REG - Anglo American PLC - Anglo American year end financial report 2023
22/02/2024 07:00
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RNS Number : 0090E Anglo American PLC 22 February 2024
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YEAR END FINANCIAL REPORT
for the year ended 31 December 2023
22 February 2024
Anglo American Preliminary Results for the year ended 31 December 2023
Production increase and strong cost performance outweighed by cyclical lows
for PGMs and diamonds
•Quellaveco fully ramped up and produced 319,000 tonnes of copper at unit
cost of 111 c/lb
•On track to reduce annual costs by c.$1 billion and capex by c.$1.6 billion
over 2024-2026
•Underlying EBITDA* of $10.0 billion, a 31% decrease; 2% volume increase
and unit costs held to +4% despite high inflation, more than offset by $5.5
billion revenue impact of PGMs and diamonds at cyclical lows
•Profit attributable to equity shareholders of $0.3 billion
•Net debt* of $10.6 billion: investing in long term growth through the
cycle, with leverage at 1.1x
•$1.2 billion total dividend for FY 2023, equal to $0.96 per share,
consistent with our 40% payout policy.
Duncan Wanblad, Chief Executive of Anglo American, said: "2023 saw us increase
production by 2% and contain the effect of high inflation on our costs, while
facing a cyclical downturn in PGMs and diamonds. Against that backdrop, we are
reducing annual run rate costs by $1 billion and capital spend by $1.6 billion
over the next three years, while also cutting out unprofitable volumes. This
value over volume mindset represents our biggest margin lever to enhance
returns. We are systematically reviewing our assets and will take further
actions as needed to ensure their competitiveness. We have also this week set
out the difficult but necessary reconfigurations of our PGMs and Kumba
operations to set them up on a far more sustainable footing, building on the
recent 25% cost reduction from our consolidation of senior head office roles.
"We continue to make progress on safety, achieving our lowest ever injury rate
in 2023. However, I am sad to report that three colleagues died during the
year following two accidents, at Los Bronces and Kumba. We extend our deepest
condolences to their families, friends and colleagues. We are unconditional in
our commitment to safety and working to ensure that every colleague returns
home safe and well each day.
"Operationally, we ramped up our flagship Quellaveco operation to full
capacity in 2023, producing 319,000 tonnes of copper at a highly competitive
unit cost. Minas-Rio set a number of performance records, while Kumba
performed well but was limited by third-party rail constraints. At Los Bronces
we have reconfigured the mine plan to remove unprofitable production during a
phase of lower grades and hard ore, and in Australia we reset production plans
to align with new safety protocols and ongoing challenging ground conditions
at Moranbah. PGMs and De Beers performed well operationally but faced markets
at cyclical lows.
"Underlying EBITDA of $10.0 billion at a 39% Mining EBITDA margin* reflects a
13% lower product basket price and a 4% unit cost increase, partially offset
by our 2% volume growth. Net debt increasing to $10.6 billion reflects the
growth investments we are making through the cycle in line with our belief in
the strong long term fundamentals. Our updated assessment of global GDP growth
and consumer demand were the main factors behind our $1.6 billion write-down
of our book value of De Beers, principally relating to goodwill. Our
$0.5 billion proposed final dividend of $0.41 per share is in line with our
40% payout policy.
"There is no doubt that while the immediate macro picture presents some
challenges for our PGMs and diamonds businesses, the demand trends for metals
and minerals have rarely looked better. We are focused on reducing
complexities and continue to manage our assets, capital and portfolio
dynamically and for value. This includes syndicating large greenfield projects
for value, as we did with Quellaveco, and as we plan to do for Woodsmith at
the right time. We also look to identify opportunities with adjacent assets
where there is significant value to be unlocked, while progressing our
sequence of organic project options that offer considerable value growth,
predominantly in copper, crop nutrients and high quality iron ore."
Year ended 31 December 2023 31 December 2022 Change
US$ million, unless otherwise stated
Revenue 30,652 35,118 (13) %
Underlying EBITDA* 9,958 14,495 (31)%
Mining EBITDA margin* 39% 47%
Attributable free cash flow* (1,385) 1,585 (187)%
Profit attributable to equity shareholders of the Company 283 4,514 (94)%
Basic underlying earnings per share* ($) 2.42 4.97 (51)%
Basic earnings per share ($) 0.23 3.72 (94)%
Final dividend per share ($) 0.41 0.74 (45)%
Interim dividend per share ($) 0.55 1.24 (56)%
Total dividend per share ($) 0.96 1.98 (52)%
Group attributable ROCE* 16% 30%
Terms with this symbol * are defined as Alternative Performance Measures
(APMs). For more information, refer to page 84.
Sustainability performance
Key sustainability performance indicators(1)
Anglo American tracks its strategic progress using KPIs that are based on our
seven pillars of value: safety and health, environment, socio-political,
people, production, cost, and financial. In addition to the financial
performance set out above and our operational performance on pages 6-34, our
performance for the first four pillars is set out below:
Pillar of value Metric 31 December 2023 31 December 2022 Target Target achieved
Safety and health Work-related fatal injuries 3 2 Zero Not achieved
Total recordable injury frequency rate (TRIFR) per million hours 1.78 2.19 Reduction year on year On track
New cases of occupational disease 15 5 Reduction year on year Not achieved
Environment GHG emissions - Scopes 1 & 2 12.5 13.3 Reduce absolute GHG emissions by 30% by 2030 On track
(Mt CO2e)
Fresh water withdrawals (ML)(2) 38,040 35,910 Reduce fresh water abstraction in water scarce areas by 50% by 2030 On track for 2030 target
Level 4-5 environmental incidents 0 0 Zero On track
Socio-political Social Way 3.0 implementation(3) 73% 66% Full implementation of the Social Way 3.0 by end 2022 Behind schedule
Number of jobs supported 139,308 114,534
off site(4)
Local procurement spend ($bn)(5) 13.0 13.6
Taxes and royalties ($m)(6) 5,081 5,893
People Women in management 34% 32% To achieve 33% by 2023 Achieved
Women in the workforce 26% 24%
Voluntary labour turnover 3.5% 3.6% < 5% On track
(1)The following sustainability performance indicators for the year ended 31
December 2023 and the comparative period are externally assured: work-related
fatal injuries; TRIFR; GHG emissions; and fresh water withdrawals.
(2)Fresh water withdrawal data can vary year on year due to seasonal
variations in hydrological cycles, production profiles and operational
requirements. The fresh water savings projects and initiatives remain on track
to achieve our 2030 water reduction targets, with a reduction to date of 22%
against the 2015 baseline (48,666 ML).
(3)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 Socio-political commentary on page 4.
(4)Jobs supported since 2018, in line with the Sustainable Mining Plan
Livelihoods stretch goal.
(5) 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.
(6)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.
Safety
Anglo American's number one value is safety, and it is our first priority,
always. We are committed, and believe it is possible, to prevent our people
from being harmed at work. Safety is foremost in everything we do; we train,
equip and empower our people to work safely, because we believe that
everybody, everywhere should return home safe at the end of their working day.
In 2023, we renewed our focus on three key safety levers: supporting
operational leaders to spend more time in the field; using our Operating Model
principles to deliver planned work, with risk identification and mitigation at
the heart of that work; and implementing our new Contractor Performance
Management framework across the business. We have made solid progress in our
safety journey, recording our lowest total recordable injury frequency rate
(TRIFR) of 1.78 in 2023 (2022: 2.19). While encouraged by this improvement, we
were deeply saddened to lose three colleagues at our managed operations: one
at our Kumba iron ore business in South Africa, and two at our Los Bronces
copper operation in Chile.
Alongside our continued use of innovative technologies to help make Anglo
American a safer and healthier place to work, we are building a stronger
safety culture, based on the established concept of Visible Felt Leadership
(VFL). VFL involves connecting operational leaders on a one to one or small
group basis around a task or activity and ensuring that it is done safely and
effectively. Unlike traditional 'top-down' interventions, which were generally
regarded by both leaders and frontline workers as "looking to see what's
wrong", our approach to VFL recognises people for doing the right things, and
encourages them to stand up for safety and speak up if they see something that
doesn't look or feel right.
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. We have, therefore, launched a new Contractor Performance
Management framework which has been designed as an end to end approach: it
incorporates people, processes and systems and provides the foundation for
safe and stable production by creating a psychologically and physically safe,
healthy and productive work environment for employees, contractors and
suppliers.
Health
In 2023, we continued to implement our Health and Well-being strategy in line
with the World Health Organization (WHO) Healthy Workplace model and framework
covering employee health. This strategy, supported by our WeCare well-being
and livelihoods support programmes, requires us to work together to support
our people and achieve our health and well-being goals.
Occupational diseases
In 2023, there were 15 reported new cases of occupational disease, of which 14
were related to noise exposure (2022: 5, all 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 long term environment monitoring, comprehensive worker
occupational health surveillance, and proactive risk assessment - preventative
management strategies that are an ongoing focus at Anglo American.
Occupational exposures
At the beginning of 2023, we changed the definition of our occupational
exposure metrics to reduce the threshold of definitions of exposure to
inhalables and carcinogens in line with the Occupational Health and Safety Act
85 (1993) South Africa. This change to the reporting basis has led to an
increase in the number of exposure incidents captured, resulting in 2023 data
being incomparable to that reported in 2022.
Although it is not possible to compare year-on-year exposure levels, there has
been a reduction in the number of employees exposed to occupational hazards
above the occupational exposure limit over the course of 2023. Occupational
noise exposure enhancements were driven by acoustic improvements at both PGMs
and Copper. Advancements in relation to employees exposed to inhalables and
carcinogens were largely driven by enhanced local exhaust ventilation controls
at our PGMs processing operations and retrofitting of diesel exhaust
after-treatment systems on a range of diesel-powered equipment at our
underground operations.
Environment
Our Sustainable Mining Plan includes commitments to be a leader in
environmental stewardship. By 2030, we aim to reduce 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.
In addition to our GHG emissions reduction aims, we also have a target to be
carbon neutral across our operations by 2040, and an ambition to at least
halve our Scope 3 emissions, also by 2040. We continue to make encouraging
progress, with Scope 1 and 2 GHG emissions 6% lower than the prior year,
despite the increase in production volumes. In Peru, our Quellaveco copper
mine was supplied with 100% renewable electricity supply from April 2023,
completing the transition for all our operations in South America. With our
operations in Australia moving to renewable supply from 2025, we are on target
to be drawing approximately 60% of our global grid supply from renewables from
2025. In southern Africa, we are developing a regional renewable energy
ecosystem through our partnership with EDF Renewables, known as Envusa Energy.
