REG - Anglo American PLC - Anglo American half year financial report 2022
28/07/2022 07:17
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RNS Number : 9959T Anglo American PLC 28 July 2022
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HALF YEAR FINANCIAL REPORT
for the six months ended 30 June 2022
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28 July 2022
Anglo American Interim Results 2022
Portfolio quality supports underlying EBITDA of $8.7 billion
Financial highlights for the six months ended 30 June 2022
· Underlying EBITDA* of $8.7 billion
· Profit attributable to equity shareholders of $3.7 billion
· Net debt* of $4.9 billion (0.3 x annualised underlying EBITDA): cash
generation partially offset by investment in asset resilience and growth
· $1.5 billion interim dividend, equal to $1.24 per share, consistent
with our 40% payout policy
· Quellaveco commissioned on time and on budget: multi-decade new
copper operation expected to produce 300,000 copper equivalent tonnes per year
on average over first 10 years
Duncan Wanblad, Chief Executive of Anglo American, said: "Anglo American's
differentiated combination of portfolio quality and growth optionality,
underpinned by our operating model and innovation track record, continues to
position us strongly through the current market volatility and longer term
cycle. Our unwavering focus is on driving consistent performance across our
operations - which starts with the safety and health of our employees - and
progress towards our full suite of sustainability ambitions. As we progressed
through the first half, we began to regain operational momentum while also
adjusting to the considerable challenges posed by Covid-19 related
absenteeism, disrupted supply chains and logistics corridors, weather extremes
and geopolitically-led economic volatility.
"Against that backdrop, we generated underlying EBITDA of $8.7 billion in the
first six months, our second highest for a half year, albeit a 28% decrease
compared to the record first half of 2021. Attributable free cash flow of
$1.6 billion was driven largely by strong prices in the first quarter that
declined towards the end of the period in tandem with increasing cost
inflation. Despite those headwinds and our operational challenges, in
steelmaking coal and iron ore in particular, that reduced our planned
production output, our return on capital employed of 36% stayed well above our
targeted 15% through-the-cycle return and our mining EBITDA margin remained at
a healthy 52%. Our commitment to capital discipline and to a strong and
flexible balance sheet is paramount to remain resilient to the external
environment and retain optionality for value-adding growth. At the end of
June, net debt of $4.9 billion, or 0.3 x annualised underlying EBITDA,
reflects the cash generation of the business, partially offset by our
investments in our existing assets and future growth. Our $1.5 billion
interim dividend of $1.24 per share is in line with our 40% payout policy.
"We continue to make progress on our long term safety journey. There is no
doubt, however, that the operational changes necessary to help protect the
health of our employees during the last two years require us to apply
additional targeted effort to regain our momentum of continuous improvement. I
am also sad to report that we lost one colleague in March in an equipment
lifting incident in Australia. It is simply unacceptable to lose a life at
work and we are determined to eliminate workplace fatalities once and for all.
This is my number one priority.
"Looking ahead, growing the value of our business by progressing asset
development options is the foundation of our organic margin-enhancing volume
growth potential of 30%((1)) over the next decade. More than a third of this
growth comes from our newly commissioned Quellaveco copper operation. With our
customer proposition almost entirely oriented around future-enabling metals
and minerals, we are well positioned to play a critical role in the
decarbonisation of global energy and transport systems, alongside good
progress in meeting our own ambitious emissions targets, thereby delivering
enhanced value for our shareholders and stakeholders across society."
Six months ended 30 June 2022 30 June 2021 Change
US$ million, unless otherwise stated
Revenue 18,111 21,779 (17) %
Underlying EBITDA* 8,701 12,140 (28)%
Mining EBITDA margin* 52% 61%
Attributable free cash flow* 1,564 5,641 (72)%
Profit attributable to equity shareholders of the Company 3,680 5,188 (29)%
Basic underlying earnings per share* ($) 3.11 4.30 (28)%
Basic earnings per share ($) 3.03 4.18 (28)%
Interim dividend per share ($) 1.24 1.71 (27)%
Additional returns per share ($) - 1.60
Total dividend and buyback per share ($) 1.24 3.31 (47)%
Group attributable ROCE* 36% 49%
Terms with this symbol * are defined as Alternative Performance Measures
(APMs). For more information, refer to page 86.
( )
((1) ) Copper equivalent volume growth vs. 2021 copper equivalent
production.
Sustainability performance
Key sustainability performance indicators((1))
Anglo American tracks its strategic progress using KPIs that are based on our
seven pillars of value: safety and health, environment, socio-political,
people, production, cost, and financial. In addition to the financial
performance set out above and our operational performance on pages 6-39, our
performance for the first four pillars is set out below:
Pillar of value Metric 30 June 2022 30 June 2021((2)) Target Target achieved
Safety and health Work-related fatal injuries((3)) 1 0 Zero Not achieved
Total recordable injury frequency rate per million hours((3)) 2.36 2.34 Year-on-year reduction Not achieved
New cases of occupational disease 0 8 Year-on-year reduction On track
Employees potentially exposed to noise over 85 dBA((4)(5)) 17,944 18,983 Year-on-year reduction On track
Employees potentially exposed to inhalable hazards over the occupational 1,090 827 5% reduction year-on-year Not achieved
exposure limit ((4)(5))
Environment Energy consumption (million GJ)((5)) 32.7 35.3 Improve energy efficiency by 30% by 2030 On track
GHG emissions - Scopes 1 & 2 5.0 6.3 Reduce absolute GHG emissions by 30% by 2030 On track
(Mt CO(2)e)((5))
Freshwater withdrawals (million m(3))((5)(6)) 12.5 15.7 Reduce freshwater abstraction in water scarce areas by 50% by 2030 On track
Level 4-5 environmental incidents((5)) 0 0 Zero On track
Socio-political Social Way 3.0 implementation((7)(8)) 49 % 23 % Full compliance with Social Way 3.0 by end 2022 Behind schedule
Local procurement spend ($bn)((9)) 6.1 5.9
Taxes and royalties ($m)((10)) 3,491 3,303
Jobs supported by Enterprise and Supplier Development (ESD) 147,374 137,777
initiatives((7)(11))
People Women in management 31 % 28 % To achieve 33% by 2023 On track
Women in the workforce 24 % 23 %
Voluntary labour turnover 2.3 % 2.5 % < 5% On track
((1)) Sustainability performance indicators for the six months to 30
June 2022, and the comparative period, are not externally assured, unless
otherwise stated.
((2)) 2021 data includes Thermal Coal South Africa until the date of
the Thungela demerger on 4 June 2021, unless otherwise stated.
((3)) Prior period safety data is externally assured and includes
data for the six months to 30 June 2021. The TRIFR presented for H1 2021 has
been restated to reflect the final 2021 externally assured safety statistics.
((4)) Reflects the number of employees who work in environments
where there is potential for exposure above the exposure limit. All employees
working in such environments are issued with protective equipment to prevent
occupational illness. Prior period data excludes Thermal Coal South Africa.
((5)) Energy, GHG emissions and water-withdrawal data for the
current period and prior period is shown to end of May. Occupational exposure
data for the current period is to the end of May 2022, and to the end of June
for the prior period. Energy, GHG emissions, occupational exposure, and Level
4-5 environmental incidents data for the prior period is externally assured.
((6)) Water metric and data have been revised in line with our
freshwater definition. Data represents total Group water withdrawals.
((7)) Data presented for the years ended 31 December 2021 and 2020.
((8)) While sites are assessed annually against all requirements
applicable to their context, for consistency during the transition period, the
metric reflects performance against the Social Way foundational requirements.
For further information on progress, see page 4.
((9)) Local procurement spend relates to spend within the country
where an operation is located. The basis of calculation has been amended to
more closely reflect the Group's financial accounting consolidation, i.e. 100%
of subsidiaries and a proportionate share of joint operations, based on Anglo
American's shareholding. The prior period comparative has been restated to
reflect the new basis of preparation.
((10)) Taxes and royalties include all taxes and royalties both borne
and collected by the Group. This includes corporate income taxes, withholding
taxes, mining taxes and royalties, employee taxes and social security
contributions and other taxes, levies and duties directly incurred by the
Group, as well as taxes incurred by other parties (e.g. customers and
employees) but collected and paid by the Group on their behalf. Figures
disclosed are based on cash remitted, net of entities consolidated for
accounting purposes, plus a proportionate share, based on the percentage
shareholding, of joint operations. Taxes borne and collected by associates and
joint ventures are not included. Prior year comparatives have been restated.
((11)) Includes the following enterprise development programmes: Crescer
(Brazil), Emerge Chile (Chile), Emerge Peru (Peru), Takura (Zimbabwe),
Tokafala (Botswana) and Zimele (South Africa). Data refers to the cumulative
number of businesses and jobs supported since programme inception.
Safety
Anglo American's most important priority is always safety - keeping our
colleagues safe and well. Making sure every employee returns home at the end
of each day, better for having worked at Anglo American, is our vision for
safety and health across the business. We continue to make progress on our
long term safety journey, including further developing our broader safety
processes and procedures. Sadly, however, we lost one colleague at a managed
operation in a fatal incident in Australia and one colleague at an
independently managed joint venture operation in South Africa in the first
half of the year. We are unconditional about safety, and we will not rest
until zero harm is achieved and sustained across our business. We have shown
it can be done for long stretches of time and now we must make it permanent.
Everyone is a leader in safety and has a role to play in delivering an
injury-free and fatality-free workplace.
Our Elimination of Fatalities Taskforce has, since 2018, supported a 93%
reduction in fatal incidents over the last decade. The core programme is 82%
complete with a material focus on Supply Chain Safety, Contractor Management,
and Fatigue Management.
Our total injury frequency rate tracked up marginally again, after multiple
years of progressive improvement, reflecting the changed operating
configurations necessary to manage Covid-19 that tend to disrupt planned work
routines. To stop, reflect and stand up for safety, all business units
participated in a people-focused Global Safety Reset during April and May, led
by supervisors. Significant focus is also being placed on leading indicators,
specifically, increased high potential hazard (HPH) reporting, on-time
investigations and action management, rigorous critical-control monitoring,
and people-centric technology implementation.
Health
Our health focus remains on helping keep our people protected from Covid-19,
while sustaining our work to continuously improve our key health measures. The
pandemic is continuing to challenge us but, encouragingly, although case rates
remain high in many places, a combination of less severe variants and much
higher levels of vaccination (particularly in our organisation) has helped to
keep hospitalisation and death rates far lower than in previous phases. We
have also provided significant monetary and other support to accelerate
vaccination rates, using our own health facilities and encouraging vaccination
at the earliest opportunity, including in many host communities.
Recognising the link between employee health and broader community well-being,
last year we completed community health improvement strategies for our
operations in support of our Sustainable Mining Plan targets. Building on our
extensive Covid-19 support, implementation of these strategies will start
later this year.
We tackle the threats to health and well-being wherever we find them, with
separate programmes for physical and mental health - including our Living with
Dignity programme to help tackle gender-based and domestic violence; for
creating a healthier working environment; and for encouraging healthy
lifestyles. We are paying greater attention to psychological safety, intrinsic
to embedding a safety-conscious mindset, establishing a steering group to
investigate psychological safety issues, while also introducing the thinking
into an array of other programmes.
People
Tightly linked to our safety imperative and our Values, we strive to create a
workplace that places people even more at its heart. People are central to
everything we do, and each individual has expectations of us. Workforce
engagement is a priority for every leader at Anglo American and we aim to
create safe, inclusive and diverse workplaces that encourage high performance
and innovative thinking. We have zero tolerance for any form of bullying,
harassment or victimisation and we know there is no room for complacency when
it comes to culture in any organisation. To that end, we have extensive
training, systems and processes in place to keep improving both physical and
psychological safety. We will continue to embed and launch initiatives that
will allow us to realise our vision of a truly inclusive workplace where every
employee can reach their full potential.
We also continue to make progress against our diversity goals, including to
achieve 33% female representation in management by 2023. The proportion of
women at this level increased to 31% (30 June 2021: 28%), while female
employees across the company represent 24% of our workforce.
Living with Dignity - building a safe and inclusive culture
Building a safe and inclusive culture has been a focus for us for a number of
years and this is constant work for any company or society. We are committed
to listening to our people and other stakeholders that are close to our
business every day.
We have long understood the role of our business in society, and we believe
that this extends beyond our own mine gates. We launched our Living with
Dignity programme in 2019, founded on the belief that everyone has the right
to dignity - in our homes, schools, at work and everywhere in between. Through
this programme, Anglo American is working collaboratively with our partners in
government and civil society to build sustainable partnerships aimed at
providing direct employee and community support to combat gender-based and
domestic violence.
We continue to build on this important work and we have now established our
Living with Dignity Hub in South Africa that brings together our policies and
its mandates to provide ongoing and committed support to our employees,
contractors and their families. The hub handles all formal complaints of
sexual harassment and gender-based violence and bullying, harassment and
victimisation across our South African footprint and is overseen by an
independent Ambassador to ensure we stand by our policies and remain committed
to amplifying our efforts.
