REG - Anglo American PLC - Anglo American FY 2022 Financial Results
23/02/2023 07:00
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RNS Number : 7705Q Anglo American PLC 23 February 2023
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23 February 2023
Anglo American Preliminary Results 2022
Portfolio quality, diversification and growth support underlying EBITDA of
$14.5 billion
Financial highlights for the year ended 31 December 2022
•Underlying EBITDA* of $14.5 billion
•Profit attributable to equity shareholders of $4.5 billion
•Net debt* of $6.9 billion (<0.5 x underlying EBITDA): cash generation
offset by investment in value-adding growth
•Woodsmith impaired by $1.7 billion due to extended development schedule and
budget, designed to deliver maximum returns over long life of asset
•Quellaveco commissioned on time and on budget: multi-decade copper
operation ramping up
•$0.9 billion final dividend, equal to $0.74 per share, consistent with our
40% payout policy.
Duncan Wanblad, Chief Executive of Anglo American, said: "Anglo American
offers a differentiated investment proposition of portfolio quality,
diversification and growth, positioning us strongly for the structurally
attractive long term dynamics. Our unwavering focus is on driving consistent
performance across our operations - which starts with the safety and health of
our employees - and progress towards our full suite of sustainability
ambitions, including our 2040 carbon neutral operations commitment.
"Safety always comes first as we strive to reach zero harm for every one of
our people, every single day. While we continue to make progress on our long
term safety journey and further develop our safety processes and procedures,
we were deeply saddened to lose two colleagues at our managed operations
during the year. We will not rest until zero harm is achieved and sustained
across our business.
"We continued to feel the effects of dislocations in the global economy on our
business in 2022 - in energy, and across supply chains and labour markets.
Extreme weather has disrupted the lives of so many, with exceptional rainfall
also setting back several of our operations, while the energy crisis caused
policymakers to react to mitigate sharply higher inflation. With that
backdrop, we built momentum during the year with our focus on regaining
operational stability and targeted incremental performance improvement.
"Underlying EBITDA of $14.5 billion, a 30% decrease compared with the record
achieved in 2021, reflects inflationary headwinds and higher energy prices
combined with lower production volumes which, together, lifted our production
costs amid dampened prices for many of our products. We delivered a return on
capital employed of 30% - above our targeted 15% through-the-cycle return -
and a mining EBITDA margin of 47%. Our commitment to capital discipline and to
a strong and flexible balance sheet is paramount to remain resilient to the
external environment and retain optionality for value-adding growth. Net debt
increasing to $6.9 billion, or less than 0.5 x underlying EBITDA, reflects the
growth investments we are making in line with our belief in the strong long
term fundamentals. Our $0.9 billion final dividend of $0.74 per share is in
line with our 40% payout policy.
"The fundamental demand picture for future-enabling metals and minerals -
particularly those that are responsibly sourced with traceable provenance - is
ever more compelling. Our new Quellaveco copper operation in Peru increases
our global production base by 10%(1) and is the cornerstone of our
value-adding growth potential of 25%(2) over the next decade, with further
optionality beyond, from copper to crop nutrients. As most of the world's
major economies accelerate their decarbonisation efforts and as the global
population increases and continues to urbanise, we aim to keep growing the
value of our business into that demand."
Year ended 31 December 2022 31 December 2021 Change
US$ million, unless otherwise stated
Revenue 35,118 41,554 (15) %
Underlying EBITDA* 14,495 20,634 (30)%
Mining EBITDA margin* 47% 56%
Attributable free cash flow* 1,585 7,803 (80)%
Profit attributable to equity shareholders of the Company 4,514 8,562 (47)%
Basic underlying earnings per share* ($) 4.97 7.22 (31)%
Basic earnings per share ($) 3.72 6.93 (46)%
Final dividend per share ($) 0.74 1.18 (37)%
Interim dividend per share ($) 1.24 1.71 (27)%
Additional returns per share ($) - 2.10 n/a
Total dividend and buyback per share ($) 1.98 4.99 (60)%
Group attributable ROCE* 30% 43%
See page 2 for footnotes. Terms with this symbol * are defined as Alternative
Performance Measures (APMs). For more information, refer to page 86.
Sustainability performance
Key sustainability performance indicators(3)
Anglo American tracks its strategic progress using KPIs that are based on our
seven pillars of value: safety and health, environment, socio-political,
people, production, cost, and financial. In addition to the financial
performance set out above and our operational performance on pages 7-40, our
performance for the first four pillars is set out below:
Pillar of value Metric 31 December 31 December 2021(4) Target Target achieved
2022
Safety and Work-related fatal injuries(5) 2 2 Zero Not achieved
health
Total recordable injury frequency rate per million hours(5) 2.19 2.24 Year-on-year reduction On track
New cases of occupational 5 16 Year-on-year reduction On track
disease
Employees potentially exposed to noise over 85 dBA(6)(7) 23,179 30,832 Year-on-year reduction On track
Employees potentially exposed to inhalable hazards over the occupational 317 1,796 5% reduction year-on- On track
exposure limit (6)(7)
year
Environment Energy consumption (million GJ)(7) 83 84 Improve energy efficiency On track
by 30% by 2030
GHG emissions - Scopes 1 & 2 13.3 14.5 Reduce absolute GHG On track
emissions by 30%
(Mt CO2e)(7)
by 2030
Fresh water withdrawals (ML)(7)(8) 35,910 36,888 Reduce fresh water On track
abstraction in water
scarce areas by 50%
by 2030
Level 4-5 environmental incidents(7) 0 0 Zero On track
Socio- Social Way 3.0 implementation(9) 66% 49% Full implementation of the Behind
political
Social Way 3.0 by
schedule
end 2022
Local procurement spend ($bn)(10) 13.6 10.0
Taxes and royalties ($m)(11) 5,893 7,134
Number of jobs supported off site(12) 114,534 104,860
People Women in management 32% 31% To achieve 33% by 2023 On track
Women in the workforce 24% 23%
Voluntary labour turnover 3.6% 3.5% < 5% On track
(1)Copper equivalent volume growth from 2022 baseline, pre the commissioning
of Quellaveco.
(2)Copper equivalent production basis. Calculated including the equity share
of De Beers' production and using long term consensus parameters. It is
normalised to reflect the demerger of the South Africa thermal coal operations
and the sale of our interest in Cerrejón. Future production levels are
indicative and subject to final approval.
(3)Sustainability performance indicators for the year ended 31 December 2022,
and the comparative period, are not externally assured, unless otherwise
stated.
(4)2021 data includes Thermal Coal South Africa until the date of the Thungela
demerger on 4 June 2021, unless otherwise stated.
(5)Safety data is externally assured. The work-related fatal injuries figure
presented for 2021 has been restated to reflect the death of an employee in
April 2022, following a fall-related injury in November 2021. While the
Group's TRIFR improved year-on-year, it has not yet
decreased below the rate experienced in 2020. The focused safety interventions
in the second half of 2022 did, however, result in a significant improvement
in our injury rates, with a H2 2022 TRIFR of 2.00.
(6)Reflects the number of employees who work in environments where there is
potential for exposure above the exposure limit. All employees working in such
environments are issued with protective equipment to prevent occupational
illness.
(7)Energy, GHG emissions, occupational exposure, fresh water withdrawals and
Level 4-5 environmental incidents data is externally assured. Energy, GHG
emissions, fresh water withdrawals and occupational exposure data for 2021
excludes Thermal Coal South Africa.
(8)Water metric and data have been revised in line with our fresh water
definition.
(9)While sites are assessed annually against all requirements applicable to
their context, for consistency during the transition period, the metric
reflects performance against the Social Way foundational requirements. For
further information on progress, see page 5.
(10)Local procurement spend relates to spend within the country where an
operation is located. The basis of calculation reflects the Group's financial
accounting consolidation, i.e. 100% of subsidiaries and a proportionate share
of joint operations, based on Anglo American's shareholding.
(11)Taxes and royalties include all taxes and royalties borne and taxes
collected by the Group. This includes corporate income taxes, withholding
taxes, mining taxes and royalties, employee taxes and social security
contributions and other taxes, levies and duties directly incurred by the
Group, as well as taxes incurred by other parties (e.g. customers and
employees) but collected and paid by the Group on their behalf. Figures
disclosed are based on cash remitted, net of entities consolidated for
accounting purposes, plus a proportionate share, based on the percentage
shareholding, of joint operations. Taxes borne and collected by equity
accounted associates and joint ventures are not included.
(12)Jobs supported since 2018, in line with the Sustainable Mining Plan
Livelihoods stretch goal.
Safety
Anglo American's most important priority is always safety - keeping our
colleagues safe and well. We believe everybody, everywhere should return home
each and every day. 'Always safe' is our safety vision and safety is our
number one value.
In 2022, we continued to implement our safety strategy through targeted
tactics, and by investing in systems, standards and people. We enabled this
through digital innovation and advanced systems, informing and eliminating and
minimising risk wherever possible as we seek to be an innovative safety
leader.
While we continue to make progress on our long term safety journey, we were
deeply saddened to lose two colleagues at our managed operations during the
year - at our Steelmaking Coal business in Australia and at a De Beers
operation in Canada, as well as the loss of a colleague from a complication
following an injury sustained in our PGMs business in 2021. We also lost one
colleague at an non-managed PGMs joint operation in South Africa. As well as
thoroughly and rigorously investigating each of these tragic incidents and
sharing learnings internally, we are committed to also sharing those learnings
across the industry so that action can be taken to help prevent repeats and
achieve our 'Always safe' vision on a sustainable basis.
We are unconditional about safety, and we will not rest until zero harm is
achieved and sustained across our business. We have shown it can be done for
long stretches of time and now we must make it permanent. Everyone is
empowered to be a leader in safety and has a role to play in delivering an
injury-free and fatality-free workplace.
Our total recordable injury frequency rate (TRIFR) improved by 2% to 2.19
(2021: 2.24), reflecting the urgent safety reset and calls to action completed
across the Group in the second half of the year, in response to the fatal
incidents and the deterioration in overall safety performance in the first
half. We remain absolutely committed to working towards a step-change in the
reduction of injuries.
Safety is often the first topic discussed in meetings across the Group, from
operations to our corporate offices. We continually focus on improving our
safety performance by strengthening our culture, including ensuring our
workforce feels safe to speak up about concerns related to safety, and making
specific safety interventions when we see deficiencies in our operations.
During 2022, our areas of focus included Chief Executive safety summits with
senior leaders from across the business units; observing and actively
monitoring mandatory critical controls for common catastrophic and fatal
risks; sharing of lessons learned and actions taken from incidents across the
organisation; safety stand-downs (voluntary events to pause production and
talk with employees and contractors about safety); employee-engagement
sessions; and enhanced reporting and progress tracking of safety-improvement
initiatives.
We also held Contractor Safety Engagement Summits between senior Anglo
American leaders and key suppliers around the world.
Health
Our health focus remains on helping keep our people protected from Covid-19,
while sustaining our work to continuously improve our key health measures. We
continued to work to prevent the spread of Covid-19 among our employees and in
our host communities, primarily through testing and providing access to
vaccines and boosters as
part of our WeCare programme. This approach provides three phases of support -
Prevention, Response and Recovery - relating to physical health, mental
health, living with dignity, and community response interventions.
Alongside the continued deployment of testing, we also focused on vaccine
access. We worked in close partnership with national and local governments
around the world to help deliver vaccinations to our employees, contractors
and host communities. We have mobilised resources to manage 'long Covid',
where people continue to feel symptoms of the disease for weeks or even months
after its typical course.
In 2022, there were 5 reported new cases of occupational disease, all related
to noise exposure (2021:16). Reducing exposure to noise, which remains our
single greatest occupational health risk, is a significant challenge. While
all our employees are issued with and trained in the use of PPE, there are
still as many as 23,000 employees in the workplace where noise levels can
exceed applicable exposure levels, rending the proper use of PPE necessary as
a mitigation mechanism. The identification and monitoring of critical noise
controls allow us to analyse the effectiveness of our controls and develop
additional measures. The comprehensive roll-out of diesel particulate filters
across our PGMs business contributed to the reduction in employees exposed to
inhalable hazards.
In 2022, we focused on the implementation of our Health and Well-being
strategy in line with the World Health Organization (WHO) principles, covering
employee health, in accordance with our global approach to quality of life.
We understand there is a continuum between the workplace and home and host
communities. We are committed to dedicating the resources required to apply
evidence-based interventions, including emerging digital solutions, aimed at
reducing risks associated with occupational diseases, as well as with
unhealthy lifestyles, including smoking and poor diet.
Our many years of work with employees and host communities on HIV/AIDS and TB,
and over nearly three years on Covid-19, have positioned us to extend our
learnings from managing communicable diseases to non-communicable diseases, a
major focus in 2022.
The launch of our digital health strategy is driven by the concept of virtual
care and our ability to use mobile data devices and a growing range of
applications to help individuals harness their own health information.
