Company Announcements

Anglo American Interim Results 2021

Source: RNS
RNS Number : 8262G
Anglo American PLC
29 July 2021
 

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HALF YEAR FINANCIAL REPORT

for the six months ended 30 June 2021

 

 

 

 

 

 29 July 2021

Anglo American Interim Results 2021

Strong market demand and operational resilience deliver underlying EBITDA of $12.1 billion

Financial highlights for the six months ended 30 June 2021

•   Underlying EBITDA* of $12.1 billion, driven by strong market demand and operational resilience

•   Profit attributable to equity shareholders of $5.2 billion

•   Net debt* of $2.0 billion (0.1 x annualised underlying EBITDA), reflecting strong cash generation

•   $4.1 billion shareholder return, reflecting capital discipline and commitment to return excess cash:

◦   $2.1 billion interim dividend, equal to $1.71 per share, consistent with our 40% payout policy

◦   $2.0 billion additional return: $1.0 billion special dividend and $1.0 billion share buyback

•   Exit from thermal coal operations: Thungela demerger completed and sale of Cerrejón interest announced

Mark Cutifani, Chief Executive of Anglo American, said:

"The first six months of 2021 have seen strong demand and prices for many of our products as economies begin to recoup lost ground, spurred by stimulus measures across the major economies. The platinum group metals and copper - essential to the global decarbonisation imperative as we electrify transport and harness clean, renewable energy - and premium quality iron ore for greener steelmaking, supported by an improving market for diamonds, all contributed to a record half year financial performance, generating underlying EBITDA of $12.1 billion.

"Against a backdrop of ongoing Covid hardships in many countries, our commitment to do everything we can to help protect our people and communities stands firm. It is in this spirit that we have decided to make a special contribution of $100 million to our Anglo American Foundation to fund more ambitious and longer term health, social and environmental projects, aligned with our Sustainable Mining Plan areas of focus, as we look ahead to the              post-pandemic recovery phase. With widespread health protocols in place across our operations, workplace safety has never been higher on our agenda. Building on our considerable improvements in recent years, I'm pleased to report no fatal incidents in the first half of this year.

"The resilience of our business through a tough operating environment, supported by the prevailing market conditions, increased our mining EBITDA margin* to 61%. Attributable free cash flow* of $5.4 billion helped reduce net debt to just 0.1 x annualised underlying EBITDA at the end of June. In line with our commitment to disciplined capital allocation, and in addition to our established 40% dividend payout, we will return an additional $2 billion to shareholders, split equally between a special cash dividend and a share buyback, recognising the different preferences of our shareholders, amounting to a $4.1 billion total cash return for the half year.

"Our balanced investment programme is driving margin-enhancing volume growth of 20% over the next three years, including copper production from Quellaveco due to come on stream in 2022, and growth of 25-35% in the medium term. Our business is increasingly geared towards providing the future-enabling metals and minerals for a low carbon economy and to meet global consumer demand trends. Combined with our commitment to carbon neutrality across our operations by 2040, we are working to meet the expectations of our full breadth of stakeholders."

Six months ended

30 June 2021

30 June 2020

Change

US$ million, unless otherwise stated

Revenue(1)

21,779 

 

10,187 

 

114 

%

Underlying EBITDA*

12,140 

 

3,350 

 

262 

%

Mining EBITDA margin*

61 

%

38 

%

 

Attributable free cash flow*

5,381 

 

(1,282)

 

 

Profit attributable to equity shareholders of the Company

5,188 

 

471 

 

1,001 

%

Basic underlying earnings per share* ($)

4.30 

 

0.72 

 

497 

%

Basic earnings per share ($)

4.18 

 

0.38 

 

1,000 

%

Interim dividend per share ($)

1.71 

 

0.28 

 

511 

%

Special dividend per share ($)

0.80 

 

 

 

Share buyback per share ($)

0.80 

 

 

 

Total dividend and buyback per share ($)

3.31 

 

0.28 

 

1,082 

%

Group attributable ROCE*

49 

%

11 

%

 

Terms with this symbol * are defined as Alternative Performance Measures (APMs). For more information refer to page 77.

 

(1)      The comparative figure for the six months ended 30 June 2020 has been restated. See note 2 to the Condensed financial statements for further details.

 

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, our performance for the first four pillars is set out below:

Pillar of Value

Metric

30 June 2021

30 June 2020

Target

Target achieved

Safety and health

Work-related fatal injuries

0

0

Zero

On track

 

Total recordable case frequency rate per million hours

2.28

2.10

Year-on-year reduction

In progress

 

New cases of occupational disease

8

24

Year-on-year reduction

On track

Environment

Energy consumption (million GJ)(2)

35

32

Improve energy efficiency by 30% by 2030

On track

 

GHG emissions - Scope 1 and 2

(Mt CO2e)(2)

6.2

6.0

Reduce net GHG emissions by 30% by 2030

On track

 

Water withdrawals (million m3)(2)

91

86

Reduce freshwater abstraction by 50% by 2030(3)

On track

 

Level 4-5 environmental incidents

0

0

Zero

On track

Socio-political

Social Way implementation (based on updated Social Way 3.0 for 2020)(4)

80% / 23%

96%

Full compliance with Social Way 3.0 by end 2022

On track

 

Local procurement spend ($bn)(5)

4.9

4.5

 

 

 

Taxes paid ($m)(6)

3,136

1,273 

 

 

 

 

Jobs supported by Enterprise and Supplier Development (ESD) initiatives(7)

137,777

132,082 

 

 

 

 

Businesses supported by ESD initiatives(7)

66,625

65,548 

 

 

 

People

Women in senior management

28%

25%

To achieve 33% by 2023

On track

 

Women in the workforce

23%

22%

 

 

(1)     Sustainability performance indicators for six months to 30 June 2021, and the comparative period, are not externally assured.

(2)      Energy, GHG savings and water withdrawals data for the current period and prior period is shown to end of May.

(3)    Consistent with our ambition towards responsible water stewardship, we will reassess our water targets and their underlying indicators in 2021. The aim is to ensure they are meaningful to all stakeholders and technically appropriate; drive the right behaviours at our operations; reflect the complexity of the socio-political and ecological context of our sites; and embrace our ambition to reduce our water footprint, while creating value for our stakeholders. The 2030 target relates to freshwater abstraction in water scarce regions.

(4)    Data presented is for the years ended 31 December 2020 and 2019. In 2020, we launched a new integrated social performance management system (Social Way 3.0), which has raised performance expectations and has resulted in continued improvement in our social performance. Prior to 2020, our target was full compliance against our previous standard. As we implement the new standard, sites have been required to set milestone targets on the way to the requirement of full compliance by end 2022. Data for 2020 and 2019 are, therefore, not comparable. In 2020, 80% of our year-end roll-out milestone targets were met and 23% of the Social Way 3.0 requirements were fulfilled in the first year of the transition to the new standard. Sites are expected to have fully implemented the Social Way 3.0 by the end of 2022.

(5)    Local procurement spend relates to spend within the country where an operation is located. Data for the current period and prior period is shown until end of May.

(6)    Taxes paid are equivalent to taxes borne and collected and are payments by Anglo American in respect of taxes either directly incurred or paid on behalf of other parties as a result of the Group's economic activity. The six months to 30 June 2020 use assumptions and should be treated as an approximation.

(7)    Data presented is for the years ended 31 December 2020 and 2019.

 

 

Safety

Our safety performance has been fundamentally transformed in recent years, though we know there is always more to do and we cannot allow any form of complacency. Our determination to achieve zero harm is our most pressing challenge. Making sure every employee returns home safely at the end of each day drives our thinking and behaviour across the business. It is with this mindset that we have completed the first six months of 2021 without any fatal incidents. Our independently managed joint venture operations have also not reported any fatal incidents in the first half of the year.

We are unconditional about safety and we will not rest until zero harm is achieved and sustained across our business. We have shown it can be done for long stretches of time and now we must make it permanent.

In recognising material progress, the Elimination of Fatalities Taskforce that we launched in 2018 has been central to our improvement and is being stepped up in our quest for zero harm. In 2020, we recorded an all-time-low total recordable safety rate, being a 60% improvement since 2013, though we have regressed marginally in the first half of 2021 and we are giving this our full attention.

Environment

Our environmental performance continues to improve, with no Level 5, 4 or 3 incidents in the first half of 2021. This achievement reflects the improvements to our planning and operating disciplines across the business. We also launched a 'no repeats' challenge to help us learn from low level incidents and prevent repeats of a similar nature across the business, which has led to improvements in controls, specifically helping to prevent significant incidents.

Energy consumption in the first half of 2021 increased in line with production following the operational shutdowns during the first half of 2020 due to the pandemic. However, the increase in GHG emissions is partly offset due to our Copper business in Chile moving to a renewable electricity supply in 2021, thereby reducing its Scope 2 emissions, as well as a reduction in methane emissions from our metallurgical coal mines in Australia. Our operations in both Brazil and Peru have also agreed 100% renewable electricity supply contracts, resulting in an approximately 70% reduction in CO2 emissions in Brazil, Chile and Peru.

Our Sustainable Mining Plan includes commitments to be a leader in environmental stewardship. By 2030, we aim to: reduce GHG emissions (Scope 1 and 2 emissions) by 30% against a 2016 baseline; improve energy efficiency by 30%; achieve a 50% net reduction in freshwater abstraction; and deliver net-positive impacts in biodiversity wherever we operate. And, by 2040, we have committed to being carbon neutral across our operations (Scope 1 and 2 emissions), including by using 100% renewables for our grid supply across our operations in South America.

WeCare - our global response to the pandemic

Anglo American acted quickly at the onset of the pandemic to support the lives and livelihoods of our workforce and host communities through the health, social and economic effects of the Covid-19 pandemic - through our global "WeCare" response programme. Our mines and host communities, which are also often home to much of our workforce, operate as an ecosystem and both must be healthy to prosper. Across our operational footprint and in those communities that are local to our operations, WeCare provides information and extensive practical support across four pillars of: physical health, mental health, living with dignity, and community response:

Physical health - education and behavioural change to support personal health and hygiene; health screening and testing; PPE and medical equipment and facilities; vaccination information programme; and support for government-led vaccination programmes, including licensing our own medical facilities in South Africa to vaccinate employees.

Mental health - employee support programmes to assist with mental health management, including via our employee app and online events and other digital materials.

Living with dignity - direct employee and community support to combat gender-based and domestic violence; work with health authorities to identify abuse cases and referrals to support mechanisms.

Community response - wide-ranging livelihoods programme to support communities through the social and economic effects of the pandemic, including: public information campaigns aimed at health and hygiene; health screening and Covid-19 testing; support for health service provision; continuation of essential services (e.g. water, energy, accommodation); food package distribution; employee match-giving programme; support for SMEs and entrepreneurs; support for teachers and students; job training for post-pandemic employability; and regional development planning to enhance local economic activity for the long term.

Anglo American Foundation - special endowment of $100 million

Building on the extensive in-kind support and financial contributions as part of the WeCare programme, we will also be making a special contribution of $100 million to the Anglo American Foundation. The Anglo American Foundation is focused on accelerating progress towards the United Nations' Sustainable Development Goals (UNSDGs), placing a particular importance on programmes that empower women, youth and vulnerable groups in Anglo American's host communities and countries of operation. By partnering with non-profit, public and private organisations, the Anglo American Foundation supports health, education, economic and environmental projects aligned with the goals of Anglo American's Sustainable Mining Plan - itself designed to align with the UNSDGs.

This special endowment is an opportunity to accelerate the Anglo American Foundation's work at a critical time for so many of our stakeholders and our planet and will help us take the scale of what the Anglo American Foundation can deliver to an entirely new level, funding more ambitious and longer term projects.

