REG - Anglo American PLC - AGM address to shareholders

Anglo AmericanAnnouncement

26/04/2023 15:00

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RNS Number : 5759X  Anglo American PLC  26 April 2023

 26 April 2023
 AGM 2023 - Address to Shareholders

Anglo American plc held its Annual General Meeting for shareholders in London
today. The following remarks were made by the Chairman and the Chief
Executive.

 

Stuart Chambers, Chairman of Anglo American plc, made the following remarks:

 

Good morning, ladies and gentlemen and welcome to Anglo American's 2023 Annual
General Meeting. Notice of the meeting was published to shareholders on 6
March 2023, and a quorum is present.  I therefore declare this meeting duly
constituted. Have I your permission to take the Notice of Meeting as read and
formally propose the resolutions set out in the Notice?

 

Thank you.

 

I will now introduce the rest of your Board, all of whom are present. Starting
on my far left is Magali Anderson, Marcelo Bastos and Hilary Maxson, three of
our independent non-executive directors.

 

Magali Anderson, who joined us on 1 April, is the newest member of the
Board.  Magali is French and brings to Anglo American highly relevant
experience in capital intensive industries from an international executive
career in operational, commercial and business transformational leadership
roles, and a deep understanding of sustainability in its broadest sense.
Following Magali's appointment, female representation constitutes 40% of the
Board's membership, further strengthening our diversity. Magali currently
serves as Chief Sustainability and Innovation Officer of Holcim Group and is a
member of its executive committee.

 

Next to Hilary is Stephen Pearce, our finance director and next to me is our
chief executive, Duncan Wanblad.  To my immediate right is Richard Price, the
Group General Counsel and Company Secretary and then Ian Tyler, our Senior
Independent Director.  Next to Ian are independent non-executive directors,
Hixonia Nyasulu, Nonkululeko Nyembezi and Ian Ashby.

Ensuring we have the right mix of skills, experience and diversity at Board
level that reflects the breadth of our business is critical to effective
governance. To that end, our Board appointments are sequenced to reflect the
areas of expertise that we feel we need as we look ahead at the trajectory of
the business.

 

You can find the biographies for each director in our Notice of AGM and I
trust that you agree with me in noting the high calibre and diverse experience
of our Board members.

Later, I will be asking you to vote on the election of Magali Anderson for the
first time as an independent non-executive director and the usual annual
re-election of myself and all other directors.

 

Now, before I ask Duncan Wanblad, our chief executive, to give you an overview
of recent performance, allow me to share some of my perspectives on your
company, Anglo American.

 

There is no doubt that 2022 was a tough year in many ways, with extreme
weather and other factors affecting our operations. Nevertheless, we continued
to build momentum, with our focus on regaining all-important stability
following the disruption of the Covid pandemic. Anglo American performed
strongly and we delivered a major capital project, Quellaveco, on time and on
budget, and made further progress towards our full range of sustainability
goals.

Starting, as always, with safety … we continue to work tirelessly on our
long term safety improvement journey. However, it is profoundly saddening to
report that we were not able to achieve zero fatalities in 2022.

 

A death is always a terrible loss for family, friends and colleagues and we
will continue to increase our efforts to keep everyone safe.

 

It is with deep regret that we lost two colleagues following accidents during
the year at our managed operations, as well as the loss of a colleague from a
complication following an injury sustained in 2021. We also sadly lost one
colleague at a non-managed joint operation. Pertinent to all these awful
accidents, the Group's safety focus is on vigilance and encouraging employees
to speak up when they encounter a situation that doesn't look safe, so that we
can finally put a stop to serious incidents.

 

Turning to climate change, there is no doubt that this is the defining
challenge of our time; it will affect everyone, everywhere. Through our
Sustainable Mining Plan, which is aligned to the UN's Sustainable Development
Goals, Anglo American is committed to playing its part in addressing the
climate change challenge, across our value chain.

