REG - Anglo American PLC - Anglo American performance update

Anglo AmericanAnnouncement

08/12/2023 07:00

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RNS Number : 1056W  Anglo American PLC  08 December 2023

 8 December 2023
 Anglo American unlocks value through operational, cost and capital discipline

Anglo American plc ("Anglo American") is today providing an update on its
performance during 2023 and setting out capital expenditure and production
guidance for the next three financial years.

 

Duncan Wanblad, Chief Executive of Anglo American, said: "The prospects for
mined products have rarely looked better. In the near term, given continuing
elevated macro volatility, we are being deliberate in reducing our costs and
prioritising our capital to drive more profitable production on a sustainable
basis.  We are focused on what we can control - safety, operational
discipline and capital allocation.  We are confident in our actions to
sustain the competitiveness of our world class assets and deliver on our
outstanding growth opportunities in the metals and minerals that are so
critical now and for generations to come.

 

"We are building a platform for strengthened and sustainable operational and
financial performance. We took early action in 2023 to increase business
resilience in the face of ongoing economic and geopolitical volatility and the
current cyclical weakness in PGMs and diamonds. As a result, we have already
gone a long way towards reducing our business support costs by $0.5 billion by
mid-2024, with an additional $0.5 billion in annual cost efficiencies
identified across our global businesses that we expect to deliver in 2024.

 

"Operationally, we are improving cost performance and cash generation by
reconfiguring a number of our assets to adjust the production profile to near
term constraints and market conditions, and thereby also protect longer term
value. This includes reducing production at Kumba in line with prolonged
logistics constraints, focusing on higher margin own-production through our
PGMs processing facilities, and moving to one plant at the Los Bronces copper
operation in Chile. As a result of such initiatives, we expect to deliver
lower unit costs in 2024, despite high inflation, and $1.8 billion lower
capital expenditure in the 2023 to 2026 period((1)).

 

"Anglo American's differentiated investment proposition is underpinned by the
high quality and diversification of our portfolio, which includes a number of
unmatched resources and industry leading positions. Each of our businesses has
a dynamic role within the overall portfolio, at different times delivering
cash returns and supporting through-the-cycle investment - in copper and crop
nutrients in particular - positioning us well to supply into structural long
term demand growth."

 

 

 

Guidance outlook:

 

2023

·   Production increased by c.3%((2)): Quellaveco copper ramp-up and solid
iron ore production, offset by ore grades in Chile and lower PGMs and diamonds
production

·      Unit costs up c.5%((3)): due to CPI and mining inflation, with
some production impacts

·      Effective tax rate: c.39%: due to change in profit mix to higher
tax jurisdictions

·      Capex of c.$5.8 billion: a reduction of c.$0.2 billion, due to
prioritisation

·      Year-end working capital build of c.$1.5 billion, subject to
pricing

 

 

 

2024

·      Production expected to decrease by c.4%((2)): production
rescheduled to enhance value and reduce unit costs

·      Unit costs expected to decrease by c.2%((3)): cost discipline
more than offsetting inflation

·      Capex of c.$5.7 billion (a reduction of c.$0.8 billion) and
includes Woodsmith

 

2025

·      Production expected to decrease by a further c.3%((2)):
 production changes to enhance value and reduce unit costs, and scheduled
maintenance

·      Capex of c.$5.7 billion (a reduction of c.$0.4 billion),
including Woodsmith

 

2026

·      Production expected to increase by c.4%((2)):  benefiting from
higher volumes in copper, iron ore, steelmaking coal and diamonds

·      Capex of c.$5.3 billion, including Woodsmith

 

 

Duncan Wanblad concluded: "Looking ahead, the fundamental supply and demand
picture for many metals and minerals is ever more attractive. Many of the
world's major economies are focusing their resources on meeting global
decarbonisation timelines and, as the global population grows, continues to
urbanise and demands higher living standards, we expect unprecedented demand
for responsibly produced raw materials. We are improving our resilience and
ensuring we are set up to grow the value of our business into the major demand
trends, drawing on the bench of well sequenced margin-enhancing project
options within Anglo American."

 

 

Footnotes:

 

((1)) Capex savings in 2023-2025 calculated against most recently published
guidance. 2026 capex saving of

~$0.4 billion is versus previous budget.

((2)) Copper equivalent production basis. Calculated including the equity
share of De Beers' production and using long term consensus parameters. Future
production levels are indicative and subject to final approval.

((3)) Copper equivalent unit costs are shown on nominal terms and calculated
as the total USD cost base divided by copper equivalent production.

 

The presentation which contains the details relating to the information
referred to above will be available on the Anglo American website at 7.00am UK
time today at:

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

 

 

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

                                                                                  Juliet Newth

                                                                                  juliet.newth@angloamerican.com (mailto:juliet.newth@angloamerican.com)
 Rebecca Meeson-Frizelle

                                                                                  Tel: +44 (0)20 7968 8830
 rebecca.meeson-frizelle@angloamerican.com

 (mailto:rebecca.meeson-frizelle@angloamerican.com)

 Tel: + 44 (0)20 7968 1374                                                          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

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)

 

 

 

 

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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