Environment
Our Sustainable Mining Plan includes commitments to be a leader in
environmental stewardship. By 2030, we aim to reduce GHG emissions (Scopes 1
and 2) by 30%; improve energy efficiency by 30%; achieve a 50% net reduction
in freshwater abstraction in water scarce areas; and deliver net-positive
impacts in biodiversity wherever we operate.
Our environmental performance continues to improve, with no Level 5 or 4
incidents (or indeed Level 3) in the first half of the year. This achievement
reflects the improvements to our planning and operating disciplines across the
business. We launched a 'no repeats' challenge last year to help us learn from
low level incidents and prevent repeats of a similar nature across the
business, which has led to improvements in controls, specifically helping to
prevent significant incidents.
Both energy consumption and GHG emissions decreased in the first half of the
year and we remain on track to improve energy efficiency by 30% and reduce
absolute GHG emissions by 30%, by 2030. We have a target to be carbon neutral
across our operations by 2040, and an ambition to reduce our Scope 3 emissions
by 50%, also by 2040. We are making encouraging progress. In 2020, around one
third of the electricity Anglo American used globally was drawn from
renewables. Having secured 100% renewable electricity supply across our
operations in South America, by 2023 we expect to be drawing 56% of our global
grid supply from renewables.
Socio-political
In 2020, we launched a new integrated social performance management system
(Social Way 3.0) which has raised performance expectations and has resulted in
continued improvement in our social performance. It was expected that
additional site and corporate resourcing would be needed to support the
initial plan for sites to have fully implemented the Social Way 3.0 by the end
of 2022. However, these plans have been delayed through the considerable work
required from our teams to deliver our Covid-19 community response programmes,
recruitment challenges during the pandemic and restrictions impacting our
ability to engage with external and internal stakeholders to support
implementation of the new approach. Several sites are expected to still
complete the transition by the end of 2022, and performance recovery plans are
in place for sites where performance is lagging.
As we grow our business and improve our performance, so our total tax
contribution increases, benefiting host countries. Total taxes and royalties
borne and collected in the first half of the year amounted to $3.5 billion, a
6% increase compared with the prior period. We also made further progress with
our enterprise and supplier development initiatives, supporting over 147,000
jobs in 2021 - a key component of our Sustainable Mining Plan goal to support
five jobs offsite for every job onsite by 2030.
During the half year, we signed a $100 million 10-year loan agreement with the
International Finance Corporation. The specific goals tied to the loan
agreement are aimed at supporting community development in rural communities
close to our operations across South Africa, including by promoting the
creation of jobs, as well as improving the quality of education for more than
73,000 students. In addition, we are rolling out a comprehensive information
and communications technology programme in 109 schools around our operations
in South Africa, to give thousands of learners and community members the
skills they need to enter the digital job market.
Sustainable Mining Plan - update in progress
We launched Anglo American's Sustainable Mining Plan in 2018, setting out
three sustainability pillars and a number of medium and longer term stretch
goals for each, guided by our Purpose and supported by six critical
foundations that underpin how we do business. The three pillars of Healthy
Environment, Thriving Communities, and Trusted Corporate Leader encapsulate
the holistic realities of what it means to be a socially responsible and
ultimately sustainable business. We continue to make good progress towards our
2025 and 2030 goals, as laid out in the table on page 2, in addition to
progress towards our 2040 carbon neutral operations target that we added in
2020.
Our Sustainable Mining Plan is designed to be a living plan and we will
continue to evolve it to ensure it stays relevant and suitably stretching, in
tune with our employees' and stakeholders' ambitions for our business. We are
currently exploring a number of areas that we feel would benefit from being
added into the Sustainable Mining Plan and will update the plan when we have
developed these options sufficiently.
Operational and financial review of Group results for the six months ended
30 June 2022
Operational performance
The impact of adverse weather and planned lower grades at many of our
operations contributed to a 9% production decrease on a copper equivalent
basis((1)). Extreme rainfall in Brazil, South Africa and Australia affected
iron ore production at Minas-Rio and Kumba, steelmaking coal at Capcoal and
Dawson, PGMs production at Mogalakwena and nickel production at Barro Alto.
Planned lower grades at Los Bronces and Collahuasi (Copper), as well as the
effect of expected lower water availability at Los Bronces, resulted in
decreased copper production, while the impact of lower grade at Mogalakwena
(PGMs) was only partially offset by improved operational performances across
the remaining PGMs operations. Nickel production was also affected by lower
ore grades. The planned end of mining at the Grasstree operation and ramp-up
of the replacement Aquila longwall contributed to lower production volumes at
Steelmaking Coal. De Beers increased production in line with continued strong
demand for rough diamonds.
The suspended Grosvenor operation (Steelmaking Coal) restarted in February and
ramped up well during the period, as did the Benguela Gem diamond recovery
vessel (De Beers) and Aquila (Steelmaking Coal). Adding to our forecast copper
production in the second half is the newly commissioned Quellaveco project in
Peru, which delivered first copper concentrate in July as it nears completion
ahead of receiving final regulatory clearance for commercial operations to
begin.
De Beers' rough diamond production increased by 10% to 16.9 million carats
(30 June 2021: 15.4 million carats), reflecting a strong operational
performance and higher planned levels of production to meet continued strong
demand for rough diamonds, while the first quarter of 2021 was affected by
particularly high rainfall in southern Africa.
Copper production of 273,400 tonnes was 17% lower than the prior period
(30 June 2021: 330,000 tonnes). At Los Bronces, production decreased
by 21% to 129,700 tonnes (30 June 2021: 163,200 tonnes) due to planned
lower grades and the impact of expected lower water availability on plant
throughput and copper recovery. Planned lower grades at Collahuasi resulted in
a 12% decrease in attributable production to 127,800 tonnes (30 June 2021:
145,900 tonnes).
Nickel production decreased by 5% to 19,600 tonnes (30 June 2021: 20,700
tonnes), primarily due to lower ore grades as a result of licensing delays
that are now resolved, as well as the impact of heavy rainfall.
PGM production (metal in concentrate) decreased by 4% to 1,987,500 ounces
(30 June 2021: 2,079,100 ounces), principally due to lower grade at
Mogalakwena, partially offset by increased production from Mototolo, Unki and
Amandelbult. Refined PGM production decreased by 16% to 1,959,100 ounces
(30 June 2021: 2,326,700 ounces), as the first half of 2021 benefited from
the processing of higher than normal work-in-progress inventory following the
converter plant (ACP) Phase A rebuild and commissioning in the fourth quarter
of 2020. Planned maintenance and the annual stock count also resulted in
additional downtime of processing assets.
Iron ore production decreased by 14% to 27.5 Mt (30 June 2021: 31.9 Mt). At
Kumba, production decreased by 13% to 17.8 Mt (30 June 2021: 20.4 Mt),
driven by extremely high rainfall, a safety intervention at Kolomela and
equipment reliability. Minas-Rio production decreased by 15% to 9.8 Mt
(30 June 2021: 11.5 Mt) due to maintenance and unusually heavy rainfall
that impacted the availability of the mining fleet and plant.
Steelmaking coal production decreased by 22% to 4.8 Mt (30 June 2021:
6.2 Mt), principally due to the planned end of mining at the Grasstree
operation in January and ramp-up of the replacement Aquila longwall, which
began operations in February and fully ramped up in June. Production was also
impacted by record unseasonal rainfall in May at the open cut operations.
Manganese ore production was in line with the prior period at 1.8 Mt
(30 June 2021: 1.8 Mt).
Group copper equivalent unit costs((1)) increased by 18% in US dollar terms,
largely due to lower production volumes and inflationary pressures,
particularly diesel.
((1) ) Copper equivalent production and unit cost is normalised to
reflect the demerger of the South Africa thermal coal operations and the sale
of our shareholding in Cerrejón.
(2)
Financial performance
Anglo American's profit attributable to equity shareholders decreased to
$3.7 billion (30 June 2021: $5.2 billion). Underlying earnings were
$3.8 billion (30 June 2021: $5.3 billion), while operating profit was
$6.7 billion (30 June 2021: $11.0 billion).
The war in Ukraine, and resulting trade sanctions on Russia, have restricted
the supply of certain key commodities to the market, and caused further
disruption to already stretched global supply chains. This has resulted in
higher prices for energy, agricultural and other commodities, exacerbating
broader inflationary pressures across the global economy, and contributing to
more aggressive interest rate rises by central banks than had been expected
and an associated strengthening of the dollar. While the medium and longer
term demand outlooks for our products remain strong - not least given the role
these play in sustaining global economic development for a growing population
and enabling the decarbonisation of energy and transport systems - these
deteriorating macro-economic conditions are contributing to a weaker near term
outlook for demand, due to weaker investment and slower real income growth.
Associated pressures on our operating costs have been partly mitigated by
weakening commodity producer country currencies, including in Australia,
Brazil, Chile and South Africa.
Underlying EBITDA*
Group underlying EBITDA decreased by $3.4 billion to $8.7 billion
(30 June 2021: $12.1 billion) due to a decrease in the price for the
Group's basket of products, unfavourable sales volumes and higher input costs
across the Group. As a result, the Group Mining EBITDA margin* of 52% was
lower than the prior year (30 June 2021: 61%). A reconciliation of 'Profit
before net finance costs and tax', the closest equivalent IFRS measure to
underlying EBITDA, is provided within note 3 to the Condensed financial
statements.
Underlying EBITDA* by segment
6 months ended 6 months ended
$ million 30 June 2022 30 June 2021
De Beers 944 610
Copper 1,166 1,935
Nickel 239 135
PGMs 2,732 4,383
Iron Ore 2,298 4,910
Steelmaking Coal 1,399 (94)
Manganese 223 154
Crop Nutrients (18) (12)
Corporate and other (282) 119
Total 8,701 12,140
Underlying EBITDA* reconciliation for the six months ended 30 June 2021 to
six months ended 30 June 2022
The reconciliation of underlying EBITDA from $12.1 billion in the six months
to 30 June 2021 to $8.7 billion in the six months ended 30 June 2022 shows
the controllable factors (e.g. cost and volume), as well as those outside of
management control (e.g. price, foreign exchange and inflation), that drive
the Group's performance.
$ billion
H1 2021 underlying EBITDA* 12.1
Price (1.5)
Foreign exchange 0.4
Inflation (0.4)
Net cost and volume (1.4)
Other (0.5)
H1 2022 underlying EBITDA* 8.7
Price
Average market prices for the Group's basket of products decreased by 2%
compared with the first half of 2021, reducing underlying EBITDA by $1.5
billion. Realised prices decreased for iron ore (36%), copper (13%) and the
PGMs basket (7%) - primarily driven by rhodium which decreased by 30%. This
was partly offset by steelmaking coal prices where the weighted average price
increased by 245%.
Foreign exchange
The favourable foreign exchange impact on underlying EBITDA of $0.4 billion
was due to weaker local currencies in many of our countries of operation,
principally the South African rand and Chilean peso.
Inflation
The Group's weighted average CPI for the first half of the year was 7.2%,
compared with 3.3% in the first six months of 2021, as inflation increased in
all regions. The impact of CPI inflation on costs reduced underlying EBITDA by
$0.4 billion.
Net cost and volume
The net impact of cost and volume was a $1.4 billion reduction in underlying
EBITDA, driven by lower PGM sales from planned lower refined volumes following
the higher than normal work-in-progress (WIP) inventory in the first half of
2021; lower sales volumes at Iron Ore Brazil due to maintenance and unusually
heavy rainfall impacting production; and lower copper sales at the Chilean
operations owing to planned lower grades and the negative effect on production
of expected lower water availability at Los Bronces. In addition to these
volume impacts, inflationary pressures (other than CPI) contributed to an
increase in costs across the Group.
Other
The $0.5 billion unfavourable movement in underlying EBITDA from other factors
was driven by the demerger and sale of thermal coal assets, resulting in an
EBITDA reduction of $0.2 billion. Also included is $0.1 billion related to a
decrease in environmental restoration provisions at Copper in the first half
of 2021, and the impact of lower sales volumes and cost pressures at our
Associates and Joint Ventures.
Underlying earnings*
Group underlying earnings decreased to $3.8 billion
(30 June 2021: $5.3 billion), driven by the lower underlying EBITDA,
partly offset by a corresponding decrease in income tax expense and earnings
attributable to non‑controlling interests.
Reconciliation from underlying EBITDA* to underlying earnings*
6 months ended 6 months ended
$ million 30 June 2022 30 June 2021
Underlying EBITDA* 8,701 12,140
Depreciation and amortisation (1,226) (1,462)
Net finance costs and income tax expense (2,552) (3,448)
Non-controlling interests (1,136) (1,895)
Underlying earnings* 3,787 5,335
Depreciation and amortisation
Depreciation and amortisation decreased by 16% to $1.2 billion
(30 June 2021: $1.5 billion), reflecting the demerger of Thungela in the
prior period and lower cost base of Steelmaking Coal, following the impairment
at 30 June 2021.
Net finance costs and income tax expense
Net finance costs, before special items and remeasurements, were $0.2 billion
(30 June 2021: $0.4 billion). The decrease was principally driven by fair
value gains.
The underlying effective tax rate was 32.6% (30 June 2021: 29.6%). The
underlying effective tax rate was impacted by the relative levels of profits
arising in the Group's operating jurisdictions. Over the longer term, the
underlying effective tax rate is expected to be in the range of 31% to 35%.
