REG - Anglo American PLC - Anglo American financial results 2021
24/02/2022 07:00
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RNS Number : 6323C Anglo American PLC 24 February 2022
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YEAR END FINANCIAL REPORT
for the year ended 31 December 2021
24 February 2022
Anglo American Preliminary Results 2021
Strong market dynamics and operational performance drive underlying EBITDA of
$20.6 billion
Financial highlights for the year ended 31 December 2021
• Underlying EBITDA* of $20.6 billion: strong demand and prices, and
resilient operational performance
• Profit attributable to equity shareholders of $8.6 billion
• Net debt* of $3.8 billion (0.2x underlying EBITDA): strong cash generation
partially offset by investment in growth
• $6.2 billion shareholder return: capital discipline and commitment to
return excess cash
◦ $2.1 billion proposed final dividend, equal to $1.18 per share final
dividend, consistent with our 40% payout policy, and $0.50 per share special
dividend
◦ $4.1 billion return announced at half year, including $1.0 billion special
dividend and $1.0 billion buyback
• Exit from thermal coal operations completed
Mark Cutifani, Chief Executive of Anglo American, said: "In a year of two
distinct halves, we recorded strong demand and prices for many products as
economies recouped lost ground, spurred by government stimulus. Copper and
PGMs - essential to the global decarbonisation imperative - and premium
quality iron ore for greener steelmaking, supported by an improving market for
diamonds, all contributed to a record financial performance, generating
underlying EBITDA of $20.6 billion.
"We generated attributable free cash flow of $7.8 billion due largely to a
strong price environment in the first half, which moderated in the second
half. Our return on capital employed of 43% was well above our targeted 15%
through-the-cycle return, as it should be in times of strong pricing, and we
increased our mining EBITDA margin to 56%. We are resolutely committed to
capital discipline and to maintaining a strong and flexible balance sheet. At
the end of 2021, net debt of $3.8 billion, or 0.2x underlying EBITDA, reflects
the strong cash generation of the business, partially offset by our
investments in growth. The proposed final dividend of $1.18 per share, in line
with our 40% payout policy, in addition to a special dividend of $0.50 per
share, will bring our total return to shareholders in respect of 2021 to $6.2
billion (including our share buyback), equal to $4.99 per share.
"We continue to make progress in reducing fatal incidents and our broader
safety processes and procedures. Sadly, however, we still lost one colleague
in a vehicle incident in Peru. Our total injury frequency rate tracked up
marginally, after multiple years of progressive improvement, reflecting the
changed operating configurations necessary to manage Covid-19. Our health
focus remains on helping keep our people protected from Covid-19. In many
ways, the pandemic has proven more challenging in 2021, particularly where
vaccination roll-outs have been slower and uptake lower. We have provided
significant monetary and other support to accelerate vaccination rates,
including by using our own health facilities and encouraging vaccination at
the earliest opportunity.
"Our balanced investments are driving margin-enhancing volume growth of
35%((1)) over the next decade, including copper from Quellaveco, due to start
up mid-year. The large majority of our output and investment capital is
focused on future-enabling products - metals and minerals essential for
decarbonisation and to meet global consumer demand. Through our integrated
technology and sustainability programme, we are well positioned to run the
business safely and sustainably, further enhance our competitive position and
- disciplined with our capital - deliver value-adding growth as a foundation
for future returns."
Year ended 31 December 2021 31 December 2020 Change
US$ million, unless otherwise stated
Revenue((2)) 41,554 25,447 63 %
Underlying EBITDA* 20,634 9,802 111 %
Mining EBITDA margin* 56 % 43 %
Attributable free cash flow* 7,803 1,209
Profit attributable to equity shareholders of the Company 8,562 2,089 310 %
Basic underlying earnings per share* ($) 7.22 2.53 185 %
Basic earnings per share ($) 6.93 1.69 310 %
Final dividend per share ($) 1.18 0.72 64 %
Final special dividend per share ($) 0.50 -
Interim and special dividend per share ($) 2.51 0.28
Share buyback per share ($) 0.80 -
Total dividend and buyback per share ($) 4.99 1.00 399 %
Group attributable ROCE* 43 % 17 %
Terms with this symbol * are defined as Alternative Performance Measures
(APMs). For more information refer to page 83.
((1)) Copper equivalent volume growth vs. 2021 copper equivalent production.
((2) )The comparative figure for 2020 has been restated. See note 2 to the
Condensed financial statements for further details.
Sustainability performance
Key sustainability performance indicators
Anglo American tracks its strategic progress using KPIs that are based on our
seven pillars of value: safety and health, environment, socio-political,
people, production, cost and financial. In addition to the financial
performance set out above, our performance for the first four pillars is set
out below:
Pillar of Value Metric 2021 2020 Target Target achieved
Safety and health Work-related fatal injuries 1 2 Zero Not achieved
Total recordable case frequency rate per million hours 2.24 2.14 Year-on-year reduction Not achieved
New cases of occupational disease 16 30 Year-on-year reduction On track
Workforce potentially exposed to noise over 85 dBA((1)) 30,832 33,253 Year-on-year reduction On track
Workforce potentially exposed to inhalable hazards over the occupational 1,796 1,994 10% reduction year-on-year On track
exposure limit ((1))
Environment Energy consumption (million GJ) 85 81 Improve energy efficiency by 30% by 2030 On track
GHG emissions - Scopes 1 & 2 14.8 16.1 Reduce absolute GHG emissions by 30% by 2030 On track
(Mt CO(2)e)
Operational water withdrawals (million m(3)) 176.5 197.5 Reduce freshwater abstraction in water scarce areas by 50% by 2030 On track
Level 4-5 environmental incidents 0 0 Zero On track
Socio-political Social Way implementation (based on updated Social Way 3.0 for 2020)((2)) 49 % 23 % Full compliance with Social Way 3.0 by end 2022 On track
Local procurement spend ($bn)((3)) 10.0 10.0
Taxes and royalties ($m)((4)) 7,134 3,778
Jobs supported by Enterprise and Supplier Development (ESD) initiatives 147,374 137,777
People Women in management 31% 27% To achieve 33% by 2023 On track
Women in the workforce 23% 23%
Voluntary labour turnover 3.5% 2.8% < 5% On track
((1)) Reflects the number of employees and contractors who work in
environments where there is potential for exposure above the exposure limit.
All employees and contractors working in such environments are issued with
protective equipment to prevent occupational illness.
((2) )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. Sites are
expected to have implemented the Social Way 3.0 by the end of 2022. 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.
((3)) 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 year comparative has been restated.
((4)) Taxes and royalties include all taxes and royalties both borne and
collected by the Group. This includes corporate income taxes, withholding
taxes, mining taxes 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.
Safety
Anglo American's most important priority is always safety - keeping our
colleagues safe and well. We also look beyond safety, working towards everyone
being better off and healthier having worked for Anglo American. This drives
our thinking and the commitment to quality of life and sustainable livelihoods
across the company. We continue to make progress in reducing fatal incidents
and our broader safety processes and procedures. Sadly, however, we still lost
one colleague in a vehicle incident on our major project in Peru. Our total
injury frequency rate tracked up marginally, after multiple years of
progressive improvement, reflecting the changed operating configurations
necessary to manage Covid that tend to disrupt planned work routines. The
increase in the first half of the year reduced in the second half as we
reinforced the importance of these new routines across the business.
On fatal incidents, our Elimination of Fatalities Taskforce has supported a
93% reduction in fatal incidents since 2013 and we are engaging with our
non-managed joint operations and our approach to influencing better
performance, as they reported three fatal incidents in the year. For us, every
loss of life is a tragedy, and we will continue to mobilise our resources
across the Group to support our zero harm imperative.
Health
We tackle the threats to health and wellbeing 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.
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 proved to be more challenging in 2021, particularly in those
countries where vaccination roll-outs lagged. We 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. With the pandemic as a backdrop, we are pleased to
have met our three major annual improvement targets for health - for
occupational disease, noise exposure and inhalable hazards.
Recognising the link between employee health and broader community wellbeing,
in 2021 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 begin in
2022.
Environment
Our Sustainable Mining Plan (SMP) 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 in 2021. This achievement reflects the improvements to our planning
and operating disciplines across the business. We launched a 'no repeats'
challenge during the 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.
Energy consumption increased in line with production following the operational
shutdowns during the first half of 2020 due to the pandemic. Nevertheless, we
achieved an 8% reduction in GHG emissions due to our Copper business in Chile
moving to a renewable electricity supply in 2021, thereby reducing its Scope 2
emissions, as well as a reduction in methane emissions from our metallurgical
coal mines in Australia.
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
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 2021 amounted to $7.1 billion, an 89% increase from
2020. We also made further progress with our enterprise and supplier
development initiatives, supporting 147,374 jobs in the year - a key component
of our SMP goal to support five jobs offsite for every job onsite by 2030.
People
Tightly linked to our safety imperative and our Values, we strive to create a
workplace that is safe in every respect, inclusive and that empowers every
colleague to bring their whole self to work. 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, with an increased focus on addressing
gender-based and domestic violence since 2019, including in host communities.
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% (2020: 27%), while female employees
across the company represent 23% of our workforce.
WeCare - our global response to the pandemic
Anglo American acted quickly at the onset of the pandemic to support the lives
and livelihoods of our workforce and host communities through the health,
social and economic effects of the Covid-19 pandemic - through our global
"WeCare" response programme. Our mines and host communities, which are also
often home to much of our workforce, operate as an ecosystem and both must be
healthy to prosper. Across our operational footprint and in those communities
that are local to our operations, WeCare provides information and extensive
practical support across four pillars of: physical health, mental health,
Living with Dignity, and community response:
Physical health - education and behavioural change to support personal health
and hygiene; health screening and testing; PPE and medical equipment and
facilities; vaccination information programme; and support for government-led
vaccination programmes, including licensing our own medical facilities in
South Africa to vaccinate employees, to encourage vaccination at the earliest
opportunity.
Mental health - employee support programmes, including via our employee app,
expanding the number of professionally trained mental health first aiders, and
online events and other digital materials.
Living with Dignity - direct employee and community support to combat the
prevalence of gender-based and domestic violence; work with health authorities
to identify abuse cases and referrals to support mechanisms.
Community response - wide-ranging livelihoods programme to support communities
through the social and economic effects of the pandemic, including: public
information campaigns aimed at health and hygiene; health screening and
Covid-19 testing; support for health service provision; continuation of
essential services (e.g. water, energy, accommodation); food package
distribution; employee match-giving programme; support for SMEs and
entrepreneurs; support for teachers and students; job training for
post-pandemic employability; and regional development planning to enhance
local economic activity for the long term.
Anglo American Foundation - special endowment of $100 million
Building on the extensive in-kind support and financial contributions as part
of the WeCare programme detailed above, in July 2021 we committed to endowing
the Anglo American Foundation with a $100 million donation. The Anglo American
Foundation is focused on accelerating progress towards the United Nations'
Sustainable Development Goals (UNSDGs), placing a particular importance on
programmes that empower women, youth and vulnerable groups. By partnering with
non-profit, public and private organisations, the Anglo American Foundation
supports health, education, economic and environmental projects aligned with
the goals of Anglo American's Sustainable Mining Plan - itself designed to
align with the UNSDGs.