 

Operational and financial review of Group results for the period ended 30 June 2021

OPERATIONAL PERFORMANCE

Improved operational performances at PGMs, De Beers, Kumba (Iron Ore) and Copper contributed to a 10% production increase on a copper equivalent basis(1), driven in part by the easing of Covid-19 related restrictions that impacted production in the first half of 2020, as well as higher throughput at Mogalakwena (PGMs) and strong plant performance at Los Bronces (Copper), Collahuasi (Copper) and Kumba. Production was adversely affected by the suspension of longwall operations at Grosvenor and other operational issues (Metallurgical Coal), unplanned maintenance at Minas-Rio (Iron Ore) and planned lower grades at Nickel. In response to the pandemic, comprehensive safeguarding measures remain in place at operations which has resulted in a return to more normal operating levels, with production at around 95%(2) of normal capacity in the first half of 2021.

De Beers' rough diamond production increased by 37% to 15.4 million carats (30 June 2020: 11.3 million carats) in response to the strong recovery in consumer demand, following the impact of Covid-19 in the first half of 2020.

Copper production increased by 5% to 330,000 tonnes (30 June 2020: 313,900 tonnes), driven by a 9% increase in production at Los Bronces to 163,200 tonnes (30 June 2020: 149,400 tonnes), with higher water availability as a result of water management initiatives resulting in an increase in throughput, and a 3% increase in attributable production from Collahuasi to a record 145,900 tonnes (30 June 2020: 142,200 tonnes), due to continued strong plant performance.

PGMs' production (metal in concentrate) increased by 28% to 2,079,100 ounces (30 June 2020: 1,620,000 ounces), reflecting the impact in the first half of 2020 of the temporary shutdown of operations in response to the Covid-19 pandemic, as well as an increase in throughput at Mogalakwena. Refining performance also improved, reflecting the strong performance of the converter plant (ACP) following its rebuild in 2020. 

Iron ore production increased by 3% to 31.9 Mt (30 June 2020: 30.8 Mt). At Kumba, production increased by 12% to 20.4 Mt (30 June 2020: 18.2 Mt), owing to the easing of Covid-19 related restrictions that had affected production in the first half of 2020, and improved plant availability. Minas-Rio production decreased by 9% to 11.5 Mt (30 June 2020: 12.6 Mt), due to unplanned maintenance at the beneficiation plant, with the majority of the volumes expected to be recovered during the remainder of the year.

Metallurgical coal production decreased by 20% to 6.2 Mt (30 June 2020: 7.8 Mt), principally due to the suspension of longwall operations at Grosvenor since May 2020 following the underground incident, and the elevated gas levels at Moranbah that resulted in the stoppage of longwall operations from 21 February 2021 until 3 June 2021.

Nickel's production decreased by 5% to 20,700 tonnes (30 June 2020: 21,700 tonnes), reflecting planned lower ore grades, while manganese ore production increased by 13% to 1.8 Mt (30 June 2020: 1.6 Mt).

Thermal coal export production decreased by 12% to 9.3 Mt (30 June 2020: 10.5 Mt). In South Africa, production decreased by 27% to 5.7 Mt (30 June 2020: 7.8 Mt), mainly due to the demerger of operations on 4 June 2021, as well as the Bokgoni pit at Khwezela being placed onto care and maintenance. In Colombia, attributable production increased by 30% to 3.6 Mt (30 June 2020: 2.7 Mt) as the Covid-19 related restrictions imposed in the first half of 2020 were eased.

Group copper equivalent unit costs(1) increased by 15% in US dollar terms and 6% in local currency terms, despite higher production, due to stronger producer currencies and input cost increases at most of our operations.  

 

 

(1)    Copper equivalent production and unit cost is normalised to reflect the demerger of the South Africa thermal coal operations and the closure of the manganese alloy operations.

(2)    Production capacity excludes Moranbah and Grosvenor.  

 

FINANCIAL PERFORMANCE

Anglo American's profit attributable to equity shareholders increased significantly to $5.2 billion (30 June 2020: $0.5 billion). Underlying earnings were $5.3 billion (30 June 2020: $0.9 billion), while operating profit was $11.0 billion (30 June 2020: $1.8 billion).

UNDERLYING EBITDA*

Group underlying EBITDA increased by $8.8 billion to $12.1 billion (30 June 2020: $3.4 billion). The Group Mining EBITDA margin* was higher than for the first half of 2020 at 61% (30 June 2020: 38%), due to the increase in the price for the Group's basket of products and improved production at PGMs, Kumba (Iron Ore) and Copper, partly offset by unfavourable exchange rates and higher input costs across the Group. 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(1)

 

6 months ended

6 months ended

$ million

30 June 2021

30 June 2020

De Beers

610 

 

 

Copper

1,935 

 

706 

 

PGMs

4,383 

 

610 

 

Iron Ore

4,910 

 

1,827 

 

Metallurgical Coal

(94)

 

(10)

 

Nickel and Manganese

289 

 

218 

 

Crop Nutrients

(12)

 

 

Corporate and other

119 

 

(7)

 

Total

12,140 

 

3,350 

 

(1)    Following the demerger of Thungela, the Group has reassessed its reportable segments to include thermal coal operations in Corporate and other. Prior period comparatives have been restated. See note 3 to the Condensed financial statements for further details.

 

Underlying EBITDA* reconciliation for the six months ended 30 June 2020 to six months ended 30 June 2021

The reconciliation of underlying EBITDA from $3.4 billion in the six months ended 30 June 2020 to $12.1 billion in the six months ended 30 June 2021 shows the controllable factors (e.g. cost and volume), as well as those outside of management control (e.g. price, foreign exchange, inflation and the impact of the pandemic), that drive the Group's performance.

$ billion

 

H1 2020 underlying EBITDA*

3.4 

 

Price

7.9 

 

Foreign exchange

(0.4)

 

Inflation

(0.2)

 

Covid-19 volume recovery

0.8 

 

Net cost and volume

0.5 

 

Other

0.1 

 

H1 2021 underlying EBITDA*

12.1 

 

Price

Average market prices for the Group's basket of products increased by 62% compared to the first half of 2020, increasing underlying EBITDA by $7.9 billion. Higher realised prices were achieved across most of our products, with iron ore increasing by 133%; the dollar PGMs basket increasing by 47%, driven mainly by a significantly stronger average rhodium price; and copper increasing by 84%.

Foreign exchange

The unfavourable foreign exchange impact on underlying EBITDA of $0.4 billion was due to stronger local currencies in our countries of operation, principally the South African rand, Australian dollar and Chilean peso.

Inflation

The Group's weighted average CPI for the first half of the year was 3.3%, compared with 3.1% in the first six months of 2020. This was principally influenced by an increase in inflation in Brazil, partly offset by a decrease in Australia. The impact of inflation on costs reduced underlying EBITDA by $0.2 billion.

Covid-19 volume recovery

The positive $0.8 billion effect on the Group's underlying EBITDA reflects the easing of the Covid-19 related restrictions that impacted sales in the first half of 2020, as well as a recovering diamond market. This was partly offset, however, by continued disruption to production and the supply chain in the first six months of 2021.

Global consumer demand continued to recover from the impact of Covid-19 during the first half of 2021. In particular, rough diamond demand increased as the midstream pulled through stocks in response to the recovery, which drove a strong sales performance for De Beers during the period.

Operational impacts in the first half of 2021 were driven by safeguarding measures across the Group. At De Beers, production in Canada was affected by a Covid-19 related suspension of operations in February. The second wave in South Africa at the beginning of the year also impacted the Group as comprehensive preventative safety measures including extra testing, social distancing and workplace sanitation between shift changes were implemented to help safeguard the lives and livelihoods of our workforce and host communities.

Net cost and volume

The net effect of cost and volume was a $0.5 billion increase in underlying EBITDA, as strong PGM sales and the impact of PGMs' ACP outage in 2020 more than offset the effect of logistics constraints at Kumba and unplanned maintenance at Minas-Rio.

Metallurgical Coal longwall operations were affected by a suspension at Moranbah from February 2021 to May 2021, as well as the continued suspension of Grosvenor following the incident in May 2020.

Other

The $0.1 billion positive movement in underlying EBITDA from other factors was largely due to higher earnings at Cerrejón owing to the impact of Covid-19 lockdowns in the first half of 2020, and decreases in the environmental restoration provisions at Copper as a result of recent market volatility influencing the discount rate.

UNDERLYING EARNINGS*

Group underlying earnings increased to $5.3 billion (30 June 2020: $0.9 billion), driven by the significantly higher underlying EBITDA, partly offset by an increase in net finance costs and income tax expense and an increase in earnings attributable to non-controlling interests.

Reconciliation from underlying EBITDA* to underlying earnings*

 

6 months ended

6 months ended

$ million

30 June 2021

30 June 2020

Underlying EBITDA*

12,140

3,350

Depreciation and amortisation

(1,462)

 

(1,266)

 

Net finance costs and income tax expense

(3,448)

 

(849)

 

Non-controlling interests

(1,895)

 

(349)

 

Underlying earnings*

5,335 

 

886 

 

 

 

Depreciation and amortisation

Depreciation and amortisation increased by 15% to $1.5 billion (30 June 2020: $1.3 billion), reflecting the effect of stronger local currencies.

Net finance costs and income tax expense

Net finance costs, before special items and remeasurements, were $0.4 billion (30 June 2020: $0.3 billion). The increase was principally driven by fair value losses on the revaluation of deferred consideration balances at PGMs relating to the Mototolo acquisition.

The underlying effective tax rate was 29.6% (30 June 2020: 30.9%). The underlying effective tax rate in the first half of 2021 was impacted by the relative levels of profits arising in the Group's operating jurisdictions. In future periods, the underlying effective tax rate is expected to be in the range of 30% to 33%. The tax charge for the period, before special items and remeasurements, was $3.0 billion (30 June 2020: $0.5 billion).

Non-controlling interests

The share of underlying earnings attributable to non-controlling interests of $1.9 billion (30 June 2020: $0.3 billion) principally relates to minority shareholdings in Kumba, PGMs and Copper.

SPECIAL ITEMS AND REMEASUREMENTS

Special items and remeasurements (after tax and non-controlling interests) are a net charge of $0.1 billion (30 June 2020: net charge of $0.4 billion) and include impairment reversals of $1.0 billion, related mainly to Minas-Rio (Iron Ore Brazil), impairment charges of $0.6 billion at Moranbah/Grosvenor, Dawson and Capcoal (Metallurgical Coal), and a loss on disposal of $0.4 billion on the demerger of the South African thermal coal operations. 

Full details of the special items and remeasurements recorded are included in note 9 to the Condensed financial statements.

NET DEBT*

$ million

2021

2020

Opening net debt* at 1 January

(5,575)

 

(4,626)

 

Underlying EBITDA* from subsidiaries and joint operations

11,740 

 

3,050 

 

Working capital movements

(805)

 

(1,439)

 

Other cash flows from operations

(261)

 

(87)

 

Cash flows from operations

10,674 

 

1,524 

 

Capital repayments of lease obligations

(133)

 

(75)

 

Cash tax paid

(1,973)

 

(451)

 

Dividends from associates and joint ventures

83 

 

132 

 

Net interest(1)

(155)

 

(184)

 

Dividends paid to non-controlling interests

(832)

 

(395)

 

Sustaining capital expenditure(2)

(1,476)

 

(1,171)

 

Sustaining attributable free cash flow*

6,188 

 

(620)

 

Growth capital expenditure and other(2)

(807)

 

(662)

 

Attributable free cash flow*

5,381 

 

(1,282)

 

Dividends to Anglo American plc shareholders

(907)

 

(557)

 

Acquisitions

 

(515)

 

Disposals

 

187 

 

Foreign exchange and fair value movements

(102)

 

(53)

 

Other net debt movements(3)

(829)

 

(771)

 

Total movement in net debt*

3,543 

 

(2,991)

 

Closing net debt* at 30 June

(2,032)

 

(7,617)

 

(1)      Includes cash inflows of $78 million (30 June 2020: inflows of $15 million), relating to interest receipts on derivatives hedging net debt, which are included in cash flows from derivatives related to financing activities.

(2)      Included within sustaining capital expenditure is $39 million (30 June 2020: $21 million) of capitalised operating cash flows relating to life-extension projects. In addition to Growth capex, 'Growth capital expenditure and other' includes $3 million (30 June 2020: $1 million) of capitalised operating cash flows relating to growth projects and $25 million (30 June 2020: $25 million) of expenditure on non-current intangible assets.