 

We are steadily reducing our Scope 1 and Scope 2 greenhouse gas emissions and
decarbonising our energy supply chains. By 2040, we are targeting to achieve
carbon neutrality across the operations, along with an ambition to at least
halve our Scope 3 emissions. The Plan also sets out very ambitious targets for
reducing our water footprint, including to reduce fresh water usage in water
scarce areas by 50% by 2030.

 

I was pleased to see that the company's effort and investment in sustainable
practices over many years was recognised in our financing for the first time.
During the year, Anglo American issued two sustainability-linked instruments:
a €745 million bond as well as a $100 million loan with the IFC, which are
both linked to delivery against our Sustainable Mining Plan.

 

Looking at the portfolio … Our diversified set of assets is increasingly
focused on the metals and minerals that are enabling both the move to a lower
carbon economy and to meeting the many demand needs and wants of a growing
global population.

 

In 2022, as I mentioned, we commissioned Quellaveco, our new copper mine in
Peru. This is one of South America's most technologically advanced mines, with
many operational activities remotely controlled and automated and, as is the
case with our other operations in South America, all electricity will come
from renewable energy sources from this year.

 

Woodsmith is next - a rare, Tier 1 asset which we are setting up to deliver
significant returns over many decades. We are making good progress with the
critical infrastructure - the shafts and tunnel - and excellent progress with
the product, too. POLY4 is a high value fertiliser, uniquely positioned to
address farming's three real challenges of yield, decarbonisation and soil
health.

 

Anglo American continues to re-invest in the business and deliver sustainable
cash returns to you, our shareholders. For 2022, we delivered our second
highest financial performance after the record in 2021.

 

The Board has recommended a final dividend of 74 US cents per share, in line
with our 40% of underlying earnings payout policy, bringing total dividends
for the year to $1.98 per share, which amounts to $2.4 billion. Anglo
American's Total Shareholder Return for the year was 15%, three times higher
than that of the FTSE 100 Index.

 

Anglo American's differentiated combination of portfolio diversification and
growth optionality continues to set us apart from our peers and to position us
strongly through the current market volatility and for the longer term cycle.
With the potential for 25% organic growth over the next decade, we are well
placed to deliver many of the critical metals and minerals the world requires
for a transition to a cleaner, greener world.

 

I am confident that under Duncan's leadership, Anglo American will continue to
demonstrate that we are a well-run, resilient company with the underlying
culture, assets and ambition to continue growing and to deliver value and
competitive returns, together with those much-needed products, the market
fundamentals for which look very attractive indeed.

 

Duncan Wanblad, Chief Executive of Anglo American plc, made the following
remarks:

 

Thank you, Stuart and good afternoon, everyone.

 

Safety is always our number one priority…so let me start there.

 

Simply put, safety always comes first as we strive to reach zero harm for
every one of our people, every single day. As Stuart said, while we continue
to make progress and develop our safety processes and procedures, we are
deeply saddened to have lost five colleagues in total from the beginning of
2022 to date, including at a non-managed operation.

 

Unless all of us, at all times, across our business are unconditional about
safety, accidents will continue to happen - and that is not acceptable.

 

Our response spans three broad aspects:

 

·      Firstly, an urgent safety reset and calls to action during the
second half of 2022.

·      Secondly, our work to improve operational stability through the
discipline of our Operating Model - which is key to safer outcomes.

·      And finally, a broader approach to alter the collective mindset,
so that people are more aware of potentially unsafe situations and look out
for one another - and feel confident to speak up. We are focusing on
increasing leadership time in the field to help build a safe and inclusive
culture, as well as applying technology to ensure everyone can come to work
and return home safely, every day.

 

In addition to rigorously investigating each tragic incident and sharing
learnings internally, we are committed to also sharing those learnings across
the industry so that action can be taken to help prevent repeats.

 

Be in no doubt, we will not rest until zero harm is achieved and sustained
across our business.

 

Let me now talk through some of the operational performance and other
financials.