The tax charge for the period, before special items and remeasurements, was
$2.2 billion (30 June 2021: $3.0 billion).
Non-controlling interests
The share of underlying earnings attributable to non-controlling interests of
$1.1 billion (30 June 2021: $1.9 billion) principally relates to minority
shareholdings in Kumba (Iron Ore), PGMs and Copper.
Special items and remeasurements
Special items and remeasurements (after tax and non-controlling interests) are
a net charge of $0.1 billion (30 June 2021: net charge of $0.1 billion),
principally relating to adjustments to former operations of $0.1 billion
arising in PGMs.
Full details of the special items and remeasurements recorded are included in
note 9 to the Condensed financial statements.
Net debt*
$ million 2022 2021
Opening net debt* at 1 January((1)) (3,842) (5,530)
Underlying EBITDA* from subsidiaries and joint operations 8,011 11,740
Working capital movements((2)) (1,013) (545)
Other cash flows from operations 19 (261)
Cash flows from operations 7,017 10,934
Capital repayments of lease obligations (131) (133)
Cash tax paid (1,751) (1,973)
Dividends from associates, joint ventures and financial asset investments 238 83
Net interest((3)) (116) (155)
Dividends paid to non-controlling interests (1,079) (832)
Sustaining capital expenditure((4)) (1,757) (1,476)
Sustaining attributable free cash flow* 2,421 6,448
Growth capital expenditure and other((4)) (857) (807)
Attributable free cash flow* 1,564 5,641
Dividends to Anglo American plc shareholders (2,052) (907)
Disposals 467 -
Foreign exchange and fair value movements (146) (102)
Other net debt movements((5)) (844) (733)
Total movement in net debt* (1,011) 3,899
Closing net debt* at 30 June (4,853) (1,631)
((1)) At 31 December 2021, the Group amended its definition of net
debt to exclude variable vessel leases that are priced with reference to a
freight index. Net debt reported at 30 June 2021 has therefore been restated
to reflect the revised definition.
((2)) Working capital movements for the six months ended 30 June
2021 have been restated to correct the presentation of a contract liability of
$260 million previously presented within other borrowings.
((3)) Includes cash inflows of $57 million (30 June 2021: inflows
of $78 million), relating to interest receipts on derivatives hedging net
debt, which are included in cash flows from derivatives related to financing
activities.
((4)) Following an amendment to IAS16 Proceeds before intended use,
operating cash flows relating to sustaining and growth capital expenditure are
no longer capitalised. For further details, refer to note 2 of the Condensed
Financial Statements. Included within sustaining capital expenditure for the
six months ended 30 June 2021 is $39 million of capitalised operating cash
flows relating to life extension projects. 'Growth capital expenditure and
other' includes $39 million (30 June 2021: $25 million) of expenditure on
non-current intangible assets and $3 million of capitalised operating cash
flows relating to growth projects for the six months ended 30 June 2021.
((5)) Includes the purchase of shares under the 2021 buyback of $186
million; the purchase of shares for other purposes (including for employee
share schemes) of $252 million; Mitsubishi's share of Quellaveco capital
expenditure of $260 million; other movements in lease liabilities (excluding
variable vessel leases) decreasing net debt by $65 million; and contingent and
deferred consideration paid in respect of acquisitions completed in previous
years of $157 million. 2021 includes Mitsubishi's share of Quellaveco capital
expenditure of $226 million; other movements in lease liabilities (excluding
variable vessel leases) increasing net debt by $299 million; contingent and
deferred consideration paid in respect of acquisitions completed in previous
years of $111 million; and the purchase of shares for employee share schemes
of $174 million.
Net debt (including related derivatives) of $4.9 billion has increased by
$1.0 billion since 31 December 2021, driven by working capital cash outflows
of $1.0 billion due to higher PGMs pricing impacting the valuation of purchase
of concentrate (POC) inventory, and an increase in finished goods at Copper
and De Beers. The Group generated strong sustaining attributable free cash
inflows of $2.4 billion, used in part to fund growth capital expenditure of
$0.8 billion and dividends paid to Anglo American plc shareholders of $2.1
billion. Net debt at 30 June 2022 represented gearing (net debt to equity)
of 12% (31 December 2021: 10%).
Cash flow
Cash flows from operations
Cash flows from operations decreased to $7.0 billion
(30 June 2021: $10.9 billion), reflecting a reduction in underlying EBITDA
from subsidiaries and joint operations, and a working capital build of
$1.0 billion (30 June 2021: build of $0.5 billion). The inventory
increase of $1.2 billion was driven by the higher POC valuation at PGMs and
an increase in finished goods at Copper and De Beers. A reduction in payables
of $0.3 billion was driven by the settlement of provisional price adjustments
within Iron Ore, partly offset by a reduction in receivables of $0.4 billion,
mainly owing to decreased base metal prices.
Capital expenditure*
6 months ended 6 months ended
$ million 30 June 2022 30 June 2021
Stay-in-business 1,010 808
Development and stripping 462 412
Life extension projects 292 217
Proceeds from disposal of property, plant and equipment (7) -
Sustaining capital 1,757 1,437
Growth projects 818 779
Total 2,575 2,216
Capitalised operating cash flows - 42
Total capital expenditure 2,575 2,258
Capital expenditure increased to $2.6 billion
(30 June 2021: $2.3 billion), as spend normalised following deferrals due
to Covid-19.
Sustaining capital expenditure increased to $1.8 billion
(30 June 2021: $1.4 billion), driven by planned additional
stay-in-business expenditure across the Group.
Growth capital expenditure of $0.8 billion (30 June 2021: $0.8 billion)
primarily relates to the Woodsmith and Quellaveco projects.
In line with previous guidance, total capital expenditure for 2022 is expected
to be $6.1-6.6 billion.
Attributable free cash flow*
The Group's attributable free cash flow decreased to $1.6 billion
(30 June 2021: $5.6 billion) due to lower cash flows from operations of
$7.0 billion (30 June 2021: $10.9 billion), higher capital expenditure of
$2.6 billion (30 June 2021: $2.3 billion), and increased dividends paid
to non-controlling interests of $1.1 billion (30 June 2021: $0.8 billion).
This was partially offset by decreased tax payments of $1.8 billion
(30 June 2021: $2.0 billion).
Shareholder returns
In line with the Group's established dividend policy to pay out 40% of
underlying earnings, the Board has proposed a dividend of $1.24 per share
for the six months to 30 June 2022 (30 June 2021: $1.71 ordinary dividend
per share and $0.80 special dividend per share), equivalent to $1.5 billion
(30 June 2021: $3.1 billion including special dividend).
Disposals
On 11 January 2022, the Group completed the sale of its 33.3% shareholding in
Cerrejón to Glencore plc for a total cash consideration of approximately $294
million - of which $50 million was received in January, after adjustment for
dividends received in 2021. This sale represents the final stage of Anglo
American's previously announced responsible transition from thermal coal
operations.
On 25 March 2022, the Group announced the sale of its remaining 8.0%
shareholding in Thungela Resources Limited, realising gross proceeds of R1,672
million (approximately $115 million). Anglo American's Marketing business
continues to support Thungela in the sale and marketing of its products, and
sales and purchases under the offtake agreement will continue to be reported
on a net basis, together with the Group's other third-party trading
activities.
In addition, there were cash receipts principally relating to the settlement
of deferred consideration balances on the sale of the Rustenburg operations
(PGMs) that was completed in November 2016.
Balance sheet
Net assets increased by $0.7 billion to $35.5 billion (31 December 2021:
$34.8 billion), reflecting the profit for the period, offset by dividend
payments and additional shareholder returns to Company shareholders and
non-controlling interests.
Attributable ROCE*
Attributable ROCE decreased to 36% (30 June 2021: 49%). Annualised
attributable underlying EBIT decreased to $11.5 billion
(30 June 2021: $15.7 billion), reflecting the impact of lower realised
prices achieved for the Group's products and lower production volumes. Average
attributable capital employed remained broadly flat at $32.0 billion
(30 June 2021: $32.1 billion), as growth capital expenditure, largely at
Quellaveco (Copper) and Woodsmith (Crop Nutrients), was offset by the sale of
thermal coal operations.
Liquidity and funding
Group liquidity remains conservative at $17.3 billion (31 December 2021:
$17.1 billion), comprising $9.2 billion of cash and cash equivalents
(31 December 2021: $9.1 billion) and $8.1 billion of undrawn committed
facilities (31 December 2021: $8.0 billion).
In March 2022, the Group issued $500 million 3.875% Senior Notes due 2029, and
$750 million 4.75% Senior Notes due 2052, as part of the Group's routine
financing activities.
The weighted average maturity on the Group's bonds increased to 7.7 years
(31 December 2021: 6.2 years).
The Group has an undrawn $4.7 billion revolving credit facility due to mature
in March 2025.
Portfolio upgrade
Anglo American continues to evolve its portfolio of competitive, world class
assets towards those future-enabling products that are fundamental to enabling
a low carbon economy, a sustainable future, and that cater to global consumer
demand trends. Aligned to this strategy, the Group entered into the below
agreements in the first half of 2022.
On 18 March 2022, Anglo American announced the signing of a Memorandum of
Understanding with EDF Renewables, a global leader in renewable energy, to
work together towards developing a regional renewable energy ecosystem in
South Africa. The ecosystem is expected to be designed to meet Anglo
American's operational electricity requirements in South Africa through the
supply of 3-5 GW of 100% renewable electricity (solar and wind) and storage by
2030, with excess electricity supplied to the grid to increase its resilience.
The partnership is also expected to bring a host of economic benefits -
stimulating the development of new economic sectors, local production and
supply chains - to South Africa and the broader region, while also supporting
the wider decarbonisation of energy in the country and the Just Energy
Transition.
On 9 June 2022, Anglo American announced that it had signed a $100
million10-year loan agreement with the International Finance Corporation (IFC)
linked to the delivery of sustainability goals that are integral to Anglo
American's Sustainable Mining Plan. This sustainability-linked loan is the
IFC's first in the mining sector and is understood to be the first in the
mining sector globally that focuses exclusively on social development
indicators.
On 30 June 2022, Anglo American entered into exclusive negotiations with First
Mode Holding Inc (First Mode), and has agreed non-binding terms, to combine
Anglo American's nuGen™ Zero Emissions Haulage Solution (ZEHS) with 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.
Growth projects (metrics presented on a 100% basis unless otherwise indicated)
Progress and current expectations in respect of our key growth projects are as
follows:
Operation Scope Capex Remaining capex First production Progress
$bn $bn
Copper
Quellaveco New copper mine in Moquegua, Peru producing c. 300 ktpa (100% basis, 180 ktpa c.2.8 (Anglo American 60% share) 0.6 (Anglo American 60% share) 2022 Construction began in 2018.
our share) over the first 10 years.
First production of concentrate in July 2022.
Refer to the Technology projects table below for Coarse Particle Recovery at
Quellaveco.
Collahuasi Phase 1 expansion focused on near term P101 optimisation opportunities, the Fifth ball mill c.0.1 (44% basis) c. 0.3 in total. Additional expansion studies ongoing. Subject to permitting 2023 Environmental approval (EIA) approval was obtained in December 2021, enabling
implementation of a fifth ball mill (approved) and a restart of leaching and approvals expansion of the processing capacity up to 210 ktpd, and the construction of a
activities to add c.50 ktpa (44% basis). Additional debottlenecking options to desalination plant and related infrastructure to provide a sustainable
further increase throughput remain under study. alternative water source.
Further phase expansions are in early stage study to increase production by up The fifth ball mill project (first stage of the expansion) is progressing
to an additional 100 ktpa (44% basis). according to plan. The expected start-up is during Q4 2023.
Diamonds
Marine Namibia New diamond recovery vessel, adding 0.5 Mctpa (100% basis) of some of the c.0.2 (Anglo American 50% share) <0.1 (Anglo American 50% share) 2022 Construction began in 2019.
highest value diamonds in the portfolio.
The vessel is now contributing to marine production, having been successfully
commissioned ahead of schedule and below budget in Q1 2022.
Crop Nutrients
Woodsmith New polyhalite (natural mineral fertiliser) mine being developed in Yorkshire, Subject to development timeline review Subject to development timeline review Subject to development timeline review Major critical path components have continued to progress to our updated
UK. Expected to produce POLY4 - a premium quality, low carbon fertiliser plan. Ongoing technical review confirmed there are several improvements
certified for organic use. to modify design to bring it up to Anglo American's safety and operating
integrity standards and optimise value for the long term. There has also been
a leadership change, with Tom McCulley having replaced Chris Fraser as CEO of
Crop Nutrients.
Iron Ore
Sishen Implementation of Ultra High Dense Media Separation (UHDMS) technology at 0.2 0.2 2023 Project execution approved in Feb 2021.
Kumba's Sishen operation will enable an increase in premium product production
and the beneficiation of lower grade materials by reducing the current cut-off
grade of <48% Fe to <40% Fe. In addition, the project contributes an
additional 3-4 years to Sishen's life of mine to 2039.
