela Gem diamond recovery vessel (De Beers) and Aquila
(Steelmaking Coal). Adding to our forecast copper production in the
second half is the newly commissioned Quellaveco project in Peru,
which delivered first copper concentrate in July as it nears
completion ahead of receiving final regulatory clearance for
commercial operations to begin.
De Beers' rough diamond production increased by 10% to 16.9
million carats (30 June 2021: 15.4 million carats), reflecting a
strong operational performance and higher planned levels of
production to meet continued strong demand for rough diamonds,
while the first quarter of 2021 was affected by particularly high
rainfall in southern Africa.
Copper production of 273,400 tonnes was 17% lower than the prior
period (30 June 2021: 330,000 tonnes). At Los Bronces, production
decreased by 21% to 129,700 tonnes (30 June 2021: 163,200 tonnes)
due to planned lower grades and the impact of expected lower water
availability on plant throughput and copper recovery. Planned lower
grades at Collahuasi resulted in a 12% decrease in attributable
production to 127,800 tonnes (30 June 2021: 145,900 tonnes).
Nickel production decreased by 5% to 19,600 tonnes (30 June
2021: 20,700 tonnes), primarily due to lower ore grades as a result
of licensing delays that are now resolved, as well as the impact of
heavy rainfall.
PGM production (metal in concentrate) decreased by 4% to
1,987,500 ounces (30 June 2021: 2,079,100 ounces), principally due
to lower grade at Mogalakwena, partially offset by increased
production from Mototolo, Unki and Amandelbult. Refined PGM
production decreased by 16% to 1,959,100 ounces (30 June 2021:
2,326,700 ounces), as the first half of 2021 benefited from the
processing of higher than normal work-in-progress inventory
following the converter plant (ACP) Phase A rebuild and
commissioning in the fourth quarter of 2020. Planned maintenance
and the annual stock count also resulted in additional downtime of
processing assets.
Iron ore production decreased by 14% to 27.5 Mt (30 June 2021:
31.9 Mt). At Kumba, production decreased by 13% to 17.8 Mt (30 June
2021: 20.4 Mt), driven by extremely high rainfall, a safety
intervention at Kolomela and equipment reliability. Minas-Rio
production decreased by 15% to 9.8 Mt (30 June 2021: 11.5 Mt) due
to maintenance and unusually heavy rainfall that impacted the
availability of the mining fleet and plant.
Steelmaking coal production decreased by 22% to 4.8 Mt (30 June
2021: 6.2 Mt), principally due to the planned end of mining at the
Grasstree operation in January and ramp-up of the replacement
Aquila longwall, which began operations in February and fully
ramped up in June. Production was also impacted by record
unseasonal rainfall in May at the open cut operations.
Manganese ore production was in line with the prior period at
1.8 Mt (30 June 2021: 1.8 Mt).
Group copper equivalent unit costs(1) increased by 18% in US
dollar terms, largely due to lower production volumes and
inflationary pressures, particularly diesel.
(1) Copper equivalent production and unit cost is normalised to
reflect the demerger of the South Africa thermal coal operations
and the sale of our shareholding in Cerrejón.
(2)
Financial performance
Anglo American's profit attributable to equity shareholders
decreased to $3.7 billion (30 June 2021: $5.2 billion). Underlying
earnings were $3.8 billion (30 June 2021: $5.3 billion), while
operating profit was $6.7 billion (30 June 2021: $11.0
billion).
The war in Ukraine, and resulting trade sanctions on Russia,
have restricted the supply of certain key commodities to the
market, and caused further disruption to already stretched global
supply chains. This has resulted in higher prices for energy,
agricultural and other commodities, exacerbating broader
inflationary pressures across the global economy, and contributing
to more aggressive interest rate rises by central banks than had
been expected and an associated strengthening of the dollar. While
the medium and longer term demand outlooks for our products remain
strong - not least given the role these play in sustaining global
economic development for a growing population and enabling the
decarbonisation of energy and transport systems - these
deteriorating macro-economic conditions are contributing to a
weaker near term outlook for demand, due to weaker investment and
slower real income growth. Associated pressures on our operating
costs have been partly mitigated by weakening commodity producer
country currencies, including in Australia, Brazil, Chile and South
Africa.
Underlying EBITDA*
Group underlying EBITDA decreased by $3.4 billion to $8.7
billion (30 June 2021: $12.1 billion) due to a decrease in the
price for the Group's basket of products, unfavourable sales
volumes and higher input costs across the Group. As a result, the
Group Mining EBITDA margin* of 52% was lower than the prior year
(30 June 2021: 61%). A reconciliation of 'Profit before net finance
costs and tax', the closest equivalent IFRS measure to underlying
EBITDA, is provided within note 3 to the Condensed financial
statements.
Underlying EBITDA* by segment
6 months 6 months
ended ended
30 June 30 June
$ million 2022 2021
===================== ========= =========
De Beers 944 610
Copper 1,166 1,935
Nickel 239 135
PGMs 2,732 4,383
Iron Ore 2,298 4,910
Steelmaking Coal 1,399 (94)
Manganese 223 154
Crop Nutrients (18) (12)
Corporate and other (282) 119
===================== ========= =========
Total 8,701 12,140
===================== ========= =========
Underlying EBITDA* reconciliation for the six months ended 30
June 2021 to six months ended 30 June 2022
The reconciliation of underlying EBITDA from $12.1 billion in
the six months to 30 June 2021 to $8.7 billion in the six months
ended 30 June 2022 shows the controllable factors (e.g. cost and
volume), as well as those outside of management control (e.g.
price, foreign exchange and inflation), that drive the Group's
performance.
$ billion
============================ ======
H1 2021 underlying EBITDA* 12.1
Price (1.5)
Foreign exchange 0.4
Inflation (0.4)
Net cost and volume (1.4)
Other (0.5)
============================ ======
H1 2022 underlying EBITDA* 8.7
============================ ======
Price
Average market prices for the Group's basket of products
decreased by 2% compared with the first half of 2021, reducing
underlying EBITDA by $1.5 billion. Realised prices decreased for
iron ore (36%), copper (13%) and the PGMs basket (7%) - primarily
driven by rhodium which decreased by 30%. This was partly offset by
steelmaking coal prices where the weighted average price increased
by 245%.
Foreign exchange
The favourable foreign exchange impact on underlying EBITDA of
$0.4 billion was due to weaker local currencies in many of our
countries of operation, principally the South African rand and
Chilean peso.
Inflation
The Group's weighted average CPI for the first half of the year
was 7.2%, compared with 3.3% in the first six months of 2021, as
inflation increased in all regions. The impact of CPI inflation on
costs reduced underlying EBITDA by $0.4 billion.
Net cost and volume
The net impact of cost and volume was a $1.4 billion reduction
in underlying EBITDA, driven by lower PGM sales from planned lower
refined volumes following the higher than normal work-in-progress
(WIP) inventory in the first half of 2021; lower sales volumes at
Iron Ore Brazil due to maintenance and unusually heavy rainfall
impacting production; and lower copper sales at the Chilean
operations owing to planned lower grades and the negative effect on
production of expected lower water availability at Los Bronces. In
addition to these volume impacts, inflationary pressures (other
than CPI) contributed to an increase in costs across the Group.
Other
The $0.5 billion unfavourable movement in underlying EBITDA from
other factors was driven by the demerger and sale of thermal coal
assets, resulting in an EBITDA reduction of $0.2 billion. Also
included is $0.1 billion related to a decrease in environmental
restoration provisions at Copper in the first half of 2021, and the
impact of lower sales volumes and cost pressures at our Associates
and Joint Ventures.
Underlying earnings*
Group underlying earnings decreased to $3.8 billion (30 June
2021: $5.3 billion), driven by the lower underlying EBITDA, partly
offset by a corresponding decrease in income tax expense and
earnings attributable to non--controlling interests.
Reconciliation from underlying EBITDA* to underlying
earnings*
6 months 6 months
ended ended
30 June 30 June
$ million 2022 2021
========================================== ========= =========
Underlying EBITDA* 8,701 12,140
Depreciation and amortisation (1,226) (1,462)
Net finance costs and income tax expense (2,552) (3,448)
Non-controlling interests (1,136) (1,895)
========================================== ========= =========
Underlying earnings* 3,787 5,335
========================================== ========= =========
Depreciation and amortisation
Depreciation and amortisation decreased by 16% to $1.2 billion
(30 June 2021: $1.5 billion), reflecting the demerger of Thungela
in the prior period and lower cost base of Steelmaking Coal,
following the impairment at 30 June 2021.
Net finance costs and income tax expense
Net finance costs, before special items and remeasurements, were
$0.2 billion (30 June 2021: $0.4 billion). The decrease was
principally driven by fair value gains.
The underlying effective tax rate was 32.6% (30 June 2021:
29.6%). The underlying effective tax rate was impacted by the
relative levels of profits arising in the Group's operating
jurisdictions. Over the longer term, the underlying effective tax
rate is expected to be in the range of 31% to 35%. The tax charge
for the period, before special items and remeasurements, was $2.2
billion (30 June 2021: $3.0 billion).
Non-controlling interests
The share of underlying earnings attributable to non-controlling
interests of $1.1 billion (30 June 2021: $1.9 billion) principally
relates to minority shareholdings in Kumba (Iron Ore), PGMs and
Copper.
Special items and remeasurements
Special items and remeasurements (after tax and non-controlling
interests) are a net charge of $0.1 billion (30 June 2021: net
charge of $0.1 billion), principally relating to adjustments to
former operations of $0.1 billion arising in PGMs.
Full details of the special items and remeasurements recorded
are included in note 9 to the Condensed financial statements.
Net debt*
$ million 2022 2021
================================================ ======== ========
Opening net debt* at 1 January(1) (3,842) (5,530)
================================================ ======== ========
Underlying EBITDA* from subsidiaries and joint
operations 8,011 11,740
Working capital movements(2) (1,013) (545)
Other cash flows from operations 19 (261)
================================================ ======== ========
Cash flows from operations 7,017 10,934
Capital repayments of lease obligations (131) (133)
Cash tax paid (1,751) (1,973)
Dividends from associates, joint ventures and
financial asset investments 238 83
Net interest(3) (116) (155)
Dividends paid to non-controlling interests (1,079) (832)
Sustaining capital expenditure(4) (1,757) (1,476)
================================================ ======== ========
Sustaining attributable free cash flow* 2,421 6,448
Growth capital expenditure and other(4) (857) (807)
================================================ ======== ========
Attributable free cash flow* 1,564 5,641
Dividends to Anglo American plc shareholders (2,052) (907)
Disposals 467 -
Foreign exchange and fair value movements (146) (102)
Other net debt movements(5) (844) (733)
================================================ ======== ========
Total movement in net debt* (1,011) 3,899
================================================ ======== ========
Closing net debt* at 30 June (4,853) (1,631)
================================================ ======== ========
(1) At 31 December 2021, the Group amended its definition of net
debt to exclude variable vessel leases that are priced with
reference to a freight index. Net debt reported at 30 June 2021 has
therefore been restated to reflect the revised definition.
(2) Working capital movements for the six months ended 30 June
2021 have been restated to correct the presentation of a contract
liability of $260 million previously presented within other
borrowings.
(3) Includes cash inflows of $57 million (30 June 2021: inflows
of $78 million), relating to interest receipts on derivatives
hedging net debt, which are included in cash flows from derivatives
related to financing activities.