In 2023, Envusa Energy made significant progress towards the delivery of solar
and wind power to our operations. The three Koruson 2 projects, on the border
of the Northern and Eastern Cape provinces, are expected to reach a key
milestone - financial close - with the lenders consortium and EDF Renewables,
imminently.
Methane emissions from our steelmaking coal operations represent the largest
component of our Scope 1 emissions and we continue to explore ways to manage
and abate these emissions. We have invested significantly, in excess of $100
million per annum, in methane capture infrastructure at our underground
steelmaking coal operations. In 2023, across these operations, we abated
approximately 60% of methane emissions, including 5.3 million tonnes of CO2e
emissions through the capture and delivery of methane to gas-fired power
stations with our partner and operator, EDL.
As part of our ambition to reduce our Scope 3 emissions by at least 50% by
2040, we are focusing on hard-to-abate sectors such as steel - from which most
of our value chain emissions derive. In 2023, we agreed several MoUs with our
customers, including H2 Green Steel, Meranti and Baowu, with a focus on
reducing emissions within the steel value chain. The collaborations focus on
accelerating the adoption of less carbon intensive production technologies,
such as DRI and EAF, using Anglo American's premium quality iron ore products
from the Kumba mines in South Africa and Minas-Rio mine in Brazil.
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 technologies to
help us do that. Our combined technologies of coarse particle recovery (CPR)
and hydraulic dewatered stacking (HDS) are demonstrating a new way to safely
dispose of mining waste and accelerate our progress towards ending wet
tailings storage, while also increasing production and reducing energy
consumption. Following an 18-month pilot period at our El Soldado copper
mine's technology-testing hub in Chile, the two processes, working in tandem
with each other, have accelerated dewatering times significantly and yielded
water recoveries of c.80%, while considerably lowering the liquefaction risk
of stored tailings, as well as delivering significant energy savings.
Full-scale CPR plants are at advanced stage of commissioning at Mogalakwena
(PGMs) and Quellaveco (Copper).
Socio-political
We continue working to strengthen and broaden our social performance
competencies through embedding the Social Way 3.0 (launched in 2020) across
Anglo American. The Social Way is our asset-level system for managing impacts
to stakeholders, related risks to the business and delivery of socio-economic
benefits. The Social Way 3.0 is a critical foundation of our business and an
enabler of our sustainability commitments. We believe it is one of the most
robust and comprehensive social performance management systems in the mining
sector.
While we did not meet our ambitious goal of full implementation of the Social
Way 3.0 at all sites by the end of 2022, we continued to progress embedding
the system and have implemented a significant majority of the core elements.
Half of the assets assessed have achieved the implementation goal, and we
continue to work with those needing to make more progress. In early 2023, we
re-baselined the site-level implementation pathways and challenged our teams
to set realistic but ambitious goals for delivery, focusing on the most
material elements that mattered to our stakeholders. By the end of 2023, our
operations reported 96% delivery against those implementation pathways, and we
expect this to continue in 2024 as we embed the implementation and use it to
deliver value for our stakeholders and business. The programme is critical to
underpinning many of our ambitious 2030 Sustainable Mining Plan targets,
demonstrating our commitment to partnering with host communities and
governments.
Since the launch of our Sustainable Mining Plan, we have supported 139,308 off
site jobs through socio-economic development programmes, including local
procurement, enterprise and supplier development initiatives, training,
mentoring and capacity development, loan funding to small businesses,
agriculture programmes, and collaborative regional development initiatives.
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 $5,081 million, a 14% decrease
compared with the prior year, reflecting lower profit before tax and revenues.
People
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 the business for our management population, reaching
34%. However, for female representation for those on the Executive Leadership
Team and for those reporting into an Executive Leadership Team member, we
achieved 25% and 29%, respectively. The company is committed to building
female representation in our Executive Leadership Team and those reporting to
them. We have seen positive improvements year on year on other key performance
metrics such as the percentage of women in the workforce which increased
to 26% in 2023 (2022: 24%).
We were recognised for our work on reducing gender inequalities in the
workplace by being included in The Times' Top 50 Employers for Gender Equality
Index for the second year in a row; both Anglo American plc and our PGMs
business, Anglo American Platinum, were also included in the Bloomberg Gender
Equality Index in 2023. Anglo American was once again included in the Top
Employer listings in both South Africa and the UK. In January 2023, Anglo
American became the first mining company, and the third company in the world,
to secure a global living wage accreditation from the Fair Wage Network,
formally recognising our status as a committed living wage employer across the
Group.
Living with Dignity - building a safe and inclusive culture
Building a safe and inclusive culture has been a longstanding focus Anglo
American as part of our commitment to our people and the communities in which
we operate. We are committed to listening to our people and the community
stakeholders who support our business every day.
We deeply understand the unique role our business plays in society, and we
believe that this extends beyond our mine fences. We launched our Living with
Dignity programme in 2019, founded on the belief that everyone has the right
to dignity - in our homes, schools, at work and everywhere in between. Through
this programme, Anglo American is working collaboratively with our partners in
government and civil society to build sustainable partnerships aimed at
providing direct employee and community support to combat dignity harms,
including gender-based and domestic violence.
We continue to build on this important work as part of our WeCare global lives
and livelihoods programme and, in 2022, established our Living with Dignity
Hub in South Africa to bring our policies to life in an independent unit
dedicated to providing ongoing and committed support to our employees,
contractors and their families. The Hub handles all formal complaints of
dignity harms - including sexual harassment and gender-based violence - and
bullying, harassment and victimisation across our South African footprint, and
is overseen by an independent Ambassador to ensure we stand by our policies
and remain committed to amplifying our efforts. We are proud of the results we
have seen from the Hub, which has handled over 429 cases since opening and a
consistent increase in reports as awareness rises, establishing itself as the
primary support centre to get help when it is most needed.
Sustainable Mining Plan
Our Sustainable Mining Plan is designed to be a flexible, living plan and we
will 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
currently exploring a number of areas of the Sustainable Mining Plan that we
feel may benefit from being updated to align more closely with our stakeholder
expectations or deliver improved sustainability outcomes and will update the
plan when we have developed these options more fully.
Operational and financial review of Group results for the year ended
31 December 2023
Operational performance
Production volumes increased by 2% on a copper equivalent basis, primarily
driven by the ramp-up of our Quellaveco copper mine in Peru, a strong
operational performance at our Minas-Rio iron ore operation in Brazil,
as well as higher production from our Steelmaking Coal operations in
Australia. Production was lower at De Beers, as the Venetia mine transitions
from open pit to underground operations, and at PGMs due to lower production
from the Kroondal joint operation (now sold) and planned infrastructure
closures at Amandelbult. Lower grades impacted production at Los Bronces
(Copper Chile).
Total copper production of 826,200 tonnes increased by 24% (2022: 664,500
tonnes), primarily driven
by Quellaveco (Copper Peru), which reached commercial production levels in
June 2023 and delivered 319,000 tonnes of copper in the year. Copper Chile's
production of 507,200 tonnes was 10% lower (2022: 562,200 tonnes),
principally driven by Los Bronces, where production decreased by 20% to
215,500 tonnes (2022: 270,900 tonnes) due to lower grades and ore hardness.
Collahuasi's attributable production was marginally higher at 252,200 tonnes
(2022: 251,100 tonnes) due to planned higher grades and the ongoing
commissioning of a fifth ball mill that started at the end of October.
Nickel production increased marginally to 40,000 tonnes (2022: 39,800 tonnes),
reflecting improved operational stability.
Total PGM production decreased by 5% to 3,806,100 ounces (2022: 4,024,000
ounces), principally due to lower production from the Kroondal joint operation
(now sold), planned infrastructure closures at Amandelbult and lower grades at
Mogalakwena, partially offset by higher production at Unki.
De Beers' rough diamond production decreased by 8% to 31.9 million carats
(2022: 34.6 million carats), due to planned lower production levels at
Venetia as the operation transitions to underground.
Iron ore production was broadly in line with the prior year at 59.9 Mt (2022:
59.3 Mt). Minas-Rio production increased by 12% to 24.2 Mt (2022: 21.6 Mt),
the best performance since the start of the operation in 2014, reflecting an
integrated focus on stable and capable operating performance. At Kumba,
production decreased by 5% to 35.7 Mt (2022: 37.7 Mt), as underperformance by
the third-party logistics provider, Transnet, resulted in production in the
fourth quarter being reduced to align to lower rail capacity and alleviate
mine stockpile constraints.
Steelmaking coal production increased by 7% to 16.0 Mt (2022: 15.0
Mt), reflecting a steady step-up in performance from the Aquila underground
operation due to its largely automated longwall, and increased production at
the open cut operations which were impacted by unseasonal wet weather
in 2022. Moranbah continues to operate through challenging strata conditions.
Manganese ore production was in line with the prior year at 3.7 Mt (2022: 3.7
Mt).
Group copper equivalent unit costs increased by 4% as inflationary pressures,
particularly labour and electricity, were partially offset by the benefit of
favourable exchange rates and ramp-up of production from Quellaveco which
started operations in July 2022. Excluding the favourable impact of foreign
exchange, unit costs increased by 7%.
Financial performance
Anglo American's profit attributable to equity shareholders decreased to
$0.3 billion (2022: $4.5 billion). Underlying earnings were $2.9 billion
(2022: $6.0 billion), while operating profit was $3.9 billion (2022: $9.2
billion).
Underlying EBITDA*
Group underlying EBITDA decreased by $4.5 billion to $10.0 billion
(2022: $14.5 billion). Financial results were impacted by lower prices in
PGMs, as well as diamonds, which were predominantly driven by mix. As a
result, the Group Mining EBITDA margin* of 39% was lower than the prior year
(2022: 47%). Our strong balance sheet and ongoing focus on cost control and
cash generation has allowed us to continue to invest appropriately in our
future growth options. A reconciliation of 'Profit before net finance costs
and tax', the closest equivalent IFRS measure to underlying EBITDA, is
provided within note 3 to the Condensed financial statements.