PGMs
Mogalakwena Evaluating various options to expand PGM production of the mine through Number of options being considered Not yet approved ~2026 The Future of Mogalakwena work continues to make good progress in the six
technology development and deployment and the optimal mine plan to deliver workstreams.
feed to the concentrators.
Steelmaking Coal
Moranbah-Grosvenor Expansion of the processing facilities to increase Anglo American's share of c.0.3 (Anglo American 88% share) Not yet approved 2025 Project approval expected 2023, dependent on progress of longwall operations
saleable tonnes of high quality steelmaking coal by c. 2.5 Mtpa (Anglo post-restart of Grosvenor mine.
American 88%).
Life extension projects (metrics presented on a 100% basis unless otherwise
indicated)
Progress and current expectations in respect of our key life extension
projects are as follows:
Operation Scope Capex Remaining capex Expected first production Progress
$bn $bn
Diamonds
Venetia 4 Mctpa underground replacement for the existing open pit. The project is 2.1 1.1 2023 Open-pit mining at Venetia is planned to end in H2 2022, with the transition
expected to add an estimated 88 million carats from approximately 134 million to underground mining starting thereafter.
tonnes of material((1)) and extend the life of the mine to 2047.
Jwaneng 9 Mctpa replacement (100% basis) for Cuts 7 and 8. The Cut-9 expansion of 0.3 (Anglo American 19.2% share) 0.2 (Anglo American 19.2% share) 2027 Project progressing on schedule.
Jwaneng will extend the life of the mine to 2036 and is expected to yield
approximately 57 million carats of rough diamonds from approximately
47 million tonnes of material((1)).
Steelmaking Coal
Aquila 3.5 Mtpa (70% basis), 0.2 (Anglo American 70% share) <0.1 (Anglo American 70% share) 2022 Development work began in September 2019 and first longwall production began
in February 2022.
7 year replacement for the Grasstree operation which has reached the end of
life. Aquila will be a longwall operation leveraging the existing Grasstree
infrastructure and producing high quality hard coking coal to 2028.
Iron Ore
Kolomela 4 Mtpa high grade iron ore replacement project. The development of a new pit, 0.4 0.3 2024 Approved in July 2020. Pit establishment and waste stripping commenced in
Kapstevel South, and associated infrastructure at Kolomela to help sustain 2021, with first ore expected in 2024.
output of c.13 Mtpa and extend the remaining life of mine to 2034.
PGMs
Mototolo/ The development of the project leverages the existing Mototolo infrastructure, 0.2 Approved 2023 Approved in December 2021. Execution commenced in Q1 2022. First production
enabling mining to extend into the adjacent and down-dip Der Brochen resource, expected in late 2023.
Der Brochen which will potentially extend the life of mine beyond 30 years.
((1)) Refer to Anglo American plc Ore Reserves and Mineral Resources
Report 2021 for additional information.
Technology projects((1))
The Group is investing c. $0.2-0.5 billion per year over the next three years
on technology projects to support the FutureSmart Mining(TM) programme and the
delivery of Anglo American's Sustainable Mining Plan targets, particularly
those that relate to safety, energy, emissions and water (metrics presented on
a 100% basis unless otherwise indicated):
Initiative Scope Progress
Copper, PGMs, and Nickel
Bulk ore sorting Deliver improved feed grade to plants through early rejection of waste, · Mogalakwena (PGMs) North Concentrator (~70% of complex feed) and
resulting in energy, water and cost savings. Los Bronces (Copper) Confluencia Plant (~65% of complex feed) units
operational and integration to business as usual is under way.
· Barro Alto (Nickel) in-pit unit to commence upgrades in second half
of 2022 for improved future sorting performance, and additional in-pit unit
under technical evaluation.
· Planning for trials at Kolomela (Iron Ore) under way.
Copper, PGMs, and Iron Ore
Coarse particle recovery (CPR) Innovative flotation process allows material to be ground to a larger particle · Demonstration plant construction and commissioning completed in
size, rejecting coarse gangue and allowing water to release from coarser ore 2021at El Soldado (Copper), with further testing in progress.
particles, improving energy efficiencies and water savings.
· Constructing full scale system at Mogalakwena North concentrator
(PGMs) - start-up anticipated Q4 2022.
· CPR approved at Quellaveco (Copper) to treat flotation tails,
improving recoveries by c.3% over the life of mine. Commissioning expected in
late 2023.
· Minas-Rio (Iron Ore) PFS-A complete, advancing to PFS-B in 2022 and
Feasibility in 2023.
· Los Bronces (Copper) PFS-B complete, advancing to Feasibility in
2022. Options being investigated at Collahuasi.
Copper and PGMs
Hydraulic dry stack Engineering of geotechnically stable tailings facilities that dry out in · El Soldado (Copper) demonstration unit commissioned. Full-scale
weeks, facilitating up to 85% water recovery. operation is under way and validation will continue until Q1 2023.
· Assessing application to tailings expansion at Mogalakwena (PGMs)
with benefits from water quality and quantity improvements. Brownfield trial
starting in Q3 2022.
Portfolio-wide
nuGen™ Zero Emissions Haulage Solution (ZEHS) Developing the world's largest hydrogen powered mining truck and providing · Launched prototype ZEHS hydrogen-powered mine haul truck - the
critical supporting infrastructure such as refuelling, recharging, and world's largest, designed to operate in everyday mining conditions - at our
facilitation of hydrogen production to decarbonise high power transport, using Mogalakwena PGMs mine in South Africa on 6 May.
renewable energy.
· Announced agreement of non-binding terms to combine Anglo
American's nuGen™ ZEHS with First Mode, the specialist engineering
technology company that partnered with us to develop the prototype.
· Agreement aims to support decarbonisation of our global fleet of
ultra-class mine haul trucks, of which approximately 400 are currently in
operation.
((1)) Expenditure relating to technology projects is included within
operating expenditure, or if it meets the accounting criteria for
capitalisation, within Growth capital expenditure.
Digital projects((1))
The Group is investing c. $0.1-0.2 billion per year over the next three years
on digital projects as part of the FutureSmart Mining(TM) programme (metrics
presented on a 100% basis unless otherwise indicated):
Initiative Scope Progress
PGMs, Iron Ore, Steelmaking Coal, Copper, and Diamonds
Predictive Maintenance, VOXEL™ Asset Strategy & Reliability Maintenance planning based on predictive analytics - resulting in improvements · A variety of deployments at Mogalakwena, Amandelbult, Amandelbult
in safety, reliability and availability of critical assets. Concentrator Plant, Rustenburg Base Metal Refinery and Polokwane Smelter
(PGMs), Kolomela (Iron Ore), Moranbah (Steelmaking Coal), Los Bronces
(Copper), Mafuta vessel, Jwaneng, and Gahcho Kué (Diamonds).
Copper, PGMs, and Iron Ore
Rapid Resource Modelling, VOXEL™ Discovery & Geosciences Enables consistent core logging, 3D implicit modelling, and statistical · Deployments at Mogalakwena (PGMs) and Quellaveco (Copper).
resource modelling as one integrated workflow in weeks vs years.
Spatial Inventory Management, VOXEL™ Discovery & Geosciences Builds a digital twin of material flow, providing access to accurate · Deployments at Los Bronces and Quellaveco (Copper), Minas-Rio,
information about material within the mining operation and enabling additional Kolomela and Sishen (Iron Ore), and Mogalakwena (PGMs).
value through bulk ore sorting.
Copper, PGMs, Iron Ore, and Steelmaking Coal
Process Performance Review, VOXEL™ Processing Delivers automated support to improve the detection, prioritisation, and · Deployments at Los Bronces and Quellaveco (Copper), Moranbah
resolution of process issues. (Steelmaking Coal), Kolomela (Iron Ore) and Mogalakwena (PGMs).
Copper, PGMs, Iron Ore, and Steelmaking Coal
Digital Operational Planning, VOXEL™ Integrated Operations Enables definition and management of models and data that then applies cutting · Deployments at Los Bronces (Copper), Mogalakwena Anglo Converter
edge simulation and elastic cloud-based computing technology to deliver Plant and Amandelbult (PGMs), Sishen, Kolomela and Minas-Rio (Iron Ore), and
optimised operational plans across the mining value chain. Moranbah and Grosvenor (Steelmaking Coal).
Diamonds, Copper, PGMs, and Iron Ore
Advanced Process Control Up to 40% improvement in stability and productivity. · Delivered at Minas-Rio and Kumba (Iron
Ore), Los Bronces, Quellaveco and Chagres
(Copper), Mogalakwena (PGMs), and Venetia and Benguela Gem (Diamonds).
· Ambition for 95% of automatable processes within our plant
flowsheets to be under Advanced Process Control by end of 2022.
((1) ) Expenditure relating to digital programmes is included within
underlying operating costs.
The Board
Changes during 2022 to the composition of the Board are set out below.
On 1 January 2022, Ian Tyler joined the Board as a non-executive director and
member of the Audit and Remuneration committees.
On 19 April 2022, at the conclusion of the Company's Annual General Meeting:
· Duncan Wanblad joined the Board as chief executive.
· Mark Cutifani retired as chief executive and stepped down from the
Board, after nine years in the role.
· Anne Stevens and Byron Grote stepped down from the Board as
non-executive directors, having both served for nine years.
· Ian Tyler succeeded Anne Stevens as chair of the Remuneration
Committee, and Hilary Maxson succeeded Byron Grote as chair of the Audit
Committee.
· Ian Tyler succeeded Byron Grote as the Board's senior independent
director.
· Marcelo Bastos succeeded Byron Grote as the designated non-executive
director to chair the Anglo American Global Workforce Advisory Panel.
The names of the directors at the date of this report and the skills and
experience our Board members contribute to the long term sustainable success
of Anglo American are set out on the Group's website:
www.angloamerican.com/about-us/leadership-team/board
Principal risks and uncertainties
Anglo American is exposed to a variety of risks and uncertainties which may
have a financial, operational or reputational impact on the Group, and which
may also have an impact on the achievement of social, economic and
environmental objectives. The principal risks and uncertainties facing the
Group at the 2021 year end are set out in detail on pages 60-67 of the
strategic report section of the Integrated Annual Report 2021
www.angloamerican.com (http://www.angloamerican.com) . The principal risks and
uncertainties facing the Group relate to the following:
· Catastrophic and natural catastrophe risks
· Economic environment including product prices
· Cyber security
· Political
· Community and social relations
· Safety
· Climate change
· Regulatory and permitting
· Operational performance
· Pandemic
· Corruption
· Water
· Future demand
The Group is exposed to changes in the economic environment, including to tax
rates and regimes, as with any other business. Details of any key risks and
uncertainties specific to the period are covered in the Operations review
section. Details of relevant tax matters are included in note 6 to the
Condensed financial statements.
De Beers - Diamonds
Financial and operational metrics((1))
Production Sales Unit Group Underlying EBITDA Underlying Capex* ROCE*
volume volume Price cost* revenue* EBITDA* margin*((6)) EBIT*
'000 '000 $/ct((3)) $/ct((4)) $m((5)) $m $m $m
cts((2))
cts
De Beers 16,884 15,329 213 59 3,595 944 53% 718 250 11%
Prior period 15,409 19,161 135 59 2,900 610 42% 377 205 6%
Botswana 11,705 n/a 189 32 n/a 333 n/a 295 31 n/a
Prior period 10,687 - 131 35 - 226 - 203 29 -
Namibia 1,016 n/a 632 292 n/a 93 n/a 78 19 n/a
Prior period 676 - 578 374 - 43 - 25 23 -
South Africa 2,916 n/a 147 39 n/a 227 n/a 162 169 n/a
Prior period 2,437 - 107 48 - 113 - 34 122 -
Canada 1,247 n/a 97 60 n/a 2 n/a (25) 19 n/a
Prior period 1,609 - 55 42 - 35 - 5 17 -
Trading n/a n/a n/a n/a n/a 401 12% 398 1 n/a
Prior period - - - - - 279 11% 276 1 -
Other((7)) n/a n/a n/a n/a n/a (112) n/a (190) 11 n/a
Prior period - - - - - (86) - (166) 13 -
((1) ) Prepared on a consolidated accounting basis, except for
production, which is stated on a 100% basis except for the Gahcho Kué joint
operation in Canada, which is on an attributable 51% basis.
((2)) Total sales volumes on a 100% basis were 17.3 million carats
(30 June 2021: 20.8 million carats). Total sales volumes (100%) include
De Beers Group's joint arrangement partners' 50% proportionate share of sales
to entities outside De Beers Group from Diamond Trading Company Botswana and
Namibia Diamond Trading Company.
((3)) Pricing for the mining business units is based on 100% selling
value post-aggregation of goods. Realised price includes the price impact of
the sale of non-equity product and, as a result, is not directly comparable to
the unit cost.
((4)) Unit cost is based on consolidated production and operating
costs, excluding depreciation and operating special items, divided by carats
recovered.
((5) ) Includes rough diamond sales of $3.3 billion (30 June 2021:
$2.6 billion).
((6) ) Total De Beers EBITDA margin shows mining EBITDA margin on an
equity basis, which excludes the impact of non-mining activities,
third‑party sales, purchases, trading downstream and corporate.