(4) Following an amendment to IAS16 Proceeds before intended
use, operating cash flows relating to sustaining and growth capital
expenditure are no longer capitalised. For further details, refer
to note 2 of the Condensed Financial Statements. Included within
sustaining capital expenditure for the six months ended 30 June
2021 is $39 million of capitalised operating cash flows relating to
life extension projects. 'Growth capital expenditure and other'
includes $39 million (30 June 2021: $25 million) of expenditure on
non-current intangible assets and $3 million of capitalised
operating cash flows relating to growth projects for the six months
ended 30 June 2021.
(5) Includes the purchase of shares under the 2021 buyback of
$186 million; the purchase of shares for other purposes (including
for employee share schemes) of $252 million; Mitsubishi's share of
Quellaveco capital expenditure of $260 million; other movements in
lease liabilities (excluding variable vessel leases) decreasing net
debt by $65 million; and contingent and deferred consideration paid
in respect of acquisitions completed in previous years of $157
million. 2021 includes Mitsubishi's share of Quellaveco capital
expenditure of $226 million; other movements in lease liabilities
(excluding variable vessel leases) increasing net debt by $299
million; contingent and deferred consideration paid in respect of
acquisitions completed in previous years of $111 million; and the
purchase of shares for employee share schemes of $174 million.
Net debt (including related derivatives) of $4.9 billion has
increased by $1.0 billion since 31 December 2021, driven by working
capital cash outflows of $1.0 billion due to higher PGMs pricing
impacting the valuation of purchase of concentrate (POC) inventory,
and an increase in finished goods at Copper and De Beers. The Group
generated strong sustaining attributable free cash inflows of $2.4
billion, used in part to fund growth capital expenditure of $0.8
billion and dividends paid to Anglo American plc shareholders of
$2.1 billion. Net debt at 30 June 2022 represented gearing (net
debt to equity) of 12% (31 December 2021: 10%).
Cash flow
Cash flows from operations
Cash flows from operations decreased to $7.0 billion (30 June
2021: $10.9 billion), reflecting a reduction in underlying EBITDA
from subsidiaries and joint operations, and a working capital build
of $1.0 billion (30 June 2021: build of $0.5 billion). The
inventory increase of $1.2 billion was driven by the higher POC
valuation at PGMs and an increase in finished goods at Copper and
De Beers. A reduction in payables of $0.3 billion was driven by the
settlement of provisional price adjustments within Iron Ore, partly
offset by a reduction in receivables of $0.4 billion, mainly owing
to decreased base metal prices.
Capital expenditure*
6 months 6 months
ended ended
30 June 30 June
$ million 2022 2021
=============================================== ========= =========
Stay-in-business 1,010 808
Development and stripping 462 412
Life extension projects 292 217
Proceeds from disposal of property, plant and -
equipment (7)
=============================================== ========= =========
Sustaining capital 1,757 1,437
Growth projects 818 779
=============================================== ========= =========
Total 2,575 2,216
Capitalised operating cash flows - 42
=============================================== ========= =========
Total capital expenditure 2,575 2,258
=============================================== ========= =========
Capital expenditure increased to $2.6 billion (30 June 2021:
$2.3 billion), as spend normalised following deferrals due to
Covid-19.
Sustaining capital expenditure increased to $1.8 billion (30
June 2021: $1.4 billion), driven by planned additional
stay-in-business expenditure across the Group.
Growth capital expenditure of $0.8 billion (30 June 2021: $0.8
billion) primarily relates to the Woodsmith and Quellaveco
projects.
In line with previous guidance, total capital expenditure for
2022 is expected to be $6.1-6.6 billion.
Attributable free cash flow*
The Group's attributable free cash flow decreased to $1.6
billion (30 June 2021: $5.6 billion) due to lower cash flows from
operations of $7.0 billion (30 June 2021: $10.9 billion), higher
capital expenditure of $2.6 billion (30 June 2021: $2.3 billion),
and increased dividends paid to non-controlling interests of $1.1
billion (30 June 2021: $0.8 billion). This was partially offset by
decreased tax payments of $1.8 billion (30 June 2021: $2.0
billion).
Shareholder returns
In line with the Group's established dividend policy to pay out
40% of underlying earnings, the Board has proposed a dividend of
$1.24 per share for the six months to 30 June 2022 (30 June 2021:
$1.71 ordinary dividend per share and $0.80 special dividend per
share), equivalent to $1.5 billion (30 June 2021: $3.1 billion
including special dividend).
Disposals
On 11 January 2022, the Group completed the sale of its 33.3%
shareholding in Cerrejón to Glencore plc for a total cash
consideration of approximately $294 million - of which $50 million
was received in January, after adjustment for dividends received in
2021. This sale represents the final stage of Anglo American's
previously announced responsible transition from thermal coal
operations.
On 25 March 2022, the Group announced the sale of its remaining
8.0% shareholding in Thungela Resources Limited, realising gross
proceeds of R1,672 million (approximately $115 million). Anglo
American's Marketing business continues to support Thungela in the
sale and marketing of its products, and sales and purchases under
the offtake agreement will continue to be reported on a net basis,
together with the Group's other third-party trading activities.
In addition, there were cash receipts principally relating to
the settlement of deferred consideration balances on the sale of
the Rustenburg operations (PGMs) that was completed in November
2016.
Balance sheet
Net assets increased by $0.7 billion to $35.5 billion (31
December 2021: $34.8 billion), reflecting the profit for the
period, offset by dividend payments and additional shareholder
returns to Company shareholders and non-controlling interests.
Attributable ROCE*
Attributable ROCE decreased to 36% (30 June 2021: 49%).
Annualised attributable underlying EBIT decreased to $11.5 billion
(30 June 2021: $15.7 billion), reflecting the impact of lower
realised prices achieved for the Group's products and lower
production volumes. Average attributable capital employed remained
broadly flat at $32.0 billion (30 June 2021: $32.1 billion), as
growth capital expenditure, largely at Quellaveco (Copper) and
Woodsmith (Crop Nutrients), was offset by the sale of thermal coal
operations.
Liquidity and funding
Group liquidity remains conservative at $17.3 billion (31
December 2021: $17.1 billion), comprising $9.2 billion of cash and
cash equivalents (31 December 2021: $9.1 billion) and $8.1 billion
of undrawn committed facilities (31 December 2021: $8.0
billion).
In March 2022, the Group issued $500 million 3.875% Senior Notes
due 2029, and $750 million 4.75% Senior Notes due 2052, as part of
the Group's routine financing activities.
The weighted average maturity on the Group's bonds increased to
7.7 years (31 December 2021: 6.2 years).
The Group has an undrawn $4.7 billion revolving credit facility
due to mature in March 2025.
Portfolio upgrade
Anglo American continues to evolve its portfolio of competitive,
world class assets towards those future-enabling products that are
fundamental to enabling a low carbon economy, a sustainable future,
and that cater to global consumer demand trends. Aligned to this
strategy, the Group entered into the below agreements in the first
half of 2022.
On 18 March 2022, Anglo American announced the signing of a
Memorandum of Understanding with EDF Renewables, a global leader in
renewable energy, to work together towards developing a regional
renewable energy ecosystem in South Africa. The ecosystem is
expected to be designed to meet Anglo American's operational
electricity requirements in South Africa through the supply of 3-5
GW of 100% renewable electricity (solar and wind) and storage by
2030, with excess electricity supplied to the grid to increase its
resilience. The partnership is also expected to bring a host of
economic benefits - stimulating the development of new economic
sectors, local production and supply chains - to South Africa and
the broader region, while also supporting the wider decarbonisation
of energy in the country and the Just Energy Transition.
On 9 June 2022, Anglo American announced that it had signed a
$100 million10-year loan agreement with the International Finance
Corporation (IFC) linked to the delivery of sustainability goals
that are integral to Anglo American's Sustainable Mining Plan. This
sustainability-linked loan is the IFC's first in the mining sector
and is understood to be the first in the mining sector globally
that focuses exclusively on social development indicators.
On 30 June 2022, Anglo American entered into exclusive
negotiations with First Mode Holding Inc (First Mode), and has
agreed non-binding terms, to combine Anglo American's nuGen(TM)
Zero Emissions Haulage Solution (ZEHS) with First Mode, the
specialist engineering technology company that partnered with Anglo
American to develop the nuGen(TM) ZEHS. The combination is expected
to accelerate the development and deployment of the ZEHS technology
across Anglo American's mine haul truck fleet, while exploring
commercial opportunities for ZEHS across other industries that rely
on heavy duty forms of transport.
Growth projects (metrics presented on a 100% basis unless
otherwise indicated)
Progress and current expectations in respect of our key growth
projects are as follows:
Remaining
Capex capex First
Operation Scope $bn $bn production Progress
==================== ================== ================== ================== ================ ==================
Copper
Quellaveco New copper mine c.2.8 (Anglo 0.6 (Anglo 2022 Construction
in Moquegua, American American began in 2018.
Peru producing 60% share) 60% share)
c. 300 ktpa First production
(100% basis, of concentrate
180 ktpa our in July 2022.
share) over
the first 10 Refer to the
years. Technology
projects
table below
for Coarse
Particle
Recovery at
Quellaveco.
==================== ================== ================== ================== ================ ==================
Collahuasi Phase 1 expansion Fifth ball c. 0.3 in 2023 Environmental
focused on near mill c.0.1 total. Additional approval (EIA)
term P101 (44% basis) expansion approval was
optimisation studies ongoing. obtained in
opportunities, Subject to December 2021,
the permitting enabling
implementation and approvals expansion
of a fifth ball of the processing
mill (approved) capacity up
and a restart to 210 ktpd,
of leaching and the
activities to construction
add c.50 ktpa of a desalination
(44% basis). plant and related
Additional infrastructure
debottlenecking to provide a
options to sustainable
further alternative
increase water source.
throughput
remain under The fifth ball
study. mill project
(first stage
Further phase of the expansion)
expansions are is progressing
in early stage according to
study to increase plan. The
production by expected
up to an start-up is
additional during Q4 2023.
100 ktpa (44%
basis).
Diamonds
Marine Namibia New diamond c.0.2 (Anglo <0.1 (Anglo 2022 Construction
recovery vessel, American American began in 2019.
adding 0.5 Mctpa 50% share) 50% share)
(100% basis) The vessel is
of some of the now contributing
highest value to marine
diamonds in production,
the portfolio. having been
successfully
commissioned
ahead of schedule
and below budget
in Q1 2022.
Crop Nutrients
Woodsmith New polyhalite Subject Subject to Subject Major critical
(natural mineral to development development to development path components
fertiliser) timeline timeline timeline have continued
mine being review review review to progress
developed to our updated
in Yorkshire, plan. Ongoing
UK. Expected technical review
to produce POLY4 confirmed there
- a premium are several
quality, low improvements
carbon fertiliser to modify design
certified for to bring it
organic use. up to Anglo
American's safety
and operating
integrity
standards
and optimise
value for the
long term. There
has also been
a leadership
change, with
Tom McCulley
having replaced
Chris Fraser
as CEO of Crop
Nutrients.
Iron Ore
Implementation
of Ultra High
Dense Media
Separation
(UHDMS)
technology at
Kumba's Sishen
operation will
enable an
increase
in premium
product
production and
the
beneficiation
of lower grade
materials by
reducing the
current cut-off
grade of <48%
Fe to <40% Fe.
In addition,
the project
contributes
an additional
3-4 years to Project execution
Sishen's life approved in
Sishen of mine to 2039. 0.2 0.2 2023 Feb 2021.
PGMs
Mogalakwena Evaluating Number of Not yet approved 2026 The Future of
various options Mogalakwena
options to being considered work continues
expand to make good
PGM production progress in
of the mine the six
through workstreams.
technology
development
and deployment
and the optimal
mine plan to
deliver feed
to the
concentrators.
