REG - Anglo American PLC - Anglo American half year financial report 2024
25/07/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240725:nRSY7377Xa&default-theme=true
RNS Number : 7377X Anglo American PLC 25 July 2024
Click on, or paste the following link into your web browser, to view the
associated PDF document.
http://www.rns-pdf.londonstockexchange.com/rns/7377X_1-2024-7-24.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/7377X_1-2024-7-24.pdf)
25 July 2024
Anglo American Interim Results 2024
Strong operational performance delivers $5.0 billion of underlying EBITDA
• Underlying EBITDA* of $5.0 billion: improved cost performance
largely offset a 10% lower product basket price
• Copper and Iron Ore performance and margins particularly strong,
contributing $3.5 billion of EBITDA
• Unit costs improved by 4%, reflecting weaker currencies, operational
improvements and effective cost control
• $0.7 billion loss attributable to equity shareholders, impacted by
a $1.6 billion impairment of Woodsmith due to the decision to slowdown the
project's development
• Net debt* of $11.1 billion, with leverage steady at 1.1x annualised
EBITDA
• On track to reduce annual costs by c.$1.7 billion and reduce capex
by c.$1.6 billion over 2024-26
• $0.5 billion interim dividend, equal to $0.42 per share, consistent
with 40% payout policy
Duncan Wanblad, Chief Executive of Anglo American, said: "I am very encouraged
by a strong operational performance that delivered steady volumes and a 4%
improvement in unit costs, while still facing weak cyclical markets for PGMs
and diamonds. We are on track to reduce our annual run rate costs by $1.7
billion and reduce capital spend by $1.6 billion over the 2024-2026 period.
We are moving at pace to create a much more agile and structurally profitable
mining company focused on our exceptional quality Copper and Premium Iron Ore
businesses, which both continue to perform very strongly, while maintaining
our growth optionality in crop nutrients. We are committed to completing the
key elements of this transformation by the end of 2025, creating a simpler,
highly valued mining company with extensive growth options and considerable
strategic flexibility.
"In the first six months of this year, I am very sad to report that we lost
two colleagues who died in an accident at our Amandelbult PGMs mine in South
Africa. We offer our deepest condolences to their families, friends and
colleagues. We are absolutely committed to workforce safety and we are working
to ensure that every colleague returns home safe and well each day. More
broadly, we continue to make progress on safety, achieving our lowest ever
injury rate and a 23% improvement compared to just two years ago.
"Our focus on operational performance is delivering results, most notably in
our Copper and Premium Iron Ore businesses, with EBITDA margins* of 53% and
43% respectively. Copper is tracking well, Minas-Rio achieved its strongest
first half production for several years, and Kumba continues to perform
strongly while we work with Transnet on rail reliability. The Steelmaking Coal
business has also improved its production and cost performance, though the
incident at Grosvenor will set production back. Most importantly, everyone
there is safe. Our process to divest that business is well under way with
continued strong interest from a large number of potential new owners.
"Underlying EBITDA for the half year of $5.0 billion at a 33% EBITDA margin*
reflects a 10% lower product basket price, partly offset by a 4% improvement
in unit costs, with broadly flat production volumes. Net debt increasing
marginally to $11.1 billion reflects tight discipline to optimise capital
allocation and free cash flow. Our decision to temporarily slowdown the
Woodsmith crop nutrients project and thereby push out its production timing
has resulted in a $1.6 billion impairment of the project. As we progress our
portfolio transformation, we expect to substantially reduce our overhead and
other non-operational costs in phases, but weighted towards the end of the
process to minimise business risk.
"We are transforming Anglo American by focusing on our world-class asset base
in copper, premium iron ore and crop nutrients, thereby accelerating the
recognition of value inherent in our business. From that compelling platform,
I believe our proven project delivery capabilities, global relationship
networks and longstanding reputation as a responsible mining company will
together help us unlock the outstanding mineral endowment options within our
portfolio and other growth opportunities that we will aim to secure over time.
We have taken clear and decisive action to deliver value in the long term
interests of our shareholders and other stakeholders, from a portfolio that
will deliver the products that underpin the energy transition, improving
global living standards and food security."
Six months ended 30 June 2024 30 June 2023 Change
US$ million, unless otherwise stated
Revenue 14,464 15,674 (8) %
Underlying EBITDA* 4,980 5,114 (3)%
EBITDA margin* 33% 31%
Attributable free cash flow* 506 (466) n/a
(Loss)/Profit attributable to equity shareholders of the Company (672) 1,262 n/a
Basic underlying earnings per share* ($) 1.06 1.38 (23)%
Basic earnings per share ($) (0.55) 1.04 n/a
Interim dividend per share ($) 0.42 0.55 (24)%
Group attributable ROCE* 14% 18%
Terms with this symbol * are defined as Alternative Performance Measures
(APMs). For more information, refer to page 83.
Sustainability performance
Key sustainability performance indicators((1))
Anglo American tracks its strategic progress using KPIs that are based on our
seven pillars of value: safety and health, environment, socio-political,
people, production, cost, and financial. In addition to the financial
performance set out above and our operational performance on pages 7-33, our
performance for the first four pillars is set out below:
Pillar of value Metric 30 June 2024 30 June 2023 Target Target achieved
Safety and health Work-related fatal injuries 2 1 Zero Not achieved
Total recordable injury frequency rate (TRIFR) per million hours((2)) 1.69 1.91 Reduction year on year On track
New cases of occupational disease((2)) 9 3 Reduction year on year Not achieved
Environment GHG emissions - Scopes 1 & 2 5.0 5.1 Reduce absolute GHG emissions by 30% by 2030 On track
(Mt CO(2)e)((3))
Fresh water withdrawals (ML)((3)) 17,261 14,096 Reduce fresh water abstraction in water scarce areas by 50% by 2030 On track for 2030 target
Level 4-5 environmental incidents 0 0 Zero On track
Socio-political Social Way 3.0 implementation((4)) 73% 66% Full implementation of the Social Way 3.0 by end 2022 Behind schedule
Number of jobs supported 139,300 114,500
off site((5))
Local procurement spend ($bn)((6)) 6.2 6.5
Taxes and royalties ($m)((7)) 2,481 2,828
People Women in management((8)) 35% 33% To achieve 33% by 2023 Achieved
Women in the workforce 26% 25%
Voluntary labour turnover 4% 3% < 5% On track
((1) ) Sustainability performance indicators for the six months ended 30
June 2024 and the comparative period are not externally assured.
((2) ) TRIFR data for the prior period has been restated following
adjustments to working hours identified through the year end assurance
process. Prior period data related to new cases of occupational disease has
been restated due to cases identified in H1 2023 that were not confirmed until
H2 2023.
((3) ) Data for current and prior period is to 31 May 2024 and 31 May
2023, respectively. Prior period comparatives have been restated to reflect
data model updates and the results of external assurance findings at 31
December 2023.
((4) ) Current and prior period data presented is at 31 December 2023 and
2022, respectively. 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 Thriving Communities commentary on
page 5.
((5) ) Jobs supported since 2018, in line with the Sustainable Mining
Plan Livelihoods stretch goal. Current and prior period data presented is at
31 December 2023 and 2022, respectively.
((6) ) Local procurement is defined as procurement from businesses that
are registered and based in the country of operation - also referred to as
in-country procurement - and includes local procurement expenditure from the
Group's subsidiaries and a proportionate share of the Group's joint
operations, based on shareholding.
((7) ) Taxes and royalties include all taxes and royalties borne and
taxes collected by the Group. This includes corporate income taxes,
withholding taxes, mining taxes and royalties, employee taxes and social
security contributions and other taxes, levies and duties directly incurred by
the Group, as well as taxes incurred by other parties (e.g. customers and
employees) but collected and paid by the Group on their behalf. Figures
disclosed are based on cash remitted, being the amounts remitted by entities
consolidated for accounting purposes, plus a proportionate share, based on the
percentage shareholding, of joint operations. Taxes borne and collected by
equity accounted associates and joint ventures are not included. Prior period
comparatives have been restated to reflect data model updates.
((8) ) Management includes middle and senior management across the Group.
Sustainable Mining Plan
Anglo American's longstanding and holistic approach to sustainability helps to
build trust with our employees and stakeholders across society, reduces
operational risk and in many cases delivers direct financial value for our
business. Our reputation as a responsible mining company supports our ability
to access future resource development opportunities, both from the significant
endowments within our business and more broadly - critical to delivering our
growth ambitions.
Our Sustainable Mining Plan is designed to be a flexible, living plan and we
continue to evolve it as we learn and make progress and as technologies
develop, while also ensuring it stays relevant and suitably stretching, in
tune with our employees' and stakeholders' ambitions for our business. We are
reviewing the Sustainable Mining Plan to reflect the Group's future portfolio
composition that was announced in May 2024. We are also using this opportunity
to ensure that our sustainability ambitions deliver tangible value to our many
stakeholders and will set out an update when we have completed the review,
likely only once the portfolio transformation has made significant progress.
Progress against the existing Sustainable Mining Plan targets is discussed
below.
Zero mindset
Occupational safety
Anglo American's number one value is safety, and it is our first priority,
always. We are committed to preventing our people from being harmed at work.
Keeping our workforce safe is an unremitting endeavour and comes foremost
in everything we do. We are unconditional about safety and train, equip and
empower our people to work safely, because we believe that everybody,
everywhere should return home safe and well at the end of their working day.
In 2024, we continued to focus on three key safety levers that we believe are
critical to improving front line safety: supporting operational leaders to
spend more time in the field; using our Operating Model principles to deliver
planned work; and implementing our new Contractor Performance Management
framework across the business. Following the achievement of a record low total
recordable injury frequency rate (TRIFR) of 1.78 in 2023, we continued to make
solid progress in our safety journey, with our TRIFR further improving to 1.69
in the six months to 30 June 2024 (30 June 2023: 1.91). While encouraged by
this continued improvement, we are deeply saddened to have lost two colleagues
at Dishaba mine, part of the Amandelbult PGMs complex in South Africa, who
were fatally injured after falling down a raised ore-pass. We also lost a
colleague at the independently managed, joint venture Jwaneng diamond mine in
Botswana. Full investigations are currently under way to understand the
circumstances behind these incidents and we extend our deepest condolences to
families, friends and colleagues.
Following the underground fire that started at the Grosvenor steelmaking coal
mine in Australia on 29 June 2024, all emergency protocols were followed and
the workforce was safely evacuated without injury. Our primary focus continues
to be the safety and well-being of our workforce and local communities. The
mine has been stabilised and we are re-establishing comprehensive underground
gas monitoring, prior to being able to assess the steps towards a safe
re-entry into the mine.
Alongside our continued use of innovative technologies to help make Anglo
American a safer and healthier place to work, we are building an ever stronger
safety culture, based on the established concept of Visible Felt Leadership.
This programme is focused on ensuring all leaders, at all levels in the
organisation, are spending sufficient time in the field having quality
interactions with our workforce. These interactions are helping to deliver
considerable improvements in work conditions and execution methods, as well as
empowering our employees and contractors to speak up if they have concerns
about the safety of their work activities.
Applying the principles of our Operating Model across all our activities, but
particularly to our maintenance work, has played a major role in lowering
injury levels across the Group. Planned maintenance allows for better
identification and mitigation of risk and ensures work is appropriately
resourced and executed, with the right people with the correct skills
completing the work safely.
To deliver safe, responsible production, we know that we need to be better at
how we work with our contractors and how we support their safety on our sites,
ensuring they too feel valued and respected as a critical contributor to
everyone's safety. Our Contractor Performance Management programme is a
three-year initiative, started in 2023, which has been designed to ensure that
the work our contractors undertake is well planned, aligned with our Operating
Model and meaningfully risk assessed and resourced with the right skills.
Occupational health
Our health and well-being strategy, aligned with the World Health Organization
(WHO) Healthy Workplace model, has been updated to include Total Worker Health
concepts that integrate actions to support the health and well-being of our
workforce and host communities. This integrated strategy incorporates our
WeCare well-being programme and other social performance activities, including
our livelihoods support programmes. It requires us to work synergistically to
support our people and achieve our health and well-being goals.
Occupational diseases
In the six months to 30 June 2024, there were 9 reported new cases of
occupational disease, all of which were related to noise exposure (30 June
2023: 3, 2 of which were related to noise exposure). A significant challenge
in reporting occupational disease is that many hazards do not cause immediate
symptoms or measurable health harms. Occupational disease is often not
detectable or definable until many years after exposure. This means cases
reported in a given year are most likely to reflect accumulated past working
conditions. This latency challenge underscores the importance of risk
assessment and preventative management strategies, continuous environment
monitoring, and comprehensive worker occupational health surveillance. These
activities are an ongoing focus at Anglo American and, as we continue to
improve the rigour of our reporting processes and proactive case management,
we may detect further historic cases of occupational disease.
Healthy environment
Our existing Sustainable Mining Plan includes commitments to be a leader in
environmental stewardship. These include our aims, by 2030, to reduce
operational greenhouse gas (GHG) emissions (Scopes 1 and 2) by 30%; achieve a
50% reduction in fresh water abstraction in water scarce areas; and deliver
net-positive impacts in biodiversity across our managed operations.