This special endowment presented an opportunity for the Foundation to redefine
its strategy, including governance and operating model, to ensure it can
deliver to an entirely new level - creating systemic impact at scale. Aligned
with Anglo American's Purpose, the Foundation will become a strategic
grant-maker focusing on long-term system‑level change within three themes,
each with two 'signature' topics:
• Clean water and energy: water resource management; access to (clean)
energy / off-grid solutions
• Skills and job creation for growth: development of relevant skills for
current and future jobs (focus on youth); incubating innovative tech; and
supporting SMEs and entrepreneurs
• Healthy living: access to primary health care; preventative health care
Geographically, the Foundation focuses its funding on the current, and
potential future, footprint of Anglo American. During 2022, the Foundation is
working with strategic partners to detail the priority areas of focus and
design a number of programmatic interventions.
Operational and financial review of Group results for the year ended
31 December 2021
Operational performance
Improved operational performances at PGMs, De Beers and Kumba (Iron Ore)
contributed to a 5% production increase on a copper equivalent basis((1)).
This was driven in part by the easing of certain Covid-19 related restrictions
that impacted production throughout 2020, as well as improved mining
performance and processing stability at PGMs, planned higher rough diamond
production at De Beers in response to strong consumer demand, and improved
plant availability at Kumba. These improvements were partially offset by the
continued suspension of longwall operations at Grosvenor, operational issues
and geological conditions at Moranbah (Metallurgical Coal), unplanned
maintenance at Minas-Rio (Iron Ore), and licensing delays at Nickel. In
response to the pandemic, comprehensive safeguarding measures remain in place
at operations, which have helped a return to more normal operating levels,
with production generally maintained at approximately 95%((2)) of normal
capacity across the year.
De Beers' rough diamond production increased by 29% to 32.3 million carats
(2020: 25.1 million carats), in response to the strong recovery in consumer
demand following the impact of Covid-19 in 2020.
Copper production was in line with the prior year at 647,200 tonnes (2020:
647,400 tonnes). At Los Bronces, production increased marginally by 1% to
327,700 tonnes (2020: 324,700 tonnes) due to higher water availability owing
to water management initiatives, partially offset by planned lower grades. A
strong plant performance at Collahuasi improved attributable production to a
record 277,200 tonnes (2020: 276,900 tonnes).
Nickel production decreased by 4% to 41,700 tonnes (2020: 43,500 tonnes), due
to licencing delays and lower ore grades.
PGMs' production (metal in concentrate) increased by 13% to 4,298,700 ounces
(2020: 3,808,900 ounces), reflecting the impact in 2020 of the temporary
shutdown of operations in response to the Covid-19 pandemic, the improved
mining performance at both Amandelbult and Mogalakwena, as well as processing
stability. Refined PGM production increased to a record 5,138,400 ounces
(2020: 2,713,000 ounces), reflecting the strong performance of the converter
plant (ACP) Phase A unit following its successful rebuild in 2020. The ACP
Phase B rebuild was completed in January 2022 and is expected to be
recommissioned in the first quarter of 2022.
Iron ore production increased by 3% to 63.8 Mt (2020: 61.7 Mt). At Kumba,
production increased by 9% to 40.9 Mt (2020: 37.6 Mt), owing to the easing
of Covid-19 related restrictions that had affected production in 2020, and
improved plant availability. Minas-Rio production decreased by 5% to 22.9 Mt
(2020: 24.1 Mt), due to unplanned maintenance at the beneficiation plant.
Metallurgical coal production decreased by 11% to 14.9 Mt (2020: 16.8 Mt),
principally due to the suspension of longwall operations at Grosvenor since
May 2020 following the underground incident, and the elevated gas levels at
Moranbah that resulted in the stoppage of longwall operations from
21 February 2021 until 3 June 2021. Operations at Moranbah were further
impacted by challenging geological conditions in the second half of the year.
Grosvenor longwall production received approval to restart in February 2022
and is now operational again.
Manganese ore production increased by 5% to 3.7 Mt (2020: 3.5 Mt).
Thermal coal export production was 9.3 Mt (2020: 20.6 Mt). In South Africa,
production was 5.7 Mt (2020: 16.5 Mt), reflecting the demerger of operations
on 4 June 2021. In Colombia, attributable production was 3.6 Mt
(2020: 4.1 Mt), which reflects production until 30 June 2021, when the sale
agreement for Cerrejón was reached. Both of these businesses have now been
exited.
Group copper equivalent unit costs((1)) increased by 16% in US dollar terms
and 10% in local currency terms, due to stronger producer currencies and input
cost increases at most of our operations, despite higher production. ( )
((1) )Copper equivalent production and unit cost is normalised to reflect
the demerger of the South Africa thermal coal operations, the sale of our
shareholding in Cerrejón and the closure of the manganese alloy operations.
((2) )Production capacity excludes Grosvenor.
Financial performance
Anglo American's profit attributable to equity shareholders increased
significantly to $8.6 billion (2020: $2.1 billion). Underlying earnings
were $8.9 billion (2020: $3.1 billion), while operating profit was $17.6
billion (2020: $5.6 billion).
Underlying EBITDA*
Group underlying EBITDA increased by $10.8 billion to $20.6 billion
(2020: $9.8 billion). The Group Mining EBITDA margin* of 56% was
significantly higher than the prior year (2020: 43%), due to the increase in
the price for the Group's basket of products and improved production at PGMs,
De Beers and Kumba (Iron Ore), partly offset by unfavourable exchange rates
and higher input costs across the Group. 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((1))
Year ended Year ended
$ million 31 December 2021 31 December 2020
De Beers 1,100 417
Copper 4,011 1,864
Nickel 320 206
PGMs 7,099 2,555
Iron Ore 6,871 4,565
Metallurgical Coal 962 50
Manganese 315 304
Crop Nutrients (41) 1
Corporate and other (3) (160)
Total 20,634 9,802
((1)) Following the demerger of Thungela, the Group has reassessed its
reportable segments to include thermal coal operations in Corporate and other.
Prior period comparatives have been restated. See note 3 to the Condensed
financial statements for further details.
Underlying EBITDA* reconciliation for the year ended 31 December 2020 to
year ended 31 December 2021
The reconciliation of underlying EBITDA from $9.8 billion in 2020 to
$20.6 billion in 2021 shows the controllable factors (e.g. cost and volume),
as well as those outside of management control (e.g. price, foreign exchange,
inflation and the impact of the pandemic), that drive the Group's performance.
$ billion
2020 underlying EBITDA* 9.8
Price 10.2
Foreign exchange (1.0)
Inflation (0.5)
Covid-19 volume recovery 1.1
Net cost and volume 1.2
Other (0.2)
2021 underlying EBITDA* 20.6
Price
Average market prices for the Group's basket of products increased by 43%
compared to 2020, increasing underlying EBITDA by $10.2 billion. Higher
realised prices were achieved across all of our products, with the dollar PGM
basket increasing by 36%, primarily driven by rhodium which increased by 85%
in the year, as well as iron ore and copper which increased by 41% and 52%
respectively.
Foreign exchange
The unfavourable year-on-year foreign exchange impact on underlying EBITDA of
$1.0 billion was due to stronger local currencies in our countries of
operation, principally the South African rand.
Inflation
The Group's weighted average CPI for the year was 5.0%, compared with 2.9% in
2020, as inflation increased in all countries of operation. The impact of
inflation on costs reduced underlying EBITDA by $0.5 billion.
Covid-19 volume recovery
The positive $1.1 billion effect on the Group's underlying EBITDA reflects
the easing of certain Covid-19 related restrictions that impacted global
demand in 2020 (particularly in the first half), as well as the continued
strong recovery in the diamond market. The ongoing cost of disruption to
production owing to enhanced preventative Covid-19 safety measures and supply
chain interruptions is included within net cost and volume.
Net cost and volume
The net effect of cost and volume was a $1.2 billion increase in underlying
EBITDA, as strong PGM sales due to higher refined volumes following the
successful restart of PGMs' converter plant (ACP) Phase A unit more than
offset operational issues at Metallurgical Coal, unplanned maintenance at
Minas-Rio and above CPI cost increases across the Group.
Other
The $0.2 billion negative movement in underlying EBITDA from other factors was
largely driven by a change in inventory value estimation methodology at PGMs
(see note 8 to the Condensed Financial Statements for more detail) and
unfavourable foreign exchange movements at Samancor (Manganese). This was
partially offset by a decrease in environmental restoration provisions at
Copper Chile as a result of recent market volatility affecting the discount
rate. Despite no underlying earnings from thermal coal assets in the second
half of the year, high thermal coal prices in the first half of 2021, as well
as the impact of Covid-19 disruptions in 2020, resulted in higher EBITDA than
for the full year 2020.
Underlying earnings*
Group underlying earnings increased to $8.9 billion (2020: $3.1 billion),
driven by the significantly higher underlying EBITDA, partly offset by a
corresponding increase in income tax expense and earnings attributable to
non‑controlling interests.
Reconciliation from underlying EBITDA* to underlying earnings*
Year ended Year ended
$ million 31 December 2021 31 December 2020
Underlying EBITDA* 20,634 9,802
Depreciation and amortisation (2,844) (2,752)
Net finance costs and income tax expense (5,783) (2,745)
Non-controlling interests (3,082) (1,170)
Underlying earnings* 8,925 3,135
Depreciation and amortisation
Depreciation and amortisation increased by 3% to $2.8 billion
(2020: $2.8 billion), reflecting the increased production of the Group.
Net finance costs and income tax expense
Net finance costs, before special items and remeasurements, were $0.3 billion
(2020: $0.8 billion). The decrease was principally driven by foreign exchange
gains and a decrease in other net fair value losses.
The underlying effective tax rate was 31.4% (2020: 31.2%). 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 $5.3
billion (2020: $1.8 billion).
Non-controlling interests
The share of underlying earnings attributable to non-controlling interests of
$3.1 billion (2020: $1.2 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 $0.4 billion (2020: net charge of $1.0 billion), including
tax special items and remeasurements arising in Iron Ore Brazil (Iron Ore) and
Nickel of $0.3 billion; impairment charges of $0.6 billion at
Moranbah/Grosvenor, Dawson and Capcoal (Metallurgical Coal); and a loss of
$0.4 billion on the demerger of the South African thermal coal operations
(Corporate and other), offset by impairment reversals of $1.0 billion mainly
related to Minas-Rio (Iron Ore).
Full details of the special items and remeasurements recorded are included in
note 9 to the Condensed financial statements.
Net debt*
$ million 2021 2020
Opening net debt* at 1 January((1)) (5,530) (4,535)
Underlying EBITDA* from subsidiaries and joint operations 19,808 9,284
Working capital movements 1,059 (1,534)
Other cash flows from operations (279) 248
Cash flows from operations 20,588 7,998
Capital repayments of lease obligations (336) (195)
Cash tax paid (4,341) (1,606)
Dividends from associates, joint ventures and financial asset investments((2)) 236 226
Net interest((3)) (245) (358)
Dividends paid to non-controlling interests (2,838) (668)
Sustaining capital expenditure((4)) (3,437) (2,675)
Sustaining attributable free cash flow* 9,627 2,722
Growth capital expenditure and other((4)) (1,824) (1,513)
Attributable free cash flow* 7,803 1,209
Dividends to Anglo American plc shareholders (4,047) (904)
Acquisitions - (520)
Disposals 63 384
Foreign exchange and fair value movements (227) 17
Other net debt movements((5)) (1,904) (1,181)
Total movement in net debt* 1,688 (995)
Closing net debt* at 31 December (3,842) (5,530)
(1) Opening net debt and prior year comparatives have been restated following
an amendment to the definition of net debt to exclude all variable vessel
lease contracts that are priced with reference to a freight index. For more
information please refer to note 13 to the Condensed financial statements.
