Anglo American combines nuGen with First ModeSource: RNS
7 December 2022
Anglo American combines nuGen™ with First Mode and invests $200m to accelerate Zero Emissions Haulage Solution
Anglo American has signed a binding agreement with First Mode Holding Inc ("First Mode") 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, first indicated in June 2022, is intended to accelerate the development and commercialisation of Anglo American's nuGen™ ZEHS. Anglo American acquired a 10% strategic equity interest in First Mode in 2021. The Transaction includes Anglo American making an additional capital investment of $200 million in the combined business to help fund the ongoing development of ZEHS which, upon completion of the Transaction, values the business in the order of $1.5 billion and results in Anglo American owning a majority shareholding in First Mode. The balance of the equity interest at that time will be held by a number of First Mode's founders and employees.
Upon closing of the Transaction, expected in January 2023, Anglo American will enter into a supply agreement with First Mode to decarbonise its global fleet of ultra-class mine haul trucks, of which approximately 400 are currently in operation, in support of Anglo American achieving its 2040 target for carbon neutral operations. The roll-out across Anglo American's haul truck fleet over the next c.15 years is subject to the completion of agreed and committed studies across seven mine sites, certain performance and cost criteria, and relevant regulatory, corporate and shareholder approvals. The supply agreement also includes the appropriate provision of 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.
In addition to accelerating the development and commercialisation of the ZEHS technology, the new combined business will 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.
The new combined business retains the First Mode name and will prioritise developing nuGen™ ZEHS, building on three years of extensive development by Anglo American and First Mode.
Notes to editors:
Anglo American launched the prototype of its nuGen™ ZEHS hydrogen-powered mine haul truck at its Mogalakwena PGMs mine in South Africa in May 2022 - the world's largest designed to operate in everyday mining conditions.
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 up to 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 global carbon reduction company developing creative, clean energy solutions for heavy industry's toughest problems. We started by removing the diesel engine from a colossal mining truck and replacing it with a hydrogen fuel cell powerplant. A world-first, and the world's largest. But we're not stopping there. We are also working on providing critical mine site infrastructure for hydrogen production, battery recharging, and hydrogen refuelling. Today, we're starting at the source, the mining industry, and tomorrow the larger supply chain, to completely eliminate the use of diesel and speed the clean energy transition.
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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