TIDMAAL
RNS Number : 7705Q
Anglo American PLC
23 February 2023
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23 February 2023
Anglo American Preliminary Results 2022
Portfolio quality, diversification and growth support underlying
EBITDA of $14.5 billion
Financial highlights for the year ended 31 December 2022
-- Underlying EBITDA* of $14.5 billion
-- Profit attributable to equity shareholders of $4.5
billion
-- Net debt* of $6.9 billion (<0.5 x underlying EBITDA): cash
generation offset by investment in value-adding growth
-- Woodsmith impaired by $1.7 billion due to extended
development schedule and budget, designed to deliver maximum
returns over long life of asset
-- Quellaveco commissioned on time and on budget: multi-decade
copper operation ramping up
-- $0.9 billion final dividend, equal to $0.74 per share,
consistent with our 40% payout policy.
Duncan Wanblad, Chief Executive of Anglo American , said: "Anglo
American offers a differentiated investment proposition of
portfolio quality, diversification and growth, positioning us
strongly for the structurally attractive long term dynamics. Our
unwavering focus is on driving consistent performance across our
operations - which starts with the safety and health of our
employees - and progress towards our full suite of sustainability
ambitions, including our 2040 carbon neutral operations
commitment.
"Safety always comes first as we strive to reach zero harm for
every one of our people, every single day. While we continue to
make progress on our long term safety journey and further develop
our safety processes and procedures, we were deeply saddened to
lose two colleagues at our managed operations during the year. We
will not rest until zero harm is achieved and sustained across our
business.
"We continued to feel the effects of dislocations in the global
economy on our business in 2022 - in energy, and across supply
chains and labour markets. Extreme weather has disrupted the lives
of so many, with exceptional rainfall also setting back several of
our operations, while the energy crisis caused policymakers to
react to mitigate sharply higher inflation. With that backdrop, we
built momentum during the year with our focus on regaining
operational stability and targeted incremental performance
improvement.
"Underlying EBITDA of $14.5 billion, a 30% decrease compared
with the record achieved in 2021, reflects inflationary headwinds
and higher energy prices combined with lower production volumes
which, together, lifted our production costs amid dampened prices
for many of our products. We delivered a return on capital employed
of 30% - above our targeted 15% through-the-cycle return - and a
mining EBITDA margin of 47%. Our commitment to capital discipline
and to a strong and flexible balance sheet is paramount to remain
resilient to the external environment and retain optionality for
value-adding growth. Net debt increasing to $6.9 billion, or less
than 0.5 x underlying EBITDA, reflects the growth investments we
are making in line with our belief in the strong long term
fundamentals. Our $0.9 billion final dividend of $0.74 per share is
in line with our 40% payout policy.
"The fundamental demand picture for future-enabling metals and
minerals - particularly those that are responsibly sourced with
traceable provenance - is ever more compelling. Our new Quellaveco
copper operation in Peru increases our global production base by
10% (1) and is the cornerstone of our value-adding growth potential
of 25% (2) over the next decade, with further optionality beyond,
from copper to crop nutrients. As most of the world's major
economies accelerate their decarbonisation efforts and as the
global population increases and continues to urbanise, we aim to
keep growing the value of our business into that demand."
Year ended 31 December 2022 31 December 2021 Change
================ ================ ======
US$ million, unless otherwise stated
========================================================== ================ ================ ======
Revenue 35,118 41,554 (15) %
========================================================== ================ ================ ======
Underlying EBITDA* 14,495 20,634 (30)%
Mining EBITDA margin* 47% 56%
========================================================== ================ ================ ======
Attributable free cash flow* 1,585 7,803 (80)%
========================================================== ================ ================ ======
Profit attributable to equity shareholders of the Company 4,514 8,562 (47)%
========================================================== ================ ================ ======
Basic underlying earnings per share* ($) 4.97 7.22 (31)%
Basic earnings per share ($) 3.72 6.93 (46)%
========================================================== ================ ================ ======
Final dividend per share ($) 0.74 1.18 (37)%
Interim dividend per share ($) 1.24 1.71 (27)%
Additional returns per share ($) - 2.10 n/a
========================================================== ================ ================ ======
Total dividend and buyback per share ($) 1.98 4.99 (60)%
========================================================== ================ ================ ======
Group attributable ROCE* 30% 43%
========================================================== ================ ================ ======
See page 2 for footnotes. Terms with this symbol * are defined
as Alternative Performance Measures (APMs). For more information,
refer to page 86.
Sustainability performance
Key sustainability performance indicators (3)
Anglo American tracks its strategic progress using KPIs that are
based on our seven pillars of value: safety and health,
environment, socio-political, people, production, cost, and
financial. In addition to the financial performance set out above
and our operational performance on pages 7-40, our performance for
the first four pillars is set out below:
Pillar 31 December 31 December
of value Metric 2022 2021 (4) Target Target achieved
============ ========================== =========== =========== =================== ===============
Safety
and Work-related fatal
health injuries (5) 2 2 Zero Not achieved
Total recordable
injury frequency
rate per million Year-on-year
hours (5) 2.19 2.24 reduction On track
New cases of occupational Year-on-year
disease 5 16 reduction On track
Employees potentially
exposed to noise Year-on-year
over 85 dBA (6)(7) 23,179 30,832 reduction On track
Employees potentially
exposed to inhalable
hazards over the 5% reduction
occupational exposure year-on-
limit (6)(7) 317 1,796 year On track
======================================= =========== =========== =================== ===============
Improve energy
efficiency
Energy consumption by 30% by
Environment (million GJ) (7) 83 84 2030 On track
GHG emissions Reduce absolute
- Scopes 1 & 2 13.3 14.5 GHG On track
emissions
(Mt CO 2 e) (7) by 30%
by 2030
Reduce fresh
water
abstraction
in water
scarce areas
Fresh water withdrawals by 50%
(ML) (7)(8) 35,910 36,888 by 2030 On track
Level 4-5 environmental
incidents (7) 0 0 Zero On track
======================================= =========== =========== =================== ===============
Full implementation
of the
Social Way 3.0 Social Way
Socio- implementation 3.0 by Behind
political (9) 66% 49% end 2022 schedule
Local procurement
spend ($bn) (10) 13.6 10.0
Taxes and royalties
($m) (11) 5,893 7,134
Number of jobs
supported off
site (12) 114,534 104,860
======================================= =========== =========== =================== ===============
To achieve
People Women in management 32% 31% 33% by 2023 On track
Women in the workforce 24% 23%
Voluntary labour
turnover 3.6% 3.5% < 5% On track
======================================= =========== =========== =================== ===============
(1) Copper equivalent volume growth from 2022 baseline, pre the
commissioning of Quellaveco.
(2) Copper equivalent production basis. Calculated including the
equity share of De Beers' production and using long term consensus
parameters. It is normalised to reflect the demerger of the South
Africa thermal coal operations and the sale of our interest in
Cerrejón. Future production levels are indicative and subject to
final approval.
(3) Sustainability performance indicators for the year ended 31
December 2022, and the comparative period, are not externally
assured, unless otherwise stated.
(4) 2021 data includes Thermal Coal South Africa until the date
of the Thungela demerger on 4 June 2021, unless otherwise
stated.
(5) Safety data is externally assured. The work-related fatal
injuries figure presented for 2021 has been restated to reflect the
death of an employee in April 2022, following a fall-related injury
in November 2021. While the Group's TRIFR improved year-on-year, it
has not yet
decreased below the rate experienced in 2020. The focused safety
interventions in the second half of 2022 did, however, result in a
significant improvement in our injury rates, with a H2 2022 TRIFR
of 2.00.
(6) Reflects the number of employees who work in environments
where there is potential for exposure above the exposure limit. All
employees working in such environments are issued with protective
equipment to prevent occupational illness.
(7) Energy, GHG emissions, occupational exposure, fresh water
withdrawals and Level 4-5 environmental incidents data is
externally assured. Energy, GHG emissions, fresh water withdrawals
and occupational exposure data for 2021 excludes Thermal Coal South
Africa.
(8) Water metric and data have been revised in line with our
fresh water definition.
(9) While sites are assessed annually against all requirements
applicable to their context, for consistency during the transition
period, the metric reflects performance against the Social Way
foundational requirements. For further information on progress, see
page 5.
(10) Local procurement spend relates to spend within the country
where an operation is located. The basis of calculation reflects
the Group's financial accounting consolidation, i.e. 100% of
subsidiaries and a proportionate share of joint operations, based
on Anglo American's shareholding.
(11) Taxes and royalties include all taxes and royalties borne
and taxes collected by the Group. This includes corporate income
taxes, withholding taxes, mining taxes and royalties, employee
taxes and social security contributions and other taxes, levies and
duties directly incurred by the Group, as well as taxes incurred by
other parties (e.g. customers and employees) but collected and paid
by the Group on their behalf. Figures disclosed are based on cash
remitted, net of entities consolidated for accounting purposes,
plus a proportionate share, based on the percentage shareholding,
of joint operations. Taxes borne and collected by equity accounted
associates and joint ventures are not included.
(12) Jobs supported since 2018, in line with the Sustainable
Mining Plan Livelihoods stretch goal.
Safety
Anglo American's most important priority is always safety -
keeping our colleagues safe and well. We believe everybody,
everywhere should return home each and every day. 'Always safe' is
our safety vision and safety is our number one value.
In 2022, we continued to implement our safety strategy through
targeted tactics, and by investing in systems, standards and
people. We enabled this through digital innovation and advanced
systems, informing and eliminating and minimising risk wherever
possible as we seek to be an innovative safety leader.
While we continue to make progress on our long term safety
journey, we were deeply saddened to lose two colleagues at our
managed operations during the year - at our Steelmaking Coal
business in Australia and at a De Beers operation in Canada, as
well as the loss of a colleague from a complication following an
injury sustained in our PGMs business in 2021. We also lost one
colleague at an non-managed PGMs joint operation in South Africa.
As well as thoroughly and rigorously investigating each of these
tragic incidents and sharing learnings internally, we are committed
to also sharing those learnings across the industry so that action
can be taken to help prevent repeats and achieve our 'Always safe'
vision on a sustainable basis.
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. Everyone is empowered to be a leader in safety
and has a role to play in delivering an injury-free and
fatality-free workplace.
Our total recordable injury frequency rate (TRIFR) improved by
2% to 2.19 (2021: 2.24), reflecting the urgent safety reset and
calls to action completed across the Group in the second half of
the year, in response to the fatal incidents and the deterioration
in overall safety performance in the first half. We remain
absolutely committed to working towards a step-change in the
reduction of injuries.
Safety is often the first topic discussed in meetings across the
Group, from operations to our corporate offices. We continually
focus on improving our safety performance by strengthening our
culture, including ensuring our workforce feels safe to speak up
about concerns related to safety, and making specific safety
interventions when we see deficiencies in our operations.
During 2022, our areas of focus included Chief Executive safety
summits with senior leaders from across the business units;
observing and actively monitoring mandatory critical controls for
common catastrophic and fatal risks; sharing of lessons learned and
actions taken from incidents across the organisation; safety
stand-downs (voluntary events to pause production and talk with
employees and contractors about safety); employee-engagement
sessions; and enhanced reporting and progress tracking of
safety-improvement initiatives.
We also held Contractor Safety Engagement Summits between senior
Anglo American leaders and key suppliers around the world.
Health
Our health focus remains on helping keep our people protected
from Covid-19, while sustaining our work to continuously improve
our key health measures. We continued to work to prevent the spread
of Covid-19 among our employees and in our host communities,
primarily through testing and providing access to vaccines and
boosters as
part of our WeCare programme. This approach provides three
phases of support - Prevention, Response and Recovery - relating to
physical health, mental health, living with dignity, and community
response interventions.
Alongside the continued deployment of testing, we also focused
on vaccine access. We worked in close partnership with national and
local governments around the world to help deliver vaccinations to
our employees, contractors and host communities. We have mobilised
resources to manage 'long Covid', where people continue to feel
symptoms of the disease for weeks or even months after its typical
course.
In 2022, there were 5 reported new cases of occupational
disease, all related to noise exposure (2021:16). Reducing exposure
to noise, which remains our single greatest occupational health
risk, is a significant challenge. While all our employees are
issued with and trained in the use of PPE, there are still as many
as 23,000 employees in the workplace where noise levels can exceed
applicable exposure levels, rending the proper use of PPE necessary
as a mitigation mechanism. The identification and monitoring of
critical noise controls allow us to analyse the effectiveness of
our controls and develop additional measures. The comprehensive
roll-out of diesel particulate filters across our PGMs business
contributed to the reduction in employees exposed to inhalable
hazards.
In 2022, we focused on the implementation of our Health and
Well-being strategy in line with the World Health Organization
(WHO) principles, covering employee health, in accordance with our
global approach to quality of life.
We understand there is a continuum between the workplace and
home and host communities. We are committed to dedicating the
resources required to apply evidence-based interventions, including
emerging digital solutions, aimed at reducing risks associated with
occupational diseases, as well as with unhealthy lifestyles,
including smoking and poor diet.
Our many years of work with employees and host communities on
HIV/AIDS and TB, and over nearly three years on Covid-19, have
positioned us to extend our learnings from managing communicable
diseases to non-communicable diseases, a major focus in 2022.
The launch of our digital health strategy is driven by the
concept of virtual care and our ability to use mobile data devices
and a growing range of applications to help individuals harness
their own health information.
People
Tightly linked to our safety imperative and our Values, we
strive to create a workplace that places people even more at its
heart. People are central to everything we do, and each individual
has expectations of us. Workforce engagement is a priority for
every leader at Anglo American and we aim to create safe, inclusive
and diverse workplaces that encourage high performance and
innovative thinking. We have zero tolerance for any form of
bullying, harassment or victimisation and we know there is no room
for complacency when it comes to culture in any organisation. To
that end, we have extensive training, systems and processes in
place to keep improving both physical and psychological safety. We
will continue to embed and launch initiatives that will allow us to
realise our vision of a truly inclusive workplace where every
employee can reach their full potential.