(3)      Includes revaluations of shipping lease liabilities and new leases entered into (less capital repayments of lease obligations) of $387 million; Mitsubishi's share of Quellaveco capital expenditure of $226 million; contingent and deferred consideration paid in respect of acquisitions completed in previous years of $111 million; and the purchase of shares for employee share schemes of $174 million. 2020 includes Mitsubishi's share of Quellaveco capital expenditure of $277 million; $253 million of debt recognised on the acquisition of Sirius Minerals Plc; the purchase of shares under a buyback of $223 million; and the purchase of shares for other purposes (including for employee share schemes) of $117 million.

Net debt (including related derivatives) of $2.0 billion has decreased by $3.5 billion since 31 December 2020, driven by robust cash flows from operations of $10.7 billion. The Group generated strong sustaining attributable free cash inflows of $6.2 billion, used in part to fund growth capital expenditure of $0.8 billion and dividends paid to Anglo American plc shareholders of $0.9 billion. New leases entered into, including for the Group's new London head office, and upwards revaluation of shipping lease liabilities, added $0.5 billion to net debt.

Net debt at 30 June 2021 represented gearing of 5% (31 December 2020: 15%) and comprised cash and cash equivalents of $10.9 billion (31 December 2020: $7.5 billion) and gross debt (including related derivatives) of $13.0 billion (31 December 2020: $13.1 billion).

CASH FLOW

Cash flows from operations

Cash flows from operations increased to $10.7 billion (30 June 2020: $1.5 billion), reflecting an increase in underlying EBITDA from subsidiaries and joint operations, partly offset by a price-driven build-up in working capital of $0.8 billion (30 June 2020: outflows of $1.4 billion). Cash outflows on inventories of $0.7 billion were driven by higher PGMs prices increasing the cost of purchased concentrate and a build-up in copper inventory purchased from external sources to be sold in the second half of the year. Receivables increased by $0.7 billion, mainly owing to increased iron ore, base metals and PGMs prices, offset by a payables increase of $0.6 billion, driven by a higher customer           pre-payment within PGMs reflecting increased metal prices.

Capital expenditure*

 

6 months ended

6 months ended

$ million

30 June 2021

30 June 2020

Stay-in-business

808 

 

622 

 

Development and stripping

412 

 

390 

 

Life-extension projects

217 

 

141 

 

Proceeds from disposal of property, plant and equipment

 

(3)

 

Sustaining capital

1,437 

 

1,150 

 

Growth projects

779 

 

636 

 

Total

2,216 

 

1,786 

 

Capitalised operating cash flows

42 

 

22 

 

Total capital expenditure

2,258 

 

1,808 

 

Capital expenditure increased to $2.3 billion for the first six months of the year (30 June 2020: $1.8 billion), as comprehensive response plans mitigated the impact of the Covid-19 pandemic to a large degree and ensured business continuity.

Sustaining capital expenditure increased to $1.4 billion (30 June 2020: $1.2 billion), driven by the effect of stronger local currencies in our countries of operation and the roll-over of deferred expenditure from 2020 owing to Covid-19 related restrictions.

Growth capital expenditure increased to $0.8 billion (30 June 2020: $0.6 billion), largely due to higher expenditure incurred at the Woodsmith polyhalite project of $0.3 billion (30 June 2020: $0.1 billion) following the acquisition of the project in the first half of 2020.

Attributable free cash flow*

The Group's attributable free cash flow increased to an inflow of $5.4 billion (30 June 2020: outflow of $1.3 billion) due to higher cash flows from operations of $10.7 billion (30 June 2020: $1.5 billion). This was partially offset by increased capital expenditure of $2.3 billion (30 June 2020: $1.8 billion), higher tax payments of $2.0 billion (30 June 2020: $0.5 billion) and increased dividends paid to non-controlling interests of $0.8 billion (30 June 2020: $0.4 billion).

Shareholder returns

In line with the Group's established dividend policy to pay out 40% of underlying earnings, the Board has proposed a dividend of $1.71 per share (30 June 2020: $0.28 per share), equivalent to $2.1 billion (30 June 2020: $0.3 billion).

The Group has made significant progress in deleveraging and strengthening the balance sheet and, given the current levels of cash generated in the business, along with the further value potential in Anglo American, the directors consider it appropriate at this point in time to return excess cash to shareholders. As a result, the Board also approved a special dividend of $0.80 per share, equivalent to $1.0 billion, as well as the establishment of a $1.0 billion on-market share buyback programme to be executed concurrently on both the London Stock Exchange (LSE) and Johannesburg Stock Exchange (JSE).

  

Acquisitions

The Group completed no material acquisitions in the six months to 30 June 2021. In the previous corresponding period, on 17 March 2020, the Group completed the acquisition of Sirius Minerals Plc for a cash consideration of $0.5 billion.

Disposals

On 4 June 2021, the Group demerged its thermal coal operations in South Africa into a newly incorporated company, Thungela Resources Limited, that was subsequently admitted to trading on both the Johannesburg and London stock exchanges on 7 June 2021. The demerged assets included net cash of $0.2 billion. Following the demerger of the South Africa thermal coal operations, no further production will be reported by Anglo American. Anglo American's marketing business will continue to support Thungela in the sale and marketing of its products, and sales and purchases under the offtake agreement will be reported on a net basis, together with the Group's other third-party trading activities.

In 2021, the Group received $0.2 billion (30 June 2020 $0.2 billion) of deferred and contingent consideration in respect of previous divestments by PGMs and Copper (30 June 2020: PGMs), offsetting the net cash disposed in 2021 through the demerger of the Group's South African thermal coal operations.

BALANCE SHEET

Net assets increased by $4.9 billion to $37.7 billion (31 December 2020: $32.8 billion), reflecting the profit for the period, offset by dividend payments to Company shareholders and non-controlling interests.

ATTRIBUTABLE ROCE*

Attributable ROCE increased to 49% (30 June 2020: 11%). Annualised attributable underlying EBIT was higher at $15.7 billion (30 June 2020: $3.2 billion), reflecting the impact of significantly higher realised prices achieved for most of the Group's products and the easing of Covid-19 related restrictions that impacted sales in the first half of 2020. Average attributable capital employed increased to $32.1 billion (30 June 2020: $29.8 billion), primarily due to growth capital expenditure, largely at Quellaveco (Copper) and Woodsmith (Crop Nutrients), as well as working capital build.

LIQUIDITY AND FUNDING

Group liquidity remains conservative at $19.2 billion (31 December 2020: $17.5 billion), comprising $10.9 billion of cash and cash equivalents (31 December 2020: $7.5 billion) and $8.3 billion of undrawn committed facilities (31 December 2020: $10.0 billion).

In March 2021, the Group issued $500 million 2.250% Senior Notes due 2028, and $500 million 2.875% Senior Notes due 2031, as part of the Group's routine financing activities.

In June 2021, the Group bought back US dollar denominated bonds with maturities in 2025. The Group used $1.0 billion of cash to retire $0.9 billion of contractual repayment obligations (including derivatives hedging the bonds).

The bond issuances and the buyback transactions increased the weighted average maturity on the Group's bonds to 6.7 years (31 December 2020: 6.3 years).

The Group has an undrawn $4.5 billion revolving credit facility and an undrawn $0.2 billion bilateral credit facility, both due to mature in March 2025.

In April 2020, the Group signed a new $2.0 billion revolving credit facility with an initial maturity date of April 2021. After the Group's $1.0 billion bond issuance in March 2021, the Group issued a notice of cancellation for the facility, which became effective in March 2021 and, accordingly, this facility is no longer available.

PORTFOLIO UPGRADE

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 global consumer demand trends. Aligned to this strategy, in the first half of 2021, the Group commenced or completed several transactions.

In April 2021, Anglo American reached a significant milestone in delivering our sustainability commitments, securing 100% renewable electricity supply for all our operations in South America by signing an agreement with Engie Energía Perú to provide 100% renewable electricity for the Quellaveco copper operation in Peru, which is expected to begin production in 2022, having already met our objective to source electricity entirely from renewables in Chile from 2021, and Brazil from 2022.

In June 2021, we completed the demerger of our thermal coal operations in South Africa through the creation of a new stand-alone company, Thungela Resources Limited ('Thungela'), which has a primary listing on the Johannesburg Stock Exchange, and a standard listing on the London Stock Exchange.

In June 2021, we also entered into an agreement for the sale of our 33.3% interest in Cerrejón to Glencore plc. The agreement is effective on 31 December 2020 and, therefore, economic benefits from 1 January 2021 onwards will not accrue to Anglo American should the transaction complete. The transaction is subject to competition authority and other regulatory approvals and is expected to complete in the first half of 2022.

Both the Thungela demerger and Cerrejón sale represent the final stage of Anglo American's previously announced responsible transition from thermal coal operations, being a transition that seeks to balance the needs and expectations of all stakeholders.

 

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

$bn

Remaining Capex

$bn

First production

Progress

Copper

 

 

 

 

 

Quellaveco

New copper mine in Moquegua, Peru producing 300 ktpa (100% basis,

180 ktpa our share) over the first 10 years in Q1 cost curve position.

2.7-2.8 (Anglo American 60% share)

1.1-1.2 (Anglo American 60% share)

2022

Construction began in 2018. Strong progress continues, with the project currently tracking against its original schedule, despite the impact of Covid-19 related disruptions, as execution was ahead of schedule prior to the pandemic. Refer to the Technology projects table below for Coarse Particle Recovery at Quellaveco.

Diamonds

 

 

 

 

 

Marine Namibia

New mining vessel, adding 0.5 Mctpa (100% basis) of some of the highest value diamonds in the portfolio.

c.0.2 (Anglo American 50% share)

0.1 (Anglo American 50% share)

2022

Construction began in 2019 and is progressing to schedule with the vessel platform expected in

Cape Town in Q3 2021 for the fitting of the mining and plant equipment.

Crop Nutrients

 

 

 

 

 

Woodsmith

New polyhalite (natural mineral fertiliser) mine being developed in Yorkshire, UK. Expected to produce up to 10 Mtpa of POLY4 - a premium quality, low carbon fertiliser certified for organic use.

Subject to development timeline review

Subject to development timeline review

Subject to development timeline review

c.$0.5 bn expected to be spent in 2021 while a project review is ongoing to optimise development timeline and design. Refer to page 30 for a full update on progress and 2021 priorities.

Iron Ore

 

 

 

 

 

Sishen

Implementation of Ultra High Dense Media Separation (UHDMS) technology at Kumba's Sishen operation will enable an increase in premium product production and the beneficiation of lower grade materials by reducing the current cut-off grade of <48% Fe to <40% Fe. In addition, the project contributes an additional

3-4 years to Sishen's life of mine to 2039.

0.2

0.2

2023

Project execution approved in Feb 2021.

PGMs

 

 

 

 

 

Mogalakwena

Evaluating various options to expand PGM production of the mine by 0.3-0.6 moz, through technology development and deployment and the optimal mine plan to deliver feed to the concentrators.

0.8-1.4 (Studies ongoing)

Not yet approved

2025

Feasibility studies on the future of Mogalakwena are expected to be completed by the end of 2021, with decisions on the pathway forward shortly thereafter. Current key milestones include progressing an underground exploration decline; engagement with communities on resettlements; integrating the bulk ore sorting plant into planning; and construction of the coarse particle recovery plant, which should be complete by the end of the year.

Metallurgical Coal

 

 

 

 

 

Moranbah-Grosvenor

Expansion of the processing facilities to increase ROM capacity of high-quality metallurgical coal by

c. 3.5 Mtpa (Anglo American share 88%).

c.0.3 (Anglo American 88% share)

Not yet approved

2024/2025

Project approval expected 2023, dependent on progress of longwall operations post-restart.

 

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

$bn

Remaining spend

$bn

Expected first production

Progress

Diamonds

 

 

 

 

 

Venetia

5 Mctpa underground replacement for the existing open pit. The project is expected to add an estimated 95 million carats and extend the life of the mine to 2045.

2.1

1.2

2023

Open-pit mining at Venetia is planned to end in H2 2022, with the transition to underground mining starting thereafter.