Climate change
In addition to our existing 2030 operational emissions reduction target, we
have stated our aim to achieve carbon neutrality across our operations by
2040, and an ambition to halve our Scope 3 emissions, also by 2040. We
continue to make progress across the current portfolio in reducing our
emissions, with our Scope 1 and 2 GHG emissions lower than the prior period.
Since 2023, our managed operations in South America have been supplied with
100% renewable electricity and the managed operations in Australia are
scheduled to move to renewable supply from 2025. At this stage, 60% of the
global grid supply for the current Anglo American portfolio would be drawn
from renewable sources. We continue to make progress towards addressing Anglo
American's largest remaining current source of Scope 2 emissions - our
electricity supply in southern Africa. Our jointly owned renewable energy
venture with EDF Renewables, known as Envusa Energy, completed the project
financing for the first three wind and solar projects in South Africa in
February 2024. These three renewable energy projects, known as the Koruson 2
cluster and located on the border of the Northern and Eastern Cape provinces
of South Africa, are designed to have a total capacity of 520 MW of wind and
solar electricity generation.
Methane emissions from the Australian steelmaking coal operations represent
the largest component of our current Scope 1 emissions and we continue to
work hard to capture, use and abate those emissions. We have invested
significantly over several years, in excess of $100 million per annum, in
methane capture infrastructure at our underground steelmaking coal operations.
This investment has allowed those operations to capture gas before and during
mining. In 2023, this resulted in approximately 60% of methane emissions, the
equivalent of about 5.3 million tonnes of CO(2)e, being abated and has
provided gas to adjacent power stations with our partner and operator, EDL,
providing power for the local area.
We have set an ambition to achieve carbon neutrality across our controlled
ocean freight activities by 2040, with an interim 30% reduction in emissions
by 2030. The delivery in Q1 2024 of the final two vessels of a 10-strong
chartered fleet of Capesize+ liquefied natural gas (LNG) dual-fuelled bulk
carriers, marks a significant milestone towards achieving our commitment to
more sustainable shipping. The LNG-dual-fuelled vessels offer an estimated 35%
reduction in emissions compared to ships fuelled by conventional marine oil
fuel and are the most efficient vessels of their type today.
Water
With more than 80% of our global assets located in water scarce areas, we need
to reduce our dependence on fresh water and are working on a number of
projects and technologies to help us achieve our freshwater reduction targets.
At 31 December 2023, Anglo American had reduced fresh water withdrawals by
22%, compared with the 2015 baseline. Although this is encouraging, progress
is not always linear due to factors such as variable operational requirements
and changing precipitation levels.
In the five months to 31 May 2024, fresh water withdrawals increased to 17,261
ML (31 May 2023: 14,096 ML), owing to higher water use across most sites,
driven principally by an increase in production at Steelmaking Coal, adverse
hydrological conditions at several operations and an increase in dewatering,
particularly at Kumba (Iron Ore). While annual variability is expected until
such time as major fresh water savings and replacement projects are delivered,
we believe we are still on track to meet our 2030 target of a 50% reduction in
fresh water withdrawals in water scarce areas.
Biodiversity
As custodians of the land and ecosystems around our operations, we seek to
improve the footprint of our operations and direct our efforts towards
delivering positive and lasting environmental outcomes for host communities
and our wide range of stakeholders. Within our Sustainable Mining Plan we have
a commitment to deliver Net Positive Impact on biodiversity across Anglo
American by 2030, compared with the 2018 baseline.
We have now completed detailed biodiversity baseline assessments across all
our managed operations, defining and assessing significant biodiversity
features including key habitats and species, as well as identifying those
ecosystems that require protection and restoration. Detailed biodiversity
management programmes have been developed for each site and have been
independently reviewed by our NGO partners.
We have continued to refine our measurement processes to develop, in
partnership with two long term NGO partners, a new science-based metric called
Quality Habitat Hectares (QHH) that will help us to measure our contribution
to internal and global biodiversity targets, as well as nature-positive
outcomes. QHH enables an objective assessment of quantity and quality that are
reliable and replicable through incorporating the extent, type and condition
of ecosystems and species impacted in and around our operations.
We believe that the development of a metric such as QHH represents a
significant advancement in the metals and mining sector, offering a new tool
for measuring and reporting on nature related impacts and dependencies. This
metric can serve as a catalyst for enhancing transparency and accountability
across industries, encouraging businesses to disclose their interactions with
nature more openly. By adopting such measures, companies can align their
approach with the mitigation hierarchy, which prioritises avoiding,
minimising, and compensating for biodiversity impacts.
Thriving communities
We continue working to strengthen and broaden our social performance
competencies through embedding our social performance management system - the
Social Way - across Anglo American. Through the implementation of the Social
Way - which we believe is one of the most robust and comprehensive social
performance management systems in the mining sector - and through our
collaborative regional development initiatives, we are working actively to
support local and regional economies, as well as the lives and livelihoods of
the communities where we operate.
Since the launch of our Sustainable Mining Plan, we have supported more than
139,000 off site jobs through livelihoods programmes. One example of where we
are offering support beyond traditional social investment is our Impact
Finance Network, which provides tailored technical assistance to help match
third-party impact capital to host-region, non-mining impact businesses and
enterprises. Since 2021, we have supported a pipeline of over 100 businesses
across southern Africa and South America, having helped close deals with a
cumulative value of $65 million, and support for over 20,000 livelihoods.
Building off the work in southern Africa, we now have a strong footprint in
South America. We are into our third year of operation in Chile, are about to
launch the post-pilot phase in Peru, and intend to roll out a pilot in Brazil
before the end of 2024.
While we did not meet our ambitious goal of full implementation of the Social
Way at all sites by the end of 2022, we continue to progress embedding the
system and have implemented a significant majority of the core elements. In
2023, we re-baselined the site-level implementation pathways and by the end of
the year, our operations reported 96% delivery against those implementation
pathways. The Social Way is critical to underpinning many of our ambitious
2030 Sustainable Mining Plan targets, demonstrating our commitment to
partnering with host communities and governments.
Trusted corporate leader
Tightly linked to our safety imperative and our Values, we strive to create a
workplace that places people at its heart. We are committed to promoting an
inclusive and diverse environment where every colleague is valued and
respected for who they are, and has the opportunity to fulfil their potential.
By the end of 2023, we exceeded our consolidated target of 33% female
representation across our management population, reaching 34%. For the six
months to 30 June 2024, the percentage of females in management increased to
35%. We have also seen positive improvements in other key performance metrics
such as the percentage of women in the workforce which increased to 26% in the
period (30 June 2023: 25%).
To demonstrate the high standards to which we operate, we have been at the
forefront of developing and adopting some of the most trusted sustainability
certification programmes for the mining sector, including the Initiative for
Responsible Mining Assurance (IRMA) and the Responsible Jewellery Council
(RJC).
Having met our Sustainable Mining Plan interim target in 2022 of having half
of our operations undergo third-party audits against recognised responsible
mine certification systems, we continue to work towards our 2025 target for
audits of all operations.
Some of the most recent achievements for our sites that were assessed against
IRMA's comprehensive mining standard include:
- Our Mototolo and Amandelbult mines in South Africa became the first
PGMs mines in the country to complete the audit - achieving the IRMA 75 and
IRMA 50 level of performance, respectively;
- Confirmation from IRMA that the Unki PGMs mine in Zimbabwe retained
its IRMA 75 level of performance; and
- Our Minas-Rio and Barro Alto mines in Brazil are the first iron ore
and nickel-producing mines in the world to complete an IRMA audit. Both mines
achieved the IRMA 75 level of performance.
The success of our business is shared with a wide range of stakeholders,
including national governments and host communities, through the significant
corporate tax, mining tax and royalty payments that we make. Total taxes and
royalties borne and taxes collected amounted to $2.5 billion, an 11% decrease
compared with the first half of 2023, reflecting lower revenues and profit
before tax.
( )
Operational and financial review of Group results for the six months ended
30 June 2024
Operational performance
Production H1 2024 H1 2023 % vs H1 2023
Copper (kt)((1)) 394 387 2%
Iron ore (Mt)((2)) 30.7 30.7 0%
Platinum group metals (koz)((3)) 1,755 1,844 (5)%
Diamonds (Mct)((4)) 13.3 16.5 (19)%
Steelmaking coal (Mt) 8.0 6.9 16%
Nickel (kt)((5)) 19.5 19.6 (1)%
Manganese ore (kt) 1,140 1,811 (37)%
((1) ) Contained metal basis. Reflects copper production from the Copper
operations in Chile and Peru only (excludes copper production from the
Platinum Group Metals business).
((2) ) Wet basis.
((3) ) Produced ounces of metal in concentrate. 5E + gold (platinum,
palladium, rhodium, ruthenium and iridium plus gold). Reflects own mined
production and purchase of concentrate.
((4) ) Production is on a 100% basis, except for the Gahcho Kué joint
operation which is on an attributable 51% basis.
((5) ) Reflects nickel production from the Nickel operations in Brazil
only (excludes 7.3 kt of H1 2024 nickel production from the Platinum Group
Metals business).
Production volumes decreased by 1% on a copper equivalent basis, as Manganese
was impacted by a suspension to the Australian operations due to the impact of
tropical cyclone Megan in the first half of 2024, the disposal of Kroondal at
PGMs, and the decision to intentionally lower production at De Beers in
response to weaker rough diamond demand. This is offset by Steelmaking Coal,
as the underground operations were impacted by longwall moves in the first
half of 2023, and higher throughput at Copper Peru since commercial production
was reached in June 2023.
Group copper equivalent unit costs decreased by 4% driven by weaker local
currencies. Excluding the favourable impact of foreign exchange, unit costs
were flat as high unit costs at De Beers, due to intentional lower production
and the ramp up of Venetia underground, and higher costs at Copper Peru, as
the asset has now moved into commercial production, were offset by effective
cost control measures at Copper Chile and favourable unit costs at Steelmaking
Coal, driven by higher production.
For more information on each Business' production and unit cost performance,
please refer to the following pages 16-33.
( )
Financial performance
Anglo American's profit/(loss) attributable to equity shareholders decreased
to a loss of $0.7 billion (30 June 2023: profit of $1.3 billion).
Underlying earnings were $1.3 billion (30 June 2023: $1.7 billion), while
operating profit was $1.5 billion (30 June 2023: $3.0 billion).
Underlying EBITDA*
Group underlying EBITDA decreased by $0.1 billion to $5.0 billion (30 June
2023: $5.1 billion). Financial results were impacted by lower iron ore
prices and sales, and the effect of the cyclone at Manganese, largely offset
by higher copper prices, price-driven POC normalisation at PGMs and effective
progress in our cost-out programmes. The reductions in cost and normalisation
of POC drove an improvement in the Group's underlying EBITDA margin* to 33%
(30 June 2023: 31%). Our ongoing focus on cost control and cash generation
has positioned us well as we execute our strategy. A reconciliation of 'Profit
before net finance costs and tax', the closest equivalent IFRS measure to
underlying EBITDA, is provided within note 4 to the Condensed financial
statements.
Underlying EBITDA* by segment
Six months ended Six months ended
$ million 30 June 2024 30 June 2023
Copper 2,038 1,492
Iron Ore 1,413 1,775
Crop Nutrients (22) (20)
PGMs 675 667
De Beers 300 347
Steelmaking Coal 592 615
Nickel 28 110
Manganese 11 138
Corporate and other (55) (10)
Total 4,980 5,114
Underlying EBITDA* reconciliation for the six months ended 30 June 2023 to
six months ended 30 June 2024
The reconciliation of underlying EBITDA from $5.1 billion in 2023 to
$5.0 billion in 2024 shows the major controllable factors (e.g. cost and
volume), as well as those outside of management control (e.g. price, foreign
exchange and inflation), that drive the Group's performance.
$ billion
H1 2023 underlying EBITDA* 5.1
Price (0.6)
Foreign exchange 0.2
Inflation (0.3)
Net cost and volume 0.7
Other (0.1)
H1 2024 underlying EBITDA* 5.0
Price
Average market prices for the Group's basket of products decreased by 10%
compared with the first half of 2023, reducing underlying EBITDA by $0.6
billion. This was driven by the weighted average realised price for iron ore
which reduced by 11%, alongside the PGMs basket price which decreased by 24%,
primarily driven by rhodium and palladium which decreased by 49% and 34%,
respectively. The decrease was predominantly in H2 2023, with prices fairly
stable through H1 2024. This was partly offset by a 9% increase in the copper
weighted average realised price and the price-driven normalisation of POC at
PGMs.
Foreign exchange
Favourable foreign exchange benefited underlying EBITDA by $0.2 billion,
primarily reflecting the favourable impact of the weaker Chilean peso.
Inflation
The Group's weighted average CPI was 4% in the first six months of 2024, as
inflation continued to increase in all regions, albeit lower than the 6% in
2023 over the same period. The impact of CPI inflation on costs reduced
underlying EBITDA by $0.3 billion (30 June 2023: $0.5 billion).