Steelmaking
Coal
Moranbah-Grosvenor Expansion of c.0.3 (Anglo Not yet approved 2025 Project approval
the processing American expected 2023,
facilities to 88% share) dependent on
increase Anglo progress of
American's share longwall
of saleable operations
tonnes of high post-restart
quality of Grosvenor
steelmaking mine.
coal by c. 2.5
Mtpa (Anglo
American 88%).
Life extension projects (metrics presented on a 100% basis
unless otherwise indicated)
Progress and current expectations in respect of our key life
extension projects are as follows:
Remaining
Capex capex Expected
Operation Scope $bn $bn first production Progress
============== =========================== ============== ============== ================== =====================
Diamonds
4 Mctpa underground
replacement
for the existing
open pit. The
project is expected
to add an estimated
88 million carats Open-pit mining
from approximately at Venetia is
134 million planned to end
tonnes of material in H2 2022,
(1) and extend with the transition
the life of to underground
the mine to mining starting
Venetia 2047. 2.1 1.1 2023 thereafter.
Jwaneng 9 Mctpa replacement 0.3 (Anglo 0.2 (Anglo 2027 Project progressing
(100% basis) American American on schedule.
for Cuts 7 and 19.2% share) 19.2% share)
8. The Cut-9
expansion of
Jwaneng will
extend the life
of the mine
to 2036 and
is expected
to yield approximately
57 million carats
of rough diamonds
from approximately
47 million tonnes
of material
(1) .
Steelmaking
Coal
Aquila 3.5 Mtpa (70% 0.2 (Anglo <0.1 (Anglo 2022 Development
basis), American American work began in
7 year replacement 70% share) 70% share) September 2019
for the Grasstree and first longwall
operation which production began
has reached in February
the end of life. 2022.
Aquila will
be a longwall
operation leveraging
the existing
Grasstree infrastructure
and producing
high quality
hard coking
coal to 2028.
Iron Ore
4 Mtpa high
grade iron ore
replacement
project. The
development
of a new pit,
Kapstevel South,
and associated
infrastructure Approved in
at Kolomela July 2020. Pit
to help sustain establishment
output of c.13 and waste stripping
Mtpa and extend commenced in
the remaining 2021, with first
life of mine ore expected
Kolomela to 2034. 0.4 0.3 2024 in 2024.
PGMs
Mototolo/ The development 0.2 Approved 2023 Approved in
Der Brochen of the project December 2021.
leverages the Execution commenced
existing Mototolo in Q1 2022.
infrastructure, First production
enabling mining expected in
to extend into late 2023.
the adjacent
and down-dip
Der Brochen
resource, which
will potentially
extend the life
of mine beyond
30 years.
(1) Refer to Anglo American plc Ore Reserves and Mineral
Resources Report 2021 for additional information.
Technology projects(1)
The Group is investing c. $0.2-0.5 billion per year over the
next three years on technology projects to support the FutureSmart
Mining(TM) programme and the delivery of Anglo American's
Sustainable Mining Plan targets, particularly those that relate to
safety, energy, emissions and water (metrics presented on a 100%
basis unless otherwise indicated):
Initiative Scope Progress
=================== =============================== =============================================================
Copper, PGMs,
and Nickel
Bulk ore sorting Deliver improved feed
grade to plants through * Mogalakwena (PGMs) North Concentrator (70% of
early rejection of waste, complex feed) and Los Bronces (Copper) Confluencia
resulting in energy, Plant (65% of complex feed) units operational and
water and cost savings. integration to business as usual is under way.
* Barro Alto (Nickel) in-pit unit to commence upgrades
in second half of 2022 for improved future sorting
performance, and additional in-pit unit under
technical evaluation.
* Planning for trials at Kolomela (Iron Ore) under way.
Copper, PGMs,
and Iron Ore
Coarse particle Innovative flotation
recovery (CPR) process allows material * Demonstration plant construction and commissioning
to be ground to a larger completed in 2021at El Soldado (Copper), with further
particle size, rejecting testing in progress.
coarse gangue and allowing
water to release from
coarser ore particles,
improving energy efficiencies * Constructing full scale system at Mogalakwena North
and water savings. concentrator (PGMs) - start-up anticipated Q4 2022.
* CPR approved at Quellaveco (Copper) to treat
flotation tails, improving recoveries by c.3% over
the life of mine. Commissioning expected in late
2023.
* Minas-Rio (Iron Ore) PFS-A complete, advancing to
PFS-B in 2022 and Feasibility in 2023.
* Los Bronces (Copper) PFS-B complete, advancing to
Feasibility in 2022. Options being investigated at
Collahuasi.
Copper and PGMs
Hydraulic dry Engineering of geotechnically
stack stable tailings facilities * El Soldado (Copper) demonstration unit commissioned.
that dry out in weeks, Full-scale operation is under way and validation will
facilitating up to 85% continue until Q1 2023.
water recovery.
* Assessing application to tailings expansion at
Mogalakwena (PGMs) with benefits from water quality
and quantity improvements. Brownfield trial starting
in Q3 2022.
Portfolio-wide
nuGen(TM) Zero Developing the world's
Emissions Haulage largest hydrogen powered * Launched prototype ZEHS hydrogen-powered mine haul
Solution (ZEHS) mining truck and providing truck - the world's largest, designed to operate in
critical supporting everyday mining conditions - at our Mogalakwena PGMs
infrastructure such mine in South Africa on 6 May.
as refuelling, recharging,
and facilitation of
hydrogen production
to decarbonise high * Announced agreement of non-binding terms to combine
power transport, using Anglo American's nuGen(TM) ZEHS with First Mode, the
renewable energy. specialist engineering technology company that
partnered with us to develop the prototype.
* Agreement aims to support decarbonisation of our
global fleet of ultra-class mine haul trucks, of
which approximately 400 are currently in operation.
(1) Expenditure relating to technology projects is included
within operating expenditure, or if it meets the accounting
criteria for capitalisation, within Growth capital expenditure.
Digital projects(1)
The Group is investing c. $0.1-0.2 billion per year over the
next three years on digital projects as part of the FutureSmart
Mining(TM) programme (metrics presented on a 100% basis unless
otherwise indicated):
Initiative Scope Progress
========================= ============================= ============================================================
PGMs, Iron Ore,
Steelmaking Coal,
Copper, and Diamonds
Predictive Maintenance, Maintenance planning
VOXEL(TM) Asset based on predictive * A variety of deployments at Mogalakwena, Amandelbult,
Strategy & Reliability analytics - resulting Amandelbult Concentrator Plant, Rustenburg Base Metal
in improvements in safety, Refinery and Polokwane Smelter (PGMs), Kolomela (Iron
reliability and availability Ore), Moranbah (Steelmaking Coal), Los Bronces
of critical assets. (Copper), Mafuta vessel, Jwaneng, and Gahcho Kué
(Diamonds).
Copper, PGMs,
and Iron Ore
Rapid Resource Enables consistent core
Modelling, VOXEL(TM) logging, 3D implicit * Deployments at Mogalakwena (PGMs) and Quellaveco
Discovery & Geosciences modelling, and statistical (Copper).
resource modelling as
one integrated workflow
in weeks vs years.
Spatial Inventory Builds a digital twin
Management, VOXEL(TM) of material flow, providing * Deployments at Los Bronces and Quellaveco (Copper),
Discovery & Geosciences access to accurate Minas-Rio, Kolomela and Sishen (Iron Ore), and
information Mogalakwena (PGMs).
about material within
the mining operation
and enabling additional
value through bulk ore
sorting.
Copper, PGMs,
Iron Ore, and
Steelmaking Coal
Process Performance Delivers automated support
Review, VOXEL(TM) to improve the detection, * Deployments at Los Bronces and Quellaveco (Copper),
Processing prioritisation, and Moranbah (Steelmaking Coal), Kolomela (Iron Ore) and
resolution of process Mogalakwena (PGMs).
issues.
Copper, PGMs,
Iron Ore, and
Steelmaking Coal
Digital Operational Enables definition and
Planning, VOXEL(TM) management of models * Deployments at Los Bronces (Copper), Mogalakwena
Integrated Operations and data that then applies Anglo Converter Plant and Amandelbult (PGMs), Sishen,
cutting edge simulation Kolomela and Minas-Rio (Iron Ore), and Moranbah and
and elastic cloud-based Grosvenor (Steelmaking Coal).
computing technology
to deliver optimised
operational plans across
the mining value chain.
Diamonds, Copper,
PGMs, and Iron
Ore
Advanced Process Up to 40% improvement
Control in stability and * Delivered at Minas-Rio and Kumba (Iron Ore), Los
productivity. Bronces, Quellaveco and Chagres (Copper), Mogalakwena
(PGMs), and Venetia and Benguela Gem (Diamonds).
* Ambition for 95% of automatable processes within our
plant flowsheets to be under Advanced Process Control
by end of 2022.
(1) Expenditure relating to digital programmes is included
within underlying operating costs.
The Board
Changes during 2022 to the composition of the Board are set out
below.
On 1 January 2022, Ian Tyler joined the Board as a non-executive
director and member of the Audit and Remuneration committees.
On 19 April 2022, at the conclusion of the Company's Annual
General Meeting:
-- Duncan Wanblad joined the Board as chief executive.
-- Mark Cutifani retired as chief executive and stepped down
from the Board, after nine years in the role.
-- Anne Stevens and Byron Grote stepped down from the Board as
non-executive directors, having both served for nine years.
-- Ian Tyler succeeded Anne Stevens as chair of the Remuneration
Committee, and Hilary Maxson succeeded Byron Grote as chair of the
Audit Committee.
-- Ian Tyler succeeded Byron Grote as the Board's senior independent director.
-- Marcelo Bastos succeeded Byron Grote as the designated
non-executive director to chair the Anglo American Global Workforce
Advisory Panel.
The names of the directors at the date of this report and the
skills and experience our Board members contribute to the long term
sustainable success of Anglo American are set out on the Group's
website:
www.angloamerican.com/about-us/leadership-team/board
Principal risks and uncertainties
Anglo American is exposed to a variety of risks and
uncertainties which may have a financial, operational or
reputational impact on the Group, and which may also have an impact
on the achievement of social, economic and environmental
objectives. The principal risks and uncertainties facing the Group
at the 2021 year end are set out in detail on pages 60-67 of the
strategic report section of the Integrated Annual Report 2021
www.angloamerican.com . The principal risks and uncertainties
facing the Group relate to the following:
-- Catastrophic and natural catastrophe risks
-- Economic environment including product prices
-- Cyber security
-- Political
-- Community and social relations
-- Safety
-- Climate change
-- Regulatory and permitting
-- Operational performance
-- Pandemic
-- Corruption
-- Water
-- Future demand
The Group is exposed to changes in the economic environment,
including to tax rates and regimes, as with any other business.
Details of any key risks and uncertainties specific to the period
are covered in the Operations review section. Details of relevant
tax matters are included in note 6 to the Condensed financial
statements.