((7)) Other includes Element Six, Brands and consumer markets,
and corporate.
Markets
Following a continued strong recovery in consumer demand for diamond jewellery
over the holiday season at the end of 2021, the year began with healthy demand
and inventory conditions throughout the diamond pipeline as retailers
restocked in the first two months of the year - with polished diamond prices
rising on the back of the strong trading environment.
The onset of the Russia-Ukraine war initially affected industry sentiment
negatively as diamond businesses sought to understand the potential impact on
supply and demand from both consumer self-sanctioning in western markets and
subsequent formal sanctions.
Nonetheless, despite the impact of the war and associated sanctions, as well
as the recovering demand for luxury travel, consumer demand for diamond
jewellery in the key US market has continued to post positive growth on the
record levels of demand seen in 2021. Polished prices subsequently started to
rise again in the second quarter, especially in the smaller diamond sizes (of
which Russia produces a large share) but softened slightly in June from higher
inventory levels and increased economic uncertainty. The overall improvement
in prices was despite the recovery in Chinese consumer demand for diamond
jewellery seen at the start of the year being impacted in the second quarter
by the latest wave of Covid-19 and subsequent lockdowns in major Chinese
cities.
Demand for De Beers' rough diamonds remained robust throughout the first half
of the year, supported by strong US consumer demand for diamond jewellery,
tightness in global rough diamond supply and De Beers' focus on enhanced
provenance assurance for its rough diamonds through its blockchain-backed
Tracr(TM) technology platform.
Financial and operational overview
Total revenue increased to $3.6 billion (30 June 2021: $2.9 billion), with
rough diamond sales rising to $3.3 billion (30 June 2021: $2.6 billion), as
the midstream replenished their stocks following strong consumer demand over
the holiday season. Rough diamond sales volumes totalled 15.3 million carats
(30 June 2021: 19.2 million carats), with the prior period benefiting from
very strong demand recovery following the impact of Covid-19 in 2020. The
average realised price rose by 58% to $213/ct (30 June 2021: $135/ct),
driven by a larger proportion of higher value rough diamonds sold, as well as
growth in the De Beers rough diamond price index. The rough price index
increased by 28% compared with the same period in the prior year, reflecting
positive consumer demand for diamond jewellery as well as tightness in
inventories across the diamond value chain.
Underlying EBITDA increased by 55% to $944 million (30 June 2021: $610
million), reflecting the recovery in sales. Unit costs were flat at $59/ct
(30 June 2021: $59/ct) as the benefit of higher production was offset by
rising inflation and input costs.
Capital expenditure increased by 22% to $250 million (30 June 2021: $205
million), largely due to a ramp-up in the Venetia Underground project, ahead
of first production in 2023.
Operational performance
Mining
Rough diamond production increased by 10% to 16.9 million carats
(30 June 2021: 15.4 million carats), reflecting a strong operational
performance and higher planned levels of production to meet continued strong
demand for rough diamonds, while the first quarter of 2021 was affected by
particularly high rainfall in Botswana and at Venetia.
In Botswana, production increased by 10% to 11.7 million carats
(30 June 2021: 10.7 million carats) owing to increased processing at both
Orapa and Jwaneng, as well as planned higher grade at Orapa. The Government of
the Republic of Botswana and De Beers Group have extended their existing
agreement for the sale of Debswana's rough diamond production by 12 months
until 30 June 2023. Following further positive progress towards a new
agreement being made in the first half of 2022, the two parties have agreed to
the one-year extension to enable the finalisation of the ongoing discussions.
Namibia production increased by 50% to 1.0 million carats (30 June 2021: 0.7
million carats) primarily due to continued strong performance from the new
diamond recovery vessel, the Benguela Gem, in the first quarter of 2022.
South Africa production increased by 20% to 2.9 million carats
(30 June 2021: 2.4 million carats) due to the treatment of higher grade ore
from the final cut of the open pit at Venetia.
Production in Canada decreased by 22% to 1.2 million carats (30 June 2021:
1.6 million carats), primarily as a result of treating lower grade ore and
Covid-19 related absenteeism.
Brands and consumer markets
The strong recovery in US consumer demand for diamond jewellery was reflected
in continued growth in De Beers' branded diamond jewellery from De Beers
Jewellers and De Beers Forevermark. As diamond provenance and traceability
become increasingly important, De Beers continues to invest in its unique
ability to provide source assurance for its diamonds at scale, underpinned by
the Tracr(TM) blockchain platform. This proprietary technology provides an
immutable record of a diamond's provenance, underpinning confidence in natural
diamonds.
Operational and market outlook
Consumer desire for natural diamonds continues to be robust in key consumer
markets. However, a deterioration in global macro-economic conditions and
significant inflation in the key markets could result in reduced consumer
spending impacting demand for diamond jewellery. Despite this, the combination
of ongoing sanctions against Russia, decisions from a number of US-based
jewellery businesses to apply their own restrictions on purchases of Russian
diamonds, and continued development of provenance initiatives has the
potential to underpin continued demand for De Beers' rough diamonds in the
medium to longer term.
Meanwhile, the longer term evolution of the diamond value chain continues,
including a sustained focus on inventory balance, the efficient distribution
of diamonds throughout the pipeline, increased online purchasing, and
a greater focus on the provenance and sustainability credentials of companies
and their products. Despite the near term challenges and uncertainties, the
long term outlook for diamond jewellery demand remains positive, while the
global supply of rough diamonds is expected to slightly decline owing to the
lack of recent discoveries.
Full year production guidance for 2022 is 32-34 million carats (100% basis),
subject to trading conditions and the extent of further Covid-19 related
disruptions. Full year unit cost guidance for 2022 is c.$65/ct.
Copper
Financial and operational metrics
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 273 265 401 150 2,443 1,166 47% 894 953 19%
Prior period 330 305 460 116 2,974 1,935 66% 1,630 768 38%
Los Bronces((5)) 130 122 n/a 219 1,027 431 42% 324 363 n/a
Prior period 163 155 - 155 1,431 920 64% 768 189 -
Collahuasi((6)) 128 128 n/a 85 1,095 821 75% 697 145 n/a
Prior period 146 133 - 58 1,238 1,048 85% 928 197 -
Quellaveco((7)) n/a n/a n/a n/a n/a n/a n/a n/a 376 n/a
Prior period - - - - - - - - 331 -
Other operations((8)) 16 15 n/a n/a 321 (86) (3)% (127) 69 n/a
Prior period 21 17 - - 305 (33) 16% (66) 51 -
((1)) Excludes 216 kt third-party sales (30 June 2021: 157 kt).
((2)) Represents realised copper price and excludes impact of
third-party sales.
((3)) C1 unit cost includes by-product credits.
((4)) Group revenue is shown after deduction of treatment and
refining charges (TC/RCs).
((5)) Figures on a 100% basis (Group's share: 50.1%).
((6)) 44% share of Collahuasi production, sales and financials.
((7)) Figures on a 100% basis (Group's share: 60%), except capex
which represents the Group's share after deducting direct funding from
non‑controlling interests. H1 2022 capex on a 100% basis is $626 million, of
which the Group's share is $376 million. H1 2021 capex on a 100% basis was
$551 million, of which the Group's share was $331 million.
((8) ) Other operations includes El Soldado and Chagres (figures on a
100% basis, Group's share: 50.1%). Financials include third-party sales and
purchases, projects and corporate costs.
( )
Financial and operational overview
Underlying EBITDA decreased by 40% to $1,166 million (30 June 2021: $1,935
million), reflecting lower production and a 13% decrease in the realised
price.
Copper production of 273,400 tonnes was 17% lower than the prior period
(30 June 2021: 330,000 tonnes) due to planned lower grades and expected
lower water availability at Los Bronces, owing to the ongoing drought in
Chile's central zone - with record low levels of precipitation in 2021 and the
first half of 2022, which were partly offset by water management initiatives.
Unit costs increased by 29% to 150 c/lb (30 June 2021: 116 c/lb), reflecting
lower production, record levels of local inflation and higher input costs,
particularly diesel and explosives, partly offset by the weaker Chilean peso
and higher by-product credits.
Capital expenditure increased by 24% to $953 million (30 June 2021: $768
million), reflecting expenditure on critical infrastructure projects deferred
due to the Covid-19 pandemic in Chile and the ongoing investment in the
Quellaveco project in Peru, partly offset by the weaker Chilean peso.
Markets
6 months ended 6 months ended
30 June 2022 30 June 2021
Average market price (c/lb) 443 413
Average realised price (c/lb) 401 460
The difference between the market price and realised price is largely a
function of provisional pricing adjustments, with 145,900 tonnes of copper
provisionally priced at 374 c/lb at 30 June 2022 (30 June 2021: 181,072
tonnes provisionally priced at 425 c/lb), and the timing of sales across the
period.
The average LME copper price was 7% higher compared with the same period in
2021, in spite of the sharp decline in the average price towards the end of
June as investor selling took place across a range of markets, including
copper. Fears of recession, supply-chain disruptions in manufacturing,
inflation and interest rate increases have adversely impacted investor
sentiment as the conflict in Ukraine persists and energy costs rise. In
addition, economic growth in China is only recovering slowly after recent
coronavirus-induced lockdowns in key centres. Despite copper's strong role in
global energy transition activity, and concerns about supply availability over
the medium and longer term, copper prices have been adversely affected by the
weaker near term global economic outlook.
Operational performance
Copper production of 273,400 tonnes was 17% lower than the prior period
(30 June 2021: 330,000 tonnes).
At Los Bronces, production decreased by 21% to 129,700 tonnes (30 June 2021:
163,200 tonnes) due to planned lower grades (0.59% vs 0.70%), lower plant
throughput (23.1 Mt vs 24.7 Mt) as a result of expected lower water
availability, and lower copper recovery (80.9% vs 83.2%). The impact of
expected lower water availability, following the record low levels of
precipitation at the end of 2021 and during the first half of 2022, was
partially offset by initiatives to maximise water efficiency, including
sourcing of external industrial water. C1 unit costs increased by 41% to 219
c/lb (30 June 2021: 155 c/lb), driven by planned lower production, record
levels of inflation and cost increases associated with water management,
partly offset by higher by-product credits and the weaker Chilean peso.
At Collahuasi, Anglo American's attributable share of copper production
decreased by 12% to 127,800 tonnes (30 June 2021: 145,900 tonnes) due to
planned lower grades (1.14% vs 1.27%) in accordance with the mine plan. C1
unit costs increased by 47% to 85 c/lb (30 June 2021: 58 c/lb), driven by
planned lower production and the effect of inflation, partly offset by the
weaker Chilean peso and higher by-product credits.
Production at El Soldado decreased by 24% to 15,900 tonnes (30 June 2021:
20,900 tonnes) due to planned lower grades (0.54% vs 0.73%) in accordance with
the mine plan. C1 unit costs increased by 43% to 304 c/lb (30 June 2021: 213
c/lb) due to the lower production and inflation, partly offset by the weaker
Chilean peso.
Chile´s central zone continues to face severe drought conditions, with the
two years up to June 2022 being the driest years since records began, and with
the outlook for the year remaining very dry.
Operational outlook - Copper Chile
2022 full year production guidance for Chile is 560,000-600,000 tonnes,
subject to the extent of further Covid-19 related disruptions and water
availability. 2022 full year C1 unit cost guidance for Chile is c.150c/lb,
subject to the impact of water availability on production volumes.
There is limited near term production impact from the recent rejection of the
environmental permit application for the Los Bronces Integrated Project. Anglo
American is continuing to engage with the relevant regulatory authorities to
make available any additional information or clarity that may be required.
Anglo American has requested a review by a Minister's Committee - which is the
next stage of the regulated permitting process in Chile - to evaluate the full
breadth of merits of the project. Anglo American remains hopeful that the
positive impact this project will have on the local area, including an
improvement to air quality, as well as a major long term inward investment for
Chile, will be recognised.
Quellaveco update
The Group announced first production of copper concentrate from Quellaveco on
12 July 2022, a key milestone in delivery of this world class asset, on time
and on budget, as Quellaveco nears completion ahead of receiving final
regulatory clearance for commercial operations to begin.
The production of first copper concentrate marks the beginning of a normal
period of testing of the processing plant to demonstrate readiness for
operations. Copper concentrate from the testing period is being stockpiled for
future sale whilst the process of obtaining regulatory permits for commercial
operations takes place.
The delivery of first concentrate has taken place against an extremely
challenging backdrop through two years of pandemic-related disruption. Despite
this, the project is producing copper in line with the original construction
schedule and less than four years after project approval. The total estimated
capex is $5.5 billion and is in line with the 2020 budget to accommodate
Covid-19 requirements. The Group's share of total estimated capex is $2.8
billion.
Focus is now on receiving the required regulatory clearances, execution of
remaining project-scope activities including the commissioning of the second
grinding line expected to begin in the third quarter of 2022, and safely
ramping up the processing plant to nameplate capacity over the next 12 months.
We are also working closely with government and local communities on the safe
and responsible demobilisation of the project workforce.
Capital expenditure in the first half of 2022 (on a 100% basis) was $0.6
billion, of which the Group's share is $0.4 billion.