(2) Excludes dividends received from Cerrejón of $240 million now presented
within 'other net debt movements'.
(3) Includes cash inflows of $101 million (2020: inflows of $29 million),
relating to interest receipts on derivatives hedging net debt, which are
included in cash flows from derivatives related to financing activities.
(4) Included within sustaining capital expenditure is $8 million (2020: $51
million) of capitalised operating cash flows relating to life extension
projects. In addition to Growth capex, 'Growth capital expenditure and other'
includes $4 million (2020: $12 million) of capitalised operating cash flows
relating to growth projects and $68 million (2020: $63 million) of expenditure
on non-current intangible assets.
(5) Includes the purchase of shares under a buyback of $814 million; the
purchase of shares for other purposes (including for employee share schemes)
of $270 million; Mitsubishi's share of Quellaveco capital expenditure of $530
million; new leases entered into (less capital repayments of lease
obligations) of $369 million; dividends received from Cerrejón of $240
million; and contingent and deferred consideration paid in respect of
acquisitions completed in previous years of $117 million. 2020 includes
Mitsubishi's share of Quellaveco capital expenditure of $526 million; $253
million of debt recognised on the acquisition of Sirius Minerals Plc; the
purchase of shares under a buyback of $223 million; and the purchase of shares
for other purposes (including for employee share schemes) of $162 million.
Net debt (including related derivatives) of $3.8 billion has
decreased by $1.7 billion since 31 December 2020, driven by robust cash
flows from operations of $20.6 billion. The Group generated strong sustaining
attributable free cash inflows of $9.6 billion, used in part to fund growth
capital expenditure of $1.8 billion and dividends paid to Anglo American plc
shareholders of $4.0 billion. New leases entered into, including for the
Group's London head office, added $0.7 billion to net debt. Net debt at
31 December 2021 represented gearing (net debt to equity) of 10%
(2020: 14%).
Cash flow
Cash flows from operations
Cash flows from operations increased to $20.6 billion
(2020: $8.0 billion), reflecting an increase in underlying EBITDA from
subsidiaries and joint operations, and a working capital reduction of
$1.1 billion (2020: increase of $1.5 billion). A reduction in inventories
of $0.3 billion was driven by a change in the inventory value estimation
methodology that reduced the cost of purchased concentrate at PGMs (see note 8
to the Condensed financial statements for more detail); and an increase in
payables of $1.4 billion was driven by a higher customer pre‑payment within
PGMs and provisionally priced sale adjustments within Iron Ore. These were
partly offset by an increase in receivables of $0.6 billion, mainly owing to
increased base metal prices.
Capital expenditure*
Year ended Year ended
$ million 31 December 2021 31 December 2020
Stay-in-business 2,068 1,566
Development and stripping 904 769
Life extension projects 474 296
Proceeds from disposal of property, plant and equipment (17) (7)
Sustaining capital 3,429 2,624
Growth projects 1,752 1,438
Total 5,181 4,062
Capitalised operating cash flows 12 63
Total capital expenditure 5,193 4,125
Capital expenditure increased to $5.2 billion (2020: $4.1 billion), as
comprehensive response plans partially mitigated the impact of the Covid-19
pandemic, which affected spend in 2020, and ensured business continuity.
Sustaining capital expenditure increased to $3.4 billion
(2020: $2.6 billion), driven by the roll-over of deferred expenditure from
2020 owing to Covid-19 related restrictions and the effect of stronger local
currencies in our countries of operation.
Growth capital expenditure increased to $1.8 billion (2020: $1.4 billion),
largely due to higher expenditure incurred at the Woodsmith polyhalite project
of $0.5 billion (2020: $0.3 billion) following the acquisition of the
project in the first half of 2020.
Attributable free cash flow*
The Group's attributable free cash flow increased to $7.8 billion
(2020: $1.2 billion) due to higher cash flows from operations of
$20.6 billion (2020: $8.0 billion). This was partially offset by increased
capital expenditure of $5.2 billion (2020: $4.1 billion), higher tax
payments of $4.3 billion (2020: $1.6 billion) and increased dividends paid to
non-controlling interests of $2.8 billion (2020: $0.7 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 $1.18 per share
(2020: $0.72 per share), as well as a special dividend of $0.50 per share,
bringing the total dividends paid and proposed in respect of 2021 to $4.19 per
share (2020: $1.00 per share), equivalent to $5.2 billion (2020:
$1.2 billion). The timetable for the special dividend will follow the same
timetable as for the payment of Anglo American's final dividend. For further
information, please refer to the 'Notice of Final Dividend' set out on page
91.
The Group has made significant progress in deleveraging and strengthening the
balance sheet and, given the levels of cash generated in the business, along
with the further value potential in Anglo American, excess cash was paid out
to shareholders in the second half of the year. In September 2021, in
addition to the interim base dividend, the Group paid a special dividend of
$1.0 billion equal to $0.80 per share. Anglo American also returned $0.8
billion to shareholders in 2021, as part of a $1.0 billion on-market share
buyback programme that completed on 11 February 2022, at an average price of
£28.84 per share.
Acquisitions
The Group completed no material acquisitions in the year. In the prior year,
on 17 March 2020, the Group completed the acquisition of Sirius Minerals Plc
for a cash consideration of $0.5 billion.
Disposals
On 4 June 2021, the Group demerged its thermal coal operations in South Africa
into a newly incorporated company, Thungela Resources Limited ('Thungela'),
that was subsequently admitted to trading on both the Johannesburg and London
stock exchanges on 7 June 2021. The demerged assets included net cash of
$0.2 billion. Following the demerger, no further production from South
African thermal coal was reported by Anglo American.
Net cash received from disposals was $0.1 billion (2020: $0.4 billion), being
deferred and contingent consideration in respect of previous divestments by
PGMs and Copper, partially offset by the net cash disposed in 2021 through the
demerger of the Group's South African thermal coal operations.
Balance sheet
Net assets increased by $2.0 billion to $34.8 billion (2020: $32.8 billion),
reflecting the profit for the period, offset by dividend payments to Company
shareholders and non-controlling interests.
Attributable ROCE*
Attributable ROCE increased to 43% (2020: 17%). Attributable underlying EBIT
was higher at $13.5 billion (2020: $5.3 billion), reflecting the impact of
significantly higher realised prices achieved for the Group's products and the
easing of Covid-19 related restrictions that impacted sales in 2020. Average
attributable capital employed increased to $31.4 billion
(2020: $30.5 billion), primarily due to growth capital expenditure, largely
at Quellaveco (Copper) and Woodsmith (Crop Nutrients).
Liquidity and funding
Group liquidity remains conservative at $17.1 billion (2020: $17.5 billion),
comprising $9.1 billion of cash and cash equivalents (2020: $7.5 billion) and
$8.0 billion of undrawn committed facilities (2020: $10.0 billion).
In March 2021, the Group issued $500 million 2.250% Senior Notes due 2028, and
$500 million 2.875% Senior Notes due 2031, as part of the Group's routine
financing activities.
In June 2021, the Group bought back US dollar denominated bonds with
maturities in 2025. The Group used $1.0 billion of cash to retire $0.9
billion of contractual repayment obligations (including derivatives hedging
the bonds).
The weighted average maturity on the Group's bonds decreased marginally to 6.2
years (31 December 2020: 6.3 years).
The Group has an undrawn $4.7 billion revolving credit facility due to mature
in March 2025.
In April 2020, the Group signed a new $2.0 billion revolving credit facility
with an initial maturity date of April 2021. After the Group's $1.0 billion
bond issuance in March 2021, the Group issued a notice of cancellation for the
facility, which became effective in March 2021 and, accordingly, this facility
is no longer available.
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 and that cater to global consumer demand trends. Aligned
to this strategy, the Group commenced or completed several transactions in
2021.
In April 2021, Anglo American reached a significant milestone in delivering
our environmental commitments, securing 100% renewable electricity supply for
all our operations in South America including by, for example, signing an
agreement to provide 100% renewable electricity for the Quellaveco copper
operation in Peru, where the mains power supply will come entirely from
renewables from 2022, having already met our objective to source electricity
entirely from renewables in Chile from 2021, and Brazil from 2022.
In June 2021, we completed the demerger of our thermal coal operations in
South Africa through the creation of a new stand-alone company, Thungela,
which has a primary listing on the Johannesburg Stock Exchange, and a standard
listing on the London Stock Exchange.
On 20 December 2021, Anglo American Platinum announced its sale of its 49%
interest in Bokoni. The transaction is subject to the fulfilment or waiver of
notable conditions precedent and is expected to complete during 2022.
In January 2022, Anglo American Platinum entered into transaction agreements
for the sale of its 50% interests in the Kroondal and Marikana pool-and-share
agreements (the 'PSAs') to Sibanye-Stillwater (Sibanye). The transaction is
subject to regulatory approvals, including section 11 consent for the transfer
of the mining right and approvals by the Competition Authorities, as well as
the delivery of 1.35 million 4E ounces of metal in concentrate by the
Kroondal PSA (100% basis).
On 11 January 2022, we completed the sale of our 33.3% shareholding in
Cerrejón to Glencore plc for a total cash consideration of $0.3 billion,
before adjustment for dividends received in 2021. The agreement is effective
on 31 December 2020 and, therefore, economic benefits from 1 January 2021
onwards have not accrued to Anglo American.
Both the Thungela demerger and Cerrejón sale represent the final stage of our
responsible exit from thermal coal operations.
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:
Operation Scope Capex Remaining Capex First production Progress
$bn $bn
Copper
Quellaveco New copper mine in Moquegua, Peru producing c. 300 ktpa (100% basis, 180 ktpa c.2.8 (Anglo American 60% share) 0.7 -0.8 (Anglo American 60% share) 2022 Construction began in 2018. The project is moving into the final stages as all
our share) over the first 10 years in Q1 cost curve position. major works near completion. Significant milestones delivered include: the
start of pre-stripping in April 2021; first ore excavated in October;
pre-commissioning activities commenced at the first grinding line in the
processing plant; and completion of the water dam (to mainly provide fresh
water to communities) and the tailings starter dam. First production is
expected mid-2022 but remains subject to the current and ongoing impacts of
the pandemic. Refer to the Technology projects table below for Coarse Particle
Recovery at Quellaveco.
Collahuasi Phase 1 expansion focused on near-term P101 optimisation opportunities, the Fifth ball mill approved; other studies ongoing c. 0.3 in total, with 5th ball mill c.0.1 (44% basis). Additional expansion 2023 As part of the routine environmental approval (EIA) cycle a nominal expansion
implementation of a fifth ball mill (approved) and a restart of leaching studies ongoing. Subject to permitting and approvals of throughput to 210 ktpd has been submitted as part of this application. EIA
activities to add c.50 ktpa (44% basis). Additional debottlenecking options to approval was obtained in December 2021, enabling expansion of the processing
further increase throughput remain under study. capacity up to a maximum 210 ktpd and the construction of a desalination plant
and related infrastructure to provide a sustainable alternative water source.
Further phase expansions are in early stage study to increase production by up
to an additional 100 ktpa (44% basis). The fifth ball mill project (first stage of the expansion) is progressing
according to plan with the execution of early works and purchase of critical
items. The expected start up is during Q4 2023.
Diamonds
Marine Namibia New diamond recovery vessel, adding 0.5 Mctpa (100% basis) of some of the c.0.2 (Anglo American 50% share) <0.1 (Anglo American 50% share) 2022 Construction began in 2019 and the vessel was successfully completed and
highest value diamonds in the portfolio. delivered to Cape Town in Q3 2021 where recovery and plant systems have been
installed.
