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Anglo AmericanAnnouncement

09/12/2022 07:00

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RNS Number : 1379J  Anglo American PLC  09 December 2022

 9 December 2022
 Anglo American builds operational momentum for next phase of value-driven
 growth

Anglo American plc ("Anglo American") is today providing an update on its
performance during 2022 and capital expenditure and production guidance for
the next three financial years.

 

Duncan Wanblad, Chief Executive of Anglo American, said: "This year has seen
us focus on our immediate priorities of safety and restoring normal
operational disciplines given the pandemic related disruptions of the last few
years. In 2022, these have been added to by geopolitically-led economic
volatility, and extreme weather and other localised disruptions at our
operations.

 

"As we have built operational momentum in the second half, we have also
moderated our near term production growth plans with a clear priority to
deliver a stable platform from which to build strengthened and repeatable
performance. This allows us to invest in increased ore reserve flexibility and
systematically implement our P101 best practice programme of equipment and
process performance. We have also taken the opportunity to re-phase certain of
our growth investments to ensure optimal sequencing for long term value
creation in the current high inflationary and dynamic external environment.

 

"Anglo American offers a highly differentiated investment proposition, founded
upon our high quality diversified portfolio of future-enabling products and
our depth of growth optionality, underpinned by our operating model and track
record of innovation. Together, these position us strongly for the
structurally attractive longer term, notwithstanding current market
volatility. Our unwavering focus is on driving safe, consistent performance
across our operations, delivering value-adding growth and progressing towards
our full suite of sustainability ambitions - including our 2040 carbon neutral
operations commitment."

 

Anglo American to continue its improvement and growth momentum:

 

2022

·    Production down by c.3%((1)): Quellaveco copper ramp-up and strong
diamond production, offset by ore grades in Chile and lower production from
Kumba and PGMs

·      Unit costs up c.16%((2)): above CPI inflation and some production
decreases

·      Capex of c.$5.7 billion: lower due to supply chain disruptions,
people availability and FX

·     Year-end working capital build of $2.0 - 2.5 billion, subject to
pricing: inventories expected to partially unwind in 2023

2023

·      Production expected to increase by 5%((1)) as Quellaveco ramps up

·    Unit costs expected to increase by c.3%((2)): inflation expected to
moderate; and the benefit of Quellaveco

·      Capex forecast of $6.0 - 6.5 billion, including $0.8 billion for
Woodsmith

·      Expected review of Woodsmith year-end carrying value for
accounting purposes

 

2024

·      Production expected to increase by 5% ((1)): led by copper, iron
ore and steelmaking coal

·      Capex forecast of $5.5 - 6.0 billion

 

2025

·      Production expected to be in line with 2024

·      Capex forecast of $5.0 - 5.5 billion

Stephen Pearce, Finance Director of Anglo American, commented: "We have set up
Anglo American as a resilient business through the cycle, both through the
quality of the portfolio and our balanced approach to capital allocation. That
balance supports investment in business improvement and value accretive
growth, while also providing attractive shareholder returns through the cycle,
translating into $7.5 billion in cash returns to shareholders in 2021 and 2022
to date. Our resilience also relies on having a highly competitive cost base -
and we are acting to reduce the impact of inflation across our cost base and
limiting the extent to which it is entrenched on the balance sheet through
capex.

 

"At Woodsmith, our next major greenfield project after Quellaveco, we have
approved $0.8 billion of capex for 2023, focused on shaft sinking and other
critical infrastructure as part of our phased approach. As we have said for
some time, we are improving the project's configuration to ensure we realise
the full commercial value over the expected multi-decade asset life. This will
extend the development schedule and the capital budget, compared to what was
anticipated prior to our ownership, and so potentially impact our carrying
value of Woodsmith for accounting purposes at the year end. Looking ahead, we
are even more positive today about the prospects for Woodsmith and its
potential to become a high margin, major contributor to our diversified
product portfolio given the outstanding nature of the resource and the premium
pricing upside we expect to realise for Poly4 - the highly effective, low
carbon fertiliser we will produce."

 

Duncan Wanblad concluded: "Our mid-year commissioning and ramp-up of our new
Quellaveco copper operation in Peru is testament to the determination of the
entire team through the considerable adversity of pandemic disruption.
Quellaveco alone increases our global production base by 10%((3)) and is the
cornerstone of our margin-enhancing growth potential of 25%((1)) over the next
decade, with further optionality beyond, focused on our future-enabling metals
and minerals, from copper to crop nutrients. We are sequencing options
appropriately, based on capital efficiency and returns, cognisant of balancing
the current macro uncertainties with the compelling longer term supply and
demand dynamics.

 

"The fundamental demand picture for mined metals and minerals is ever stronger
as most of the world's major economies accelerate their decarbonisation
efforts and as the global population increases and continues to urbanise. We
aim to keep growing our business into that demand, drawing on the range of
margin-enhancing organic options within our business."

 

 

 

The presentation which contains the details relating to the information
referred to above will be available on the Anglo American website at 8am UK
time today at:

www.angloamerican.com/investors/investor-presentations
(http://www.angloamerican.com/investors/investor-presentations)

 

 

((1))  Copper equivalent production basis. Calculated including the equity
share of De Beers' production and using long term consensus parameters. It is
normalised to reflect the demerger of the South Africa thermal coal operations
and the sale of our interest in Cerrejón. Future production levels are
indicative and subject to final approval.