Net cost and volume
The net impact of cost and volume was a $0.7 billion increase in underlying
EBITDA, driven by effective cost-out programmes across the Group, alongside
higher sales volumes at PGMs from a drawdown of finished goods, and higher
sales at Steelmaking Coal driven by higher production due to longwall moves in
2023.
Other
The $0.1 billion unfavourable movement was driven by the temporary suspension
of the Australia-based Manganese operations since mid-March 2024 as a result
of the impact of tropical cyclone Megan and losses relating to PGM's share in
AP Ventures. This was partly offset by a fair value gain of a non-diamond
royalty right at De Beers.
Underlying earnings*
Group underlying earnings decreased to $1.3 billion (30 June
2023: $1.7 billion), driven by higher depreciation and amortisation, higher
finance costs and slightly 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*
Six months ended Six months ended
$ million 30 June 2024 30 June 2023
Underlying EBITDA* 4,980 5,114
Depreciation and amortisation (1,517) (1,265)
Net finance costs and income tax expense (1,644) (1,550)
Non-controlling interests (529) (629)
Underlying earnings* 1,290 1,670
Depreciation and amortisation
Depreciation and amortisation increased by 20% to $1.5 billion (30 June
2023: $1.3 billion), largely due to Quellaveco commencing commercial
production in June 2023 and an increase in shipping leases.
Net finance costs and income tax expense
Net finance costs, before special items and remeasurements, were $0.4 billion
(30 June 2023: $0.2 billion). The increase was principally driven by the
impact of higher floating interest rates on the Group's interest expense
coupled with higher gross debt, as well as Copper Peru commencing commercial
production in June 2023 resulting in the cessation of interest capitalised on
the project.
The underlying effective tax rate was higher than the prior period at 40.3%
(30 June 2023: 37.0%), impacted by the relative levels of profits arising in
the Group's operating jurisdictions. The tax charge for the period, before
special items and remeasurements, was $1.2 billion (30 June 2023: $1.2
billion).
Non-controlling interests
The share of underlying earnings attributable to non-controlling interests of
$0.5 billion (30 June 2023: $0.6 billion) principally relates to minority
shareholdings in Kumba (Iron Ore), Copper and PGMs.
Special items and remeasurements
Special items and remeasurements (after tax and non-controlling interests) are
a net charge of $2.0 billion (30 June 2023: net charge of $0.4 billion),
principally relating to the impairments of $1.6 billion recognised in
Woodsmith (Crop Nutrients) and restructuring costs linked to the strategic
change programme across the Group of $0.3 billion.
Full details of the special items and remeasurements recorded are included in
note 11 to the Condensed financial statements.
Net debt*
$ million 2024 2023
Opening net debt* at 1 January (10,615) (6,918)
Underlying EBITDA* from subsidiaries and joint operations 4,802 4,685
Working capital movements 562 (701)
Other cash flows from operations (203) (53)
Cash flows from operations 5,161 3,931
Capital repayments of lease obligations (200) (125)
Cash tax paid (884) (1,096)
Dividends from associates, joint ventures and financial asset investments 142 208
Net interest((1)) (476) (303)
Distributions paid to non-controlling interests (300) (362)
Sustaining capital expenditure (2,197) (2,024)
Sustaining attributable free cash flow* 1,246 229
Growth capital expenditure and other((2)) (740) (695)
Attributable free cash flow* 506 (466)
Dividends to Anglo American plc shareholders (503) (905)
Acquisitions and disposals 16 197
Foreign exchange and fair value movements 1 (2)
Other net debt movements((3)) (493) (704)
Total movement in net debt* (473) (1,880)
Closing net debt* at 30 June (11,088) (8,798)
((1))Includes cash outflows of $243 million (30 June 2023: outflows of
$196 million), relating to interest payments on derivatives hedging net debt,
which are included in cash flows from derivatives related to financing
activities.
((2))Growth capital expenditure and other includes $46 million (30 June 2023:
$59 million) of expenditure on non-current intangible assets.
((3))Includes the purchase of shares (including for employee share schemes)
of $111 million; Mitsubishi's share of Quellaveco's capital expenditure of
$26 million; other movements in lease liabilities (excluding variable vessel
leases) increasing net debt by $132 million; and contingent and deferred
consideration paid in respect of acquisitions completed in previous years of
$58 million. 30 June 2023 includes the purchase of shares (including for
employee share schemes) of $187 million; Mitsubishi's share of Quellaveco
capital expenditure of $83 million; other movements in lease liabilities
(excluding variable vessel leases) increasing net debt by $89 million; and
contingent and deferred consideration paid in respect of acquisitions
completed in previous years of $124 million.
Net debt (including related derivatives) of $11.1 billion increased by $0.5
billion from 31 December 2023. Net debt at 30 June 2024 represented gearing
(net debt to total capital) of 26% (31 December 2023: 25%). The net debt to
EBITDA ratio of 1.1x (31 December 2023: 1.1x) remains unchanged, and well
within our target range of <1.5x at the bottom of the cycle.
Cash flow
Cash flows from operations and Cash conversion*
Cash flows from operations increased to $5.2 billion (30 June
2023: $3.9 billion), reflecting the impact of a working capital reduction of
$0.6 billion (30 June 2023: build of $0.7 billion) and an increase in
underlying EBITDA from subsidiaries and joint operations. Receivables
decreased by $0.7 billion, led by a lower iron ore price, coupled with lower
Copper sales volumes more than offsetting the higher copper price. Inventory
reduced by $0.1 billion, driven by a sell-down of finished diamonds
inventory. This was partly offset by a decrease in payables of $0.3 billion,
owing to lower costs and the impact of lower coal prices on royalties at
Steelmaking Coal and phasing on consumable and marketing spend at De Beers.
These factors contributed to the Group's cash conversion increasing to 86%
(30 June 2023: 52%).
Capital expenditure*
Six months ended Six months ended
$ million 30 June 2024 30 June 2023
Stay-in-business 1,370 1,242
Development and stripping 531 510
Life-extension projects 301 274
Proceeds from disposal of property, plant and equipment (5) (2)
Sustaining capital 2,197 2,024
Growth projects 694 636
Total capital expenditure 2,891 2,660
Capital expenditure increased to $2.9 billion (30 June 2023: $2.7 billion),
driven by both higher sustaining and growth capital compared to the prior
period.
Sustaining capital expenditure increased to $2.2 billion (30 June
2023: $2.0 billion), driven by additional stay-in-business expenditure for
the tailings filtration plant at Minas-Rio (Iron Ore) in Brazil, desalination
plant project at Collahuasi, and increased expenditure at Quellaveco as the
project has transitioned to commercial production.
Growth capital expenditure was $0.7 billion (30 June 2023: $0.6 billion),
primarily related to the Woodsmith project (Crop Nutrients).
Attributable free cash flow*
The Group's attributable free cash flow increased to an inflow of
$0.5 billion (30 June 2023: outflow of $0.5 billion), mainly due to an
increase in cash flows from operations to $5.2 billion (30 June
2023: $3.9 billion), decreased tax payments of $0.9 billion (30 June
2023: $1.1billion) and a reduction in distributions paid to non-controlling
interests to $0.3 billion (30 June 2023: $0.4 billion). This was partly
offset by an increase in capital expenditure to $2.9 billion (30 June 2023:
$2.7 billion) and in net interest paid to $0.5 billion (30 June 2023: $0.3
billion). This attributable free cash flow was then used in the funding of
dividends paid to Anglo American plc shareholders of $0.5 billion.
Shareholder returns
In line with the Group's established dividend policy to pay out 40% of
underlying earnings, the Board has approved an interim dividend of 40% of
first half underlying earnings, equal to $0.42 per share (30 June 2023:
$0.55 per share), equivalent to $0.5 billion (30 June 2023: $0.7 billion).
Balance sheet
Net assets decreased by $0.8 billion to $30.9 billion (31 December 2023:
$31.6 billion), reflecting dividend payments to Company shareholders and
non-controlling interests, foreign exchange movements as well as the loss in
the period, which was impacted by the impairment at Crop Nutrients.
Attributable ROCE*
Attributable ROCE decreased to 14% (30 June 2023: 18%). Annualised
attributable underlying EBIT decreased to $4.6 billion (30 June 2023: $5.9
billion), reflecting the impact of lower realised prices for the Group's
products, inflationary cost pressures and higher depreciation and
amortisation. Average attributable capital employed increased to
$33.7 billion (30 June 2023: $33.1 billion), primarily due to capital
expenditure, largely at Platinum Group Metals and Steelmaking Coal, partly
offset by the reduction in capital employed following the De Beers and Nickel
impairments recorded in 2023.
Liquidity and funding
Group liquidity stood at $15.7 billion (31 December 2023: $13.2 billion),
comprising $8.6 billion of cash and cash equivalents (31 December 2023: $6.1
billion) and $7.1 billion of undrawn committed facilities (31 December 2023:
$7.2 billion).
During the first six months of 2024, the Group issued $2.9 billion of bond
debt. In March 2024, the Group issued €500 million 3.75% Senior Notes due
June 2029 and €750 million 4.125% Senior Notes due March 2032, and in April
2024, $1.0 billion 5.75% Senior Notes due April 2034 and $500 million 6%
Senior Notes due April 2054. These were swapped to US dollar floating interest
rate exposures in line with the Group's policy.
Consequently, the weighted average maturity on the Group's bonds increased to
7.8 years (31 December 2023: 7.4 years).
Attractive growth options
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, improving global living standards, and that help address
food security. In addition to a strong pipeline of organic growth projects,
Anglo American also continues to progress opportunities with industry partners
in respect of adjacent assets where there is significant value to be unlocked.
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
$bn $bn
Copper
Collahuasi Commissioning of the fifth ball mill, adding c.15 ktpa (44% Fifth ball mill c.0.1 (44% share) 0.0 2023
share), started at the end of October 2023 and is ongoing.
Investment in additional crushing capacity and flotation cells is expected to
add production of c.10 ktpa (44% share) on average from 2026. Additional crushing capacity and flotation cells c.0.2 (44% share)
0.2 (44% share) 2026
Further debottlenecking options remain under study and are expected to add
c.15 ktpa (44% share) with capex from 2025 to 2028. Beyond that, studies and
permitting are required to be finalised for a fourth processing line in the
plant and mine expansion that would add up to c.150 ktpa (44% share) from
~2032. The desalination plant that is currently under construction has been
designed to accommodate capital efficient expansion in light of the growth
potential at the asset.
Expansion studies ongoing. Subject to permitting and approvals
Quellaveco The plant throughput is permitted to a level of 127.5 ktpd and a recent change Expansion studies ongoing. Subject to permitting and approvals.
in legislation has increased the permit allowance from 5% to 10%, enabling
throughput of up to c.140 ktpd. In light of this, studies are underway for an
incremental expansion to c.140 ktpd, potentially by late 2026. A subsequent
increase to c.150 ktpd, which was already considered in the development of the
greenfield project, is in the pre-feasibility study stage, and subject to
further permitting, that could benefit production from 2027. No additional
water rights will be required. Further local and regional expansion potential
at Quellaveco is also being evaluated.
Sakatti Polymetallic greenfield project in Finland containing copper, nickel, Studies ongoing. Subject to permitting and approvals. c.2033
platinum, palladium, gold, silver and cobalt. Expected to deliver
c.100 ktpa copper equivalent production from a state-of-the-art mine design
with minimal surface footprint. The EIA was approved by the Finnish
authorities in 2023 and the Natura 2000 assessment is progressing.
Los Bronces The underground project will partly replace lower grade open pit tonnes with Studies ongoing. Subject to approvals. Early 2030s
higher grade underground tonnes. It is located 5km from the existing pit and
will use the same plant and tailings deposit capacity used by the current
operation, without requiring any additional fresh water.
The underground development was permitted as part of the wider Los Bronces
Integrated Project permit granted in 2023. Studies are under way with the aim
being to develop a modern operation with minimal surface impact while
maximising value delivery from the project.
Premium iron ore
Minas-Rio The acquisition of the neighbouring Serpentina resource from Vale is currently Subject to studies, permitting and approvals.
expected to complete in Q4 2024, subject to regulatory conditions. At
completion, Vale will contribute Serpentina and $157.5 million in cash to
acquire a 15% shareholding in the enlarged Minas-Rio, subject to normal
completion adjustments.
Serpentina is of a higher iron ore grade than Minas-Rio's ore and contains
predominantly softer friable ore that together are expected to translate into
lower unit costs and capital requirements.
The combination of Minas-Rio with the scale and quality of the Serpentina
endowment also offers considerable expansion opportunities, including the
potential to double production towards 60Mtpa. Vale will also have an option
to acquire an additional 15% shareholding in the enlarged Minas-Rio for cash
(at fair value calculated at the time of exercise of the option), if and when
certain events relating to a future expansion occur.
Near-term access to the Serpentina ore as well as the potential future
expansion are both subject to obtaining normal licenses, which are expected to
take a number of years.
Crop Nutrients
Woodsmith New polyhalite (natural mineral fertiliser) mine being developed in North Refer to page 21 for more information on project progress
Yorkshire, UK. Expected to produce POLY4 - a premium quality, comparatively
low carbon fertiliser suitable for organic use. Final design capacity of c.13
Mtpa is expected, subject to studies and approval.