The vessel is currently undergoing sea trials and is on track for
commissioning in Q1 2022.
Crop Nutrients
Woodsmith New polyhalite (natural mineral fertiliser) mine being developed in Yorkshire, Subject to development timeline review Subject to development timeline review Subject to development timeline review Ongoing technical review confirmed there are several improvements to modify
UK. Expected to produce POLY4 - a premium quality, low carbon fertiliser design to bring it up to Anglo American's safety and operating integrity
certified for organic use. 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
Sishen Implementation of Ultra High Dense Media Separation (UHDMS) technology at 0.2 0.2 2023 Project execution approved in Feb 2021.
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 Sishen's life of mine to 2039.
PGMs
Mogalakwena Evaluating various options to expand PGM production of the mine through Number of options being considered Not yet approved ~2026 The Future of Mogalakwena (FoM) work continues to make good progress in the
technology development and deployment and the optimal mine plan to deliver six workstreams:
feed to the concentrators.
Each of the six workstreams have several steps to unlock value. Although
integrated, the workstreams allow for separate approval stage gates and an
optimised development pathway.
Metallurgical Coal
Moranbah-Grosvenor Expansion of the processing facilities to increase Anglo American's share of c.0.3 (Anglo American 88% share) Not yet approved 2025 Project approval expected 2023, dependent on progress of longwall operations
saleable tonnes of high quality metallurgical coal by c. 2.5 Mtpa (Anglo post-restart of Grosvenor mine.
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:
Operation Scope Capex Remaining spend Expected first production Progress
$bn $bn
Diamonds
Venetia 4 Mctpa underground replacement for the existing open pit. The project is 2.1 1.2 2023 Open-pit mining at Venetia is planned to end in H2 2022, with the transition
expected to add an estimated 88 million carats and extend the life of the mine to underground mining starting thereafter.
to 2047.
Jwaneng 9 Mctpa replacement (100% basis) for cuts 7 and 8. The Cut-9 expansion of 0.3 (Anglo American 19.2% share) 0.2 (Anglo American 19.2% share) 2027 Project progressing on schedule.
Jwaneng will extend the life of the mine to 2036 and is expected to yield
approximately 57 million carats of rough diamonds.
Metallurgical Coal
Aquila 3.5 Mtpa (70% basis), 7 year extension of Capcoal's underground operations 0.2 (Anglo American 70% share) <0.1 (Anglo American 70% share) 2022 Development work began in September 2019 and first longwall production
with Grasstree approaching end of life. Aquila will be a longwall operation commenced in February 2022.
leveraging the existing Grasstree infrastructure and producing high quality
hard coking coal. The project will extend the life of the Capcoal underground
operations to 2028.
Iron Ore
Kolomela 4 Mtpa high grade iron ore replacement project. The development of a new pit, 0.4 0.4 2024 Approved in July 2020. Pit establishment and waste stripping has commenced in
Kapstevel South, and associated infrastructure at Kolomela to help sustain 2021, with first ore expected in 2024.
output of c.13 Mtpa and extend the remaining life of mine to 2034.
PGMs
Mototolo/Der Brochen The development of the project leverages the existing Mototolo infrastructure, 0.2 Approved 2023 Approved in December 2021. Execution commenced in Q1 2022, with the majority
enabling mining to extend into the adjacent and down-dip Der Brochen resource, of capital invested in 2022, 2023 and 2024. First production expected in late
which will potentially extend the life of mine beyond 30 years. 2023.
( )
Technology projects((1))
The Group is investing $0.2-0.5 billion per year over the next three years on
technology projects to support the FutureSmart Mining(TM) programme (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 early rejection of waste, - Testing complete at Barro Alto (Nickel) August 2020. c. 35 million capex
resulting in energy, water and cost savings. for 100% throughput with phased upgrade through 2022-23.
- Testing complete at Mogalakwena (PGMs) November 2020. Full scale North
Concentrator unit operational, integration to business as usual is under way
(~70% of complex feed).
Copper, PGMs and Iron Ore
Coarse particle recovery (CPR) Innovative flotation process allows material to be ground to a larger particle - Demo plant construction and commissioning completed in 2021 at El Soldado
size, rejecting coarse gangue and allowing water to release from coarser ore (Copper) with further testing in progress.
particles, improving energy efficiencies and water savings.
- Constructing full scale system at Mogalakwena North concentrator (PGMs) with
start-up anticipated Q3 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) currently in PFS-A, advancing to PFS‑B in 2022 and
Feasibility in 2023.
- Feasibility work continues at Los Bronces (Copper) with options being
investigated at Collahuasi.
Copper and PGMs
Hydraulic dry stack Engineering of geotechnically stable tailings facilities that dry out in - El Soldado (Copper) demonstration anticipated commissioning in Q1 2022.
weeks, facilitating up to 85% water recovery.
- Assessing application to tailings expansion at Mogalakwena (PGMs) with
benefits from water quality and quantity improvements.
- Together with CPR, potential for 20-30% additional production within
existing water licences at Quellaveco and Collahuasi (Copper).
Portfolio-wide
Zero emissions haulage solution - Hydrogen Truck Proof of Concept Developing the world's largest hydrogen powered mining truck to decarbonise - Proof of concept delivered at Mogalakwena in Q4 2021 and commissioning
high power transport, using renewable energy. anticipated Q1 2022. 40 truck roll-out planned to start in 2024, powered by a
local solar plant.
- Assessing rollouts at Copper, Diamonds and Iron Ore operations.
((1)) Capital expenditure relating to technology projects is included within
Growth capital expenditure.
Digital projects((1))
The Group is investing $0.1-0.2 billion per year over the next three years on
digital projects to support the FutureSmart Mining(TM) programme (metrics
presented on a 100% basis unless otherwise indicated):
Initiative Scope Progress
PGMs, Iron Ore, Met Coal and Diamonds
Predictive Maintenance, VOXEL Asset Strategy & Reliability Maintenance planning based on predictive analytics - resulting in improvements - A variety of deployments at Mogalakwena, Amandelbult, Amandelbult
in safety, reliability and availability of critical assets. Concentrator Plant, Rustenburg Base Metal Refinery and Polokwane Smelter
(PGMs), Kolomela (Iron Ore), Moranbah (Met Coal), Los Bronces (Copper),
Mafuta Vessel, Jwaneng, and Gahcho Kué (Diamonds).
Copper, PGMs and Iron Ore
Rapid Resource Modelling, VOXEL Discovery & Geosciences Enables consistent core logging, 3D implicit modelling, and statistical - Deployments at Mogalakwena (PGMs) and Quellaveco (Copper).
resource modelling as one integrated workflow in weeks vs years.
Spatial Inventory Management, VOXEL Discovery & Geosciences Builds a digital twin of material flow, providing access to accurate - Deployments at Quellaveco and Los Bronces (Copper), Kolomela and Sishen
information about material within the mining operation and enabling additional (Iron Ore) and Mogalakwena (PGMs).
value through Bulk Ore Sorting.
PGMs, Iron Ore, Met Coal and Nickel
Process Performance Review, VOXEL Processing Delivers automated support to improve the detection, prioritisation, and - Deployments at Moranbah (Met Coal), Kolomela (Iron Ore) and Mogalakwena
resolution of process issues. (PGMs).
Recipe Advisor, VOXEL Processing Identifies the most valuable way to operate a process given the operational - Deployments at Barro Alto (Nickel).
constraints, using Machine Learning (ML) models to recommend the optimum
targets for the Advanced Process Control (APC) to execute.
Copper, PGMs, Iron Ore, and Met Coal
Digital Operational Planning, VOXEL Integrated Operations Enables definition and management of models and data that then applies cutting - Deployments at Mogalakwena (PGMs), Sishen and Kolomela (Iron Ore), Los
edge simulation and elastic cloud-based computing technology to deliver Bronces (Copper), and Moranbah (Met Coal).
optimised operational plans across the mining value chain.
Diamonds, Copper, PGMs, Iron Ore and Met Coal
Advanced Process Control Up to 40% improvement in stability & productivity. - Delivered at Minas-Rio (Iron Ore), Los Bronces (Copper), Kumba (Iron Ore),
Mogalakwena (PGMs) and Venetia (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 2021 to the composition of the Board are set out below.
On 1 March 2021, Elisabeth Brinton joined the Board as a non-executive
director and as a member of the Sustainability Committee in September 2021.
On 1 June 2021, Hilary Maxson joined the Board as a non-executive director and
member of the Audit Committee.
The following non-executive changes were announced in October:
• Ian Tyler joined the Board as a non-executive director and member of the
Audit and Remuneration committees on 1 January 2022.
• Anne Stevens and Byron Grote will step down from the Board at the
Company's Annual General Meeting (AGM) on 19 April 2022, having both served
for nine years.
• Ian Tyler will succeed Anne Stevens as chair of the Remuneration
Committee, and Hilary Maxson will succeed Byron Grote as chair of the Audit
Committee, both with effect from the AGM in April 2022.
The following executive changes were announced in November:
• Duncan Wanblad will join the Board as chief executive at the Company's AGM
on 19 April 2022.
• Mark Cutifani will retire as chief executive and step down from the Board
at the 2022 AGM, after nine years in the role.
On 23 February 2022, the following non-executive appointments were announced;
both to take effect on 19 April 2022:
• Ian Tyler will succeed Byron Grote as the Board's senior independent
director.
• Marcelo Bastos will succeed 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 relate to the following:
• Catastrophic and natural catastrophe risks
• 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.
The principal risks and uncertainties facing the Group at the 2021 year end
are set out in detail in the strategic report section of the Integrated Annual
Report 2021 on the Group's website from 7 March 2022 www.angloamerican.com
(http://www.angloamerican.com) .
De Beers - Diamonds
Financial and operational metrics((1))
Production Sales Unit Group Underlying EBITDA Underlying Capex* ROCE*
volume volume Price cost* revenue* EBITDA* margin*((6)) EBIT*
'000 '000 $/ct((3)) $/ct((4)) $m((5)) $m $m $m
cts((2))
cts
De Beers 32,276 33,357 146 58 5,602 1,100 47 % 620 565 7 %
Prior year 25,102 21,380 133 57 3,378 417 54 % 0 381 0 %
Botswana 22,326 n/a 152 32 n/a 464 n/a 407 72 n/a
Prior year 16,559 - 124 35 - 225 - 178 66 -
Namibia 1,467 n/a 565 359 n/a 101 n/a 68 91 n/a
Prior year 1,448 - 492 272 - 113 - 82 77 -
South Africa 5,306 n/a 113 45 n/a 241 n/a 82 309 n/a
Prior year 3,771 - 99 53 - 165 - 16 147 -
Canada 3,177 n/a 62 44 n/a 68 n/a 4 42 n/a
Prior year 3,324 - 58 36 - 92 - 40 31 -
Trading n/a n/a n/a n/a n/a 515 11 % 505 4 n/a
Prior year - - - - - 80 3 % 74 3 -
Other((7)) n/a n/a n/a n/a n/a (289) n/a (446) 47 n/a
Prior year - - - - - (258) - (390) 57 -
((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 36.3 million carats (2020:
22.7 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 $4.9 billion (2020: $2.8 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, acquisition
accounting adjustments and corporate.
Markets
The diamond industry continued to recover from the impacts of the Covid-19
pandemic during 2021. In the first half of the year, consumer sales of diamond
jewellery in the US and mainland China posted positive growth not only on the
Covid-19 affected sales in 2020, but also in comparison to 2019 before the
onset of the pandemic. Other global consumer markets initially saw a less
pronounced rebound due to the uneven timing of pandemic impacts across the
world, but the second half of 2021 saw a more positive recovery trend across
the entire international diamond value chain.