We also continue to make further progress to reach our gender
representation goal of 33% female representation by the end of 2023
at all management levels, across the business. We have set a
similar target for 33% of our Group Management Committee and those
reporting to the committee to be women by the end of 2023. The
proportion of women at this level was in line with the prior year
at 29%. At the end of 2022, and across Anglo American as a whole,
24% of our employees were women.
Living with Dignity - building a safe and inclusive culture
Building a safe and inclusive culture has been a focus for us
for a number of years and this is constant work for any company or
society. We are committed to listening to our people and other
stakeholders that are close to our business every day.
We have long understood the role of our business in society, and
we believe that this extends beyond our own mine gates. We launched
our Living with Dignity programme in 2019, founded on the belief
that everyone has the right to dignity - in our homes, schools, at
work and everywhere in between. Through this programme, Anglo
American is working collaboratively with our partners in government
and civil society to build sustainable partnerships aimed at
providing direct employee and community support to combat
gender-based and domestic violence.
We continue to build on this important work and we have now
established our Living with Dignity Hub in South Africa that brings
together our policies and its mandates to provide ongoing and
committed support to our employees, contractors and their families.
The hub handles all formal complaints of sexual harassment and
gender-based violence and bullying, harassment and victimisation
across our South African footprint and is overseen by an
independent Ambassador to ensure we stand by our policies and
remain committed to amplifying our efforts.
Environment
Our Sustainable Mining Plan includes commitments to be a leader
in environmental stewardship. By 2030, we aim to reduce GHG
emissions (Scopes 1 and 2) by 30%; improve energy efficiency by
30%; achieve a 50% reduction in fresh water abstraction in water
scarce areas; and deliver net-positive impacts in biodiversity
wherever we operate.
Our environmental performance continues to improve. In 2022, we
saw no Level 5 environmental incidents at our managed operations,
for the tenth consecutive year, and no Level 4 incidents. There
was, unfortunately, one Level 3 incident reported in 2022, at our
Polokwane PGMs smelter, related to water discharge following a
period of significant storm water. The discharge did not result in
any environmental toxic impact. A full investigations was carried
out and lessons learned across both PGMs and the wider Anglo
American Group. We launched a 'no repeats' challenge last year 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.
Both energy consumption and GHG emissions decreased in the year
and we remain committed to improving energy efficiency by 30% and
reducing absolute GHG emissions by 30%, by 2030. We have a target
to be carbon neutral across our operations by 2040, and an ambition
to halve our Scope 3 emissions, also by 2040. We are making
encouraging progress. In 2020, around one third of the electricity
Anglo American used globally was drawn from renewables. Having
secured 100% renewable electricity supply across our operations in
South America from 2023, and for our Steelmaking Coal operations in
Australia from 2025, we expect to be drawing approximately 60% of
our global grid supply from renewables from 2025.
As part of the our ambition to reduce our Scope 3 emissions by
50% by 2040, we are focusing on hard-to-abate sectors such as steel
- from which most of our value chain emissions derive. We are
joining forces with steelmakers in Europe and Asia to research
efficient feed materials - capitalising on the premium physical and
chemical qualities of our minerals, including iron ore pellets and
lump iron ore. These premium products are suited for use in the
direct reduced iron (DRI) process, a technically proven and
significantly less carbon intensive steel production method.
Examples of this approach include the memorandum of
understanding (MOU) announced in July, between Anglo American and
Nippon Steel Corporation, where the two companies will research
ways to optimise premium lump ore produced by Anglo American's
mines to decrease emissions via the traditional blast furnace (BF)
steelmaking process; and the MOU announced in October, between
Anglo American and its longstanding customer Thyssenkrupp Steel, to
collaborate on developing new pathways for the decarbonisation of
steelmaking.
Socio-political
In 2022, we continued working to strengthen and broaden our
social performance competencies through embedding the Social Way
3.0 (launched in 2020) across the organisation. As part of the
implementation process, each site and function has established
cross-functional Social Performance Management Committees.
Over 2,000 people across the business have participated in
Social Way training sessions since 2020. This includes orientation
sessions for leaders, completing Social Way Foundation Training, as
well as cross-functional Social Way Foundation Training for
non-social performance teams, at all sites, business units and
relevant functions.
At the end of 2022, 66% of Social Way 3.0 foundational
requirements were implemented. While we did not meet our ambitious
goal of implementation of the Social Way 3.0 at all sites by the
end of 2022, we continued to make significant progress and
recognise the very much higher standards (the highest that we are
aware of across our industry) required of this third version of our
social management system. The programme is critical to underpinning
many of our ambitious 2030 Sustainable Mining Plan targets,
demonstrating our commitment to partnering with host communities
and governments.
The success of our business drives tax revenues for host
communities, in addition to significant royalty and mining tax
payments made regardless of our profitability, and our broader
economic contribution to other stakeholders. Total taxes and
royalties borne and taxes collected amounted to $5.9 billion, a 17%
decrease compared with 2021.
Anglo American has committed to support three off site jobs by
2025, and five off site jobs by 2030 for every on site job. Since
the launch our Sustainable Mining Plan, 114,534 off site jobs have
been supported through socio-economic development programmes,
including local procurement, enterprise and supplier development
initiatives, training, mentoring and capacity development, loan
funding to small businesses, agriculture programmes, and
collaborative regional development initiatives.
In June, we signed a $100 million 10-year sustainability-linked
loan agreement with the International Finance Corporation. The
specific goals tied to the loan agreement are aimed at supporting
community development in rural communities close to our operations
across South Africa, including by promoting the creation of jobs,
as well as improving the quality of education for more than 73,000
students.
In September, we issued our first sustainability-linked bond,
including performance targets to reduce greenhouse gas emissions
and fresh water abstraction, and to support job creation in host
communities. This EUR745 million bond is the first instrument
issued following the publication of Anglo American's Sustainability
Financing Framework and bond investors will be entitled to a higher
final coupon payment should the company not meet the targets.
Sustainable Mining Plan - update in progress
We launched Anglo American's Sustainable Mining Plan in 2018,
setting out three sustainability pillars and a number of medium and
longer term stretch goals for each, guided by our Purpose and
supported by six critical foundations that underpin how we do
business. The three pillars of Healthy Environment, Thriving
Communities, and Trusted Corporate Leader encapsulate the holistic
realities of what it means to be a socially responsible and
ultimately sustainable business. We continue to make good progress
towards our 2025 and 2030 goals, as laid out in the table on page
2, in addition to progress towards our 2040 carbon neutral
operations target that we added in 2020.
Our Sustainable Mining Plan is designed to be a living plan and
we will continue to evolve it to ensure it stays relevant and
suitably stretching, in tune with our employees' and stakeholders'
ambitions for our business. We are currently exploring a number of
areas that we feel would benefit from being incorporated into the
Sustainable Mining Plan and will update the plan when we have
developed these options more fully.
Operational and financial review of Group results for the year
ended 31 December 2022
Operational performance
The impact of adverse weather and planned lower grades at many
of our operations contributed to a 2% production decrease on a
copper equivalent basis (1) . Extreme rainfall in Brazil, South
Africa and Australia affected iron ore production at Minas-Rio and
Kumba, steelmaking coal production at Capcoal and Dawson, and
nickel production at Barro Alto. First copper concentrate
production from our newly commissioned Quellaveco copper mine in
Peru more than offset lower production at our copper operations in
Chile that were due to planned lower grades at Los Bronces and
Collahuasi. Lower grades also impacted production at Mogalakwena
(PGMs) and Barro Alto (Nickel). The planned end of mining at the
Grasstree steelmaking coal operation was partially offset by the
ramp-up of the replacement Aquila longwall. De Beers increased
production in line with continued strong demand for rough diamonds
.
De Beers' rough diamond production increased by 7% to 34.6
million carats (2021: 32.3 million carats), reflecting strong
operational performance and higher planned levels of production to
meet continued strong demand for rough diamonds, particularly in
the first half of the year.
Total copper production of 664,500 tonnes increased by 3% (2021:
647,200 tonnes). Copper Chile's production of 562,200 tonnes was
13% lower than the prior year (2021: 647,200 tonnes), principally
driven by Los Bronces, where production decreased by 17% to 270,900
tonnes (2021: 327,700 tonnes) due to planned lower grades, coupled
with unfavourable ore characteristics and unplanned stoppages.
Planned lower grades at Collahuasi resulted in a 9% decrease in
attributable production to 251,100 tonnes (2021: 277,200 tonnes).
Copper Peru (Quellaveco) delivered 102,300 tonnes of production,
reflecting the ongoing ramp-up of the newly commissioned mine in
July 2022.
Nickel production decreased by 5% to 39,800 tonnes (2021: 41,700
tonnes), primarily due to lower ore grades as a result of licensing
delays, as well as the impact of unplanned maintenance and heavy
rainfall.
Total PGM production decreased by 6% to 4,024,000 ounces (2021:
4,298,700 ounces), principally due to lower grade at Mogalakwena
and the impact of planned infrastructure closures at Amandelbult,
partially offset by increased production from Mototolo and
Unki.
Iron ore production decreased by 7% to 59.3 Mt (2021: 63.8 Mt).
At Kumba, production decreased by 8% to 37.7 Mt (2021: 40.9 Mt),
reflecting the impact of high rainfall across Kumba's operating
footprint and a safety intervention at Kolomela, as well as
equipment reliability and the impact of third-party logistics
constraints at both mines. Minas-Rio production decreased by 6% to
21.6 Mt (2021: 22.9 Mt) due to more challenging ore feed
characteristics, lower mining equipment availability and heavy
rainfall.
Steelmaking coal production was in line with the prior year at
15.0 Mt (2021: 14.9 Mt), with all three underground longwalls
operating in the second half of 2022. The planned end of mining at
the Grasstree operation in January 2022 was partially offset by the
ramp-up of the replacement Aquila longwall, which began operations
in February and fully ramped up in June. Production was also
impacted by tight labour markets and record unseasonal rainfall at
the open pit operations.
Manganese ore production was in line with the prior period at
3.7 Mt (2021: 3.7 Mt).
Group copper equivalent unit costs (1) increased by 15% in US
dollar terms, largely due to lower production volumes and
inflationary pressures, particularly diesel, partially offset by
favourable foreign exchange.
(1) Copper equivalent production and unit cost is normalised to
reflect the demerger of the South Africa thermal coal operations
and the sale of our shareholding in Cerrejón.
Financial performance
Anglo American's profit attributable to equity shareholders
decreased to $4.5 billion (2021: $8.6 billion). Underlying earnings
were $6.0 billion (2021: $8.9 billion), while operating profit was
$9.2 billion (2021: $17.6 billion).
Underlying EBITDA*
Group underlying EBITDA decreased by $6.1 billion to $14.5
billion (2021: $20.6 billion) due to a decrease in the price for
the Group's basket of products, lower sales volumes and higher
input costs across the Group. As a result, the Group Mining EBITDA
margin* of 47% was lower than the prior year (2021: 56%). A
reconciliation of 'Profit before net finance costs and tax', the
closest equivalent IFRS measure to underlying EBITDA, is provided
within note 3 to the Condensed financial statements.
Underlying EBITDA* by segment
Year ended Year ended
$ million 31 December 2022 31 December 2021
==================== ================ ================
De Beers 1,417 1,100
Copper 2,182 4,011
Nickel 381 320
PGMs 4,417 7,099
Iron Ore 3,455 6,871
Steelmaking Coal 2,749 962
Manganese 378 315
Crop Nutrients (44) (41)
Corporate and other (440) (3)
==================== ================ ================
Total 14,495 20,634
==================== ================ ================
Underlying EBITDA* reconciliation for the year ended 31 December
2021 to year ended 31 December 2022
The reconciliation of underlying EBITDA from $20.6 billion in
2021 to $14.5 billion in 2022 shows the major controllable factors
(e.g. cost and volume), as well as those outside of management
control (e.g. price, foreign exchange and inflation), that drive
the Group's performance.
$ billion
======================== =====
2021 underlying EBITDA* 20.6
Price (2.2)
Foreign exchange 1.1
Inflation (0.9)
Net cost and volume (3.3)
Other (0.8)
======================== =====
2022 underlying EBITDA* 14.5
======================== =====
Price
Average market prices for the Group's basket of products
decreased by 6% compared to 2021, reducing underlying EBITDA by
$2.2 billion. Realised prices decreased for iron ore (29%), copper
(15%) and the PGMs basket (8%) - primarily driven by rhodium, which
decreased by 20%. These were partly offset by steelmaking coal
prices, where the weighted average price increased by 52%, and De
Beers, where the realised price increased by 35%.
Foreign exchange
The favourable foreign exchange impact on underlying EBITDA of
$1.1 billion reflected weaker local currencies in many of our
countries of operation, principally the South African rand.
Inflation
The Group's weighted average CPI for the year was 8%, compared
with 5% in 2021, as inflation increased in all regions. The impact
of CPI inflation on costs reduced underlying EBITDA by $0.9
billion.
Net cost and volume
The net impact of cost and volume was a $3.3 billion reduction
in underlying EBITDA, driven by lower PGM sales from planned lower
refined volumes following the higher than normal work-in-progress
inventory in 2021, and the impact of the Polokwane smelter rebuild
in the second half of 2022; lower copper sales from the Chile
operations owing to planned lower grades at all sites, coupled with
unfavourable ore characteristics and unplanned stoppages at Los
Bronces; lower sales volumes at Kumba owing to third-party
logistics constraints; and lower sales volumes at Minas-Rio due to
challenging ore characteristics, lower mining equipment
availability and heavy rainfall. In addition to these volume
impacts, inflationary pressures (other than CPI) contributed to an
increase in costs across the Group. This was partly offset by the
start of copper concentrate sales volumes in September 2022, and
the ongoing ramp-up of the newly commissioned Quellaveco mine.
Other
The $0.8 billion unfavourable movement in underlying EBITDA from
other factors was driven by the demerger and sale of thermal coal
assets, resulting in an EBITDA reduction of $0.2 billion. Also
included are increases in environmental restoration provisions of
$0.2 billion at the copper business in Chile and $0.1 billion at De
Beers, and the impact of lower sales volumes and cost pressures at
our associates and joint operations.