De Beers - Diamonds
Financial and operational metrics(1)
Production Sales Unit Group Underlying EBITDA Underlying
volume volume Price cost* revenue* EBITDA* margin*(6) EBIT* Capex* ROCE*
========== =========== ======= ======== ======== ========= =========== =========== =========== ======= ======
'000 '000
cts cts(2) $/ct(3) $/ct(4) $m(5) $m $m $m
========== =========== ======= ======== ======== ========= =========== =========== =========== ======= ======
De Beers 16,884 15,329 213 59 3,595 944 53% 718 250 11%
Prior
period 15,409 19,161 135 59 2,900 610 42% 377 205 6%
Botswana 11,705 n/a 189 32 n/a 333 n/a 295 31 n/a
Prior
period 10,687 - 131 35 - 226 - 203 29 -
Namibia 1,016 n/a 632 292 n/a 93 n/a 78 19 n/a
Prior
period 676 - 578 374 - 43 - 25 23 -
South
Africa 2,916 n/a 147 39 n/a 227 n/a 162 169 n/a
Prior
period 2,437 - 107 48 - 113 - 34 122 -
Canada 1,247 n/a 97 60 n/a 2 n/a (25) 19 n/a
Prior
period 1,609 - 55 42 - 35 - 5 17 -
Trading n/a n/a n/a n/a n/a 401 12% 398 1 n/a
Prior
period - - - - - 279 11% 276 1 -
Other(7) n/a n/a n/a n/a n/a (112) n/a (190) 11 n/a
Prior
period - - - - - (86) - (166) 13 -
========== =========== ======= ======== ======== ========= =========== =========== =========== ======= ======
(1) Prepared on a consolidated accounting basis, except for
production, which is stated on a 100% basis except for the Gahcho
Kué joint operation in Canada, which is on an attributable 51%
basis.
(2) Total sales volumes on a 100% basis were 17.3 million carats
(30 June 2021: 20.8 million carats). Total sales volumes (100%)
include De Beers Group's joint arrangement partners' 50%
proportionate share of sales to entities outside De Beers Group
from Diamond Trading Company Botswana and Namibia Diamond Trading
Company.
(3) Pricing for the mining business units is based on 100%
selling value post-aggregation of goods. Realised price includes
the price impact of the sale of non-equity product and, as a
result, is not directly comparable to the unit cost.
(4) Unit cost is based on consolidated production and operating
costs, excluding depreciation and operating special items, divided
by carats recovered.
(5) Includes rough diamond sales of $3.3 billion (30 June 2021:
$2.6 billion).
(6) Total De Beers EBITDA margin shows mining EBITDA margin on
an equity basis, which excludes the impact of non-mining
activities, third--party sales, purchases, trading downstream and
corporate.
(7) Other includes Element Six, Brands and consumer markets, and corporate.
Markets
Following a continued strong recovery in consumer demand for
diamond jewellery over the holiday season at the end of 2021, the
year began with healthy demand and inventory conditions throughout
the diamond pipeline as retailers restocked in the first two months
of the year - with polished diamond prices rising on the back of
the strong trading environment.
The onset of the Russia-Ukraine war initially affected industry
sentiment negatively as diamond businesses sought to understand the
potential impact on supply and demand from both consumer
self-sanctioning in western markets and subsequent formal
sanctions.
Nonetheless, despite the impact of the war and associated
sanctions, as well as the recovering demand for luxury travel,
consumer demand for diamond jewellery in the key US market has
continued to post positive growth on the record levels of demand
seen in 2021. Polished prices subsequently started to rise again in
the second quarter, especially in the smaller diamond sizes (of
which Russia produces a large share) but softened slightly in June
from higher inventory levels and increased economic uncertainty.
The overall improvement in prices was despite the recovery in
Chinese consumer demand for diamond jewellery seen at the start of
the year being impacted in the second quarter by the latest wave of
Covid-19 and subsequent lockdowns in major Chinese cities.
Demand for De Beers' rough diamonds remained robust throughout
the first half of the year, supported by strong US consumer demand
for diamond jewellery, tightness in global rough diamond supply and
De Beers' focus on enhanced provenance assurance for its rough
diamonds through its blockchain-backed Tracr(TM) technology
platform.
Financial and operational overview
Total revenue increased to $3.6 billion (30 June 2021: $2.9
billion), with rough diamond sales rising to $3.3 billion (30 June
2021: $2.6 billion), as the midstream replenished their stocks
following strong consumer demand over the holiday season. Rough
diamond sales volumes totalled 15.3 million carats (30 June 2021:
19.2 million carats), with the prior period benefiting from very
strong demand recovery following the impact of Covid-19 in 2020.
The average realised price rose by 58% to $213/ct (30 June 2021:
$135/ct), driven by a larger proportion of higher value rough
diamonds sold, as well as growth in the De Beers rough diamond
price index. The rough price index increased by 28% compared with
the same period in the prior year, reflecting positive consumer
demand for diamond jewellery as well as tightness in inventories
across the diamond value chain .
Underlying EBITDA increased by 55% to $944 million (30 June
2021: $610 million), reflecting the recovery in sales. Unit costs
were flat at $59/ct (30 June 2021: $59/ct) as the benefit of higher
production was offset by rising inflation and input costs.
Capital expenditure increased by 22% to $250 million (30 June
2021: $205 million), largely due to a ramp-up in the Venetia
Underground project, ahead of first production in 2023.
Operational performance
Mining
Rough diamond production increased by 10% to 16.9 million carats
(30 June 2021: 15.4 million carats), reflecting a strong
operational performance and higher planned levels of production to
meet continued strong demand for rough diamonds, while the first
quarter of 2021 was affected by particularly high rainfall in
Botswana and at Venetia.
In Botswana, production increased by 10% to 11.7 million carats
(30 June 2021: 10.7 million carats) owing to increased processing
at both Orapa and Jwaneng, as well as planned higher grade at
Orapa. The Government of the Republic of Botswana and De Beers
Group have extended their existing agreement for the sale of
Debswana's rough diamond production by 12 months until 30 June
2023. Following further positive progress towards a new agreement
being made in the first half of 2022, the two parties have agreed
to the one-year extension to enable the finalisation of the ongoing
discussions.
Namibia production increased by 50% to 1.0 million carats (30
June 2021: 0.7 million carats) primarily due to continued strong
performance from the new diamond recovery vessel, the Benguela Gem,
in the first quarter of 2022.
South Africa production increased by 20% to 2.9 million carats
(30 June 2021: 2.4 million carats) due to the treatment of higher
grade ore from the final cut of the open pit at Venetia.
Production in Canada decreased by 22% to 1.2 million carats (30
June 2021: 1.6 million carats), primarily as a result of treating
lower grade ore and Covid-19 related absenteeism.
Brands and consumer markets
The strong recovery in US consumer demand for diamond jewellery
was reflected in continued growth in De Beers' branded diamond
jewellery from De Beers Jewellers and De Beers Forevermark. As
diamond provenance and traceability become increasingly important,
De Beers continues to invest in its unique ability to provide
source assurance for its diamonds at scale, underpinned by the
Tracr(TM) blockchain platform. This proprietary technology provides
an immutable record of a diamond's provenance, underpinning
confidence in natural diamonds.
Operational and market outlook
Consumer desire for natural diamonds continues to be robust in
key consumer markets. However, a deterioration in global
macro-economic conditions and significant inflation in the key
markets could result in reduced consumer spending impacting demand
for diamond jewellery. Despite this, the combination of ongoing
sanctions against Russia, decisions from a number of US-based
jewellery businesses to apply their own restrictions on purchases
of Russian diamonds, and continued development of provenance
initiatives has the potential to underpin continued demand for De
Beers' rough diamonds in the medium to longer term.
Meanwhile, the longer term evolution of the diamond value chain
continues, including a sustained focus on inventory balance, the
efficient distribution of diamonds throughout the pipeline,
increased online purchasing, and a greater focus on the provenance
and sustainability credentials of companies and their products.
Despite the near term challenges and uncertainties, the long term
outlook for diamond jewellery demand remains positive, while the
global supply of rough diamonds is expected to slightly decline
owing to the lack of recent discoveries.
Full year production guidance for 2022 is 32-34 million carats
(100% basis), subject to trading conditions and the extent of
further Covid-19 related disruptions. Full year unit cost guidance
for 2022 is c.$65/ct.
Copper
Financial and operational metrics
Mining
Production Sales Unit Group Underlying EBITDA Underlying
volume volume Price cost* revenue* EBITDA* margin*(2) EBIT* Capex* ROCE*
=============== =========== ======= ======== ======== ========= =========== =========== =========== ======= ======
kt kt(1) c/lb(2) c/lb(3) $m(4) $m $m $m
=============== =========== ======= ======== ======== ========= =========== =========== =========== ======= ======
Copper 273 265 401 150 2,443 1,166 47% 894 953 19%
Prior period 330 305 460 116 2,974 1,935 66% 1,630 768 38%
Los Bronces(5) 130 122 n/a 219 1,027 431 42% 324 363 n/a
Prior period 163 155 - 155 1,431 920 64% 768 189 -
Collahuasi(6) 128 128 n/a 85 1,095 821 75% 697 145 n/a
Prior period 146 133 - 58 1,238 1,048 85% 928 197 -
Quellaveco(7) n/a n/a n/a n/a n/a n/a n/a n/a 376 n/a
Prior period - - - - - - - - 331 -
Other
operations(8) 16 15 n/a n/a 321 (86) (3)% (127) 69 n/a
Prior period 21 17 - - 305 (33) 16% (66) 51 -
=============== =========== ======= ======== ======== ========= =========== =========== =========== ======= ======
(1) Excludes 216 kt third-party sales (30 June 2021: 157 kt).
(2) Represents realised copper price and excludes impact of third-party sales.
(3) C1 unit cost includes by-product credits.
(4) Group revenue is shown after deduction of treatment and refining charges (TC/RCs).
(5) Figures on a 100% basis (Group's share: 50.1%).
(6) 44% share of Collahuasi production, sales and financials.
(7) Figures on a 100% basis (Group's share: 60%), except capex
which represents the Group's share after deducting direct funding
from non--controlling interests. H1 2022 capex on a 100% basis is
$626 million, of which the Group's share is $376 million. H1 2021
capex on a 100% basis was $551 million, of which the Group's share
was $331 million.
(8) Other operations includes El Soldado and Chagres (figures on
a 100% basis, Group's share: 50.1%). Financials include third-party
sales and purchases, projects and corporate costs.
Financial and operational overview
Underlying EBITDA decreased by 40% to $1,166 million (30 June
2021: $1,935 million), reflecting lower production and a 13%
decrease in the realised price.
Copper production of 273,400 tonnes was 17% lower than the prior
period (30 June 2021: 330,000 tonnes) due to planned lower grades
and expected lower water availability at Los Bronces, owing to the
ongoing drought in Chile's central zone - with record low levels of
precipitation in 2021 and the first half of 2022, which were partly
offset by water management initiatives. Unit costs increased by 29%
to 150 c/lb (30 June 2021: 116 c/lb), reflecting lower production,
record levels of local inflation and higher input costs,
particularly diesel and explosives, partly offset by the weaker
Chilean peso and higher by-product credits.
Capital expenditure increased by 24% to $953 million (30 June
2021: $768 million), reflecting expenditure on critical
infrastructure projects deferred due to the Covid-19 pandemic in
Chile and the ongoing investment in the Quellaveco project in Peru,
partly offset by the weaker Chilean peso.
Markets
6 months 6 months
ended ended
30 June 30 June
2022 2021
=============================== ========= =========
Average market price (c/lb) 443 413
Average realised price (c/lb) 401 460
=============================== ========= =========
The difference between the market price and realised price is
largely a function of provisional pricing adjustments, with 145,900
tonnes of copper provisionally priced at 374 c/lb at 30 June 2022
(30 June 2021: 181,072 tonnes provisionally priced at 425 c/lb),
and the timing of sales across the period.
The average LME copper price was 7% higher compared with the
same period in 2021, in spite of the sharp decline in the average
price towards the end of June as investor selling took place across
a range of markets, including copper. Fears of recession,
supply-chain disruptions in manufacturing, inflation and interest
rate increases have adversely impacted investor sentiment as the
conflict in Ukraine persists and energy costs rise. In addition,
economic growth in China is only recovering slowly after recent
coronavirus-induced lockdowns in key centres. Despite copper's
strong role in global energy transition activity, and concerns
about supply availability over the medium and longer term, copper
prices have been adversely affected by the weaker near term global
economic outlook.