((2)) Copper equivalent unit costs are shown on nominal terms and calculated
as the total USD cost base divided by copper equivalent production. Copper
equivalent unit cost is normalised to reflect the demerger of the South Africa
thermal coal operations and the sale of our interest in Cerrejón.

((3))   Copper equivalent volume growth from 2021 baseline, pre the
commissioning of Quellaveco.

 

 

 

 

 

 

Notes to editors:

 

Anglo American is a leading global mining company and our products are the
essential ingredients in almost every aspect of modern life. Our portfolio of
world-class competitive operations, with a broad range of future development
options, provides many of the future-enabling metals and minerals for a
cleaner, greener, more sustainable world and that meet the fast growing every
day demands of billions of consumers. With our people at the heart of our
business, we use innovative practices and the latest technologies to discover
new resources and to mine, process, move and market our products to our
customers - safely and sustainably.

 

As a responsible producer of diamonds (through De Beers), copper, platinum
group metals, premium quality iron ore and steelmaking coal, and nickel - with
crop nutrients in development - we are committed to being carbon neutral
across our operations by 2040. More broadly, our Sustainable Mining Plan
commits us to a series of stretching goals to ensure we work towards a healthy
environment, creating thriving communities and building trust as a corporate
leader. We work together with our business partners and diverse stakeholders
to unlock enduring value from precious natural resources for the benefit of
the communities and countries in which we operate, for society as a whole, and
for our shareholders. Anglo American is re-imagining mining to improve
people's lives.

www.angloamerican.com (http://www.angloamerican.com)

 

 

 

 

For further information, please contact:

 

 Media                                                                              Investors

 UK                                                                                 UK

 James Wyatt-Tilby                                                                  Paul Galloway

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

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

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

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

 Tel: +44 (0)20 7968 8891

                                                                                  Michelle Jarman

                                                                                  michelle.jarman@angloamerican.com (mailto:michelle.jarman@angloamerican.com)

 South Africa                                                                       Tel: +44 (0)20 7968 1494

 Nevashnee Naicker

 nevashnee.naicker@angloamerican.com

 Tel: +27 (0)11 638 3189

 Sibusiso Tshabalala

 sibusiso.tshabalala@angloamerican.com
 (mailto:sibusiso.tshabalala@angloamerican.com)

 Tel: +27 (0)11 638 2175

 

 

 

 

 

 

Forward-looking statements:

This document includes forward-looking statements. All statements other than
statements of historical facts included in this document, including, without
limitation, those regarding Anglo American's financial position, business,
acquisition and divestment strategy, dividend policy, plans and objectives of
management for future operations (including development plans and objectives
relating to Anglo American's products, production forecasts and Ore Reserve
and Mineral Resource positions) and environmental, social and corporate
governance goals and aspirations, are forward-looking statements. By their
nature, such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Anglo American or industry results to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements.

 

Such forward-looking statements are based on numerous assumptions regarding
Anglo American's present and future business strategies and the environment in
which Anglo American will operate in the future. Important factors that could
cause Anglo American's actual results, performance or achievements to differ
materially from those in the forward-looking statements include, among others,
levels of actual production during any period, levels of global demand and
commodity market prices, mineral resource exploration and development
capabilities, recovery rates and other operational capabilities, safety,
health or environmental incidents, the effects of global pandemics and
outbreaks of infectious diseases, the outcome of litigation or regulatory
proceedings, the availability of mining and processing equipment, the ability
to produce and transport products profitably, the availability of transport
infrastructure, the impact of foreign currency exchange rates on market prices
and operating costs, the availability of sufficient credit, the effects of
inflation, political uncertainty and economic conditions in relevant areas of
the world, the actions of competitors, activities by courts, regulators and
governmental authorities such as in relation to permitting or forcing closure
of mines and ceasing of operations or maintenance of Anglo American's assets
and changes in taxation or safety, health, environmental or other types of
regulation in the countries where Anglo American operates, conflicts over land
and resource ownership rights and such other risk factors identified in Anglo
American's most recent Annual Report. Forward-looking statements should,
therefore, be construed in light of such risk factors and undue reliance
should not be placed on forward-looking statements. These forward-looking
statements speak only as of the date of this document. Anglo American
expressly disclaims any obligation or undertaking (except as required by
applicable law, the City Code on Takeovers and Mergers, the UK Listing Rules,
the Disclosure and Transparency Rules of the Financial Conduct Authority, the
Listings Requirements of the securities exchange of the JSE Limited in South
Africa, the SIX Swiss Exchange, the Botswana Stock Exchange and the Namibian
Stock Exchange and any other applicable regulations) to release publicly any
updates or revisions to any forward-looking statement contained herein to
reflect any change in Anglo American's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statement is
based.

 

Nothing in this document should be interpreted to mean that future earnings
per share of Anglo American will necessarily match or exceed its historical
published earnings per share. Certain statistical and other information about
Anglo American included in this document is sourced from publicly available
third party sources. As such it has not been independently verified and
presents the views of those third parties, but may not necessarily correspond
to the views held by Anglo American and Anglo American expressly disclaims any
responsibility for, or liability in respect of, such information.

 

Legal Entity Identifier: 549300S9XF92D1X8ME43

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