Underlying earnings*
Group underlying earnings decreased to $6.0 billion (2021: $8.9
billion), driven by the lower underlying EBITDA, partly offset by a
corresponding decrease in income tax expense and earnings
attributable to non--controlling interests.
Reconciliation from underlying EBITDA* to underlying
earnings*
Year ended Year ended
$ million 31 December 2022 31 December 2021
========================================= ================ ================
Underlying EBITDA* 14,495 20,634
Depreciation and amortisation (2,532) (2,844)
Net finance costs and income tax expense (4,307) (5,783)
Non-controlling interests (1,620) (3,082)
========================================= ================ ================
Underlying earnings* 6,036 8,925
========================================= ================ ================
Depreciation and amortisation
Depreciation and amortisation decreased by 11% to $2.5 billion
(2021: $2.8 billion), reflecting the lower cost base of Steelmaking
Coal assets due to the impairment recognised in 2021, foreign
currency exchange impacts and the demerger and sale of thermal coal
assets in the prior year.
Net finance costs and income tax expense
Net finance costs, before special items and remeasurements, were
in line with the prior year at $0.3 billion (2021: $0.3
billion).
The underlying effective tax rate was 34.0% (2021: 31.4%). The
underlying effective tax rate was impacted by the relative levels
of profits arising in the Group's operating jurisdictions. The tax
charge for the period, before special items and remeasurements, was
$3.6 billion (2021: $5.3 billion). Over the longer term, the
underlying effective tax rate is expected to be in the range of 33%
to 37%.
Non-controlling interests
The share of underlying earnings attributable to non-controlling
interests of $1.6 billion (2021: $3.1 billion) principally relates
to minority shareholdings in Kumba (Iron Ore), PGMs and Copper.
Special items and remeasurements
Special items and remeasurements (after tax and non-controlling
interests) are a net charge of $1.5 billion (2021: net charge of
$0.4 billion), principally relating to impairments after tax and
non-controlling interests of $1.7 billion recognised in Crop
Nutrients, and $0.1 billion recognised in Kumba, partially offset
by an impairment reversal after tax of $0.3 billion at Steelmaking
Coal.
Full details of the special items and remeasurements recorded
are included in note 9 to the Condensed financial statements.
Net debt*
$ million 2022 2021
========================================================================== ======= =======
Opening net debt* at 1 January (3,842) (5,530)
========================================================================== ======= =======
Underlying EBITDA* from subsidiaries and joint operations 13,370 19,808
Working capital movements (2,102) 1,059
Other cash flows from operations 621 (279)
========================================================================== ======= =======
Cash flows from operations 11,889 20,588
Capital repayments of lease obligations (266) (336)
Cash tax paid (2,726) (4,341)
Dividends from associates, joint ventures and financial asset investments 602 236
Net interest (1) (253) (245)
Dividends paid to non-controlling interests (1,794) (2,838)
Sustaining capital expenditure (2) (4,143) (3,437)
========================================================================== ======= =======
Sustaining attributable free cash flow* 3,309 9,627
Growth capital expenditure and other (2) (1,724) (1,824)
========================================================================== ======= =======
Attributable free cash flow* 1,585 7,803
Dividends to Anglo American plc shareholders (3,549) (4,047)
Disposals 564 63
Foreign exchange and fair value movements (238) (227)
Other net debt movements (3) (1,438) (1,904)
========================================================================== ======= =======
Total movement in net debt* (3,076) 1,688
========================================================================== ======= =======
Closing net debt* at 31 December (6,918) (3,842)
========================================================================== ======= =======
(1) Includes cash outflows of $14 million (2021: inflows of $101
million), relating to interest receipts on derivatives hedging net
debt, which are included in cash flows from derivatives related to
financing activities.
(2) Following an amendment to IAS16 Proceeds before intended
use, operating cash flows relating to sustaining and growth capital
expenditure are no longer capitalised. For further details, refer
to note 2 of the Condensed Financial Statements. Included within
sustaining capital expenditure for the year ended 31 December 2021
is $8 million of capitalised operating cash flows relating to
life-extension projects. 'Growth capital expenditure and other'
includes $129 million (2021: $68 million) of expenditure on
non-current intangible assets and $4 million of capitalised
operating cash flows relating to growth projects fo r the year
ended 31 December 2021.
(3) Includes the purchase of shares under the 2021 buyback of
$186 million; the purchase of shares for other purposes (including
for employee share schemes) of $341 million; Mitsubishi's share of
Quellaveco capital expenditure of $446 million; other movements in
lease liabilities (excluding variable vessel leases) decreasing net
debt by $33 million; and contingent and deferred consideration paid
in respect of acquisitions completed in previous years of $165
million. 2021 includes the purchase of shares under a buyback of
$814 million; the purchase of shares for other purposes (including
for employee share schemes) of $270 million; Mitsubishi's share of
Quellaveco capital expenditure of $530 million; other movements in
lease liabilities (excluding variable vessel leases) increasing net
debt by $340 million; dividends received from Cerrejón of $240
million; and contingent and deferred consideration paid in respect
of acquisitions completed in previous years of $117 million.
Net debt (including related derivatives) of $6.9 billion has
increased by $3.1 billion since 31 December 2021, driven by working
capital cash outflows of $2.1 billion primarily due to inventory
builds. The Group generated sustaining attributable free cash
inflows of $3.3 billion, used in part to fund growth capital
expenditure of $1.6 billion and dividends paid to Anglo American
plc shareholders of $3.5 billion. Net debt at 31 December 2022
represented gearing (net debt to total capital) of 17% ( 2021:
10%).
Cash flow
Cash flows from operations
Cash flows from operations decreased to $11.9 billion (2021:
$20.6 billion), reflecting a reduction in underlying EBITDA from
subsidiaries and joint operations, and a working capital build of
$2.1 billion (2021: release of $1.1 billion). The inventory
increase of $1.8 billion was driven by a delay in the rebuild of
the Polokwane smelter and
an increase in purchase of concentrate at PGMs, as well as an
increase at De Beers and in finished products at Copper and Kumba.
An increase in receivables of $0.4 billion was largely due to the
start of copper concentrate sales in September 2022, following the
ongoing ramp-up of operations at Quellaveco (Copper Peru). Payables
are broadly flat, with the ramp-up of operations at Quellaveco
being offset by the settlement of provisional price adjustments
within Iron Ore.
Capital expenditure*
Year ended Year ended
$ million 31 December 2022 31 December 2021
======================================================== ================ ================
Stay-in-business 2,558 2,068
Development and stripping 1,010 904
Life-extension projects 582 474
Proceeds from disposal of property, plant and equipment (7) (17)
======================================================== ================ ================
Sustaining capital 4,143 3,429
Growth projects 1,595 1,752
======================================================== ================ ================
Total 5,738 5,181
Capitalised operating cash flows - 12
======================================================== ================ ================
Total capital expenditure 5,738 5,193
======================================================== ================ ================
Capital expenditure increased to $5.7 billion (2021: $5.2
billion), owing to deferred expenditure from 2021, and a planned
increase in investment programmes.
Sustaining capital expenditure increased to $4.1 billion (2021:
$3.4 billion), largely driven by the Collahuasi desalination plant
in Chile, deferred expenditure from 2021, and capitalised waste
stripping at Quellaveco being classified as sustaining capital
expenditure from July 2022 as the project commenced the ramp-up of
operations.
Growth capital expenditure was $1.6 billion (2021: $1.8
billion), mostly driven by the Quellaveco project, which delivered
first production of copper concentrate in July 2022, and
Woodsmith.
Attributable free cash flow*
The Group's attributable free cash flow decreased to $1.6
billion (2021: $7.8 billion) due to lower cash flows from
operations of $11.9 billion (2021: $20.6 billion) and higher
capital expenditure of $5.7 billion (2021: $5.2 billion). This was
partially offset by decreased tax payments of $2.7 billion (2021:
$4.3 billion) and a reduction in dividends paid to non-controlling
interests of $1.8 billion (2021: $2.8 billion).
Shareholder returns
In line with the Group's established dividend policy to pay out
40% of underlying earnings, the Board has proposed a final dividend
of $0.74 per share (2021: $1.18 ordinary dividend per share and
$0.50 special dividend per share), equivalent to $0.9 billion
(2021: $2.1 billion including special dividend).
Disposals
On 11 January 2022, the Group completed the sale of its 33.3%
shareholding in Cerrejón to Glencore plc for a total cash
consideration of approximately $294 million - of which $50 million
was received in January, after adjustment for dividends received in
2021. This sale represents the final stage of Anglo American's
previously announced responsible transition away from thermal coal
operations.
On 25 March 2022, the Group announced the sale of its remaining
8.0% shareholding in Thungela Resources Limited, realising gross
proceeds of R1,672 million (approximately $115 million). Anglo
American's Marketing business continues to support Thungela in the
sale and marketing of its products, and sales and purchases under
the offtake agreement will continue to be reported on a net basis,
together with the Group's other third-party trading activities.
Anglo American Platinum, together with its joint venture partner
Atlatsa Resources Corporation, concluded the disposal of the Bokoni
mine to African Rainbow Minerals in September 2022.
In addition, there were cash receipts principally relating to
the settlement of deferred consideration balances on the sale of
the Rustenburg operations (PGMs) that was completed in November
2016.
Balance sheet
Net assets decreased by $0.7 billion to $34.0 billion (2021:
$34.8 billion), reflecting dividend payments, additional
shareholder returns to Company shareholders and non-controlling
interests, partially offset by the profit in the period.
Attributable ROCE*
Attributable ROCE decreased to 30% (2021: 43%). Attributable
underlying EBIT decreased to $9.7 billion (2021: $13.5 billion),
reflecting the impact of higher input costs, unfavourable sales
volumes and lower realised prices achieved for the Group's
products. Average attributable capital employed has increased to
$32.0 billion (2021: $31.4 billion), primarily due to growth
capital expenditure, largely at Quellaveco (Copper).
Liquidity and funding
Group liquidity stands at $16.1 billion (2021: $17.1 billion),
comprising $8.4 billion of cash and cash equivalents (2021: $9.1
billion) and $7.7 billion of undrawn committed facilities (2021:
$8.0 billion).
During 2022, the Group issued $2.0 billion of bond debt. In
March 2022, the Group issued $500 million 3.875% Senior Notes due
2029, and $750 million 4.750% Senior Notes due 2052 and in
September 2022, its first EUR 745 million 4.75%
sustainability-linked bond due 2032.
The weighted average maturity on the Group's bonds increased to
7.7 years (2021: 6.2 years).
The Group has an undrawn $4.7 billion revolving credit facility
due to mature in March 2025.
The Group received an upgrade to BBB+ (stable outlook) in
November 2022 from S&P Global Ratings.
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
major global consumer demand trends. Aligned to this strategy, we
delivered the newly commissioned Quellaveco copper mine in Peru in
July 2022, with commercial operations starting in September. The
operation continues to ramp up and is expected to reach nameplate
capacity around mid-2023.
The Group also entered into the below agreements in the second
half of 2022:
On 14 September 2022, Anglo American plc issued its first
sustainability-linked bond, including performance targets to reduce
greenhouse gas emissions and fresh water abstraction, and to
support job creation in host communities. This EUR745 million bond
is the first instrument issued following the publication of Anglo
American's Sustainability Financing Framework and bond investors
will be entitled to a higher final coupon payment should the
company not meet specific sustainability targets.
On 4 October 2022, Anglo American in partnership with EDF
Renewables announced their agreement to form a new jointly owned
company, Envusa Energy, to develop a regional renewable energy
ecosystem (RREE) in South Africa. As part of the agreement, Envusa
Energy is launching a mature pipeline of more than 600 MW of wind
and solar projects in South Africa - a major first step towards the
development of an ecosystem that is expected to generate 3-5 GW of
renewable energy by 2030.
On 16 November 2022, Anglo American agreed terms for a 10-year
partnership with Stanwell Corporation, the Queensland
Government-owned provider of electricity and energy solutions, to
source the supply of 100% renewable electricity for its operations
in Australia from 2025, supporting Anglo American's progress
towards carbon neutral operations by 2040.
In November 2022, we signed an agreement with Aguas Pacífico, a
Chilean water desalination and solutions provider, to secure
desalinated water for our Los Bronces copper mine. In this first
phase, the desalination plant will supply up to 500 litres per
second of desalinated water to the mine from 2025, via a pipeline
from the plant to a water-reception pool at our Las Tórtolas
operation. This desalinated water will supply more than 45% of Los
Bronces' needs while also providing clean water to approximately
20,000 people in the communities of Colina and Til Til, local to
the operation.
On 24 November 2022, Anglo American signed a memorandum of
understanding with Aurubis AG (Aurubis) - a global provider of
non-ferrous metals and one of the world's largest copper recyclers
- to develop a copper product offering that responds to increasing
expectations for future-enabling metals that are sustainably
sourced and supplied. The objective of the collaboration is to
provide assurance around the way copper is mined, processed,
transported and brought to market.
In addition, on 7 December 2022, Anglo American signed a binding
agreement to combine Anglo American's nuGen(TM) Zero Emissions
Haulage Solution (ZEHS) with First Mode Holding Inc. (First Mode),
the specialist engineering technology company that partnered with
Anglo American to develop the nuGen(TM) ZEHS. The combination is
expected to accelerate the development and deployment of the ZEHS
technology across Anglo American's mine haul truck fleet, while
exploring commercial opportunities for ZEHS across other industries
that rely on heavy duty forms of transport. The transaction was
completed on 5 January 2023.
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:
Capex Remaining capex First
Operation Scope $bn $bn production Progress
========== ============================= ================== =================== ========== =============================
Copper
Quellaveco New copper mine in c.2.8 (Anglo c.0.1 (Anglo 2022 Construction began in 2018.
Moquegua, Peru American 60% American 60%
producing c.300 ktpa share) share) First production of
copper equivalent (100% concentrate in July 2022 and
basis, 180 ktpa copper the start of commercial
equivalent our share) over operations in September
the first 10 years. 2022.
Ramp-up of the process plant
is ongoing with full
nameplate capacity expected
around mid-2023.