Underlying EBITDA* by segment
Year ended Year ended
$ million 31 December 2023 31 December 2022
Copper 3,233 2,182
Nickel 133 381
PGMs 1,209 4,417
De Beers 72 1,417
Iron Ore 4,013 3,455
Steelmaking Coal 1,320 2,749
Manganese 231 378
Crop Nutrients (60) (44)
Corporate and other (193) (440)
Total 9,958 14,495
Underlying EBITDA* reconciliation for the year ended 31 December 2022 to
year ended 31 December 2023
The reconciliation of underlying EBITDA from $14.5 billion in 2022 to
$10.0 billion in 2023 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
2022 underlying EBITDA* 14.5
Price (4.8)
Foreign exchange 1.0
Inflation (0.7)
Net cost and volume (0.1)
Other 0.1
2023 underlying EBITDA* 10.0
Price
Average market prices for the Group's basket of products decreased by 13%
compared to 2022, reducing underlying EBITDA by $4.8 billion. The PGMs basket
price decreased by 35%, primarily driven by rhodium and palladium, which
decreased by 58% and 37% respectively. Alongside this, the weighted average
realised price for steelmaking coal reduced by 14% and the De Beers
consolidated average realised price for diamonds fell by 25%, predominantly
driven by mix.
Foreign exchange
Favourable foreign exchange benefited underlying EBITDA by $1.0 billion,
primarily reflecting the favourable impact of the weaker South African rand on
costs.
Inflation
The Group's weighted average CPI was 5% in 2023 as inflation continued to
increase in all regions, albeit lower than the 8% in 2022. The impact of CPI
inflation on costs reduced underlying EBITDA by $0.7 billion (2022:
$0.9 billion).
Net cost and volume
The net impact of cost and volume was a $0.1 billion decrease in underlying
EBITDA, driven by lower sales volumes at De Beers due to weaker market
sentiment, and lower sales at Copper Chile primarily as a result of lower
grades and ore hardness at Los Bronces impacting production and costs. In
addition, above-CPI inflationary pressures contributed to higher costs across
the Group, particularly in South Africa at both PGMs and Kumba. These were
largely offset by the ramp-up of volumes at Quellaveco and improved sales at
Minas-Rio due to higher production volumes.
Other
The $0.1 billion favourable movement in underlying EBITDA from other factors
was primarily driven by smaller increases to environmental restoration
provisions at Copper Chile than in the prior year, partially offset by the
impact of lower sales volumes and cost pressures at our associates and joint
operations.
Underlying earnings*
Group underlying earnings decreased to $2.9 billion (2022: $6.0 billion),
driven by the lower underlying EBITDA, partly offset by a corresponding
decrease in income tax expense and earnings attributable to non‑controlling
interests.
Reconciliation from underlying EBITDA* to underlying earnings*
Year ended Year ended
$ million 31 December 2023 31 December 2022
Underlying EBITDA* 9,958 14,495
Depreciation and amortisation (2,790) (2,532)
Net finance costs and income tax expense (3,126) (4,307)
Non-controlling interests (1,110) (1,620)
Underlying earnings* 2,932 6,036
Depreciation and amortisation
Depreciation and amortisation increased by 10% to $2.8 billion
(2022: $2.5 billion), largely due to Quellaveco commencing commercial
production in June 2023, as well as a higher carrying value of our Steelmaking
Coal assets due to the impairment reversal recognised in 2022.
Net finance costs and income tax expense
Net finance costs, before special items and remeasurements, were $0.6 billion
(2022: $0.3 billion). The increase was principally driven by the impact of
higher floating interest rates on the Group's interest expenses.
The underlying effective tax rate (ETR) was higher than the prior year at
38.5% (2022: 34.0%), impacted by the relative levels of profits arising in
the Group's operating jurisdictions as well as the revaluation of deferred
taxes in Chile following the enactment of the Mining Royalty Bill during the
year, which contributed a 1.2 percentage point increase to the Group's ETR.
The tax charge for the year, before special items and remeasurements, was $2.3
billion (2022: $3.6 billion), reflecting lower profit before tax.
Non-controlling interests
The share of underlying earnings attributable to non-controlling interests of
$1.1 billion (2022: $1.6 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 $2.6 billion (2022: net charge of $1.5 billion),
principally relating to the impairments after tax and non-controlling
interests of $1.6 billion recognised in De Beers and $0.5 billion recognised
in Barro Alto (Nickel).
Full details of the special items and remeasurements recorded are included in
note 10 to the Condensed financial statements.
Net debt*
$ million 2023 2022
Opening net debt* at 1 January (6,918) (3,842)
Underlying EBITDA* from subsidiaries and joint operations 9,241 13,370
Working capital movements (1,167) (2,102)
Other cash flows from operations 41 621
Cash flows from operations 8,115 11,889
Capital repayments of lease obligations (309) (266)
Cash tax paid (2,001) (2,726)
Dividends from associates, joint ventures and financial asset investments 382 602
Net interest(1) (727) (253)
Distributions paid to non-controlling interests (978) (1,794)
Sustaining capital expenditure (4,404) (4,143)
Sustaining attributable free cash flow* 78 3,309
Growth capital expenditure and other(2) (1,463) (1,724)
Attributable free cash flow* (1,385) 1,585
Dividends to Anglo American plc shareholders (1,564) (3,549)
Acquisitions and disposals 200 564
Foreign exchange and fair value movements 21 (238)
Other net debt movements(3) (969) (1,438)
Total movement in net debt* (3,697) (3,076)
Closing net debt* at 31 December (10,615) (6,918)
(1) Includes cash outflows of $403 million (2022: outflows of
$14 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 $133 million (2022:
$129 million) of expenditure on non-current intangible assets.
(3) Includes the purchase of shares (including for employee share
schemes) of $274 million; Mitsubishi's share of Quellaveco capital
expenditure of $129 million; other movements in lease liabilities (excluding
variable vessel leases) increasing net debt by $120 million; and contingent
and deferred consideration paid in respect of acquisitions completed in
previous years of $128 million. 2022 includes the purchase of shares under the
2021 buyback programme of $186 million; the purchase of shares for other
purposes (including for employee share schemes) of $341 million; Mitsubishi's
share of Quellaveco capital expenditure of $446 million; other movements in
lease liabilities (excluding variable vessel leases) decreasing net debt by
$33 million; and contingent and deferred consideration paid in respect of
acquisitions completed in previous years of $165 million.
Net debt (including related derivatives) of $10.6 billion increased by $3.7
billion since 31 December 2022, which includes a working capital cash outflow
of $1.2 billion, primarily due to a reduction in payables. The Group
generated sustaining attributable free cash flow of $0.1 billion. Further
funding includes growth capital expenditure of $1.3 billion and dividends paid
to Anglo American plc shareholders of $1.6 billion. Net debt at
31 December 2023 represented gearing (net debt to total capital) of 25%
(2022: 17%). Net debt to EBITDA ratio of 1.1x (2022: 0.5x) remains well
within our target range of <1.5x at the bottom of the cycle.
Cash flow
Cash flows from operations
Cash flows from operations decreased to $8.1 billion (2022: $11.9 billion),
reflecting a reduction in underlying EBITDA from subsidiaries and joint
operations, and a working capital build of $1.2 billion (2022: build of
$2.1 billion). Payables reduced by $0.8 billion, largely driven by the
impact of lower PGM prices on the valuation of the Purchase of Concentrate
(POC) creditor as well as the PGM customer prepayment. Receivables increased
by $0.4 billion led by higher price and volume across Iron Ore and Copper.
Inventory was flat in the year, with price and volume led reductions at PGMs
offsetting a build at De Beers driven by weak demand for diamonds and the
impact of logistics constraints on Kumba's inventory levels.
Capital expenditure*
Year ended Year ended
$ million 31 December 2023 31 December 2022
Stay-in-business 2,902 2,558
Development and stripping 920 1,010
Life-extension projects 598 582
Proceeds from disposal of property, plant and equipment (16) (7)
Sustaining capital 4,404 4,143
Growth projects 1,330 1,595
Total capital expenditure 5,734 5,738
Capital expenditure remained in line with prior year at $5.7 billion as
higher sustaining capital was offset by reduced growth capital.
Sustaining capital expenditure increased to $4.4 billion
(2022: $4.1 billion), driven by additional stay-in-business expenditure for
Copper Chile related to the Collahuasi desalination plant project, the new
tailings filtration plant for Minas-Rio (Iron Ore) in Brazil, and increased
expenditure at Quellaveco as it transitioned into operations.
Growth capital expenditure of $1.3 billion primarily related to the Woodsmith
project and the remaining spend on completing Quellaveco. This was lower than
the prior year (2022: $1.6 billion) as the Quellaveco project was successfully
delivered in July 2022, and reached commercial production levels in June 2023.
Attributable free cash flow*
The Group's attributable free cash flow decreased to an outflow of
$1.4 billion (2022: inflow of $1.6 billion), mainly due to lower cash
flows from operations of $8.1 billion (2022: $11.9 billion) and an increase
in net interest to $0.7 billion (2022: $0.3 billion). This was partially
offset by decreased tax payments of $2.0 billion (2022: $2.7billion) and a
reduction in dividends paid to non-controlling interests to $1.0 billion
(2022: $1.8 billion).
Shareholder returns
In line with the Group's established dividend policy to pay out 40% of
underlying earnings, the Board has proposed a final dividend of $0.41 per
share (2022: $0.74 per share), equivalent to $0.5 billion (2022:
$0.9 billion).
Disposals
Net cash inflows on disposals of $0.2 billion principally relate to the
settlement of the deferred consideration balance relating to the sale of the
Rustenburg operations (PGMs) completed in November 2016.
Balance sheet
Net assets decreased by $2.3 billion to $31.6 billion (2022: $34.0 billion),
reflecting dividend payments to Company shareholders and non-controlling
interests as well as foreign exchange movements, partially offset by the
profit in the year, which was impacted by the impairments at De Beers and
Nickel.