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
$bn $bn
Diamonds
Venetia 4 Mctpa underground replacement for the open pit. First production achieved in 2.3 0.6 Achieved in June 2023
2023 with ramp-up over the next few years as development continues.
Jwaneng 9 Mctpa (100% basis) replacement for Cuts 7 and 8. The Cut-9 expansion of 0.4 (19.2% share) 0.1 (19.2% share) 2027
Jwaneng will extend the life of the mine by 9 years to 2036.
Iron Ore
Kolomela High grade iron ore replacement project of c.4 Mtpa. The 0.4 0.0 First ore mined in June 2024
development of a new pit, Kapstevel South, and associated infrastructure at
Kolomela to sustain output of 10-11Mtpa.
PGMs
Mototolo/ Project leverages the existing Mototolo infrastructure, enabling mining to 0.3 0.2 2024
extend into the adjacent and down-dip Der Brochen resource to extend life of
Der Brochen asset to c.2074.
Mogalakwena Evaluating various options to support possible future underground operations Studies under review with a number of options being considered
of the mine through progressing the drilling, twin exploration decline and
studies for underground operations.
Technology projects((1))
The Group plans to invest c.$0.1-0.3 billion per year on 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. The Group is currently optimising the technology
programme, focusing only on those technologies that will bring the most
benefit to the operating assets and development projects, as well as
determining the most effective manner to execute these programmes. For more
information on our technology, please refer to our 2023 Integrated Annual
Report, page 44.
((1))Expenditure relating to technology projects is included within operating
expenditure, or if it meets the accounting criteria for capitalisation, within
Growth capital expenditure.
The Board
There have been no changes to the composition of the Board in the six months to 30 June 2024.
At the date of this report, four (40%) of the 10 Board directors are female and two (20%) identify as minority ethnic. 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 (https://www.angloamerican.com/about-us/leadership-team)
Principal risks and uncertainties
Anglo American is exposed to a variety of risks and uncertainties which may
have a financial, operational or reputational impact on the Group, and which
may also have an impact on the achievement of social, economic and
environmental objectives. The principal risks and uncertainties facing the
Group relate to the following:
- Catastrophic (tailings dam failure; geotechnical failure; mineshaft
failure; and fire and explosion) and natural catastrophe risks
- Product prices
- Cybersecurity
- Geopolitical
- Community and social relations
- Safety
- Corruption
- Operational performance (including interruption to power supply and
the failure of critical third-party owned and operated infrastructure)
- Regulatory and permitting
- Water
- Climate change
- Pandemic
- Future demand
The Group is exposed to changes in the economic environment, including tax
rates and regimes, as with any other business. Details of any key risks and
uncertainties specific to the period are covered in the business reviews on
pages 16-33. Details of relevant tax matters are included in note 7 to the
Condensed financial statements.
The principal risks and uncertainties facing the Group at the 2023 year end
are set out in detail in the strategic report section of the Integrated Annual
Report 2023, published on the Group's website www.angloamerican.com.
Copper
Operational and financial metrics
Production Sales Price Unit Group Underlying EBITDA Underlying Capex* ROCE*
volume volume cost* revenue* EBITDA* margin* EBIT*
kt kt((1)) c/lb((2)) c/lb((3)) $m((4)) $m $m $m
Copper Total 394 391 429 152 3,875 2,038 53% 1,564 855 25%
Prior period 387 389 393 179 3,493 1,492 43% 1,176 878 19%
Copper Chile 247 242 437 176 2,455 1,196 49% 893 620 33%
Prior period 249 238 393 205 2,263 691 31% 418 657 20%
Los Bronces((5)) 97 92 n/a 241 873 369 42% 244 146 n/a
Prior period 113 103 - 310 843 128 15% 24 340 -
Collahuasi((6)) 125 127 n/a 119 1,204 782 65% 654 463 n/a
Prior period 114 114 - 114 1,014 565 56% 447 297 -
Other operations((7)) 24 23 n/a n/a 378 45 12% (5) 11 n/a
Prior period 23 21 - - 406 (2) 0% (53) 20 -
Copper Peru (Quellaveco)((8)) 147 149 415 112 1,420 842 59% 671 235 17%
Prior period 138 151 394 132 1,230 801 65% 758 221 18%
((1))Excludes 168 kt third-party sales (30 June 2023: 178 kt).
((2))Represents realised copper price and excludes impact of third-party
sales.
((3))C1 unit cost includes by-product credits.
((4))Group revenue is shown after deduction of treatment and refining charges
(TC/RCs).
((5))Figures on a 100% basis (Group's share: 50.1%).
((6))44% share of Collahuasi production, sales and financials.
((7))Other operations form part of the results of Copper Chile. Production and
sales are from El Soldado mine (figures on a 100% basis, Group's share:
50.1%). Financials include El Soldado and Chagres (figures on a 100% basis,
Group's share: 50.1%), third-party trading, projects and corporate costs. El
Soldado mine C1 unit costs decreased by 26% to 224c/lb (30 June 2023:
301c/lb).
((8))Figures on a 100% basis (Group's share: 60%).
Operational performance
Copper Chile
Copper production of 246,500 tonnes was broadly in line with the prior period
(30 June 2023: 249,400 tonnes), due to planned higher throughput and grades
at Collahuasi and El Soldado, offset by planned lower grade at Los Bronces.
At Los Bronces, production decreased by 14% to 97,100 tonnes (30 June 2023:
112,500 tonnes), due to planned lower ore grade (0.48% vs 0.52%) and
throughput associated with continued ore hardness. As previously disclosed,
the unfavourable ore characteristics in the current mining area will continue
to impact operations until the next phase of the mine, where the grades are
expected to be higher and the ore softer. Development work for this phase is
now under way and it is expected to benefit production from early 2027 (refer
to 'Operational outlook' below for further details). As planned, in line with
our broader focus on improving cash generation, the older, smaller (c.40% of
plant capacity) and more costly Los Bronces processing plant will be placed on
care and maintenance by the end of July, in light of the current unfavourable
ore characteristics in the mine.
At Collahuasi, Anglo American's attributable share of copper production
increased by 9% to 125,000 tonnes (30 June 2023: 114,400 tonnes), due to
higher throughput driven by the fifth ball mill that started up in Q4 2023 and
planned higher grade (1.13% vs 1.07%), partially offset by lower copper
recovery.
Production at El Soldado increased by 8% to 24,400 tonnes (30 June 2023:
22,500 tonnes) due to planned higher grade (0.94% vs 0.84%).
The central zone of Chile, where Los Bronces and El Soldado are located,
experienced record levels of rain and snow - with the wettest June and also
the most snowfall in over 20 years. While both operations were impacted, there
has been limited disruption, despite the extent of snowfall.
Copper Peru
Quellaveco production increased by 7% to 147,300 tonnes (30 June 2023:
137,800 tonnes), reflecting the higher throughput reached since commercial
production was achieved in June 2023, despite the impact of planned lower
grades during the first six months of 2024. Operational performance is
tracking well against the revised mine plan.
Focus is on the ramp up of the coarse particle recovery plant that treats
flotation tails, leading to improved metal recoveries.
Markets
30 June 2024 30 June 2023
Average market price (c/lb) 412 394
Average realised price (Copper Chile - c/lb) 437 393
Average realised price (Copper Peru - c/lb) 415 394
The differences between the market price and the realised prices are largely a
function of provisional pricing adjustments and the timing of sales across the
year. At Copper Chile, 72,800 tonnes of copper were provisionally priced at
432 c/lb at 30 June 2024 (30 June 2023: 134,500 tonnes provisionally priced
at 377 c/lb). At Copper Peru, 64,600 tonnes of copper were provisionally
priced at 410 c/lb at 30 June 2024 (30 June 2023: 91,700 tonnes
provisionally priced at 377 c/lb).
Copper prices were firmer during the first six months of 2024, with LME prices
averaging 412 c/lb, up 5% from last year (30 June 2023: 394 c/lb). Investor
flows into base metals helped drive copper prices higher, reaching an all-time
nominal high in May, offsetting slower physical demand growth from China
during the second quarter. Copper prices remain well supported by ongoing
global decarbonisation efforts and energy transition infrastructure
investment.
Financial performance
Underlying EBITDA for Copper increased by 37% to $2,038 million (30 June
2023: $1,492 million), driven by the higher copper price and improved cost
performance.
Copper Chile
Underlying EBITDA increased by 73% to $1,196 million (30 June 2023: $691
million), driven by higher copper prices, the benefit of a weaker Chilean
peso, lower costs and slightly higher copper sales volumes. C1 unit costs
decreased by 14% to 176 c/lb (30 June 2023: 205 c/lb), reflecting effective
cost control and the benefit of a weaker Chilean peso.
Capital expenditure decreased by 6% to $620 million (30 June 2023: $657
million), driven by a weaker Chilean peso and lower expenditure at Los
Bronces, partially offset by expected higher expenditure at Collahuasi on the
desalination plant project.
Copper Peru
Underlying EBITDA increased by 5% to $842 million (30 June 2023: $801
million), driven by higher copper prices and lower unit costs. C1 unit costs
decreased by 15% to 112 c/lb (30 June 2023: 132 c/lb), reflecting the benefit
of increased molybdenum production offsetting higher costs due to entering
commercial production.
Capital expenditure increased by 6% to $235 million (30 June 2023: $221
million), due to higher sustaining capital in the current period as the asset
commenced commercial production in June 2023. This is partly offset by
decreased growth capital following project completion.
Operational outlook
Copper Chile
Los Bronces
Los Bronces is currently mining a single phase with expected lower grades.
Stripping of additional mining phases is progressing according to plan, aiming
to mitigate previous delays in mine development, permitting and operational
challenges.
Los Bronces is a world class copper deposit, accounting for more than 2% of
the world's known copper resources. While the operation effectively works
through the challenges in the mine, and until the economics improve, the
older, smaller (c.40% of production volumes) and more costly Los Bronces
processing plant will be placed on care and maintenance, now scheduled for the
end of July 2024. This value over volume decision will enable the business to
build on the strong cost performance from the first half of 2024, with some
cost savings from the expected plant closure already being achieved, improving
the asset's competitive position.
The development of the first phase of the Los Bronces integrated water
security project is also ongoing, which will secure a large portion of the
mine's water needs through a desalinated water supply from 2026.
Pre-feasibility studies to advance the permitted Los Bronces open pit
expansion and underground development are progressing and are expected to be
finalised in mid-2025.
Collahuasi
Collahuasi is a world class orebody with significant growth potential. Near
term grades are expected to be c.1.05% TCu, with the exception of 2025 where
the grade temporarily declines to c.0.95% TCu. Various debottlenecking options
are being studied that are expected to add c.25,000 tonnes per annum (tpa)
(our 44% share) between 2025-2028. Beyond that, studies and permitting are
under way for a fourth processing line in the plant and mine expansion that
would add up to 150,000 tpa (our 44% share). Timing of that expansion is
subject to the permitting process; assuming permit approval in 2027, first
production could follow from c.2032.
A desalination plant is currently under construction that will meet a large
portion of the mine's water requirements when complete in 2026 and has been
designed to accommodate capital-efficient expansion as the fourth processing
line project progresses. Until then, the operation continues to progress
mitigation measures to optimise and reduce water consumption and secure
third-party sources.
El Soldado
Production in 2024 is expected to be broadly comparable to 2023, before
declining to 30,000-35,000 tpa until end of mine life which is expected by
mid-2028. Options to extend the life of the mine beyond 2028 are being
evaluated.
Copper Chile
These impacts are reflected in the unchanged guidance provided on pages 34-35.
Production guidance for Chile for 2024 is 430,000-460,000 tonnes, subject to
water availability and is weighted to the first half of the year owing to the
planned closure of the Los Bronces plant by the end of July. 2024 unit cost
guidance is c.190 c/lb((1)). The first half unit cost of 176 c/lb was lower
than guidance, reflecting the benefit of a weaker Chilean peso.
Copper Peru
A localised geotechnical fault in one of the high grade phases previously
scheduled for mining in 2024 necessitated a revised mining plan in the latter
part of 2023, as it was determined that a change in the inter-ramp angle of
that phase was required to ensure safety standards. This stripping work is
progressing well, with other lower grade phases being mined, until the high
grade phase is accessed in 2027.
There is significant expansion potential that could sustain production beyond
the initial high grade area. Currently, the plant throughput is permitted to a
level of 127,500 tonnes per day (tpd) and a recent change in legislation has
increased the permit allowance from 5% to 10%, enabling throughput to increase
from 133,800 tpd to c.140,000 tpd. In light of this, studies are underway for
an incremental expansion to c.140,000 tpd, potentially by late 2026.
A subsequent increase to c.150,000 tpd is in the pre-feasibility study stage,
and subject to further permitting, that could benefit production from 2027. No
additional water rights will be required. Beyond that, different expansion
alternatives are under study, including a possible third ball mill. There is
also interesting regional potential that our Discovery team is progressing -
including the adjacent Mamut area, c.10 km away.
These impacts are reflected in the unchanged guidance provided on pages 34-35.