Refer to the Technology
projects table below for
Coarse Particle Recovery at
Quellaveco.
========== ============================= ================== =================== ========== =============================
Collahuasi At Collahuasi, the Fifth ball mill c. Additional 2023 Environmental approval
0.1
independently managed (44% basis) expansion studies (EIA) was obtained in
joint operation (Copper), ongoing. Subject December 2021,
to
the implementation of the permitting and enabling expansion of the
approved fifth ball mill is approvals processing capacity up to
progressing to plan with 210 ktpd, and the
ramp up expected to construction of a
commence in Q4 2023. desalination plant and
Additional related infrastructure to
debottlenecking options provide a sustainable
to further increase alternative water source.
production remain under
study and are expected to The fifth ball mill project
add 20-50 ktpa (44% (first stage of the
basis) in the medium term. expansion) is progressing
Further expansions are in according to plan. The
early-stage study to expected start-up is
increase plant capacity during Q4 2023.
beyond 210 ktpd,
delivering over 100 ktpa
of copper (44% basis).
Diamonds
Marine New diamond recovery c.0.2 (Anglo 0 2022 Construction began in
Namibia vessel, adding 0.5 Mctpa American 50% 2019.
(100% basis) of some of share)
the highest value The vessel is now
diamonds in the portfolio. contributing to marine
production, having been
successfully
commissioned ahead of
schedule and below
budget in Q1 2022.
Capex Remaining capex
Operation Scope $bn $bn First production Progress
============== ======================= ================ ================ ================ =======================
Crop Nutrients
Woodsmith New polyhalite (natural Subject to Subject to Subject to Significant changes
development development development have
mineral fertiliser) timeline review timeline review timeline review been made to the scope,
mine
being developed in design and approach to
Yorkshire, UK. Expected execution of the
to project.
produce POLY4 - a These changes will
premium quality, low allow
carbon fertiliser future optionality for
suitable a
for organic use. larger operating
Studies footprint,
remain ongoing but the to be delivered in a
indicative design phased approach in step
capacity
is currently expected with market
to be development,
c.13 Mtpa. and optimise the value
of
the asset for the long
term.
These changes are
expected to result in
an
extended project and
ramp up schedule, with
first product to market
expected to be
available
in 2027, and higher
capital expenditure
than
envisaged at the time
of
acquisition. The
critical
path construction
activities of shaft
sinking
and tunnel boring
continue to progress
well
and, as we continue to
develop the revised
plan,
additional studies will
focus on optimisation
of
the mine development,
materials transport and
handling facilities, to
support the phased
approach.
c.$0.8 bn capex has
been
approved for 2023 to
progress critical path
activities.
Iron Ore
Sishen Implementation of Ultra Under review Under review Under review Project plan under
review.
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 run-of-mine
(between 40% Fe and
48% Fe). In addition,
the
project contributes an
additional 3-4 years to
Sishen's life of asset
to
2039.
Capex Remaining capex
Operation Scope $bn $bn First production Progress
=========== ========================== ============== ================ ================ =========================
PGMs
Mogalakwena Evaluating various options Number of Not yet approved Under review The Future of Mogalakwena
to expand PGM options being work continues to make
production of the mine considered good progress in the six
through technology workstreams.
development and
deployment and the
optimal mine plan to
deliver feed to the
concentrators.
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:
Capex Remaining capex Expected first
Operation Scope $bn $bn production Progress
================= ====================== =============== =================== ============== =====================
Diamonds
4 Mctpa underground
replacement for the
existing open pit.
The project is The mining of the
expected to add Venetia
an estimated 88 open pit was
million carats from completed
approximately 132 in December 2022, and
million tonnes of
material (1) and the mine will
extend transition to
the life of the mine underground mining
Venetia to 2047. 2.1 1.0 2023 operations in 2023.
Jwaneng 9 Mctpa replacement 0.3 (Anglo 0.2 (Anglo American 2027 Project progressing
(100% basis) for Cuts American 19.2% 19.2% share) on
7 and 8. The Cut-9 share) schedule.
expansion of Jwaneng
will extend
the life of the mine
to 2036 and is
expected to yield
approximately 59
million carats of
rough
diamonds from
approximately
49 million tonnes of
material (1) .
Steelmaking Coal
Aquila 3.5 Mtpa (70% basis), 0.2 (Anglo 0 2022 Development work
7 year replacement for American 70% began in September
share) 2019 and first
the Grasstree longwall
operation production began in
which has reached the February 2022.
end of life. Aquila is
a
longwall operation
leveraging the
existing
Grasstree
infrastructure
and producing high
quality hard coking
coal
to 2029.
Iron Ore
4 Mtpa high grade iron
ore replacement
project.
The development of a
new pit, Kapstevel
South,
and associated
infrastructure at
Kolomela Approved in July
to help sustain 2020. Pit
output of establishment and
c.12 Mtpa and extend waste
the stripping commenced
remaining life of in
mine to 2021, with first ore
Kolomela 2034. 0.4 0.2 2024 expected in 2024.
PGMs
The development of the
project leverages the
existing Mototolo
infrastructure,
enabling
mining to extend into
the
adjacent and down-dip Approved in December
2021. Execution
Der Brochen resource commenced in Q1 2022.
to
extend the life of First production
Mototolo/ the asset expected
Der Brochen beyond 30 years. 0.2 0.2 2024 in 2024.
(1) Refer to Anglo American plc Ore Reserves and Mineral
Resources Report 2022 for additional information.
Technology projects (1)
The Group plans to continue investing c. $0.2-0.5 billion per
year on projects to support the FutureSmart Mining TM programme and
the delivery of Anglo American's Sustainable Mining Plan targets,
particularly those that relate to safety, energy, emissions and
water, including the following innovative technology projects
(metrics presented on a 100% basis unless otherwise indicated):
Initiative Scope Progress
============================ =========================== ===========================================================
Copper, PGMs, and Nickel
Bulk ore sorting (BOS) Deliver improved feed grade
to plants * Mogalakwena (PGMs) North Concentrator (70% of
through early rejection of complex feed) and Los Bronces (Copper) Confluencia
waste, resulting Plant (c.65% of complex feed) units operational with
in energy, water and cost workplans under way to support business as usual.
savings.
* Barro Alto (Nickel) in-pit unit will recommence in H1
2023, after the upgrade is completed, resulting in
improved future sorting performance. Additional
in-pit unit under technical evaluation.
* Planning for trials at Kolomela (Iron Ore) under way.
Copper, PGMs, and Iron Ore
Coarse particle recovery Innovative flotation
(CPR) process allows * El Soldado (Copper) CPR unit in operation.
material to be ground to a
larger particle
size, rejecting coarse
gangue and * Construction of full-scale system at Mogalakwena
allowing water to release North concentrator (PGMs) complete. Slurry
from coarser ore commissioning commenced in Dec 2022.
particles, improving energy
efficiencies
and water savings.
* Constructing CPR at Quellaveco (Copper) to treat
flotation tails, improving recoveries by c.3% over
the life of mine. Commissioning expected in late
2023.
* Feasibility work continues at Los Bronces (Copper)
and Minas-Rio (Iron Ore). Options being investigated
at Collahuasi (Copper).
Copper and PGMs
Hydraulic dewatered Engineering of
stacking (HDS) geotechnically stable * El Soldado (Copper) demonstration unit commissioned.
tailings facilities that The trial is still ongoing, with encouraging results,
dry out in weeks, expected to continue to Q4 2023.
facilitating up to 85%
water recovery.
* Assessing application to tailings expansion at
Mogalakwena (PGMs) with benefits from water quality
and quantity improvements. Brownfield trial starting
in Q1 2023, after learnings from El Soldado trial.
Portfolio-wide
nuGen(TM) Zero Emissions Developing the world's
Haulage Solution (ZEHS) largest hydrogen powered * ZEHS hydrogen-powered mine haul truck at Mogalakwena
mining truck and providing (PGMs) is continuing operational testing - it has
critical supporting accessed the deepest parts of the mine, hauling 300
infrastructure such as tonne loads of PGMs ore.
refuelling, recharging, and
facilitation of hydrogen
production to
decarbonise high power * Binding agreement signed to combine First Mode and
transport, using renewable Anglo American's nuGen(TM) ZEHS to accelerate the
energy. transition of mining and other heavy industries
towards zero emissions. In January 2023, completed
deal to combine nuGen(TM) ZEHS with specialist
engineering technology company First Mode (our
partners in prototype development).
* Supporting decarbonisation of our global fleet of
c.400 ultra-class mine haul trucks.
(1) Expenditure relating to technology projects is included
within operating expenditure, or if it meets the accounting
criteria for capitalisation, within Growth capital expenditure.
Also includes capex on the regional renewable energy ecosystem in
South Africa, which includes the Group's proportionate share of
capex incurred by Envusa Energy.
Digital projects (1)
The Group plans to continue investing c. $0.1-0.2 billion per
year on digital projects as part of the FutureSmart Mining TM
programme (metrics presented on a 100% basis unless otherwise
indicated):
Initiative Scope Progress
============================ ============================ ==========================================================
Diamonds, Copper, PGMs,
Iron Ore and Steelmaking
Coal
Predictive Maintenance, Maintenance planning based
VOXEL(TM) Asset Strategy & on * Full coverage of critical assets at Venetia, Jwaneng
Reliability predictive analytics - ,
resulting in and Gahcho Kué (Diamonds), Los Bronces (Copper)
improvements in safety, ,
reliability and Mogalakwena, Amandelbult, Anglo Converter Plant,
availability of critical Rustenburg Base Metal Refinery and Polokwane Smelter
assets. (PGMs), Kolomela (Iron Ore) and Moranbah (Steelmakin
g
Coal).
Copper, PGMs, and Iron Ore
Rapid Resource Modelling, Enables consistent core
VOXEL(TM) Discovery & logging, 3D * Deployment at Mogalakwena (PGMs).
Geosciences implicit modelling, and
statistical resource
modelling as one integrated
workflow in * Deployments planned for Quellaveco (Copper) and
weeks vs years. Minas-Rio (Iron Ore) in 2023.
Spatial Inventory Builds a digital twin of
Management, VOXEL(TM) material flow, * Deployments at Los Bronces and Quellaveco (Copper),
Discovery & Geosciences providing access to accurate Mogalakwena (PGMs), Minas-Rio (Iron Ore) and Kolomel
information a
about material within the and Sishen (Iron Ore).
mining operation
and enabling additional
value through
increased intelligence.
Copper, PGMs, Iron Ore, and
Steelmaking Coal
Process Performance Delivers automated support
Review, VOXEL(TM) Processing to improve the detection, * Deployments at Los Bronces (Copper), Mogalakwena
prioritisation, and (PGMs), Kolomela (Iron Ore) and Moranbah (Steelmakin
resolution of process g
issues. Coal).
Diamonds, PGMs, Iron Ore,
and Steelmaking Coal
Digital Operational Enables optimised
Planning, VOXEL(TM) operational plans * Deployments at Venetia (De Beers), Mogalakwena,
Integrated Operations across the mining value Amandelbult, Unki, Anglo Converter Plant, Polokwane,
definition and Waterval and Mortimer smelters (PGMs), Sishen and
management of models and Kolomela (Iron Ore), and Moranbah and Grosvenor
data that (Steelmaking Coal).
then applies cutting edge
simulation and
elastic Cloud-based
computing * Deployments planned in early 2023 for Barro Alto and
technology to deliver. Codemin (Nickel), Minas-Rio (Iron Ore) and Aquila,
Capcoal and Dawson (Steelmaking Coal).
Group-wide
Advanced Process Control Up to 40% improvement in
process * Delivered at Venetia and Benguela Gem (Diamonds), Lo
mainstream stability, up to s
2% Bronces, El Soldado, Quellaveco and Chagres (Copper)
improvement in process ,
recoveries, 4% Mogalakwena (PGMs), Minas-Rio and Kumba (Iron Ore),
reduction in Specific Energy Moranbah, Capcoal and Dawson (Steelmaking Coal), and
Consumption, Barro Alto and Codemin (Nickel).
with associated productivity
improvements.
* Reached 96.5% automation of automatable processes by
the end of 2022, with an ambition for 100% of
automatable processes within our plant flowsheets to
be under Advanced Process Control by end 2024.
(1) Expenditure relating to digital programmes is included within underlying operating costs.
The Board
Changes during 2022 to the composition of the Board are set out
below.
On 1 January 2022, Ian Tyler joined the Board as a non-executive
director and member of the Audit and Remuneration committees.
On 19 April 2022, at the conclusion of the Company's Annual
General Meeting:
- Duncan Wanblad joined the Board as chief executive.
- Mark Cutifani retired as chief executive and stepped down from
the Board, after nine years in the role.
- Anne Stevens and Byron Grote stepped down from the Board as
non-executive directors, having both served for nine years.
- Ian Tyler succeeded Anne Stevens as chair of the Remuneration
Committee, and Hilary Maxson succeeded Byron Grote as chair of the
Audit Committee.
- Ian Tyler succeeded Byron Grote as the Board's senior
independent director.
- Marcelo Bastos succeeded Byron Grote as the designated
non-executive director to chair the Anglo American Global Workforce
Advisory Panel.
On 23 September 2022, Elisabeth Brinton stepped down from the
Board as a non-executive director.
On 31 December 2022, Tony O'Neill stepped down from the Board
and as technical director, following his decision to retire from
the Group in June 2023.
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
- Economic environment including product prices
- Cyber security
- Political
- Community and social relations
- Regulatory and permitting
- Operational performance
- Safety
- Climate change
- Pandemic
- 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
2022 year end are set out in detail in the strategic report section
of the Integrated Annual Report 2022 on the Group's website from 6
March 2023 www.angloamerican.com.