Operational performance
Copper production of 273,400 tonnes was 17% lower than the prior
period (30 June 2021: 330,000 tonnes).
At Los Bronces, production decreased by 21% to 129,700 tonnes
(30 June 2021: 163,200 tonnes) due to planned lower grades (0.59%
vs 0.70%), lower plant throughput (23.1 Mt vs 24.7 Mt) as a result
of expected lower water availability, and lower copper recovery
(80.9% vs 83.2%). The impact of expected lower water availability,
following the record low levels of precipitation at the end of 2021
and during the first half of 2022, was partially offset by
initiatives to maximise water efficiency, including sourcing of
external industrial water. C1 unit costs increased by 41% to 219
c/lb (30 June 2021: 155 c/lb), driven by planned lower production,
record levels of inflation and cost increases associated with water
management, partly offset by higher by-product credits and the
weaker Chilean peso.
At Collahuasi, Anglo American's attributable share of copper
production decreased by 12% to 127,800 tonnes (30 June 2021:
145,900 tonnes) due to planned lower grades (1.14% vs 1.27%) in
accordance with the mine plan. C1 unit costs increased by 47% to 85
c/lb (30 June 2021: 58 c/lb), driven by planned lower production
and the effect of inflation, partly offset by the weaker Chilean
peso and higher by-product credits.
Production at El Soldado decreased by 24% to 15,900 tonnes (30
June 2021: 20,900 tonnes) due to planned lower grades (0.54% vs
0.73%) in accordance with the mine plan. C1 unit costs increased by
43% to 304 c/lb (30 June 2021: 213 c/lb) due to the lower
production and inflation, partly offset by the weaker Chilean
peso.
Chile's central zone continues to face severe drought
conditions, with the two years up to June 2022 being the driest
years since records began, and with the outlook for the year
remaining very dry.
Operational outlook - Copper Chile
2022 full year production guidance for Chile is 560,000-600,000
tonnes, subject to the extent of further Covid-19 related
disruptions and water availability. 2022 full year C1 unit cost
guidance for Chile is c.150c/lb, subject to the impact of water
availability on production volumes.
There is limited near term production impact from the recent
rejection of the environmental permit application for the Los
Bronces Integrated Project. Anglo American is continuing to engage
with the relevant regulatory authorities to make available any
additional information or clarity that may be required. Anglo
American has requested a review by a Minister's Committee - which
is the next stage of the regulated permitting process in Chile - to
evaluate the full breadth of merits of the project. Anglo American
remains hopeful that the positive impact this project will have on
the local area, including an improvement to air quality, as well as
a major long term inward investment for Chile, will be
recognised.
Quellaveco update
The Group announced first production of copper concentrate from
Quellaveco on 12 July 2022, a key milestone in delivery of this
world class asset, on time and on budget, as Quellaveco nears
completion ahead of receiving final regulatory clearance for
commercial operations to begin.
The production of first copper concentrate marks the beginning
of a normal period of testing of the processing plant to
demonstrate readiness for operations. Copper concentrate from the
testing period is being stockpiled for future sale whilst the
process of obtaining regulatory permits for commercial operations
takes place.
The delivery of first concentrate has taken place against an
extremely challenging backdrop through two years of
pandemic-related disruption. Despite this, the project is producing
copper in line with the original construction schedule and less
than four years after project approval. The total estimated capex
is $5.5 billion and is in line with the 2020 budget to accommodate
Covid-19 requirements. The Group's share of total estimated capex
is $2.8 billion.
Focus is now on receiving the required regulatory clearances,
execution of remaining project-scope activities including the
commissioning of the second grinding line expected to begin in the
third quarter of 2022, and safely ramping up the processing plant
to nameplate capacity over the next 12 months. We are also working
closely with government and local communities on the safe and
responsible demobilisation of the project workforce.
Capital expenditure in the first half of 2022 (on a 100% basis)
was $0.6 billion, of which the Group's share is $0.4 billion.
Capital expenditure guidance for 2022 remains $0.8-1.1 billion
(100% basis), of which the Group's share is $0.5-0.7 billion.
Operational outlook - Copper Peru
Production guidance for Peru for 2022 remains 100,000-150,000
tonnes of copper. C1 unit cost guidance for 2022 is c. 135c/lb,
subject to progressing the ramp-up of production volumes. All
guidance and project progress remains subject to the extent of any
further Covid-19 related disruption.
Quellaveco expects to deliver around 300,000 tonnes per annum of
copper equivalent production on average in its first 10 years of
operation.
Nickel
Financial and operational metrics
Mining
Production Sales Unit Group Underlying EBITDA Underlying
volume volume Price cost* revenue* EBITDA* margin* EBIT* Capex* ROCE*
========== =========== ======== ======== ======== ========= =========== ========= =========== ======= ======
t t $/lb(1) c/lb(2) $m $m $m $m
========== =========== ======== ======== ======== ========= =========== ========= =========== ======= ======
Nickel 19,600 16,800 11.59 487 407 239 59% 201 32 30%
Prior
period 20,700 20,000 7.21 350 325 135 41% 106 10 18%
========== =========== ======== ======== ======== ========= =========== ========= =========== ======= ======
(1) Realised price.
(2) C1 unit cost.
Financial and operational overview
Underlying EBITDA increased by 77% to $239 million (30 June
2021: $135 million), reflecting higher realised nickel prices,
partially offset by lower volumes and higher unit costs. C1 unit
costs increased by 39% to 487 c/lb (30 June 2021: 350 c/lb) as a
result of higher input prices, lower production volumes and the
stronger Brazilian real.
Capital expenditure increased to $32 million (30 June 2021: $10
million), primarily due to planned higher expenditure on P101 asset
productivity initiatives.
Markets
6 months 6 months
ended ended
30 June 30 June
2022 2021
=============================== ========= =========
Average market price ($/lb) 12.52 7.93
Average realised price ($/lb) 11.59 7.21
=============================== ========= =========
Differences between the market price (which are LME-based) and
our realised price (the ferronickel price) are due to the discounts
(or premiums) to the LME price, which depend on market conditions,
supplier products and consumer preferences.
The average LME nickel price of $12.52/lb was 58% higher (30
June 2021: $7.93/lb). The year started with strong demand and
prices, which were further bolstered by the invasion of Ukraine by
Russia, a major nickel supplier, and growing consumer resistance to
buying Russian nickel. Prices weakened at the end of the period due
to inflation and global economic growth concerns, despite available
nickel stocks continuing to decline.
Operational performance
Nickel production decreased by 5% to 19,600 tonnes (30 June
2021: 20,700 tonnes), primarily due to lower ore grades as a result
of licensing delays that are now resolved, as well as the impact of
heavy rainfall and unplanned maintenance. Sales volumes were
further impacted by logistics constraints, primarily in the
container freight market.
Operational outlook
Production guidance for 2022 is 40,000-42,000 tonnes, subject to
the extent of further Covid-19 related disruption.
C1 unit cost guidance for 2022 is c.495c/lb.
Platinum Group Metals
Financial and operational metrics
Production Sales Mining
volume volume Basket Unit Group Underlying EBITDA Underlying
PGMs PGMs price cost* revenue* EBITDA* margin*(5) EBIT* Capex* ROCE*
=============== =========== ======= ======= ====== ========= =========== =========== =========== ======= ======
$/PGM $/PGM
koz(1) koz(2) oz(3) oz(4) $m $m $m $m
=============== =========== ======= ======= ====== ========= =========== =========== =========== ======= ======
PGMs 1,988 2,044 2,671 948 5,555 2,732 55% 2,555 394 119%
Prior period 2,079 2,568 2,884 866 7,414 4,383 71% 4,211 363 160%
Mogalakwena 510 540 2,543 821 1,374 871 63% 796 210 n/a
Prior period 637 712 2,748 690 1,958 1,403 72% 1,330 189 -
Amandelbult 343 372 3,016 1,184 1,122 603 54% 573 32 n/a
Prior period 341 441 3,247 1,178 1,432 965 67% 938 34 -
Other
operations(6) 456 436 2,780 924 1,210 581 48% 524 152 n/a
Prior period 425 521 3,054 880 1,547 1,116 72% 1,059 140 -
Processing
and
trading(7) 678 696 n/a n/a 1,849 677 37% 662 n/a n/a
Prior period 675 894 - - 2,477 899 36% 884 n/a -
=============== =========== ======= ======= ====== ========= =========== =========== =========== ======= ======
(1) Production reflects own-mined production and purchase of
metal in concentrate. PGM volumes consists of 5E metals and
gold.
(2) Sales volumes exclude the sale of refined metal purchased
from third parties and toll material. PGM volumes consists of 5E
metals and gold.
(3) Average US$ realised basket price, based on sold ounces
(own-mined and purchased concentrate). Excludes the impact of the
sale of refined metal purchased from third parties.
(4) Total cash operating costs (includes on-mine, smelting and
refining costs only) per own-mined PGM ounce of production.
(5) The total PGMs mining EBITDA margin excludes the impact of
the sale of refined metal purchased from third parties, purchase of
concentrate and tolling.
(6) Includes Unki, Mototolo and PGMs' share of joint operations
(Kroondal and Modikwa). Other operations margin includes
unallocated market development, care and maintenance, and corporate
costs.
(7) Purchase of concentrate from joint operations, associates
and third parties for processing into refined metals, tolling and
trading activities.
Financial and operational overview
Underlying EBITDA decreased to $2,732 million (30 June 2021:
$4,383 million), as a result of a 7% decrease in the PGM basket
price, reflecting lower market prices, partly offset by a more
normal sales mix compared with the first half of 2021. Underlying
EBITDA was also negatively affected by reduced sales, as refined
production in the first half of 2021 benefited from the processing
of higher than normal work-in-progress inventory following the ACP
Phase A rebuild. Unit costs increased by 9% to $948/PGM ounce (30
June 2021: $866/PGM ounce), reflecting higher input cost inflation
and lower production volumes, partly offset by the weaker South
African rand.
Capital expenditure increased by 9% to $394 million (30 June
2021: $363 million), driven by the Covid-19 related deferral of
project timelines that were rescheduled from 2021 into the first
half of 2022.
Markets
6 months 6 months
ended ended
30 June 30 June
2022 2021
======================================= ========= =========
Average platinum market price ($/oz) 995 1,170
Average palladium market price ($/oz) 2,219 2,592
Average rhodium market price ($/oz) 17,167 24,662
US$ realised basket price ($/PGM oz) 2,671 2,884
======================================= ========= =========
The average realised PGM basket price decreased by 7% to $2,671
per PGM ounce (30 June 2021: $2,884 per PGM ounce). PGM prices were
volatile in the first half of 2022, initially increasing due to
supply concerns following Russia's invasion of Ukraine, then
falling back as demand was negatively affected by the slowing
global economy.
All three major PGMs showed similar price trends, with palladium
being particularly turbulent, reaching a new all-time high of
almost $3,340 per ounce in March, before ending the period below
$2,000 per ounce, largely reflecting the large proportion of
palladium supply that comes from Russia. The platinum price was
also adversely affected by a stronger US dollar, which reached a
20-year high in the period. Strong by-product prices and
differences in the timing and mix of metals sold cushioned the
impact of lower PGM prices on the realised basket price.