Jwaneng

9 Mctpa replacement (100% basis) for cuts 7 and 8. The Cut-9 expansion of Jwaneng will extend the life of the mine to 2036 and is expected to yield approximately 51 million carats of rough diamonds.

0.3 (Anglo American 19.2% share)

0.2 (Anglo American 19.2% share)

2027

Project progressing on schedule.

Metallurgical Coal

 

 

 

 

 

Aquila

3.5 Mtpa (70% basis), 6 year extension of Capcoal's underground operations with Grasstree approaching end of life. Aquila will be a longwall operation leveraging the existing Grasstree infrastructure and producing high quality hard coking coal. The project will extend the life of the Capcoal underground operations to 2028.

0.2 (Anglo American 70% share)

0.1 (Anglo American 70% share)

2022

Development work began in September 2019 and first longwall production is expected in 2022.

Iron Ore

 

 

 

 

 

Kolomela

4 Mtpa high grade iron ore replacement project. The development of a new pit, Kapstevel South, and associated infrastructure at Kolomela to help sustain output of c.13 Mtpa and extend the remaining life of mine to 2032.

0.4

0.4

2024

Approved in July 2020. Pit establishment and waste stripping has commenced in 2021, with first ore expected in 2024.

PGMs

 

 

 

 

 

Mototolo/Der Brochen

Development of infrastructure to access the Der Brochen ore body, replacing declining production from Mototolo, and extending the life of mine by more than 30 years.

0.2 (studies ongoing)

Not yet approved

2024

Project approval expected in 2021.

 

Technology projects(1) 

 

The Group is spending $0.2-0.5 billion per annum on technology programmes over the next three years to support the FutureSmart MiningTM programme (metrics presented on a 100% basis unless otherwise indicated):

 

Initiative

Scope

Progress

Copper, PGMs and Nickel

 

 

Bulk ore sorting

Deliver improved feed grade to plants through early rejection of waste, improving energy efficiencies.

- Full scale solution option being reviewed at El Soldado (Copper).

 

- Testing complete at Mogalakwena (PGMs). Commissioned full scale North Concentrator unit H1 2021 (~70% of complex feed).

 

- Testing complete at Barro Alto (Nickel). c.$35 million capex to scale up to 100% throughput through 2022-23.

 

- Phase 1 testing at Los Bronces (Copper) during 2021.

c.$10 million capex for initial deployment (up to c.60% of throughput). Phase 2 study work under way.

 

Copper, PGMs and Iron Ore

 

 

Coarse particle recovery (CPR)

Innovative flotation process allows material to be crushed to a larger particle size, rejecting coarse gangue and allowing water to release from coarser ore particles, improving energy efficiencies and water savings.

 

- Full scale demo plant commissioned at El Soldado (Copper) with ramp up to full capacity expected in H2 2021.

 

- Full scale system under construction at Mogalakwena North concentrator (PGMs). Commissioning expected in Q4 2021.

 

- CPR approved at Quellaveco (Copper) to treat flotation tails, improving recoveries by c.3% over the life of mine. Commissioning expected in 2022.

 

- Feasibility work continues at Los Bronces (Copper) and Minas-Rio (Iron Ore).

 

Copper, PGMs and Iron Ore

 

 

Hydraulic dry stack

Engineering of geotechnically stable tailings facilities that dry out in weeks, facilitating up to 85% water recovery.

- El Soldado (Copper) unit under construction, due to complete in Q4 2021.

 

- Sequencing and application of future roll-outs to be determined.

Portfolio-wide

 

 

Hydrogen mine haul trucks and associated renewables infrastructure

Developing the world's first hydrogen powered mining truck to decarbonise high power transport, using renewable energy.

 

- On-site testing and validation programme at Mogalakwena (PGMs) will commence in Q4 2021, with 40 truck roll-out planned to start in 2024, powered by a local solar plant.

 

(1)    Capital expenditure relating to technology projects is included within Growth capital expenditure.

THE BOARD

Changes during 2021 to the composition of the Board are set out below.

On 1 March 2021, Elisabeth Brinton joined the Board as a non-executive director and will join the Sustainability Committee in September 2021.

On 1 June 2021, Hilary Maxson joined the Board as a non-executive director and member of the Audit Committee.

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/board

PRINCIPAL RISKS AND UNCERTAINTIES

Anglo American is exposed to a variety of risks and uncertainties which may have a financial, operational or reputational impact on the Group, and which may also have an impact on the achievement of social, economic and environmental objectives.

The principal risks and uncertainties facing the Group relate to the following:

•     Catastrophic and natural catastrophe risks

•     Product prices

•     Cyber security

•     Safety

•     Climate change

•     Community and social relations

•     Operational stability

•     Pandemic

•     Political, regulatory and permitting

•     Corruption

•     Water

•     Future demand

The Group is exposed to changes in the economic environment, including to tax rates and regimes, as with any other business. Details of any key risks and uncertainties specific to the period are covered in the Operations review section. 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 2020 year end are set out in detail in the strategic report section of the Integrated Annual Report 2020 on the Group's website www.angloamerican.com.

DE BEERS

Financial and operational metrics(1)

 

Production

volume

Sales

volume

 

Price

Unit

cost*

Group

revenue*

Underlying

EBITDA*

EBITDA

margin*(6)

Underlying

EBIT*

Capex*

ROCE*

 

'000 
cts

'000 
cts(2)

$/ct(3)

$/ct(4)

$m(5)

$m

 

$m

$m

 

De Beers

15,409 

 

19,161 

 

135 

 

59 

 

2,900 

 

610 

 

42 

%

377 

 

205 

 

%

Prior year

11,277 

 

8,547 

 

119 

 

62 

 

1,223 

 

 

49 

%

(179)

 

159 

 

(4)

%

Botswana

10,687 

 

n/a

131 

 

35 

 

n/a

226 

 

n/a

203 

 

29 

 

n/a

Prior year

7,469 

 

 

124 

 

36 

 

 

83 

 

-

57 

 

29 

 

-

Namibia

676 

 

n/a

578 

 

374 

 

n/a

43 

 

n/a

25 

 

23 

 

n/a

Prior year

869 

 

 

477 

 

208 

 

 

28 

 

-

14 

 

30 

 

-

South Africa

2,437 

 

n/a

107 

 

48 

 

n/a

113 

 

n/a

34 

 

122 

 

n/a

Prior year

1,306 

 

 

94 

 

71 

 

 

26 

 

-

(20)

 

58 

 

-

Canada

1,609 

 

n/a

55 

 

42 

 

n/a

35 

 

n/a

 

17 

 

n/a

Prior year

1,633 

 

 

56 

 

39 

 

 

36 

 

-

12 

 

12 

 

-

Trading

n/a

n/a

n/a

n/a

n/a

279 

 

11 

%

276 

 

 

n/a

Prior year

 

 

 

 

 

(17)

 

(2)

%

(20)

 

 

-

Other(7)

n/a

n/a

n/a

n/a

n/a

(86)

 

n/a

(166)

 

13 

 

n/a

Prior year

 

 

 

 

 

(154)

-

(222)

29

-

(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 20.8 million carats (30 June 2020: 9.2 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 business units is based on 100% selling value post-aggregation of goods. Realised price includes the price impact of the sale of non-equity product and, as a result, is not directly comparable to the unit cost.

(4)    Unit cost is based on consolidated production and operating costs, excluding depreciation and operating special items, divided by carats recovered.

(5)    Includes rough diamond sales of $2.6 billion (30 June 2020: $1.0 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, downstream, acquisition accounting adjustments and corporate.

 

Markets

Global consumer demand for diamonds continued to recover from the impact of Covid-19, supported by fiscal stimulus in the US and the roll-out of Covid-19 vaccines. Restrictions on international travel and entertainment over the course of the pandemic resulted in higher discretionary spending on luxury goods, including diamond jewellery.

In the first six months of 2021, the cutting centres achieved strong sales of polished diamonds in response to the ongoing recovery of consumer demand. However, the severe Covid-19 wave in India during April and May reduced capacity at cutting and polishing operations within the key Indian midstream sector, which was further exacerbated by polished diamond grading backlogs in key markets. The relative shortage of polished supply contributed to a positive polished price trend in the first half of 2021.

The recovery of demand in all parts of the pipeline enabled rough diamond producers to destock at the start of 2021. This robust demand, combined with supply constraints arising from production challenges, created a favourable dynamic in the first half of 2021 that also supported higher rough diamond prices.

Financial and operational overview

Total revenue increased significantly to $2.9 billion(1) (30 June 2020: $1.2 billion), with rough diamond sales rising to $2.6 billion(1) (30 June 2020: $1.0 billion), driven by robust rough diamond demand as the midstream pulled through stocks in response to the recovery in consumer demand, with rough diamond sales volumes significantly higher at 19.2 million carats (30 June 2020: 8.5 million carats). The average realised price rose by 13% to $135/ct (30 June 2020: $119/ct), driven by a larger proportion of higher value rough diamonds. The closing price index was 14% above the opening index over the first six months of 2021, reflecting positive consumer demand for diamond jewellery as well as tightness in inventories across the diamond value chain.

Underlying EBITDA increased to $610 million (30 June 2020: $2 million), broadly returning to 2019 levels, owing to the recovery in sales. Unit costs were lower than in the first half of 2020 at $59/ct (30 June 2020: $62/ct), as the benefit of higher production was primarily offset by unfavourable exchange rates.

Capital expenditure increased by 29% to $205 million (30 June 2020: $159 million), largely due to a reduction of sustaining projects during 2020 in response to Covid-19. The Venetia Underground and Jwaneng Cut-9 life-extension projects continued to progress and the new AMV3 vessel for Namibia remains on track for commissioning in 2022.

(1)    Total revenue and rough diamond sales for the six months to 30 June 2019 were $2.6 billion and $2.3 billion respectively.

 

Operational performance

Mining and manufacturing

Rough diamond production increased by 37% to 15.4 million carats (30 June 2020: 11.3 million carats) primarily due to the lower levels of production in the first half of 2020 resulting from Covid-19 related shutdowns and the response to the resultant reduced demand owing to the pandemic.

In Botswana, production was 43% higher at 10.7 million carats (30 June 2020: 7.5 million carats) as production was increased in response to stronger prevailing demand. Production at Jwaneng increased by 44% to 6.3 million carats (30 June 2020: 4.3 million carats), and production at Orapa increased by 41% to 4.4 million carats (30 June 2020: 3.1 million carats), despite the impact of heavy rainfall at the beginning of the year.

In Namibia, production decreased by 22% to 0.7 million carats (30 June 2020: 0.9 million carats) due to planned maintenance of the Mafuta crawler vessel and the continued demobilisation of another vessel.

In South Africa, production increased by 87% to 2.4 million carats (30 June 2020: 1.3 million carats), owing to the impact of the Covid-19 shutdown in the first half of 2020, as well as planned processing of higher grade ore from the final cut of the open pit while the mine transitions to underground operations, where first production is expected in 2023.

In Canada, production was broadly in line at 1.6 million carats (30 June 2020: 1.6 million carats) due to a Covid-19 related temporary shutdown being offset by higher grade and plant throughput.

Brands and consumer markets

The first half of 2021 saw a strong recovery in consumer demand for De Beers' branded diamond jewellery from both De Beers Jewellers and De Beers Forevermark.

Online jewellery sales continued to show strong growth, reflecting the strong e-commerce growth trend over recent years as consumer buying habits continue to evolve into the digital age.

Operational and market outlook

The strong recovery in consumer demand is expected to continue, as the global economy recovers from the impact of Covid-19. In addition, midstream capacity is expected to increase during the second half of the year, subject to the Covid-19 situation in India.

The longer term transformation of the diamond value chain continues, including a sustained focus on stock level optimisation and distribution of polished diamonds and diamond jewellery, increased online purchasing, and greater focus on the provenance and sustainability credentials of companies and their products. The long term outlook for diamond jewellery demand remains positive, while the lack of new diamond projects means supply is likely to be flat or declining for the foreseeable future.