De Beers - Diamonds
Financial and operational metrics (1)
Production Sales Unit Group Underlying EBITDA Underlying
volume volume Price cost* revenue* EBITDA* margin* (6) EBIT* Capex* ROCE*
============ ========== ======== ======== ======== ========= ========== ============ ========== ====== =====
'000 '000
cts cts (2) $/ct (3) $/ct (4) $m (5) $m $m $m
============ ========== ======== ======== ======== ========= ========== ============ ========== ====== =====
De Beers 34,609 30,355 197 59 6,622 1,417 52% 994 593 11%
Prior year 32,276 33,357 146 58 5,602 1,100 47% 620 565 7%
Botswana 24,142 n/a 193 32 n/a 614 n/a 537 70 n/a
Prior year 22,326 - 152 32 - 464 - 407 72 -
Namibia 2,137 n/a 599 293 n/a 181 n/a 149 34 n/a
Prior year 1,467 - 565 359 - 101 - 68 91 -
South Africa 5,515 n/a 134 42 n/a 413 n/a 315 378 n/a
Prior year 5,306 - 113 45 - 241 - 82 309 -
Canada 2,815 n/a 100 50 n/a (10) n/a (68) 48 n/a
Prior year 3,177 - 62 44 - 68 - 4 42 -
Trading n/a n/a n/a n/a n/a 589 10% 582 4 n/a
Prior year - - - - - 515 11% 505 4 -
Other (7) n/a n/a n/a n/a n/a (370) n/a (521) 59 n/a
Prior year - - - - - (289) - (446) 47 -
============ ========== ======== ======== ======== ========= ========== ============ ========== ====== =====
(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 33.7 million carats
(2021: 36.3 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 $6.0 billion (2021: $4.9 billion).
(6) Total De Beers EBITDA margin shows mining EBITDA margin on
an equity basis, which excludes the impact of non-mining
activities, third--party sales, purchases, trading downstream and
corporate.
(7) Other includes Element Six, brands and consumer markets, and corporate.
Markets
The first half of 2022 saw largely positive trading conditions
throughout the diamond pipeline; the year started with retailers
restocking following strong consumer demand for diamond jewellery
sales over the 2021 holiday season. While the start of Russia's
invasion of Ukraine and the imposition of related formal sanctions,
as well as self-sanctioning, on Russian diamonds created
uncertainty in the sector, healthy consumer demand, particularly in
the US, led to polished price growth and robust demand for rough
diamonds in the first half of the year. De Beers' focus on enhanced
provenance assurance for its rough diamonds helped underpin solid
demand.
By June, the global economic picture was more uncertain, owing
to interest rate increases by advanced economies' central banks to
combat accelerating inflation. With a weaker economic outlook,
consumer demand for diamond jewellery in the US softened in the
second half of 2022, though it remained above pre-Covid-19 levels.
Amid this economic uncertainty, retailers restocked more
cautiously, causing midstream polished diamond inventories to build
up through the second half of the year, putting downward pressure
on polished prices and softening demand for rough diamonds. In
China, the heightened Covid-19 restrictions from the second quarter
onwards impacted diamond jewellery retail sales, resulting in
negative demand growth for the year.
Financial and operational overview
Total revenue increased to $6.6 billion (2021: $5.6 billion),
with rough diamond sales rising to $6.0 billion (2021: $4.9
billion), reflecting strong demand for rough diamonds, particularly
in the first half of the year, with the midstream replenishing
stocks following strong consumer demand over the 2021 holiday
season. Rough diamond sales volumes totalled 30.4 million carats
(2021: 33.4 million carats). The average realised price rose by 35%
to $197/ct (2021: $146/ct), driven by growth in the rough price
index, as well as selling a larger proportion of higher value rough
diamonds in the first half of the year. The average rough price
index increased by 23%, reflecting overall positive consumer demand
for diamond jewellery, particularly in the first half of the
year.
Underlying EBITDA increased by 29% to $1,417 million (2021:
$1,100 million), reflecting overall positive consumer demand for
diamond jewellery. Unit costs were broadly flat at $59/ct (2021:
$58/ct), as rising inflation and higher input costs were offset by
the benefits of higher production and favourable exchange
rates.
Capital expenditure increased by 5% to $593 million (2021: $565
million), largely due to the Venetia underground project, which is
expecting first production in 2023, and the continued execution of
life-extension projects, including Jwaneng Cut-9 and at the
Namibian land operations.
Operational performance
Mining
Rough diamond production increased by 7% to 34.6 million carats
(2021: 32.3 million carats), reflecting strong operational
performance and higher planned levels of production to meet
continued strong demand for rough diamonds, particularly in the
first half of the year.
In Botswana, production increased by 8% to 24.1 million carats
(2021: 22.3 million carats), owing to strong plant performances at
both Jwaneng and Orapa, as well as planned higher grade at Orapa
.
Namibia production increased by 46% to 2.1 million carats (2021:
1.5 million carats), primarily due to the commissioning of the
Benguela Gem diamond recovery vessel, which was delivered ahead of
schedule and below budget, as well as the treatment of higher grade
ore at the land operations.
South Africa production increased by 4% to 5.5 million carats
(2021: 5.3 million carats), due to the treatment of higher grade
ore from the final cut of the open pit at Venetia. The mining of
the open pit was completed in December and the mine will transition
to underground operations in 2023 .
Production in Canada decreased by 11% to 2.8 million carats
(2021: 3.2 million carats), due to the treatment of lower grade ore
and the impact of tight labour markets .
Brands and consumer markets
Despite the near term economic uncertainty, De Beers Jewellers
have continued to focus on developing their geographic footprint in
China, with underlying demand for branded diamond jewellery
expected to remain strong following the removal of Covid-19 related
restrictions.
Operational and market outlook
Early indications are that the 2022 holiday season was robust,
with diamond jewellery sales remaining above pre-Covid-19 levels,
though below the record level seen in 2021. However, continued
softening in global macro-economic conditions could see a
contraction in consumer spending and demand for diamond jewellery,
which may result in lower demand for rough diamonds in the near
term. This may be partly mitigated by an increase in demand for
diamond jewellery in China, following the removal of Covid-19
restrictions in late 2022.
De Beers continues to invest in its leading ability to provide
source assurance for its diamonds at scale, underpinned by the
Tracr(TM) blockchain platform. This proprietary technology provides
an immutable record of a diamond's provenance, a key priority for
consumers, underpinning confidence in natural diamonds.
De Beers considers that increased focus on diamond provenance by
a number of US-based jewellery businesses and global brands has the
potential to underpin continued demand for De Beers' rough diamonds
in the medium and longer term. Consumer desire for natural diamonds
remains robust in key consumer markets, and over the medium term
the global supply of rough diamonds is expected to decline slightly
owing to limited new discoveries, supporting the value growth
potential for natural diamonds .
Production guidance for 2023 is 30-33 million carats (100%
basis), subject to trading conditions .
2023 unit cost guidance is c.$80/ct .
Copper
Financial and operational metrics
Mining
Production Sales Unit Group Underlying EBITDA Underlying
volume volume Price cost* revenue* EBITDA* margin* (2) EBIT* Capex* ROCE*
============= ========== ======= ======== ======== ========= ========== ============ ========== ====== =====
kt kt (1) c/lb (2) c/lb (3) $m (4) $m $m $m
============= ========== ======= ======== ======== ========= ========== ============ ========== ====== =====
Copper Total 664 641 385 154 5,599 2,182 39% 1,595 2,031 16%
Prior year 647 641 453 120 6,433 4,011 62% 3,428 1,773 39%
Copper Chile 562 563 386 157 4,991 1,952 40% 1,387 1,217 32%
Prior year 647 641 453 120 6,433 4,011 62% 3,428 996 81%
Los Bronces
(5) 271 268 n/a 214 2,185 533 24% 306 725 n/a
Prior year 328 325 - 158 3,047 1,871 61% 1,588 493 -
Collahuasi
(6) 251 256 n/a 87 2,180 1,512 69% 1,259 419 n/a
Prior year 277 273 - 61 2,641 2,188 83% 1,970 365 -
Other
operations
(7) 40 39 n/a n/a 626 (93) (9)% (178) 73 n/a
Prior year 42 43 - - 745 (48) (8)% (130) 138 -
Copper Peru
(Quellaveco)
(8) 102 78 379 136 608 230 38% 208 814 2%
Prior year - - - - - - - - 777 -
============= ========== ======= ======== ======== ========= ========== ============ ========== ====== =====
(1) Excludes 422 kt third-party sales (31 December 2021: 432 kt).
(2) Represents realised copper price and excludes impact of third-party sales.
(3) C1 unit cost includes by-product credits.
(4) Group revenue is shown after deduction of treatment and refining charges (TC/RCs).
(5) Figures on a 100% basis (Group's share: 50.1%).
(6) 44% share of Collahuasi production, sales and financials.
(7) Other operations form part of the results of Copper Chile.
Production and sales are from El Soldado mine (figures on a 100%
basis, Group's share 50.1%). Financials include El Soldado and
Chagres (figures on a 100% basis, Group's share 50.1%), third-party
trading, projects and corporate costs. In 2021, financials also
included operational and capital expenditure related to Copper
Peru.
(8) Figures on a 100% basis (Group's share: 60%). Included in
capex is the project capex which represents the Group's share after
deducting direct funding from non--controlling interests. In 2022,
the Group's share of project capex was $633 million (on a 100%
basis $1,055 million). In 2021, the Group's share was $777 million
(on a 100% basis, was $1,295 million).
Financial and operational overview
Underlying EBITDA for Copper decreased by 46% to $2,182 million
(2021: $4,011 million), driven by a 28% increase in unit costs and
a 15% decrease in realised price, despite total sales being in line
with the prior year.
Copper Chile
Underlying EBITDA decreased by 51% to $1,952 million (2021:
$4,011 million), reflecting a 15% decrease in the realised price,
lower production and the impact of inflation.
Copper production of 562,200 tonnes was 13% lower than the prior
year (2021: 647,200 tonnes) due to planned lower grades at all
sites, coupled with unfavourable ore characteristics and unplanned
stoppages at Los Bronces. The impact of lower water availability,
owing to the ongoing drought in Chile's central zone following
record low levels of precipitation in 2021 and 2022, was partially
offset by water management initiatives. Unit costs increased by 31%
to 157 c/lb (2021: 120 c/lb), reflecting record levels of local
inflation, lower production and higher input costs, particularly
diesel and explosives, which were partly offset by the weaker
Chilean peso and higher by-product credits.
Capital expenditure increased by 22% to $1,217 million (2021:
$996 million), reflecting expenditure on the Collahuasi
desalination project and the impact of Covid-19 related deferrals
in previous years, partly offset by the weaker Chilean peso.
Copper Peru
Underlying EBITDA was $230 million as the project ramped up
following the mid-year start of operations, with unit costs of 136
c/lb.
Capital expenditure was $0.8 billion. $0.6 billion relates to
our share of project capex; the remainder primarily relates to
development and stripping capex (100% basis).
Markets
31 December 2022 31 December 2021
============================================= ================ ================
Average market price (c/lb) (1) 400 423
Average realised price (Copper Chile - c/lb) 386 453
Average realised price (Copper Peru - c/lb) 379 -
============================================= ================ ================
(1) Average LME price calculated from 26 September 2022 onwards,
reflecting the commencement of sales for Copper Peru, was 362
c/lb.
The difference between the market price and Copper Chile's
realised price is largely a function of provisional pricing
adjustments, with 166,900 tonnes of copper provisionally priced at
379 c/lb at 31 December 2022 (31 December 2021: 162,361 tonnes
provisionally priced at 442 c/lb), and the timing of sales across
the period.
The average market price from 26 September 2022, the date of
commencement of sales by Copper Peru, until the end of the year was
362 c/lb. Copper Peru's realised price is higher than this,
reflecting the benefit of provisional pricing adjustments since
shipments commenced, with 74,800 tonnes of copper provisionally
priced
at 380 c/lb at 31 December 2022.
The average LME copper price decreased by 5% as a result of
fears of global recession, manufacturing supply chain disruptions,
rising energy costs and weaker investor sentiment. The continuing
impact of Russia's invasion of Ukraine, central bank interest rate
rises and the effects of China's zero-Covid policy contributed to
growing concerns around economic growth prospects. Copper's
underlying fundamentals, however, remained attractive, as continued
global decarbonisation efforts benefited the use of copper in
applications and infrastructure associated with the energy
transition. Reported stocks fell to historically low levels and
supply disruptions continued to be a feature of the sector.
Operational performance
Copper Chile
Copper production of 562,200 tonnes was 13% lower than the prior
year (2021: 647,200 tonnes).
At Los Bronces, production decreased by 17% to 270,900 tonnes
(2021: 327,700 tonnes) due to lower planned grades (0.62% vs 0.70%)
and lower ore processed (45.9 Mt vs 50.7 Mt) as a result of
expected lower water availability, coupled with the impact of
increased ore hardness and unplanned stoppages. The impact of
reduced water availability, following the record low levels of
precipitation in 2021 and 2022, was partially offset by initiatives
to maximise water efficiency, including sourcing of external
industrial water. C1 unit costs increased by 35% to 214 c/lb (2021:
158 c/lb), driven by high inflation, planned lower production and
higher water management costs, partly offset by the weaker Chilean
peso and higher by-product credits.
At Collahuasi, Anglo American's attributable share of copper
production decreased by 9% to 251,100 tonnes (2021: 277,200 tonnes)
due to planned lower grades (1.11% vs 1.25%) in accordance with the
mine plan. C1 unit costs increased by 43% to 87 c/lb (2021: 61
c/lb), driven by high inflation and planned lower production,
partly offset by the weaker Chilean peso and higher by-product
credits.
Production at El Soldado decreased by 5% to 40,200 tonnes (2021:
42,300 tonnes) due to planned lower grades (0.65% vs 0.73%). C1
unit costs increased by 27% to 262 c/lb (2021: 206 c/lb), driven by
high inflation and lower production, partly offset by the weaker
Chilean peso.
Chile's central zone continues to face severe drought
conditions. While the rain and snowfall deficit decreased during
the second half of 2022, the outlook for 2023 remains very dry and
these conditions place pressure on water availability. An agreement
to secure desalinated water supply for Los Bronces from 2025 was
completed in the fourth quarter of 2022. This is the first step in
an integrated plan to eliminate the use of fresh water at the Los
Bronces operation. In the interim, various management initiatives
to improve water efficiency and secure alternative sources of water
continue to mitigate the impact on production.