People
Tightly linked to our safety imperative and our Values, we strive to create a
workplace that places people even more at its heart. People are central to
everything we do, and each individual has expectations of us. Workforce
engagement is a priority for every leader at Anglo American and we aim to
create safe, inclusive and diverse workplaces that encourage high performance
and innovative thinking. We have zero tolerance for any form of bullying,
harassment or victimisation and we know there is no room for complacency when
it comes to culture in any organisation. To that end, we have extensive
training, systems and processes in place to keep improving both physical and
psychological safety. We will continue to embed and launch initiatives that
will allow us to realise our vision of a truly inclusive workplace where every
employee can reach their full potential.
We also continue to make further progress to reach our gender representation
goal of 33% female representation by the end of 2023 at all management levels,
across the business. We have set a similar target for 33% of our Group
Management Committee and those reporting to the committee to be women by the
end of 2023. The proportion of women at this level was in line with the prior
year at 29%. At the end of 2022, and across Anglo American as a whole, 24% of
our employees were women.
Living with Dignity - building a safe and inclusive culture
Building a safe and inclusive culture has been a focus for us for a number of
years and this is constant work for any company or society. We are committed
to listening to our people and other stakeholders that are close to our
business every day.
We have long understood the role of our business in society, and we believe
that this extends beyond our own mine gates. We launched our Living with
Dignity programme in 2019, founded on the belief that everyone has the right
to dignity - in our homes, schools, at work and everywhere in between. Through
this programme, Anglo American is working collaboratively with our partners in
government and civil society to build sustainable partnerships aimed at
providing direct employee and community support to combat gender-based and
domestic violence.
We continue to build on this important work and we have now established our
Living with Dignity Hub in South Africa that brings together our policies and
its mandates to provide ongoing and committed support to our employees,
contractors and their families. The hub handles all formal complaints of
sexual harassment and gender-based violence and bullying, harassment and
victimisation across our South African footprint and is overseen by an
independent Ambassador to ensure we stand by our policies and remain committed
to amplifying our efforts.
Environment
Our Sustainable Mining Plan includes commitments to be a leader in
environmental stewardship. By 2030, we aim to reduce GHG emissions (Scopes 1
and 2) by 30%; improve energy efficiency by 30%; achieve a 50% reduction in
fresh water abstraction in water scarce areas; and deliver net-positive
impacts in biodiversity wherever we operate.
Our environmental performance continues to improve. In 2022, we saw no Level 5
environmental incidents at our managed operations, for the tenth consecutive
year, and no Level 4 incidents. There was, unfortunately, one Level 3 incident
reported in 2022, at our Polokwane PGMs smelter, related to water discharge
following a period of significant storm water. The discharge did not result in
any environmental toxic impact. A full investigations was carried out and
lessons learned across both PGMs and the wider Anglo American Group. We
launched a 'no repeats' challenge last year to help us learn from low level
incidents and prevent repeats of a similar nature across the business, which
has led to improvements in controls, specifically helping to prevent
significant incidents.
Both energy consumption and GHG emissions decreased in the year and we remain
committed to improving energy efficiency by 30% and reducing absolute GHG
emissions by 30%, by 2030. We have a target to be carbon neutral across our
operations by 2040, and an ambition to halve our Scope 3 emissions, 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 from 2023, and for our Steelmaking Coal operations in Australia from
2025, we expect to be drawing approximately 60% of our global grid supply from
renewables from 2025.
As part of the our ambition to reduce our Scope 3 emissions by 50% by 2040, we
are focusing on hard-to-abate sectors such as steel - from which most of our
value chain emissions derive. We are joining forces with steelmakers in Europe
and Asia to research efficient feed materials - capitalising on the premium
physical and chemical qualities of our minerals, including iron ore pellets
and lump iron ore. These premium products are suited for use in the direct
reduced iron (DRI) process, a technically proven and significantly less carbon
intensive steel production method.
Examples of this approach include the memorandum of understanding (MOU)
announced in July, between Anglo American and Nippon Steel Corporation, where
the two companies will research ways to optimise premium lump ore produced by
Anglo American's mines to decrease emissions via the traditional blast furnace
(BF) steelmaking process; and the MOU announced in October, between Anglo
American and its longstanding customer Thyssenkrupp Steel, to collaborate on
developing new pathways for the decarbonisation of steelmaking.
Socio-political
In 2022, we continued working to strengthen and broaden our social performance
competencies through embedding the Social Way 3.0 (launched in 2020) across
the organisation. As part of the implementation process, each site and
function has established cross-functional Social Performance Management
Committees.
Over 2,000 people across the business have participated in Social Way training
sessions since 2020. This includes orientation sessions for leaders,
completing Social Way Foundation Training, as well as cross-functional Social
Way Foundation Training for non-social performance teams, at all sites,
business units and relevant functions.
At the end of 2022, 66% of Social Way 3.0 foundational requirements were
implemented. While we did not meet our ambitious goal of implementation of the
Social Way 3.0 at all sites by the end of 2022, we continued to make
significant progress and recognise the very much higher standards (the highest
that we are aware of across our industry) required of this third version of
our social management system. The programme is critical to underpinning many
of our ambitious 2030 Sustainable Mining Plan targets, demonstrating our
commitment to partnering with host communities and governments.
The success of our business drives tax revenues for host communities, in
addition to significant royalty and mining tax payments made regardless of our
profitability, and our broader economic contribution to other stakeholders.
Total taxes and royalties borne and taxes collected amounted to $5.9 billion,
a 17% decrease compared with 2021.
Anglo American has committed to support three off site jobs by 2025, and five
off site jobs by 2030 for every on site job. Since the launch our Sustainable
Mining Plan, 114,534 off site jobs have been supported through socio-economic
development programmes, including local procurement, enterprise and supplier
development initiatives, training, mentoring and capacity development, loan
funding to small businesses, agriculture programmes, and collaborative
regional development initiatives.
In June, we signed a $100 million 10-year sustainability-linked loan agreement
with the International Finance Corporation. The specific goals tied to the
loan agreement are aimed at supporting community development in rural
communities close to our operations across South Africa, including by
promoting the creation of jobs, as well as improving the quality of education
for more than 73,000 students.
In September, we issued our first sustainability-linked bond, including
performance targets to reduce greenhouse gas emissions and fresh water
abstraction, and to support job creation in host communities. This €745
million bond is the first instrument issued following the publication of Anglo
American's Sustainability Financing Framework and bond investors will be
entitled to a higher final coupon payment should the company not meet the
targets.
Sustainable Mining Plan - update in progress
We launched Anglo American's Sustainable Mining Plan in 2018, setting out
three sustainability pillars and a number of medium and longer term stretch
goals for each, guided by our Purpose and supported by six critical
foundations that underpin how we do business. The three pillars of Healthy
Environment, Thriving Communities, and Trusted Corporate Leader encapsulate
the holistic realities of what it means to be a socially responsible and
ultimately sustainable business. We continue to make good progress towards our
2025 and 2030 goals, as laid out in the table on page 2, in addition to
progress towards our 2040 carbon neutral operations target that we added in
2020.
Our Sustainable Mining Plan is designed to be a living plan and we will
continue to evolve it to ensure it stays relevant and suitably stretching, in
tune with our employees' and stakeholders' ambitions for our business. We are
currently exploring a number of areas that we feel would benefit from being
incorporated into the Sustainable Mining Plan and will update the plan when we
have developed these options more fully.
Operational and financial review of Group results for the year ended
31 December 2022
Operational performance
The impact of adverse weather and planned lower grades at many of our
operations contributed to a 2% production decrease on a copper equivalent
basis(1). Extreme rainfall in Brazil, South Africa and Australia affected iron
ore production at Minas-Rio and Kumba, steelmaking coal production at Capcoal
and Dawson, and nickel production at Barro Alto. First copper concentrate
production from our newly commissioned Quellaveco copper mine in Peru more
than offset lower production at our copper operations in Chile that were due
to planned lower grades at Los Bronces and Collahuasi. Lower grades also
impacted production at Mogalakwena (PGMs) and Barro Alto (Nickel). The planned
end of mining at the Grasstree steelmaking coal operation was partially offset
by the ramp-up of the replacement Aquila longwall. De Beers increased
production in line with continued strong demand for rough diamonds.
De Beers' rough diamond production increased by 7% to 34.6 million carats
(2021: 32.3 million carats), reflecting strong operational performance and
higher planned levels of production to meet continued strong demand for rough
diamonds, particularly in the first half of the year.
Total copper production of 664,500 tonnes increased by 3% (2021: 647,200
tonnes). Copper Chile's production of 562,200 tonnes was 13% lower than the
prior year (2021: 647,200 tonnes), principally driven by Los Bronces, where
production decreased by 17% to 270,900 tonnes (2021: 327,700 tonnes) due to
planned lower grades, coupled with unfavourable ore characteristics and
unplanned stoppages. Planned lower grades at Collahuasi resulted in a 9%
decrease in attributable production to 251,100 tonnes (2021: 277,200 tonnes).
Copper Peru (Quellaveco) delivered 102,300 tonnes of production, reflecting
the ongoing ramp-up of the newly commissioned mine in July 2022.
Nickel production decreased by 5% to 39,800 tonnes (2021: 41,700 tonnes),
primarily due to lower ore grades as a result of licensing delays, as well as
the impact of unplanned maintenance and heavy rainfall.
Total PGM production decreased by 6% to 4,024,000 ounces (2021: 4,298,700
ounces), principally due to lower grade at Mogalakwena and the impact of
planned infrastructure closures at Amandelbult, partially offset by increased
production from Mototolo and Unki.
Iron ore production decreased by 7% to 59.3 Mt (2021: 63.8 Mt). At Kumba,
production decreased by 8% to 37.7 Mt (2021: 40.9 Mt), reflecting the impact
of high rainfall across Kumba's operating footprint and a safety intervention
at Kolomela, as well as equipment reliability and the impact of third-party
logistics constraints at both mines. Minas-Rio production decreased by 6% to
21.6 Mt (2021: 22.9 Mt) due to more challenging ore feed characteristics,
lower mining equipment availability and heavy rainfall.
Steelmaking coal production was in line with the prior year at 15.0 Mt (2021:
14.9 Mt), with all three underground longwalls operating in the second half of
2022. The planned end of mining at the Grasstree operation in January 2022 was
partially offset by the ramp-up of the replacement Aquila longwall, which
began operations in February and fully ramped up in June. Production was also
impacted by tight labour markets and record unseasonal rainfall at the open
pit operations.
Manganese ore production was in line with the prior period at 3.7 Mt (2021:
3.7 Mt).
Group copper equivalent unit costs(1) increased by 15% in US dollar terms,
largely due to lower production volumes and inflationary pressures,
particularly diesel, partially offset by favourable foreign exchange.
(1)Copper equivalent production and unit cost is normalised to reflect the
demerger of the South Africa thermal coal operations and the sale of our
shareholding in Cerrejón.
Financial performance
Anglo American's profit attributable to equity shareholders decreased to
$4.5 billion (2021: $8.6 billion). Underlying earnings were $6.0 billion
(2021: $8.9 billion), while operating profit was $9.2 billion (2021: $17.6
billion).
Underlying EBITDA*
Group underlying EBITDA decreased by $6.1 billion to $14.5 billion
(2021: $20.6 billion) due to a decrease in the price for the Group's basket
of products, lower sales volumes and higher input costs across the Group. As a
result, the Group Mining EBITDA margin* of 47% was lower than the prior year
(2021: 56%). 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
Year ended Year ended
$ million 31 December 2022 31 December 2021
De Beers 1,417 1,100
Copper 2,182 4,011
Nickel 381 320
PGMs 4,417 7,099
Iron Ore 3,455 6,871
Steelmaking Coal 2,749 962
Manganese 378 315
Crop Nutrients (44) (41)
Corporate and other (440) (3)
Total 14,495 20,634
Underlying EBITDA* reconciliation for the year ended 31 December 2021 to
year ended 31 December 2022
The reconciliation of underlying EBITDA from $20.6 billion in 2021 to
$14.5 billion in 2022 shows the major controllable factors (e.g. cost and
volume), as well as those outside of management control (e.g. price, foreign
exchange and inflation), that drive the Group's performance.
$ billion
2021 underlying EBITDA* 20.6
Price (2.2)
Foreign exchange 1.1
Inflation (0.9)
Net cost and volume (3.3)
Other (0.8)
2022 underlying EBITDA* 14.5
Price
Average market prices for the Group's basket of products decreased by
6% compared to 2021, reducing underlying EBITDA by $2.2 billion. Realised
prices decreased for iron ore (29%), copper (15%) and the PGMs basket (8%) -
primarily driven by rhodium, which decreased by 20%. These were partly offset
by steelmaking coal prices, where the weighted average price increased by 52%,
and De Beers, where the realised price increased by 35%.
Foreign exchange
The favourable foreign exchange impact on underlying EBITDA of
$1.1 billion reflected weaker local currencies in many of our countries of
operation, principally the South African rand.
Inflation
The Group's weighted average CPI for the year was 8%, compared with 5% in
2021, as inflation increased in all regions. The impact of CPI inflation on
costs reduced underlying EBITDA by $0.9 billion.