The ongoing increase in consumer demand led to strong growth rates in consumer
sales of diamond jewellery in the US, with holiday season sales increasing by
about a third compared to 2020. The strength of demand was the result of an
accumulation of savings by US consumers through the various lockdowns and
restrictions on movement seen earlier in the pandemic; a pent-up demand for
weddings and engagements; a strong desire for diamonds as meaningful gifts
that symbolise personal connection; less luxury travel; and supported by
ongoing marketing campaigns (including an increase in marketing effectiveness
from De Beers).
The positive demand trends in retail underpinned the increased demand for
polished diamonds and as a result, stocks of polished diamonds in cutting
centres steadily declined during the course of the year. Lower supply and
steady demand for polished diamonds from retailers supported growth in
polished diamond prices.
As downstream and midstream demand conditions continued to improve, rough
diamond production and prices increased throughout the year, following the
significant reductions seen at the start of the pandemic. Midstream sentiment
and rough diamond demand were robust throughout 2021.
Financial and operational overview
Total revenue increased significantly to $5.6 billion((1)) (2020: $3.4
billion), with rough diamond sales rising to $4.9 billion((1)) (2020:
$2.8 billion), driven by positive sentiment and strong demand for diamond
jewellery in key consumer markets. With midstream capacity recovering, despite
the second wave of Covid-19 infections in India in the second quarter of
2021, on a consolidated basis, rough diamond sales volumes were significantly
higher at 33.4 million carats (2020: 21.4 million carats). The average
realised price rose by 10% to $146/ct (2020: $133/ct), primarily as a result
of positive market sentiment which gave rise to an 11% strengthening of the
average rough price index. Revenue also increased within De Beers' other
businesses, including Element Six.
Underlying EBITDA increased to $1,100 million (2020: $417 million), reflecting
the improvement in sales driven by the recovery in demand. Unit costs were
broadly flat at $58/ct (2020: $57/ct), as the benefit of higher production
volumes was offset by an increase in input costs and unfavourable exchange
rates.
Capital expenditure increased by 48% to $565 million (2020: $381 million), as
spend returned to more normalised levels following the deferral of sustaining
projects during 2020 in response to Covid-19. The execution of Venetia
Underground (in South Africa) and Jwaneng Cut-9 (in Botswana) life extension
projects continued to progress, and the mine life extension of the Namibian
land operations was approved during the year. The new AMV3 vessel for Namibia,
now named the Benguela Gem (the largest and most advanced diamond recovery
vessel ever built), arrived in Cape Town in September 2021 to complete
preparations for its commissioning in the first quarter of 2022.
((1)) Total revenue and rough diamond sales for 2019 were $4.6 billion and
$4.0 billion respectively.
Operational performance
Mining and manufacturing
Rough diamond production increased by 29% to 32.3 million carats (2020:
25.1 million carats) primarily due to the lower levels of production in 2020
as a result of the impact of Covid-19 related lockdowns and lower demand due
to the pandemic. Despite the operational issues and heavy rains in southern
Africa in the first quarter of 2021, production was increased to meet the
stronger demand for rough diamonds.
In Botswana, production was 35% higher at 22.3 million carats (2020:
16.6 million carats) as production was increased in response to stronger
prevailing demand. Production at Jwaneng increased by 71% to 12.9 million
carats (2020: 7.5 million carats) due to the planned treatment of higher grade
ore, and as a result of Covid-19 related lockdowns in the previous year.
Production at Orapa increased marginally by 5% to 9.4 million carats
(2020: 9.0 million carats), despite the impact of heavy rainfall at the
beginning of the year and the planned closure of Plant 1 in late 2020.
In Namibia, production was broadly in line at 1.5 million carats (2020: 1.4
million carats), reflecting an increase from the remobilisation of most
vessels in late 2020, partly offset by planned maintenance.
In South Africa, production increased by 41% to 5.3 million carats (2020:
3.8 million carats), owing to the impact of the Covid-19 lockdowns in the
first half of 2020 and the planned processing of higher grade ore from the
final cut of the Venetia open pit.
In Canada, production was marginally lower at 3.2 million carats (2020:
3.3 million carats), mainly due to a temporary Covid-19 related shutdown in
the first quarter of 2021.
Brands and consumer markets
2021 saw a strong recovery in consumer demand for De Beers' branded diamond
jewellery from De Beers Jewellers and De Beers Forevermark, with both
achieving double digit retail growth year-on-year. De Beers also continued to
expand its retail stores in 2021, including its new flagship store in Old Bond
Street, London and new stores in China and Qatar.
In August 2021, De Beers Group announced its new 'One De Beers' approach and
its focus on establishing De Beers as a 'purpose-led' brand. De Beers has now
launched its new brand campaign built around a widening interpretation of the
phrase 'I do', itself the embodiment of one of the most time-honoured
expressions of intent and values.
Operational and market outlook
Expectations for retail restocking in early 2022 are encouraging following the
strong retail sales of diamond jewellery over the holiday season. The growth
in consumer demand for diamond jewellery is expected to continue, driven by
the US, primarily due to continued economic recovery, higher accumulated
savings and postponed marriages. Rough diamond demand is expected to remain
steady as the midstream continues to operate with lower stock levels,
manufacturing below full capacity but using a faster manufacturing cycle.
While there continue to be risks relating to the effects of Covid-19 across
the pipeline, geo-political uncertainty and cost inflation pressures,
sentiment in the midstream is expected to remain positive on the back of
anticipated strong US retailer restocking in the first quarter.
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.
De Beers is well positioned to take advantage of these changes. The long term
outlook for diamond jewellery demand remains positive.
Production guidance for 2022 is 30-33 million carats (100% basis), subject to
trading conditions and the extent of further Covid-19 related disruptions.
Unit cost guidance for 2022 is c.$65/ct, reflecting the impact of inflation.
Copper
Financial and operational metrics
Production Sales Price Unit Group Underlying Mining Underlying Capex* ROCE*
volume volume cost* revenue* EBITDA* EBITDA EBIT*
margin*((2))
kt kt((1)) c/lb((2)) c/lb((3)) $m((4)) $m $m $m
Copper 647 641 453 120 6,433 4,011 62 % 3,428 1,773 39 %
Prior year 647 648 299 113 4,199 1,864 45 % 1,227 1,443 19 %
Los Bronces((5)) 328 325 n/a 158 3,047 1,871 61 % 1,588 493 n/a
Prior year 325 325 - 149 2,013 639 32 % 294 272 -
Collahuasi((6)) 277 273 n/a 61 2,641 2,188 83 % 1,970 365 n/a
Prior year 277 278 - 62 1,767 1,308 74 % 1,083 313 -
Quellaveco((7)) n/a n/a n/a n/a n/a n/a n/a n/a 777 n/a
Prior year - - - - - - - - 788 -
Other operations((8)) 42 43 n/a n/a 745 (48) 61 % (130) 138 n/a
Prior year 46 45 - - 419 (83) 9 % (150) 70 -
((1)) Excludes 432 kt third-party sales (2020: 453 kt).
((2)) Represents realised 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). Total Copper and Other operations prior year comparatives have been
restated from a gross to net presentation. See note 2 to the Condensed
financial statements for more details.
((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. 2021 capex on a 100% basis is $1,295 million, of
which the Group's share is $777 million. 2020 capex on a 100% basis was $1,314
million, of which the Group's share was $788 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 more than doubled to $4,011 million (2020: $1,864 million),
underpinned by record copper prices.
Copper production of 647,200 tonnes was in line with the prior year (2020:
647,400 tonnes). Planned lower grades were fully offset by continued strong
plant performance at Collahuasi and the implementation of water management
initiatives at Los Bronces. Unit costs increased by 6% to 120 c/lb (2020: 113
c/lb), reflecting a stronger Chilean peso and high levels of local inflation
impacting production and selling costs, partly offset by an increase in waste
stripping capitalised and higher by-product credits.
Capital expenditure increased by 23% to $1,773 million (2020: $1,443
million), reflecting adverse movements in the Chilean peso and higher
capitalised waste stripping as a result of resuming mine development activity
following the impact of the pandemic in 2020.
Markets
31 December 2021 31 December 2020
Average market price (c/lb) 423 280
Average realised price (c/lb) 453 299
The difference between the market price and realised price is largely a
function of provisional pricing adjustments, with 162,361 tonnes of copper
provisionally priced at 442 c/lb at 31 December 2021 (2020: 140,599 tonnes
provisionally priced at 352 c/lb), and the timing of sales across the year.
The average LME copper price increased by 51%, due to a strong recovery in
economic activity following the initial waves of the Covid-19 outbreak in
2020. While demand rebounded sharply in 2020 in China, momentum in 2021 was
led by the US and Europe, as China faced headwinds in its real estate sector.
The strength of demand for copper, like many commodities, was reinforced by
government measures which were implemented to help offset the effects of the
pandemic, and during the year this was further affected by supply-chain
bottlenecks in major economies. Copper supply growth continued to be
constrained, resulting in declines in reported inventories to multi‑year
lows. Demand for the metal has benefited from copper's key role in global
decarbonisation efforts, with growth in copper-intensive applications, such as
wind and solar power generation. Investment fund interest in copper also
contributed to price strength, as prices reached a record high of 486c/lb in
May 2021, although concerns about inflation and potential interest rate rises
have tempered further advances.
Operational performance
Copper production was in line with the prior year at 647,200 tonnes (2020:
647,400 tonnes).
At Los Bronces, production increased marginally by 1% to 327,700 tonnes (2020:
324,700 tonnes) due to higher water availability owing to water management
initiatives, partially offset by planned lower grades (0.70% vs. 0.81%). C1
unit costs increased by 6% to 158 c/lb (2020: 149 c/lb), with the benefit of
higher waste stripping capitalised and higher by-product credits, offset by
the stronger Chilean peso and inflation, as well as cost increases associated
with water management.
At Collahuasi, Anglo American's attributable share of copper production of
277,200 tonnes was a record and slightly above the prior year (2020: 276,900
tonnes). C1 unit costs decreased by 2% to 61 c/lb (2020: 62 c/lb), reflecting
the benefit of higher production and by-product credits, offset by the
stronger Chilean peso and inflation.
Production at El Soldado decreased by 8% to 42,300 tonnes (2020: 45,800
tonnes) due to lower grades in accordance with the mine plan (0.73% vs.
0.84%). C1 unit costs of 206 c/lb are broadly in line with the prior year
(2020: 204 c/lb), with the impact of lower production volumes, the stronger
Chilean peso and inflation being offset by an increase in waste stripping
capitalised.
Chile´s central zone continues to face severe drought conditions. While
production impacts during 2021 have been fully mitigated by the successful
implementation of water management initiatives, record low levels of
precipitation during the year have reduced water availability for Los Bronces
in the first half of 2022 and have been factored into our production guidance.
Operational outlook - Copper Chile
Production guidance for Chile for 2022 is 560,000-600,000 tonnes, subject to
the extent of further Covid-19 related disruptions and water availability. C1
unit cost guidance for Chile for 2022 is c.145c/lb, reflecting lower
production volumes, the impact of inflation, higher input costs and water
purchases, as well as lower by-product credits.
Quellaveco update
The project is on track to achieve first production in mid-2022, in line with
the original project schedule despite the challenges presented by the Covid-19
pandemic to date.