Copper Peru
The world class Quellaveco copper mine in Peru was delivered on
time and on budget during 2022 - a major achievement for the Group.
First production of copper concentrate was announced on 12 July
2022, with concentrate shipments commencing at the end of
September. The second processing line started up in September, with
regulatory clearances received in early December.
Quellaveco produced 102,300 tonnes at a C1 unit cost of 136
c/lb, reflecting the operational ramp-up.
The delivery of the project has taken place against an extremely
challenging backdrop through more than two years of
pandemic-related disruption. Despite this, Quellaveco is producing
copper in line with the original construction schedule and less
than four years after project approval. The final total capex
estimate is $5.5 billion and is in line with the 2020 budget to
accommodate Covid-19 requirements. The Group's share of the final
total capex is $2.8 billion.
With the mine operational, focus is now on safely ramping up the
processing plant to nameplate capacity, receiving the required
regulatory clearances for the molybdenum plant and completing the
construction and commissioning of the coarse particle recovery
(CPR) plant. We are also working closely with government and local
communities on the safe and responsible demobilisation of the
project workforce by the middle of 2023.
Operational outlook
Copper Chile
Production guidance for Chile for 2023 is 530,000-580,000
tonnes, subject to water availability.
C1 unit cost guidance for 2023 is c.190 c/lb.
There is limited near term production impact from the rejection
of the environmental permit application for the Los Bronces
Integrated Project in early 2022. Anglo American is continuing to
participate in the appeals process to make available any additional
information required, as the merits of the project are re-evaluated
by a Committee of Ministers. Anglo American remains hopeful that
the positive impact this project will have on the local area,
including an improvement to air quality, as well as a major long
term inward investment for Chile, will be recognised to enable
urgent critical-path mine planning activities to get under way.
Copper Peru
Production guidance for Peru for 2023 is 310,000-350,000
tonnes.
C1 unit cost guidance for 2023 is c.100 c/lb., subject to any
socio-political effects and full ramp-up.
Project capital expenditure guidance for 2023 is c.$0.2 billion
(100% basis), of which the Group's share is c.$0.1 billion.
Quellaveco expects to deliver around 300,000 tonnes per annum of
copper equivalent production on average in its first 10 years of
operation.
Nickel
Financial and operational metrics
Mining
Production Sales Unit Group Underlying EBITDA Underlying
volume volume Price cost* revenue* EBITDA* margin* EBIT* Capex* ROCE*
=========== ========== ======= ======== ======== ========= ========== ======== ========== ====== =====
t t $/lb (1) c/lb (2) $m $m $m $m
=========== ========== ======= ======== ======== ========= ========== ======== ========== ====== =====
Nickel 39,800 39,000 10.26 513 858 381 44% 317 79 24%
Prior year 41,700 42,100 7.73 377 710 320 45% 261 29 21%
=========== ========== ======= ======== ======== ========= ========== ======== ========== ====== =====
(1) Realised price.
(2) C1 unit cost.
Financial and operational overview
Underlying EBITDA increased by 19% to $381 million (2021: $320
million), reflecting higher realised prices, partially offset by
higher unit costs and lower sales volumes. C1 unit costs increased
by 36% to 513 c/lb (2021: 377 c/lb) as a result of high input cost
inflation, particularly on consumables, lower production volumes
and the stronger Brazilian real.
Capital expenditure increased to $79 million (2021: $29
million), primarily due to planned higher expenditure on
productivity initiatives, such as bulk ore sorting.
Markets
31 December 2022 31 December 2021
============================== ================ ================
Average market price ($/lb) 11.61 8.39
Average realised price ($/lb) 10.26 7.73
============================== ================ ================
Differences between the market price (which is LME-based) and
our realised price (the ferronickel price) are due to the discounts
(or premiums) to the LME price, which depend on market conditions,
supplier products and consumer preferences.
The average LME nickel price of $11.61/lb was 38% higher (2021:
$8.39/lb). Global nickel consumption grew year on year, with the
fourth quarter seeing the highest level of consumption as China
began to recover from earlier Covid-19 related industrial
stoppages. Batteries were the main driver of demand growth, as the
production of electric vehicles continued to accelerate. Global
refined nickel production also increased in the year; however, the
nickel price was further supported by the decision of some
purchasers to avoid Russian-sourced metal, following the invasion
of Ukraine.
Operational performance
Nickel production decreased by 5% to 39,800 tonnes (2021: 41,700
tonnes), primarily due to lower ore grades as a result of licensing
delays, as well as the impact of unplanned maintenance and heavy
rainfall. Sales volumes were further impacted by logistics
constraints, primarily in the container freight sector.
Operational outlook
Production guidance for 2023 is 38,000-40,000 tonnes .
C1 unit cost guidance for 2023 is c.515 c/lb.
Platinum Group Metals
Financial and operational metrics
Mining
Production Sales EBITDA
volume volume Basket Unit Group Underlying margin* Underlying
PGMs PGMs price cost* revenue* EBITDA* (5) EBIT* Capex* ROCE*
============ ========== ======= ========= ========== ========= ========== ========== ========== ====== =====
$/PGM oz $/PGM oz
koz (1) koz (2) (3) (4) $m $m $m $m
============ ========== ======= ========= ========== ========= ========== ========== ========== ====== =====
PGMs 4,024 3,861 2,551 937 10,096 4,417 54% 4,052 1,017 86%
Prior year 4,299 5,214 2,761 868 14,502 7,099 62% 6,753 894 140%
Mogalakwena 1,026 1,010 2,451 826 2,466 1,548 63% 1,380 394 n/a
Prior year 1,215 1,479 2,563 694 3,787 2,611 69% 2,471 435 -
Amandelbult 713 700 2,883 1,127 2,010 1,036 52% 982 74 n/a
Prior year 773 907 3,122 1,127 2,817 1,633 58% 1,571 81 -
Other
operations
(6) 911 842 2,615 928 2,270 1,033 46% 922 549 n/a
Prior year 871 1,056 2,935 899 3,081 1,717 56% 1,601 378 -
Processing
and trading
(7) 1,375 1,309 n/a n/a 3,350 800 24% 768 n/a n/a
Prior year 1,440 1,772 - - 4,817 1,138 24% 1,110 - -
============ ========== ======= ========= ========== ========= ========== ========== ========== ====== =====
(1) Production reflects own-mined production and purchase of
metal in concentrate. PGM volumes consists of 5E metals and
gold.
(2) Sales volumes exclude the sale of refined metal purchased
from third parties and toll material. PGM volumes consists of 5E
metals and gold.
(3) Average US$ realised basket price, based on sold ounces
(own-mined and purchased concentrate). Excludes the impact of the
sale of refined metal purchased from third parties.
(4) Total cash operating costs (includes on-mine, smelting and
refining costs only) per own-mined PGM ounce of production.
(5) The total PGMs mining EBITDA margin excludes the impact of
the sale of refined metal purchased from third parties, purchase of
concentrate and tolling.
(6) Includes Unki, Mototolo and PGMs' share of joint operations
(Kroondal and Modikwa). Other operations margin includes
unallocated market development, care and maintenance, and corporate
costs.
(7) 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 decreased to $4,417 million (2021: $7,099
million), primarily reflecting lower sales volumes as the prior
year benefited from the processing of higher than normal
work-in-progress inventory following the ACP Phase A rebuild, as
well as the impact of the Polokwane smelter rebuild in the second
half of 2022. Underlying EBITDA was also affected by an 8% decrease
in the basket price to $2,551/PGM ounce (2021: $2,761/PGM ounce),
as well as higher unit costs. Unit costs increased by 8% to
$937/PGM ounce (31 December 2021: $868/PGM ounce), impacted by high
input cost inflation and lower production, partly offset by the
weaker South African rand.
Capital expenditure increased by 14% to $1,017 million (2021:
$894 million), driven by the impact of Covid-19 related deferrals
in 2021.
Markets
31 December 2022 31 December 2021
====================================== ================ ================
Average platinum market price ($/oz) 961 1,086
Average palladium market price ($/oz) 2,111 2,388
Average rhodium market price ($/oz) 15,465 20,109
Realised basket price ($/PGM oz) 2,551 2,761
====================================== ================ ================
The average realised PGM basket price decreased by 8% to $2,551
per PGM ounce (2021: $2,761 per PGM ounce), reflecting lower market
prices. PGM prices surged in early 2022 owing to supply concerns
following Russia's invasion of Ukraine, but soon fell back when no
trade sanctions were levied on Russian metal. The price decline was
exacerbated by growing fears of another poor year for automotive
production due to renewed Chinese Covid-19 lockdowns. Sentiment
improved in the second half as restrictions eased in China, leading
to a sharp recovery in global automotive production, underpinned by
an improvement in manufacturing supply chains. The recovery in
automotive production resulted in a rally in palladium and rhodium
prices; however, platinum prices continued to
struggle as tighter US monetary policy pushed the US dollar to
multi-decade highs. By the end of the year, the situation had
reversed, with palladium and rhodium prices decreasing on fears of
a global slowdown, while platinum prices rallied as the US dollar
retreated.
The palladium price was particularly volatile, reaching a new
all--time high of almost $3,340 per ounce in March 2022, reflecting
the importance of Russian supply, albeit the metal started and
ended the year below $2,000 per ounce. Platinum prices also peaked
in March but the late rally meant it increased by 11% over the
year. Strong by-product prices and differences in the timing and
mix of metals sold cushioned the impact of lower PGM prices on the
realised basket price.
Operational performance
Total PGM production decreased by 6% to 4,024,000 ounces (2021:
4,298,700 ounces), principally due to lower grade at Mogalakwena
and the impact of planned infrastructure closures at Amandelbult,
partially offset by increased production from Mototolo and
Unki.
Own-mined production
PGM production from own-managed mines (Mogalakwena, Amandelbult,
Unki and Mototolo) and equity share of joint operations decreased
by 7% to 2,649,200 ounces (2021: 2,858,300 ounces).
Mogalakwena PGM production decreased by 16% to 1,026,200 ounces
(2021: 1,214,600 ounces), largely as a result of lower grades as
well as the impact of Eskom load-shedding.
Amandelbult PGM production decreased by 8% to 712,500 ounces
(2021: 773,200 ounces) as a result of the planned mining
infrastructure closures and the closure of the Merensky
Concentrator, as well as the impact of Eskom load-shedding.
Production from other operations increased by 5% to 910,500
ounces (2021: 870,500 ounces), reflecting the benefit of
concentrator debottlenecking projects at Unki and Mototolo, as well
as higher grades due to improved ground conditions at Mototolo,
offsetting lower production from Kroondal as a consequence of
planned infrastructure closures.
Purchase of concentrate
Purchase of concentrate decreased by 5% to 1,374,800 ounces
(2021: 1,440,400 ounces), driven by lower third-party receipts as
well as the impact of lower production at Kroondal.
Refined production and sales volumes
Refined PGM production (excluding toll-treated metal) decreased
by 25% to 3,831,100 ounces (2021: 5,138,400 ounces) as the first
half of 2021 benefited from the processing of higher than normal
work-in-progress inventory following the ACP Phase A rebuild in the
fourth quarter of 2020. The second half of 2022 was impacted by the
planned structural rebuild of the Polokwane smelter - a process
that was extended by approximately two months following the receipt
of materials found to be sub-standard as identified through our
quality assurance processes.
PGM sales volumes decreased by 26% to 3,861,300 ounces (2021:
5,214,400 ounces), in line with refined production.
Operational outlook
PGM metal in concentrate production guidance for 2023 is 3.6-4.0
million ounces, with own-mined output accounting for c.65%. Refined
PGM production guidance for 2023 is 3.6-4.0 million ounces, subject
to the impact of Eskom load-shedding.
Unit cost guidance for 2023 is c.$1,025/PGM ounce.
Iron Ore
Financial and operational metrics
Mining
Production Sales Unit Group Underlying EBITDA Underlying
volume volume Price cost* revenue* EBITDA* margin* EBIT* Capex* ROCE*
=================== ========== ======= ======= ======= ========= ========== ======== ========== ====== =====
Mt (1) Mt (1) $/t (2) $/t (3) $m $m $m $m
=================== ========== ======= ======= ======= ========= ========== ======== ========== ====== =====
Iron Ore Total 59.3 58.0 111 38 7,534 3,455 45% 2,962 834 28%
Prior year 63.8 63.3 157 33 11,104 6,871 62% 6,359 628 62%
Kumba Iron Ore (4) 37.7 36.7 113 40 4,580 2,211 48% 1,894 674 66%
Prior year 40.9 40.3 161 39 6,958 4,311 62% 3,960 417 140%
Iron Ore Brazil
(Minas-Rio) 21.6 21.3 108 35 2,954 1,244 41% 1,068 160 18%
Prior year 22.9 23.0 150 24 4,146 2,560 61% 2,399 211 42%
=================== ========== ======= ======= ======= ========= ========== ======== ========== ====== =====
(1 ) Production and sales volumes are reported as wet metric
tonnes. Product is shipped with c.1.6% moisture from Kumba and c.9%
moisture from Minas-Rio .
(2) Prices for Kumba Iron Ore are the average realised export
basket price (FOB Saldanha) (wet basis). Prices for Minas-Rio are
the average realised export basket price (FOB Brazil) (wet basis).
Prices for total iron ore are a blended average.
(3) Unit costs are reported on an FOB wet basis. Unit costs for
total iron ore are a blended average.
(4) Sales volumes and realised price differ to Kumba's
stand-alone reported results due to sales to other Group
companies.
Financial and operational overview
Underlying EBITDA for Iron Ore decreased by 50% to $3,455
million (2021: $6,871 million), due to a 29% decrease in the
realised iron ore price, lower sales volumes and higher unit
costs.
Kumba
Underlying EBITDA decreased by 49% to $2,211 million (2021:
$4,311 million), driven by a lower average realised price of
$113/tonne (2021: $161/tonne) and lower sales volumes. Unit costs
increased by 3% to $40/tonne (2021: $39/tonne), due to lower
production volumes and high input cost inflation, partially offset
by the weaker South African rand.