Attributable ROCE*
Attributable ROCE decreased to 16% (2022: 30%). Attributable underlying EBIT
decreased to $5.4 billion (2022: $9.7 billion), reflecting the impact of
lower realised prices for the Group's products and inflationary cost
pressures. Average attributable capital employed increased to $33.2 billion
(2022: $32.0 billion), primarily due to capital expenditure, largely at
Quellaveco and Collahuasi (Copper), and shipping vessel lease additions and
revaluations (Corporate and Other), 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 $13.2 billion (2022: $16.1 billion), comprising
$6.1 billion of cash and cash equivalents (2022: $8.4 billion) and
$7.2 billion of undrawn committed facilities (2022: $7.7 billion).
During the first half of 2023, the Group issued $2.0 billion of bond debt. In
March 2023, the Group issued €500 million 4.5% Senior Notes due 2028, €500
million 5.0% Senior Notes due 2031 and, in May 2023, $900 million 5.5% Senior
Notes due 2033. 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 was broadly
in line with the prior year at 7.4 years (2022: 7.7 years).
In the second half of 2023, the Group refinanced its $4.7 billion revolving
credit facility maturing in March 2025, to a one year $1 billion facility
maturing in November 2024, and a $3.7 billion five year facility maturing in
November 2028.
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 and that cater to major global consumer demand trends.
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.
Additional crushing capacity and flotation cells c.0.2 (44% share) 0.2 (44% share) 2026
Investment in additional crushing capacity and flotation cells is expected to
add additional production of c.10 ktpa (44% share) on average from 2026. Expansion studies ongoing. Subject to permitting and approvals
Additional
debottlenecking options remain under study and are expected to add c.15 ktpa
(44% share) 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).
Crop Nutrients
Woodsmith New polyhalite (natural mineral fertiliser) mine being developed in North Refer to page 32 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 recently 2.3 0.8 Achieved in June 2023
achieved 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) 0.2 (19.2% share) 2027
Jwaneng will extend the life of the mine to 2036.
Iron Ore
Kolomela High grade iron ore replacement project of c.4 Mtpa. The 0.4 0.0 First ore is expected in 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 0.2 0.2 2024
extend into the adjacent and down-dip Der Brochen resource to extend life of
Der Brochen asset to 2074.
Mogalakwena Evaluating various options to support possible future underground operations Projects 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 MiningTM 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 Integrated Annual Report
2023, page 44, due to be published on the Group's website on 4 March 2024.
(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
Changes during 2023 to the composition of the Board are set out below.
On 1 April 2023, Magali Anderson joined the Board as a non-executive director
and member of the Board's Sustainability Committee.
On 1 December 2023, Stephen Pearce stepped down from the Board and as Finance
Director, following his decision to retire from the Group in February 2024.
John Heasley joined Anglo American as Finance Director and as an executive
director on the Board on 1 December 2023.
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 are unchanged from those reported in 2022 and relate to the following:
-Catastrophic and natural catastrophe risks
-Product prices
-Cybersecurity
-Geopolitical
-Community and social relations
-Safety
-Climate change
-Corruption
-Regulatory and permitting
-Water
-Pandemic
-Operational performance
-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 15-34. Details of relevant tax matters are included in note 6 to the
Condensed financial statements.
The principal risks and uncertainties facing the Group at the 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, on 4
March 2024.
Copper
Operational and financial metrics
Production Sales Price Unit Group Underlying Mining Underlying Capex* ROCE*
volume volume cost* revenue* EBITDA* EBITDA EBIT*
margin*
kt kt(1) c/lb(2) c/lb(3) $m(4) $m $m $m
Copper Total 826 843 384 166 7,360 3,233 44% 2,451 1,684 20%
Prior year 664 641 385 154 5,599 2,182 39% 1,595 2,031 16%
Copper Chile 507 505 384 200 4,615 1,452 31% 893 1,268 22%
Prior year 562 563 386 157 4,991 1,952 40% 1,387 1,217 32%
Los Bronces(5) 216 217 n/a 304 1,724 114 7% (94) 552 n/a
Prior year 271 268 - 214 2,185 533 24% 306 725 -
Collahuasi(6) 252 248 n/a 113 2,197 1,372 62% 1,124 678 n/a
Prior year 251 256 - 87 2,180 1,512 69% 1,259 419 -
Other operations(7) 40 40 n/a n/a 694 (34) (5)% (137) 38 n/a
Prior year 40 39 - - 626 (93) (9)% (178) 73 -
Copper Peru (Quellaveco)(8) 319 339 384 111 2,745 1,781 65% 1,558 416 19%
Prior year 102 78 379 136 608 230 38% 208 814 2%
(1) Excludes 444 kt third-party sales (2022: 422 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 increased by 21% to 316 c/lb (2022: 262
c/lb).
(8) Figures on a 100% basis (Group's share: 60%). Included in capex is
the project capex which represents the Group's share after deducting direct
funding from non‑controlling interests. The Group's share of project capex
was $138 million (on a 100% basis, $230 million). In 2022, the Group's share
was $633 million (on a 100% basis, $1,055 million).
Operational performance
Copper Chile
Copper production of 507,200 tonnes was 10% lower than the prior year (2022:
562,200 tonnes), due to lower grades and ore hardness at Los Bronces.
At Los Bronces, production decreased by 20% to 215,500 tonnes (2022: 270,900
tonnes), due to lower ore grade (0.51% vs 0.62%) and continued ore hardness,
as well as an electrical sub-station fire that interrupted plant facilities'
power supply for 16 days. The unfavourable ore characteristics in the current
area of mining will continue to affect the operation 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 is expected to benefit
production from early 2027 (refer to 'Operational outlook' below for further
details).
At Collahuasi, Anglo American's attributable share of copper production
increased marginally to 252,200 tonnes (2022: 251,100 tonnes), due to planned
higher grades (1.17% vs 1.11%) and the ongoing commissioning of a fifth ball
mill that started at the end of October, partially offset by lower copper
recovery.
Production at El Soldado decreased by 2% to 39,500 tonnes (2022: 40,200
tonnes). Planned higher grades were offset by an existing geotechnical fault
that was exacerbated by record levels of rain during the third quarter,
resulting in the temporary closure of the mine. The production impact was
partially mitigated by processing lower grade ore from stockpiles.
Chile´s central zone, where Los Bronces is located, faced dry conditions
during the first half of the year followed by heavy precipitation. The
increase in precipitation and the decision to place the smaller and less
efficient of the two plants at the Los Bronces operation (the 'Los Bronces
plant') on care and maintenance during 2024, has significantly reduced the
risk in relation to water availability for Los Bronces in 2024. For
Collahuasi, which is located
in the north of the country, the outlook for 2024 remains dry; a desalination
water solution is expected to be operational from 2026.
Copper Peru
Quellaveco produced 319,000 tonnes (2022: 102,300 tonnes), reflecting the
progressive ramp-up in production volumes since first production in July 2022,
with commercial production achieved in June 2023.
Following first production from the molybdenum plant in April 2023, commercial
production was achieved in November 2023.
With the mine operational, focus is on the commissioning of the coarse
particle recovery plant, which started in November 2023, and will treat
flotation tails, leading to improved metal recoveries.
Markets
Year ended Year ended
31 December 2023 31 December 2022
Average market price (c/lb) 385 399
Average realised price (Copper Chile - c/lb) 384 386
Average realised price (Copper Peru - c/lb) 384 379
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, 114,500 tonnes of copper were provisionally priced at
386 c/lb at 31 December 2023 (31 December 2022: 166,900 tonnes
provisionally priced at 379 c/lb). At Copper Peru, 39,000 tonnes of copper
were provisionally priced at 385 c/lb at 31 December 2023 (31 December 2022:
74,800 tonnes provisionally priced at 380 c/lb).
Copper prices were relatively stable during 2023, with LME prices averaging
385 c/lb, down 4% from last year (2022: 399 c/lb). Concerns over China's
property sector weighed on market sentiment and copper prices, masking the
solid underlying demand growth from China during the year, particularly from
electric vehicles and the renewable energy sector. Copper prices remained
sensitive to fluctuations in the strength of the US dollar throughout much of
2023, with prices benefiting in December from expectations that US interest
rates have now peaked. Copper demand is well supported by ongoing global
decarbonisation efforts and the infrastructure associated with the energy
transition. However disruptions, mostly from social and environment concerns,
continue to impact global mine supply.
Financial performance
Underlying EBITDA for Copper increased by 48% to $3,233 million (2022: $2,182
million), driven by the successful ramp-up of Quellaveco in Peru, partly
offset by an 8% increase in unit costs and 19% lower sales from Los Bronces.
Copper Chile
Underlying EBITDA decreased by 26% to $1,452 million (2022: $1,952 million),
driven by lower sales and higher unit costs. C1 unit costs increased by 27% to
200 c/lb (2022: 157 c/lb), reflecting the impact of lower production, cost
inflation and a stronger Chilean peso, partially offset through cost control
and higher by-product credits.
Capital expenditure increased by 4% to $1,268 million (2022: $1,217 million),
mainly driven by expenditure at Collahuasi on the desalination plant and the
fifth ball mill.
Copper Peru
The significant increase in underlying EBITDA to $1,781 million (2022: $230
million), reflects higher sales volumes and lower unit costs, as the operation
ramped up. C1 unit costs decreased by 18% to 111 c/lb (2022: 136 c/lb),
reflecting the benefit of higher production volumes.
Capital expenditure decreased by 49% to $416 million (2022: $814
million), reflecting the completion of major project spend for the
construction of Quellaveco, which was successfully delivered in July 2022.
Operational outlook
Copper Chile
Los Bronces
Los Bronces is currently mining a single phase impacted by ore hardness, and
with expected lower grades. Additional mining phases and intermediate ore
stockpiles that would typically provide operational flexibility have not been
developed as a result of delays in mine development, permitting and
operational challenges.
While the operation 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
from mid-2024. This value over volume decision will enable the business to
significantly reduce operating costs and improve competitiveness, at both the
mine and the plant, reduce overheads, reduce capital spend as well as reduce
reliance on external water sources (such as transportation via truck). The
expected annualised unit cost saving from this action is c.30-40 c/lb.
The development of the first phase of the Los Bronces integrated water
solution is also ongoing, which will secure a large portion of the mine's
water needs through a desalinated water supply from the beginning of 2026.