2021 saw the achievement of several major milestones and, as at February 2022,
construction on all work fronts is reaching the final stages. The Vizcachas
Dam - part of the infrastructure that will provide water to both the operation
and local communities - is now commissioned and turned over to the operating
team, and the 95 km water pipeline to site is on track to complete in the
first quarter of 2022. In the mine, pre-stripping started in April 2021,
moving 24 million tonnes in the year, and first ore was reached and excavated
in October. The majority of the mine equipment fleet is now assembled, being
the first in Peru to use fully automated haul trucks and drills, and all three
rope shovels are operation-ready. Significant progress has been made on the
primary crusher, with commissioning due to begin in the first quarter of 2022.
The overland ore transport conveyor belt to the processing plant is being
installed following completion of excavation work in the tunnel section of the
conveyor route. We are also nearing construction completion at the processing
plant, and pre-commissioning of the first of two milling lines began in
January 2022. In the tailings area, the starter dam is built to its full
elevation, and at the port, works to expand the existing port facilities
remain on-track to allow copper concentrate shipments to begin in 2022.
During January and early February, Peru has been experiencing its third wave
of Covid-19 following the spread of the Omicron variant throughout the
country. While almost all of the on-site workforce is fully vaccinated and
serious illness has been rare, progress has been negatively impacted by
reduced workforce availability and the need to isolate the increasing number
of Covid-19 cases identified on-site. To date, this disruption has not
materially impacted the project schedule or capital estimate, however the camp
has, at times, reduced to 50% occupancy rates, compared with 95% in December
2021 and early January 2022, and the full impact will depend on how long these
challenging conditions last. As a result of this, production guidance for 2022
has been revised (see operational outlook below) and the total project capital
expenditure estimate has been tightened to $5.4-5.5 billion (previously
$5.3-5.5 billion), of which the Group's share is c.$2.8 billion.
Capital expenditure in 2021 (on a 100% basis) was $1.3 billion, of which the
Group's share is $0.8 billion. Guidance for 2022 remains $0.8-1.1 billion
(100% basis), of which the Group's share is $0.5-0.7 billion.
In 2022, focus is shifting to commissioning and operational readiness, which
is aligned with the Anglo American Operating Model. The operating team is
largely in place, along with a dedicated commissioning team implementing an
integrated commissioning plan. All key obtainable permits have been received,
and we are on track to obtain operational permits that become available as
infrastructure is completed. In addition, key operational contracts are placed
or under negotiation. The local Moqueguan workforce has been key to the
success of the project and, as we near the close-out of construction
activities, we are working closely with government and local communities to
manage the demobilisation and support future employment opportunities for the
local workforce.
Revised mine design and planning at the Quellaveco district has led to an 18%
increase in Ore Reserves, with estimated contained copper of c.8.9 million
tonnes at 0.53% TCu, and a resultant six-year increase in the Life of Mine to
36 years.
Operational outlook - Quellaveco
We expect to achieve first production in mid-2022, followed by a 12-month
ramp-up to full capacity. Production guidance for Quellaveco for 2022 is
100,000-150,000 tonnes (previously 120,000-160,000 tonnes). Both the
schedule and production guidance remain subject to the extent of current and
ongoing Covid-19 related disruption.
C1 unit cost guidance for 2022 is c.125c/lb, based on ramp-up production
volumes. It is, therefore, highly dependent on production start date and is
subject to further Covid-19 impacts. Unit costs are expected to average c.
95c/lb over the first five years once the operation reaches full production
capacity from 2023.
All guidance, project progress and capital expenditure remain subject to the
extent of ongoing and further Covid-19 related disruption. Quellaveco expects
to deliver around 300,000 tonnes per year of copper equivalent production on
average in its first 10 years of operation.
Nickel
Financial and operational metrics
Production Sales Price Unit Group Underlying Mining Underlying Capex* ROCE*
volume volume cost* revenue* EBITDA* EBITDA EBIT*
margin*
t t c/lb((1)) c/lb((2)) $m((3)) $m $m $m
Nickel 41,700 42,100 773 377 710 320 45 % 261 29 21 %
Prior year 43,500 43,000 563 334 534 206 36 % 79 33 5 %
((1)) Realised price.
((2)) C1 unit cost.
((3)) Nickel prior year revenue has been restated from a gross to net
presentation. See note 2 to the Condensed financial statements for more
details.
( )
Financial and operational overview
Underlying EBITDA increased by 55% to $320 million (2020: $206 million),
reflecting higher realised nickel prices and continued operational stability.
C1 unit costs increased by 13% to 377 c/lb (2020: 334 c/lb) as a result of
lower production volumes and higher input and selling costs, partly offset by
energy sales and a favourable Brazilian real.
Capital expenditure decreased by 12% to $29 million (2020: $33 million),
primarily due to lower capitalised waste stripping.
Markets
31 December 2021 31 December 2020
Average market price (c/lb) 839 625
Average realised price (c/lb) 773 563
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 839 c/lb was 34% higher (2020: 625 c/lb), as
demand outstripped supply, with demand benefiting from the easing of Covid-19
restrictions globally, and particularly robust consumption in stainless steel
and batteries (electric vehicles and energy storage) end-markets.
Operational performance
Nickel production decreased by 4% to 41,700 tonnes (2020: 43,500 tonnes), due
to licensing delays in the second half of the year (the relevant licences only
being received towards the end of the final quarter of the year) and planned
lower ore grades.
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.450 c/lb, reflecting the impact of
inflation, higher input costs and marginally lower production volumes.
Platinum Group Metals
Financial and operational metrics
Production Sales Basket Unit Group Underlying Mining Underlying Capex* ROCE*
volume volume price cost* revenue* EBITDA* EBITDA EBIT*
PGMs PGMs margin*((6))
koz((1)) koz((2)) $/PGM oz((3)) $/PGM oz((4)) $m((5)) $m $m $m
PGMs 4,299 5,214 2,761 868 14,502 7,099 62 % 6,753 894 140 %
Prior year 3,809 2,869 2,035 713 6,604 2,555 51 % 2,270 571 48 %
Mogalakwena 1,215 1,479 2,563 694 3,787 2,611 69 % 2,471 435 n/a
Prior year 1,182 839 2,065 530 1,720 1,059 62 % 944 273 -
Amandelbult 773 907 3,122 1,127 2,817 1,633 58 % 1,571 81 n/a
Prior year 608 501 2,228 1,031 1,108 474 43 % 429 56 -
Other operations((7)) 871 1,056 2,935 899 3,081 1,717 56 % 1,601 378 n/a
Prior year 759 576 2,083 757 1,295 562 43 % 461 242 -
Processing and trading((8)) 1,440 1,772 n/a n/a 4,817 1,138 24 % 1,110 n/a n/a
Prior year 1,260 953 - - 2,481 460 19 % 436 n/a -
((1) )Production reflects own-mined production and purchase of metal in
concentrate. PGM volumes is 5E metals and gold.
((2) )Sales volumes exclude the sale of refined metal purchased from third
parties and toll material. PGM volumes is 5E metals and gold.
((3) )Average US$ 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)) Total PGMs and Processing and trading prior year comparatives have been
restated from a gross to net presentation. See note 2 to the Condensed
financial statements for more details.
((6)) The total PGMs mining EBITDA margin excludes the impact of the sale of
refined metal purchased from third parties, purchase of concentrate and
tolling.
((7)) 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.
((8)) 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 increased to $7,099 million (2020: $2,555 million), as a
result of a 36% increase in the PGM basket price, driven mainly by the higher
average rhodium price, as well as an 82% increase in sales volumes. EBITDA was
slightly reduced by a change in inventory value estimation methodology,
resulting in a $0.4 billion reduction in the value of inventory, with a
corresponding increase in operating costs (see note 8 to the Condensed
financial statements for more detail). Unit costs increased by 22% to $868/PGM
ounce (2020: $713/PGM ounce), reflecting the stronger South African rand and
input cost inflation, partly offset by higher production volumes following the
Covid-19 lockdowns and ACP shutdown in 2020.
Capital expenditure increased by 57% to $894 million (2020: $571 million) due
to lower capital expenditure in the first half of 2020 as a consequence of
deferred projects due to the impact of Covid-19.
Markets
31 December 2021 31 December 2020
Average platinum market price ($/oz) 1,086 885
Average palladium market price ($/oz) 2,388 2,197
Average rhodium market price ($/oz) 20,109 11,220
US$ realised basket price ($/PGM oz) 2,761 2,035
Annual average PGM prices were significantly higher than the prior year, with
a multitude of price records in the first half of 2021 giving way to lower
prices in the second half, reflecting supply and demand dynamics. In the first
half of the year, demand was supported by a recovering global economy and
optimism over the automotive production outlook; it moderated in the second
half as the semi-conductor chip shortage curtailed automotive production.
Meanwhile, supply was disrupted by the temporary closure of two Russian mines
early in the year, but increased later on due to robust South African refined
production and a recovery in Russian refined production. The average realised
basket price increased by 36% in dollar terms to $2,761 per PGM ounce (2020:
$2,035 per PGM ounce), with all PGMs contributing.
Operational performance
Total PGM production increased by 13% to 4,298,700 ounces (2020: 3,808,900
ounces), primarily reflecting a strong recovery from the Covid-19 impacts in
the prior period.
Own-mined production
PGM production from own-managed mines (Mogalakwena, Amandelbult, Unki and
Mototolo) and equity share of joint operations increased by 12% to 2,858,300
ounces (2020: 2,549,000 ounces) following a robust recovery from the Covid-19
impacts in the prior year.
Mogalakwena PGM production increased by 3% to 1,214,600 ounces (2020:
1,181,600 ounces), largely driven by mining efficiencies resulting from
P101initiatives, leading to higher throughput at the concentrators, despite
overall lower grade.
Amandelbult PGM production increased by 27% to 773,200 ounces (2020: 608,100
ounces), due to an improved underground mining performance, leading to
increased stability and higher throughput at the concentrator, as well as a
recovery from the impacts of Covid-19.
Production from other operations increased by 15% to 870,500 ounces (2020:
759,300 ounces), reflecting the strong recovery from the impacts of Covid-19.
During the year, the concentrator debottlenecking projects at Unki and
Mototolo were successfully completed.
Purchase of concentrate
Purchase of concentrate, excluding tolling, increased by 14% to 1,440,400
ounces (2020: 1,259,900 ounces), reflecting the strong recovery from the
impact of Covid-19 at joint operations and third parties.
Refined production and sales volumes
Refined PGM production (excluding toll-treated metal) increased to a record
5,138,400 ounces (2020: 2,713,000 ounces), reflecting the strong recovery in
the ACP Phase A unit's performance following its successful rebuild in 2020,
as well as strong performance across all processing assets.
The build-up in work-in-progress inventory following the temporary closure of
the ACP has largely been processed and refined. The ACP Phase B unit rebuild
has been completed in January 2022 and recommissioning is expected to commence
in the first quarter of 2022.
PGM sales volumes increased to 5,214,400 ounces (2020: 2,868,500 ounces), due
to the higher refined production and the drawdown of refined inventory from
minor metals to supplement sales. This was partially offset by the rebuild in
3E refined inventory to normalised levels.
Operational outlook
PGM metal in concentrate production guidance for 2022 is 4.1-4.5 million
ounces, with own-mined output accounting for c.65%. Refined PGM production
guidance for 2022 is 4.2-4.6 million ounces, subject to the impact of Eskom
load-shedding. Both are subject to the extent of further Covid-19 related
disruption. Unit cost guidance for 2022 is c.$900/PGM ounce, reflecting the
impact of inflation and higher input costs, including labour and electricity.