Net cost and volume
The net impact of cost and volume was a $3.3 billion reduction in underlying
EBITDA, driven by lower PGM sales from planned lower refined volumes following
the higher than normal work-in-progress inventory in 2021, and the impact of
the Polokwane smelter rebuild in the second half of 2022; lower copper sales
from the Chile operations owing to planned lower grades at all sites, coupled
with unfavourable ore characteristics and unplanned stoppages at Los Bronces;
lower sales volumes at Kumba owing to third-party logistics constraints; and
lower sales volumes at Minas-Rio due to challenging ore characteristics, lower
mining equipment availability and heavy rainfall. In addition to these volume
impacts, inflationary pressures (other than CPI) contributed to an increase in
costs across the Group. This was partly offset by the start of copper
concentrate sales volumes in September 2022, and the ongoing ramp-up of the
newly commissioned Quellaveco mine.
Other
The $0.8 billion unfavourable movement in underlying EBITDA from other factors
was driven by the demerger and sale of thermal coal assets, resulting in an
EBITDA reduction of $0.2 billion. Also included are increases in environmental
restoration provisions of $0.2 billion at the copper business in Chile and
$0.1 billion at De Beers, and the impact of lower sales volumes and cost
pressures at our associates and joint operations.
Underlying earnings*
Group underlying earnings decreased to $6.0 billion (2021: $8.9 billion),
driven by the lower underlying EBITDA, partly offset by a corresponding
decrease in income tax expense and earnings attributable to non‑controlling
interests.
Reconciliation from underlying EBITDA* to underlying earnings*
Year ended Year ended
$ million 31 December 2022 31 December 2021
Underlying EBITDA* 14,495 20,634
Depreciation and amortisation (2,532) (2,844)
Net finance costs and income tax expense (4,307) (5,783)
Non-controlling interests (1,620) (3,082)
Underlying earnings* 6,036 8,925
Depreciation and amortisation
Depreciation and amortisation decreased by 11% to $2.5 billion
(2021: $2.8 billion), reflecting the lower cost base of Steelmaking Coal
assets due to the impairment recognised in 2021, foreign currency exchange
impacts and the demerger and sale of thermal coal assets in the prior year.
Net finance costs and income tax expense
Net finance costs, before special items and remeasurements, were in line with
the prior year at $0.3 billion (2021: $0.3 billion).
The underlying effective tax rate was 34.0% (2021: 31.4%). The underlying
effective tax rate was impacted by the relative levels of profits arising in
the Group's operating jurisdictions. The tax charge for the period, before
special items and remeasurements, was $3.6 billion (2021: $5.3 billion). Over
the longer term, the underlying effective tax rate is expected to be in the
range of 33% to 37%.
Non-controlling interests
The share of underlying earnings attributable to non-controlling interests of
$1.6 billion (2021: $3.1 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 $1.5 billion (2021: net charge of $0.4 billion),
principally relating to impairments after tax and non-controlling interests of
$1.7 billion recognised in Crop Nutrients, and $0.1 billion recognised in
Kumba, partially offset by an impairment reversal after tax of
$0.3 billion at Steelmaking Coal.
Full details of the special items and remeasurements recorded are included in
note 9 to the Condensed financial statements.
Net debt*
$ million 2022 2021
Opening net debt* at 1 January (3,842) (5,530)
Underlying EBITDA* from subsidiaries and joint operations 13,370 19,808
Working capital movements (2,102) 1,059
Other cash flows from operations 621 (279)
Cash flows from operations 11,889 20,588
Capital repayments of lease obligations (266) (336)
Cash tax paid (2,726) (4,341)
Dividends from associates, joint ventures and financial asset investments 602 236
Net interest(1) (253) (245)
Dividends paid to non-controlling interests (1,794) (2,838)
Sustaining capital expenditure(2) (4,143) (3,437)
Sustaining attributable free cash flow* 3,309 9,627
Growth capital expenditure and other(2) (1,724) (1,824)
Attributable free cash flow* 1,585 7,803
Dividends to Anglo American plc shareholders (3,549) (4,047)
Disposals 564 63
Foreign exchange and fair value movements (238) (227)
Other net debt movements(3) (1,438) (1,904)
Total movement in net debt* (3,076) 1,688
Closing net debt* at 31 December (6,918) (3,842)
(1) Includes cash outflows of $14 million (2021: inflows of
$101 million), relating to interest receipts on derivatives hedging net debt,
which are included in cash flows from derivatives related to financing
activities.
(2) Following an amendment to IAS16 Proceeds before intended use,
operating cash flows relating to sustaining and growth capital expenditure are
no longer capitalised. For further details, refer to note 2 of the Condensed
Financial Statements. Included within sustaining capital expenditure for
the year ended 31 December 2021 is $8 million of capitalised operating
cash flows relating to life-extension projects. 'Growth capital expenditure
and other' includes $129 million (2021: $68 million) of expenditure on
non-current intangible assets and $4 million of capitalised operating cash
flows relating to growth projects for the year ended 31 December 2021.
(3) Includes the purchase of shares under the 2021 buyback of $186
million; the purchase of shares for other purposes (including for employee
share schemes) of $341 million; Mitsubishi's share of Quellaveco capital
expenditure of $446 million; other movements in lease liabilities (excluding
variable vessel leases) decreasing net debt by $33 million; and contingent and
deferred consideration paid in respect of acquisitions completed in previous
years of $165 million. 2021 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; other movements in lease liabilities
(excluding variable vessel leases) increasing net debt by $340 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.
Net debt (including related derivatives) of $6.9 billion has increased by
$3.1 billion since 31 December 2021, driven by working capital cash outflows
of $2.1 billion primarily due to inventory builds. The Group generated
sustaining attributable free cash inflows of $3.3 billion, used in part to
fund growth capital expenditure of $1.6 billion and dividends paid to
Anglo American plc shareholders of $3.5 billion. Net debt at
31 December 2022 represented gearing (net debt to total capital) of 17%
(2021: 10%).
Cash flow
Cash flows from operations
Cash flows from operations decreased to $11.9 billion
(2021: $20.6 billion), reflecting a reduction in underlying EBITDA from
subsidiaries and joint operations, and a working capital build of
$2.1 billion (2021: release of $1.1 billion). The inventory increase of
$1.8 billion was driven by a delay in the rebuild of the Polokwane smelter
and
an increase in purchase of concentrate at PGMs, as well as an increase at De
Beers and in finished products at Copper and Kumba. An increase in
receivables of $0.4 billion was largely due to the start of copper
concentrate sales in September 2022, following the ongoing ramp-up of
operations at Quellaveco (Copper Peru). Payables are broadly flat, with the
ramp-up of operations at Quellaveco being offset by the settlement of
provisional price adjustments within Iron Ore.
Capital expenditure*
Year ended Year ended
$ million 31 December 2022 31 December 2021
Stay-in-business 2,558 2,068
Development and stripping 1,010 904
Life-extension projects 582 474
Proceeds from disposal of property, plant and equipment (7) (17)
Sustaining capital 4,143 3,429
Growth projects 1,595 1,752
Total 5,738 5,181
Capitalised operating cash flows - 12
Total capital expenditure 5,738 5,193
Capital expenditure increased to $5.7 billion (2021: $5.2 billion), owing
to deferred expenditure from 2021, and a planned increase in investment
programmes.
Sustaining capital expenditure increased to $4.1 billion
(2021: $3.4 billion), largely driven by the Collahuasi desalination plant
in Chile, deferred expenditure from 2021, and capitalised waste stripping at
Quellaveco being classified as sustaining capital expenditure from July
2022 as the project commenced the ramp-up of operations.
Growth capital expenditure was $1.6 billion (2021: $1.8 billion), mostly
driven by the Quellaveco project, which delivered first production of copper
concentrate in July 2022, and Woodsmith.
Attributable free cash flow*
The Group's attributable free cash flow decreased to $1.6 billion
(2021: $7.8 billion) due to lower cash flows from operations of
$11.9 billion (2021: $20.6 billion) and higher capital expenditure of
$5.7 billion (2021: $5.2 billion). This was partially offset by decreased
tax payments of $2.7 billion (2021: $4.3 billion) and a reduction in
dividends paid to non-controlling interests of $1.8 billion (2021: $2.8
billion).
Shareholder returns
In line with the Group's established dividend policy to pay out 40% of
underlying earnings, the Board has proposed a final dividend of $0.74 per
share (2021: $1.18 ordinary dividend per share and $0.50 special dividend per
share), equivalent to $0.9 billion (2021: $2.1 billion including special
dividend).
Disposals
On 11 January 2022, the Group completed the sale of its 33.3% shareholding in
Cerrejón to Glencore plc for a total cash consideration of approximately $294
million - of which $50 million was received in January, after adjustment for
dividends received in 2021. This sale represents the final stage of Anglo
American's previously announced responsible transition away from thermal coal
operations.
On 25 March 2022, the Group announced the sale of its remaining 8.0%
shareholding in Thungela Resources Limited, realising gross proceeds of R1,672
million (approximately $115 million). Anglo American's Marketing business
continues to support Thungela in the sale and marketing of its products, and
sales and purchases under the offtake agreement will continue to be reported
on a net basis, together with the Group's other third-party trading
activities.
Anglo American Platinum, together with its joint venture partner Atlatsa
Resources Corporation, concluded the disposal of the Bokoni mine to African
Rainbow Minerals in September 2022.
In addition, there were cash receipts principally relating to the settlement
of deferred consideration balances on the sale of the Rustenburg operations
(PGMs) that was completed in November 2016.
Balance sheet
Net assets decreased by $0.7 billion to $34.0 billion (2021: $34.8 billion),
reflecting dividend payments, additional shareholder returns to Company
shareholders and non-controlling interests, partially offset by the profit in
the period.
Attributable ROCE*
Attributable ROCE decreased to 30% (2021: 43%). Attributable underlying EBIT
decreased to $9.7 billion (2021: $13.5 billion), reflecting the impact of
higher input costs, unfavourable sales volumes and lower realised prices
achieved for the Group's products. Average attributable capital employed has
increased to $32.0 billion (2021: $31.4 billion), primarily due to growth
capital expenditure, largely at Quellaveco (Copper).
Liquidity and funding
Group liquidity stands at $16.1 billion (2021: $17.1 billion), comprising
$8.4 billion of cash and cash equivalents (2021: $9.1 billion) and
$7.7 billion of undrawn committed facilities (2021: $8.0 billion).
During 2022, the Group issued $2.0 billion of bond debt. In March 2022, the
Group issued $500 million 3.875% Senior Notes due 2029, and $750 million
4.750% Senior Notes due 2052 and in September 2022, its first €745 million
4.75% sustainability-linked bond due 2032.
The weighted average maturity on the Group's bonds increased to 7.7 years
(2021: 6.2 years).
The Group has an undrawn $4.7 billion revolving credit facility due to mature
in March 2025.
The Group received an upgrade to BBB+ (stable outlook) in November 2022 from
S&P Global Ratings.
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 major global consumer demand trends.
Aligned to this strategy, we delivered the newly commissioned Quellaveco
copper mine in Peru in July 2022, with commercial operations starting in
September. The operation continues to ramp up and is expected to reach
nameplate capacity around mid-2023.
The Group also entered into the below agreements in the second half of 2022:
On 14 September 2022, Anglo American plc issued its first
sustainability-linked bond, including performance targets to reduce greenhouse
gas emissions and fresh water abstraction, and to support job creation in host
communities. This €745 million bond is the first instrument issued following
the publication of Anglo American's Sustainability Financing Framework and
bond investors will be entitled to a higher final coupon payment should the
company not meet specific sustainability targets.
On 4 October 2022, Anglo American in partnership with EDF
Renewables announced their agreement to form a new jointly owned company,
Envusa Energy, to develop a regional renewable energy ecosystem (RREE) in
South Africa. As part of the agreement, Envusa Energy is launching a mature
pipeline of more than 600 MW of wind and solar projects in South Africa - a
major first step towards the development of an ecosystem that is expected to
generate 3-5 GW of renewable energy by 2030.
On 16 November 2022, Anglo American agreed terms for a 10-year partnership
with Stanwell Corporation, the Queensland Government-owned provider of
electricity and energy solutions, to source the supply of 100% renewable
electricity for its operations in Australia from 2025, supporting Anglo
American's progress towards carbon neutral operations by 2040.
In November 2022, we signed an agreement with Aguas Pacífico, a Chilean water
desalination and solutions provider, to secure desalinated water for our
Los Bronces copper mine. In this first phase, the desalination plant will
supply up to 500 litres per second of desalinated water to the mine from 2025,
via a pipeline from the plant to a water-reception pool at our Las Tórtolas
operation. This desalinated water will supply more than 45% of Los Bronces'
needs while also providing clean water to approximately 20,000 people in the
communities of Colina and Til Til, local to the operation.
On 24 November 2022, Anglo American signed a memorandum of understanding with
Aurubis AG (Aurubis) - a global provider of non-ferrous metals and one of the
world's largest copper recyclers - to develop a copper product offering that
responds to increasing expectations for future-enabling metals that are
sustainably sourced and supplied. The objective of the collaboration is to
provide assurance around the way copper is mined, processed, transported and
brought to market.
In addition, on 7 December 2022, Anglo American signed a binding agreement to
combine Anglo American's nuGen™ Zero Emissions Haulage Solution (ZEHS) with
First Mode Holding Inc. (First Mode), the specialist engineering technology
company that partnered with Anglo American to develop the nuGen™ ZEHS. The
combination is expected to accelerate the development and deployment of the
ZEHS technology across Anglo American's mine haul truck fleet, while exploring
commercial opportunities for ZEHS across other industries that rely on heavy
duty forms of transport. The transaction was completed on 5 January 2023.