Los Bronces remains a world class copper deposit, accounting for more than 2%
of the world's known copper resources. The environmental permit for the Los
Bronces open pit expansion and underground development was issued by the
authorities in November 2023. Development work for the next higher grade,
softer ore phase of the mine, Donoso 2, is now under way and is expected
to benefit production and unit costs from early 2027. Pre-feasibility studies
for the Los Bronces underground expansion are ongoing 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.
El Soldado
Following the exacerbation of the geotechnical fault at El Soldado by the
heavy rainfall in 2023, the mine plan was revised in the third quarter of
2023. Production in 2024 is expected to be broadly comparable to 2023, before
declining to 30,000-35,000 tpa as the mine reaches end of life by mid-2028.
Following receipt of the environmental permit for phase 5, options are being
evaluated that may enable a life extension.
Copper Chile
These impacts are reflected in the three-year guidance provided on pages
35-36, which is unchanged from the December 2023 Investor Update presentation.
Production guidance for Chile for 2024 is 430,000-460,000 tonnes, subject to
water availability. 2024 unit cost guidance is c.190 c/lb.
Copper Peru
A localised geotechnical fault in one of the 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. While this stripping work progresses,
other lower grade phases will be mined. As a result, access to higher grade
sectors that were previously planned to be mined in 2024 have been rephased to
2027. However, as a result of further optimisation work within the revised
mine plan, an additional c.25,000 tonnes of copper is expected to be mined
over the next five years. Given the current copper market outlook, higher real
term prices for these volumes may be achieved; thereby negating, or even
benefiting, the NPV impact of the revised mine plan.
While current focus remains on embedding safe, consistent and stable
operational performance, there is significant expansion potential that could
sustain production beyond the initial high grade area. The first step, subject
to permitting, would be an increase in throughput rates to 150,000 tonnes per
day (tpd) (from the currently permitted level of 127,500 tpd), with limited
capital required and no additional water 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 three-year guidance provided on pages
35-36, which is unchanged from the December 2023 Investor Update
presentation. Production guidance for Peru for 2024 is 300,000-330,000 tonnes
and 2024 unit cost guidance is c.110 c/lb. Production in Peru will be weighted
to the second half of the year, primarily as a result of the grades
temporarily declining to between 0.6-0.7% TCu in the first half of the year.
Nickel
Operational and financial metrics
Production Sales Price Unit Group Underlying Mining Underlying Capex* ROCE*
volume volume cost* revenue* EBITDA* EBITDA EBIT*
margin*
t t $/lb(1) c/lb(2) $m $m $m $m
Nickel 40,000 39,800 7.71 541 653 133 20% 62 91 6%
Prior year 39,800 39,000 10.26 513 858 381 44% 317 79 24%
(1) Realised price.
(2) C1 unit cost.
Operational performance
Nickel production increased marginally to 40,000 tonnes (2022: 39,800 tonnes),
reflecting improved operational stability.
Markets
31 December 2023 31 December 2022
Average market price ($/lb) 9.74 11.61
Average realised price ($/lb) 7.71 10.26
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 $9.74/lb was 16% lower than prior year
(2022: $11.61/lb), mainly due to significant supply growth of refined nickel
products in Indonesia and China, along with the impact of higher interest
rates on consumer inventory levels, resulting in consumer destocking and
widening market discounts for ferronickel. Offsetting this, global nickel
consumption grew strongly year on year, particularly in China, which saw
record volumes of nickel consumed in the stainless steel and battery sectors.
Financial performance
Underlying EBITDA decreased by 65% to $133 million (2022: $381 million),
primarily as a result of lower realised prices. C1 unit costs increased by 5%
to 541 c/lb (2022: 513 c/lb), reflecting the stronger Brazilian real and
the impact of higher costs of production due to lower grade ore, including
planned maintenance costs to secure asset integrity and availability.
Capital expenditure increased by 15% to $91 million (2022: $79 million),
mainly driven by higher deferred stripping costs capitalised.
Within special items and remeasurements, total impairments of $779 million
(before tax) were recognised at Barro Alto in 2023 following revisions to the
pricing outlook and the long term cost profile of the asset.
Operational outlook
Following safety improvements within the mine plan, certain geotechnical
parameters have been revised, so the amount of material accessed from higher
grade areas of the mine has reduced. 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. Also, bulk ore sorting
has not yet delivered the scale that had previously been anticipated. While
studies are ongoing to calibrate and adapt the technology, these benefits are
no longer incorporated into guidance due to their early maturity. Additional
drilling is under way to increase coverage and enhance confidence levels
within the geological models.
These impacts are reflected in the three-year guidance provided on pages
35-36, which is unchanged from the December 2023 Investor Update presentation.
Production guidance for 2024 is 36,000-38,000 tonnes, and 2024 unit cost
guidance is c.600 c/lb.
Platinum Group Metals (PGMs)
Operational and financial metrics
Production Sales Basket Unit Group Underlying Mining Underlying Capex* ROCE*
volume volume price cost* revenue* EBITDA* EBITDA EBIT*
PGMs PGMs margin*(5)
koz(1) koz(2) $/PGM oz(3) $/PGM oz(4) $m $m $m $m
PGMs 3,806 3,925 1,657 968 6,734 1,209 30% 855 1,108 15%
Prior year 4,024 3,861 2,551 937 10,096 4,417 54% 4,052 1,017 86%
Mogalakwena 974 1,011 1,718 884 1,740 778 45% 601 519 n/a
Prior year 1,026 1,010 2,451 826 2,466 1,548 63% 1,380 394 -
Amandelbult 634 668 1,934 1,189 1,294 323 25% 276 75 n/a
Prior year 713 700 2,883 1,127 2,010 1,036 52% 982 74 -
Other operations(6) 853 894 1,587 973 1,453 246 17% 151 514 n/a
Prior year 911 842 2,615 928 2,270 1,033 46% 922 549 -
Processing and trading(7) 1,346 1,352 n/a n/a 2,247 (138) (6)% (173) n/a n/a
Prior year 1,375 1,309 - - 3,350 800 24% 768 - -
(1) Production reflects own-mined production and purchase of metal in
concentrate. PGM volumes consist of 5E metals and gold.
(2) Sales volumes exclude tolling and third-party trading activities.
PGM volumes consist of 5E metals and gold.
(3) Average US$ 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) The total PGMs mining EBITDA margin excludes the impact of the sale
of refined metal purchased from third parties, purchase of concentrate and
tolling.
(6) Includes Unki, Mototolo, 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.
(7) 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 at the end of
H1 2024.
Operational performance
Total PGM production decreased by 5% to 3,806,100 ounces (2022: 4,024,000
ounces), primarily due to lower production from the Kroondal joint operation
(now sold), planned infrastructure closures at Amandelbult and lower grades at
Mogalakwena, partially offset by higher production from Unki.
Own mined production
PGM production from own-managed mines (Mogalakwena, Amandelbult, Unki and
Mototolo) and equity share of joint operations decreased by 7% to
2,460,200 ounces (2022: 2,649,200 ounces).
Amandelbult production decreased by 11% to 634,200 ounces (2022: 712,500
ounces) due to planned infrastructure closures and poor ground conditions at
Dishaba.
Mogalakwena production decreased by 5% to 973,500 ounces (2022: 1,026,200
ounces), largely as a result of lower grades, and lower throughput from
unplanned maintenance, despite moving into a higher grade, lower waste area
towards the end of the year.
Production from other operations decreased by 6% to 852,500 ounces (2022:
910,500 ounces), mainly due to lower production from Kroondal, reflecting both
a planned ramp-down of the operation and the disposal of our 50% interest,
effective 1 November 2023; Kroondal has now transitioned to a 100% third-party
purchase of concentrate arrangement. This arrangement is then expected to
transition to a toll arrangement at the end of the first half in 2024.
Purchase of concentrate
Purchase of concentrate decreased by 2% to 1,345,900 ounces (2022: 1,374,800
ounces), primarily due to lower production from Kroondal in light of the
planned ramp-down of the operation.
Refined production and sales volumes
Refined PGM production (excluding toll-treated metal) was broadly unchanged
at 3,800,600 ounces (2022: 3,831,100 ounces).
PGM sales volumes increased marginally to 3,925,300 ounces (2022: 3,861,300
ounces) as inventory was drawn down to mitigate the lower production.
Markets
31 December 2023 31 December 2022
Average platinum market price ($/oz) 965 961
Average palladium market price ($/oz) 1,336 2,111
Average rhodium market price ($/oz) 6,611 15,465
Realised basket price ($/PGM oz) 1,657 2,551
Following record pricing in 2021-2022, a general easing of supply concerns
that had arisen post Russia's invasion of Ukraine and end-user destocking saw
sharp falls in palladium and rhodium prices. This drove the average realised
PGM basket price down by 35% in 2023 to $1,657 per PGM ounce (2022: $2,551
per PGM ounce).
The average rhodium market price of $6,611 per ounce was 57% lower than in
2022, impacted in the first half of the year by persistent selling of excess
stock from the glass industry, which had shifted to a lower rhodium, higher
platinum mix. Palladium declined 37%, averaging $1,336 per ounce, as robust
Russian metal flows met automotive industry destocking. Platinum was broadly
flat at $965 per ounce. The minor PGMs, iridium and ruthenium, continued to
make historically large contributions to the basket price. By the end of the
year, PGM pricing was firmly into the cost curve, and several producers
responded by restructuring existing mines or mothballing future plans.
Financial performance
Underlying EBITDA decreased to $1,209 million (2022: $4,417 million),
primarily driven by a lower basket price, which resulted in lower POC margins
and affected the cost of POC inventory. Additionally, own-mined unit costs
increased by 3% to $968/PGM ounce (2022: $937/PGM ounce), due to lower
production and higher inflation, partly offset by the weaker South African
rand.
Capital expenditure increased by 9% to $1,108 million (2022: $1,017 million),
as planned higher stay-in-business expenditure was partially offset by the
weaker South African rand.
Operational outlook
PGM prices remain at low levels and the prevailing macro-economic conditions
and uncertainty have prompted the difficult but necessary action to
reconfigure our PGM business to ensure the long term sustainability and
competitive position of our operations.
There is an intentional strategy at the concentrators to produce higher grade
concentrate which results in the same PGM content, but from lower concentrate
volume. This reduces required primary furnace capacity and allows us to place
the Mortimer smelter on care and maintenance - reducing both operating and
capital expenditure while enhancing overall processing competitiveness.
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.