Iron Ore
Financial and operational metrics
Production Sales Price Unit Group Underlying Mining Underlying Capex* ROCE*
volume volume cost* revenue* EBITDA* EBITDA EBIT*
margin*
Mt((1)) Mt((1)) $/t((2)) $/t((3)) $m((4)) $m((4)) $m $m
Iron Ore Total 63.8 63.3 157 33 11,104 6,871 62 % 6,359 628 62 %
Prior year 61.7 64.2 111 27 7,905 4,565 58 % 4,091 517 41 %
Kumba Iron Ore((5)) 40.9 40.3 161 39 6,958 4,311 62 % 3,960 417 140 %
Prior year 37.6 40.4 113 31 4,880 2,702 55 % 2,386 354 84 %
Iron Ore Brazil (Minas-Rio) 22.9 23.0 150 24 4,146 2,560 61 % 2,399 211 42 %
Prior year 24.1 23.8 107 21 3,025 1,863 62 % 1,705 163 30 %
((1)) Production and sales volumes are reported as wet metric tonnes. The
comparative has been restated as Kumba previously reported on a dry basis.
Product is shipped with c.9% moisture from Minas‑Rio and c.1.6% moisture
from Kumba. Total iron ore is the sum of Kumba and Minas‑Rio.
((2) )Prices for Kumba Iron Ore are the average realised export basket price
(FOB Saldanha) (wet basis) and the comparative has been restated as Kumba
previously reported on a dry 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. The comparative has been
restated as Kumba previously reported on a dry basis. Unit costs for total
iron ore are a blended average.
((4) )Total iron ore and Iron Ore Brazil prior year comparatives have been
restated from a gross to net presentation. See note 2 to the Condensed
financial statements for more details.
((5) )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 increased by 51% to $6,871 million, following a
41% increase in the blended realised iron ore price to $157/tonne, despite
marginally lower sales volumes and higher unit costs.
Kumba
Underlying EBITDA increased by 60% to $4,311 million (2020: $2,702 million),
driven by a higher average realised FOB iron ore export price of $161/tonne
(2020: $113/tonne), partly offset by the stronger South African rand. Unit
costs of $39/tonne (2020: $31/tonne) reflected the stronger rand, as well as
input cost inflation.
Total sales volumes were in line with the prior year at 40.3 Mt (2020: 40.4
Mt) due to third-party logistics constraints. Production increased by 9%,
reflecting the Covid-19 related lockdowns in the first half of 2020, as well
as improved equipment availability and reliability.
Capital expenditure increased by 18% to $417 million (2020: $354 million),
owing to the effect of the stronger South African rand and spend related to
the Kapstevel South pit life extension project at Kolomela and the Ultra High
Dense Media Separation (UHDMS) technology growth project at Sishen as these
projects ramp up.
Minas-Rio
Underlying EBITDA increased by 37% to $2,560 million (2020: $1,863 million),
reflecting a higher average realised price, partly offset by lower volumes
resulting from unplanned maintenance at the beneficiation plant. Unit costs
increased by 16% to $24/tonne (2020: $21/tonne), as higher input costs,
principally consumables and electricity, increased maintenance costs and lower
production volumes more than offset the benefit of the weaker Brazilian real.
Capital expenditure was 29% higher at $211 million (2020: $163 million), as
planned higher expenditure, including P101 initiatives, was partly offset by
the weaker Brazilian real.
Markets
31 December 2021 31 December 2020
Average market price (Platts 62% Fe CFR China - $/tonne) 160 109
Average market price (MB 66% Fe Concentrate CFR - $/tonne) 185 120
Average realised price (Kumba export - $/tonne) (FOB wet basis) 161 113
Average realised price (Minas-Rio - $/tonne) (FOB wet basis) 150 107
Kumba's FOB realised price of $161/wet metric tonne was 18% higher than the
equivalent Platts 62% Fe FOB Saldanha market price (adjusted for moisture) of
$136/wet metric tonne. This reflects the premium for the higher iron content
at 64.1% and relatively high proportion (approximately 69%) of lump that the
product portfolio attracts (which helps steel mills reduce emissions). There
was also a benefit of $3/tonne (2020: $7/tonne) related to marketing
activities.
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 $150/wet
metric tonne was 6% higher than the equivalent MB 66 FOB Brazil index,
(adjusted for moisture, of $142/wet metric tonne). This reflects the premium
quality of the product, as well as a benefit of $5/tonne (2020: $13/tonne)
related to marketing activities.
Operational performance
Kumba
Despite third-party logistical constraints, production increased by 9% to 40.9
Mt relative to 2020, which was impacted by Covid-19 related disruptions (2020:
37.6 Mt). The increase was partly driven by improved plant availability and
reliability in 2021. Production at Sishen increased by 9% to 28.0 Mt (2020:
25.8 Mt) and at Kolomela by 8% to 12.8 Mt (2020: 11.9 Mt).
Minas-Rio
Production decreased by 5% to 22.9 Mt (2020: 24.1 Mt), due to lower plant
availability as a result of unplanned maintenance at the beneficiation plant.
Operational outlook
Kumba
Production guidance for 2022 is 39-41 Mt, subject to the extent of further
Covid-19 related disruption and third‑party rail and port performance.
2022 unit cost guidance is c.$41/tonne, reflecting the impact of inflation and
higher input costs.
Minas-Rio
Production guidance for 2022 is 24-26 Mt, subject to the extent of further
Covid-19 related disruption.
2022 unit cost guidance is c.$25/tonne, reflecting the impact of inflation and
higher input costs.
Metallurgical Coal
Financial and operational metrics
Production Sales Price Unit Group Underlying Mining Underlying Capex* ROCE*
volume volume cost* revenue* EBITDA* EBITDA EBIT*
margin*
Mt((1)) Mt((2)) $/t((3)) $/t((4)) $m $m $m $m
Metallurgical Coal 14.9 14.1 200 105 2,899 962 33 % 450 649 15 %
Prior year 16.8 16.9 109 86 1,909 50 3 % (468) 683 (15) %
((1)) Production volumes are saleable tonnes, excluding thermal coal
production of 1.7 Mt (2020: 2.0 Mt).
((2) )Sales volumes exclude thermal coal sales of 2.1 Mt (2020: 2.3 Mt).
((3)) Realised price is the weighted average hard coking coal and PCI sales
price achieved at managed operations.
((4) )FOB cost per saleable tonne, excluding royalties and study costs.
Financial and operational overview
Underlying EBITDA increased to $962 million (2020: $50 million), driven by an
83% increase in the weighted average realised price for metallurgical coal,
partially offset by 16% lower sales volumes, and 22% increase in unit costs to
$105/tonne (2020: $86/tonne), reflecting the impact of lower production and
the stronger Australian dollar. The volume and cost performances were
principally affected by the impact of the underground incident at Grosvenor in
May 2020, where longwall production received approval to restart in February
2022 and is now operational again, as well as the temporary suspension at
Moranbah during the first half of 2021 in response to elevated gas levels.
Capital expenditure decreased by 5% to $649 million (2020: $683 million) due
to reduced capitalised stripping at Grasstree, partly offset by the Aquila
life extension project (replacing production from Grasstree), where longwall
production commenced in February 2022.
Markets
31 December 2021 31 December 2020
Average benchmark price - hard coking coal ($/tonne)((1)) 226 124
Average benchmark price - PCI ($/tonne)((1)) 164 78
Average realised price - hard coking coal ($/tonne)((2)) 211 112
Average realised price - PCI ($/tonne)((2)) 138 84
((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 owing to
differences in material grade and timing of contracts. Hard coking coal price
realisation increased to 93% of benchmark (2020: 90%), driven by the return of
premium quality hard coking coal production from Moranbah in the second half
of the year, in a higher price environment.
The average market price for Australian hard coking coal increased by 82% to
$226/tonne (2020: $124/tonne). Coking coal prices in the first half of 2021
were impacted by the ban on Australian-originated coal into Chinese ports and
the Covid-19 outbreak in India, but recovered strongly in the second half of
the year, due to a reduction of supply from Australian and North American
producers, while demand from Asian steelmakers outside China, remained strong
with steel production supported by robust margins.
Operational performance
Production decreased by 11% to 14.9 Mt (2020: 16.8 Mt), principally due to the
suspension of longwall operations at Grosvenor since May 2020 following the
underground gas incident, and at Moranbah from 21 February 2021 until 3 June
2021, in response to elevated gas levels. Operations at Moranbah were further
impacted by challenging geological conditions during the second half of the
year. Open cut operations returned to pre-Covid-19 production levels, having
been scaled back at Dawson and Capcoal since mid-2020 in response to reduced
demand for the products. At Grosvenor, development activities have progressed
well and the longwall restarted operations in the first quarter of 2022,
following approval from Resources Safety and Health Queensland.
Operational outlook
Following confirmation of the restart at Grosvenor, while export metallurgical
coal production guidance for 2022 is 20-22 Mt, due to the impact of Covid-19
in early 2022 and a later than expected restart of operations at Grosvenor,
production is expected to be towards the lower end of the guidance range. As a
result, unit cost guidance for 2022 is revised to c.$85/tonne (previously
c.$80/tonne and compared to 2021 unit costs of $105/tonne). These figures are
subject to the extent of any further Covid-19 related disruptions.
Manganese
Financial and operational metrics((1))
Production Sales Price Unit Group Underlying Mining Underlying Capex* ROCE*((3))
volume volume cost* revenue* EBITDA* EBITDA EBIT*
margin*
Mt Mt c/lb((2)) c/lb $m $m $m $m
Manganese 3.7 3.7 n/a n/a 768 315 41 % 250 n/a 104 %
Prior year 3.6 3.6 - - 697 304 44 % 245 - 78 %
((1)) Production, sales and financials include ore and alloy.
((2)) Realised price.
((3) )Attributable ROCE for 2020 has been updated to include allocation of
corporate costs.
Financial and operational overview
Manganese (Samancor)
Underlying EBITDA increased by 4% to $315 million (2020: $304 million),
benefiting from a 6% increase in manganese ore sales volumes, driven by higher
South African production, partially offset by increased costs due to the
stronger South African rand and Australian dollar.
Markets
The average benchmark price for manganese ore (Metal Bulletin 44% manganese
ore CIF China) increased by 12% to $5.21/dmtu (2020: $4.67/dmtu), largely due
to stronger demand and weather related supply disruptions that affected South
African producers.
Operational performance
Attributable manganese ore production increased by 5% to 3.7 Mt (2020: 3.5
Mt), reflecting the impact of Covid-19 lockdowns in South Africa in 2020.
There was no manganese alloy production as the South African smelter has been
on care and maintenance since the Covid-19 lockdown in 2020. During the fourth
quarter of 2021, an agreement was entered into to divest the Metalloys
business (the smelter in South Africa) and that transaction is expected to
complete during 2022.
Crop Nutrients
Financial and operational metrics
Production Sales Price Unit Group Underlying Mining Underlying Capex* ROCE*
volume volume cost revenue* EBITDA* EBITDA EBIT*
margin*
c/lb c/lb $m $m $m $m
Crop Nutrients n/a n/a n/a n/a 114 (41) n/a (42) 530 n/a
Prior year - - - - 107 1 - 1 292 -
Woodsmith project n/a n/a n/a n/a n/a n/a n/a n/a 530 n/a
Prior year - - - - - - - - 292 -
Other((1)) n/a n/a n/a n/a 114 (41) n/a (42) n/a n/a
Prior year - - - - 107 1 - 1 - -
((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 3 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.