Operational performance
Total PGM production decreased by 4% to 1,987,500 ounces (30
June 2021: 2,079,100 ounces), principally due to lower grade at
Mogalakwena, partially offset by increased production from
Mototolo, Unki and Amandelbult.
Own-mined production
PGM production from own-managed mines (Mogalakwena, Amandelbult,
Unki and Mototolo) and equity share of joint operations decreased
by 7% to 1,309,400 ounces (30 June 2021: 1,404,100 ounces).
Mogalakwena PGM production decreased by 20% to 510,200 ounces
(30 June 2021: 637,400 ounces), largely as a result of heavy
rainfall in the first quarter, leading to the need to mine in lower
grade areas, and Covid-19 supply chain disruptions impacting
delivery of heavy mining equipment.
Amandelbult PGM production increased by 1% to 343,300 ounces (30
June 2021: 341,300 ounces), despite infrastructure closures,
reflecting improved underground mining performance that led to
increased stability and higher throughput at the concentrator.
Production from other operations increased by 7% to 455,900
ounces (30 June 2021: 425,400 ounces), reflecting the increased
production as a result of the completion of the concentrator
debottlenecking projects at Unki and Mototolo.
Purchase of concentrate
Purchase of concentrate, excluding tolling, was flat at 678,100
ounces (30 June 2021: 675,000 ounces).
Refined production and sales volumes
Refined PGM production (excluding toll-treated metal) decreased
by 16% to 1,959,100 ounces (30 June 2021: 2,326,700 ounces) as the
first half of 2021 benefited from the processing of higher than
normal work-in-progress inventory following the ACP Phase A rebuild
and commissioning in the fourth quarter of 2020. Planned
maintenance and the annual stock count (including at the Precious
Metals Refinery, which only happens every three years) also
resulted in additional downtime of processing assets.
PGM sales volumes decreased to 2,044,400 ounces (30 June 2021:
2,568,200 ounces), in line with refined production.
Operational outlook
PGM metal in concentrate production guidance for 2022 is 3.9-4.3
million ounces, with own-mined output accounting for c.65%. Refined
PGM production guidance for 2022 is 4.0-4.4 million ounces, subject
to the potential impact of Eskom load-shedding. Both are subject to
the extent of further Covid-19 related disruption. Unit cost
guidance for 2022 is c.$950/PGM ounce.
Iron Ore
Financial and operational metrics
Mining
Production Sales Unit Group Underlying EBITDA Underlying
volume volume Price cost* revenue* EBITDA* margin* EBIT* Capex* ROCE*
============= =========== ======== ======= ======= ========= =========== ======== =========== ======= ======
Mt(1) Mt(1) $/t(2) $/t(3) $m $m $m $m
============= =========== ======== ======= ======= ========= =========== ======== =========== ======= ======
Iron Ore
Total 27.5 28.3 135 40 4,393 2,298 51% 2,047 427 38%
Prior
period 31.9 30.7 210 33 6,935 4,910 70% 4,661 278 88%
Kumba Iron
Ore(4) 17.8 19.6 135 43 2,907 1,570 54% 1,403 355 99%
Prior
period 20.4 19.6 216 40 4,412 3,033 69% 2,860 210 211%
Iron Ore
Brazil
(Minas-Rio) 9.8 8.7 134 35 1,486 728 45% 644 72 23%
Prior
period 11.5 11.1 200 22 2,523 1,877 73% 1,801 68 59%
============= =========== ======== ======= ======= ========= =========== ======== =========== ======= ======
(1) Production and sales volumes are reported as wet metric
tonnes. Product is shipped with c.9% moisture from Minas--Rio and
c.1.6% moisture from Kumba.
(2) Prices for Kumba Iron Ore are the average realised export
basket price (FOB Saldanha) (wet basis). Prices for Minas-Rio are
the average realised export basket price (FOB Brazil) (wet basis).
Prices for total iron ore are a blended average.
(3) Unit costs are reported on an FOB wet basis. Unit costs for
total iron ore are a blended average.
(4) Sales volumes and realised price differ to Kumba's
stand-alone reported results due to sales to other Group
companies.
Financial and operational overview
Underlying EBITDA for Iron Ore decreased by 53% to $2,298
million (30 June 2021: $4,910 million), following a 36% decrease in
the realised iron ore price to $135/tonne, lower sales and higher
unit costs.
Kumba
Underlying EBITDA decreased by 48% to $1,570 million (30 June
2021: $3,033 million), driven by a lower average realised FOB iron
ore export price of $135/tonne (30 June 2021: $216/tonne) and
higher unit costs, partly offset by the weaker South African rand.
Unit costs increased by 8% to $43/tonne (30 June 2021: $40/tonne),
reflecting lower production volumes and input cost inflation,
partially offset by higher waste stripping capitalised.
Production decreased by 13%, largely due to heavy rainfall in
the period. Total sales volumes were broadly flat at 19.6 Mt (30
June 2021: 19.6 Mt), with lower production supplemented by a
sell-down of finished goods inventory.
Capital expenditure increased by 69% to $355 million (30 June
2021: $210 million), reflecting the ramp-up in activity at the
Kapstevel South pit life extension project at Kolomela and the
Ultra High Dense Media Separation (UHDMS) technology growth project
at Sishen, partly offset by the impact of the weaker South African
rand.
Minas-Rio
Underlying EBITDA decreased by 61% to $728 million (30 June
2021: $1,877 million), reflecting the lower average realised price
and lower volumes as a result of maintenance and unusually heavy
rainfall. Unit costs increased by 59% to $35/tonne (30 June 2021:
$22/tonne), reflecting higher input costs, principally consumables
and electricity, lower production volumes, increased maintenance
costs and the impact of the stronger Brazilian real.
Capital expenditure was broadly flat at $72 million (30 June
2021: $68 million).
Markets
6 months 6 months
ended ended
30 June 30 June
2022 2021
================================================= ========= =========
Average market price (Platts 62% Fe CFR China
- $/tonne) 140 183
Average market price (MB 66% Fe Concentrate CFR
- $/tonne) 174 209
Average realised price (Kumba export - $/tonne)
(FOB wet basis) 135 216
Average realised price (Minas-Rio - $/tonne)
(FOB wet basis) 134 200
================================================= ========= =========
Kumba's FOB realised price of $135/wet metric tonne was 14%
higher than the equivalent Platts 62% Fe FOB Saldanha market price
(adjusted for moisture) of $118/wet metric tonne. This reflects the
premium for the higher iron content at 64.0% and relatively high
proportion (approximately 66%) of lump that the product portfolio
attracts (which helps steel mills reduce emissions).
Minas-Rio's pellet feed product is also higher grade (with iron
content of 67% and lower impurities) than the reference product
used for the Platts 62% Fe CFR China index. The Metal Bulletin (MB)
66 index, therefore, is used when referring to Minas-Rio product.
The Minas-Rio realised price of $134/wet metric tonne was 1% higher
than the equivalent MB 66 FOB Brazil index, (adjusted for moisture,
of $133/wet metric tonne), reflecting the premium quality of the
product.
Operational performance
Kumba
Production decreased by 13% to 17.8 Mt (30 June 2021: 20.4 Mt),
driven by extremely high rainfall impacting feedstock availability,
a safety intervention at Kolomela and equipment reliability.
Production at Sishen decreased by 7% to 12.9 Mt (30 June 2021: 13.9
Mt) and at Kolomela by 25% to 4.8 Mt (30 June 2021: 6.4 Mt).
Minas-Rio
Production decreased by 15% to 9.8 Mt (30 June 2021: 11.5 Mt)
due to maintenance and unusually heavy rainfall that impacted the
availability of the mining fleet and plant.
Operational outlook
Kumba
2022 full year production guidance is 38-40 Mt, subject to the
extent of further Covid-19 related disruption and third--party rail
and port performance.
2022 full year unit cost guidance is c.$44/tonne.
Minas-Rio
2022 full year production guidance is 22-24 Mt, subject to the
extent of further Covid-19 related disruption, as well as weather
related disruptions.
2022 full year unit cost guidance is c.$32/tonne.
Steelmaking Coal
Financial and operational metrics
Mining
Production Sales Unit Group Underlying EBITDA Underlying
volume volume Price cost* revenue* EBITDA* margin* EBIT* Capex* ROCE*
============= =========== ======== ======= ======= ========= =========== ======== =========== ======= ======
Mt(1) Mt(2) $/t(3) $/t(4) $m $m $m $m
============= =========== ======== ======= ======= ========= =========== ======== =========== ======= ======
Steelmaking
Coal 4.8 5.2 397 160 2,213 1,399 63% 1,246 265 92%
Prior
period 6.2 6.0 115 124 736 (94) (13)% (383) 257 (26)%
============= =========== ======== ======= ======= ========= =========== ======== =========== ======= ======
(1) Production volumes are saleable tonnes, excluding thermal
coal production of 0.8 Mt (30 June 2021: 0.9 Mt).
(2) Sales volumes exclude thermal coal sales of 0.7 Mt (six
months ended 30 June 2021: 1.1 Mt). The first half of 2022 includes
0.1 Mt of steelmaking coal mined by third parties and processed by
Anglo American.
(3) Realised price is the weighted average hard coking coal and
PCI sales price achieved at managed operations.
(4) FOB cost per tonne, excluding royalties and study costs.
Financial and operational overview
Underlying EBITDA increased to $1,399 million (30 June 2021: $94
million loss), driven by a 245% increase in the weighted average
realised price for steelmaking coal. This was partially offset by
13% lower sales volumes and a 29% increase in unit costs to
$160/tonne (30 June 2021: $124/tonne), reflecting the impact of
lower production, Covid-19 related disruptions and higher
inflation. Also included is $250 million for the finalisation of
the Grosvenor gas ignition claim by the Group's self-insurance
entity. Production was primarily affected by the planned end of
mining at the Grasstree operation in January 2022 and associated
ramp-up of the replacement Aquila longwall operation, as well as
record unseasonal rainfall in May at the open pit operations,
partly offset by restart of the Grosvenor mine in February 2022,
following the underground incident in May 2020.
Capital expenditure was broadly flat at $265 million (30 June
2021: $257 million), with higher development-related spend across
all three underground mines largely offset by lower life extension
expenditure following the completion of the Aquila project, where
longwall production began in February 2022.
Markets
6 months 6 months
ended ended
30 June 30 June
2022 2021
========================================================= ========= =========
Average benchmark price - hard coking coal ($/tonne)(1) 467 132
Average benchmark price - PCI ($/tonne)(1) 406 110
Average realised price - hard coking coal ($/tonne)(2) 407 117
Average realised price - PCI ($/tonne)(2) 322 103
========================================================= ========= =========
(1) Represents average spot prices.
(2) Realised price is the sales price achieved at managed
operations.
Average realised prices differ from the average market prices
due to differences in material grade and timing of shipments. Hard
coking coal (HCC) price realisation decreased slightly to 87% of
average benchmark price (30 June 2021: 89%), driven by a higher
proportion of lower grade coking coal sales in the first half of
2022 compared to the same period in 2021.
The average benchmark price for Australian HCC increased to
$467/tonne (30 June 2021: $132/tonne). HCC prices at the start of
2022 were lifted by wet weather events and Covid-19 related
workforce absenteeism in Australia, and later by buyers' anxiety
around global sanctions on Russian supply, but fell sharply after
reaching multiple record highs in March. Global seaborne demand for
steelmaking coal has since fallen in tandem with weakness in the
downstream steel sector.
Operational performance
Production decreased by 22% to 4.8 Mt (30 June 2021: 6.2 Mt),
principally due to the planned end of mining at the Grasstree
operation in January 2022 and ramp-up of the replacement Aquila
longwall, which began operations in February 2022 and fully ramped
up in June. Production was also impacted by record unseasonal
rainfall in May at the open cut operations.