 

When we look back at 2022 as a whole, we certainly felt the effects of
dislocations in the global economy on our business - in energy, and across
supply chains and labour markets. Extreme weather which disrupted the lives of
so many people around the world, also set back several of our operations,
while the energy crisis caused policymakers to react to mitigate sharply
higher inflation.

 

Yet despite these headwinds, our business built good momentum during the year,
with our focus on regaining operational stability and targeted incremental
performance improvement. In 2022, we delivered an underlying EBITDA of $14.5
billion at a mining margin of 47%, testament to the quality and
diversification of our portfolio and how we market our premium products to
customers.

 

We saw a significant step-up in production in the second half of the year and
I am confident that the focus on operational excellence and getting the basics
right has put us in good shape to deliver on our guidance for 2023. Unit costs
were impacted by the combination of very high inflation as well as lower
volumes for the year as a whole. We are incredibly focused on those cost
drivers.

 

Looking at the asset portfolio, we are predominantly a producer of what we
refer to as future-enabling products, being those metals and minerals that are
required to enable and meet the two major demand trends we see. First,
decarbonisation…that is, providing many of the raw materials required to
bring about a cleaner, greener, more sustainable world. And, second, improving
the lives of a growing global population - from homes and electronics, to food
and luxuries.

 

The commissioning of Quellaveco in the middle of last year - a world class
mine delivered on time and on budget - marks a step-change in our production
of copper, one of the most critical metals to global decarbonisation, as well
as broader infrastructure development and consumer demand.

 

Quellaveco alone increases our global production base by 10%. It is the
cornerstone of our margin-enhancing growth potential of 25% over the next
decade, which spans many of our products from copper all the way through to
crop nutrients from our Woodsmith project: itself a multigenerational, high
margin, Tier 1 asset which we expect to deliver significant returns over many
decades.

 

To summarise, overall, a strong set of numbers in the circumstances - and I am
encouraged by the operational momentum we carried into 2023, through what is
always the seasonally slower first quarter of the year.

 

We remain absolutely committed to disciplined capital-allocation and
maintaining a strong and flexible balance sheet. It is always about balance as
we invest in sustaining and improving our existing assets for earnings
reliability and near term growth, repositioning the portfolio to improve
returns for the longer term, and returning cash to shareholders on a
sustainable basis.

 

Turning to sustainability and looking in particular at the key components of
our environmental and social performance.

 

On our emissions trajectory, it's unlikely to be linear as we head towards our
2040 carbon neutral operations target, but we are making progress. Our
proportion of energy drawn from renewable sources continues to increase - and
52% of our electricity used is from renewable sources. Quellaveco's renewable
energy contracts kick-in during 2023, taking us to 100% renewables in South
America, and our Australian steelmaking coal operations will transition to
renewable electricity contracts from 2025.

 

And we have made good progress on the implementation of our Social Way 3
management system, with 66% of foundational requirements implemented.
Attaining this level of performance represents a higher bar than any that has
been set before in the industry.

 

I've just covered the headlines of our environmental and social performance,
but I should also mention a few particular areas of progress towards our
Sustainable Mining Plan targets.

 

On carbon, we launched our hydrogen mine haul truck prototype in the first
half of 2022. Displacing diesel in these ultra-class 500 tonne trucks is one
of the hardest to abate areas of our business, and in-mine testing so far
continues to yield positive results.

 

We also announced the first 600MW of renewable energy projects out of our
3-5GW renewable energy strategy in southern Africa, which includes the
creation of Envusa Energy in partnership with EDF Renewables.

 

And in Chile, we secured desalinated water for more than 45% of Los Bronces'
needs from 2025, while also providing clean water for local communities. For
the second, as yet unapproved phase, we are planning an innovative water swap
by exchanging that desal water for a larger offtake of industrial water. The
local community get the clean water and we use 'dirty' water that would
otherwise be discharged. This would get us to the stage of not drawing any
fresh water for Los Bronces, which would be a gamechanger and a win-win given
the ongoing drought conditions in Chile.