Furthermore, in line with lower capital expenditure and near term asset
optimisation, work on the option for the third concentrator at Mogalakwena
will not be progressing, nor will the expansion opportunities at both
Amandelbult and Mototolo.
These extensive measures will improve the positioning of our world-class PGM
assets for the long term, securing the highly attractive value proposition of
Mogalakwena.
These impacts are reflected in the three-year guidance provided on pages
35-36, which is unchanged from the December 2023 Investor Update presentation.
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. Refined production is usually lower in the
first quarter than the rest of the year, due to the annual stock count and
planned processing maintenance. Production remains subject to the impact
of Eskom load-curtailment.
Unit cost guidance for 2024 is c.$920/PGM ounce.
De Beers - Diamonds
Operational and financial metrics(1)
Production Sales Unit Group Underlying EBITDA Underlying Capex* ROCE*
volume volume Price cost* revenue* EBITDA* margin(6) EBIT*
'000 '000 $/ct(3) $/ct(4) $m(5) $m $m $m
cts(2)
cts
De Beers 31,865 24,682 147 71 4,267 72 48% (252) 623 (3)%
Prior year 34,609 30,355 197 59 6,622 1,417 52% 994 593 11%
Botswana 24,700 n/a 168 31 n/a 412 n/a 349 74 n/a
Prior year 24,142 - 193 32 - 614 - 537 70 -
Namibia 2,327 n/a 515 246 n/a 159 n/a 123 35 n/a
Prior year 2,137 - 599 293 - 181 - 149 34 -
South Africa 2,004 n/a 109 97 n/a 26 n/a 5 403 n/a
Prior year 5,515 - 134 42 - 413 - 315 378 -
Canada 2,834 n/a 85 48 n/a 35 n/a (6) 63 n/a
Prior year 2,815 - 100 50 - (10) - (68) 48 -
Trading n/a n/a n/a n/a n/a (104) (3)% (111) 2 n/a
Prior year - - - - - 589 10% 582 4 -
Other(7) n/a n/a n/a n/a n/a (456) n/a (612) 46 n/a
Prior year - - - - - (370) - (521) 59 -
(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 27.4 million carats
(2022: 33.7 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 $3.6 billion (2022: $6.0 billion).
(6) Total De Beers EBITDA margin shows mining EBITDA margin on an
equity basis, which excludes the impact of non-mining activities,
third‑party sales, purchases, trading downstream and corporate.
(7) Other includes Element Six, brands and consumer markets,
and corporate.
Markets
After strong demand in 2021 and 2022, global rough diamond demand fell
significantly in 2023. With polished diamond inventories rising and increases
in inflation and interest rates, jewellery retailers took a cautious approach
to purchasing new stock. US consumer demand for natural diamonds was impacted
by macro-economic challenges as well as rising supply of lab-grown diamonds -
however, while sales of lab-grown diamonds to consumers increased, wholesale
lab-grown prices continued to fall sharply, supporting further differentiation
from natural diamonds. In China, economic challenges led to low consumer
confidence, which lead to marginal consumer demand contraction off the subdued
levels seen in 2022. In contrast, consumer confidence and demand growth in
India were robust in 2023, especially towards the end of the year.
The retail slowdown led to already inflated midstream polished diamond
inventories increasing over the course of the year, resulting in downward
pressure on polished diamond wholesale prices. In response, the midstream
industry in India implemented a voluntary moratorium on rough diamond imports
into the country between 15 October and 15 December. De Beers supported its
Sightholders by offering full flexibility for rough diamond allocations for
Sight 9 and Sight 10 as the midstream sought to re-establish equilibrium. This
resulted in very low rough diamond sales in the fourth quarter.
Overall, during the fourth quarter, industry conditions began to stabilise.
Retail demand improved over the end of year holiday season, especially in the
United States, helping to ease midstream inventory pressure. However, with
ongoing macro-economic uncertainty, it is anticipated that recovery in rough
diamond demand will be gradual.
Operational performance
Mining
Operational performance was strong in 2023. The new Venetia underground
project delivered first production in June and will ramp up over the next few
years.
Rough diamond production decreased to 31.9 million carats (2022: 34.6 million
carats), due to planned lower production levels at Venetia as the operation
transitions to underground.
In Botswana, production was broadly stable, with a 2% increase to 24.7
million carats (2022: 24.1 million carats), driven by the planned treatment of
higher grade ore at Orapa.
Namibia production increased by 9% to 2.3 million carats (2022: 2.1 million
carats), primarily driven by a full year of production from the Benguela Gem
vessel (commissioned in March 2022) and the ongoing ramp-up and expansion of
the mining area at the land operations.
South Africa production decreased by 64% to 2.0 million carats (2022: 5.5
million carats), due to the planned completion of the Venetia open pit in
December 2022. Venetia continues to process lower grade surface stockpiles,
while the new underground project commenced operations in June, and will ramp
up over the next few years as development continues.
Production in Canada was stable at 2.8 million carats (2022: 2.8 million
carats), with higher throughput offset by planned treatment of lower grade
ore.
Financial performance
Due to the downturn in industry conditions from 2022 to 2023, total revenue
decreased to $4.3 billion (2022: $6.6 billion), with rough diamond sales
decreasing to $3.6 billion (2022: $6.0 billion). Total rough diamond sales
volumes decreased by 19% to 24.7 million carats (2022: 30.4 million carats).
The average realised price decreased by 25% to $147/ct (2022: $197/ct),
reflecting a larger proportion of lower value rough diamonds being sold, as
well as a 6%, decrease in the average rough price index.
Underlying EBITDA decreased to $72 million (2022: $1,417 million) as a result
of significantly lower sales volumes, coupled with a lower average realised
price (impacted by both the mix of products sold and a lower average rough
price index) which negatively impacted margins in the trading business. The
current year results incorporate an inventory write-down of $0.2 billion on
rough stock. The increase in unit cost to $71/ct (2022: $59/ct), was primarily
driven by lower production volumes from Venetia as the underground operations
ramp up.
Capital expenditure increased by 5% to $623 million (2022: $593 million), due
to the ramp-up of the Venetia underground project as well as the continued
execution of other life-extension projects, including Jwaneng Cut-9.
An impairment of $1.6 billion (before tax and non-controlling interests) to
the carrying value of De Beers has been recognised within special items and
remeasurements, reflecting the near term adverse macro-economic outlook and
industry-specific challenges. Please refer to note 9 in the financial
statements for further details.
De Beers and the Government of the Republic of Botswana have 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 under the UK Listing
Rules, given that both Anglo American and the Government of Botswana are
shareholders in De Beers, and therefore will be subject to approval by Anglo
American's shareholders in due course.
De Beers Jewellers delivered a stable sales performance given the global
macro-economic headwinds and challenging Chinese sector.
Market outlook
Industry conditions are expected to remain challenging in the short term, but
the long term outlook is favourable. Midstream and retail demand stabilised
towards the end of 2023, but inventories of rough diamonds reportedly grew at
producers globally. Over the course of 2024, assuming a measured approach from
producers to the
release of upstream inventory, the high midstream inventory levels seen in
2023 are expected to decline as retailers replenish their stocks.
Limited consumer demand growth and ongoing retailer caution are anticipated
ahead of an expected return to growth into 2025.
The ongoing focus on diamond provenance - especially given the expected
introduction of Russian diamond import restrictions by G7 nations - has the
potential to reinforce demand for De Beers' rough diamonds, supported by the
blockchain Tracr™ platform. The global supply of rough diamonds is
anticipated to continue to decline owing to the maturity of major mines and
limited new discoveries.
The wholesale prices of lab-grown diamonds are falling sharply, leading to
financial challenges at some leading lab-grown diamond producers. These price
declines are expected to lead to further substantial reductions in retail
prices (with De Beers' Lightbox brand testing significantly lower prices for
its products). This will further reinforce consumers' understanding of the
fundamental differences between lab-grown and natural diamond jewellery.
Operational outlook
2025 guidance was reduced at the December investor update, reflecting the
ramp-up profile at Venetia underground as well as deferral of an expansion
project at Gahcho Kué (Canada) into 2026.
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
(Mctpa) production over the next few years.
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 three-year guidance provided at the
December 2023 Investor Update presentation, which is unchanged. Production
guidance for 2024 is 29-32 million carats (100% basis) and 2024 unit cost
guidance is c.$80/ct. However, De Beers will assess options to reduce
production in response to prevailing market conditions.
Iron Ore
Operational and financial metrics
Production Sales Price Unit Group Underlying Mining Underlying Capex* ROCE*
volume volume cost* revenue* EBITDA* EBITDA EBIT*
margin*
Mt(1) Mt(1) $/t(2) $/t(3) $m $m $m $m
Iron Ore Total 59.9 61.5 114 38 8,000 4,013 50% 3,549 909 34%
Prior year 59.3 58.0 111 38 7,534 3,455 45% 2,962 834 28%
Kumba Iron Ore(4) 35.7 37.2 117 41 4,680 2,415 52% 2,136 538 71%
Prior year 37.7 36.7 113 40 4,580 2,211 48% 1,894 674 66%
Iron Ore Brazil (Minas-Rio) 24.2 24.3 110 33 3,320 1,598 48% 1,413 371 24%
Prior year 21.6 21.3 108 35 2,954 1,244 41% 1,068 160 18%
(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 5% to 35.7 Mt (2022: 37.7 Mt), driven by a 6%
decrease at Sishen to 25.4 Mt (2022: 27.0 Mt) and a 4% decrease at Kolomela
to 10.3 Mt (2022: 10.7 Mt). The under-performance by the third-party
logistics provider, Transnet, resulted in production in the fourth quarter
being reduced to align to lower rail capacity and alleviate mine stockpile
constraints. Sales volumes were 37.2 Mt, slightly higher than the prior year
(2022: 36.7 Mt), driven by improved performance at Saldanha Bay port, despite
the low levels of finished stock at the port.
As a result of actively managing inventory, total finished stock decreased to
7.1 Mt(1) (2022: 7.8 Mt(1)), with stock at the mines decreasing to
6.5 Mt(1), which remains above desired levels. However, due to rail
under-performance, stock at the port is very low, having decreased to
0.6 Mt(1) (2022: 0.8 Mt(1)).
(1)Production and sales volumes, stock and realised price are reported on a
wet basis and could differ to Kumba's stand-alone results due to sales to
other Group companies.