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 c.2.8 (Anglo c.0.1 (Anglo 2022 Construction began in 2018.
Moquegua, Peru
American 60%
American 60%
producing c.300 ktpa
share)
share)
copper equivalent (100%
basis, 180 ktpa copper First production of concentrate in July 2022 and the start of commercial
equivalent our share) over operations in September 2022.
the first 10 years.
Ramp-up of the process plant is ongoing with full nameplate capacity expected
around mid-2023.
Refer to the Technology projects table below for Coarse Particle Recovery at
Quellaveco.
Collahuasi At Collahuasi, the Fifth ball mill c.0.1 Additional 2023 Environmental approval
independently managed
(44% basis)
expansion studies
(EIA) was obtained in
joint operation (Copper),
ongoing. Subject to
December 2021,
the implementation of the
permitting and
enabling expansion of the
approved fifth ball mill is
approvals
processing capacity up to
progressing to plan with
210 ktpd, and the
ramp up expected to
construction of a
commence in Q4 2023.
desalination plant and
Additional
related infrastructure to
debottlenecking options
provide a sustainable
to further increase
alternative water source.
production remain under
study and are expected to
The fifth ball mill project
add 20-50 ktpa (44%
(first stage of the
basis) in the medium term.
expansion) is progressing
Further expansions are in
according to plan. The
early-stage study to
expected start-up is
increase plant capacity
during Q4 2023.
beyond 210 ktpd,
delivering over 100 ktpa
of copper (44% basis).
Diamonds
Marine Namibia New diamond recovery c.0.2 (Anglo 0 2022 Construction began in
vessel, adding 0.5 Mctpa
American 50%
2019.
(100% basis) of some of
share)
the highest value
The vessel is now
diamonds in the portfolio.
contributing to marine
production, having been
successfully
commissioned ahead of
schedule and below
budget in Q1 2022.
Operation Scope Capex Remaining capex First production Progress
$bn
$bn
Crop Nutrients
Woodsmith New polyhalite (natural Subject to Subject to Subject to Significant changes have
mineral fertiliser) mine
development
development
development
been made to the scope,
being developed in
timeline review
timeline review
timeline review
design and approach to
Yorkshire, UK. Expected to
execution of the project.
produce POLY4 - a
These changes will allow
premium quality, low
future optionality for a
carbon fertiliser suitable
larger operating footprint,
for organic use. Studies
to be delivered in a
remain ongoing but the
phased approach in step
indicative design capacity
with market development,
is currently expected to be
and optimise the value of
c.13 Mtpa.
the asset for the long
term.
These changes are
expected to result in an
extended project and
ramp up schedule, with
first product to market
expected to be available
in 2027, and higher
capital expenditure than
envisaged at the time of
acquisition. The critical
path construction
activities of shaft sinking
and tunnel boring
continue to progress well
and, as we continue to
develop the revised plan,
additional studies will
focus on optimisation of
the mine development,
materials transport and
handling facilities, to
support the phased
approach.
c.$0.8 bn capex has been
approved for 2023 to
progress critical path
activities.
Iron Ore
Sishen Implementation of Ultra Under review Under review Under review Project plan under review.
High Dense Media
Separation (UHDMS)
technology at Kumba's
Sishen operation will
enable an increase in
premium product
production and the
beneficiation of lower
grade run-of-mine
(between 40% Fe and
48% Fe). In addition, the
project contributes an
additional 3-4 years to
Sishen's life of asset to
2039.
Operation Scope Capex Remaining capex First production Progress
$bn
$bn
PGMs
Mogalakwena Evaluating various options Number of Not yet approved Under review The Future of Mogalakwena work continues to make good progress in the six
to expand PGM
options being workstreams.
production of the mine
considered
through technology
development and
deployment and the
optimal mine plan to
deliver feed to the
concentrators.
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 capex Expected first Progress
$bn
$bn
production
Diamonds
Venetia 4 Mctpa underground replacement for the existing open pit. The project is 2.1 1.0 2023 The mining of the Venetia
expected to add an estimated 88 million carats from approximately 132 million
open pit was completed
tonnes of material(1) and extend the life of the mine to 2047.
in December 2022, and
the mine will transition to
underground mining
operations in 2023.
Jwaneng 9 Mctpa replacement (100% basis) for Cuts 7 and 8. The Cut-9 expansion of 0.3 (Anglo 0.2 (Anglo American 2027 Project progressing on
Jwaneng will extend the life of the mine to 2036 and is expected to yield
American 19.2%
19.2% share)
schedule.
approximately 59 million carats of rough diamonds from approximately
share)
49 million tonnes of material(1).
Steelmaking Coal
Aquila 3.5 Mtpa (70% basis), 0.2 (Anglo 0 2022 Development work
7 year replacement for
American 70%
began in September
the Grasstree operation
share)
2019 and first longwall
which has reached the
production began in
end of life. Aquila is a
February 2022.
longwall operation
leveraging the existing
Grasstree infrastructure
and producing high
quality hard coking coal
to 2029.
Iron Ore
Kolomela 4 Mtpa high grade iron 0.4 0.2 2024 Approved in July 2020. Pit
ore replacement project.
establishment and waste
The development of a
stripping commenced in
new pit, Kapstevel South,
2021, with first ore
and associated
expected in 2024.
infrastructure at Kolomela
to help sustain output of
c.12 Mtpa and extend the
remaining life of mine to
2034.
PGMs
Mototolo/ The development of the 0.2 0.2 2024 Approved in December
Der Brochen
project leverages the
2021. Execution
existing Mototolo
commenced in Q1 2022.
infrastructure, enabling
First production expected
mining to extend into the
in 2024.
adjacent and down-dip
Der Brochen resource to
extend the life of the asset
beyond 30 years.
(1) Refer to Anglo American plc Ore Reserves and Mineral Resources
Report 2022 for additional information.
Technology projects(1)
The Group plans to continue investing c. $0.2-0.5 billion per year on projects
to support the FutureSmart MiningTM programme and the delivery of Anglo
American's Sustainable Mining Plan targets, particularly those that relate to
safety, energy, emissions and water, including the following innovative
technology projects (metrics presented on a 100% basis unless otherwise
indicated):
Initiative Scope Progress
Copper, PGMs, and Nickel
Bulk ore sorting (BOS) Deliver improved feed grade to plants -Mogalakwena (PGMs) North Concentrator (~70% of complex feed) and Los Bronces
through early rejection of waste, resulting (Copper) Confluencia Plant (c.65% of complex feed) units operational with
in energy, water and cost savings. workplans under way to support business as usual.
-Barro Alto (Nickel) in-pit unit will recommence in H1 2023, after the upgrade
is completed, resulting in improved future sorting performance. Additional
in-pit unit under technical evaluation.
-Planning for trials at Kolomela (Iron Ore) under way.
Copper, PGMs, and Iron Ore
Coarse particle recovery Innovative flotation process allows -El Soldado (Copper) CPR unit in operation.
(CPR)
material to be ground to a larger particle
size, rejecting coarse gangue and
allowing water to release from coarser ore
particles, improving energy efficiencies -Construction of full-scale system at Mogalakwena North concentrator (PGMs)
and water savings. complete. Slurry commissioning commenced in Dec 2022.
-Constructing CPR at Quellaveco (Copper) to treat flotation tails, improving
recoveries by c.3% over the life of mine. Commissioning expected in late 2023.
-Feasibility work continues at Los Bronces (Copper) and Minas-Rio (Iron Ore).
Options being investigated at Collahuasi (Copper).
Copper and PGMs
Hydraulic dewatered Engineering of geotechnically stable -El Soldado (Copper) demonstration unit commissioned. The trial is still
stacking (HDS)
tailings facilities that dry out in weeks, ongoing, with encouraging results, expected to continue to Q4 2023.
facilitating up to 85% water recovery.
-Assessing application to tailings expansion at Mogalakwena (PGMs) with
benefits from water quality and quantity improvements. Brownfield trial
starting in Q1 2023, after learnings from El Soldado trial.
Portfolio-wide
nuGen™ Zero Emissions Haulage Solution (ZEHS) Developing the world's largest hydrogen powered mining truck and providing -ZEHS hydrogen-powered mine haul truck at Mogalakwena (PGMs) is continuing
critical supporting infrastructure such as refuelling, recharging, and operational testing - it has accessed the deepest parts of the mine, hauling
facilitation of hydrogen production to decarbonise high power transport, using 300 tonne loads of PGMs ore.
renewable energy.
-Binding agreement signed to combine First Mode and Anglo American's nuGen™
ZEHS to accelerate the transition of mining and other heavy industries towards
zero emissions. In January 2023, completed deal to combine nuGen™ ZEHS with
specialist engineering technology company First Mode (our partners in
prototype development).
-Supporting decarbonisation of our global fleet of c.400 ultra-class mine haul
trucks.
(1) Expenditure relating to technology projects is included within
operating expenditure, or if it meets the accounting criteria for
capitalisation, within Growth capital expenditure. Also includes capex on the
regional renewable energy ecosystem in South Africa, which includes the
Group's proportionate share of capex incurred by Envusa Energy.
Digital projects(1)
The Group plans to continue investing c. $0.1-0.2 billion per year on digital
projects as part of the FutureSmart MiningTM programme (metrics presented on a
100% basis unless otherwise indicated):
Initiative Scope Progress
Diamonds, Copper, PGMs,
Iron Ore and Steelmaking
Coal
Predictive Maintenance, VOXEL™ Asset Strategy & Reliability Maintenance planning based on -Full coverage of critical assets at Venetia, Jwaneng, and Gahcho Kué
predictive analytics - resulting in (Diamonds), Los Bronces (Copper), Mogalakwena, Amandelbult, Anglo Converter
improvements in safety, reliability and Plant, Rustenburg Base Metal Refinery and Polokwane Smelter (PGMs), Kolomela
availability of critical assets. (Iron Ore) and Moranbah (Steelmaking Coal).
Copper, PGMs, and Iron Ore
Rapid Resource Modelling, VOXEL™ Discovery & Geosciences Enables consistent core logging, 3D -Deployment at Mogalakwena (PGMs).
implicit modelling, and statistical resource
modelling as one integrated workflow in
weeks vs years.
-Deployments planned for Quellaveco (Copper) and Minas-Rio (Iron Ore) in 2023.
Spatial Inventory Management, VOXEL™ Discovery & Geosciences Builds a digital twin of material flow, -Deployments at Los Bronces and Quellaveco (Copper), Mogalakwena (PGMs),
providing access to accurate information Minas-Rio (Iron Ore) and Kolomela and Sishen (Iron Ore).
about material within the mining operation
and enabling additional value through
increased intelligence.
Copper, PGMs, Iron Ore, and
Steelmaking Coal
Process Performance Delivers automated support to improve the detection, prioritisation, and -Deployments at Los Bronces (Copper), Mogalakwena (PGMs), Kolomela (Iron Ore)
Review, VOXEL™ Processing resolution of process issues. and Moranbah (Steelmaking Coal).
Diamonds, PGMs, Iron Ore,
and Steelmaking Coal
Digital Operational Planning, VOXEL™ Integrated Operations Enables optimised operational plans -Deployments at Venetia (De Beers), Mogalakwena, Amandelbult, Unki, Anglo
across the mining value definition and Converter Plant, Polokwane, Waterval and Mortimer smelters (PGMs), Sishen and
management of models and data that Kolomela (Iron Ore), and Moranbah and Grosvenor (Steelmaking Coal).
then applies cutting edge simulation and
elastic Cloud-based computing
technology to deliver.
-Deployments planned in early 2023 for Barro Alto and Codemin (Nickel),
Minas-Rio (Iron Ore) and Aquila, Capcoal and Dawson (Steelmaking Coal).
Group-wide
Advanced Process Control Up to 40% improvement in process -Delivered at Venetia and Benguela Gem (Diamonds), Los Bronces, El Soldado,
mainstream stability, up to 2% Quellaveco and Chagres (Copper), Mogalakwena (PGMs), Minas-Rio and Kumba (Iron
improvement in process recoveries, 4% Ore), Moranbah, Capcoal and Dawson (Steelmaking Coal), and Barro Alto and
reduction in Specific Energy Consumption, Codemin (Nickel).
with associated productivity
improvements.
-Reached 96.5% automation of automatable processes by the end of 2022, with an
ambition for 100% of automatable processes within our plant flowsheets to be
under Advanced Process Control by end 2024.
(1) Expenditure relating to digital programmes is included within
underlying operating costs.
The Board
Changes during 2022 to the composition of the Board are set out below.
On 1 January 2022, Ian Tyler joined the Board as a non-executive director and
member of the Audit and Remuneration committees.
On 19 April 2022, at the conclusion of the Company's Annual General Meeting:
-Duncan Wanblad joined the Board as chief executive.
-Mark Cutifani retired as chief executive and stepped down from the Board,
after nine years in the role.
-Anne Stevens and Byron Grote stepped down from the Board as non-executive
directors, having both served for nine years.
-Ian Tyler succeeded Anne Stevens as chair of the Remuneration Committee, and
Hilary Maxson succeeded Byron Grote as chair of the Audit Committee.