Production decreased by 8% to 37.7Mt (2021: 40.9Mt), largely as
a result of high rainfall and a safety intervention at Kolomela, as
well as equipment reliability. The impact of third-party logistics
constraints, including industrial action at Transnet (the
third-party rail and port operator) also contributed to the
decrease in production, as well as a 9% decrease in sales volumes
to 36.7Mt (2021: 40.3Mt). Total finished goods inventory increased
to 7.8 Mt (2021: 6.1 Mt), with most of the inventory being at the
mines .
Capital expenditure increased by 62% to $674 million (2021: $417
million), reflecting planned higher sustaining capital spend and
higher expansion capital spend at the Kapstevel South pit, as good
progress was made on the life-extension project at Kolomela. This
was partially offset by the weaker South African rand. Additional
complexities related to the ultra high dense media separation
(UHDMS) technology growth project at Sishen have necessitated a
review of the project plan.
Within special items and remeasurements, an impairment of $313
million (before tax and non-controlling interest) was recognised at
Kolomela following revisions to the production and cost profile in
the latest life of asset plan.
Minas-Rio
Underlying EBITDA decreased by 51% to $1,244 million (2021:
$2,560 million), reflecting the lower average realised price of
$108/tonne (2021: $150/tonne), lower sales volumes and higher unit
costs. Unit costs increased by 46% to $35/tonne (2021: $24/tonne),
reflecting higher input costs, principally in consumables and
electricity, lower production volumes, increased maintenance costs
and the impact of the stronger Brazilian real.
Capital expenditure was 24% lower at $160 million (2021: $211
million), reflecting the impact of timing differences.
Markets
31 December 2022 31 December 2021
================================================================ ================ ================
Average market price (Platts 62% Fe CFR China - $/tonne) 120 160
Average market price (MB 66% Fe Concentrate CFR - $/tonne) 145 185
Average realised price (Kumba export - $/tonne) (FOB wet basis) 113 161
Average realised price (Minas-Rio - $/tonne) (FOB wet basis) 108 150
================================================================ ================ ================
Kumba's FOB realised price of $113/wet metric tonne was 13%
higher than the equivalent Platts 62% Fe FOB Saldanha market price
(adjusted for moisture) of $100/wet metric tonne. This reflects the
premium for the higher iron content at 63.8% and relatively high
proportion (approximately 67%) of lump that the product portfolio
attracts, in particular because higher quality Fe product helps
steel mills reduce emissions.
Minas-Rio's pellet feed product is also higher grade (with iron
content of 67% and lower impurities) than the reference product
used for the Platts 62% Fe CFR China index. The Metal Bulletin (MB)
66 index, therefore, is used when referring to Minas-Rio product.
The Minas-Rio realised price of $108/wet metric tonne was in line
with the equivalent MB 66 FOB Brazil index (adjusted for moisture)
of $108/wet metric tonne, which reflects that the premium for our
high quality product was offset by the impact of provisionally
priced volumes.
Operational performance
Kumba
Production decreased by 8% to 37.7 Mt (2021: 40.9 Mt),
reflecting the impact of high rainfall across Kumba's operating
footprint and a safety intervention at Kolomela, as well as
equipment reliability and the impact of third-party logistics
constraints at both mines. The constraints have led to a
significant build-up of iron ore stockpiles at both mines, which
necessitated a decrease in production given the lack of available
storage space. Production at Sishen decreased by 4% to 27.0 Mt
(2021: 28.0 Mt) and at Kolomela by 17% to 10.7 Mt (2021: 12.8
Mt).
Minas-Rio
Production decreased by 6% to 21.6 Mt (2021: 22.9 Mt) due to
more challenging ore characteristics, lower mining equipment
availability and heavy rainfall.
Operational outlook
Kumba
Production guidance for 2023 is 35-37 Mt, subject to third-party
rail and por t performance.
2023 unit cost guidance is c.$44/tonne.
Minas-Rio
Production guidance for 2023 is 22-24 Mt.
2023 unit cost guidance is c.$32/tonne.
Steelmaking Coal
Financial and operational metrics
Mining
Production Sales Unit Group Underlying EBITDA Underlying
volume volume Price cost* revenue* EBITDA* margin* EBIT* Capex* ROCE*
================= ========== ======= ======= ======= ========= ========== ======== ========== ====== =====
Mt (1) Mt (2) $/t (3) $/t (4) $m $m $m $m
================= ========== ======= ======= ======= ========= ========== ======== ========== ====== =====
Steelmaking Coal 15.0 14.7 304 107 5,034 2,749 55% 2,369 648 85%
Prior year 14.9 14.1 200 105 2,899 962 33% 450 649 15%
================= ========== ======= ======= ======= ========= ========== ======== ========== ====== =====
(1) Production volumes are saleable tonnes, excluding thermal
coal production of 1.6 Mt (2021: 1.7 Mt). Includes production
relating to processing of third-party product.
(2) Sales volumes exclude thermal coal sales of 1.7 Mt (2021:
2.1 Mt). 2022 includes 0.3 Mt of steelmaking coal mined by third
parties and processed by Anglo American.
(3) Realised price is the weighted average hard coking coal and
PCI sales price achieved at managed operations.
(4) FOB cost per tonne, excluding royalties and study costs.
Financial and operational overview
Underlying EBITDA increased to $2,749 million (2021: $962
million), driven by a 52% increase in the weighted average realised
price for steelmaking coal and higher sales volumes. This was
partially offset by a 2% increase in unit costs to $107/tonne
(2021: $105/tonne), reflecting higher inflation and the impact of
tight labour markets. Also included is $250 million for the
finalisation of the Grosvenor gas ignition claim by the Group's
self-insurance entity that was received in the first half of the
year, as well as a further $93 million insurance receipt in
December for the overpressure event claim at Moranbah.
Capital expenditure was flat at $648 million (2021: $649
million), with higher development-related spend across all three
underground mines largely offset by lower life-extension
expenditure following the completion of the Aquila project, where
longwall production began in February 2022.
Within special items and remeasurements, impairment reversals of
$211 million and $217 million (before tax) were recognised at
Moranbah-Grosvenor and Dawson respectively. The reversal at
Moranbah-Grosvenor represents a partial reversal of previous
impairments, with improvements in the macro-economic environment
partially offset by a revised production profile and deferral of
the expansion project. The majority of the Dawson reversal is
arising from value expected to be generated in the short term.
Markets
31 December 2022 31 December 2021
========================================================= ================ ================
Average benchmark price - hard coking coal ($/tonne) (1) 364 226
Average benchmark price - PCI ($/tonne) (1) 331 164
Average realised price - hard coking coal ($/tonne) (2) 310 211
Average realised price - PCI ($/tonne) (2) 271 138
========================================================= ================ ================
(1) Represents average spot prices.
(2) Realised price is the sales price achieved at managed operations.
Average realised prices differ from the average market prices
due to differences in material grade and timing of shipments. Hard
coking coal (HCC) price realisation decreased to 85% of average
benchmark price (2021: 93%), driven by a higher volume of premium
HCC being produced and sold in the second half of 2022 when the
benchmark price was lower.
The average benchmark price for Australian HCC reached a record
high of $364/tonne (2021: $226/tonne). In the first half of 2022,
steelmaking coal prices rose on Queensland supply challenges and
buyers' anxiety around the effects of sanctions on Russian supply.
The daily spot index rallied to record multiple highs and
eventually peaked at $671/tonne in March 2022. In the second half
of the year, HCC prices remained at elevated levels due to ongoing
supply challenges in Australia and Canada, despite a significant
decline in demand from global steelmakers and coke merchants.
Operational performance
Production was broadly flat at 15.0 Mt (2021: 14.9 Mt), with all
three underground longwalls operating in the second half of 2022.
The planned end of mining at the Grasstree operation in January
2022 was partially offset by the ramp-up of the replacement Aquila
longwall, which began operations in February 2022, and fully ramped
up in June.
At Grosvenor, longwall operations restarted in February 2022
following regulatory approval, while longwall mining restarted at
Moranbah in the next planned longwall panel in May 2022, following
a fatal incident in March 2022, and an extended longwall move. Both
these longwall operations have continued to ramp up during the
second half of the year under the new operating protocols and
regulatory environment - a learning process that will continue
through 2023.
Production was also impacted by tight labour markets and record
unseasonal rainfall at the open pit operations.
Operational outlook
Export steelmaking coal production guidance for 2023 is 16-19
Mt.
Unit cost guidance for 2023 is c.$105/tonne.
Manganese
Financial and operational metrics
Mining
Production Sales Group Underlying EBITDA Underlying
volume volume revenue* EBITDA* margin* EBIT* Capex* ROCE*
=========== ========== ======= ========= ========== ======== ========== ====== =====
Mt Mt $m $m $m $m
=========== ========== ======= ========= ========== ======== ========== ====== =====
Manganese 3.7 3.6 840 378 45 % 312 n/a 138%
Prior year 3.7 3.7 768 315 41 % 250 - 104%
=========== ========== ======= ========= ========== ======== ========== ====== =====
Financial and operational overview
Manganese (Samancor)
Underlying EBITDA increased by 20% to $378 million (2021: $315
million), benefiting from a stronger average realised manganese ore
price, partially offset by a 4% decrease in manganese ore sales
volumes and by increased freight and operating costs.
The average benchmark price for manganese ore (Metal Bulletin
44% manganese ore CIF China) increased by 16% to $6.06/dmtu (2021:
$5.21/dmtu). Prices increased strongly in the first half of the
year, but were on a declining trend through much of the second
half. Prices regained some ground during December, ending the year
at $5.13/dmtu.
Operational performance
Attributable manganese ore production was flat at 3.7 Mt (2021:
3.7 Mt).
Crop Nutrients
Financial and operational metrics
Mining
Production Sales Group Underlying EBITDA Underlying
volume volume revenue* EBITDA* margin* EBIT* Capex* ROCE*
================== ========== ======= ========= ========== ======== ========== ====== =====
$m $m $m $m
================== ========== ======= ========= ========== ======== ========== ====== =====
Crop Nutrients n/a n/a 254 (44) n/a (45) 522 n/a
Prior year - - 114 (41) - (42) 530 -
Woodsmith project n/a n/a n/a n/a n/a n/a 522 n/a
Prior year - - - - - n/a 530 -
Other (1) n/a n/a 254 (44) n/a (45) n/a n/a
Prior year - - 114 (41) - (42) - -
================== ========== ======= ========= ========== ======== ========== ====== =====
(1) Other comprises projects and corporate costs as well as the
share in associate results from The Cibra Group, a fertiliser
distributor based in Brazil.
Crop Nutrients
Anglo American is developing 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 project is located on the North Yorkshire coast,
just south of Whitby, where polyhalite ore will be extracted via
1.6 km deep mine shafts and transported to Teesside via an
underground conveyor belt in a 37 km tunnel, thereby minimising any
environmental impact on the surface. It will then be granulated at
a materials handling facility to produce a low carbon fertiliser -
known as POLY4 - that will then be exported from our port facility,
where we have priority access, to a network of customers around the
world. POLY4 will enable farmers to enhance their crop yield,
increase crop quality and improve soil structure with one core
product.
Progress update
Woodsmith project
Throughout 2022, we continued with the detailed design reviews
and non-critical path studies, following which a number of areas
were modified to align with Anglo American's standards and optimise
value for the long term. Progress has continued to plan on the core
project infrastructure, with capital expenditure of $522 million in
2022.
During the year, as part of the construction review, contracts
were awarded for the shaft sinking operations, programme management
services and construction management to ensure the project can be
executed in line with Anglo American's stringent requirements.
With the award of these contracts and other infrastructure
improvements, activities at the deep shafts have progressed well
during 2022. The service shaft is now more than 360 metres deep,
while shaft sinking began 120 metres below the surface for the
production shaft in January 2023, as planned.
Three intermediate shafts will provide both ventilation and
additional access to the mineral transport system (MTS) tunnel. The
Lockwood Beck intermediate access shaft was successfully completed
in 2022 and is fully lined and connected to the tunnel. Work on the
MTS shaft at the mine head progressed through 2022 and is 85%
complete, and the excavation at the final intermediate access shaft
at the Ladycross site commenced in early 2023.
Following a planned maintenance pause in mid-2022 to refurbish
the tunnel boring machine and allow the connection with the
Lockwood Beck shaft, the mineral transport tunnel is now past the
21 km point and is more than 56% complete, progressing at rates not
seen since the start of the tunnelling activities.
As noted in a number of market updates throughout 2022, we are
enhancing the project's configuration - including the capacity of
the shafts and other infrastructure to accommodate higher
production volumes and more efficient and scalable mining methods
over time - to ensure we deliver maximum commercial returns from
Woodsmith over the expected multi-decade asset life. These project
team proposals, endorsed by the Board at the end of the year,
indicate an extension of the development schedule and the capital
budget, compared to what was previously anticipated.
In light of these changes, we now expect first product to market
in 2027, with an annual capital investment of around $1.0 billion.
We also expect design capacity to increase from c.10 Mtpa to c.13
Mtpa, subject to studies and approval. $0.8 billion is approved for
2023, with the bulk of initial spend on the shaft sinking and
tunnel boring activities. As usual in developing underground mines,
the schedule will largely be determined by the ground conditions
encountered as sinking activities progress.
We believe that the changes we have made to the project have had
a materially positive impact on the project's long term
attractiveness and prospects. However, for accounting purposes at
this early stage of the project's development, we have recognised
an impairment of $1.7 billion to the carrying value of the asset
within special items and remeasurements, reflecting the extension
of the development schedule and capital budget.
Market development - POLY4
The ongoing focus of the market development activities is to
develop and implement detailed sales and marketing strategies for
each region and to support customers with their own market
development activities to further promote POLY4 to the end users of
the product - farmers.
The number of commercial scale on-farm demonstrations has
accelerated, with more than 1,500 now complete and hundreds more in
progress. The demonstrations continue to validate the extent of
improvements that our product can deliver to farmers in terms of
crop yield and quality. In addition, studies show POLY4 enhances
soil health through resilience to compaction, erosion and run-off,
as well as improve nutrient availability to crops and fertiliser
nutrient use efficiency.