At Grosvenor, longwall operations restarted in February 2022
following regulatory approval, with production ramped up as planned
in the second quarter. Longwall mining restarted at Moranbah in the
next planned longwall panel in May 2022, following a fatal incident
in March 2022, and an extended longwall move.
Operational outlook
2022 full year export steelmaking coal production guidance is
15-17 Mt, subject to the extent of further unseasonal wet weather,
continued tight labour markets and further Covid-19 related
disruption. Unit cost guidance for 2022 is c.$110/tonne.
As a result of increases to Queensland's royalty rates from 1
July, government taxation for the second half of the year is
expected to increase from around 48% to 59% in total (at current
spot prices).
Manganese
Financial and operational metrics
Mining
Production Sales Group Underlying EBITDA Underlying
volume volume revenue* EBITDA* margin* EBIT* Capex* ROCE*
=================== =========== ======== ========== =========== ========= =========== ======= ======
Mt Mt $m $m $m $m
=================== =========== ======== ========== =========== ========= =========== ======= ======
Manganese 1.8 1.8 475 223 47 % 192 n/a 162%
Prior period(1) 1.8 1.9 370 154 42 % 121 - 104%
=================== =========== ======== ========== =========== ========= =========== ======= ======
(1) Sales and financials include ore and alloy.
Financial and operational overview
Manganese (Samancor)
Underlying EBITDA increased by 45% to $223 million (30 June
2021: $154 million), benefiting from a stronger average realised
manganese ore selling price, partially offset by a 3% decrease in
manganese ore sales volumes, as well as increased freight and
operating costs.
The average benchmark price for manganese ore (Metal Bulletin
44% manganese ore CIF China) increased by 39% to $6.99/dmtu (30
June 2021: $5.03/dmtu), largely due to stronger demand in the first
quarter and the impact of the war in Ukraine.
Operational performance
Attributable manganese ore production was in line with the prior
period at 1.8 Mt (30 June 2021: 1.8 Mt) . There was no manganese
alloy production as the South African smelter has been on care and
maintenance since the Covid-19 lockdown in 2020. The divestment of
the Metalloys business did not proceed as certain commercial
conditions were not satisfied.
Crop Nutrients
Financial and operational metrics
Mining
Production Sales Group Underlying EBITDA Underlying
volume volume revenue* EBITDA* margin* EBIT* Capex* ROCE*
=================== ============ ========= ========== =========== ========= =========== ======= ======
$m $m $m $m
=================== ============ ========= ========== =========== ========= =========== ======= ======
Crop Nutrients n/a n/a 110 (18) n/a (18) 242 n/a
Prior period - - 53 (12) - (12) 279 -
Woodsmith project n/a n/a n/a n/a n/a n/a 242 n/a
Prior period - - - - - n/a 279 -
Other(1) n/a n/a 110 (18) n/a (18) n/a n/a
Prior period - - 53 (12) - (12) - -
=================== ============ ========= ========== =========== ========= =========== ======= ======
(1) Other comprises projects and corporate costs as well as the
share in associate results from The Cibra Group, a fertiliser
distributor based in Brazil.
Crop Nutrients
Anglo American is developing the Woodsmith project in the north
east of England to access the world's largest known deposit of
polyhalite, a natural mineral fertiliser product containing
potassium, sulphur, magnesium and calcium - four of the six
nutrients that every plant needs to grow.
The Woodsmith project is located approximately 8 km south of
Whitby, where polyhalite ore will be extracted via two 1.6 km deep
mine shafts and transported to Teesside on an underground conveyor
belt in a 37 km tunnel, thereby minimising impact on the surface.
It will then be granulated at a materials handling facility to
produce a low carbon fertiliser product - known as POLY4 - that
will be exported from our dedicated port facility to a network of
customers around the world.
Woodsmith project
Anglo American has completed a detailed technical review of the
Woodsmith project to ensure the technical and commercial integrity
of the full scope of its design recognising the multi-decade life
of the mine. The review confirmed that a number of elements of the
project's original design would benefit from modification to bring
it up to Anglo American's safety and operating integrity standards
and to optimise the value of the asset and its world class orebody
for the long term.
Throughout 2022, and ahead of the full project execution phase,
the Woodsmith team, led by new Crop Nutrients CEO Tom McCulley, is
working through the detailed design engineering and is making a
number of changes. Changes relate particularly to the design and
phasing of the two main shafts, the development of the underground
mining area, and the processing and port facilities, as well as
those changes required to accommodate both increased production
capacity and more efficient and scalable mining methods; such
improvements will also require the installation of additional
ventilation earlier in the development of the underground mining
area.
Anglo American expects that the improvements it is making to the
project will result in an enhanced configuration and therefore a
different and longer construction schedule than anticipated prior
to Anglo American's ownership. Anglo American's capital budget for
the development of Woodsmith will reflect such scope and timing
changes to ensure that its exacting standards are met and the full
commercial value of the asset is realised. The capital budget and
schedule to completion will be finalised once the detailed design
engineering is complete and with the benefit of further shaft
sinking progress over the next 12-18 months.
In the meantime, development of the project's major critical
path components has continued to progress to our updated plan
during the first half of 2022, with capital expenditure of $242
million in the first half out of an estimated $600 million for the
year as a whole (2021: $530 million). The mineral transport tunnel
has now been connected to the 383 m deep intermediate access shaft
site at Lockwood Beck during a period of planned maintenance for
the tunnel boring machine. At the mine site, engineering
improvements have been made to the infrastructure in the services
shaft aimed at increasing shaft sinking rates over the project's
duration. We continue to progress the infrastructure at the
production shaft in advance of shaft sinking activities getting
under way, with the shaft boring road header now assembled in the
shaft.
Market development - POLY4
The ongoing focus of the market development activities is to
develop and implement customer-centric sales and marketing
strategies utilising regional customer insights throughout the
value chain and developing routes to market. With more than 1,150
commercial scale, in-progress or completed on-farm demonstrations,
we continue to build a compelling body of evidence that shows
POLY4's efficacy to support crop production through increased
yields, improved crop quality and enhanced soil health through
resilience to compaction, erosion and run-off, as well as improving
nutrient availability to crops, helping to reduce nutrient waste
into watercourses.
Sustainability is becoming an ever more central imperative for
the fertiliser industry, aiming to improve environmental
sustainability, including reducing carbon intensity. Regenerative
farming is also gaining in popularity among upstream and downstream
agribusinesses. Anglo American has an important role to play, with
POLY4 offering a unique combination of properties to support
sustainable agricultural production. POLY4 offers farmers a
solution to agricultural efficiency and sustainability challenges,
through its natural multi-nutrient composition, its suitability for
organic use and ultra-low carbon footprint generating up to 85%
fewer carbon emissions than the equivalent conventional nutrient
products, with little to no waste generated in its production.
At a macro market level, the dislocation experienced within the
global fertiliser market during the first half of 2022 has had a
major impact, causing restrictions in the availability of, and
sharp increases in, the price of crop nutrients. Prices are
expected to remain firm and above historical levels for the
foreseeable future, as supply restrictions and high energy and
manufacturing costs continue. Many countries are re-assessing their
sourcing of fertiliser and agricultural products as they seek
greater reliability of supply while also encouraging more efficient
fertiliser use, driving innovation, and supporting more sustainable
crop solutions.
Corporate and Other
Financial metrics
Production Sales Unit Group Underlying Underlying
volume volume Price cost* revenue* EBITDA* EBIT* Capex*
====================== =========== ======== ======= ======= ========== =========== =========== =======
Mt(1) Mt(2) $/t(3) $/t(4) $m $m $m $m
====================== =========== ======== ======= ======= ========== =========== =========== =======
Segment n/a n/a n/a n/a 258 (282) (360) 12
Prior period - - - - 907 119 (33) 98
Exploration n/a n/a n/a n/a n/a (64) (65) n/a
Prior period - - - - - (42) (43) -
Corporate activities
and unallocated
costs n/a n/a n/a n/a 258 (218) (295) 12
Prior period - - - - 135 (27) (103) 17
Thermal Coal - - - - - - - - -
South Africa(5)
Prior period 5.7 5.3 77 46 553 101 70 81
Thermal Coal - - - - - - - - n/a
Colombia(6)
Prior period 3.6 3.4 65 34 219 87 43 -
====================== =========== ======== ======= ======= ========== =========== =========== =======
(1) Production volumes are saleable tonnes. South African
production volumes include export primary production, secondary
production sold into export markets, production sold domestically
at export parity pricing and excludes other domestic production of
5.6 Mt in 2021.
(2) South African sales volumes include export primary
production, secondary production sold into export markets and
production sold domestically at export parity pricing and exclude
domestic sales of 5.3 Mt in 2021 and third-party sales of 6.4 Mt in
2021.
(3) Thermal Coal - South Africa realised price is the weighted
average export thermal coal price achieved. Excludes third-party
sales from locations other than Richards Bay.
(4) Thermal Coal - South Africa FOB cost per saleable tonne from
the trade operations, excluding royalties and study costs.
(5) Thermal Coal - South Africa mining activity included in
prior period until the demerger on 4 June 2021.
(6) Thermal Coal - Colombia represents the Group's attributable
share from its 33.3% shareholding in Cerrejón and reflects earnings
and volumes from the first half of 2021 only, before the agreement
was entered into.
Financial overview
Exploration
Exploration's underlying EBITDA loss was $64 million (30 June
2021: $42 million loss), driven by the recovery from the Covid-19
disruptions in 2021 that affected greenfield base metals
exploration and near-mine iron ore exploration.
Corporate activities and unallocated costs
Underlying EBITDA was a $218 million loss (30 June 2021: $27
million loss), driven primarily by the finalisation of the $250
million Grosvenor gas ignition claim by the Group's self-insurance
entity which resulted in an expense in Corporate activities that
was offset within the underlying EBITDA of Steelmaking Coal.
Guidance summary
Production and unit costs
Unit costs
2022F Production volumes
==================
Units 2022F 2023F 2024F
===============================================
Diamonds(1) c.$65/ct Mct 32-34 30-33 30-33
Copper(2) c.147c/lb kt 660-750 910-1,020 910-1,020
Nickel(3) c.495c/lb kt 40-42 41-43 42-44
PGMs - metal c.$950/PGM ounce 3.9-4.3 4.1-4.5 4.1-4.5
in concentrate(4) Moz
Platinum Moz 1.8-2.0 1.9-2.1 1.9-2.1
Palladium Moz 1.2-1.3 1.3-1.4 1.3-1.4
Other Moz 0.9-1.0 0.9-1.0 0.9-1.0
PGMs - refined(5) Moz 4.0-4.4 3.8-4.2 4.1-4.5
==================== ================== ======= ======== ==========
Iron ore(6) c.$40/tonne Mt 60-64 64-68 67-71
Steelmaking
Coal(7) c.$110/tonne Mt 15-17 22-24 24-26
Note: Unit costs are subject to any further effects of Covid-19
and exclude royalties, depreciation and include direct support
costs only. FX rates for H2 2022 unit costs: 17 ZAR:USD, 1.5
AUD:USD, 5.5 BRL:USD, 1,000 CLP:USD, 4 PEN:USD. Production volumes
are subject to the extent of further Covid-19 related
disruption.
(1) Unit cost is based on De Beers' share of production.
Production on a 100% basis except for the Gahcho Kué joint
operation, which is on an attributable 51% basis, subject to
trading conditions. Venetia continues to transition to underground
operations during 2022, with ramp-up expected from 2023.
