REG - Anglo American PLC - Copper shipments from Quellaveco to begin

Anglo AmericanAnnouncement

26/09/2022 07:00

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RNS Number : 5231A  Anglo American PLC  26 September 2022

 26 September 2022
 Anglo American to begin copper shipments from Quellaveco

Anglo American plc ("Anglo American") announces the start of commercial copper
operations at its Quellaveco project in Peru, following the successful testing
of operations and final regulatory clearance. Quellaveco is expected to
produce 300,000 tonnes per year of copper equivalent volume on average over
its first ten years.

 

Duncan Wanblad, Chief Executive of Anglo American, said:

 

"Our delivery of Quellaveco, a major new world class copper mine, is testament
to the incredible efforts of our workforce and our commitment to our
stakeholders in Peru over many years. Quellaveco alone is expected to lift our
total global output by 10% in copper equivalent terms and take our total
copper production close to 1 million tonnes per year. At a highly competitive
operating cost, Quellaveco exemplifies the asset and return profile that is
central to our portfolio quality and our ability to provide customers with a
reliable and sustainable supply of future-enabling metals."

 

Ruben Fernandes, CEO of Anglo American's Base Metals business, added:

 

"We designed Quellaveco as one of Anglo American's and South America's most
technologically advanced mines, incorporating autonomous drilling and haulage
fleets - a first in Peru - a remote operations centre, as well as a number of
Anglo American's digital and advanced processing technologies. Drawing its
electricity supply entirely from renewables, Quellaveco is setting an example
of a low emission mine producing a critical metal for decarbonising the global
economy - copper. In Quellaveco, we can see FutureSmart Mining™ in action."

 

Anglo American expects that Quellaveco will ramp up fully over the next 9-12
months. Following a thorough commissioning and testing period, and receipt of
final regulatory clearance, production guidance for Quellaveco in 2022 is
revised to 80,000-100,000 tonnes of copper (previously 100,000-150,000) at a
C1 unit cost of c.150c/lb, previously c.135c/lb. Production guidance for
Quellaveco in 2023 and 2024 is unchanged at 320,000-370,000 tonnes of copper.

 

 

Guidance update - copper (Chile)

 

Production guidance for Chile is tightened to 560,000-580,000 tonnes of copper
(previously 560,000-600,000 tonnes) due to lower throughput at Los Bronces
caused by a combination of water restrictions and a change in ore
characteristics. 2022 C1 unit cost guidance is revised to c.160c/lb
(previously c.150c/lb), reflecting the impact of lower volumes and inflation.

 

 

For further information, please contact:

 

 Media                                                                              Investors

 UK                                                                                 UK

 James Wyatt-Tilby                                                                  Paul Galloway

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

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

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

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

 Tel: +44 (0)20 7968 8891

                                                                                  Michelle Jarman

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

 Nevashnee Naicker                                                                  Tel: +44 (0)20 7968 1494

 nevashnee.naicker@angloamerican.com

 Tel: +27 (0)11 638 3189

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

 Tel: +27 (0)11 638 2175

Notes to editors:

 

Quellaveco is an open pit copper mine located in the Moquegua region in the
south of Peru. Construction started in 2018, with estimated total capex of
$5.5 billion, which includes the $0.6 billion additional cost of managing the
impacts of the Covid-19 pandemic since 2020. In 2021, Anglo American also
approved the construction of a Coarse Particle Recovery plant to allow
retreatment of coarse particles from flotation tailings to further enhance
copper recovery rates.

 

Quellaveco is expected to produce 300,000 tonnes of copper equivalent per year
on average over the first 10 years of operation, with a competitive C1 unit
cost position.

 

The support of local communities is paramount in both the success of
developing the project and its operational phase. Such support is underpinned
by a successful 18-month "Dialogue Table" consultation with local authorities
and community representatives from the Moquegua region that took place in
2011. A total of 26 commitments were made, spanning water to environmental
protection and social development. One of the major such commitments delivered
is the construction of the Vizcachas Dam which brings net positive water
benefits to local communities by delivering supply of high-quality water for
agriculture, among other uses, while the Quellaveco operation will
predominantly utilise water that is unfit for such uses.

 

Quellaveco has an estimated 1.7 billion tonnes of Ore Reserves, 8.9 million
tonnes of contained copper at 0.53% TCu, and a 36-year Reserve Life, with
potential for further expansion given its estimated additional Mineral
Resources at 1.6 billion tonnes, containing 6.1 million tonnes copper (at
0.38% TCu). 1  (#_ftn1)

 

Following final regulatory clearance, shipments of copper concentrate can now
begin, with revenue and associated costs being recognised within underlying
EBITDA. The operation Is expected to ramp up fully over the next 9-12 months.
Once the mine reaches commercial production, depreciation of the mine will
commence, borrowing costs will no longer be capitalised and interest on the
Mitsubishi shareholder facility will be expensed in finance costs.

 

Quellaveco is owned 60:40 between Anglo American and Mitsubishi Corporation.

 

 

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

 

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

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

 

 

 

 

 

Forward-looking statements:

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

 

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

 

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

 

Legal Entity Identifier: 549300S9XF92D1X8ME43

 

 

 1  (#_ftnref1) Estimates as at 31 December 2021. Please refer to the Anglo
American Ore Reserves and Mineral Resources Report 2021 for further
information. TCu = total copper

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