Production guidance for Peru for 2024 is 300,000-330,000 tonnes. Production in
Peru is weighted to the second half of the year as a higher grade area of the
mine is accessed. 2024 unit cost guidance is c.110 c/lb((1)). The first half
unit cost of 112 c/lb, was slightly higher than guidance, reflecting the
weighting of production volumes to the second half of the year.
((1) ) The copper unit costs are impacted by FX rates and pricing of
by-products, such as molybdenum. 2024 unit cost guidance was set at c.850
CLP:USD for Chile and c.3.7 PEN:USD for Peru.
Iron Ore
Operational and financial metrics
Production Sales Price Unit Group Underlying EBITDA Underlying Capex* ROCE*
volume volume cost* revenue* EBITDA* margin* EBIT*
Mt((1)) Mt((1)) $/t((2)) $/t((3)) $m $m $m $m
Iron Ore Total 30.7 29.5 93 37 3,296 1,413 43% 1,171 495 21%
Prior period 30.7 30.3 105 36 3,660 1,775 48% 1,554 382 30%
Kumba Iron Ore((4)) 18.5 18.1 97 39 1,988 888 45% 742 266 47%
Prior period 18.7 19.0 106 39 2,169 1,105 51% 975 277 69%
Iron Ore Brazil (Minas-Rio) 12.3 11.4 86 33 1,308 525 40% 429 229 14%
Prior period 12.0 11.4 104 32 1,491 670 45% 579 105 20%
((1) ) Production and sales volumes are reported as wet metric tonnes.
Product is shipped with c.1.6% moisture from Kumba and c.9% moisture from
Minas-Rio.
((2) ) Prices for Kumba Iron Ore are the average realised export basket
price (FOB Saldanha) (wet basis). Prices for Minas-Rio are the average
realised export basket price (FOB Brazil) (wet basis). Prices for total iron
ore are a blended average.
((3) ) Unit costs are reported on an FOB wet basis. Unit costs for total
iron ore are a blended average.
((4) ) Sales volumes, stock and realised price could differ to Kumba's
stand-alone reported results due to sales to other Group companies.
Operational performance
Kumba
Production decreased by 2% to 18.5 Mt (30 June 2023: 18.7 Mt), driven by a
12% decrease at Kolomela to 5.3Mt (30 June 2023: 6.0Mt) partly offset by a 3%
increase at Sishen to 13.2 Mt (30 June 2023: 12.8 Mt). Kumba reduced
production in the fourth quarter of 2023 to alleviate mine stockpile
constraints, followed by an operational reconfiguration implemented in the
first quarter of 2024 to align with Transnet's rail capacity. Sales volumes
were 18.1 Mt, 5% below the prior period (30 June 2023: 19.0 Mt), reflecting
the impact of equipment challenges at Saldanha Bay port, which were partly
mitigated by a proactive mini-shut and stacker reclaimer repairs in April.
As a result of rail and port challenges during the first half of the year,
total finished stock increased by 1.1 Mt to 8.2 Mt, with stock at the mines
increasing by 0.9 Mt to 7.4 Mt, above desired levels. Consequently, stock at
the port remains low at 0.8 Mt, an increase of only 0.2 Mt in the first six
months of the year.
Minas-Rio
Production increased by 2% to 12.3 Mt (30 June 2023: 12.0 Mt), reflecting the
strongest half-year performance since 2020 and a record second quarter. This
performance was a result of good preparation at the mine at the end of 2023,
with high stock levels available to secure the ore feed, despite the highest
rainfall in the last six years and lower mining fleet availability. Production
also benefitted from an improved performance at the crushing circuit and
beneficiation plant.
Markets
30 June 2024 30 June 2023
Average market price (Platts 62% Fe CFR China - $/tonne) 118 118
Average market price (MB 65% Fe Fines CFR - $/tonne) 131 132
Average realised price (Kumba export - $/tonne) (FOB wet basis) 97 106
Average realised price (Minas-Rio - $/tonne) (FOB wet basis) 86 104
The Platts 65-62 differential averaged $13/dmt in the first half compared to
$14/dmt in the same period of last year. Lump premium averaged $0.13/dmtu
during the first half of 2024, largely unchanged over the comparative period.
Persistent margin pressure at mills and a focus on cost reduction rather than
productivity kept premia in line with 2023 levels.
Kumba's FOB realised price of $97/wet metric tonne (wmt) was broadly in line
with the equivalent Platts 62% Fe FOB Saldanha market price (adjusted for
moisture) of $96/wmt. The premiums for higher iron content (at 64.1%) and lump
product (approximately 64%) were partially offset by the impact of
provisionally priced sales volumes.
Minas-Rio's pellet feed product is higher grade (with iron content of c.67%
and lower impurities) so the MB 65 Fines index is used when referring to the
Minas-Rio product. The Minas-Rio realised price of $86/wmt FOB was 9% lower
than the equivalent MB 65 FOB Brazil index (adjusted for moisture) of $94/wmt,
impacted by provisional pricing which more than offset the premium for our
high quality product, including higher (~67%) Fe content.
Financial performance
Underlying EBITDA for Iron Ore decreased by 20% to $1,413 million (30 June
2023: $1,775 million), principally driven by a 3% decrease in sales volumes
and 11% decrease in the realised iron ore price.
Kumba
Underlying EBITDA decreased by 20% to $888 million (30 June 2023: $1,105
million), driven by a lower average realised price and lower sales volumes.
Unit costs were flat at $39/tonne (30 June 2023: $39/tonne), as the benefit
of the mine and cost optimisation work and a slightly weaker South African
rand were offset by lower production.
Capital expenditure decreased by 4% to $266 million (30 June 2023: $277
million), reflecting planned lower growth and life-extension spend, partly
offset by higher deferred stripping capitalisation.
Minas-Rio
Underlying EBITDA decreased by 22% to $525 million (30 June 2023: $670
million), primarily due to lower realised prices and higher unit costs. Unit
costs increased by 3% to $33/tonne (30 June 2023: $32/tonne), primarily due
to maintenance costs associated with the mining fleet, partially offset by
cost reduction initiatives.
Capital expenditure was 118% higher at $229 million (30 June 2023: $105
million), primarily due to the construction of the new tailings filtration
plant, which is expected to start-up in 2026.
Operational outlook
Kumba
Production is expected to remain at 35-37 Mtpa((1)) for the period 2024 to 2026, in line with the expected third-party logistics constraint and to help ensure a balanced value chain. Unit costs are expected to be between $38-40/tonne during this three-year period, benefiting from Kumba's business reconfiguration and cost optimisation programme, in line with the lower production profile.
These impacts are reflected in the unchanged guidance provided on pages 34-35. Production guidance for 2024 is 35-37 Mt, subject to third-party rail and port availability and performance, and 2024 unit cost guidance is c.$38/tonne((2)). The first half unit cost of $39/tonne is higher than guidance, reflecting the slightly stronger South African rand and the remaining benefit of the cost-out programme that will be realised in the second half of the year, as planned. (
(1) ) Production and sales volumes, stock and realised price are reported on a wet basis and could differ from Kumba's stand-alone results due to sales to other Group companies.
Minas-Rio
Following the record quarterly production in the fourth quarter of 2023, focus is on embedding consistent, stable and strong operating performance, while increasing the maturity of capital projects to sustain and grow production volumes. Optionality is also being evaluated to maximise long term value in light of the agreement to acquire and integrate the contiguous Serra da Serpentina high grade iron ore resource.
In parallel, Minas-Rio is focused on increasing tailings storage capacity. The tailings filtration plant project is on track for completion by early 2026 and alternative, additional disposal options continue to be studied.
In mid-2025, Minas-Rio will undertake the next pipeline inspection of the 529 km pipeline that carries iron ore slurry from the plant to the port. Improvements were made to the inspection strategy that extended its duration to ensure the rigour of data collection while also incorporating some additional plant maintenance to coincide with the operational stoppage. Pipeline inspections take place every five years and are validated by external consultants and agreed with the Brazilian Environmental Authorities.
These impacts are reflected in the unchanged guidance provided on pages 34-35. Production guidance for 2024 is 23-25 Mt and 2024 unit cost guidance is c.$35/tonne((2)).The first half unit cost of $33/tonne is lower than guidance, reflecting the benefit of slightly higher volumes in the first half of the year. (
(2) ) 2024 unit cost guidance was set at c.19 ZAR:USD for Kumba and c.5.0 BRL:USD for Minas-Rio.
Crop Nutrients
Operational and financial metrics
Production Sales Group Underlying EBITDA Underlying Capex* ROCE*
volume volume revenue* EBITDA* margin* EBIT*
$m $m $m $m
Crop Nutrients n/a n/a 86 (22) n/a (22) 500 n/a
Prior period - - 93 (20) - (20) 307 -
Woodsmith project n/a n/a n/a n/a n/a n/a 500 n/a
Prior period - - - - - n/a 307 -
Other((1)) n/a n/a 86 (22) n/a (22) n/a n/a
Prior period - - 93 (20) - (20) - -
((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 Woodsmith, a large scale, long-life Tier 1 asset
in the north east of England, to access the world's largest known deposit of
polyhalite - a natural mineral fertiliser product containing potassium,
sulphur, magnesium and calcium - four of the six nutrients that every plant
needs to grow.
The Woodsmith project is located on the North Yorkshire coast, just south of
Whitby, where polyhalite ore will be extracted via two 1.6 km deep mine shafts
(a service shaft and a production shaft) and transported to the port area in
Teesside via an underground conveyor belt in a 37 km mineral transport system
(MTS) tunnel, thereby minimising any environmental impact on the surface. It
will be innovatively processed and granulated at a materials handling facility
to produce a low carbon fertiliser (relative to comparable products) - known
as POLY4 - that will then be exported from the port facility, where we have
priority access, to a network of customers around the world.
Progress update
Woodsmith project
In the first half of the year, the focus has been on continuing to progress
core infrastructure activities of shaft sinking and tunnel boring, with good
progress being made.
The service shaft is at a depth of 745 metres and has been undergoing
preparatory works ahead of intersecting the Sherwood sandstone strata,
expected in the second half of 2024. The sandstone is a key focus area for
shaft sinking due to the expected hardness of the rock and potential for water
fissures. The production shaft has reached a depth of 712 metres, and the
tunnel has reached 29.2km of the total 37 km length.
On 14 May 2024, the Group announced that in order to support deleveraging of
its balance sheet, it will be slowing the pace of development of the Woodsmith
project in the near-term. Crop Nutrients is identified as one of the three key
pillars of the Group's more focused portfolio, and as such the focus will
shift to preserving the long-term value of this high quality asset, and
enabling the project's future development. To that end, work is under way to
identify and secure one or more strategic syndication partners for Woodsmith.
Forecast capital expenditure for 2024 remains c.$0.9 billion, focused on core
infrastructure, with $500 million spent during the half (30 June 2023: $307
million). Capital expenditure for 2025 and 2026 is c.$0.2 billion and nil,
respectively. Operating expenditure for 2025 and 2026 is expected to be c.$0.2
billion and c.$0.1 billion, respectively.
A detailed review has been conducted to identify the critical value-adding
works to be executed during the slowdown period to de-risk the overall project
schedule, preserve progress on areas that will be entering a period of care
and maintenance, and further optimise certain scopes of the project ready for
ramp-up when conditions allow.
Shaft sinking activities are planned to continue on the service shaft to
progress through the key Sherwood sandstone strata, subject to capital
allocation priorities. Sinking activities on the production shaft have now
been paused and will enter a phase of care and maintenance. The tunnel has
reached the final intermediate shaft at Ladycross. The tunnel boring machine
is undergoing a planned maintenance stop during which time the tunnel and
Ladycross shaft will be connected. Following this, tunnel boring activities
will continue at a significantly reduced pace. During the slowdown period, key
permits will be maintained to allow project ramp-up in due course.
The study programme, focused on enhancing the project's configuration,
enabling efficient, scalable mining methods over time, and optimising
additional infrastructure, is being rescoped to fit the revised funding and
syndication plan, with critical technical studies planned to complete prior to
future project approval and restart. The expected final design capacity
remains c.13 Mtpa, subject to studies and approval.
The reduced pace of construction will result in an extended development
schedule and, primarily due to this, an impairment charge of $1.6 billion has
been recognised to the carrying value of the asset within 'special items and
remeasurements'.
We will continue to fund our Thriving Communities programmes that focus on
vulnerable young people. We will also engage regularly with local stakeholders
and community partners to ensure that they are informed of changes to the
project and any concerns are addressed. We are currently working closely with
a number of local organisations on a social response plan that will help
people affected by the slowdown to find new roles in the local area through
our partnerships with other businesses, suppliers and local councils.
Market development - POLY4
POLY4 provides farmers, through one core product, with a fertiliser solution
to tackle the three key challenges facing the food industry today - the
increasing demand for food from less available land; the need to reduce the
environmental impact of farming; and the deteriorating health of soils.
The ongoing focus of market development activities has been to develop and
implement detailed sales and marketing strategies for each region and to
support customers with their own market development activities to further
promote POLY4 to the end-users of the product - farmers. We have engaged
deeper into the food value chain working with our distribution partners,
leading UK retailers, large distributors, major blenders, influencers, farming
associations, and research institutions to help ensure we deliver what is
needed at the farm gate. Through our global agronomy programme, we have
conducted over 1,900 field demonstrations to date, on over 80 crops, and our
research continues to reinforce these superior qualities and characteristics
of POLY4.