Full year production guidance is 32-33 million carats (100% basis), subject to trading conditions and the extent of any further Covid-19 related disruptions. Full year unit cost guidance is revised to c.$62/ct (previously c.$55/ct), reflecting the impact of exchange rates, marginally reduced production volumes and Covid-19 related disruptions.

COPPER

Financial and operational metrics

 

Production

volume

Sales

volume

Price

Unit

cost*

Group

revenue*

Underlying

EBITDA*

Mining

EBITDA

margin*(2)

Underlying

EBIT*

Capex*

ROCE*

 

kt

kt(1)

c/lb(2)

c/lb(3)

$m(4)

$m

 

$m

$m

 

Copper

330 

 

305 

 

460 

 

116 

 

2,974 

 

1,935 

 

66 

%

1,630 

 

768 

 

38 

%

Prior year

314 

 

294 

 

250 

 

107 

 

1,589 

 

706 

 

45 

%

378 

 

729 

 

13 

%

Los Bronces(5)

163 

 

155 

 

n/a

155 

 

1,431 

 

920 

 

64 

%

768 

 

189 

 

n/a

Prior year

149 

 

136 

 

 

140 

 

669 

 

221 

 

33 

%

44 

 

133 

 

-

Collahuasi(6)

146 

 

133 

 

n/a

58 

 

1,238 

 

1,048 

 

85 

%

928 

 

197 

 

n/a

Prior year

142 

 

135 

 

 

69 

 

752 

 

546 

 

73 

%

428 

 

153 

 

-

Quellaveco(7)

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

331 

 

n/a

Prior year

 

 

 

 

 

 

 

 

415 

 

-

Other operations(8)

21 

 

17 

 

n/a

n/a

305 

 

(33)

 

16 

%

(66)

 

51 

 

n/a

Prior year

22 

 

23 

 

 

n/a

168 

 

(61)

 

20 

%

(94)

 

28 

 

-

(1)    Excludes 157 kt third-party sales (30 June 2020: 207 kt).

(2)    Excludes impact of third-party sales. Price represents realised price.

(3)    C1 unit cost includes by-product credits.

(4)    Group revenue is shown after deduction of treatment and refining charges (TC/RCs). Total Copper and Other operations prior year comparatives have been restated. See note 2 to the Condensed financial statements for more details.

(5)    Figures on a 100% basis (Group's share: 50.1%).

(6)   44% share of Collahuasi production, sales and financials.

(7)      Figures on a 100% basis (Group's share: 60%), except capex which represents the Group's share after deducting direct funding from non‑controlling interests. H1 2021 capex on a 100% basis is $551 million, of which the Group's share is $331 million. H1 2020 capex on a 100% basis was $692 million, of which the Group's share was $415 million.

(8)      Other operations includes El Soldado and Chagres (figures on a 100% basis, Group's share: 50.1%), third-party sales and purchases, projects and corporate costs.

Financial and operational overview

Underlying EBITDA increased to $1,935 million (30 June 2020: $706 million), driven by record copper prices and a 5% increase in production.

 

The increase in production to 330,000 tonnes (30 June 2020: 313,900 tonnes) was mainly attributable to continued strong plant performance at Collahuasi and planned improved water availability at Los Bronces as a result of water management initiatives. Unit costs increased by 8%, reflecting the stronger Chilean peso, cost inflation and a rise in water management costs, partly offset by an increase in waste stripping capitalised, increased production and higher by-product credits.

 

Capital expenditure increased by 5% to $768 million (30 June 2020: $729 million), reflecting the adverse movement in the Chilean peso, higher capitalised waste stripping, increased investment in technology projects and routine capital replacement.

Markets

 

30 June 2021

30 June 2020

Average market price (c/lb)

413

249

Average realised price (c/lb)

460

250

The differences between the market price and realised price are largely a function of provisional pricing adjustments, with 181,072 tonnes of copper provisionally priced at 425 c/lb (30 June 2020: 124,800 tonnes provisionally priced at 273 c/lb), and the timing of sales across the period.

The average LME copper price increased by 66% compared with the same period in 2020, largely reflecting the strong recovery in economic activity following the impact of the Covid-19 pandemic in the first half of 2020, with demand rebounding sharply in China, ahead of other regions. Demand has been positively affected by the implementation of vaccination programmes, reinforced by government stimulus measures in advanced economies, as well as a renewed focus on global decarbonisation, where copper is key to the transition to a greener infrastructure and energy mix. Constraints on mine supply growth, evidenced by multi-year lows for smelter copper concentrate treatment terms, have underpinned copper's fundamentals, attracting fund interest. Prices reached a record high of 470c/lb in May 2021, although concerns around inflation and potential interest rate rises have tempered further advances.

Operational performance

Production increased by 5% to 330,000 tonnes (30 June 2020: 313,900 tonnes).

At Los Bronces, production increased by 9% to 163,200 tonnes (30 June 2020: 149,400 tonnes) due to higher water availability owing to water management initiatives, partially offset by planned lower grades (0.70% vs. 0.90%). Chile´s central zone, where the operation is located, continues to face severe climatic conditions. However, the impact on production has been fully mitigated by successful implementation of the water management initiatives. C1 unit costs increased by 11% to 155 c/lb (30 June 2020: 140 c/lb), with the benefit of higher production more than offset by the stronger Chilean peso, inflation and other cost increases associated with water management.

At Collahuasi, Anglo American's attributable share of copper production increased by 3% to 145,900 tonnes (30 June 2020: 142,200 tonnes), a record for the operation, principally driven by continued strong plant performance. C1 unit costs decreased by 16% to 58 c/lb (30 June 2020: 69 c/lb), reflecting the higher by-product credits and increased production, partially offset by the stronger Chilean peso and inflation.

Production at El Soldado decreased by 6% to 20,900 tonnes (30 June 2020: 22,300 tonnes) due to planned lower grades (0.73% vs. 0.87%). C1 unit costs increased by 5% to 213 c/lb (30 June 2020: 202 c/lb), as a result of lower production volumes, the stronger Chilean peso and inflation.

 

Operational outlook

Full year production guidance is 650,000-680,000 tonnes, subject to water availability and the extent of any Covid-19 related disruption. Full year C1 unit cost guidance is unchanged at c.120 c/lb.

Quellaveco update

Construction has continued to progress to plan during the first half of 2021, despite the severe restrictions in place in Peru throughout this time owing to Covid-19. Significant progress has been made in the construction of the primary crusher and breakthrough was achieved in the ore transport conveyor tunnel. At the processing plant, the flotation cells and the shells and motors for the SAG and ball mills are placed and are in the process of being mechanically and electrically prepared for pre-commissioning. Construction work at the Vizcachas dam - part of the infrastructure that will provide water to both the operation and local communities - is complete and the tailings starter dam has now been built to its full elevation.

 

Pre-stripping began in April, as planned, including the use of automated haul trucks and drills, a first for the mining industry in Peru. The first graduates from our pioneering truck operating programme, which has trained women with no previous mining experience from the local community as truck operators, are now operating in the field.

 

In April 2021, Quellaveco announced an agreement with Engie Energía Perú to provide 100% renewable electricity during operations, reducing carbon dioxide emissions by approximately 70% compared with the original project baseline projections.

 

Capital expenditure (on a 100% basis) was $0.6 billion and full year guidance is expected to be towards the lower end of the $1.3-1.6 billion range (100% basis), of which the Group's share is $0.8-1.0 billion.

 

Key activities ahead of commissioning during 2022 include progressing construction of the primary crusher; completing construction of the ore transport conveyor tunnel; finishing steel and concrete placement and installation of the shells and motors for both milling lines at the processing plant; completing the c.95-kilometre freshwater pipeline that will deliver water from the water source area to the Quellaveco site; and progressing construction of the tailings system.

 

Despite the ongoing impacts of the pandemic, the project remains on track to deliver first production in 2022 and within the total project capital expenditure estimate of $5.3-5.5 billion (100% basis; Group share $2.7-2.8 billion). All guidance remains subject to the extent of any further Covid-19 related disruption. Quellaveco expects to deliver around 300,000 tonnes per annum of copper equivalent production on average in its first 10 years of operation.

PLATINUM GROUP METALS

Financial and operational metrics

 

Production

volume

PGMs

Sales

volume

PGMs

Basket

price

Unit

cost*

Group

revenue*

Underlying

EBITDA*

Mining

EBITDA

margin*(6)

Underlying

EBIT*

Capex*

ROCE*

 

koz(1)

koz(2)

$/PGM oz(3)

$/PGM oz(4)

$m(5)

$m

 

$m

$m

 

PGMs

2,079 

 

2,568 

 

2,884 

 

866 

 

7,414 

 

4,383 

 

71 

%

4,211 

 

363 

 

160 

%

Prior year

1,620 

 

1,229 

 

1,956 

 

753

2,541 

 

610 

 

26 

%

476 

 

200 

 

24 

%

Mogalakwena

637 

 

712

2,748 

 

690 

 

1,958 

 

1,403 

 

72 

%

1,330 

 

189 

 

n/a

Prior year

560 

 

343 

 

2,018 

 

547 

 

683 

 

386 

 

57 

%

330 

 

90 

 

-

Amandelbult

341 

 

441 

 

3,247 

 

1,178 

 

1,432 

 

965 

 

67 

%

938 

 

34 

 

n/a

Prior year

218 

 

229 

 

2,103 

 

1,238 

 

475 

 

137 

 

29 

%

116 

 

14 

 

-

Other operations(7)

425 

 

521 

 

3,054 

 

880 

 

1,547 

 

1,116 

 

72 

%

1,059 

 

140 

 

n/a

Prior year

307 

 

249 

 

1,998 

 

804 

 

556 

 

(69)

 

(12)

%

(115)

 

96 

 

-

Processing and trading(8)

675 

 

894 

 

n/a

n/a

2,477 

 

899 

 

36 

%

884 

 

n/a

n/a

Prior year

535 

 

408 

 

 

 

827 

 

156 

 

19 

%

145 

 

n/a

-

(1)      Production reflects own-mined production and purchase of metal in concentrate. PGMs includes 5E metals and gold.

(2)      Sales volumes exclude the sale of refined metal purchased from third parties and toll material. PGMs includes 5E metals and gold.

(3)      Average US$ realised basket price. 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)    Total PGMs and Processing and trading prior year comparatives have been restated. See note 2 to the Condensed financial statements for more details.

(6)    The total PGMs mining EBITDA margin excludes the impact of the sale of refined metal purchased from third parties, purchase of concentrate and tolling.

(7)    Includes Unki, Mototolo and PGMs' share of joint operations. Other operations margin includes unallocated market development, care and maintenance, and corporate costs.

(8)    Purchase of concentrate from joint operations, associates and third parties for processing into refined metals, tolling and trading activities.

Financial and operational overview

Underlying EBITDA increased to $4,383 million (30 June 2020: $610 million), as a result of a 47% increase in the PGM basket price, driven mainly by the higher average rhodium price, as well as by sales volumes more than doubling. Unit costs increased by 15% to $866/PGM ounce (30 June 2020: $753/PGM ounce), reflecting a stronger South African rand and input cost inflation, partly offset by higher production volumes following the Covid-19 related shutdowns in the first half of 2020.

Capital expenditure increased by 82% to $363 million (30 June 2020: $200 million) due to lower capital expenditure in the first half of 2020 as a consequence of Covid-19, as well as the adverse impact of the stronger South African currency.

Markets

 

30 June 2021

30 June 2020

Average platinum market price ($/oz)

1,170 

 

848 

 

Average palladium market price ($/oz)

2,592 

 

2,136 

 

Average rhodium market price ($/oz)

24,662

9,254 

 

US$ realised basket price ($/PGM oz)

2,884

1,956 

 

PGM prices strengthened during the first six months of 2021 as a recovering global economy and continued strong automotive demand, driven by tighter emission standards, boosted demand, while supply was disrupted by the temporary closure of two Russian mines. Rhodium and palladium set new all-time highs of c.$30,000/oz and              c.$3,000/oz respectively, while platinum hit a six-year high of more than $1,300/oz. Strong industrial buying drove the average market prices for the minor PGMs significantly higher, with iridium more than tripling to reach an all-time high and ruthenium almost doubling to a 14-year high. Consequently, the average realised PGM basket price increased by 47% to $2,884/PGM oz, reflecting the strong pricing, particularly for rhodium and the minor metals, partly offset by higher than normal sales volumes of lower priced ruthenium during the first half of 2021.