Capital expenditure guidance for 2022 remains $0.8-1.1 billion (100% basis),
of which the Group's share is $0.5-0.7 billion.
Operational outlook - Copper Peru
Production guidance for Peru for 2022 remains 100,000-150,000 tonnes of
copper. C1 unit cost guidance for 2022 is c. 135c/lb, subject to progressing
the ramp-up of production volumes. All guidance and project progress remains
subject to the extent of any further Covid-19 related disruption.
Quellaveco expects to deliver around 300,000 tonnes per annum of copper
equivalent production on average in its first 10 years of operation.
Nickel
Financial and operational metrics
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 19,600 16,800 11.59 487 407 239 59% 201 32 30%
Prior period 20,700 20,000 7.21 350 325 135 41% 106 10 18%
((1)) Realised price.
((2)) C1 unit cost.
( )
Financial and operational overview
Underlying EBITDA increased by 77% to $239 million (30 June 2021: $135
million), reflecting higher realised nickel prices, partially offset by lower
volumes and higher unit costs. C1 unit costs increased by 39% to 487 c/lb
(30 June 2021: 350 c/lb) as a result of higher input prices, lower
production volumes and the stronger Brazilian real.
Capital expenditure increased to $32 million (30 June 2021: $10 million),
primarily due to planned higher expenditure on P101 asset productivity
initiatives.
Markets
6 months ended 6 months ended
30 June 2022 30 June 2021
Average market price ($/lb) 12.52 7.93
Average realised price ($/lb) 11.59 7.21
Differences between the market price (which are LME-based) and our realised
price (the ferronickel price) are due to the discounts (or premiums) to the
LME price, which depend on market conditions, supplier products and consumer
preferences.
The average LME nickel price of $12.52/lb was 58% higher (30 June 2021:
$7.93/lb). The year started with strong demand and prices, which were further
bolstered by the invasion of Ukraine by Russia, a major nickel supplier, and
growing consumer resistance to buying Russian nickel. Prices weakened at the
end of the period due to inflation and global economic growth concerns,
despite available nickel stocks continuing to decline.
Operational performance
Nickel production decreased by 5% to 19,600 tonnes (30 June 2021: 20,700
tonnes), primarily due to lower ore grades as a result of licensing delays
that are now resolved, as well as the impact of heavy rainfall and unplanned
maintenance. Sales volumes were further impacted by logistics constraints,
primarily in the container freight market.
Operational outlook
Production guidance for 2022 is 40,000-42,000 tonnes, subject to the extent of
further Covid-19 related disruption.
C1 unit cost guidance for 2022 is c.495c/lb.
Platinum Group Metals
Financial and operational metrics
Production Sales Basket Unit Group Underlying Mining Underlying Capex* ROCE*
volume volume price cost* revenue* EBITDA* EBITDA EBIT*
PGMs PGMs margin*((5))
koz((1)) koz((2)) $/PGM oz((3)) $/PGM oz((4)) $m $m $m $m
PGMs 1,988 2,044 2,671 948 5,555 2,732 55% 2,555 394 119%
Prior period 2,079 2,568 2,884 866 7,414 4,383 71% 4,211 363 160%
Mogalakwena 510 540 2,543 821 1,374 871 63% 796 210 n/a
Prior period 637 712 2,748 690 1,958 1,403 72% 1,330 189 -
Amandelbult 343 372 3,016 1,184 1,122 603 54% 573 32 n/a
Prior period 341 441 3,247 1,178 1,432 965 67% 938 34 -
Other operations((6)) 456 436 2,780 924 1,210 581 48% 524 152 n/a
Prior period 425 521 3,054 880 1,547 1,116 72% 1,059 140 -
Processing and trading((7)) 678 696 n/a n/a 1,849 677 37% 662 n/a n/a
Prior period 675 894 - - 2,477 899 36% 884 n/a -
((1) ) Production reflects own-mined production and purchase of metal
in concentrate. PGM volumes consists of 5E metals and gold.
((2) ) Sales volumes exclude the sale of refined metal purchased from
third parties and toll material. PGM volumes consists of 5E metals and gold.
((3) ) Average US$ realised basket price, based on sold ounces
(own-mined and purchased concentrate). Excludes the impact of the sale of
refined metal purchased from third parties.
((4) ) Total cash operating costs (includes on-mine, smelting and
refining costs only) per own-mined PGM ounce of production.
((5)) The total PGMs mining EBITDA margin excludes the impact of the
sale of refined metal purchased from third parties, purchase of concentrate
and tolling.
((6)) Includes Unki, Mototolo and PGMs' share of joint operations
(Kroondal and Modikwa). Other operations margin includes unallocated market
development, care and maintenance, and corporate costs.
((7)) Purchase of concentrate from joint operations, associates and
third parties for processing into refined metals, tolling and trading
activities.
Financial and operational overview
Underlying EBITDA decreased to $2,732 million (30 June 2021: $4,383
million), as a result of a 7% decrease in the PGM basket price, reflecting
lower market prices, partly offset by a more normal sales mix compared with
the first half of 2021. Underlying EBITDA was also negatively affected by
reduced sales, as refined production in the first half of 2021 benefited from
the processing of higher than normal work-in-progress inventory following the
ACP Phase A rebuild. Unit costs increased by 9% to $948/PGM ounce
(30 June 2021: $866/PGM ounce), reflecting higher input cost inflation and
lower production volumes, partly offset by the weaker South African rand.
Capital expenditure increased by 9% to $394 million (30 June 2021: $363
million), driven by the Covid-19 related deferral of project timelines that
were rescheduled from 2021 into the first half of 2022.
Markets
6 months ended 6 months ended
30 June 2022 30 June 2021
Average platinum market price ($/oz) 995 1,170
Average palladium market price ($/oz) 2,219 2,592
Average rhodium market price ($/oz) 17,167 24,662
US$ realised basket price ($/PGM oz) 2,671 2,884
The average realised PGM basket price decreased by 7% to $2,671 per PGM ounce
(30 June 2021: $2,884 per PGM ounce). PGM prices were volatile in the first
half of 2022, initially increasing due to supply concerns following Russia's
invasion of Ukraine, then falling back as demand was negatively affected by
the slowing global economy.
All three major PGMs showed similar price trends, with palladium being
particularly turbulent, reaching a new all-time high of almost $3,340 per
ounce in March, before ending the period below $2,000 per ounce, largely
reflecting the large proportion of palladium supply that comes from Russia.
The platinum price was also adversely affected by a stronger US dollar, which
reached a 20-year high in the period. Strong by-product prices and differences
in the timing and mix of metals sold cushioned the impact of lower PGM prices
on the realised basket price.
Operational performance
Total PGM production decreased by 4% to 1,987,500 ounces (30 June 2021:
2,079,100 ounces), principally due to lower grade at Mogalakwena, partially
offset by increased production from Mototolo, Unki and Amandelbult.
Own-mined production
PGM production from own-managed mines (Mogalakwena, Amandelbult, Unki and
Mototolo) and equity share of joint operations decreased by 7% to 1,309,400
ounces (30 June 2021: 1,404,100 ounces).
Mogalakwena PGM production decreased by 20% to 510,200 ounces (30 June 2021:
637,400 ounces), largely as a result of heavy rainfall in the first quarter,
leading to the need to mine in lower grade areas, and Covid-19 supply chain
disruptions impacting delivery of heavy mining equipment.
Amandelbult PGM production increased by 1% to 343,300 ounces (30 June 2021:
341,300 ounces), despite infrastructure closures, reflecting improved
underground mining performance that led to increased stability and higher
throughput at the concentrator.
Production from other operations increased by 7% to 455,900 ounces
(30 June 2021: 425,400 ounces), reflecting the increased production as a
result of the completion of the concentrator debottlenecking projects at Unki
and Mototolo.
Purchase of concentrate
Purchase of concentrate, excluding tolling, was flat at 678,100 ounces
(30 June 2021: 675,000 ounces).
Refined production and sales volumes
Refined PGM production (excluding toll-treated metal) decreased by 16% to
1,959,100 ounces (30 June 2021: 2,326,700 ounces) as the first half of
2021 benefited from the processing of higher than normal work-in-progress
inventory following the ACP Phase A rebuild and commissioning in the fourth
quarter of 2020. Planned maintenance and the annual stock count (including at
the Precious Metals Refinery, which only happens every three years) also
resulted in additional downtime of processing assets.
PGM sales volumes decreased to 2,044,400 ounces (30 June 2021: 2,568,200
ounces), in line with refined production.
Operational outlook
PGM metal in concentrate production guidance for 2022 is 3.9-4.3 million
ounces, with own-mined output accounting for c.65%. Refined PGM production
guidance for 2022 is 4.0-4.4 million ounces, subject to the potential impact
of Eskom load-shedding. Both are subject to the extent of further Covid-19
related disruption. Unit cost guidance for 2022 is c.$950/PGM ounce.
Iron Ore
Financial and operational metrics
Production Sales Price Unit Group Underlying Mining Underlying Capex* ROCE*
volume volume cost* revenue* EBITDA* EBITDA EBIT*
margin*
Mt((1)) Mt((1)) $/t((2)) $/t((3)) $m $m $m $m
Iron Ore Total 27.5 28.3 135 40 4,393 2,298 51% 2,047 427 38%
Prior period 31.9 30.7 210 33 6,935 4,910 70% 4,661 278 88%
Kumba Iron Ore((4)) 17.8 19.6 135 43 2,907 1,570 54% 1,403 355 99%
Prior period 20.4 19.6 216 40 4,412 3,033 69% 2,860 210 211%
Iron Ore Brazil (Minas-Rio) 9.8 8.7 134 35 1,486 728 45% 644 72 23%
Prior period 11.5 11.1 200 22 2,523 1,877 73% 1,801 68 59%
((1)) Production and sales volumes are reported as wet metric
tonnes. Product is shipped with c.9% moisture from Minas‑Rio and c.1.6%
moisture from Kumba.
((2) ) Prices for Kumba Iron Ore are the average realised export
basket price (FOB Saldanha) (wet basis). Prices for Minas-Rio are the average
realised export basket price (FOB Brazil) (wet basis). Prices for total iron
ore are a blended average.
((3) ) Unit costs are reported on an FOB wet basis. Unit costs for
total iron ore are a blended average.
((4) ) Sales volumes and realised price differ to Kumba's stand-alone
reported results due to sales to other Group companies.
( )
Financial and operational overview
Underlying EBITDA for Iron Ore decreased by 53% to $2,298 million
(30 June 2021: $4,910 million), following a 36% decrease in the realised
iron ore price to $135/tonne, lower sales and higher unit costs.
Kumba
Underlying EBITDA decreased by 48% to $1,570 million (30 June 2021: $3,033
million), driven by a lower average realised FOB iron ore export price of
$135/tonne (30 June 2021: $216/tonne) and higher unit costs, partly offset
by the weaker South African rand. Unit costs increased by 8% to $43/tonne
(30 June 2021: $40/tonne), reflecting lower production volumes and input
cost inflation, partially offset by higher waste stripping capitalised.
Production decreased by 13%, largely due to heavy rainfall in the period.
Total sales volumes were broadly flat at 19.6 Mt (30 June 2021: 19.6 Mt),
with lower production supplemented by a sell-down of finished goods inventory.
Capital expenditure increased by 69% to $355 million (30 June 2021: $210
million), reflecting the ramp-up in activity at the Kapstevel South pit life
extension project at Kolomela and the Ultra High Dense Media Separation
(UHDMS) technology growth project at Sishen, partly offset by the impact of
the weaker South African rand.
Minas-Rio
Underlying EBITDA decreased by 61% to $728 million (30 June 2021: $1,877
million), reflecting the lower average realised price and lower volumes as a
result of maintenance and unusually heavy rainfall. Unit costs increased by
59% to $35/tonne (30 June 2021: $22/tonne), reflecting higher input costs,
principally consumables and electricity, lower production volumes, increased
maintenance costs and the impact of the stronger Brazilian real.
Capital expenditure was broadly flat at $72 million (30 June 2021: $68
million).
( )
Markets
6 months ended 6 months ended
30 June 2022 30 June 2021
Average market price (Platts 62% Fe CFR China - $/tonne) 140 183
Average market price (MB 66% Fe Concentrate CFR - $/tonne) 174 209
Average realised price (Kumba export - $/tonne) (FOB wet basis) 135 216
Average realised price (Minas-Rio - $/tonne) (FOB wet basis) 134 200
Kumba's FOB realised price of $135/wet metric tonne was 14% higher than the
equivalent Platts 62% Fe FOB Saldanha market price (adjusted for moisture) of
$118/wet metric tonne. This reflects the premium for the higher iron content
at 64.0% and relatively high proportion (approximately 66%) of lump that the
product portfolio attracts (which helps steel mills reduce emissions).
Minas-Rio's pellet feed product is also higher grade (with iron content of 67%
and lower impurities) than the reference product used for the Platts 62% Fe
CFR China index. The Metal Bulletin (MB) 66 index, therefore, is used when
referring to Minas-Rio product. The Minas-Rio realised price of $134/wet
metric tonne was 1% higher than the equivalent MB 66 FOB Brazil index,
(adjusted for moisture, of $133/wet metric tonne), reflecting the premium
quality of the product.