During the project slowdown period, the focus of marketing work will be on the
key commercial and technical relationships that are already well established,
maintaining presence in our key selling regions and consolidating the data
that we have around product characteristics.
Woodsmith remains a Tier 1 resource entirely aligned with the demand trends of
decarbonisation and food security. Anglo American has high confidence, backed
by its proven track record in project delivery, to develop the Woodsmith
project once the balance sheet is suitably deleveraged and the pathway to
syndication is clear.
Platinum Group Metals (PGMs)
Operational and financial metrics
Production Sales Basket Unit Group Underlying EBITDA Underlying Capex* ROCE*
volume volume price cost* revenue* EBITDA* margin* EBIT*
PGMs PGMs
koz((1)) koz((2)) $/PGM oz((3)) $/PGM oz((4)) $m $m $m $m
PGMs 1,755 1,974 1,442 976 2,796 675 24% 481 455 17%
Prior period 1,844 1,807 1,885 993 3,531 667 19% 505 449 20%
Mogalakwena 452 518 1,428 859 737 290 39% 190 271 n/a
Prior period 461 462 1,930 961 898 437 49% 355 210 -
Amandelbult 285 320 1,601 1,211 511 119 23% 92 27 n/a
Prior period 299 309 2,174 1,200 676 206 30% 187 29 -
Other operations((5)) 315 487 1,361 933 523 15 3% (31) 157 n/a
Prior period 438 414 1,815 954 773 235 30% 186 210 -
Processing and trading((6)) 704 649 n/a n/a 1,025 251 24% 230 n/a n/a
Prior period 646 622 - - 1,184 (211) (18)% (223) - -
((1))Production reflects own-mined production and purchase of metal in
concentrate. PGM volumes consist of 5E metals and gold.
((2))Sales volumes exclude tolling and third-party trading activities. PGM
volumes consist of 5E metals and gold.
((3))Average US$ 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))Includes Unki, Mototolo, our 50% share of Modikwa (joint operation), and
our 50% share of Kroondal until the disposal of our interest in the joint
operation on 1 November 2023. Other operations margin includes unallocated
market development, care and maintenance, and corporate costs.
((6))Includes purchase of concentrate from joint operations and third parties
for processing into refined metals, tolling and third-party trading
activities, with the exception of production and sales volumes which exclude
tolling and trading. The disposal of our 50% interest in Kroondal on 1
November 2023, resulted in Kroondal moving to a 100% third-party POC
arrangement, until it transitions to a toll arrangement expected in H2 2024.
Operational performance
Total PGM production decreased by 5% to 1,755,100 ounces (30 June 2023:
1,844,300 ounces) primarily due to lower production from the Kroondal joint
operation (now sold), difficult ground conditions at Mototolo and operational
challenges at Amandelbult.
Own mined production
PGM production from own-managed mines (Mogalakwena, Amandelbult, Unki and
Mototolo) and equity share of joint operations decreased by 12% to 1,051,500
ounces (30 June 2023: 1,198,700 ounces) due to the disposal of Kroondal.
Second quarter production was 9% higher than the first quarter, positioning
the business well into the second half of the year.
Amandelbult production decreased by 5% to 284,700 ounces (30 June 2023:
299,400 ounces) primarily due to operational challenges at the concentrator as
a result of blending open pit ore in the first quarter. However, there were
early-stage improvements in the second quarter driven by operational
efficiencies which allowed for higher grades and throughput from underground
material.
Mogalakwena production decreased by 2% to 452,100 ounces (30 June 2023:
461,400 ounces) primarily due to blending low grade stockpiles as the new
bench cut sequence progressed during the second quarter, which resulted in
higher waste tonnes extracted in the short term.
Production from other operations decreased by 28% to 314,700 ounces (30 June
2023: 437,900 ounces) mainly due to the disposal of Kroondal, difficult ground
conditions at Mototolo as a section of the mine nears the end of its life and
the planned, temporary mining of a low-grade section at Unki.
Purchase of concentrate
Purchase of concentrate increased by 9% to 703,600 ounces (30 June 2023:
645,600 ounces) reflecting the transition of Kroondal to a 100% third-party
purchase of concentrate arrangement. Normalising the comparative period to
include 100% of Kroondal results in a 6% decrease, reflecting lower
third-party receipts, as well as the planned ramp-down at Kroondal.
Refined production and sales volumes
Refined PGM production (excluding toll-treated metal) increased by 5% to
1,781,500 ounces (30 June 2023: 1,699,800 ounces) driven by a draw down of
work-in-progress inventory compared to the same period last year. There was no
Eskom load-curtailment during the first half of the year.
PGM sales volumes increased by 9% to 1,973,600 ounces (30 June 2023:
1,807,300 ounces) resulting from higher refined production and due to a draw
down of finished goods compared to the same period last year.
Markets
30 June 2024 30 June 2023
Average platinum market price ($/oz) 945 1,009
Average palladium market price ($/oz) 976 1,505
Average rhodium market price ($/oz) 4,602 8,957
Realised basket price ($/PGM oz) 1,442 1,885
Average PGM prices in H1 2024 were considerably lower than in H1 2023, driving
a 24% decrease in the realised basket price to $1,442/oz (30 June 2023:
$1,885/oz). This was driven largely by decreases in the realised prices of
rhodium, palladium and platinum by 49%, 34% and 4% respectively.
Platinum's average price in the first half of 2024 suffered due to a stronger
dollar compared to the same period in 2023, albeit strong investor demand on
signs of a tightening supply and demand balance and surging prices for gold
and silver have provided support through the period. The palladium price has,
despite periodic rallies, continued to trend lower during most of this period
on poor speculative sentiment. Rhodium's large year-on-year fall was driven by
events in the first half of 2023, when it fell sharply on glass industry stock
disposals, to hit a four-year low as of mid-year. After that, prices
stabilised, before modestly strengthening in the first half of 2024 on solid
automotive buying.
Sales of light vehicles that require PGM catalytic converters continued to
rise in the first half of 2024, adding around 2% on the same period in 2023.
This was despite slowing growth in the overall light vehicle sector this year
compared with 2023 due to the fading of pent-up demand and some other consumer
headwinds. Helping combustion sales was a moderation to the growth in sales of
battery-electric vehicles. Plug-in hybrid electric vehicles continue to take
share, at around 6% in 2024 so far, from 4% last year.
Financial performance
Underlying EBITDA increased to $675 million (30 June 2023: $667 million)
primarily driven by the price-driven normalisation of POC, higher sales as a
result of higher refined production, a draw down of finished goods, and
effective early results from the cost-out programme. This was partly offset by
a 24% decrease in the basket price, which impacted revenue. The cost savings,
alongside favourable foreign exchange, contributed to own-mined unit costs
decreasing by 2% to $976/PGM ounce (30 June 2023: $993/PGM ounce).
Capital expenditure of $455 million (30 June 2023: $449 million) was broadly
flat, as planned lower stay-in-business expenditure was offset by planned
higher spend on lifex projects, predominantly at Mogalakwena and Mototolo.
Operational outlook
PGM prices remain at low levels and the prevailing macro-economic conditions
and uncertainty prompted the difficult but necessary action to reconfigure our
PGM business in the first half of 2024 to ensure the long term sustainability
and competitive position of our operations.
The consultation process for section 189A restructuring has been completed and
the Mortimer Smelter placed on care and maintenance at the end of April 2024.
Overall, sustainable cost reduction initiatives will deliver annual cost
savings of c.$0.3 billion from a 2023 baseline, and in 2024, the business is
targeting an all-in-sustaining cost of c.$1,050/3E oz.
These extensive measures will improve the positioning of these world-class PGM
assets for the long term, securing the highly attractive value proposition of
Mogalakwena.
These impacts are reflected in the unchanged guidance provided on pages 34-35.
PGM metal in concentrate production guidance for 2024 is 3.3-3.7 million
ounces, with own-mined output of 2.1-2.3 million ounces and purchase of
concentrate of 1.2-1.4 million ounces. Refined PGM production guidance for
2024 is 3.3-3.7 million ounces. Production remains subject to the impact
of Eskom load-curtailment.
Unit cost guidance for 2024 is c.$920/PGM ounce((1)). The first half unit cost
of $976/PGM ounce is higher than guidance, reflecting lower production and the
slightly stronger South African rand. The remaining benefit of the cost-out
programme will be realised in the second half of the year, as planned, which
together with higher production will deliver guidance.
((1) ) Unit cost is per own mined 5E + gold PGMs metal in concentrate
ounce. 2024 unit cost guidance was set at c.19 ZAR:USD.
De Beers - Diamonds
Operational and financial metrics((1))
Production Sales Unit Group Underlying EBITDA Underlying Capex* ROCE*((7))
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 13,312 11,945 164 85 2,247 300 13% 150 264 (4)%
Prior period 16,520 15,303 163 63 2,831 347 12% 190 302 5%
Botswana 9,697 n/a 145 36 n/a 177 n/a 150 32 n/a
Prior period 12,728 - 175 30 - 274 - 242 30 -
Namibia 1,194 n/a 435 270 n/a 84 n/a 66 18 n/a
Prior period 1,231 - 550 223 - 102 - 84 20 -
South Africa 1,103 n/a 93 107 n/a (13) n/a (41) 164 n/a
Prior period 1,205 - 130 68 - 54 - 50 202 -
Canada 1,318 n/a 80 51 n/a 41 n/a 23 28 n/a
Prior period 1,356 - 89 46 - 23 - 1 32 -
Trading n/a n/a n/a n/a n/a 58 3% 56 - n/a
Prior period - - - - - 61 2% 58 1 -
Other((8)) n/a n/a n/a n/a n/a (47) n/a (104) 22 n/a
Prior period - - - - - (167) - (245) 17 -
((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 12.7 million carats (30 June
2023: 17.3 million carats). Total sales volumes (100%) include De Beers
Group's joint arrangement partners' 50% proportionate share of sales to
entities outside De Beers Group from Diamond Trading Company Botswana and
Namibia Diamond Trading Company.
((3))Pricing for the mining businesses 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 $2.0 billion (30 June 2023: $2.5
billion).
((6))De Beers EBITDA margin includes the impact of mining as well as
non-mining activities, third‑party sales, purchases, trading, brands and
consumer markets and corporate. Mining EBITDA margin for De Beers is 40%
(30 June 2023: 50%).
((7)) De Beers' attributable ROCE is based on the prior 12 months, rather than
the annualised half year performance, owing to the seasonality of sales and
underlying EBIT profile of De Beers.
((8))Other includes Element Six, brands and consumer markets, and corporate.
Markets
Following a challenging 2023, demand for rough diamonds recovered slightly at
the start of 2024 following the cessation of the voluntary moratorium on rough
diamond imports into India in late 2023 and improved demand for diamond
jewellery over the year-end retail selling season in the United States.
However, with midstream polished inventories remaining higher than normal and
continued cautious restocking from retailers, demand for rough diamonds
deteriorated in the second quarter of the year.
Global consumer demand for natural diamond jewellery in the first half of 2024
experienced very different trends within the key consumer countries. In China,
the ongoing economic challenges, particularly within the property market and
low consumer confidence, have delayed the expected recovery from the sharp
decline in 2023, with jewellery retailers largely selling from existing stocks
rather than placing new orders. Consumer demand in the United States continued
to be affected by economic uncertainty, soft consumer confidence and lab-grown
diamonds. Conversely, in India, strong economic growth underpinned positive
natural diamond jewellery demand growth.
The bifurcation of natural and lab-grown diamonds accelerated. Wholesale
lab-grown diamond prices continue to fall with retailers, including Lightbox
Jewelry, having to repeatedly reduce their prices to remain competitive,
affecting their top-line performance and shifting retailer financial
incentives increasingly towards natural diamond jewellery.
Operational performance
Mining
Rough diamond production reduced to 13.3 million carats (30 June 2023: 16.5
million carats). This reflects the decision to intentionally lower production
and change short term plant feed mix in response to the weaker rough diamond
demand due to the higher than average levels of inventory in the midstream and
cautious retailer restocking.
In Botswana, production was reduced by 24% to 9.7 million carats (30 June
2023: 12.7 million carats), driven by intentional lower production and
short-term changes in plant feed at Jwaneng and Orapa.
Namibia production decreased by 3% to 1.2 million carats (30 June 2023: 1.2
million carats), with planned lower production at Debmarine Namibia, partially
offset by planned mining of areas with higher grades and recoveries at Namdeb.
South Africa production decreased by 8% to 1.1 million carats (30 June 2023:
1.2 million carats), due to planned processing of lower grade stockpiles at
Venetia whilst the underground operations ramp-up over the next few years.
Production in Canada was broadly flat at 1.3 million carats (30 June 2023: 1.4
million carats).
Financial performance
Total revenue decreased to $2.2 billion (30 June 2023: $2.8 billion), with
rough diamond sales decreasing to $2.0 billion (30 June 2023: $2.5 billion).