POLY4 offers farmers a solution to agricultural efficiency and
sustainability challenges through its naturally low chloride
multi-nutrient composition, its suitability for organic use and low
carbon profile, with a carbon footprint up to 85% lower compared to
conventional fertilisers, and with little waste generated in its
production.
Corporate and Other
Financial metrics
Production Sales Unit Group Underlying Underlying
volume volume Price cost* revenue* EBITDA* EBIT* Capex*
======================== ========== ======= ===== ====== ========= ========== ========== ======
$/t $/t
Mt (1) Mt (2) (3) (4) $m $m $m $m
======================== ========== ======= ===== ====== ========= ========== ========== ======
Segment n/a n/a n/a n/a 554 (440) (593) 14
Prior year - - - - 1,126 (3) (289) 125
Exploration n/a n/a n/a n/a n/a (155) (162) 2
Prior year - - - - - (128) (132) -
Corporate activities
and unallocated
costs (5) n/a n/a n/a n/a 554 (285) (431) 12
Prior year - - - - 354 (63) (270) 44
Thermal Coal - - - - - - - - -
South Africa (6)
Prior year 5.7 5.3 77 46 553 101 70 81
Thermal Coal - - - - - - - - -
Colombia (7)
Prior year 3.6 3.4 65 34 219 87 43 -
======================== ========== ======= ===== ====== ========= ========== ========== ======
(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 in 2021.
(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 in 2021 and third-party sales of 6.4 Mt in
2021.
(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) Revenue within Corporate activities and unallocated costs
primarily relates to third-party shipping activities, as well as
the Marketing business' energy solution's activities.
(6) Thermal Coal - South Africa mining activity included in
prior year until the demerger on 4 June 2021.
(7) Thermal Coal - Colombia represents the Group's attributable
share from its 33.3% shareholding in Cerrejón and reflects earnings
and volumes from the first half of 2021 only, before the agreement
was entered into.
Financial overview
Exploration
Exploration's underlying EBITDA loss was $155 million (2021:
$128 million loss), driven by the recovery in activity from the
Covid-19 disruptions in 2021 that affected greenfield base metals
exploration and near-mine iron ore exploration.
Corporate activities and unallocated costs
Underlying EBITDA was a $285 million loss (2021: $63 million
loss), driven primarily by the finalisation of the Grosvenor gas
ignition claim and the Moranbah overpressure event claim by the
Group's self-insurance entity, which resulted in an expense in
Corporate activities that was offset within the underlying EBITDA
of Steelmaking Coal.
Guidance summary
Production and unit costs
Unit costs
2023F Production volumes
Units 2023F 2024F 2025F
====== ======= ========= =======
Diamonds (1) c.$80/ct Mct 30-33 29-32 32-35
Copper (2) c.156 c/lb kt 840-930 910-1,000 840-930
Nickel (3) c.515 c/lb kt 38-40 39-41 37-39
c.$1,025/PGM ounce 3.6-4.0 3.6-4.0 3.5-3.9
PGMs - metal in concentrate (4) Moz
Platinum Moz 1.6-1.8 1.6-1.8 1.6-1.8
Palladium Moz 1.2-1.3 1.2-1.3 1.1-1.2
Other Moz 0.8-0.9 0.8-0.9 0.8-0.9
PGMs - refined (5) Moz 3.6-4.0 3.6-4.0 3.3-3.7
=================== ====== ======= ========= =======
Iron ore (6) c.$39/tonne Mt 57-61 61-65 64-68
Steelmaking Coal (7) c.$105/tonne Mt 16-19 20-22 20-22
Note: Unit costs exclude royalties, depreciation and include
direct support costs only. FX rates used for 2023 unit costs: 17
ZAR:USD, 1.5 AUD:USD, 5.3 BRL:USD, 900 CLP:USD, 3.8 PEN:USD.
(1) Unit cost is based on De Beers' share of production.
Production on a 100% basis except for the Gahcho Kué joint
operation, which is on an attributable 51% basis, subject to
trading conditions. Venetia continues to transition to underground
operations, first production is expected in 2023. Step-up in 2023
unit cost is primarily driven by change in production mix, as
Venetia transitions to underground operations and delivers a lower
carat profile during ramp-up.
(2) Copper business unit only. On a contained-metal basis. Total
copper is the sum of Chile and Peru. Unit cost total is a weighted
average based on the mid-point of production guidance. 2023 Chile:
530-580kt; Peru 310-350kt. 2024 Chile: 550-600kt; Peru: 360-400kt.
2025 Chile: 530-580kt; Peru 310-350kt. Production in Chile is
subject to water availability, and in Peru is subject to any
socio-political effects and full ramp-up. Chile 2023 unit cost is
c.190 c/lb. Peru 2023 unit cost is c.100 c/lb.
(3) Nickel operations in Brazil only. The Group also produces
approximately 20 kt of nickel on an annual basis as a co-product
from the PGM operations. Nickel production is impacted by declining
grades. Bulk ore sorting unit benefits 2024, and 2025 is impacted
by a maintenance shutdown.
(4) Unit cost is per own-mined 5E + gold PGMs metal in
concentrate ounce. Production is 5E + gold produced metal in
concentrate ounces. Includes own-mined production (65%) and
purchased concentrate volumes (35%). Metal in concentrate
production is impacted by lower grade and recoveries at
Mogalakwena, planned infrastructure closures and lower volumes from
Amandelbult. Kroondal switches to a tolling arrangement upon our
exit from the operation, expected in 2024. Lower volumes in 2025
reflect the transition of the Siyanda POC agreement to tolling.
(5) 5E + gold produced refined ounces. Includes own-mined
production and purchased concentrate volumes. Refined production is
subject to the impact of Eskom load-shedding. Kroondal switches to
a tolling arrangement upon our exit from the operation, expected in
2024. Lower volumes in 2025 reflect the transition of the Siyanda
POC agreement to tolling.
(6) Wet basis. Total iron ore is the sum of Kumba and Minas-Rio.
Unit cost total is a weighted average based on the mid-point of
production guidance. 2023 Kumba: 35-37Mt (production is impacted by
high levels of on-mine inventory); Minas-Rio: 22-24Mt. 2024 Kumba:
37-39Mt (subject to UHDMS plant coming online); Minas-Rio: 24-26Mt.
2025 Kumba: 39-41Mt; Minas-Rio: 25-27Mt. Kumba production is
subject to the third-party rail and port performance. Kumba 2023
unit cost is c.$44/tonne. Minas-Rio 2023 unit cost is
c.$32/tonne.
(7) Steelmaking Coal FOB/tonne unit cost comprises managed
operations and excludes royalties and study costs. Production
excludes thermal coal by-product from Australia.
Capital expenditure (1)
2023F 2024F 2025F
Growth $1.8bn $1.0bn $1.0bn
Includes $0.8bn Woodsmith capex Includes $0.3bn South African Includes $0.3bn South African
and $0.3bn South African regional regional renewable energy regional renewable energy
renewable energy ecosystem ecosystem and nuGen TM capex ecosystem and nuGen TM capex
and nuGen TM capex
Sustaining $4.2-4.7bn $4.5-5.0bn $4.0-4.5bn
Reflects $3.1-3.6bn baseline, Reflects $3.5-4.0bn baseline, Reflects $3.2-3.7bn baseline,
$0.7bn lifex projects and $0.4bn $0.7bn lifex projects and $0.3bn $0.5bn lifex projects and $0.3bn
Collahuasi desalination plant Collahuasi desalination plant Collahuasi desalination plant
(2) (2) (2)
Total $6.0-6.5bn $5.5-6.0bn $5.0-5.5bn
================================== ================================== ==================================
Further details on Anglo American's high quality growth and
life-extension projects, including details of the associated
volumes benefit, are disclosed on pages 14-17.
Long term sustaining capital expenditure is expected to be
$3.0-3.5 billion per annum (3) , excluding life-extension
projects.
Other guidance
- 2023 depreciation: $3.3-3.5 billion
- 2023 effective tax rate: 35-37% (4)
- Long term effective tax rate: 33-37% (4)
- Dividend payout ratio: 40% of underlying earnings
- Net debt:EBITDA: <1.5x at the bottom of the cycle.
(1) Cash expenditure on property, plant and equipment including
related derivatives, net of proceeds from disposal of property,
plant and equipment and includes direct funding for capital
expenditure from non-controlling interests. Shown excluding
capitalised operating cash flows. Consequently, for Quellaveco,
growth capex reflects attributable share. Guidance includes
unapproved projects and is, therefore, subject to progress of the
project studies and unapproved Woodsmith capex of $1 bn per annum
is excluded after 2023. Refer to the 2022 results presentation
slides 43-52 for further detail on the breakdown of the capex
guidance at project level.
(2) Attributable share of capex. Collahuasi desalination capex
shown includes related infrastructure.
(3) Long term sustaining capex guidance is shown on a 2022 real basis.
(4) Effective tax rate is highly dependent on a number of
factors, including the mix of profits and any corporate tax reforms
impacting the countries where we operate, and may vary from the
guided ranges.
For further information, please contact:
Media Investors
UK UK
James Wyatt-Tilby Paul Galloway
james.wyatt-tilby@angloamerican.com paul.galloway@angloamerican.com
Tel: +44 (0)20 7968 8759 Tel: +44 (0)20 7968 8718
Marcelo Esquivel Emma Waterworth
marcelo.esquivel@angloamerican.com emma.waterworth@angloamerican.com
Tel: +44 (0)20 7968 8891 Tel: +44 (0)20 7968 8574
Rebecca Meeson-Frizelle Michelle Jarman
rebecca.meeson-frizelle@angloamerican.com michelle.jarman@angloamerican.com
Tel: +44 (0)20 7968 1374 Tel: +44 (0)20 7968 1494
South Africa
Nevashnee Naicker
nevashnee.naicker@angloamerican.com
Tel: +27 (0)11 638 3189
Sibusiso Tshabalala
sibusiso.tshabalala@angloamerican.com
Tel: +27 (0)11 638 2175
Notes to editors:
Anglo American is a leading global mining company and our
products are the essential ingredients in almost every aspect of
modern life. Our portfolio of world-class competitive operations,
with a broad range of future development options, provides many of
the future-enabling metals and minerals for a cleaner, greener,
more sustainable world and that meet the fast growing every day
demands of billions of consumers. With our people at the heart of
our business, we use innovative practices and the latest
technologies to discover new resources and to mine, process, move
and market our products to our customers - safely and
sustainably.
As a responsible producer of 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.
www.angloamerican.com
Webcast of presentation:
A live webcast of the results presentation, starting at 9.00am
UK time on 23 February 2023, 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, prospects and projects (including development
plans and objectives relating to Anglo American's products,
production forecasts and Ore Reserve and Mineral Resource
positions) and sustainability performance related (including
environmental, social and governance) goals, ambitions, targets,
visions, milestones and aspirations, are forward-looking
statements. By their nature, such forward-looking statements
involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of
Anglo American or industry results to be materially different from
any future results, performance or achievements expressed or
implied by such forward-looking statements.
Such forward-looking statements are based on numerous
assumptions regarding Anglo American's present and future business
strategies and the environment in which Anglo American will operate
in the future. Important factors that could cause Anglo American's
actual results, performance or achievements to differ materially
from those in the forward-looking statements include, among others,
levels of actual production during any period, levels of global
demand and commodity market prices, unanticipated downturns in
business relationships with customers or their purchases from Anglo
American, mineral resource exploration and project development
capabilities and delivery, recovery rates and other operational
capabilities, safety, health or environmental incidents, the
effects of global pandemics and outbreaks of infectious diseases,
the impact of attacks from third parties on our information
systems, natural catastrophes or adverse geological conditions,
climate change and extreme weather events, the outcome of
litigation or regulatory proceedings, the availability of mining
and processing equipment, the ability to obtain key inputs in a
timely manner, the ability to produce and transport products
profitably, the availability of necessary infrastructure (including
transportation) services, the development, efficacy and adoption of
new or competing technology, challenges in realising resource
estimates or discovering new economic mineralisation, the impact of
foreign currency exchange rates on market prices and operating
costs, the availability of sufficient credit, liquidity and
counterparty risks, the effects of inflation, terrorism, war,
conflict, political or civil unrest, uncertainty, tensions and
disputes and economic and financial conditions around the world,
evolving societal and stakeholder requirements and expectations,
shortages of skilled employees, unexpected difficulties relating to
acquisitions or divestitures, competitive pressures and the actions
of competitors, activities by courts, regulators and governmental
authorities such as in relation to permitting or forcing closure of
mines and ceasing of operations or maintenance of Anglo American's
assets and changes in taxation or safety, health, environmental or
other types of regulation in the countries where Anglo American
operates, conflicts over land and resource ownership rights and
such other risk factors identified in Anglo American's most recent
Annual Report. Forward-looking statements should, therefore, be
construed in light of such risk factors and undue reliance should
not be placed on forward-looking statements. These forward-looking
statements speak only as of the date of this document. Anglo
American expressly disclaims any obligation or undertaking (except
as required by applicable law, the City Code on Takeovers and
Mergers, the UK Listing Rules, the Disclosure and Transparency
Rules of the Financial Conduct Authority, the Listings Requirements
of the securities exchange of the JSE Limited in South Africa, the
SIX Swiss Exchange, the Botswana Stock Exchange and the Namibian
Stock Exchange and any other applicable regulations) to release
publicly any updates or revisions to any forward-looking statement
contained herein to reflect any change in Anglo American's
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is
based.
Nothing in this document should be interpreted to mean that
future earnings per share of Anglo American will necessarily match
or exceed its historical published earnings per share. Certain
statistical and other information about Anglo American included in
this document is sourced from publicly available third-party
sources. As such it has not been independently verified and
presents the views of those third parties, but may not necessarily
correspond to the views held by Anglo American and Anglo American
expressly disclaims any responsibility for, or liability in respect
of, such information.
(c)Anglo American Services (UK) Ltd 2023. TM and TM are trade
marks of Anglo American Services (UK) Ltd.
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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END
FR PPUQAPUPWGBP
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