Minas-Rio
Production increased by 12% to 24.2 Mt (2022: 21.6 Mt), the best performance
since the start of Minas-Rio operations in 2014, reflecting an integrated
focus on stable and capable operating performance across the operation. The
strong mining performance was underpinned by improved mine access and
equipment availability, which led to higher mine movement and enabled an
improved performance at the plant due to the quality of ore feed, as well as
increased crushing circuit availability.
Markets
31 December 2023 31 December 2022
Average market price (Platts 62% Fe CFR China - $/tonne) 120 120
Average market price (MB 65% Fe Fines CFR - $/tonne)(1) 132 139
Average realised price (Kumba export - $/tonne) (FOB wet basis) 117 113
Average realised price (Minas-Rio - $/tonne) (FOB wet basis) 110 108
(1)As publication of the Metal Bulletin (MB) 66 index has ceased, the
reference benchmark is the MB 65 index from 2023. 2022 updated to reflect MB
65 price.
Kumba's FOB realised price of $117/wet metric tonne (wmt) was 15% higher than
the equivalent Platts 62% Fe FOB Saldanha market price (adjusted for moisture)
of $102/wmt. This was driven by premiums for higher iron
content (at 63.7%) and relatively high proportion of lump sold (approximately
66%) alongside provisional pricing benefits.
Minas-Rio's pellet feed product is higher grade (with iron content of 67% and
lower impurities) so the MB 65 Fines index is used when referring to the
Minas-Rio product since the cessation of the MB 66 index. The Minas-Rio
realised price of $110/wmt was 11% higher than the equivalent MB 65 FOB
Brazil index (adjusted for moisture) of $99/wmt, reflecting the premium for
our high-quality product as well as provisional pricing benefits.
Financial performance
Underlying EBITDA for Iron Ore increased by 16% to $4,013 million (2022:
$3,455 million), principally driven by a 6% increase in sales volumes and 3%
increase in the realised iron ore price.
Kumba
Underlying EBITDA increased by 9% to $2,415 million (2022: $2,211 million),
driven by the higher average realised price as well as slightly higher sales
volumes. Unit costs increased by 3% to $41/tonne (2022: $40/tonne) due to
lower production volumes and high cost inflation, partly offset by a weaker
South African rand.
Capital expenditure decreased by 20% to $538 million (2022: $674 million),
mainly as a result of lower deferred stripping capitalisation due to lower
waste volumes at Kolomela and a weaker South African rand.
Minas-Rio
Underlying EBITDA increased by 28% to $1,598 million (2022: $1,244
million), reflecting higher sales volumes and a higher realised price, as
well as lower unit costs. Unit costs decreased by 6% to $33/tonne (2022:
$35/tonne), primarily reflecting higher production volumes, partially offset
by the stronger Brazilian real.
Capital expenditure was 132% higher at $371 million (2022: $160
million), mainly as construction is under way for a new tailings filtration
plant that will reduce the deposition rate on the tailings facility and
extend its life. In addition, there was higher spend on projects to improve
recoveries in the flotation circuit.
Operational outlook
Kumba
Kumba is committed in its support of key measures being undertaken by the
National Logistics Crisis Committee to improve the logistics network. However,
following an extended period of under-performance by the third-party logistics
provider, Transnet, and the amount of work required to turn the situation
around, the logistics network is expected to remain constrained over the near
term. The decision has been made to reduce production to align with this
reduced rail capacity and ensure a balanced value chain. Production is
therefore expected to remain at 35-37 Mtpa for the period 2024 to 2026. 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 three-year guidance provided on pages
35-36, which is unchanged from the December 2023 Investor Update presentation.
Production guidance for 2024 is 35-37 Mt, subject to third-party rail and port
performance, and 2024 unit cost guidance is c.$38/tonne.
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. Beyond the three-year guidance period, production growth will be
supported by projects to debottleneck the plant and increase recoveries and
throughput. 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 three-year guidance provided on pages
35-36, which is unchanged from the December 2023 Investor Update presentation.
Production guidance for 2024 is 23-25 Mt and 2024 unit cost guidance is
c.$35/tonne.
Steelmaking Coal
Operational and financial metrics
Production Sales Price Unit Group Underlying Mining Underlying Capex* ROCE*
volume volume cost* revenue* EBITDA* EBITDA EBIT*
margin*
Mt(1) Mt(2) $/t(3) $/t(4) $m $m $m $m
Steelmaking Coal 16.0 14.9 261 121 4,153 1,320 32% 822 619 27%
Prior year 15.0 14.7 304 107 5,034 2,749 55% 2,369 648 85%
(1) Production volumes are saleable tonnes, excluding thermal coal
production of 1.1 Mt (2022: 1.6 Mt). Includes production relating to
third-party product purchased and processed at Anglo American's operations,
and may include some product sold as thermal coal.
(2) Sales volumes exclude thermal coal sales of 1.7 Mt
(2022: 1.7 Mt). Includes sales relating to third-party product purchased and
processed by Anglo American.
(3) Realised price is the weighted average hard coking coal and PCI
export sales price achieved at managed operations.
(4) FOB unit cost comprises managed operations and excludes
royalties.
Operational performance
Production increased to 16.0 Mt (2022: 15.0 Mt), reflecting a steady step-up
in performance from the Aquila underground operation due to its largely
automated longwall, and increased production at Dawson and Capcoal open cut
operations which were impacted by unseasonal wet weather in 2022.
The increased production was partly offset by challenging operating conditions
at the Moranbah and Grosvenor longwall operations.
Markets
31 December 2023 31 December 2022
Average benchmark price - hard coking coal ($/tonne)(1) 296 364
Average benchmark price - PCI ($/tonne)(1) 219 331
Average realised price - hard coking coal ($/tonne)(2) 269 310
Average realised price - PCI ($/tonne)(2) 214 271
(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 91% of average benchmark price (2022: 85%), as
a result of the timing of sales.
The average benchmark price for Australian HCC was $296/tonne (2022:
$364/tonne). At the start of 2023, steelmaking coal prices rose in response to
supply impacts in Queensland arising from flooding and a rail outage. Prices
declined during the second quarter amid supply recovery, but increased in the
second half of 2023 following low spot availability of premium HCC as labour
strikes and production issues impacted Australian supply. Seaborne supply from
Australia was further reduced by a cyclone event affecting Queensland port
operations in December. Strong demand from Indian steelmakers for imported
steelmaking coal was driven by a healthy domestic steel industry that
resulted in a substantial year-on-year increase in crude steel production.
Financial performance
Underlying EBITDA decreased to $1,320 million (2022: $2,749 million), as a
result of a 14% decrease in the weighted average realised price for
steelmaking coal and a 13% increase in unit costs to $121/tonne
(2022: $107/tonne), reflecting the impact of high inflation and additional
operating activity. Furthermore, 2022 included a $343 million receipt from the
Group's self-insurance entity.
Capital expenditure decreased to $619 million (2022: $648 million), reflecting
lower life-extension expenditure following the completion of the Aquila
project in 2022.
Operational outlook
Following an extensive review during the course of 2023 on realistic
opportunities to improve productivity, debottleneck the operations and
leverage technology, a downwardly revised pathway has been developed to
progressively ramp-up towards 20 Mtpa of steelmaking coal production. This
pathway also incorporates the more stringent safety operating protocols
implemented by the Queensland regulator in recent years, as well as the more
complex geotechnical strata conditions that the Moranbah and Grosvenor
underground longwall operations are navigating.
These impacts are reflected in the three-year guidance provided on pages
35-36, which is unchanged from the December 2023 Investor Update
presentation. Export steelmaking coal production guidance for 2024 is 15-17
Mt and 2024 unit cost guidance is c.$115/tonne. The next longwall moves
scheduled at Moranbah and Grosvenor are both in the third quarter of 2024. A
walk-on/walk-off longwall move is scheduled at Aquila during the second
quarter with the impact on production expected to be minimal.
Manganese
Operational and financial metrics
Production Sales Group Underlying Mining Underlying Capex* ROCE*
volume volume revenue* EBITDA* EBITDA EBIT*
margin*
Mt Mt $m $m $m $m
Manganese 3.7 3.7 670 231 34 % 145 n/a 81%
Prior year 3.7 3.6 840 378 45 % 312 - 138%
Operational performance
Attributable manganese ore production was flat at 3.7 Mt (2022: 3.7 Mt).
Financial performance
Underlying EBITDA decreased by 39% to $231 million (2022: $378 million),
primarily driven by 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) decreased by 22% to $4.75/dmtu (2022: $6.06/dmtu). Prices were
on a declining trend throughout much of the year as supply improved, while
demand continued to soften in the second half of 2023. Prices stabilised
during December, however, ending the year at $4.17/dmtu.
Crop Nutrients
Operational and financial metrics
Production Sales Group Underlying Mining Underlying Capex* ROCE*
volume volume revenue* EBITDA* EBITDA EBIT*
margin*
$m $m $m $m
Crop Nutrients n/a n/a 225 (60) n/a (61) 641 n/a
Prior year - - 254 (44) - (45) 522 -
Woodsmith project n/a n/a n/a n/a n/a n/a 641 n/a
Prior year - - - - - n/a 522 -
Other(1) n/a n/a 225 (60) n/a (61) n/a n/a
Prior year - - 254 (44) - (45) - -
(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 1.6 km deep mine shafts and
transported to 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 granulated at a materials handling facility to produce
a comparatively low carbon fertiliser - 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
Throughout 2023, we saw continued good progress on the core infrastructure,
with capital expenditure of $641 million (2022: $522 million). Sinking
activities at the two deep shafts continue to progress well. The service shaft
is now c.745 metres deep, having reached the expected depth for the year.
Sinking activities on the production shaft began in January 2023 as planned,
at 120 metres below the surface, and following a successful ramp-up to planned
sinking rates, is now at a depth of c.510 metres.
Excavation of the three shallow shafts that will provide both ventilation and
additional access to the Mineral Transport System (MTS) tunnel is complete.
The MTS tunnel is also progressing to plan and has now reached c.27.5 km of
the total 37 km length.