(2) Copper business unit only. On a contained-metal basis. Total
copper is the sum of Chile and Peru. Unit cost total is a weighted
average based on the mid-point of production guidance. 2022 Chile:
560-600kt; Peru 100-150kt. 2023 Chile: 590-650kt; Peru: 320-370kt.
2024 Chile: 590-650kt; Peru 320-370kt. Chile production is subject
to water availability. Chile production in 2022 impacted by lower
expected grades at Collahuasi and Los Bronces, and lower water
availability at Los Bronces. Peru production in 2022 subject to
progress on ramp-up of operations. Chile 2022 unit cost is
c.150c/lb and is subject to the impact of water availability on
production volumes. Peru 2022 unit cost is c.135c/lb and is based
on progressing the ramp-up of production volumes.
(3) Nickel operations in Brazil only. The Group also produces
approximately 20 kt of nickel on an annual basis as a co-product
from the PGM operations. 2023 and 2024 volumes dependent on bulk
ore sorting technology and briquetting.
(4) Unit cost is per own mined 5E + gold PGMs metal in
concentrate ounce. Production is 5E + gold produced metal in
concentrate ounces. Includes own mined production (65%) and
purchased concentrate volumes (35%).
(5) 5E + gold produced refined ounces. Includes own mined
production and purchased concentrate volumes. Refined production is
subject to the potential impact of Eskom load-shedding.
(6) Wet basis. Total iron ore is the sum of Kumba and Minas-Rio.
Unit cost total is a weighted average based on the mid-point of
production guidance. 2022 Kumba: 38-40Mt; Minas-Rio: 22-24Mt. 2023
Kumba: 39-41Mt; Minas-Rio: 25-27Mt. 2024 Kumba: 41-43Mt (subject to
UHDMS plant coming online); Minas-Rio: 26-28Mt. Kumba production is
subject to the third party rail and port performance, as well as
weather related disruptions. Kumba 2022 unit cost is c.$44/tonne.
Minas-Rio 2022 unit cost is c.$32/tonne.
(7) Steelmaking Coal FOB/tonne unit cost comprises managed
operations and excludes royalties and study costs. Volumes are
subject to the progress of ramp-up of the longwalls and exclude
thermal coal by-product from Australia.
Capital expenditure(1)
2022F 2023F 2024F
Growth $1.6-2.1bn $1.2-1.7bn $1.5-2.0bn
Includes $0.6bn
Woodsmith capex
Sustaining $4.5bn $4.8bn $4.1bn
Reflects $3.4bn Reflects $3.5bn Reflects $3.3bn
baseline plus $0.7bn baseline plus $0.8bn baseline plus $0.6bn
lifex projects plus lifex projects and lifex projects and
$0.4bn Collahuasi $0.5bn Collahuasi $0.2bn Collahuasi
desalination plant(2) desalination plant(2) desalination plant(2)
Total $6.1-6.6bn $6.0-6.5bn $5.6-6.1bn
============ ======================= =======================
Further details on Anglo American's high quality growth and
life-extension projects, including details of the associated
volumes benefit, are disclosed on pages 13 -17.
Long term sustaining capital expenditure is expected to be
c.$3.0 billion per annum(3) , excluding life-extension
projects.
Other guidance
-- 2022 depreciation: $2.8-3.0 billion (previously $3.0-3.2 billion)
-- 2022 effective tax rate: 33-35%(4)
-- Long term effective tax rate: 31-35%(4)
-- Dividend payout ratio: 40% of underlying earnings
-- Net debt:EBITDA: <1.5x at the bottom of the cycle
(1) Cash expenditure on property, plant and equipment including
related derivatives, net of proceeds from disposal of property,
plant and equipment and includes direct funding for capital
expenditure from non-controlling interests. Shown excluding
capitalised operating cash flows. Consequently, for Quellaveco,
reflects attributable share of capex. Collahuasi desalination capex
shown includes related infrastructure. Guidance includes unapproved
projects and is, therefore, subject to progress of growth project
studies and Woodsmith is excluded after 2022. Long term sustaining
capex guidance is shown on a real basis. Refer to the H1 2022
results presentation slides 42 - 46 for further detail on the
breakdown of the capex guidance at project level.
(2) Attributable share of capex.
(3) Long term sustaining capex guidance is shown on a real
basis.
(4) Effective tax rate is highly dependent on a number of
factors, including the mix of profits, and may vary from the guided
ranges.
For further information, please contact:
Media Investors
UK UK
James Wyatt-Tilby Paul Galloway
james.wyatt-tilby@angloamerican.com paul.galloway@angloamerican.com
Tel: +44 (0)20 7968 8759 Tel: +44 (0)20 7968 8718
Marcelo Esquivel Emma Waterworth
marcelo.esquivel@angloamerican.com emma.waterworth@angloamerican.com
Tel: +44 (0)20 7968 8891 Tel: +44 (0)20 7968 8574
Katie Ryall Michelle Jarman
katie.ryall@angloamerican.com michelle.jarman@angloamerican.com
Tel: +44 (0)20 7968 8935 Tel: +44 (0)20 7968 1494
South Africa
Nevashnee Naicker
nevashnee.naicker@angloamerican.com
Tel: +27 (0)11 638 3189
Sibusiso Tshabalala
sibusiso.tshabalala@angloamerican.com
Tel: +27 (0)11 638 2175
Notes to editors:
Anglo American is a leading global mining company and our
products are the essential ingredients in almost every aspect of
modern life. Our portfolio of world-class competitive operations,
with a broad range of future development options, provides many of
the future-enabling metals and minerals for a cleaner, greener,
more sustainable world and that meet the fast growing every day
demands of billions of consumers. With our people at the heart of
our business, we use innovative practices and the latest
technologies to discover new resources and to mine, process, move
and market our products to our customers - safely and
sustainably.
As a responsible producer of diamonds (through De Beers),
copper, platinum group metals, premium quality iron ore and
steelmaking coal, and nickel - with crop nutrients in development -
we are committed to being carbon neutral across our operations by
2040. More broadly, our Sustainable Mining Plan commits us to a
series of stretching goals to ensure we work towards a healthy
environment, creating thriving communities and building trust as a
corporate leader. We work together with our business partners and
diverse stakeholders to unlock enduring value from precious natural
resources for the benefit of the communities and countries in which
we operate, for society as a whole, and for our shareholders. Anglo
American is re-imagining mining to improve people's lives.
www.angloamerican.com
Webcast of presentation:
A live webcast of the results presentation, starting at 9.00am
UK time on 28 July 2022, can be accessed through the Anglo American
website at www.angloamerican.com
Note: Throughout this results announcement, '$' denotes United
States dollars and 'cents' refers to United States cents. Tonnes
are metric tons, 'Mt' denotes million tonnes and 'kt' denotes
thousand tonnes, unless otherwise stated.
Group terminology
In this document, references to "Anglo American", the "Anglo
American Group", the "Group", "we", "us", and "our" are to refer to
either Anglo American plc and its subsidiaries and/or those who
work for them generally, or where it is not necessary to refer to a
particular entity, entities or persons. The use of those generic
terms herein is for convenience only, and is in no way indicative
of how the Anglo American Group or any entity within it is
structured, managed or controlled. Anglo American subsidiaries, and
their management, are responsible for their own day-to-day
operations, including but not limited to securing and maintaining
all relevant licences and permits, operational adaptation and
implementation of Group policies, management, training and any
applicable local grievance mechanisms. Anglo American produces
group-wide policies and procedures to ensure best uniform practices
and standardisation across the Anglo American Group but is not
responsible for the day to day implementation of such policies.
Such policies and procedures constitute prescribed minimum
standards only. Group operating subsidiaries are responsible for
adapting those policies and procedures to reflect local conditions
where appropriate, and for implementation, oversight and monitoring
within their specific businesses.
Forward-looking statements and third party information:
This document includes forward-looking statements. All
statements other than statements of historical facts included in
this document, including, without limitation, those regarding Anglo
American's financial position, business, acquisition and divestment
strategy, dividend policy, plans and objectives of management for
future operations, prospects and projects (including development
plans and objectives relating to Anglo American's products,
production forecasts and Ore Reserve and Mineral Resource
positions) and sustainability performance related (including
environmental, social and governance) goals, ambitions, targets,
visions, milestones and aspirations, are forward-looking
statements. By their nature, such forward-looking statements
involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of
Anglo American or industry results to be materially different from
any future results, performance or achievements expressed or
implied by such forward-looking statements.
Such forward-looking statements are based on numerous
assumptions regarding Anglo American's present and future business
strategies and the environment in which Anglo American will operate
in the future. Important factors that could cause Anglo American's
actual results, performance or achievements to differ materially
from those in the forward-looking statements include, among others,
levels of actual production during any period, levels of global
demand and commodity market prices, mineral resource exploration
and project development capabilities and delivery, recovery rates
and other operational capabilities, safety, health or environmental
incidents, the effects of global pandemics and outbreaks of
infectious diseases, the impact of attacks from third parties on
our information systems, natural catastrophes or adverse geological
conditions, climate change and extreme weather events, the outcome
of litigation or regulatory proceedings, the availability of mining
and processing equipment, the ability to obtain key inputs in a
timely manner, the ability to produce and transport products
profitably, the availability of necessary infrastructure (including
transportation) services, the development, efficacy and adoption of
new technology, challenges in realising resource estimates or
discovering new economic mineralisation, the impact of foreign
currency exchange rates on market prices and operating costs, the
availability of sufficient credit, liquidity and counterparty
risks, the effects of inflation, political uncertainty, tensions
and disputes and economic conditions in relevant areas of the
world, evolving societal and stakeholder requirements and
expectations, shortages of skilled employees, the actions of
competitors, activities by courts, regulators and governmental
authorities such as in relation to permitting or forcing closure of
mines and ceasing of operations or maintenance of Anglo American's
assets and changes in taxation or safety, health, environmental or
other types of regulation in the countries where Anglo American
operates, conflicts over land and resource ownership rights and
such other risk factors identified in Anglo American's most recent
Annual Report. Forward-looking statements should, therefore, be
construed in light of such risk factors and undue reliance should
not be placed on forward-looking statements. These forward-looking
statements speak only as of the date of this document. Anglo
American expressly disclaims any obligation or undertaking (except
as required by applicable law, the City Code on Takeovers and
Mergers, the UK Listing Rules, the Disclosure and Transparency
Rules of the Financial Conduct Authority, the Listings Requirements
of the securities exchange of the JSE Limited in South Africa, the
SIX Swiss Exchange, the Botswana Stock Exchange and the Namibian
Stock Exchange and any other applicable regulations) to release
publicly any updates or revisions to any forward-looking statement
contained herein to reflect any change in Anglo American's
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is
based.
Nothing in this document should be interpreted to mean that
future earnings per share of Anglo American will necessarily match
or exceed its historical published earnings per share. Certain
statistical and other information about Anglo American included in
this document is sourced from publicly available third party
sources. As such it has not been independently verified and
presents the views of those third parties, but may not necessarily
correspond to the views held by Anglo American and Anglo American
expressly disclaims any responsibility for, or liability in respect
of, such information.
(c)Anglo American Services (UK) Ltd 2022. (TM) and (TM) are
trade marks of Anglo American Services (UK) Ltd.
Anglo American plc
17 Charterhouse Street London EC1N 6RA United Kingdom
Registered office as above. Incorporated in England and Wales
under the Companies Act 1985.
Registered Number: 3564138 Legal Entity Identifier:
549300S9XF92D1X8ME43
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END
IR FLFITDAIDFIF
(END) Dow Jones Newswires
July 28, 2022 02:00 ET (06:00 GMT)
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