-Ian Tyler succeeded Byron Grote as the Board's senior independent director.
-Marcelo Bastos succeeded Byron Grote as the designated non-executive director
to chair the Anglo American Global Workforce Advisory Panel.
On 23 September 2022, Elisabeth Brinton stepped down from the Board as a
non-executive director.
On 31 December 2022, Tony O'Neill stepped down from the Board and as technical
director, following his decision to retire from the Group in June 2023.
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
-Economic environment including product prices
-Cyber security
-Political
-Community and social relations
-Regulatory and permitting
-Operational performance
-Safety
-Climate change
-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 2022 year end
are set out in detail in the strategic report section of the Integrated Annual
Report 2022 on the Group's website from 6 March 2023 www.angloamerican.com.
De Beers - Diamonds
Financial and operational metrics(1)
Production Sales Unit Group Underlying EBITDA Underlying Capex* ROCE*
volume
volume
revenue*
EBIT*
Price cost* EBITDA* margin*(6)
'000 '000 $/ct(3) $/ct(4) $m(5) $m $m $m
cts
cts(2)
De Beers 34,609 30,355 197 59 6,622 1,417 52% 994 593 11%
Prior year 32,276 33,357 146 58 5,602 1,100 47% 620 565 7%
Botswana 24,142 n/a 193 32 n/a 614 n/a 537 70 n/a
Prior year 22,326 - 152 32 - 464 - 407 72 -
Namibia 2,137 n/a 599 293 n/a 181 n/a 149 34 n/a
Prior year 1,467 - 565 359 - 101 - 68 91 -
South Africa 5,515 n/a 134 42 n/a 413 n/a 315 378 n/a
Prior year 5,306 - 113 45 - 241 - 82 309 -
Canada 2,815 n/a 100 50 n/a (10) n/a (68) 48 n/a
Prior year 3,177 - 62 44 - 68 - 4 42 -
Trading n/a n/a n/a n/a n/a 589 10% 582 4 n/a
Prior year - - - - - 515 11% 505 4 -
Other(7) n/a n/a n/a n/a n/a (370) n/a (521) 59 n/a
Prior year - - - - - (289) - (446) 47 -
(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 33.7 million carats (2021:
36.3 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 $6.0 billion (2021: $4.9 billion).
(6) Total De Beers EBITDA margin shows mining EBITDA margin on an
equity basis, which excludes the impact of non-mining activities,
third‑party sales, purchases, trading downstream and corporate.
(7) Other includes Element Six, brands and consumer markets,
and corporate.
Markets
The first half of 2022 saw largely positive trading conditions throughout the
diamond pipeline; the year started with retailers restocking following strong
consumer demand for diamond jewellery sales over the 2021 holiday season.
While the start of Russia's invasion of Ukraine and the imposition of related
formal sanctions, as well as self-sanctioning, on Russian diamonds created
uncertainty in the sector, healthy consumer demand, particularly in the US,
led to polished price growth and robust demand for rough diamonds in the first
half of the year. De Beers' focus on enhanced provenance assurance for its
rough diamonds helped underpin solid demand.
By June, the global economic picture was more uncertain, owing to interest
rate increases by advanced economies' central banks to combat accelerating
inflation. With a weaker economic outlook, consumer demand for diamond
jewellery in the US softened in the second half of 2022, though it remained
above pre-Covid-19 levels. Amid this economic uncertainty, retailers restocked
more cautiously, causing midstream polished diamond inventories to build up
through the second half of the year, putting downward pressure on polished
prices and softening demand for rough diamonds. In China, the heightened
Covid-19 restrictions from the second quarter onwards impacted diamond
jewellery retail sales, resulting in negative demand growth for the year.
Financial and operational overview
Total revenue increased to $6.6 billion (2021: $5.6 billion), with rough
diamond sales rising to $6.0 billion (2021: $4.9 billion), reflecting strong
demand for rough diamonds, particularly in the first half of the year, with
the midstream replenishing stocks following strong consumer demand over the
2021 holiday season. Rough diamond sales volumes totalled 30.4 million carats
(2021: 33.4 million carats). The average realised price rose by 35% to $197/ct
(2021: $146/ct), driven by growth in the rough price index, as well as selling
a larger proportion of higher value rough diamonds in the first half of the
year. The average rough price index increased by 23%, reflecting overall
positive consumer demand for diamond jewellery, particularly in the first half
of the year.
Underlying EBITDA increased by 29% to $1,417 million (2021: $1,100 million),
reflecting overall positive consumer demand for diamond jewellery. Unit costs
were broadly flat at $59/ct (2021: $58/ct), as rising inflation and higher
input costs were offset by the benefits of higher production and favourable
exchange rates.
Capital expenditure increased by 5% to $593 million (2021: $565 million),
largely due to the Venetia underground project, which is expecting first
production in 2023, and the continued execution of life-extension projects,
including Jwaneng Cut-9 and at the Namibian land operations.
Operational performance
Mining
Rough diamond production increased by 7% to 34.6 million carats (2021: 32.3
million carats), reflecting strong operational performance and higher planned
levels of production to meet continued strong demand for rough diamonds,
particularly in the first half of the year.
In Botswana, production increased by 8% to 24.1 million carats (2021: 22.3
million carats), owing to strong plant performances at both Jwaneng and Orapa,
as well as planned higher grade at Orapa.
Namibia production increased by 46% to 2.1 million carats (2021: 1.5 million
carats), primarily due to the commissioning of the Benguela Gem diamond
recovery vessel, which was delivered ahead of schedule and below budget, as
well as the treatment of higher grade ore at the land operations.
South Africa production increased by 4% to 5.5 million carats (2021: 5.3
million carats), due to the treatment of higher grade ore from the final cut
of the open pit at Venetia. The mining of the open pit was completed in
December and the mine will transition to underground operations in 2023.
Production in Canada decreased by 11% to 2.8 million carats (2021: 3.2 million
carats), due to the treatment of lower grade ore and the impact of tight
labour markets.
Brands and consumer markets
Despite the near term economic uncertainty, De Beers Jewellers have continued
to focus on developing their geographic footprint in China, with underlying
demand for branded diamond jewellery expected to remain strong following the
removal of Covid-19 related restrictions.
Operational and market outlook
Early indications are that the 2022 holiday season was robust, with diamond
jewellery sales remaining above pre-Covid-19 levels, though below the record
level seen in 2021. However, continued softening in global macro-economic
conditions could see a contraction in consumer spending and demand for diamond
jewellery, which may result in lower demand for rough diamonds in the near
term. This may be partly mitigated by an increase in demand for diamond
jewellery in China, following the removal of Covid-19 restrictions in late
2022.
De Beers continues to invest in its leading ability to provide source
assurance for its diamonds at scale, underpinned by the Tracr™ blockchain
platform. This proprietary technology provides an immutable record of a
diamond's provenance, a key priority for consumers, underpinning confidence in
natural diamonds.
De Beers considers that increased focus on diamond provenance by a number of
US-based jewellery businesses and global brands has the potential to underpin
continued demand for De Beers' rough diamonds in the medium and longer term.
Consumer desire for natural diamonds remains robust in key consumer markets,
and over the medium term the global supply of rough diamonds is expected to
decline slightly owing to limited new discoveries, supporting the value growth
potential for natural diamonds.
Production guidance for 2023 is 30-33 million carats (100% basis), subject to
trading conditions.
2023 unit cost guidance is c.$80/ct.
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 Total 664 641 385 154 5,599 2,182 39% 1,595 2,031 16%
Prior year 647 641 453 120 6,433 4,011 62% 3,428 1,773 39%
Copper Chile 562 563 386 157 4,991 1,952 40% 1,387 1,217 32%
Prior year 647 641 453 120 6,433 4,011 62% 3,428 996 81%
Los Bronces(5) 271 268 n/a 214 2,185 533 24% 306 725 n/a
Prior year 328 325 - 158 3,047 1,871 61% 1,588 493 -
Collahuasi(6) 251 256 n/a 87 2,180 1,512 69% 1,259 419 n/a
Prior year 277 273 - 61 2,641 2,188 83% 1,970 365 -
Other operations(7) 40 39 n/a n/a 626 (93) (9)% (178) 73 n/a
Prior year 42 43 - - 745 (48) (8)% (130) 138 -
Copper Peru (Quellaveco)(8) 102 78 379 136 608 230 38% 208 814 2%
Prior year - - - - - - - - 777 -
(1) Excludes 422 kt third-party sales (31 December 2021: 432 kt).
(2) Represents realised copper price and excludes impact of third-party
sales.
(3) C1 unit cost includes by-product credits.
(4) Group revenue is shown after deduction of treatment and refining
charges (TC/RCs).
(5) Figures on a 100% basis (Group's share: 50.1%).
(6) 44% share of Collahuasi production, sales and financials.
(7) Other operations form part of the results of Copper Chile.
Production and sales are from El Soldado mine (figures on a 100% basis,
Group's share 50.1%). Financials include El Soldado and Chagres (figures on a
100% basis, Group's share 50.1%), third-party trading, projects and corporate
costs. In 2021, financials also included operational and capital expenditure
related to Copper Peru.
(8) Figures on a 100% basis (Group's share: 60%). Included in capex is
the project capex which represents the Group's share after deducting direct
funding from non‑controlling interests. In 2022, the Group's share of
project capex was $633 million (on a 100% basis $1,055 million). In 2021, the
Group's share was $777 million (on a 100% basis, was $1,295 million).
Financial and operational overview
Underlying EBITDA for Copper decreased by 46% to $2,182 million (2021: $4,011
million), driven by a 28% increase in unit costs and a 15% decrease in
realised price, despite total sales being in line with the prior year.
Copper Chile
Underlying EBITDA decreased by 51% to $1,952 million (2021: $4,011 million),
reflecting a 15% decrease in the realised price, lower production and the
impact of inflation.
Copper production of 562,200 tonnes was 13% lower than the prior year (2021:
647,200 tonnes) due to planned lower grades at all sites, coupled with
unfavourable ore characteristics and unplanned stoppages at Los Bronces. The
impact of lower water availability, owing to the ongoing drought in Chile's
central zone following record low levels of precipitation in 2021 and 2022,
was partially offset by water management initiatives. Unit costs increased by
31% to 157 c/lb (2021: 120 c/lb), reflecting record levels of local inflation,
lower production and higher input costs, particularly diesel and explosives,
which were partly offset by the weaker Chilean peso and higher by-product
credits.
Capital expenditure increased by 22% to $1,217 million (2021: $996 million),
reflecting expenditure on the Collahuasi desalination project and the impact
of Covid-19 related deferrals in previous years, partly offset by the weaker
Chilean peso.
Copper Peru
Underlying EBITDA was $230 million as the project ramped up following the
mid-year start of operations, with unit costs of 136 c/lb.
Capital expenditure was $0.8 billion. $0.6 billion relates to our share of
project capex; the remainder primarily relates to development and stripping
capex (100% basis).
Markets
31 December 2022 31 December 2021
Average market price (c/lb)(1) 400 423
Average realised price (Copper Chile - c/lb) 386 453
Average realised price (Copper Peru - c/lb) 379 -
(1) Average LME price calculated from 26 September 2022 onwards,
reflecting the commencement of sales for Copper Peru, was 362 c/lb.
The difference between the market price and Copper Chile's realised price is
largely a function of provisional pricing adjustments, with 166,900 tonnes of
copper provisionally priced at 379 c/lb at 31 December 2022
(31 December 2021: 162,361 tonnes provisionally priced at 442 c/lb), and the
timing of sales across the period.
The average market price from 26 September 2022, the date of commencement of
sales by Copper Peru, until the end of the year was 362 c/lb. Copper Peru's
realised price is higher than this, reflecting the benefit of provisional
pricing adjustments since shipments commenced, with 74,800 tonnes of copper
provisionally priced at 380 c/lb at 31 December 2022.
The average LME copper price decreased by 5% as a result of fears of global
recession, manufacturing supply chain disruptions, rising energy costs and
weaker investor sentiment. The continuing impact of Russia's invasion of
Ukraine, central bank interest rate rises and the effects of China's
zero-Covid policy contributed to growing concerns around economic growth
prospects. Copper's underlying fundamentals, however, remained attractive, as
continued global decarbonisation efforts benefited the use of copper in
applications and infrastructure associated with the energy transition.
Reported stocks fell to historically low levels and supply disruptions
continued to be a feature of the sector.
Operational performance
Copper Chile
Copper production of 562,200 tonnes was 13% lower than the prior year (2021:
647,200 tonnes).
At Los Bronces, production decreased by 17% to 270,900 tonnes (2021: 327,700
tonnes) due to lower planned grades (0.62% vs 0.70%) and lower ore processed
(45.9 Mt vs 50.7 Mt) as a result of expected lower water availability, coupled
with the impact of increased ore hardness and unplanned stoppages. The impact
of reduced water availability, following the record low levels of
precipitation in 2021 and 2022, was partially offset by initiatives to
maximise water efficiency, including sourcing of external industrial water. C1
unit costs increased by 35% to 214 c/lb (2021: 158 c/lb), driven by high
inflation, planned lower production and higher water management costs, partly
offset by the weaker Chilean peso and higher by-product credits.