During 2024, a key focus area for shaft sinking will be on progress through a
strata called the Sherwood sandstone, where we expect sink rates to decrease
due to the expected hardness of the rock and potential water fissures. This is
planned for in progress rates, and the intersection of the strata is expected
around mid-2024. On the tunnel boring machine, there is a planned 3-4 month
maintenance pause from the second quarter of 2024, during which the tunnel
will be connected to the final intermediate shaft, providing further tunnel
access and ventilation.
In parallel to the core infrastructure development, we are enhancing the
project's configuration to allow a higher production capacity and more
efficient, scalable mining methods over time. The required studies for this
are progressing well and will ensure that additional infrastructure is
optimally designed to enable future optionality and maximise long term value
over the expected multi-decade asset life.
The project is planned to be submitted for a Board approval decision on Full
Notice to Proceed in the first half of 2025, following conclusion of the study
programme.
Capital expenditure of $0.9 billion is approved for 2024, the bulk of which
will continue to be invested on shaft sinking and tunnel boring activities.
The project is expected to deliver first product to market in 2027, with a
final design capacity of 13 Mtpa, subject to studies and approval.
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.
In tackling these challenges, the fertiliser industry will evolve and need new
solutions. POLY4 represents a new solution, helping farmers to deliver
balanced, nutrient-efficient and environmentally responsible crop nutrition
practices that are required at scale.
POLY4 offers farmers superior performance compared to existing fertiliser
products: demonstrated crop yield improvement of 3-5% across a wide variety of
crops and soil types, improved crop quality and resilience to drought and
disease, and help in preserving the health of a farmer's greatest asset -
their soil. The use of POLY4 can also help minimise the nutrients lost to the
environment by improving the ability of crops to take up and utilise available
nutrients - i.e. improving a plant's nutrient-use efficiency. Furthermore, its
granular form offers a more flexible and convenient in-field application for
farmers, compared with common existing fertilisers. All this, while also being
low carbon relative to comparable products, and certified for organic
agriculture.
Through our global agronomy programme, we have conducted over 1,800 field
demonstrations to date, on over 80 crops, and our research continues to
reinforce these superior qualities and characteristics of POLY4.
The ongoing focus of market development activities is to develop and implement
detailed sales and marketing strategies for each region and to support
customers with their own market development activities to further promote
POLY4 to the end-users of the product - farmers.
We have continued to develop our routes to market partnerships in key
high-value regions, working closely with our distribution partners, and also
engaging deeper into the value chain to ensure we deliver what is needed at
the farm gate. Through our ongoing engagements with some 350 value chain
partners to date - including top retailers in the United States, large
distributors and co-operatives in Europe, and major blenders and mega farms in
Brazil - we are working across the full value chain to introduce POLY4 to the
market. We have also already engaged more than 570 influencers in the
industry, including major universities, farming associations, and academic
research institutes, to ensure that the industry recognises the benefits that
POLY4 will bring at scale into the marketplace.
POLY4 has significant value beyond its multi-nutrient content, and our
innovative marketing strategy will ensure that we unlock the full potential of
our product.
Corporate and Other
Financial metrics
Group Underlying Underlying Capex*
revenue* EBITDA* EBIT*
$m $m $m $m
Corporate and Other 440 (193) (403) 59
Prior year 554 (440) (593) 14
Exploration n/a (107) (107) 3
Prior year - (155) (162) 2
Corporate activities and unallocated costs(1) 440 (86) (296) 56
Prior year 554 (285) (431) 12
(1) Revenue within Corporate activities and unallocated costs primarily
relates to third-party shipping activities, as well as the Marketing
business's energy solutions activities.
Financial overview
Exploration
Underlying EBITDA was a $107 million loss (2022: $155 million loss) following
a decrease in other expenses due to timing differences in copper. Exploration
expenditure across the Group was broadly in line with the prior year.
Corporate activities and unallocated costs
Underlying EBITDA was a $86 million loss (2022: $285 million loss), this
improved result was driven primarily by the Group's self-insurance entity and
corporate cost savings. The positive year-on-year variance reflects the
finalisation of the Grosvenor gas ignition claim and the Moranbah overpressure
event claim in 2022 by the Group's self-insurance entity, which resulted in an
expense in Corporate activities that was offset within the underlying EBITDA
of Steelmaking Coal. There have been no equivalent insurance claim settlements
in the current year. Corporate cost savings of $0.3 bn were realised and are
partially recognised in the overheads of the underlying businesses.
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
Nickel(2) c.600 c/lb kt 36-38 35-37 35-37
PGMs - metal in concentrate(3) c.$920/PGM ounce Moz 3.3-3.7 3.0-3.4 3.0-3.4
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.$80/ct Mct 29-32 30-33 32-35
Iron ore(6) c.$37/tonne Mt 58-62 57-61 58-62
Steelmaking Coal(7) c.$115/tonne Mt 15-17 17-19 18-20
Further commentary on the operational outlook at each business is included
within the respective business reviews on pages 15-34.
Note: Unit costs exclude royalties, depreciation and include direct support
costs only. FX rates used for 2024F unit costs: 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 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 in 2024, as well as the impact of a revised mine plan at El
Soldado. In 2025, grades decline at all operations in Chile. In 2026,
production benefits from improved grades at Collahuasi. Production guidance in
Chile for 2024 and 2025 is subject to water availability. Peru production in
2024 will be weighted to the second half of the year, primarily as a result of
the grades temporarily declining to between 0.6-0.7% TCu in the first half of
the year as the geotechnical fault requires changes to be made to the angle of
the slope in the mining pit wall. Chile 2024 unit cost is c.190 c/lb. Peru
2024 unit cost is c.110 c/lb.
(2) 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.
(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%. Metal in conc entrate
production from own mined remains broadly at 2023 levels (excluding Kroondal),
but POC volumes will be lower as POC agreements reach their contractual
conclusion. Kroondal is expected to move from 100% third-party POC to a toll
arrangement (4E metals) at the end of H1 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. Refined production in 2024 is expected to
be lower in the first quarter than the rest of the year, due to the annual
stock count and planned processing maintenance. 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. De Beers will assess options
to reduce production in response to prevailing market conditions. 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. Near term unit cost will be 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) 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. The UHDMS plant remains under review and is
not captured in guidance. Kumba 2024 unit cost is c.$38/tonne. Minas-Rio 2024
unit cost is c.$35/tonne.
(7) 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. In 2024, the next
longwall moves scheduled at Moranbah and Grosvenor are both in the third
quarter, and a walk-on/walk-off longwall move is scheduled at Aquila during
the second quarter with the impact on production expected to be minimal.
Capital expenditure(1)
2024F 2025F 2026F
Growth ~$1.2bn ~$1.3bn ~$1.3bn
Includes ~$0.9bn Woodsmith capex Includes ~$1.0bn Woodsmith capex Includes ~$1.0bn Woodsmith capex
Sustaining ~$4.5bn ~$4.4bn ~$4.0bn
Reflects ~$3.4bn baseline, ~$0.7bn lifex projects and ~$0.4bn Collahuasi Reflects ~$3.5bn baseline, ~$0.7bn lifex projects and ~$0.2bn Collahuasi Reflects ~$3.5bn baseline and ~$0.5bn lifex projects
desalination plant(2) desalination plant(2)
Total ~$5.7bn ~$5.7bn ~$5.3bn
Further details on Anglo American's high quality growth and life-extension
projects, including details of the associated volumes benefit, are disclosed
on pages 12-13.
Long term sustaining capital expenditure is expected to be $3.0-3.5 billion
per annum(3), excluding life-extension projects.
Other guidance
-2024 depreciation: $3.0-3.2 billion
-2024 underlying effective tax rate: 40-42%(4)
-Long term underlying effective tax rate: 35-39%(4)
-Dividend payout ratio: 40% of underlying earnings
-Net debt:EBITDA: <1.5x at the bottom of the cycle
(1) Cash expenditure on property, plant and equipment including related
derivatives, net of proceeds from disposal of property, plant and equipment,
and includes direct funding for capital expenditure from non-controlling
interests. Guidance includes unapproved projects and is, therefore, subject to
the progress of project studies, and unapproved Woodsmith capex of ∼$1
billion per annum is included after 2024. Refer to the 2023 results
presentation for further detail on the breakdown of the capex guidance at
project level.
(2) Attributable share of Collahuasi desalination capex at 44%.
(3) Long term sustaining capex guidance is shown on a 2023 real basis.
(4) 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 Paul Galloway
james.wyatt-tilby@angloamerican.com paul.galloway@angloamerican.com
Tel: +44 (0)20 7968 8759 Tel: +44 (0)20 7968 8718
Marcelo Esquivel Emma Waterworth
marcelo.esquivel@angloamerican.com emma.waterworth@angloamerican.com
Tel: +44 (0)20 7968 8891 Tel: +44 (0)20 7968 8574
Rebecca Meeson-Frizelle Juliet Newth
rebecca.meeson-frizelle@angloamerican.com juliet.newth@angloamerican.com
Tel: +44 (0)20 7968 1374 Tel: +44 (0)20 7968 8830
South Africa Michelle Jarman
Nevashnee Naicker michelle.jarman@angloamerican.com
nevashnee.naicker@angloamerican.com Tel: +44 (0)20 7968 1494
Tel: +27 (0)11 638 3189
Sibusiso Tshabalala
sibusiso.tshabalala@angloamerican.com
Tel: +27 (0)11 638 2175
Notes to editors:
Anglo American is a leading global mining company and our products are the
essential ingredients in almost every aspect of modern life. Our portfolio of
world-class competitive operations, with a broad range of future development
options, provides many of the future-enabling metals and minerals for a
cleaner, greener, more sustainable world and that meet the fast growing every
day demands of billions of consumers. With our people at the heart of our
business, we use innovative practices and the latest technologies to discover
new resources and to mine, process, move and market our products to our
customers - safely and sustainably.
As a responsible producer of 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 22
February 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
commodity market prices, unanticipated downturns in business relationships
with customers or their purchases from Anglo American, mineral resource
exploration and project development capabilities and delivery, recovery rates
and other operational capabilities, safety, health or environmental incidents,
the effects of global pandemics and outbreaks of infectious diseases, the
impact of attacks from third parties on our information systems, natural
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availability of mining and processing equipment, the ability to obtain key
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profitably, the availability of necessary infrastructure (including
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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
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Rules, the Disclosure and Transparency Rules of the Financial Conduct
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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.
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