Operational performance

Total PGM production increased by 28% to 2,079,100 ounces (30 June 2020: 1,620,000 ounces), reflecting the impact in the first half of 2020 of the temporary shutdown of operations in response to the Covid-19 pandemic, as well as strong production from Mogalakwena.

Own-mined production

PGM production from own-managed mines (Mogalakwena, Amandelbult, Unki and Mototolo) and equity share of joint operations increased by 29% to 1,404,100 ounces (30 June 2020: 1,084,800 ounces) following a robust recovery from the Covid-19 related shutdowns in the first half of 2020.

Mogalakwena PGM production increased by 14% to 637,400 ounces (30 June 2020: 559,900 ounces), largely driven by higher throughput and recoveries at the concentrators.

Amandelbult PGM production increased by 57% to 341,300 ounces (30 June 2020: 217,800 ounces), reflecting the impact of Covid-19 related shutdowns in the first half of 2020. Production was impacted in the first quarter of 2021 due to the stringent employee back to work health and safety protocols.

Production from other operations increased by 39% to 425,400 ounces (30 June 2020: 307,100 ounces), due to the effects of Covid-19 related shutdowns in the first half of 2020.

Purchase of concentrate

Purchase of concentrate, excluding tolling, increased by 26% to 675,000 ounces (30 June 2020: 535,200 ounces), reflecting the higher production from joint operations and third-parties.

Refined production and sales volumes

Refined PGM production (excluding toll-treated metal) more than doubled to 2,326,700 ounces (30 June 2020: 1,019,200 ounces) reflecting the strong recovery in the ACP Phase A performance following its successful rebuild in 2020, and despite planned maintenance at the Base Metals Refinery in the first quarter of 2021.

The ACP Phase B unit rebuild is on schedule for completion in the second half of 2021.

The ACP stoppages during 2020 resulted in an increase of work-in-progress inventory of 1.0 million ounces, which is expected to be drawn down over 2021 and 2022. In the first six months of 2021, approximately 200,000 PGM ounces of work-in-progress inventory was refined.

PGM sales volumes increased to 2,568,200 ounces (30 June 2020: 1,229,300 ounces), due to the higher refined production and the drawdown of refined inventory from minor metals to supplement sales.

Operational outlook

Full year production guidance (metal in concentrate) is 4.2-4.4 million ounces, with own-mined output accounting for c.65%. Refined PGM production guidance is 4.8-5.0 million ounces, subject to the impact of Eskom load-shedding. Both are subject to the extent of further Covid-19 related disruption. Full year unit cost guidance is revised to               c.$870/PGM ounce (previously c.$700/PGM ounce), reflecting the stronger South African rand, marginally reduced production volume expectations and inflation outlook for the remainder of 2021.

IRON ORE

Financial and operational metrics

 

Production

 volume

Sales

volume

Price

Unit

 cost*

Group

revenue*

Underlying

EBITDA*

Mining

EBITDA

margin*

Underlying

EBIT*

Capex*

ROCE*

 

Mt(1)

Mt(1)

$/t(2)

$/t(3)

$m(4)

$m(4)

 

$m(5)

$m

 

Iron Ore

31.9 

 

30.7 

 

210 

 

33 

 

6,935 

 

4,910 

 

70 

%

4,661 

 

278 

 

88 

%

Prior year

30.8 

 

31.8 

 

90 

 

25 

 

3,279 

 

1,827 

 

56 

%

1,606 

 

235 

 

34 

%

Kumba Iron Ore(6)

20.4 

 

19.6 

 

216 

 

40 

 

4,412 

 

3,033 

 

69 

%

2,860 

 

210 

 

211 

%

Prior year

18.2 

 

19.1 

 

91 

 

29 

 

1,914 

 

1,028 

 

54 

%

881 

 

174 

 

69 

%

Iron Ore Brazil (Minas-Rio)

11.5 

 

11.1 

 

200 

 

22 

 

2,523 

 

1,877 

 

73 

%

1,801 

 

68 

 

59 

%

Prior year

12.6 

 

12.7 

 

88 

 

19 

 

1,365 

 

799 

 

59 

%

725 

 

61 

 

25 

%

(1)    Production and sales volumes are reported as wet metric tonnes. The comparative has been restated as Kumba previously reported on a dry basis. Product is shipped with c.9% moisture from Minas-Rio and c.1.6% moisture from Kumba. Total iron ore is the sum of Kumba and Minas-Rio.

(2)      Prices for Kumba Iron Ore are the average realised export basket price (FOB Saldanha) (wet basis) and the comparative has been restated as Kumba previously reported on a dry basis. Prices for Minas-Rio are the average realised export basket price (FOB Açu) (wet basis). Prices for total iron ore are a blended average.

(3)      Unit costs are reported on an FOB wet basis. The comparative has been restated as Kumba previously reported on a dry basis. Unit costs for total iron ore are a blended average.

(4)      Total iron ore and Iron Ore Brazil prior year comparatives have been restated. See note 2 to the Condensed financial statements for more details.

(5)      Kumba Iron Ore segment includes $48 million projects and corporate costs (30 June 2020: $28 million). Iron Ore Brazil segment includes $40 million projects and corporate costs (30 June 2020: $26 million).

(6)      Sales volumes, stock and realised price differ to Kumba's stand-alone reported results due to sales to other Group companies.

 

Financial and operational overview

Kumba

Underlying EBITDA increased significantly to $3,033 million (30 June 2020: $1,028 million), driven by a higher average realised iron ore price of $216/tonne (30 June 2020: $91/tonne), partly offset by the stronger South African rand and higher unit costs of $40/tonne (30 June 2020: $29/tonne).

Total sales volumes increased by 3% to 19.6 Mt (30 June 2020: 19.1 Mt) due to a strong 12% increase in production following the Covid-19 related shutdowns in the first half of 2020, partly offset by rail constraints, inclement weather and bottlenecks at the port.

Capital expenditure increased by 21% to $210 million (30 June 2020: $174 million), owing to the effect of the stronger South African rand and planned higher spend related to the Kapstevel South pit life-extension project at Kolomela and the Ultra High Dense Media Separation (UHDMS) technology growth project at Sishen.

Minas-Rio

Underlying EBITDA more than doubled to $1,877 million (30 June 2020: $799 million), reflecting a higher average realised price and the impact of the weaker Brazilian real, despite lower volumes resulting from unplanned maintenance at the beneficiation plant. Unit costs increased by 16% to $22/tonne (30 June 2020: $19/tonne), as higher input costs, principally consumables and electricity, increased maintenance costs and lower volumes more than offset the benefit of the weaker Brazilian real.

Capital expenditure was 11% higher at $68 million (30 June 2020: $61 million), as the benefit of the weaker Brazilian real was partly offset by higher expenditure, including P101 initiatives.

Markets

 

30 June 2021

30 June 2020

Average market price (IODEX 62% Fe CFR China - $/tonne)

183

91

Average market price (MB 66% Fe Concentrate CFR - $/tonne)

209

104

Average realised price (Kumba export - $/tonne) (FOB wet basis)

216

91

Average realised price (Minas-Rio - $/tonne) (FOB wet basis)

200

88

Kumba's FOB realised price of $216/wet metric tonne was 33% higher than the equivalent IODEX 62% Fe FOB Saldanha market price of $163/wet metric tonne, principally reflecting the higher iron content at 64.1% and relatively high proportion (approximately 69%) of lump in the product portfolio (which helps steel mills reduce emissions). There was also a $22/tonne timing benefit (30 June 2020: $1/tonne negative timing impact), principally related to the pricing of our products on the date of delivery.

Minas-Rio's pellet feed product is also higher grade (higher iron content of 67% and lower impurities) than the reference product used for the IODEX 62% Fe CFR China index. The Metal Bulletin (MB) 66 index, therefore, is used when referring to Minas-Rio product. Adjusting for moisture, the Minas-Rio realised price of $200/wet metric tonne (30 June 2020: $88/wet metric tonne) was 21% higher than the average MB 66 FOB Açu index, again reflecting the premium quality of the product in terms of high iron content, as well as a $22/tonne timing benefit             (30 June 2020: $1/tonne) related to the pricing of our products on the date of delivery.

Operational performance

Kumba

Despite logistical capacity constraints, production increased by 12% to 20.4 Mt (30 June 2020: 18.2 Mt) relative to the first half of 2020, which was impacted by Covid-19 related disruptions. The increase was partly driven by improved plant availability following good progress made on scheduled plant maintenance. Sishen's production increased by 11% to 13.9 Mt (30 June 2020: 12.6 Mt) and Kolomela's increased by 14% to 6.4 Mt (30 June 2020: 5.7 Mt).

Minas-Rio

Production decreased by 9% to 11.5 Mt (30 June 2020: 12.6 Mt), owing to unplanned maintenance at one of the two ball mills in the beneficiation plant, with the majority of the volumes expected to be recovered during the remainder of the year.

Operational outlook

Kumba

Full year production guidance is 40.5-41.5 Mt, subject to the extent of further Covid-19 related disruption and rail performance.

Full year unit cost guidance is revised to c.$40/tonne (previously c.$34/tonne), reflecting the stronger South African rand and inflation outlook for the remainder of 2021.

Minas-Rio

Full year production guidance is 24-25 Mt, subject to the extent of further Covid-19 related disruption.

Full year unit cost guidance is revised to c.$23/tonne (previously $22/tonne), reflecting the stronger Brazilian real, marginally reduced volumes and inflation outlook for the remainder of 2021.

METALLURGICAL COAL

Financial and operational metrics

 

Production

volume

Sales

volume

Price

Unit

cost*

Group

revenue*

Underlying

EBITDA*

Mining

EBITDA

margin*

Underlying

EBIT*

Capex*

ROCE*

 

Mt(1)

Mt(2)

$/t(3)

$/t(4)

$m

$m(5)

 

$m(5)

$m

 

Metallurgical Coal

6.2 

 

6.0

115 

 

124 

 

736 

 

(94)

 

(13)

%

(383)

 

257 

 

(26)

%

Prior year

7.8 

 

7.8 

 

120 

 

97 

 

962 

 

(10)

 

(1)

%

(230)

 

287 

 

(16)

%

                                         

(1)      Production volumes are saleable tonnes, excluding thermal coal production of 0.9 Mt (30 June 2020: 0.9 Mt).

(2)      Sales volumes exclude thermal coal sales of 1.1 Mt (30 June 2020: 1.1 Mt).

(3)      Realised price is the weighted average hard coking coal and PCI sales price achieved at managed operations.

(4)    FOB cost per saleable tonne, excluding royalties and study costs.

(5)   Metallurgical Coal segment includes $28 million projects and corporate costs (30 June 2020: $30 million).

Financial and operational overview

Underlying EBITDA decreased, resulting in a $94 million loss (30 June 2020: $10 million loss), driven by 23% lower sales volumes, an associated 28% increase in unit costs to $124/tonne (30 June 2020: $97/tonne) and a 4% reduction in the weighted average realised price for metallurgical coal. The volume and cost performances were principally affected by the impact of the underground incident at Grosvenor in May 2020, where production is expected to resume towards the end of 2021, as well as the temporary suspension at Moranbah during the first half of 2021 in response to elevated gas levels.

Capital expenditure decreased by 10% to $257 million (30 June 2020: $287 million) due to a reduction in capital and development work at Moranbah and Grosvenor resulting from the suspension of underground activities in response to the operational incidents, partly offset by increased activity at the Aquila life-extension project.

Markets

 

30 June 2021

30 June 2020

Average benchmark price - hard coking coal ($/tonne)(1)

132 

 

137

Average benchmark price - PCI ($/tonne)(1)

110 

 

83

Average realised price - hard coking coal ($/tonne)(2)

117 

 

123

Average realised price - PCI ($/tonne)(2)

103 

 

98

(1)    Represents average spot prices.

(2)      Realised price is the sales price achieved at managed operations.