At Collahuasi, Anglo American's attributable share of copper production
decreased by 9% to 251,100 tonnes (2021: 277,200 tonnes) due to planned lower
grades (1.11% vs 1.25%) in accordance with the mine plan. C1 unit costs
increased by 43% to 87 c/lb (2021: 61 c/lb), driven by high inflation and
planned lower production, partly offset by the weaker Chilean peso and higher
by-product credits.
Production at El Soldado decreased by 5% to 40,200 tonnes (2021: 42,300
tonnes) due to planned lower grades (0.65% vs 0.73%). C1 unit costs increased
by 27% to 262 c/lb (2021: 206 c/lb), driven by high inflation and lower
production, partly offset by the weaker Chilean peso.
Chile´s central zone continues to face severe drought conditions. While the
rain and snowfall deficit decreased during the second half of 2022, the
outlook for 2023 remains very dry and these conditions place pressure on water
availability. An agreement to secure desalinated water supply for Los Bronces
from 2025 was completed in the fourth quarter of 2022. This is the first step
in an integrated plan to eliminate the use of fresh water at the Los Bronces
operation. In the interim, various management initiatives to improve water
efficiency and secure alternative sources of water continue to mitigate the
impact on production.
Copper Peru
The world class Quellaveco copper mine in Peru was delivered on time and on
budget during 2022 - a major achievement for the Group. First production of
copper concentrate was announced on 12 July 2022, with concentrate shipments
commencing at the end of September. The second processing line started up in
September, with regulatory clearances received in early December.
Quellaveco produced 102,300 tonnes at a C1 unit cost of 136 c/lb, reflecting
the operational ramp-up.
The delivery of the project has taken place against an extremely challenging
backdrop through more than two years of pandemic-related disruption. Despite
this, Quellaveco is producing copper in line with the original construction
schedule and less than four years after project approval. The final total
capex estimate is $5.5 billion and is in line with the 2020 budget to
accommodate Covid-19 requirements. The Group's share of the final total capex
is $2.8 billion.
With the mine operational, focus is now on safely ramping up the processing
plant to nameplate capacity, receiving the required regulatory clearances for
the molybdenum plant and completing the construction and commissioning of the
coarse particle recovery (CPR) plant. We are also working closely with
government and local communities on the safe and responsible demobilisation of
the project workforce by the middle of 2023.
Operational outlook
Copper Chile
Production guidance for Chile for 2023 is 530,000-580,000 tonnes, subject to
water availability.
C1 unit cost guidance for 2023 is c.190 c/lb.
There is limited near term production impact from the rejection of the
environmental permit application for the Los Bronces Integrated Project in
early 2022. Anglo American is continuing to participate in the appeals process
to make available any additional information required, as the merits of the
project are re-evaluated by a Committee of Ministers. Anglo American remains
hopeful that the positive impact this project will have on the local area,
including an improvement to air quality, as well as a major long term inward
investment for Chile, will be recognised to enable urgent critical-path mine
planning activities to get under way.
Copper Peru
Production guidance for Peru for 2023 is 310,000-350,000 tonnes.
C1 unit cost guidance for 2023 is c.100 c/lb., subject to any socio-political
effects and full ramp-up.
Project capital expenditure guidance for 2023 is c.$0.2 billion (100% basis),
of which the Group's share is c.$0.1 billion.
Quellaveco expects to deliver around 300,000 tonnes per annum of copper
equivalent production on average in its first 10 years of operation.
Nickel
Financial and operational metrics
Production Sales Price Unit Group Underlying Mining Underlying Capex* ROCE*
volume
volume
cost*
revenue*
EBITDA*
EBITDA
EBIT*
margin*
t t $/lb(1) c/lb(2) $m $m $m $m
Nickel 39,800 39,000 10.26 513 858 381 44% 317 79 24%
Prior year 41,700 42,100 7.73 377 710 320 45% 261 29 21%
(1) Realised price.
(2) C1 unit cost.
Financial and operational overview
Underlying EBITDA increased by 19% to $381 million (2021: $320 million),
reflecting higher realised prices, partially offset by higher unit costs and
lower sales volumes. C1 unit costs increased by 36% to 513 c/lb (2021: 377
c/lb) as a result of high input cost inflation, particularly on consumables,
lower production volumes and the stronger Brazilian real.
Capital expenditure increased to $79 million (2021: $29 million), primarily
due to planned higher expenditure on productivity initiatives, such as bulk
ore sorting.
Markets
31 December 2022 31 December 2021
Average market price ($/lb) 11.61 8.39
Average realised price ($/lb) 10.26 7.73
Differences between the market price (which is 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 $11.61/lb was 38% higher (2021: $8.39/lb).
Global nickel consumption grew year on year, with the fourth quarter seeing
the highest level of consumption as China began to recover from earlier
Covid-19 related industrial stoppages. Batteries were the main driver of
demand growth, as the production of electric vehicles continued to accelerate.
Global refined nickel production also increased in the year; however, the
nickel price was further supported by the decision of some purchasers to avoid
Russian-sourced metal, following the invasion of Ukraine.
Operational performance
Nickel production decreased by 5% to 39,800 tonnes (2021: 41,700 tonnes),
primarily due to lower ore grades as a result of licensing delays, as well as
the impact of unplanned maintenance and heavy rainfall. Sales volumes were
further impacted by logistics constraints, primarily in the container freight
sector.
Operational outlook
Production guidance for 2023 is 38,000-40,000 tonnes.
C1 unit cost guidance for 2023 is c.515 c/lb.
Platinum Group Metals
Financial and operational metrics
Production Sales Basket Unit Group Underlying Mining Underlying Capex* ROCE*
volume
PGMs volume price cost* revenue* EBITDA* EBITDA EBIT*
PGMs margin*(5)
koz(1) koz(2) $/PGM oz(3) $/PGM oz(4) $m $m $m $m
PGMs 4,024 3,861 2,551 937 10,096 4,417 54% 4,052 1,017 86%
Prior year 4,299 5,214 2,761 868 14,502 7,099 62% 6,753 894 140%
Mogalakwena 1,026 1,010 2,451 826 2,466 1,548 63% 1,380 394 n/a
Prior year 1,215 1,479 2,563 694 3,787 2,611 69% 2,471 435 -
Amandelbult 713 700 2,883 1,127 2,010 1,036 52% 982 74 n/a
Prior year 773 907 3,122 1,127 2,817 1,633 58% 1,571 81 -
Other operations(6) 911 842 2,615 928 2,270 1,033 46% 922 549 n/a
Prior year 871 1,056 2,935 899 3,081 1,717 56% 1,601 378 -
Processing and trading(7) 1,375 1,309 n/a n/a 3,350 800 24% 768 n/a n/a
Prior year 1,440 1,772 - - 4,817 1,138 24% 1,110 - -
(1) Production reflects own-mined production and purchase of metal in
concentrate. PGM volumes consists of 5E metals and gold.
(2) Sales volumes exclude the sale of refined metal purchased from
third parties and toll material. PGM volumes consists of 5E metals and gold.
(3) Average US$ realised basket price, based on sold ounces (own-mined
and purchased concentrate). Excludes the impact of the sale of refined metal
purchased from third parties.
(4) Total cash operating costs (includes on-mine, smelting and refining
costs only) per own-mined PGM ounce of production.
(5) The total PGMs mining EBITDA margin excludes the impact of the sale of
refined metal purchased from third parties, purchase of concentrate and
tolling.
(6) Includes Unki, Mototolo and PGMs' share of joint operations (Kroondal
and Modikwa). Other operations margin includes unallocated market
development, care and maintenance, and corporate costs.
(7) Purchase of concentrate from joint operations, associates and third
parties for processing into refined metals, tolling and trading activities.
Financial and operational overview
Underlying EBITDA decreased to $4,417 million (2021: $7,099 million),
primarily reflecting lower sales volumes as the prior year benefited from the
processing of higher than normal work-in-progress inventory following the ACP
Phase A rebuild, as well as the impact of the Polokwane smelter rebuild in
the second half of 2022. Underlying EBITDA was also affected by an
8% decrease in the basket price to $2,551/PGM ounce (2021: $2,761/PGM ounce),
as well as higher unit costs. Unit costs increased by 8% to $937/PGM ounce
(31 December 2021: $868/PGM ounce), impacted by high input cost inflation
and lower production, partly offset by the weaker South African rand.
Capital expenditure increased by 14% to $1,017 million (2021: $894 million),
driven by the impact of Covid-19 related deferrals in 2021.
Markets
31 December 2022 31 December 2021
Average platinum market price ($/oz) 961 1,086
Average palladium market price ($/oz) 2,111 2,388
Average rhodium market price ($/oz) 15,465 20,109
Realised basket price ($/PGM oz) 2,551 2,761
The average realised PGM basket price decreased by 8% to $2,551 per PGM ounce
(2021: $2,761 per PGM ounce), reflecting lower market prices. PGM prices
surged in early 2022 owing to supply concerns following Russia's invasion of
Ukraine, but soon fell back when no trade sanctions were levied on Russian
metal. The price decline was exacerbated by growing fears of another poor year
for automotive production due to renewed Chinese Covid-19 lockdowns. Sentiment
improved in the second half as restrictions eased in China, leading to a sharp
recovery in global automotive production, underpinned by an improvement in
manufacturing supply chains. The recovery in automotive production resulted in
a rally in palladium and rhodium prices; however, platinum prices continued to
struggle as tighter US monetary policy pushed the US dollar to multi-decade
highs. By the end of the year, the situation had reversed, with palladium and
rhodium prices decreasing on fears of a global slowdown, while platinum prices
rallied as the US dollar retreated.
The palladium price was particularly volatile, reaching a new all‑time high
of almost $3,340 per ounce in March 2022, reflecting the importance of Russian
supply, albeit the metal started and ended the year below $2,000 per ounce.
Platinum prices also peaked in March but the late rally meant it increased by
11% over the year. Strong by-product prices and differences in the timing and
mix of metals sold cushioned the impact of lower PGM prices on the realised
basket price.
Operational performance
Total PGM production decreased by 6% to 4,024,000 ounces (2021: 4,298,700
ounces), principally due to lower grade at Mogalakwena and the impact of
planned infrastructure closures at Amandelbult, partially offset by increased
production from Mototolo and Unki.
Own-mined production
PGM production from own-managed mines (Mogalakwena, Amandelbult, Unki and
Mototolo) and equity share of joint operations decreased by 7% to 2,649,200
ounces (2021: 2,858,300 ounces).
Mogalakwena PGM production decreased by 16% to 1,026,200 ounces (2021:
1,214,600 ounces), largely as a result of lower grades as well as the impact
of Eskom load-shedding.
Amandelbult PGM production decreased by 8% to 712,500 ounces (2021: 773,200
ounces) as a result of the planned mining infrastructure closures and the
closure of the Merensky Concentrator, as well as the impact of Eskom
load-shedding.
Production from other operations increased by 5% to 910,500 ounces (2021:
870,500 ounces), reflecting the benefit of concentrator debottlenecking
projects at Unki and Mototolo, as well as higher grades due to improved ground
conditions at Mototolo, offsetting lower production from Kroondal as a
consequence of planned infrastructure closures.
Purchase of concentrate
Purchase of concentrate decreased by 5% to 1,374,800 ounces (2021: 1,440,400
ounces), driven by lower third-party receipts as well as the impact of lower
production at Kroondal.
Refined production and sales volumes
Refined PGM production (excluding toll-treated metal) decreased by 25% to
3,831,100 ounces (2021: 5,138,400 ounces) as the first half of 2021
benefited from the processing of higher than normal work-in-progress inventory
following the ACP Phase A rebuild in the fourth quarter of 2020. The second
half of 2022 was impacted by the planned structural rebuild of the Polokwane
smelter - a process that was extended by approximately two months following
the receipt of materials found to be sub-standard as identified through our
quality assurance processes.
PGM sales volumes decreased by 26% to 3,861,300 ounces (2021: 5,214,400
ounces), in line with refined production.
Operational outlook
PGM metal in concentrate production guidance for 2023 is 3.6-4.0 million
ounces, with own-mined output accounting for c.65%. Refined PGM production
guidance for 2023 is 3.6-4.0 million ounces, subject to the impact of Eskom
load-shedding.
Unit cost guidance for 2023 is c.$1,025/PGM ounce.
Iron Ore
Financial and operational metrics
Production Sales Price Unit Group Underlying Mining Underlying Capex* ROCE*
volume
cost*
volume revenue* EBITDA* EBITDA EBIT*
margin*
Mt(1) Mt(1) $/t(2) $/t(3) $m $m $m $m
Iron Ore Total 59.3 58.0 111 38 7,534 3,455 45% 2,962 834 28%
Prior year 63.8 63.3 157 33 11,104 6,871 62% 6,359 628 62%
Kumba Iron Ore(4) 37.7 36.7 113 40 4,580 2,211 48% 1,894 674 66%
Prior year 40.9 40.3 161 39 6,958 4,311 62% 3,960 417 140%
Iron Ore Brazil 21.6 21.3 108 35 2,954 1,244 41% 1,068 160 18%
(Minas-Rio)
Prior year 22.9 23.0 150 24 4,146 2,560 61% 2,399 211 42%
(1) Production and sales volumes are reported as wet metric tonnes. Product
is shipped with c.1.6% moisture from Kumba and c.9% moisture from Minas-Rio.