Total rough diamond sales volumes decreased by 22% to 11.9 million carats
(30 June 2023: 15.3 million carats). The average realised price is broadly
flat at $164/ct (30 June 2023: $163/ct), reflecting a larger proportion of
higher value rough diamonds being sold, offset by a 20% decrease in the
average rough price index.
Underlying EBITDA decreased to $300 million (30 June 2023: $347 million),
driven by reduced sales volumes and high unit costs due to intentional lower
production and the ramp up of Venetia underground. Earnings benefitted from
strategic progress on announced business streamlining, with a fair value gain
of $127 million recognised in the period in relation to a non-diamond royalty
right.
De Beers has focused on managing its rough diamond inventory levels through
the softer trading conditions by reducing production to supply into demand.
Capital expenditure decreased by 13% to $264 million (30 June 2023: $302
million), reflecting phasing of life extension spend for the Venetia
underground project. Investment in the ramp-up of the Venetia underground
project continues as well as the execution of other life-extension projects,
including Jwaneng Cut-9.
De Beers and the Government of the Republic of Botswana have previously signed
Heads of Terms setting out the key terms for a new 10-year sales agreement for
Debswana's rough diamond production (through to 2034) and the new 25- year
Debswana mining licences (through to 2054). De Beers and the Government of
Botswana are working together to progress and then implement the formal new
sales agreement and related documents including the mining licences. In the
interim, the terms of the most recent sales agreement remain in place. The new
arrangements constitute a related party transaction for the purposes of the
current UK Listing Rules given the Government of the Republic of Botswana
holds a 15% interest in De Beers and is therefore deemed a related party of
Anglo American. In line with the requirements under the current UK Listing
Rules, Anglo American had previously communicated that the new arrangements
would be subject to approval by Anglo American's shareholders. As part of the
recently announced changes to the UK Listing Rules which come into effect on
29 July 2024, not only has the requirement for shareholder approval been
removed with respect to related party transactions, the threshold at which a
shareholder is deemed a related party has been increased from 10% to 20%. This
means that from 29 July 2024 the new arrangements will not require approval by
Anglo American's shareholders and will cease to qualify as a related party
transaction for the purposes of the new UK Listing Rules. As such, Anglo
American does not propose to seek shareholder approval for the new
arrangements.
Corporate strategy
De Beers communicated its new Origins strategy at the end of May, with a focus
on four key pillars underpinned by a plan to streamline the business
sustainably by reducing overhead costs by $100 million per year. These
comprised i) focusing upstream investments on the major projects that will
deliver the highest returns; ii) integrating the midstream to deliver greater
efficiency; iii) resetting the downstream by reinvigorating category marketing
and evolving proprietary brands through scaling up De Beers Jewellers and
refocusing Forevermark solely on the fast-growing Indian market; and iv)
pivoting synthetics, with Lightbox suspending production of lab-grown diamonds
for jewellery allowing Element Six to focus on its position as a world-leading
provider of synthetic diamond technology solutions.
Brands and consumer markets
De Beers Jewellers delivered positive performance in design-led pieces across
high jewellery and collections, while bridal and solitaire demand remained
challenged by macro-economic headwinds and slower Chinese recovery.
New natural diamond marketing collaborations were established with
world-leading diamond jewellery retailers: Signet in the US and Chow Tai Fook
in China. The collaborations focus on driving long term desirability for
natural diamonds in two of the world's leading consumer countries for natural
diamonds. The collaborations will also benefit from promotional messages being
amplified through the wide reach of these leading retail businesses.
De Beers also announced the introduction of DiamondProof, a new device to be
used on the jewellery retail counter for rapidly distinguishing between
natural diamonds and lab-grown stones, supporting retailers in communicating
the attributes of natural diamonds, providing customers with enhanced
confidence in the authenticity of their natural diamond purchase and deterring
undisclosed lab-grown diamonds from entering the natural supply chain.
Market outlook
Weaker demand is expected to continue for some time, given the prevailing
levels of midstream inventories. This is expected to be followed by a gradual
recovery as demand from the United States, India and other countries draws
down midstream inventories. Retailer re-stocking is expected to be supported
by new natural diamond marketing, increasing engagement rates, improving
macro-economic conditions and consumer confidence.
The wholesale prices of lab-grown diamonds continue to fall, exacerbated by
ballooning stocks of lab-grown diamonds in India. In turn, lab-grown diamond
retail prices remain on a downward trajectory, and it is expected that these
trends will further reinforce consumers' understanding of the fundamental
differences between lab-grown and natural diamond jewellery. Given the rapidly
deteriorating economics of selling lab-grown diamonds as their prices continue
to drop, there are also signs that retailers in the United States are
returning their focus to natural diamonds.
In addition, there is a growing focus on diamond provenance which has the
potential to reinforce demand for De Beers' ethically sourced rough diamonds,
supported by provenance data registered on the blockchain Tracr™ platform,
particularly given enhanced sanctions on Russian diamond import restrictions
by G7 nations expected to be introduced in September 2024.
Operational outlook
Venetia is processing lower grade surface stockpiles while the operation transitions to underground. This will continue as the underground production slowly ramps up following the first production blast in mid-2023. It is expected to ramp up to steady-state levels of c.4 million carats per annum production over the coming years.
Production in 2026 is expected to benefit from an expansion project at Gahcho
Kué (Canada).
Near term unit cost will be impacted by a low carat profile from Venetia as
the underground project ramps up and is subsequently expected to reach a
steady-state of c.$75/ct from 2026.
These impacts are reflected in the guidance provided on pages 34-35.
Production guidance for 2024 has been revised lower to 23-26 million carats
(previously 26-29 million carats), following the finalisation of discussions
with our production partners, as the business responds to the prolonged period
of lower demand, higher than normal levels of inventory in the midstream, and
a focus on working capital. Production remains subject to trading conditions.
2024 unit cost guidance is consequently revised to c.$95/carat((1))
(previously c.$90/carat). The first half unit cost of $85/carat is lower than
this guidance, reflecting the impact of lower production volumes in the second
half of the year.
((1) ) Unit cost is based on De Beers' share of production volume. 2024
unit cost guidance was set at c.19 ZAR:USD.
Steelmaking Coal
Operational and financial metrics
Production Sales Price Unit Group Underlying EBITDA Underlying Capex* ROCE*
volume volume cost* revenue* EBITDA* margin* EBIT*
Mt((1)) Mt((2)) $/t((3)) $/t((4)) $m $m $m $m
Steelmaking Coal 8.0 7.9 265 125 2,108 592 28% 346 257 20%
Prior period 6.9 6.9 274 135 2,000 615 31% 371 273 26%
((1))Production volumes are saleable tonnes, excluding thermal coal production
of 0.5 Mt (30 June 2023: 0.8 Mt). Includes production relating to
third-party product purchased and processed at Anglo American's operations,
and may include some product sold as thermal coal.
((2)) Sales volumes exclude thermal coal sales of 0.7 Mt (30 June
2023: 0.8 Mt). Includes sales relating to third-party product purchased and
processed by Anglo American.
((3))Realised price is the weighted average hard coking coal and PCI export
sales price achieved at managed operations.
((4))FOB unit cost comprises managed operations and excludes royalties.
Operational performance
Production increased to 8.0 Mt (30 June 2023: 6.9 Mt), reflecting higher
production from the underground operations, which were impacted by longwall
moves during the first half of 2023.
The increased production was partly offset by ongoing challenges with
difficult strata conditions at the Moranbah and Aquila longwall operations.
Markets
30 June 2024 30 June 2023
Average benchmark price - hard coking coal ($/tonne)((1)) 276 294
Average benchmark price - PCI ($/tonne)((1)) 164 261
Average realised price - hard coking coal ($/tonne)((2)) 274 280
Average realised price - PCI ($/tonne)((2)) 200 236
((1))Represents average spot prices.
((2))Realised price is the export 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 increased to 99% of average benchmark price (30 June 2023:
95%), primarily as a result of the timing of sales.
The average benchmark price for Australian HCC in the first half of 2024 was
$276/tonne (30 June 2023: $294/tonne). At the start of 2024, coal loading
operations at Queensland ports were disrupted by high sea swells, exacerbated
by the arrival of cyclone Kirrily. However, metallurgical coal exports from
Australia regained momentum in the following months as weather conditions
improved. Consequently, quarterly prices softened from $308/tonne in the first
quarter to $242/tonne in the second quarter.
Demand for premium seaborne metallurgical coal from Indian steelmakers
remained robust due to strong crude steel output, but this demand was
primarily met through long-term contracts, with limited observable spot
buying. In China, interest in importing seaborne Australian coking coal
remained very low due to a persistent lack of import arbitrage.
Financial performance
Underlying EBITDA decreased to $592 million (30 June 2023: $615 million), as
a result of a 3% decrease in the weighted average realised price for
steelmaking coal, which is partly offset by the 7% decrease in unit costs to
$125/tonne (30 June 2023: $135/tonne). Unit costs benefited from the higher
production in the period and a marginally weaker Australian dollar.
Capital expenditure decreased to $257 million (30 June 2023: $273 million),
reflecting lower life-extension spend at Aquila as some spend remained in H1
2023 after the completion of the project in 2022, and a reduction in
capitalised development costs at Moranbah in line with the mine advance.
Operational outlook
Production has been suspended at the Grosvenor mine following an underground
fire that started on 29 June 2024. The workforce was safely evacuated from
the mine without injury. The mine has been stabilised and we are
re-establishing comprehensive underground gas monitoring, prior to being able
to assess the steps towards a safe re-entry into the mine. The procedures are
expected to take several months as a result of the likely damage underground.
The other steelmaking coal mines are operating normally.
Export steelmaking coal production guidance for 2024 is 14-15.5 Mt. A planned
longwall move at Moranbah is expected to take place during Q4 2024. A
walk-on/walk-off longwall move at Aquila, that will have a minimal production
impact, is scheduled in Q3 2024.
2024 unit cost guidance is $130-140/tonne((1)), impacted by second half costs
at Grosvenor despite no associated production. The first half unit cost of
$125/tonne is higher than the c.$115/tonne guidance prior to the Grosvenor
incident, due to lower than expected production from the higher fixed cost
underground operations at Moranbah and Aquila.
((1) ) 2024 unit cost guidance was set at c.1.5 AUD:USD.
Nickel
Operational and financial metrics
Production Sales Price Unit Group Underlying EBITDA Underlying Capex* ROCE*
volume volume cost* revenue* EBITDA* margin* EBIT*
t t $/lb((1)) c/lb((2)) $m $m $m $m
Nickel 19,500 19,000 6.85 505 331 28 8% 24 50 8%
Prior period 19,600 19,100 9.04 550 383 110 29% 72 41 12%
((1))Realised price.
((2))C1 unit cost.
Operational performance
Nickel production was stable at 19,500 tonnes (30 June 2023: 19,600 tonnes),
reflecting operational stability at both sites.
Markets
30 June 2024 30 June 2023
Average market price ($/lb) 7.94 10.98
Average realised price ($/lb) 6.85 9.04
Differences between the market price (which is LME-based) and our realised
price (the ferronickel price) are due to the discounts to the LME price, which
depend on market conditions, supplier products and consumer preferences.
The average LME nickel price of $7.94/lb in the first half of 2024 was 28%
lower than the same period of 2023 (30 June 2023: $10.98/lb). The price
weakness was driven by increased supply from Indonesia and a sharp increase in
visible stockpiles highlighting the refined market surplus. Demand
nevertheless remains very strong globally, helped by solid demand from
batteries and stainless steel.
Financial performance
Underlying EBITDA decreased by 75% to $28 million (30 June 2023: $110
million), as significantly lower realised prices more than offset the benefit
of C1 unit costs. The C1 unit costs decreased by 8% to 505c/lb (30 June 2023:
550c/lb), driven by energy cost efficiencies and one-off costs in 2023.
Capital expenditure increased by 22% to $50 million (30 June 2023: $41
million), mainly driven by higher deferred stripping capitalisation.
Operational outlook
The next higher grade area of the pit is currently going through permitting,
with production expected from 2028 to blend with the lower grade areas of the
existing pit. Additional drilling is under way to increase coverage and
enhance confidence levels within the geological models.
These impacts are reflected in the unchanged guidance provided on pages 34-35.
Production guidance for 2024 is 36,000-38,000) tonnes. 2024 unit cost guidance
is c.550 c/lb((1)). The first half unit cost of 505c/lb is lower than
guidance, reflecting the benefit of slightly higher volumes in the first half
of the year and lower input costs, primarily from energy cost efficiencies.
((1) ) 2024 unit cost guidance was set at c.5.0 BRL:USD.
Manganese
Operational and financial metrics
Production Sales Group Underlying EBITDA Underlying Capex* ROCE*
volume volume revenue* EBITDA* margin* EBIT*
Mt Mt $m $m $m $m
Manganese 1.1 1.2 219 11 5 % (35) - (53)%
Prior period 1.8 1.8 346 138 40 % 96 - 95%
Operational performance
Attributable manganese ore production has decreased 37% to 1.1 Mt (30 June
2023: 1.8 Mt), due to the temporary suspension of the Australian operations
since mid-March 2024 as a result of the impact of tropical cyclone Megan. The
weather event caused widespread flooding and significant damage to critical
infrastructure. Operational recovery has focused on re-establishing critical
services, dewatering targeted mining pits and in June, a phased return to
mining activities has commenced. Engineering studies are under way on the
infrastructure restoration.