In December, we appointed Tom McCulley, who has led the development of our
Quellaveco copper project in Peru, as CEO of our Crop Nutrients business from
1 January 2022, replacing Chris Fraser who has taken up a strategic projects
role for Anglo American.
Woodsmith Project
Development of the project continued to progress, with capital expenditure of
$530 million (2020: $292 million). Excavation of the mineral transport tunnel
had passed 18 km by the end of the year, beyond the intermediate access shaft
site at Lockwood Beck. The Lockwood Beck shaft is complete, having reached its
target depth of 383 m, and shaft lining is currently underway. At the mine
head itself, shaft boring has started in the services shaft, while progress is
also being made on the production shaft infrastructure.
Anglo American has conducted a detailed technical review of the project since
mid-2020 to ensure the technical and commercial integrity of the full scope of
its design. Now largely complete, the review has confirmed that a number of
elements of the project's 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 for the long term.
The Woodsmith team is further developing the engineering to optimise the
configuration of the project, recognising the multi-decade life of the mine.
Particular attention is on those aspects identified at the outset of Anglo
American's ownership - namely, the sinking of the two main shafts, the
development of the underground mining area, and the changes required to
accommodate both increased production capacity and the more efficient and
scalable mining method of using only continuous miners; such improvements will
also require the installation of additional ventilation earlier in the
development of the underground mining area.
Ahead of the full project execution phase, the Woodsmith team, led by new CEO
Tom McCulley, is working through the detailed design engineering throughout
2022 and is expected to make a number of changes to the phasing of work,
particularly in relation to the two main shafts. The capital budget for 2022
is therefore expected to be reduced by approximately $0.1 billion to $0.6
billion to accommodate these changes.
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. 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. Once the detailed design engineering is complete, and the capital
budget and schedule are updated, the full project will be submitted to the
Board.
Market development - POLY4
The ongoing focus of the market development activities is to develop and
implement detailed sales and marketing strategies for each region and to
support customers with their own market development activities in order to
further promote POLY4 to the end users of the product - farmers.
We are accelerating the number of commercial scale on-farm demonstrations,
with around 800 now in progress or complete. The demonstrations continue to
validate the efficacy of the product and the improvements it can deliver to
farmers in terms of crop yield, quality or both. In addition, POLY4 has been
shown in studies to enhance 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. POLY4 offers farmers a
solution to agricultural efficiency and sustainability challenges, through its
naturally low chloride multi-nutrient composition, its suitability for organic
use and ultra low carbon profile, generating up to 85% fewer carbon emissions
than the equivalent conventional nutrient products, with little to no waste
generated in its production.
Corporate and Other
Financial metrics
Production Sales Price Unit Group Underlying Underlying Capex*
volume volume cost* revenue* EBITDA* EBIT*
Mt((1)) Mt((2)) $/t((3)) $/t((4)) $m((5)) $m $m $m
Segment n/a n/a n/a n/a 1,126 (3) (289) 125
Prior year - - - - 1,550 (160) (395) 205
Exploration n/a n/a n/a n/a n/a (128) (132) n/a
Prior year - - - - - (101) (102) -
Corporate activities and unallocated costs n/a n/a n/a n/a 354 (63) (270) 44
Prior year - - - - 191 (44) (129) 21
Thermal Coal - South Africa((6)) 5.7 5.3 77 46 553 101 70 81
Prior year 16.5 16.6 57 38 1,150 (15) (81) 184
Thermal Coal - Colombia((7)) 3.6 3.4 65 34 219 87 43 n/a
Prior year 4.1 4.5 46 39 209 - (83) -
((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 (2020: 14.0 Mt).
((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 (2020: 12.4 Mt) and
third-party sales of 6.4 Mt (2020: 9.4 Mt).
((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)) Total segment and Thermal Coal - South Africa prior year comparatives
have been restated from a gross to net presentation. See notes 2 and 3 to the
Condensed financial statements for more details.
((6) )Thermal Coal - South Africa mining activity included until the
demerger on 4 June 2021, with prior year comparison up to 31 December 2020.
Production in 2021 was 65% below 2020, reflecting the partial year of
ownership, partly offset by Covid-19 related restrictions in 2020.
((7)) Represents the Group's attributable share from its 33.3% shareholding in
Cerrejón. The sale of Anglo American's interest in Cerrejón was completed on
11 January 2022 following receipt of the relevant regulatory approvals. The
agreement is effective 31 December 2020 and, therefore, economic benefits from
1 January 2021 have not accrued to Anglo American. Metrics reflect earnings
and volumes from the first half of the year only, before the agreement was
entered into. Production in 2021 was 13% below 2020 reflecting the partial
year recognised, partly offset by Covid-19 related restrictions in 2020.
Financial overview
Exploration
Exploration's underlying EBITDA loss was $128 million (2020: $101 million
loss), driven by increased exploration activities across most product groups
reflecting Covid-19 related restrictions in 2020.
Corporate activities and unallocated costs
Underlying EBITDA was a $63 million loss (2020: $44 million loss), driven
primarily by an increase in corporate costs across various technical and
strategic projects, partially offset by an increase in profits on third-party
shipping.
Thermal Coal - South Africa
Underlying EBITDA was $101 million (2020: $15 million loss), with underlying
EBITDA no longer reported by Anglo American from 4 June 2021, the date of the
demerger of the South Africa thermal coal operations. 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 are reported
on a net basis together with the Group's other third-party trading activities
within corporate activities and unallocated costs.
Thermal Coal - Colombia
Underlying EBITDA increased to $87 million. The sale of our 33.3% shareholding
in Cerrejón was completed on 11 January 2022, with the sale agreement
having an economic effective date of 31 December 2020. After the sale was
agreed in June 2021, no further underlying EBITDA was recorded, with an
impairment charge being recognised to offset reported earnings in the first
half of the year (see note 12 of the Condensed financial statements for
more detail).
Guidance summary
Production and unit costs
Unit costs Production volumes
2022F
Units 2022F 2023F 2024F
Diamonds((1)) c.$65/ct Mct 30-33 30-33 30-33
Copper((2)) c.140 c/lb kt 660-750 910-1,020 910-1,020
(previously 680-760)
PGMs - metal in concentrate((3)) c.$900/PGM ounce 4.1-4.5 4.1-4.5 4.1-4.5
Moz
Platinum Moz 1.9-2.1 1.9-2.1 1.9-2.1
Palladium Moz 1.3-1.4 1.3-1.4 1.3-1.4
Other Moz 0.9-1.0 0.9-1.0 0.9-1.0
PGMs - refined((4)) Moz 4.2-4.6 3.8-4.2 4.1-4.5
Iron ore((5)) c.$35/tonne Mt 63-67 64-68 67-71
Metallurgical coal((6)) c.$85/tonne Mt 20-22 22-24 24-26
(previously c.$80/tonne)
Nickel((7)) c.450 c/lb kt 40-42 41-43 42-44
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
2022 costs: ~16 ZAR:USD, ~1.4 AUD:USD, ~5.6 BRL:USD, ~830 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 (previously 120-160kt). 2023 Chile: 590-650kt; Peru: 320-370kt. 2024
Chile: 590-650kt; Peru 320-370kt. Chile production is subject to water
availability. Chile 2022 unit cost is c.145c/lb. Peru 2022 unit cost is
c.125c/lb and based on ramp-up production volumes. It is therefore highly
dependent on production start date and subject to further Covid-19 impacts.
Chile production in 2022 impacted by lower expected grades at Collahuasi and
Los Bronces, and lower water availability at Los Bronces. Peru production for
2022 has been revised down as a result of reduced workforce availability due
to Covid-19 following the spread of the Omicron variant in Peru in early 2022.
((3)) 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%).
((4) )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.
((5) )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: 39-41Mt; Minas-Rio: 24-26Mt. 2023 Kumba: 39-41Mt; Minas-Rio:
25-27Mt. 2024 Kumba: 41-43Mt; Minas-Rio: 26-28Mt. Kumba production is subject
to the third party rail and port performance. Kumba 2022 unit cost is
c.$41/tonne. Minas-Rio 2022 unit cost is c.$25/tonne.
((6)) Metallurgical Coal FOB/t unit cost comprises managed operations and
excludes royalties and study costs. Volumes excludes thermal coal production
in Australia. 2022 production guidance is expected to be at the lower end of
the range due to the delayed restart of operations at Grosvenor. 2022 unit
cost revision reflects the impact of the delayed restart of operations at
Grosvenor, resulting in production volumes towards the lower end of the
guidance range.
((7)) Nickel business unit only. 2023 and 2024 volumes dependent on bulk ore
sorting technology and briquetting.
Capital expenditure((1))
2022F 2023F 2024F
Growth $1.6-2.1bn (previously $1.7-2.2bn) $1.2-1.7bn $1.5-2.0bn
Includes ~$0.6bn Woodsmith capex (previously $0.7bn)
Sustaining ~$4.5bn ~$4.8bn ~$4.1bn
Reflects ~$3.4bn baseline plus ~$0.7bn lifex projects plus ~$0.4bn Collahuasi Reflects ~$3.5bn baseline plus ~$0.8bn lifex projects and ~$0.5bn Collahuasi Reflects ~$3.3bn baseline plus ~$0.6bn lifex projects and ~$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
(previously $6.2-6.7bn)
Further details on Anglo American's high quality growth and life-extension
projects, including details of the associated volumes benefit, are disclosed
on pages 11-14.
Long term sustaining capital expenditure is expected to be c.$3.0 billion per
annum((3)), excluding life-extension projects.
Other guidance
• 2022 depreciation: $3.0-3.2 billion
• 2022 effective tax rate: 33-35%((4))
• Long term effective tax rate: 31-35%((4))
• Dividend pay-out 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 FY 2021 results presentation slides 44 to 48 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 Juliet Newth
marcelo.esquivel@angloamerican.com juliet.newth@angloamerican.com
Tel: +44 (0)20 7968 8891 Tel: +44 (0)20 7968 8830
Katie Ryall Emma Waterworth
katie.ryall@angloamerican.com emma.waterworth@angloamerican.com
Tel: +44 (0)20 7968 8935 Tel: +44 (0)20 7968 8574
South Africa Michelle Jarman
Nevashnee Naicker michelle.jarman@angloamerican.com
nevashnee.naicker@angloamerican.com Tel: +44 (0)20 7968 1494
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 metallurgical coal for steelmaking,
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)
Webcast of presentation:
A live webcast of the results presentation, starting at 9.00am UK time on 24
February 2022, can be accessed through the Anglo American website at
www.angloamerican.com (http://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, 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 produce and transport products
profitably, the availability of transport infrastructure, the development,
efficacy and adoption of new technology, the impact of foreign currency
exchange rates on market prices and operating costs, the availability of
sufficient credit, 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, 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.
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 FR KXLFLLLLLBBBRecent news on Anglo American
See all newsREG - Morgan Stanley & Co. Anglo American PLC - Form 8.5 (EPT/RI)- Replacement of Anglo
AnnouncementREG - Morgan Stanley & Co. Anglo American PLC - Form 8.5 (EPT/RI)- Replacement of Anglo American
AnnouncementREG - State Street Global BHP Group Limited Anglo American PLC - Form 8.3 - Anglo American plc
AnnouncementREG - State Street Global Anglo American PLC BHP Group Limited - Form 8.3 - BHP Group Limited
AnnouncementREG - BlackRock Group Anglo American PLC - Form 8.3 - Anglo American plc
Announcement