Operational performance
Kumba
Production decreased by 13% to 17.8 Mt (30 June 2021: 20.4 Mt), driven by
extremely high rainfall impacting feedstock availability, a safety
intervention at Kolomela and equipment reliability. Production at Sishen
decreased by 7% to 12.9 Mt (30 June 2021: 13.9 Mt) and at Kolomela by 25% to
4.8 Mt (30 June 2021: 6.4 Mt).
Minas-Rio
Production decreased by 15% to 9.8 Mt (30 June 2021: 11.5 Mt) due to
maintenance and unusually heavy rainfall that impacted the availability of the
mining fleet and plant.
Operational outlook
Kumba
2022 full year production guidance is 38-40 Mt, subject to the extent of
further Covid-19 related disruption and third‑party rail and port
performance.
2022 full year unit cost guidance is c.$44/tonne.
Minas-Rio
2022 full year production guidance is 22-24 Mt, subject to the extent of
further Covid-19 related disruption, as well as weather related disruptions.
2022 full year unit cost guidance is c.$32/tonne.
Steelmaking Coal
Financial and operational metrics
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 4.8 5.2 397 160 2,213 1,399 63% 1,246 265 92%
Prior period 6.2 6.0 115 124 736 (94) (13)% (383) 257 (26)%
((1)) Production volumes are saleable tonnes, excluding thermal coal
production of 0.8 Mt (30 June 2021: 0.9 Mt).
((2) ) Sales volumes exclude thermal coal sales of 0.7 Mt (six months
ended 30 June 2021: 1.1 Mt). The first half of 2022 includes 0.1 Mt of
steelmaking coal mined by third parties and processed by Anglo American.
((3)) Realised price is the weighted average hard coking coal and
PCI sales price achieved at managed operations.
((4) ) FOB cost per tonne, excluding royalties and study costs.
Financial and operational overview
Underlying EBITDA increased to $1,399 million (30 June 2021: $94 million
loss), driven by a 245% increase in the weighted average realised price for
steelmaking coal. This was partially offset by 13% lower sales volumes and a
29% increase in unit costs to $160/tonne (30 June 2021: $124/tonne),
reflecting the impact of lower production, Covid-19 related disruptions and
higher inflation. Also included is $250 million for the finalisation of the
Grosvenor gas ignition claim by the Group's self-insurance entity. Production
was primarily affected by the planned end of mining at the Grasstree operation
in January 2022 and associated ramp-up of the replacement Aquila longwall
operation, as well as record unseasonal rainfall in May at the open pit
operations, partly offset by restart of the Grosvenor mine in February 2022,
following the underground incident in May 2020.
Capital expenditure was broadly flat at $265 million (30 June 2021: $257
million), with higher development-related spend across all three underground
mines largely offset by lower life extension expenditure following the
completion of the Aquila project, where longwall production began in February
2022.
Markets
6 months ended 6 months ended
30 June 2022 30 June 2021
Average benchmark price - hard coking coal ($/tonne)((1)) 467 132
Average benchmark price - PCI ($/tonne)((1)) 406 110
Average realised price - hard coking coal ($/tonne)((2)) 407 117
Average realised price - PCI ($/tonne)((2)) 322 103
((1)) Represents average spot prices.
((2) ) Realised price is the sales price achieved at managed
operations.
Average realised prices differ from the average market prices due to
differences in material grade and timing of shipments. Hard coking coal (HCC)
price realisation decreased slightly to 87% of average benchmark price
(30 June 2021: 89%), driven by a higher proportion of lower grade coking
coal sales in the first half of 2022 compared to the same period in 2021.
The average benchmark price for Australian HCC increased to $467/tonne
(30 June 2021: $132/tonne). HCC prices at the start of 2022 were lifted by
wet weather events and Covid-19 related workforce absenteeism in Australia,
and later by buyers' anxiety around global sanctions on Russian supply, but
fell sharply after reaching multiple record highs in March. Global seaborne
demand for steelmaking coal has since fallen in tandem with weakness in the
downstream steel sector.
Operational performance
Production decreased by 22% to 4.8 Mt (30 June 2021: 6.2 Mt), principally
due to the planned end of mining at the Grasstree operation in January 2022
and ramp-up of the replacement Aquila longwall, which began operations in
February 2022 and fully ramped up in June. Production was also impacted by
record unseasonal rainfall in May at the open cut operations.
At Grosvenor, longwall operations restarted in February 2022 following
regulatory approval, with production ramped up as planned in the second
quarter. Longwall mining restarted at Moranbah in the next planned longwall
panel in May 2022, following a fatal incident in March 2022, and an extended
longwall move.
Operational outlook
2022 full year export steelmaking coal production guidance is 15-17 Mt,
subject to the extent of further unseasonal wet weather, continued tight
labour markets and further Covid-19 related disruption. Unit cost guidance for
2022 is c.$110/tonne.
As a result of increases to Queensland's royalty rates from 1 July, government
taxation for the second half of the year is expected to increase from around
48% to 59% in total (at current spot prices).
Manganese
Financial and operational metrics
Production Sales Group Underlying Mining Underlying Capex* ROCE*
volume volume revenue* EBITDA* EBITDA EBIT*
margin*
Mt Mt $m $m $m $m
Manganese 1.8 1.8 475 223 47 % 192 n/a 162%
Prior period((1)) 1.8 1.9 370 154 42 % 121 - 104%
((1)) Sales and financials include ore and alloy.
( )
Financial and operational overview
Manganese (Samancor)
Underlying EBITDA increased by 45% to $223 million (30 June 2021:
$154 million), benefiting from a stronger average realised manganese ore
selling price, partially offset by a 3% decrease in manganese ore sales
volumes, as well as increased freight and operating costs.
The average benchmark price for manganese ore (Metal Bulletin 44% manganese
ore CIF China) increased by 39% to $6.99/dmtu (30 June 2021: $5.03/dmtu),
largely due to stronger demand in the first quarter and the impact of the war
in Ukraine.
Operational performance
Attributable manganese ore production was in line with the prior period at 1.8
Mt (30 June 2021: 1.8 Mt) . There was no manganese alloy production as the
South African smelter has been on care and maintenance since the Covid-19
lockdown in 2020. The divestment of the Metalloys business did not proceed as
certain commercial conditions were not satisfied.
Crop Nutrients
Financial and operational metrics
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 110 (18) n/a (18) 242 n/a
Prior period - - 53 (12) - (12) 279 -
Woodsmith project n/a n/a n/a n/a n/a n/a 242 n/a
Prior period - - - - - n/a 279 -
Other((1)) n/a n/a 110 (18) n/a (18) n/a n/a
Prior period - - 53 (12) - (12) - -
((1) ) Other comprises projects and corporate costs as well as the
share in associate results from The Cibra Group, a fertiliser distributor
based in Brazil.
Crop Nutrients
Anglo American is developing the Woodsmith project in the north east of
England to access the world's largest known deposit of polyhalite, a natural
mineral fertiliser product containing potassium, sulphur, magnesium and
calcium - four of the six nutrients that every plant needs to grow.
The Woodsmith project is located approximately 8 km south of Whitby, where
polyhalite ore will be extracted via two 1.6 km deep mine shafts and
transported to Teesside on an underground conveyor belt in a 37 km tunnel,
thereby minimising impact on the surface. It will then be granulated at a
materials handling facility to produce a low carbon fertiliser product - known
as POLY4 - that will be exported from our dedicated port facility to a network
of customers around the world.
Woodsmith project
Anglo American has completed a detailed technical review of the Woodsmith
project to ensure the technical and commercial integrity of the full scope of
its design recognising the multi-decade life of the mine. The review confirmed
that a number of elements of the project's original design would benefit from
modification to bring it up to Anglo American's safety and operating integrity
standards and to optimise the value of the asset and its world class orebody
for the long term.
Throughout 2022, and ahead of the full project execution phase, the Woodsmith
team, led by new Crop Nutrients CEO Tom McCulley, is working through the
detailed design engineering and is making a number of changes. Changes relate
particularly to the design and phasing of the two main shafts, the development
of the underground mining area, and the processing and port facilities, as
well as those changes required to accommodate both increased production
capacity and more efficient and scalable mining methods; such improvements
will also require the installation of additional ventilation earlier in the
development of the underground mining area.
Anglo American expects that the improvements it is making to the project will
result in an enhanced configuration and therefore a different and longer
construction schedule than anticipated prior to Anglo American's ownership.
Anglo American's capital budget for the development of Woodsmith will reflect
such scope and timing changes to ensure that its exacting standards are met
and the full commercial value of the asset is realised. The capital budget and
schedule to completion will be finalised once the detailed design engineering
is complete and with the benefit of further shaft sinking progress over the
next 12-18 months.
In the meantime, development of the project's major critical path components
has continued to progress to our updated plan during the first half of 2022,
with capital expenditure of $242 million in the first half out of an estimated
$600 million for the year as a whole (2021: $530 million). The mineral
transport tunnel has now been connected to the 383 m deep intermediate access
shaft site at Lockwood Beck during a period of planned maintenance for the
tunnel boring machine. At the mine site, engineering improvements have been
made to the infrastructure in the services shaft aimed at increasing shaft
sinking rates over the project's duration. We continue to progress the
infrastructure at the production shaft in advance of shaft sinking activities
getting under way, with the shaft boring road header now assembled in the
shaft.
( )
( )
Market development - POLY4
The ongoing focus of the market development activities is to develop and
implement customer-centric sales and marketing strategies utilising regional
customer insights throughout the value chain and developing routes to market.
With more than 1,150 commercial scale, in-progress or completed on-farm
demonstrations, we continue to build a compelling body of evidence that shows
POLY4's efficacy to support crop production through increased yields, improved
crop quality and enhanced soil health through resilience to compaction,
erosion and run-off, as well as improving nutrient availability to crops,
helping to reduce nutrient waste into watercourses.
Sustainability is becoming an ever more central imperative for the fertiliser
industry, aiming to improve environmental sustainability, including reducing
carbon intensity. Regenerative farming is also gaining in popularity among
upstream and downstream agribusinesses. Anglo American has an important role
to play, with POLY4 offering a unique combination of properties to support
sustainable agricultural production. POLY4 offers farmers a solution to
agricultural efficiency and sustainability challenges, through its natural
multi-nutrient composition, its suitability for organic use and ultra-low
carbon footprint generating up to 85% fewer carbon emissions than the
equivalent conventional nutrient products, with little to no waste generated
in its production.
At a macro market level, the dislocation experienced within the global
fertiliser market during the first half of 2022 has had a major impact,
causing restrictions in the availability of, and sharp increases in, the price
of crop nutrients. Prices are expected to remain firm and above historical
levels for the foreseeable future, as supply restrictions and high energy and
manufacturing costs continue. Many countries are re-assessing their sourcing
of fertiliser and agricultural products as they seek greater reliability of
supply while also encouraging more efficient fertiliser use, driving
innovation, and supporting more sustainable crop solutions.
( )
( )
( )
( )
Corporate and Other
Financial metrics
Production Sales Price Unit Group Underlying Underlying Capex*
volume volume cost* revenue* EBITDA* EBIT*
Mt((1)) Mt((2)) $/t((3)) $/t((4)) $m $m $m $m
Segment n/a n/a n/a n/a 258 (282) (360) 12
Prior period - - - - 907 119 (33) 98
Exploration n/a n/a n/a n/a n/a (64) (65) n/a
Prior period - - - - - (42) (43) -
Corporate activities and unallocated costs n/a n/a n/a n/a 258 (218) (295) 12
Prior period - - - - 135 (27) (103) 17
Thermal Coal - South Africa((5)) - - - - - - - -
Prior period 5.7 5.3 77 46 553 101 70 81
Thermal Coal - Colombia((6)) - - - - - - - n/a
Prior period 3.6 3.4 65 34 219 87 43 -
((1) ) Production volumes are saleable tonnes. South African
production volumes include export primary production, secondary production
sold into export markets, production sold domestically at export parity
pricing and excludes other domestic production of 5.6 Mt in 2021.
((2) ) South African sales volumes include export primary production,
secondary production sold into export markets and production sold domestically
at export parity pricing and exclude domestic sales of 5.3 Mt in 2021 and
third-party sales of 6.4 Mt in 2021.
((3) ) Thermal Coal - South Africa realised price is the weighted
average export thermal coal price achieved. Excludes third-party sales from
locations other than Richards Bay.
((4)) Thermal Coal - South Africa FOB cost per saleable tonne from
the trade operations, excluding royalties and study costs.
((5) ) Thermal Coal - South Africa mining activity included in prior
period until the demerger on 4 June 2021.
((6)) Thermal Coal - Colombia represents the Group's attributable
share from its 33.3% shareholding in Cerrejón and reflects earnings and
volumes from the first half of 2021 only, before the agreement was entered
into.
Financial overview
Exploration
Exploration's underlying EBITDA loss was $64 million (30 June 2021: $42
million loss), driven by the recovery from the Covid-19 disruptions in 2021
that affected greenfield base metals exploration and near-mine iron ore
exploration.