The sale of the South African manganese alloy smelter, which has been on care
and maintenance since March 2020, is subject to certain conditions and is
expected to complete by the end of 2025.
Financial performance
Underlying EBITDA decreased by 92% to $11 million (30 June 2023:
$138 million), primarily driven by a 34% decrease in export sales from the
Australian operations, the weaker average realised manganese ore price,
partially offset by lower operating costs.
The average benchmark price for manganese ore (Metal Bulletin 44% manganese
ore CIF China) increased by 7% to $5.54/dmtu (30 June 2023: $5.19/dmtu).
Prices have been on an increasing trend following cyclone damage to critical
infrastructure at the Australian operation in May, which has removed more than
10% of manganese mined supply and up to a third of high-grade supply.
Corporate and Other
Financial metrics
Group Underlying Underlying Capex*
revenue* EBITDA* EBIT*
$m $m $m $m
Corporate and Other 231 (55) (216) 15
Prior period 254 (10) (95) 28
Exploration n/a (60) (60) -
Prior period - (65) (65) -
Corporate activities and unallocated costs((1)) 231 5 (156) 15
Prior period 254 55 (30) 28
((1))Revenue within Corporate activities and unallocated costs primarily
relates to third-party shipping activities, as well as the Marketing business'
energy solutions activities. Refer to note 4 to the Condensed financial
statements for more detail.
Financial overview
Exploration
Exploration expenditure was $60 million, marginally lower than the prior
period (30 June 2023: $65 million), reflecting corporate savings and timing
of spend during 2024.
Corporate activities and unallocated costs
Underlying EBITDA was $5 million (30 June 2023: $55 million), driven by
lower earnings from the Marketing business' energy solutions activities and
proportionately lower corporate costs recognised in the underlying business.
These were partly offset by strong performance within the Marketing business'
shipping activities alongside further corporate cost reduction activities
since mid-2023. The targeted annual run-rate reduction of $0.5 billion in
corporate costs was delivered in the first six months of 2024.
Guidance summary
Production and unit costs
Unit costs Production volumes
2024F
Units 2024F 2025F 2026F
Copper((1)) c.157 c/lb kt 730-790 690-750 760-820
Iron ore((2)) c.$37/t Mt 58-62 57-61 58-62
PGMs - metal in concentrate((3)) c.$920/oz 3.3-3.7 3.0-3.4 3.0-3.4
Moz
Own mined Moz 2.1-2.3 2.1-2.3 2.1-2.3
Purchase of concentrate Moz 1.2-1.4 0.9-1.1 0.9-1.1
PGMs - refined((4)) Moz 3.3-3.7 3.0-3.4 3.0-3.4
Diamonds((5)) c.$95/ct Mct 23-26 30-33 32-35
(previously c.$90/ct) (previously 26-29)
Steelmaking Coal((6)) $130-140/t Mt 14-15.5 17-19 18-20
Nickel((7)) c.550 c/lb kt 36-38 35-37 35-37
Further commentary on the operational outlook at each business is included
within the respective business reviews on pages 16-33.
Note: Unit costs exclude royalties, depreciation and include direct support
costs only. 2024 unit cost guidance was set at: c.850 CLP:USD, c.3.7 PEN:USD,
c.5.0 BRL:USD, c.19 ZAR:USD, c.1.5 AUD:USD.
((1)) Copper business 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. 2024 Chile: 430-460 kt; Peru 300-330 kt.
2025 Chile: 380-410 kt; Peru: 310-340 kt. 2026 Chile: 440-470 kt; Peru 320-350
kt. Chile production guidance is subject to water availability and is lower
for the next three years impacted by Los Bronces due to lower grades and
continued ore hardness, with the smaller and less efficient of the two
processing plants being put on care & maintenance by the end of July 2024.
In 2025, grades decline at all operations in Chile. In 2026, production
benefits from improved grades at Collahuasi. Peru production in 2024 is
weighted to the second half of the year, as a higher grade area of the mine is
accessed. Chile 2024 unit cost is c.190 c/lb. Peru 2024 unit cost is c.110
c/lb.
((2)) 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.
2024 Kumba: 35-37 Mt; Minas-Rio: 23-25 Mt. 2025 Kumba: 35-37 Mt; Minas-Rio:
22-24 Mt (impacted by pipeline inspection). 2026 Kumba: 35-37 Mt; Minas-Rio:
23-25 Mt. Kumba production is subject to the third-party rail and port
availability and performance. 2024 unit cost guidance for Kumba is c.$38/tonne
and for Minas-Rio is c.$35/tonne.
((3)) Unit cost is per own mined 5E + gold PGMs metal in concentrate ounce.
Production is 5E + gold PGMs produced metal in concentrate ounces. Includes
own mined production and purchased concentrate volumes - please see split in
above table. The average metal in concentrate split by metal is Platinum:
c.45%; Palladium: c.35% and Other: c.20%. POC volumes decline as agreements
reach their contractual conclusion. Kroondal is expected to move from 100%
third-party POC to a toll arrangement (4E metals) in H2 2024. In 2025,
the Siyanda POC agreement will transition to a tolling arrangement (4E
metals). At the end of 2026, the Sibanye-Stillwater toll agreement concludes
(impacting POC due to the minor metal volumes retained). Production remains
subject to the impact of Eskom load-curtailment.
((4)) 5E + gold produced refined ounces. Includes own mined production and
purchased concentrate volumes. Production remains subject to the impact of
Eskom load-curtailment.
((5)) Production is on a 100% basis except for the Gahcho Kué joint
operation, which is on an attributable 51% basis, and remains subject to
trading conditions. Production has been revised lower as the business responds
to the prolonged period of lower demand, higher than normal levels of
inventory in the midstream, and a focus on working capital. Venetia continues
to transition to underground operations, it is expected to ramp-up to
steady-state levels of c.4Mctpa production over the next few years. 2026
production benefits from an expansion at Gahcho Kué. Unit cost is based on De
Beers' share of production and has consequently been revised higher reflecting
the lower production. Near term unit cost is impacted by a low carat profile
from Venetia as the underground ramps up and is subsequently expected to reach
a steady-state of c.$75/ct from 2026.
((6))Steelmaking Coal FOB/tonne unit cost comprises managed operations and
excludes royalties. Production excludes thermal coal by-product and reflects
the challenging operating environment of the longwalls due to the gas, depth
and strata as well as the operating protocols. 2024 production guidance
excludes Grosvenor in the second half of the year given the current
uncertainties. 2025 and 2026 production guidance includes c.4.0Mtpa of
production from Grosvenor. A planned longwall move at Moranbah is expected to
take place during Q4 2024. A walk-on/walk-off longwall move at Aquila, that
will have a minimal production impact, is scheduled in Q3 2024.
((7)) Nickel operations in Brazil only. The Group also produces approximately
20 kt of nickel on an annual basis from the PGM operations. Nickel production
is impacted by declining grades.
Capital expenditure ($bn)((1))
2024F 2025F 2026F
Growth c.$1.2bn c.$0.5bn c.$0.3bn
Includes ~$0.9bn Woodsmith capex Includes ~$0.2bn Woodsmith capex((2)) Includes nil Woodsmith capex((2))
Sustaining c.$4.5bn c.$4.4bn c.$4.0bn
Reflects c.$3.4bn baseline, c.$0.7bn lifex projects and c.$0.4bn Collahuasi Reflects c.$3.5bn baseline, c.$0.7bn lifex projects and c.$0.2bn Collahuasi Reflects c.$3.5bn baseline and
desalination plant((3)) desalination plant((3))
c.$0.5bn lifex projects
Total c.$5.7bn c.$4.9bn c.$4.3bn
Further details on Anglo American's high quality growth and life-extension
projects, including details of the associated volumes benefit, are disclosed
on pages 12-14.
Long term sustaining capital expenditure is expected to be $3.0-3.5 billion
per annum((4)), excluding life-extension projects.
Other guidance
- 2024 depreciation: $3.0-3.2 billion
- 2024 underlying effective tax rate: 40-42%((5))
- 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. Guidance includes unapproved projects and is, therefore, subject to
the progress of project studies. Refer to the H1 2024 results presentation for
further detail on the breakdown of the capex guidance at project level. Given
the current uncertainties, no adjustment has been made to the guidance for
Grosvenor, which is currently suspended, with c.$0.2bn pa of capex included in
2024-26.
((2))Woodsmith: operating costs for 2025 and 2026 are expected to be c.$0.2
billion and c.$0.1billion, respectively.
((3))Collahuasi desalination capex shown includes related infrastructure, with
other water management projects included in baseline sustaining. Attributable
share of capex at 44%.
((4))Long term sustaining capex guidance is shown on a 2023 real basis.
((5)) Underlying effective tax rate is highly dependent on a number of
factors, including the mix of profits and any relevant tax reforms impacting
the countries where we operate, and may vary from guidance.
For further information, please contact:
Media Investors
UK UK
James Wyatt-Tilby Tyler Broda
james.wyatt-tilby@angloamerican.com tyler.broda@angloamerican.com
Tel: +44 (0)20 7968 8759 Tel: +44 (0)20 7968 1470
Marcelo Esquivel Emma Waterworth
marcelo.esquivel@angloamerican.com emma.waterworth@angloamerican.com
Tel: +44 (0)20 7968 8891 Tel: +44 (0)20 7968 8574
Rebecca Meeson-Frizelle Michelle Jarman
rebecca.meeson-frizelle@angloamerican.com michelle.jarman@angloamerican.com
Tel: +44 (0)20 7968 1374 Tel: +44 (0)20 7968 1494
South Africa
Nevashnee Naicker
nevashnee.naicker@angloamerican.com
Tel: +27 (0)11 638 3189
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 copper, nickel, platinum group metals, diamonds
(through De Beers), and premium quality iron ore and steelmaking coal - 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 25
July 2024, 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.
Disclaimer
This document is for information purposes only and does not constitute, nor is
to be construed as, an offer to sell or the recommendation, solicitation,
inducement or offer to buy, subscribe for or sell shares in Anglo American
or any other securities by Anglo American or any other party. Further, it
should not be treated as giving investment, legal, accounting, regulatory,
taxation or other advice and has no regard to the specific investment or other
objectives, financial situation or particular needs of any recipient.
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
product prices, unanticipated downturns in business relationships with
customers or their purchases from Anglo American, mineral resource
exploration and project development capabilities and delivery, recovery rates
and other operational capabilities, safety, health or environmental incidents,
the effects of global pandemics and outbreaks of infectious diseases, the
impact of attacks from third parties on our information systems, natural
catastrophes or adverse geological conditions, climate change and extreme
weather events, the outcome of litigation or regulatory proceedings, the
availability of mining and processing equipment, the ability to obtain key
inputs in a timely manner, the ability to produce and transport products
profitably, the availability of necessary infrastructure (including
transportation) services, the development, efficacy and adoption of new or
competing technology, challenges in realising resource estimates or
discovering new economic mineralisation, the impact of foreign currency
exchange rates on market prices and operating costs, the availability of
sufficient credit, liquidity and counterparty risks, the effects of inflation,
terrorism, war, conflict, political or civil unrest, uncertainty, tensions and
disputes and economic and financial conditions around the world, evolving
societal and stakeholder requirements and expectations, shortages of skilled
employees, unexpected difficulties relating to acquisitions or divestitures,
competitive pressures and the actions of competitors, activities by courts,
regulators and governmental authorities such as in relation to permitting or
forcing closure of mines and ceasing of operations or maintenance of Anglo
American's assets and changes in taxation or safety, health, environmental or
other types of regulation in the countries where Anglo American operates,
conflicts over land and resource ownership rights and such other risk factors
identified in Anglo American's most recent Annual Report. Forward-looking
statements should, therefore, be construed in light of such risk factors and
undue reliance should not be placed on forward-looking statements. These
forward-looking statements speak only as of the date of this document. Anglo
American expressly disclaims any obligation or undertaking (except as required
by applicable law, the City Code on Takeovers and Mergers, the UK Listing
Rules, the Disclosure Guidance 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
included in this document is sourced from third party sources (including, but
not limited to, externally conducted studies and trials). 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 2024. (TM) and (TM) are trade marks of
Anglo American Services (UK) Ltd.
Anglo American plc
17 Charterhouse Street London EC1N 6RA United Kingdom
Registered office as above. Incorporated in England and Wales under the
Companies Act 1985.
Registered Number: 3564138 Legal Entity Identifier: 549300S9XF92D1X8ME43
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR FLFETDRISFISRecent news on Anglo American
See all newsREG - Anglo American PLC - Total Voting Rights
AnnouncementREG - Anglo American PLC - Result of General Meeting
AnnouncementREG - Anglo American PLC - Result of AGM
AnnouncementREG - Anglo American PLC - Anglo American AGM 2025 address to shareholders
AnnouncementREG - Anglo American PLC - Anglo American Production Report Q1 2025
Announcement