 

Our social contribution, too, is powerful in terms of the direct impact it can
have on improving people's lives. I am very proud of our work on building an
inclusive workplace, including our focus on addressing gender-based violence,
bullying, harassment and victimisation. We have now established our Living
with Dignity Hub in South Africa - an independent support mechanism for our
employees, contractors and their families.

 

More broadly, we are all very proud of the significant tax and economic
contribution that we rightly make in the countries where we operate and where
we make the biggest difference, amounting to more than $24 billion in 2022.

 

Looking back on my first year as chief executive, the world has changed in
many ways. Agility and resilience are qualities good businesses need in order
to thrive, while also working to live up to the increasing expectations of the
role of business in society.

 

As we look forward and combine those qualities with the global trends that
determine demand for our products, I believe Anglo American is strongly
positioned. We offer a highly differentiated investment proposition, both
through the prevailing market volatility and for the structurally attractive
longer term.

 

Our steadfast focus is on driving safe, responsible and consistent performance
across our operations, delivering value-adding growth and progressing towards
our full suite of sustainability ambitions.

 

I thank the Board for its unwavering support and all our workforce for their
hard work and resilience.

 

Thank you.

 

 

Following a number of questions from shareholders and their proxies, Stuart
Chambers closed the meeting, by adding:

 

The final results will be announced to the stock exchanges later this
afternoon and will be published on our website. Details of the proxy votes
already received for each resolution are shown on the screen behind me.

 

I am pleased to say that we have received strong support for all 20
resolutions based on the shares already voted that represent approximately 70%
of the share capital.

 

Ladies and gentlemen, that concludes the business of this meeting. Thank you
all for your attendance today and I now declare the meeting closed.

 

Check against delivery.

 

 

 

 

 

 

For further information, please contact:

 

 Media                                                                              Investors

 UK                                                                                 UK

 James Wyatt-Tilby                                                                  Paul Galloway

 james.wyatt-tilby@angloamerican.com                                                paul.galloway@angloamerican.com (mailto:paul.galloway@angloamerican.com)
 (mailto:james.wyatt-tilby@angloamerican.com)

                                                                                  Tel: +44 (0)20 7968 8718
 Tel: +44 (0)20 7968 8759

                                                                                  Emma Waterworth
 Marcelo Esquivel                                                                   Emma.waterworth@angloamerican.com (mailto:Emma.waterworth@angloamerican.com)

Tel: +44 (0) 20 7968 8574
 marcelo.esquivel@angloamerican.com (mailto:marcelo.esquivel@angloamerican.com)

 Tel: +44 (0)20 7968 8891

                                                                                  Michelle Jarman

                                                                                  michelle.jarman@angloamerican.com (mailto:michelle.jarman@angloamerican.com)
 Rebecca Meeson-Frizelle

 Rebecca.meeson-frizelle@angloamerican.com                                          Tel: +44 (0)20 7968 1494
 (mailto:Rebecca.meeson-frizelle@angloamerican.com)

 Tel: + 44 (0)20 7968 1374

 South Africa

 Nevashnee Naicker

 nevashnee.naicker@angloamerican.com

 Tel: +27 (0)11 638 3189

 Sibusiso Tshabalala

 sibusiso.tshabalala@angloamerican.com
 (mailto: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 (http://www.angloamerican.com)

 

 

 

 

Forward-looking statements:

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 (including development plans and objectives
relating to Anglo American's products, production forecasts and Ore Reserve
and Mineral Resource positions) and environmental, social and corporate
governance goals 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 development
capabilities, recovery rates and other operational capabilities, safety,
health or environmental incidents, the effects of global pandemics and
outbreaks of infectious diseases, the outcome of litigation or regulatory
proceedings, the availability of mining and processing equipment, the ability
to produce and transport products profitably, the availability of transport
infrastructure, the impact of foreign currency exchange rates on market prices
and operating costs, the availability of sufficient credit, the effects of
inflation, political uncertainty and economic conditions in relevant areas of
the world, 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.

 

Legal Entity Identifier: 549300S9XF92D1X8ME43

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