Corporate activities and unallocated costs
Underlying EBITDA was a $218 million loss (30 June 2021: $27
million loss), driven primarily by the finalisation of the $250 million
Grosvenor gas ignition claim by the Group's self-insurance entity which
resulted in an expense in Corporate activities that was offset within the
underlying EBITDA of Steelmaking Coal.
( )
Guidance summary
Production and unit costs
Unit costs Production volumes
2022F
Units 2022F 2023F 2024F
Diamonds((1)) c.$65/ct Mct 32-34 30-33 30-33
Copper((2)) c.147c/lb kt 660-750 910-1,020 910-1,020
Nickel((3)) c.495c/lb kt 40-42 41-43 42-44
PGMs - metal in concentrate((4)) c.$950/PGM ounce 3.9-4.3 4.1-4.5 4.1-4.5
Moz
Platinum Moz 1.8-2.0 1.9-2.1 1.9-2.1
Palladium Moz 1.2-1.3 1.3-1.4 1.3-1.4
Other Moz 0.9-1.0 0.9-1.0 0.9-1.0
PGMs - refined((5)) Moz 4.0-4.4 3.8-4.2 4.1-4.5
Iron ore((6)) c.$40/tonne Mt 60-64 64-68 67-71
Steelmaking Coal((7)) c.$110/tonne Mt 15-17 22-24 24-26
Note: Unit costs are subject to any further effects of Covid-19 and exclude
royalties, depreciation and include direct support costs only. FX rates for H2
2022 unit costs: ~17 ZAR:USD, ~1.5 AUD:USD, ~5.5 BRL:USD, ~1,000 CLP:USD, ~4
PEN:USD. Production volumes are subject to the extent of further Covid-19
related disruption.
((1)) Unit cost is based on De Beers' share of production. Production
on a 100% basis except for the Gahcho Kué joint operation, which is on an
attributable 51% basis, subject to trading conditions. Venetia continues to
transition to underground operations during 2022, with ramp-up expected from
2023.
((2)) Copper business unit only. On a contained-metal basis. Total
copper is the sum of Chile and Peru. Unit cost total is a weighted average
based on the mid-point of production guidance. 2022 Chile: 560-600kt; Peru
100-150kt. 2023 Chile: 590-650kt; Peru: 320-370kt. 2024 Chile: 590-650kt; Peru
320-370kt. Chile production is subject to water availability. Chile production
in 2022 impacted by lower expected grades at Collahuasi and Los Bronces, and
lower water availability at Los Bronces. Peru production in 2022 subject to
progress on ramp-up of operations. Chile 2022 unit cost is c.150c/lb and is
subject to the impact of water availability on production volumes. Peru 2022
unit cost is c.135c/lb and is based on progressing the ramp-up of production
volumes.
((3)) Nickel operations in Brazil only. The Group also produces
approximately 20 kt of nickel on an annual basis as a co-product from the PGM
operations. 2023 and 2024 volumes dependent on bulk ore sorting technology and
briquetting.
((4)) Unit cost is per own mined 5E + gold PGMs metal in concentrate
ounce. Production is 5E + gold produced metal in concentrate ounces. Includes
own mined production (~65%) and purchased concentrate volumes (~35%).
((5) ) 5E + gold produced refined ounces. Includes own mined
production and purchased concentrate volumes. Refined production is subject to
the potential impact of Eskom load-shedding.
((6) ) Wet basis. Total iron ore is the sum of Kumba and Minas-Rio.
Unit cost total is a weighted average based on the mid-point of production
guidance. 2022 Kumba: 38-40Mt; Minas-Rio: 22-24Mt. 2023 Kumba: 39-41Mt;
Minas-Rio: 25-27Mt. 2024 Kumba: 41-43Mt (subject to UHDMS plant coming
online); Minas-Rio: 26-28Mt. Kumba production is subject to the third party
rail and port performance, as well as weather related disruptions. Kumba 2022
unit cost is c.$44/tonne. Minas-Rio 2022 unit cost is c.$32/tonne.
((7)) Steelmaking Coal FOB/tonne unit cost comprises managed
operations and excludes royalties and study costs. Volumes are subject to the
progress of ramp-up of the longwalls and exclude thermal coal by-product from
Australia.
Capital expenditure((1))
2022F 2023F 2024F
Growth $1.6-2.1bn $1.2-1.7bn $1.5-2.0bn
Includes ~$0.6bn Woodsmith capex
Sustaining ~$4.5bn ~$4.8bn ~$4.1bn
Reflects ~$3.4bn baseline plus ~$0.7bn lifex projects plus ~$0.4bn Collahuasi Reflects ~$3.5bn baseline plus ~$0.8bn lifex projects and ~$0.5bn Collahuasi Reflects ~$3.3bn baseline plus ~$0.6bn lifex projects and ~$0.2bn Collahuasi
desalination plant((2)) desalination plant((2)) desalination plant((2))
Total $6.1-6.6bn $6.0-6.5bn $5.6-6.1bn
Further details on Anglo American's high quality growth and life-extension
projects, including details of the associated volumes benefit, are disclosed
on pages 13 -17.
Long term sustaining capital expenditure is expected to be c.$3.0 billion per
annum((3)), excluding life-extension projects.
Other guidance
· 2022 depreciation: $2.8-3.0 billion (previously $3.0-3.2 billion)
· 2022 effective tax rate: 33-35%((4))
· Long term effective tax rate: 31-35%((4))
· Dividend payout ratio: 40% of underlying earnings
· Net debt:EBITDA: <1.5x at the bottom of the cycle
((1)) Cash expenditure on property, plant and equipment including
related derivatives, net of proceeds from disposal of property, plant and
equipment and includes direct funding for capital expenditure from
non-controlling interests. Shown excluding capitalised operating cash flows.
Consequently, for Quellaveco, reflects attributable share of capex. Collahuasi
desalination capex shown includes related infrastructure. Guidance includes
unapproved projects and is, therefore, subject to progress of growth project
studies and Woodsmith is excluded after 2022. Long term sustaining capex
guidance is shown on a real basis. Refer to the H1 2022 results presentation
slides 42 - 46 for further detail on the breakdown of the capex guidance at
project level.
((2)) Attributable share of capex.
((3) ) Long term sustaining capex guidance is shown on a real basis.
((4) ) Effective tax rate is highly dependent on a number of factors,
including the mix of profits, and may vary from the guided ranges.
( )
For further information, please contact:
Media Investors
UK UK
James Wyatt-Tilby Paul Galloway
james.wyatt-tilby@angloamerican.com paul.galloway@angloamerican.com
Tel: +44 (0)20 7968 8759 Tel: +44 (0)20 7968 8718
Marcelo Esquivel Emma Waterworth
marcelo.esquivel@angloamerican.com emma.waterworth@angloamerican.com
Tel: +44 (0)20 7968 8891 Tel: +44 (0)20 7968 8574
Katie Ryall Michelle Jarman
katie.ryall@angloamerican.com michelle.jarman@angloamerican.com
Tel: +44 (0)20 7968 8935 Tel: +44 (0)20 7968 1494
South Africa
Nevashnee Naicker
nevashnee.naicker@angloamerican.com
Tel: +27 (0)11 638 3189
Sibusiso Tshabalala
sibusiso.tshabalala@angloamerican.com
Tel: +27 (0)11 638 2175
Notes to editors:
Anglo American is a leading global mining company and our products are the
essential ingredients in almost every aspect of modern life. Our portfolio of
world-class competitive operations, with a broad range of future development
options, provides many of the future-enabling metals and minerals for a
cleaner, greener, more sustainable world and that meet the fast growing every
day demands of billions of consumers. With our people at the heart of our
business, we use innovative practices and the latest technologies to discover
new resources and to mine, process, move and market our products to our
customers - safely and sustainably.
As a responsible producer of diamonds (through De Beers), copper, platinum
group metals, premium quality iron ore and steelmaking coal, and nickel - with
crop nutrients in development - we are committed to being carbon neutral
across our operations by 2040. More broadly, our Sustainable Mining Plan
commits us to a series of stretching goals to ensure we work towards a healthy
environment, creating thriving communities and building trust as a corporate
leader. We work together with our business partners and diverse stakeholders
to unlock enduring value from precious natural resources for the benefit of
the communities and countries in which we operate, for society as a whole, and
for our shareholders. Anglo American is re-imagining mining to improve
people's lives.
www.angloamerican.com (http://www.angloamerican.com)
Webcast of presentation:
A live webcast of the results presentation, starting at 9.00am UK time on 28
July 2022, can be accessed through the Anglo American website at
www.angloamerican.com (http://www.angloamerican.com)
Note: Throughout this results announcement, '$' denotes United States dollars
and 'cents' refers to United States cents. Tonnes are metric tons, 'Mt'
denotes million tonnes and 'kt' denotes thousand tonnes, unless otherwise
stated.
Group terminology
In this document, references to "Anglo American", the "Anglo American
Group", the "Group", "we", "us", and "our" are to refer to either
Anglo American plc and its subsidiaries and/or those who work for them
generally, or where it is not necessary to refer to a particular entity,
entities or persons. The use of those generic terms herein is for convenience
only, and is in no way indicative of how the Anglo American Group or any
entity within it is structured, managed or controlled. Anglo American
subsidiaries, and their management, are responsible for their own day-to-day
operations, including but not limited to securing and maintaining all relevant
licences and permits, operational adaptation and implementation of Group
policies, management, training and any applicable local grievance mechanisms.
Anglo American produces group-wide policies and procedures to ensure best
uniform practices and standardisation across the Anglo American Group but is
not responsible for the day to day implementation of such policies. Such
policies and procedures constitute prescribed minimum standards only. Group
operating subsidiaries are responsible for adapting those policies and
procedures to reflect local conditions where appropriate, and for
implementation, oversight and monitoring within their specific businesses.
Forward-looking statements and third party information:
This document includes forward-looking statements. All statements other than
statements of historical facts included in this document, including, without
limitation, those regarding Anglo American's financial position, business,
acquisition and divestment strategy, dividend policy, plans and objectives of
management for future operations, prospects and projects (including
development plans and objectives relating to Anglo American's products,
production forecasts and Ore Reserve and Mineral Resource positions) and
sustainability performance related (including environmental, social and
governance) goals, ambitions, targets, visions, milestones and aspirations,
are forward-looking statements. By their nature, such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of Anglo
American or industry results to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements.
Such forward-looking statements are based on numerous assumptions regarding
Anglo American's present and future business strategies and the environment in
which Anglo American will operate in the future. Important factors that could
cause Anglo American's actual results, performance or achievements to differ
materially from those in the forward-looking statements include, among others,
levels of actual production during any period, levels of global demand and
commodity market prices, mineral resource exploration and project development
capabilities and delivery, recovery rates and other operational capabilities,
safety, health or environmental incidents, the effects of global pandemics and
outbreaks of infectious diseases, the impact of attacks from third parties on
our information systems, natural catastrophes or adverse geological
conditions, climate change and extreme weather events, the outcome of
litigation or regulatory proceedings, the availability of mining and
processing equipment, the ability to obtain key inputs in a timely manner, the
ability to produce and transport products profitably, the availability of
necessary infrastructure (including transportation) services, the development,
efficacy and adoption of new technology, challenges in realising resource
estimates or discovering new economic mineralisation, the impact of foreign
currency exchange rates on market prices and operating costs, the availability
of sufficient credit, liquidity and counterparty risks, the effects of
inflation, political uncertainty, tensions and disputes and economic
conditions in relevant areas of the world, evolving societal and stakeholder
requirements and expectations, shortages of skilled employees, the actions of
competitors, activities by courts, regulators and governmental authorities
such as in relation to permitting or forcing closure of mines and ceasing of
operations or maintenance of Anglo American's assets and changes in taxation
or safety, health, environmental or other types of regulation in the countries
where Anglo American operates, conflicts over land and resource ownership
rights and such other risk factors identified in Anglo American's most recent
Annual Report. Forward-looking statements should, therefore, be construed in
light of such risk factors and undue reliance should not be placed on
forward-looking statements. These forward-looking statements speak only as of
the date of this document. Anglo American expressly disclaims any obligation
or undertaking (except as required by applicable law, the City Code on
Takeovers and Mergers, the UK Listing Rules, the Disclosure and Transparency
Rules of the Financial Conduct Authority, the Listings Requirements of the
securities exchange of the JSE Limited in South Africa, the SIX Swiss
Exchange, the Botswana Stock Exchange and the Namibian Stock Exchange and any
other applicable regulations) to release publicly any updates or revisions to
any forward-looking statement contained herein to reflect any change in Anglo
American's expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.
Nothing in this document should be interpreted to mean that future earnings
per share of Anglo American will necessarily match or exceed its historical
published earnings per share. Certain statistical and other information about
Anglo American included in this document is sourced from publicly available
third party sources. As such it has not been independently verified and
presents the views of those third parties, but may not necessarily correspond
to the views held by Anglo American and Anglo American expressly disclaims any
responsibility for, or liability in respect of, such information.
©Anglo American Services (UK) Ltd 2022. (TM) and (TM) are trade marks of
Anglo American Services (UK) Ltd.
Anglo American plc
17 Charterhouse Street London EC1N 6RA United Kingdom
Registered office as above. Incorporated in England and Wales under the
Companies Act 1985.
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