(2) Prices for Kumba Iron Ore are the average realised export basket
price (FOB Saldanha) (wet basis). Prices for Minas-Rio are the average
realised export basket price (FOB Brazil) (wet basis). Prices for total iron
ore are a blended average.
(3) Unit costs are reported on an FOB wet basis. Unit costs for total
iron ore are a blended average.
(4) Sales volumes and realised price differ to Kumba's stand-alone
reported results due to sales to other Group companies.
Financial and operational overview
Underlying EBITDA for Iron Ore decreased by 50% to $3,455 million (2021:
$6,871 million), due to a 29% decrease in the realised iron ore price, lower
sales volumes and higher unit costs.
Kumba
Underlying EBITDA decreased by 49% to $2,211 million (2021: $4,311 million),
driven by a lower average realised price of $113/tonne (2021: $161/tonne) and
lower sales volumes. Unit costs increased by 3% to $40/tonne (2021:
$39/tonne), due to lower production volumes and high input cost inflation,
partially offset by the weaker South African rand.
Production decreased by 8% to 37.7Mt (2021: 40.9Mt), largely as a result of
high rainfall and a safety intervention at Kolomela, as well as equipment
reliability. The impact of third-party logistics constraints, including
industrial action at Transnet (the third-party rail and port operator) also
contributed to the decrease in production, as well as a 9% decrease in sales
volumes to 36.7Mt (2021: 40.3Mt). Total finished goods inventory increased to
7.8 Mt (2021: 6.1 Mt), with most of the inventory being at the mines.
Capital expenditure increased by 62% to $674 million (2021: $417 million),
reflecting planned higher sustaining capital spend and higher expansion
capital spend at the Kapstevel South pit, as good progress was made on the
life-extension project at Kolomela. This was partially offset by the weaker
South African rand. Additional complexities related to the ultra high dense
media separation (UHDMS) technology growth project at Sishen have necessitated
a review of the project plan.
Within special items and remeasurements, an impairment of $313 million (before
tax and non-controlling interest) was recognised at Kolomela following
revisions to the production and cost profile in the latest life of asset plan.
Minas-Rio
Underlying EBITDA decreased by 51% to $1,244 million (2021: $2,560 million),
reflecting the lower average realised price of $108/tonne (2021: $150/tonne),
lower sales volumes and higher unit costs. Unit costs increased by 46% to
$35/tonne (2021: $24/tonne), reflecting higher input costs, principally in
consumables and electricity, lower production volumes, increased maintenance
costs and the impact of the stronger Brazilian real.
Capital expenditure was 24% lower at $160 million (2021: $211
million), reflecting the impact of timing differences.
Markets
31 December 2022 31 December 2021
Average market price (Platts 62% Fe CFR China - $/tonne) 120 160
Average market price (MB 66% Fe Concentrate CFR - $/tonne) 145 185
Average realised price (Kumba export - $/tonne) (FOB wet basis) 113 161
Average realised price (Minas-Rio - $/tonne) (FOB wet basis) 108 150
Kumba's FOB realised price of $113/wet metric tonne was 13% higher than the
equivalent Platts 62% Fe FOB Saldanha market price (adjusted for moisture) of
$100/wet metric tonne. This reflects the premium for the higher iron content
at 63.8% and relatively high proportion (approximately 67%) of lump that the
product portfolio attracts, in particular because higher quality Fe product
helps steel mills reduce emissions.
Minas-Rio's pellet feed product is also higher grade (with iron content of 67%
and lower impurities) than the reference product used for the Platts 62% Fe
CFR China index. The Metal Bulletin (MB) 66 index, therefore, is used when
referring to Minas-Rio product. The Minas-Rio realised price of $108/wet
metric tonne was in line with the equivalent MB 66 FOB Brazil index (adjusted
for moisture) of $108/wet metric tonne, which reflects that the premium for
our high quality product was offset by the impact of provisionally priced
volumes.
Operational performance
Kumba
Production decreased by 8% to 37.7 Mt (2021: 40.9 Mt), reflecting the impact
of high rainfall across Kumba's operating footprint and a safety intervention
at Kolomela, as well as equipment reliability and the impact of third-party
logistics constraints at both mines. The constraints have led to a
significant build-up of iron ore stockpiles at both mines, which necessitated
a decrease in production given the lack of available storage space.
Production at Sishen decreased by 4% to 27.0 Mt (2021: 28.0 Mt) and at
Kolomela by 17% to 10.7 Mt (2021: 12.8 Mt).
Minas-Rio
Production decreased by 6% to 21.6 Mt (2021: 22.9 Mt) due to more challenging
ore characteristics, lower mining equipment availability and heavy rainfall.
Operational outlook
Kumba
Production guidance for 2023 is 35-37 Mt, subject to third-party rail and
port performance.
2023 unit cost guidance is c.$44/tonne.
Minas-Rio
Production guidance for 2023 is 22-24 Mt.
2023 unit cost guidance is c.$32/tonne.
Steelmaking 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
Steelmaking Coal 15.0 14.7 304 107 5,034 2,749 55% 2,369 648 85%
Prior year 14.9 14.1 200 105 2,899 962 33% 450 649 15%
(1) Production volumes are saleable tonnes, excluding thermal coal
production of 1.6 Mt (2021: 1.7 Mt). Includes production relating to
processing of third-party product.
(2) Sales volumes exclude thermal coal sales of 1.7 Mt
(2021: 2.1 Mt). 2022 includes 0.3 Mt of steelmaking coal mined by third
parties and processed by Anglo American.
(3) Realised price is the weighted average hard coking coal and PCI sales
price achieved at managed operations.
(4) FOB cost per tonne, excluding royalties and study costs.
Financial and operational overview
Underlying EBITDA increased to $2,749 million (2021: $962 million), driven by
a 52% increase in the weighted average realised price for steelmaking coal and
higher sales volumes. This was partially offset by a 2% increase in unit costs
to $107/tonne (2021: $105/tonne), reflecting higher inflation and the impact
of tight labour markets. Also included is $250 million for the finalisation of
the Grosvenor gas ignition claim by the Group's self-insurance entity that was
received in the first half of the year, as well as a further $93 million
insurance receipt in December for the overpressure event claim at Moranbah.
Capital expenditure was flat at $648 million (2021: $649 million), with higher
development-related spend across all three underground mines largely offset by
lower life-extension expenditure following the completion of the Aquila
project, where longwall production began in February 2022.
Within special items and remeasurements, impairment reversals of $211 million
and $217 million (before tax) were recognised at Moranbah-Grosvenor and Dawson
respectively. The reversal at Moranbah-Grosvenor represents a partial reversal
of previous impairments, with improvements in the macro-economic environment
partially offset by a revised production profile and deferral of the expansion
project. The majority of the Dawson reversal is arising from value expected to
be generated in the short term.
Markets
31 December 2022 31 December 2021
Average benchmark price - hard coking coal ($/tonne)(1) 364 226
Average benchmark price - PCI ($/tonne)(1) 331 164
Average realised price - hard coking coal ($/tonne)(2) 310 211
Average realised price - PCI ($/tonne)(2) 271 138
(1) Represents average spot prices.
(2) Realised price is the sales price achieved at managed operations.
Average realised prices differ from the average market prices due to
differences in material grade and timing of shipments. Hard coking coal (HCC)
price realisation decreased to 85% of average benchmark price (2021: 93%),
driven by a higher volume of premium HCC being produced and sold in the second
half of 2022 when the benchmark price was lower.
The average benchmark price for Australian HCC reached a record high of
$364/tonne (2021: $226/tonne). In the first half of 2022, steelmaking coal
prices rose on Queensland supply challenges and buyers' anxiety around the
effects of sanctions on Russian supply. The daily spot index rallied to record
multiple highs and eventually peaked at $671/tonne in March 2022. In the
second half of the year, HCC prices remained at elevated levels due to ongoing
supply challenges in Australia and Canada, despite a significant decline in
demand from global steelmakers and coke merchants.
Operational performance
Production was broadly flat at 15.0 Mt (2021: 14.9 Mt), with all three
underground longwalls operating in the second half of 2022. The planned end of
mining at the Grasstree operation in January 2022 was partially offset by the
ramp-up of the replacement Aquila longwall, which began operations in February
2022, and fully ramped up in June.
At Grosvenor, longwall operations restarted in February 2022 following
regulatory approval, while longwall mining restarted at Moranbah in the next
planned longwall panel in May 2022, following a fatal incident in March 2022,
and an extended longwall move. Both these longwall operations have continued
to ramp up during the second half of the year under the new operating
protocols and regulatory environment - a learning process that will continue
through 2023.
Production was also impacted by tight labour markets and record unseasonal
rainfall at the open pit operations.
Operational outlook
Export steelmaking coal production guidance for 2023 is 16-19 Mt.
Unit cost guidance for 2023 is c.$105/tonne.
Manganese
Financial and operational metrics
Production Sales Group Underlying Mining Underlying Capex* ROCE*
volume
volume
revenue*
EBITDA*
EBITDA
EBIT*
margin*
Mt Mt $m $m $m $m
Manganese 3.7 3.6 840 378 45 % 312 n/a 138%
Prior year 3.7 3.7 768 315 41 % 250 - 104%
Financial and operational overview
Manganese (Samancor)
Underlying EBITDA increased by 20% to $378 million (2021: $315 million),
benefiting from a stronger average realised manganese ore price, partially
offset by a 4% decrease in manganese ore sales volumes and by increased
freight and operating costs.
The average benchmark price for manganese ore (Metal Bulletin 44% manganese
ore CIF China) increased by 16% to $6.06/dmtu (2021: $5.21/dmtu). Prices
increased strongly in the first half of the year, but were on a declining
trend through much of the second half. Prices regained some ground during
December, ending the year at $5.13/dmtu.
Operational performance
Attributable manganese ore production was flat at 3.7 Mt (2021: 3.7 Mt).
Crop Nutrients
Financial and operational metrics
Production Sales Group Underlying Mining Underlying Capex* ROCE*
volume
volume
revenue*
EBITDA*
EBITDA
EBIT*
margin*
$m $m $m $m
Crop Nutrients n/a n/a 254 (44) n/a (45) 522 n/a
Prior year - - 114 (41) - (42) 530 -
Woodsmith project n/a n/a n/a n/a n/a n/a 522 n/a
Prior year - - - - - n/a 530 -
Other(1) n/a n/a 254 (44) n/a (45) n/a n/a
Prior year - - 114 (41) - (42) - -
(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 on the North Yorkshire coast, just south of
Whitby, where polyhalite ore will be extracted via 1.6 km deep mine shafts and
transported to Teesside via an underground conveyor belt in a 37 km tunnel,
thereby minimising any environmental impact on the surface. It will then be
granulated at a materials handling facility to produce a low carbon fertiliser
- known as POLY4 - that will then be exported from our port facility, where we
have priority access, to a network of customers around the world. POLY4 will
enable farmers to enhance their crop yield, increase crop quality and improve
soil structure with one core product.
Progress update
Woodsmith project
Throughout 2022, we continued with the detailed design reviews and
non-critical path studies, following which a number of areas were modified to
align with Anglo American's standards and optimise value for the long term.
Progress has continued to plan on the core project infrastructure, with
capital expenditure of $522 million in 2022.
During the year, as part of the construction review, contracts were awarded
for the shaft sinking operations, programme management services and
construction management to ensure the project can be executed in line with
Anglo American's stringent requirements.
With the award of these contracts and other infrastructure improvements,
activities at the deep shafts have progressed well during 2022. The service
shaft is now more than 360 metres deep, while shaft sinking began 120 metres
below the surface for the production shaft in January 2023, as planned.
Three intermediate shafts will provide both ventilation and additional access
to the mineral transport system (MTS) tunnel. The Lockwood Beck
intermediate access shaft was successfully completed in 2022 and is fully
lined and connected to the tunnel. Work on the MTS shaft at the mine head
progressed through 2022 and is 85% complete, and the excavation at the final
intermediate access shaft at the Ladycross site commenced in early 2023.
Following a planned maintenance pause in mid-2022 to refurbish the tunnel
boring machine and allow the connection with the Lockwood Beck shaft, the
mineral transport tunnel is now past the 21 km point and is more than 56%
complete, progressing at rates not seen since the start of the tunnelling
activities.
As noted in a number of market updates throughout 2022, we are enhancing the
project's configuration - including the capacity of the shafts and other
infrastructure to accommodate higher production volumes and more efficient and
scalable mining methods over time - to ensure we deliver maximum commercial
returns from Woodsmith over the expected multi-decade asset life. These
project team proposals, endorsed by the Board at the end of the year, indicate
an extension of the development schedule and the capital budget, compared to
what was previously anticipated.
In light of these changes, we now expect first product to market in 2027, with
an annual capital investment of around $1.0 billion. We also expect design
capacity to increase from c.10 Mtpa to c.13 Mtpa, subject to studies and
approval. $0.8 billion is approved for 2023, with the bulk of initial spend on
the shaft sinking and tunnel boring activities. As usual in developing
underground mines, the schedule will largely be determined by the ground
conditions encountered as sinking activities progress.