 

Average realised prices differ from the average market price owing to differences in material grade and timing of contracts. Hard coking coal price realisation marginally decreased to 89% of benchmark (30 June 2020: 90%), as sales consisted of a lower proportion of premium quality hard coking coal from Moranbah and Grosvenor.

Market prices decreased in the first half of 2021 as the ban on Australian-originated coal into Chinese ports remained in place and sentiment was negatively affected by the spread of Covid-19 in India. Market prices started to recover towards the end of the first half of 2021, as buyers of North American coal looked to swap out contracted volumes with lower priced Australian coal.

 

Operational performance

Production decreased by 20% to 6.2 Mt (30 June 2020: 7.8 Mt), principally due to the suspension of longwall operations at Grosvenor since May 2020 following the underground gas incident, and the elevated gas levels at Moranbah North that resulted in the stoppage of longwall operations from 21 February 2021 until 3 June 2021. Open cut operations are starting to return towards pre-Covid-19 production levels, having been scaled back at Dawson and Capcoal since mid-2020 in response to reduced demand for lower quality metallurgical coal. At Grosvenor, development activities safely resumed in early June 2021, as part of the staged approach to restarting the longwall mining operations towards the end of the year.

Operational outlook

Full year export metallurgical coal production guidance is 14-16 Mt, following a reduction earlier in 2021. Full year unit cost guidance is revised to c.$105/tonne (previously c.$75/tonne), reflecting the lower volumes and the stronger Australian dollar. Both are subject to the extent of any Covid-19 related disruption.

NICKEL AND MANGANESE

Financial and operational metrics

 

Production

volume(1)

Sales

volume(1)

Price

Unit

cost*

Group

revenue*

Underlying

EBITDA*

Mining

EBITDA

margin*

Underlying

EBIT*

Capex*

ROCE*

 

 

 

c/lb(2)

c/lb(3)

$m(4)

$m(5)

 

$m(5)

$m

 

Nickel and Manganese

n/a

n/a

n/a

n/a

695 

 

289 

 

42 

%

227 

 

10 

 

32 

%

Prior year

 

 

 

 

563 

 

218 

 

39 

%

132 

 

12 

 

12 

%

Nickel

20,700 

 

20,000 

 

721 

 

350 

 

325 

 

135 

 

41 

%

106 

 

10 

 

18 

%

Prior year

21,700 

 

20,400 

 

502 

 

336 

 

228 

 

64 

 

28 

%

 

12 

 

%

Manganese(6)

1.8 

 

1.9 

 

n/a

n/a

370 

 

154 

 

42 

%

121 

 

n/a

112 

%

Prior year

1.7 

 

1.7 

 

 

 

335 

 

154 

 

46 

%

123 

 

 

79 

%

(1)    Nickel production and sales are tonnes (t). Manganese production and sales are million tonnes (Mt).

(2)    Realised price.

(3)    C1 unit cost.

(4)    Nickel prior year revenue has been restated. See note 2 to the Condensed financial statements for more details.

(5)    Nickel segment includes $10 million projects and corporate costs (30 June 2020: $5 million).

(6)      Production, sales and financials include ore and alloy.

Financial and operational overview

Nickel

Underlying EBITDA increased to $135 million (30 June 2020: $64 million), reflecting higher realised nickel prices, continued operational stability and favourable foreign exchange movements.

 

Capital expenditure decreased by 17% to $10 million (30 June 2020: $12 million), attributable primarily to the weaker Brazilian real.

Manganese (Samancor)

Underlying EBITDA was in line with the same period in the prior year at $154 million (30 June 2020: $154 million), benefiting from a 15% increase in manganese ore sales, driven by higher South African production, offset by increased costs due to the stronger South African rand and Australian dollar.

Markets

Nickel

 

30 June 2021

30 June 2020

Average market price (c/lb)

793

566

Average realised price (c/lb)

721

502

Ferronickel is traded based on discounts or premiums to the LME nickel price, depending on market conditions, supplier products and consumer preferences. Differences between market prices and realised prices are largely due to variances between the LME and the ferronickel price.

The average LME nickel price of 793 c/lb was 40% higher than for the same period in 2020, as demand outstripped supply with demand benefiting from the easing of Covid-19 restrictions globally, with particularly robust consumption in stainless steel and batteries (electric vehicles and energy storage).

Manganese

The average benchmark price for manganese ore (Metal Bulletin 44% manganese ore CIF China) was broadly in line with the same period in the prior year at $5.03/dmtu (30 June 2020: $5.07/dmtu).

Operational performance

Nickel

Nickel production decreased by 5% to 20,700 tonnes (30 June 2020: 21,700 tonnes), reflecting planned lower ore grades.

Manganese

Attributable manganese ore production increased by 13% to 1.8 Mt (30 June 2020: 1.6 Mt), reflecting the impact of Covid-19 lockdowns in South Africa in the second quarter of 2020.

Operational outlook

Nickel

Full year production guidance is 42,000-44,000 tonnes, subject to the extent of further Covid-19 related disruption.

Full year C1 unit cost guidance is unchanged at c.360 c/lb.

CROP NUTRIENTS

Financial and operational metrics

 

Production

volume

Sales

volume

Price

Unit

cost

Group

revenue*

Underlying

EBITDA*

Mining

EBITDA

margin*

Underlying

EBIT*

Capex*

ROCE*

 

 

 

c/lb

c/lb

$m

$m

 

$m

$m

 

Crop Nutrients

n/a

n/a

n/a

n/a

53 

 

(12)

 

n/a

(12)

 

279 

 

n/a

Prior year

 

 

 

 

22 

 

 

 

 

91 

 

 

Woodsmith project

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

279 

 

n/a

Prior year

 

 

 

 

 

 

 

 

91 

 

 

Other(1)

n/a

n/a

n/a

n/a

53 

 

(12)

 

n/a

(12)

 

n/a

n/a

Prior year

 

 

 

 

22 

 

 

 

 

 

 

(1)      Other comprises projects and corporate costs as well as the share in associate results from Cibra, a fertiliser distributor based in Brazil.

 

Crop Nutrients

Anglo American is developing the Woodsmith project 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 mine is being constructed approximately 3 km south of Whitby, where polyhalite ore will be extracted via two 1.6 km deep mine shafts and transported to the port at Teesside on an underground conveyor belt system in a 37 km tunnel, thereby minimising impact on the surface above. It will then be granulated at a materials handling facility to produce a low-carbon footprint fertiliser product - known as POLY4 - that will be exported to a network of customers overseas from our dedicated port facility.

Woodsmith project

Development of the project has continued to progress, with capital expenditure of $279 million during the first half of the year. Excavation of the conveyor tunnel had passed 15 km at the end of June, beyond the intermediate shaft location at Lockwood Beck. At Lockwood Beck, shaft sinking is complete, having reached the target depth of 383 m, and shaft lining is under way. At the mine head, shaft boring has started in the services shaft, while good progress is also being made on the production shaft infrastructure.

Expected capital expenditure in 2021 is unchanged at c.$0.5 billion, while the detailed technical review of the project's development plan is completed, with the objectives of optimising the project and aligning it with Anglo American's technical and other standards. The review and subsequent finalisation of design and timing are expected to be complete by the end of the year, including final capital and schedule estimates. As previously indicated, the investment in additional ventilation to increase early production flexibility is likely to be brought forward, and we are also working through the detailed scheduling of the two shaft installations.

Market development - POLY4

Supply agreements with a global customer base are in place, including with a number of well-established counterparties such as Archer Daniels Midland Company, BayWa AG, Cibra, IFFCO and Wilmar Group. Many of these agreements have price levels benchmarked against the market prices of the underlying key nutrients within POLY4.

The ongoing focus of the market development activities is now around developing and implementing detailed sales and marketing strategies for each region and supporting customers with their own market development activities in order to further promote POLY4 to the end-users of the product.

The number of commercial scale on-farm demonstrations has accelerated, with around 550 now in progress or complete.The demonstrations continue to validate the efficacy of the product and potential improvements it can deliver to farmers in terms of crop yield, quality or both. In addition, POLY4 has been shown in studies to enhance soil health through resilience to compaction, erosion and run-off, as well as improving nutrient availability to crops, helping to reduce nutrient waste into watercourses. POLY4 offers farmers a sustainable solution to agricultural challenges as it is certified(1) for organic use and generates up to 85% fewer carbon emissions than the equivalent conventional nutrient products, with little to no waste generated in its production.

(1)      Currently certified for organic use in EU and North America with other certification pending for approval.

CORPORATE AND OTHER

Financial metrics

 

Production

volume

Sales

volume

Price

Unit

cost*

Group

revenue*

Underlying

EBITDA*

Underlying

EBIT*

Capex*

 

Mt(1)

Mt(2)

$/t(3)

$/t(4)

$m(5)

$m(6)

$m(6)

$m

Segment

n/a

n/a

n/a

n/a

907 

 

119 

 

(33)

 

98 

 

Prior year

 

 

 

 

756 

 

(7)

 

(103)

 

95 

 

Exploration

n/a

n/a

n/a

n/a

n/a

(42)

 

(43)

 

n/a

Prior year

 

 

 

 

n/a

(43)

 

(44)

 

 

Corporate activities and unallocated costs

n/a

n/a

n/a

n/a

135 

 

(27)

 

(103)

 

17 

 

Prior year

 

 

 

 

91 

 

 

(18)

 

 

Thermal Coal - South Africa(7)

5.7

5.3

77

46

553 

 

101 

 

70 

 

81 

 

Prior year

7.8 

 

7.2 

 

61 

 

39 

 

520 

 

20 

 

(8)

 

88 

 

Thermal Coal - Colombia(8)

3.6

3.4

65

34

219 

 

87 

 

43 

 

n/a

Prior year

2.7 

 

3.2 

 

46 

 

35 

 

145 

 

13 

 

(33)

 

 

(1)      Production volumes are saleable tonnes. South African production volumes include export primary production, secondary production sold into export markets, production sold domestically at export parity pricing and excludes other domestic production of 5.6 Mt (30 June 2020: 6.4 Mt).

(2)      South African sales volumes include export primary production, secondary production sold into export markets and production sold domestically at export parity pricing and exclude domestic sales of 5.3 Mt (30 June 2020: 6.0 Mt) and third-party sales of 6.4 Mt (30 June 2020: 5.6 Mt).

(3)      Thermal Coal - South Africa realised price is the weighted average export thermal coal price achieved. Excludes third-party sales from locations other than Richards Bay.

(4)    Thermal Coal - South Africa FOB cost per saleable tonne from the trade operations, excluding royalties and study costs.

(5)   Total segment and Thermal Coal - South Africa prior year comparatives have been restated. See notes 2 and 3 to the Condensed financial statements for more details.

(6)   Thermal Coal - South Africa includes $19 million projects and corporate costs (30 June 2020: $24 million).

(7)      Thermal Coal - South Africa mining activity included until the demerger on 4 June 2021, with prior year comparison up to 30 June 2020.

(8)    Represents the Group's attributable share from its 33.3% interest in Cerrejón. The sale of Anglo American's interest in Cerrejón is expected to complete in H1 2022, subject to regulatory approvals. The agreement is effective 31 December 2020 and, therefore, economic benefits from 1 January 2021 will not accrue to Anglo American, should the transaction complete.

 

Financial overview

Exploration

Exploration's underlying EBITDA loss was $42 million (30 June 2020: $43 million loss), reflecting decreased exploration activities across most product groups owing to the ongoing impact of Covid-19 related restrictions.

Corporate activities and unallocated costs

Underlying EBITDA was a $27 million loss (30 June 2020: $3 million gain), driven primarily by an increase in corporate costs across various technical and strategic projects, partially offset by an increase in profits on third-party shipping.

Thermal Coal - South Africa

Underlying EBITDA increased to $101 million (30 June 2020: $20 million), driven primarily by a 26% increase in the realised export thermal coal price, partly offset by lower export sales volumes of 5.3 Mt (30 June 2020: 7.2 Mt), mainly due to the demerger of operations on 4 June 2021. Unit costs increased by 18% to $46/tonne (30 June 2020: $39/tonne) due to the stronger South African rand and inflationary pressures, partly offset by placing the Bokgoni pit at Khwezela onto care and maintenance, as well as productivity improvements and cost savings.

