Anglo American to combine nuGen with First ModeSource: RNS
30 June 2022
Anglo American agrees to combine nuGen™ with First Mode to accelerate Zero Emissions Haulage Solution
Anglo American is in exclusive negotiations with First Mode Holding Inc ("First Mode"), and has agreed non-binding terms, to combine Anglo American's nuGen™ Zero Emissions Haulage Solution ("ZEHS") with First Mode, the specialist engineering technology company that partnered with Anglo American to develop the nuGen™ ZEHS (the "Transaction").
The Transaction would include a capital investment by Anglo American in the combined business and is intended to accelerate the development and commercialisation of Anglo American's nuGen™ ZEHS. The new combined business would retain the First Mode name as an independent business and prioritise developing nuGen™ ZEHS, building on three years of extensive development by Anglo American and First Mode.
Anglo American launched the prototype of its nuGen™ ZEHS hydrogen-powered mine haul truck at its Mogalakwena PGMs mine in South Africa on 6 May 2022 - the world's largest designed to operate in everyday mining conditions. The agreement envisages that Anglo American will enter into an agreement with First Mode to decarbonise its global fleet of ultra-class mine haul trucks, of which approximately 400 are currently in operation, as well as provide critical supporting infrastructure such as refuelling, recharging, and facilitation of hydrogen production.
Anglo American also recognises its role in supporting broader decarbonisation objectives outside its own business. The technologies and capabilities that it has been developing as part of the nuGen™ project with First Mode present opportunities beyond Anglo American's haul truck fleet, including across other industries that rely on heavy duty forms of transport, such as rail.
Anglo American acquired a 10% strategic equity interest in First Mode in 2021. The Transaction would include Anglo American making an additional capital investment in the combined business which, upon completion of the Transaction, would result in a majority shareholding. The balance of the equity interest at that time would be held by a number of First Mode's founders and employees. In addition to accelerating the development and commercialisation of the ZEHS technology, the new combined business would allow strategic third parties to co-invest alongside Anglo American and First Mode, offering the opportunity to accelerate their own decarbonisation and participate in the potential offered by the clean ZEHS technology.
Notes to editors:
Conceived as part of Anglo American's FutureSmart Mining™ programme, nuGen™ ZEHS is an end-to-end solution to decarbonise heavy duty transport and includes hydrogen production, on-site storage, ultra-heavy duty refuelling and hydrogen-battery hybrid powertrains to replace incumbent fossil fuel technology. With diesel emissions from its mine haul truck fleets accounting for 10-15% of Anglo American's total Scope 1 emissions, and haulage trucks accounting for approximately 80% of diesel emissions at open pit mines, nuGen™ ZEHS will play an important role in delivering not only Anglo American's target of carbon neutral operations by 2040, but also supporting the decarbonisation of the mining industry, with potential across other industries.
First Mode is a creative engineering company building the barely possible to enable a sustainable future for everyone. We design and deliver critically needed products and technologies focused on zero-emission mobility, decarbonisation of heavy industry, and production and distribution of green hydrogen. Our more than 200 engineers and other employees in Seattle, USA and Perth, Australia empower our clients to leverage cutting-edge solutions to achieve their sustainability objectives and help our planet survive and thrive. First Mode customers currently make use of a variety of OEM platforms and site infrastructure. The nuGen™ ZEHS makes use of prior investments and fleets, offering the optimal mix of technologies depending on each site. These variations will include battery, hydrogen, and hybrid systems, with the ability to integrate into trolly assist and autonomy programmes.
Anglo American is a leading global mining company and our products are the essential ingredients in almost every aspect of modern life. Our portfolio of world-class competitive operations, with a broad range of future development options, provides many of the future-enabling metals and minerals for a cleaner, greener, more sustainable world and that meet the fast growing every day demands of billions of consumers. With our people at the heart of our business, we use innovative practices and the latest technologies to discover new resources and to mine, process, move and market our products to our customers - safely and sustainably.
As a responsible producer of diamonds (through De Beers), copper, platinum group metals, premium quality iron ore and steelmaking coal, and nickel - with crop nutrients in development - we are committed to being carbon neutral across our operations by 2040. More broadly, our Sustainable Mining Plan commits us to a series of stretching goals to ensure we work towards a healthy environment, creating thriving communities and building trust as a corporate leader. We work together with our business partners and diverse stakeholders to unlock enduring value from precious natural resources for the benefit of the communities and countries in which we operate, for society as a whole, and for our shareholders. Anglo American is re-imagining mining to improve people's lives.
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Such forward-looking statements are based on numerous assumptions regarding Anglo American's present and future business strategies and the environment in which Anglo American will operate in the future. Important factors that could cause Anglo American's actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, levels of actual production during any period, levels of global demand and commodity market prices, mineral resource exploration and development capabilities, recovery rates and other operational capabilities, safety, health or environmental incidents, the effects of global pandemics and outbreaks of infectious diseases, the outcome of litigation or regulatory proceedings, the availability of mining and processing equipment, the ability to produce and transport products profitably, the availability of transport infrastructure, the impact of foreign currency exchange rates on market prices and operating costs, the availability of sufficient credit, the effects of inflation, political uncertainty and economic conditions in relevant areas of the world, the actions of competitors, activities by courts, regulators and governmental authorities such as in relation to permitting or forcing closure of mines and ceasing of operations or maintenance of Anglo American's assets and changes in taxation or safety, health, environmental or other types of regulation in the countries where Anglo American operates, conflicts over land and resource ownership rights, the possibility that the proposed combination of Anglo American's nuGen™ ZEHS with First Mode may not be completed in a timely manner or at all, or that Anglo American and First Mode may fail to agree upon commercial terms for their arrangement or fail to finalise and enter into definitive documentation relating to the anticipated transaction, the possibility that the final terms of any transaction with First Mode may differ, including materially, from the terms currently anticipated, any failure of Anglo American or First Mode to obtain the necessary regulatory approvals to consummate the proposed combination and such other risk factors identified in Anglo American's most recent Annual Report. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this document. Anglo American expressly disclaims any obligation or undertaking (except as required by applicable law, the City Code on Takeovers and Mergers, the UK Listing Rules, the Disclosure and Transparency Rules of the Financial Conduct Authority, the Listings Requirements of the securities exchange of the JSE Limited in South Africa, the SIX Swiss Exchange, the Botswana Stock Exchange and the Namibian Stock Exchange and any other applicable regulations) to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in Anglo American's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
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