We believe that the changes we have made to the project have had a materially
positive impact on the project's long term attractiveness and prospects.
However, for accounting purposes at this early stage of the project's
development, we have recognised an impairment of $1.7 billion to the carrying
value of the asset within special items and remeasurements, reflecting the
extension of the development schedule and capital budget.
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 to further
promote POLY4 to the end users of the product - farmers.
The number of commercial scale on-farm demonstrations has accelerated, with
more than 1,500 now complete and hundreds more in progress. The demonstrations
continue to validate the extent of improvements that our product can deliver
to farmers in terms of crop yield and quality. In addition, studies show
POLY4 enhances soil health through resilience to compaction, erosion and
run-off, as well as improve nutrient availability to crops and fertiliser
nutrient use efficiency.
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 low carbon profile, with a carbon footprint up
to 85% lower compared to conventional fertilisers, and with little waste
generated in its production.
Corporate and Other
Financial metrics
Production Sales Price Unit Group Underlying Underlying Capex*
volume
revenue*
EBITDA*
EBIT*
volume cost*
Mt(1) Mt(2) $/t(3) $/t(4) $m $m $m $m
Segment n/a n/a n/a n/a 554 (440) (593) 14
Prior year - - - - 1,126 (3) (289) 125
Exploration n/a n/a n/a n/a n/a (155) (162) 2
Prior year - - - - - (128) (132) -
Corporate activities and unallocated costs(5) n/a n/a n/a n/a 554 (285) (431) 12
Prior year - - - - 354 (63) (270) 44
Thermal Coal - South Africa(6) - - - - - - - -
Prior year 5.7 5.3 77 46 553 101 70 81
Thermal Coal - Colombia(7) - - - - - - - -
Prior year 3.6 3.4 65 34 219 87 43 -
(1) Production volumes are saleable tonnes. South African production
volumes include export primary production, secondary production sold into
export markets, production sold domestically at export parity pricing and
excludes other domestic production of 5.6 Mt in 2021.
(2) South African sales volumes include export primary production,
secondary production sold into export markets and production sold domestically
at export parity pricing and exclude domestic sales of 5.3 Mt in 2021 and
third-party sales of 6.4 Mt in 2021.
(3) Thermal Coal - South Africa realised price is the weighted average
export thermal coal price achieved. Excludes third-party sales from locations
other than Richards Bay.
(4) Thermal Coal - South Africa FOB cost per saleable tonne from the trade
operations, excluding royalties and study costs.
(5) Revenue within Corporate activities and unallocated costs primarily
relates to third-party shipping activities, as well as the Marketing business'
energy solution's activities.
(6) Thermal Coal - South Africa mining activity included in prior year
until the demerger on 4 June 2021.
(7) Thermal Coal - Colombia represents the Group's attributable share from
its 33.3% shareholding in Cerrejón and reflects earnings and volumes from the
first half of 2021 only, before the agreement was entered into.
Financial overview
Exploration
Exploration's underlying EBITDA loss was $155 million (2021: $128 million
loss), driven by the recovery in activity from the Covid-19 disruptions in
2021 that affected greenfield base metals exploration and near-mine iron ore
exploration.
Corporate activities and unallocated costs
Underlying EBITDA was a $285 million loss (2021: $63 million loss), driven
primarily by the finalisation of the Grosvenor gas ignition claim and the
Moranbah overpressure event claim by the Group's self-insurance entity, which
resulted in an expense in Corporate activities that was offset within the
underlying EBITDA of Steelmaking Coal.
Guidance summary
Production and unit costs
Unit costs Production volumes
2023F
Units 2023F 2024F 2025F
Diamonds(1) c.$80/ct Mct 30-33 29-32 32-35
Copper(2) c.156 c/lb kt 840-930 910-1,000 840-930
Nickel(3) c.515 c/lb kt 38-40 39-41 37-39
PGMs - metal in concentrate(4) c.$1,025/PGM ounce Moz 3.6-4.0 3.6-4.0 3.5-3.9
Platinum Moz 1.6-1.8 1.6-1.8 1.6-1.8
Palladium Moz 1.2-1.3 1.2-1.3 1.1-1.2
Other Moz 0.8-0.9 0.8-0.9 0.8-0.9
PGMs - refined(5) Moz 3.6-4.0 3.6-4.0 3.3-3.7
Iron ore(6) c.$39/tonne Mt 57-61 61-65 64-68
Steelmaking Coal(7) c.$105/tonne Mt 16-19 20-22 20-22
Note: Unit costs exclude royalties, depreciation and include direct support
costs only. FX rates used for 2023 unit costs: ~17 ZAR:USD, ~1.5 AUD:USD,
~5.3 BRL:USD, ~900 CLP:USD, ~3.8 PEN:USD.
(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, first production is expected in 2023.
Step-up in 2023 unit cost is primarily driven by change in production mix, as
Venetia transitions to underground operations and delivers a lower carat
profile during ramp-up.
(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. 2023 Chile: 530-580kt; Peru 310-350kt. 2024
Chile: 550-600kt; Peru: 360-400kt. 2025 Chile: 530-580kt; Peru 310-350kt.
Production in Chile is subject to water availability, and in Peru is subject
to any socio-political effects and full ramp-up. Chile 2023 unit cost is c.190
c/lb. Peru 2023 unit cost is c.100 c/lb.
(3) Nickel operations in Brazil only. The Group also produces
approximately 20 kt of nickel on an annual basis as a co-product from the PGM
operations. Nickel production is impacted by declining grades. Bulk ore
sorting unit benefits 2024, and 2025 is impacted by a maintenance shutdown.
(4) Unit cost is per own-mined 5E + gold PGMs metal in concentrate ounce.
Production is 5E + gold produced metal in concentrate ounces. Includes
own-mined production (~65%) and purchased concentrate volumes (~35%). Metal in
concentrate production is impacted by lower grade and recoveries at
Mogalakwena, planned infrastructure closures and lower volumes from
Amandelbult. Kroondal switches to a tolling arrangement upon our exit from the
operation, expected in 2024. Lower volumes in 2025 reflect the transition of
the Siyanda POC agreement to tolling.
(5) 5E + gold produced refined ounces. Includes own-mined production and
purchased concentrate volumes. Refined production is subject to the impact of
Eskom load-shedding. Kroondal switches to a tolling arrangement upon our exit
from the operation, expected in 2024. Lower volumes in 2025 reflect the
transition of the Siyanda POC agreement to tolling.
(6) Wet basis. Total iron ore is the sum of Kumba and Minas-Rio. Unit
cost total is a weighted average based on the mid-point of production
guidance. 2023 Kumba: 35-37Mt (production is impacted by high levels of
on-mine inventory); Minas-Rio: 22-24Mt. 2024 Kumba: 37-39Mt (subject to UHDMS
plant coming online); Minas-Rio: 24-26Mt. 2025 Kumba: 39-41Mt; Minas-Rio:
25-27Mt. Kumba production is subject to the third-party rail and port
performance. Kumba 2023 unit cost is c.$44/tonne. Minas-Rio 2023 unit cost is
c.$32/tonne.
(7) Steelmaking Coal FOB/tonne unit cost comprises managed operations and
excludes royalties and study costs. Production excludes thermal coal
by-product from Australia.
Capital expenditure(1)
2023F 2024F 2025F
Growth ~$1.8bn ~$1.0bn ~$1.0bn
Includes ~$0.8bn Woodsmith capex and ~$0.3bn South African regional renewable Includes ~$0.3bn South African regional renewable energy ecosystem and nuGenTM Includes ~$0.3bn South African regional renewable energy ecosystem and nuGenTM
energy ecosystem and nuGenTM capex capex capex
Sustaining $4.2-4.7bn $4.5-5.0bn $4.0-4.5bn
Reflects $3.1-3.6bn baseline, ~$0.7bn lifex projects and ~$0.4bn Collahuasi Reflects $3.5-4.0bn baseline, $0.7bn lifex projects and ~$0.3bn Collahuasi Reflects $3.2-3.7bn baseline, ~$0.5bn lifex projects and ~$0.3bn Collahuasi
desalination plant(2) desalination plant(2) desalination plant(2)
Total $6.0-6.5bn $5.5-6.0bn $5.0-5.5bn
Further details on Anglo American's high quality growth and life-extension
projects, including details of the associated volumes benefit, are disclosed
on pages 14-17.
Long term sustaining capital expenditure is expected to be $3.0-3.5 billion
per annum(3), excluding life-extension projects.
Other guidance
-2023 depreciation: $3.3-3.5 billion
-2023 effective tax rate: 35-37%(4)
-Long term effective tax rate: 33-37%(4)
-Dividend payout ratio: 40% of underlying earnings
-Net debt:EBITDA: <1.5x at the bottom of the cycle.
(1) Cash expenditure on property, plant and equipment including related
derivatives, net of proceeds from disposal of property, plant and equipment
and includes direct funding for capital expenditure from non-controlling
interests. Shown excluding capitalised operating cash flows. Consequently, for
Quellaveco, growth capex reflects attributable share. Guidance includes
unapproved projects and is, therefore, subject to progress of the project
studies and unapproved Woodsmith capex of ∼$1 bn per annum is excluded after
2023. Refer to the 2022 results presentation slides 43-52 for further detail
on the breakdown of the capex guidance at project level.
(2) Attributable share of capex. Collahuasi desalination capex shown
includes related infrastructure.
(3) Long term sustaining capex guidance is shown on a 2022 real basis.
(4) Effective tax rate is highly dependent on a number of factors,
including the mix of profits and any corporate tax reforms impacting the
countries where we operate, and may vary from the guided ranges.
For further information, please contact:
Media Investors
UK UK
James Wyatt-Tilby Paul Galloway
james.wyatt-tilby@angloamerican.com paul.galloway@angloamerican.com
Tel: +44 (0)20 7968 8759 Tel: +44 (0)20 7968 8718
Marcelo Esquivel Emma Waterworth
marcelo.esquivel@angloamerican.com emma.waterworth@angloamerican.com
Tel: +44 (0)20 7968 8891 Tel: +44 (0)20 7968 8574
Rebecca Meeson-Frizelle Michelle Jarman
rebecca.meeson-frizelle@angloamerican.com michelle.jarman@angloamerican.com
Tel: +44 (0)20 7968 1374 Tel: +44 (0)20 7968 1494
South Africa
Nevashnee Naicker
nevashnee.naicker@angloamerican.com
Tel: +27 (0)11 638 3189
Sibusiso Tshabalala
sibusiso.tshabalala@angloamerican.com
Tel: +27 (0)11 638 2175
Notes to editors:
Anglo American is a leading global mining company and our products are the
essential ingredients in almost every aspect of modern life. Our portfolio of
world-class competitive operations, with a broad range of future development
options, provides many of the future-enabling metals and minerals for a
cleaner, greener, more sustainable world and that meet the fast growing every
day demands of billions of consumers. With our people at the heart of our
business, we use innovative practices and the latest technologies to discover
new resources and to mine, process, move and market our products to our
customers - safely and sustainably.
As a responsible producer of diamonds (through De Beers), copper, platinum
group metals, premium quality iron ore and steelmaking coal, and nickel - with
crop nutrients in development - we are committed to being carbon neutral
across our operations by 2040. More broadly, our Sustainable Mining Plan
commits us to a series of stretching goals to ensure we work towards a healthy
environment, creating thriving communities and building trust as a corporate
leader. We work together with our business partners and diverse stakeholders
to unlock enduring value from precious natural resources for the benefit of
the communities and countries in which we operate, for society as a whole, and
for our shareholders. Anglo American is re-imagining mining to improve
people's lives.
www.angloamerican.com (http://www.angloamerican.com)
Webcast of presentation:
A live webcast of the results presentation, starting at 9.00am UK time on 23
February 2023, 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, unanticipated downturns in business relationships
with customers or their purchases from Anglo American, mineral resource
exploration and project development capabilities and delivery, recovery rates
and other operational capabilities, safety, health or environmental incidents,
the effects of global pandemics and outbreaks of infectious diseases, the
impact of attacks from third parties on our information systems, natural
catastrophes or adverse geological conditions, climate change and extreme
weather events, the outcome of litigation or regulatory proceedings, the
availability of mining and processing equipment, the ability to obtain key
inputs in a timely manner, the ability to produce and transport products
profitably, the availability of necessary infrastructure (including
transportation) services, the development, efficacy and adoption of new or
competing technology, challenges in realising resource estimates or
discovering new economic mineralisation, the impact of foreign currency
exchange rates on market prices and operating costs, the availability of
sufficient credit, liquidity and counterparty risks, the effects of inflation,
terrorism, war, conflict, political or civil unrest, uncertainty, tensions and
disputes and economic and financial conditions around the world, evolving
societal and stakeholder requirements and expectations, shortages of skilled
employees, unexpected difficulties relating to acquisitions or divestitures,
competitive pressures and 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 Services (UK) Ltd 2023. TM and TM are trade marks of Anglo
American Services (UK) Ltd.
Anglo American plc
17 Charterhouse Street London EC1N 6RA United Kingdom
Registered office as above. Incorporated in England and Wales under the
Companies Act 1985.
Registered Number: 3564138 Legal Entity Identifier: 549300S9XF92D1X8ME43
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