Capital expenditure decreased by 8% to $81 million (30 June 2020: $88 million), principally as a result of the demerger of the operations and completion of the Navigation life-extension project at Khwezela, offset to some extent by the stronger South African rand.

Thermal Coal - Colombia

Underlying EBITDA increased to $87 million (30 June 2020: $13 million), benefiting from a 41% increase in the average realised price and a 6% increase in sales volumes, principally as a result of Covid-19 related restrictions affecting production during the first half of 2020. Unit costs decreased by 3% to $34/tonne (30 June 2020: $35/tonne), reflecting the higher production volumes and cost saving initiatives.

Markets

Thermal coal

 

30 June 2021

30 June 2020

Average market price ($/tonne, FOB South Africa)(1)

95 

 

67

Average market price ($/tonne, FOB Colombia)

71 

 

46

Average realised price ($/tonne, FOB South Africa)(2)

77 

 

61

Average realised price ($/tonne, FOB Colombia)

65 

 

46

(1)     The average market price until the demerger of the South Africa thermal coal operations effective 4 June 2021.

(2)     Realised price is the weighted average export thermal coal price achieved. Excludes third-party sales from locations other than Richards Bay.

 

The average realised price for export thermal coal differs from the average market price, due principally to quality discounts relative to the industry benchmark and timing differences.

The average market price for South African export thermal coal increased by 42% in the first half of 2021, compared with the same period in 2020. Recovering demand from the Covid-19 pandemic was supported by a cold snap in north Asia in the first quarter of 2021, as well as a heatwave in June across parts of the US and Europe. Prices were also helped by significant increases in oil, gas and power prices, as well as supply constraints owing to heavy rains in Indonesia and logistical bottlenecks across the other main thermal coal supply regions.

 

The average market price for Colombian export thermal coal increased by 54%, as demand recovered following the easing of Covid-19 related restrictions.

Operational performance

Thermal Coal - South Africa

Export production decreased by 27% to 5.7 Mt (30 June 2020: 7.8 Mt), mainly due to the demerger of operations on 4 June 2021, as well as the Bokgoni pit at Khwezela being placed onto care and maintenance.

Thermal Coal - Colombia

Anglo American's attributable production from its 33.3% ownership of Cerrejón increased by 30% to 3.6 Mt (30 June 2020: 2.7 Mt) owing to the impact of Covid-19 related restrictions on production in the first half of 2020.

Operational outlook

Export thermal coal

Following the demerger of the South Africa thermal coal operations on 4 June 2021, no further production will be reported by Anglo American. Anglo American's marketing business will continue to support Thungela in the sale and marketing of its products, and sales and purchases under the offtake agreement will be reported on a net basis together with the Group's other third-party trading activities.

The sale of Anglo American's 33% interest in Cerrejón is expected to complete in the first half of 2022, subject to regulatory approvals. The agreement is effective on the 31 December 2020 and, therefore, economic benefits from     1 January 2021 onwards will not accrue to Anglo American, should the transaction complete.

GUIDANCE SUMMARY

Production and unit costs

 

Unit costs

2021F

Production volumes

 

Units

2021F

2022F

2023F

Diamonds(1)

c.$62/ct

Mct

32-33

30-33

30-33

 

(previously c.$55/ct)

 

 

 

 

Copper(2)

c.120 c/lb

kt

650-680

680-790

890-1,000

PGMs - metal in concentrate(3)

 

c.$870/PGM ounce

 

Moz

 

 

4.2-4.4

4.2-4.6

4.2-4.6

 

(previously c.$700/PGM oz)

 

 

 

 

Platinum

 

Moz

1.9-2.0

1.9-2.1

1.9-2.1

Palladium

 

Moz

1.35-1.4

1.4-1.5

1.4-1.5

Other

 

Moz

0.95-1.0

0.9-1.0

0.9-1.0

 

 

 

 

 

 

PGMs - refined(4)

 

Moz

4.8-5.0

4.7-5.1

4.2-4.6

Iron ore(5)

c.$34/tonne

Mt

64.5-66.5

65.5-68.5

66.5-69.5

 

(previously c.$29/t)

 

 

(previously 65-68)

(previously 66-69)

Metallurgical coal(6)

c.$105/tonne

Mt

14-16

22-24

23-25

 

(previously c.$75/t)

 

 

 

 

Nickel(7)

c.360 c/lb

kt

42-44

42-44

47-49

Note: Unit costs exclude royalties, depreciation and include direct support costs only. FX rates for revised 2021 costs: ~14.3 ZAR:USD, ~1.3 AUD:USD, ~5.0 BRL:USD, ~728 CLP:USD (previously: ~16 ZAR:USD, ~1.4 AUD:USD, ~5.3 BRL:USD, ~760 CLP:USD). Production volumes are subject to the extent of further Covid-19 related disruption.

(1)    Unit cost is based on De Beers' share of production. Unit cost revision reflects the impact of exchange rates, marginally reduced production volumes and Covid-19 related disruptions. Production on a 100% basis except for the Gahcho Kué joint operation, which is on an attributable 51% basis, subject to trading conditions and ongoing operational challenges. Lower volumes in 2022 than 2021 as Venetia continues transition to underground operations.

(2)    Copper business unit only. On a contained-metal basis. 2022 total production volumes consist of Chile 580-640kt and Peru 100-150kt. 2023 total production volumes consist of Chile 590-650kt and Peru 300-350kt. Decrease in Chile production from 2022 driven by lower expected grades at Collahuasi and Los Bronces.

(3)    Unit cost is per own mined 5E + gold PGMs metal in concentrate ounce. Unit cost revision reflects the stronger South African rand, marginally reduced volumes and inflation outlook for the remainder of 2021. Production is 5E + gold produced metal in concentrate ounces. Includes own mined production (~65%) and purchased concentrate volumes (~35%).

(4)    5E + gold produced refined ounces. Includes own mined production and purchased concentrate volumes. Higher refined volumes in 2021 and 2022 owing to release of work-in-progress inventories. 2021 Pt: 2.2-2.3Moz; Pd: 1.55-1.6Moz; Other PGMs & Au: 1.05-1.1Moz. 2022 Pt: 2.2-2.4Moz; Pd: 1.5-1.6Moz; Other PGMs & Au: 1.0-1.1Moz. 2023 Pt: 1.9-2.1Moz; Pd: 1.4-1.5Moz; Other PGMs & Au: 0.9-1.0Moz.

(5)      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. 2021 Kumba: 40.5-41.5 Mt; Minas-Rio: 24-25 Mt. 2022 Kumba: 41.5-42.5 Mt; Minas-Rio: 24-26 Mt. 2023 Kumba: 41.5-42.5 Mt; Minas-Rio: 25-27 Mt. Volumes revision in 2022 and 2023 reflects the conversion of Kumba volumes to a wet basis as previously reported dry. Kumba volumes are subject to rail and port performance. Kumba unit cost revision to c.$40/tonne (previously c.$34/tonne) reflects the stronger South African rand and inflation outlook for the remainder of 2021. Minas-Rio unit cost revision to c.$23/tonne (previously c.$22/tonne) reflects the stronger Brazilian real, marginally reduced volumes and inflation outlook for the remainder of 2021.

(6)    Metallurgical Coal FOB/t unit cost comprises managed operations and excludes royalties and study costs. Unit cost guidance revision reflects the lower volumes (revised earlier in H1 2021) and the stronger Australian dollar. Volumes excludes thermal coal production in Australia. Lower production in 2020 and 2021 principally owing to Grosvenor stoppage (restart expected in H2 2021) as well as Moranbah suspension in H1 2021. 2022-2023 guidance subject to review.

(7)    Nickel business unit only. 2023 volumes dependent on bulk ore sorting technology and briquetting.

 

 

 

Capital expenditure(1)

 

2021F

2022F

2023F

Growth

$1.9-2.4bn

Includes ~$0.5bn Woodsmith capex

(previously $2.0-2.5bn)

$1.5-2.0bn

$1.5-2.0bn

Sustaining

~$3.6bn

(previously ~$3.7bn)

Reflects ~$3.0bn baseline plus ~$0.6bn lifex projects (previously ~$0.7bn)

~$4.2bn

Reflects ~$3.0bn baseline plus ~$0.9bn lifex projects and ~$0.3bn Collahuasi desalination plant(2)

~$4.1bn

Reflects ~$3.0bn baseline plus ~$0.8bn lifex projects and ~$0.3bn Collahuasi desalination plant(2)

Total

$5.5-6.0bn

(previously $5.7-6.2bn)

$5.7-6.2bn

$5.6-6.1bn

Further details on Anglo American's high quality growth and life-extension projects, including details of the associated volumes benefit, are disclosed on pages 13-16.

Long term sustaining capital expenditure is expected to be c.$3.0 billion per annum, excluding life-extension projects.

Other guidance

•       2021 depreciation: $3.0-3.2 billion (previously $3.2-3.4 billion)

•       2021 effective tax rate: 30-32%(3)

•       Long term effective tax rate: 30-33%(3)

•       Dividend pay-out 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 and reimbursement of capital expenditure. Shown excluding capitalised operating cash flows. Consequently, for Quellaveco, reflects attributable share of capex. Guidance includes unapproved projects and is, therefore, subject to progress of growth project studies and Woodsmith is excluded after 2021 pending completion of technical review. Refer to the H1 2021 results presentation slides 45 to 50 for further detail on the breakdown of the capex guidance at project level. Revision to 2021 capex guidance reflects impact of Covid-19.

(2)      Attributable share of capex.

(3)      Effective tax rate is highly dependent on a number of factors, including the mix of profits, and may vary from the guided ranges.

For further information, please contact:

Media

Investors

UK

James Wyatt-Tilby

james.wyatt-tilby@angloamerican.com

Tel: +44 (0)20 7968 8759

 

UK

Paul Galloway

paul.galloway@angloamerican.com

Tel: +44 (0)20 7968 8718

 

Marcelo Esquivel

marcelo.esquivel@angloamerican.com

Tel: +44 (0)20 7968 8891

 

Emma Waterworth

emma.waterworth@angloamerican.com

Tel: +44 (0)20 7968 8574

Katie Ryall

katie.ryall@angloamerican.com

Tel: +44 (0)20 7968 8935

 

Juliet Newth

juliet.newth@angloamerican.com

Tel: +44 (0)20 7968 8830

South Africa

Nevashnee Naicker

nevashnee.naicker@angloamerican.com

Tel: +27 (0)71 164 5719

Michelle Jarman

michelle.jarman@angloamerican.com

Tel: +44 (0)20 7968 1494

Sibusiso Tshabalala

sibusiso.tshabalala@angloamerican.com

Tel: +27 (0)11 638 2175

 

Nomonde Ndwalaza

Nomonde.ndwalaza@angloamerican.com

Tel: +27 (0) 11 638 0228

 

 

Notes to editors:

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

As a responsible producer of diamonds (through De Beers), copper, platinum group metals, premium quality iron ore and 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

 

Webcast of presentation:

A live webcast of the results presentation, starting at 9.00am UK time on 29 July 2021, can be accessed through the Anglo American website at 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.

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 (including development plans and objectives relating to Anglo American's products, production forecasts and Ore Reserves and Mineral Resource estimates) 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 transportation 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 Guidance and Transparency Rules of the Financial Conduct Authority, the Listings Requirements of the securities exchange of the JSE Limited in South Africa, the SIX Swiss Exchange, the Botswana Stock Exchange and the Namibian Stock Exchange and any other applicable regulations) to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in Anglo American's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Nothing in this document should be interpreted to mean that future earnings per share of Anglo American will necessarily match or exceed its historical published earnings per share.

Certain statistical and other information 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, though these may not necessarily correspond to the views held by Anglo American and Anglo American expressly disclaims any responsibility for, or liability in respect of, such information.

 

Anglo American plc

17 Charterhouse Street London EC1N 6RA United Kingdom

Registered office as above. Incorporated in England and Wales under the Companies Act 1985.

Registered Number: 3564138 Legal Entity Identifier: 549300S9XF92D1X8ME43

 

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