22 February 2024
Anglo American Preliminary
Results for the year ended 31 December
2023
Production increase and strong cost
performance outweighed by cyclical lows for PGMs and
diamonds
•Quellaveco
fully ramped up and produced 319,000 tonnes of copper at unit cost
of 111 c/lb
•On track
to reduce annual costs by c.$1 billion and capex by c.$1.6 billion
over 2024-2026
•Underlying
EBITDA* of $10.0 billion, a 31% decrease; 2% volume increase
and unit costs held to +4% despite high inflation, more than offset
by $5.5 billion revenue impact of PGMs and diamonds at cyclical
lows
•Profit
attributable to equity shareholders of
$0.3 billion
•Net debt*
of $10.6 billion: investing in long term growth through the cycle,
with leverage at 1.1x
•$1.2
billion total dividend for FY 2023, equal to $0.96 per share,
consistent with our 40% payout policy.
Duncan Wanblad, Chief Executive of
Anglo American, said: "2023 saw us increase production by 2% and contain the effect
of high inflation on our costs, while facing a cyclical downturn in
PGMs and diamonds. Against that backdrop, we are reducing annual
run rate costs by $1 billion and capital spend by $1.6 billion over
the next three years, while also cutting out unprofitable volumes.
This value over volume mindset represents our biggest margin lever
to enhance returns. We are systematically reviewing our assets and
will take further actions as needed to ensure their
competitiveness. We have also this week set out the difficult but
necessary reconfigurations of our PGMs and Kumba operations to set
them up on a far more sustainable footing, building on the recent
25% cost reduction from our consolidation of senior head office
roles.
"We continue to make progress on
safety, achieving our lowest ever injury rate in 2023. However, I
am sad to report that three colleagues died during the year
following two accidents, at Los Bronces and Kumba. We extend our
deepest condolences to their families, friends and colleagues. We
are unconditional in our commitment to safety and working to ensure
that every colleague returns home safe and well each
day.
"Operationally, we ramped up our
flagship Quellaveco operation to full capacity in 2023, producing
319,000 tonnes of copper at a highly competitive unit cost.
Minas-Rio set a number of performance records,
while Kumba performed well but was limited by third-party rail
constraints. At Los Bronces we have reconfigured the mine plan to
remove unprofitable production during a phase of lower grades and
hard ore, and in Australia we reset production plans to align with
new safety protocols and ongoing challenging ground conditions at
Moranbah. PGMs and De Beers performed well operationally but faced
markets at cyclical lows.
"Underlying EBITDA of
$10.0 billion at a 39% Mining EBITDA margin* reflects a 13%
lower product basket price and a 4% unit cost increase,
partially offset by our 2% volume growth. Net debt increasing to
$10.6 billion reflects the growth investments we are making through the cycle in line with our
belief in the strong long term fundamentals. Our updated assessment
of global GDP growth and consumer demand were the main factors
behind our $1.6 billion write-down of our book value of De Beers,
principally relating to goodwill. Our $0.5 billion proposed
final dividend of $0.41 per share is in line with our 40%
payout policy.
"There is no doubt that while the
immediate macro picture presents some challenges for our PGMs and
diamonds businesses, the demand trends for metals and minerals have
rarely looked better. We are focused on reducing complexities and
continue to manage our assets, capital and portfolio dynamically
and for value. This includes syndicating large greenfield projects
for value, as we did with Quellaveco, and as we plan to do for
Woodsmith at the right time. We also look to identify opportunities
with adjacent assets where there is significant value to be
unlocked, while progressing our sequence of organic project options
that offer considerable value growth, predominantly in copper, crop
nutrients and high quality iron ore."
|
|
|
|
|
31 December 2023
|
31 December 2022
|
Change
|
US$ million, unless otherwise
stated
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable free cash
flow*
|
|
|
|
Profit attributable to equity
shareholders of the Company
|
|
|
|
Basic underlying earnings per share*
($)
|
|
|
|
Basic earnings per share
($)
|
|
|
|
Final dividend per share
($)
|
|
|
|
Interim dividend per share
($)
|
|
|
|
Total dividend per share
($)
|
|
|
|
|
|
|
|
Terms with this symbol * are
defined as Alternative Performance Measures (APMs). For more
information, refer to page 84.
Sustainability
performance
Key sustainability performance
indicators(1)
Anglo American tracks its strategic
progress using KPIs that are based on our seven pillars of value:
safety and health, environment, socio-political, people,
production, cost, and financial. In addition to the financial
performance set out above and our operational performance on pages
6-34, our performance for the first four pillars is set out
below:
|
|
|
|
|
|
Pillar of value
|
Metric
|
31 December 2023
|
31 December 2022
|
Target
|
Target achieved
|
Safety and health
|
Work-related fatal
injuries
|
3
|
2
|
Zero
|
Not achieved
|
|
Total recordable injury frequency
rate (TRIFR) per million hours
|
1.78
|
2.19
|
Reduction year on year
|
On track
|
|
New cases of occupational
disease
|
15
|
5
|
Reduction year on year
|
Not achieved
|
Environment
|
GHG emissions - Scopes 1 &
2
(Mt CO2e)
|
12.5
|
13.3
|
Reduce absolute GHG emissions by 30%
by 2030
|
On track
|
|
Fresh water withdrawals
(ML)(2)
|
38,040
|
35,910
|
Reduce fresh water abstraction in
water scarce areas by 50% by 2030
|
On track for 2030 target
|
|
Level 4-5 environmental
incidents
|
0
|
0
|
Zero
|
On track
|
Socio-political
|
Social Way 3.0
implementation(3)
|
73%
|
66%
|
Full implementation of the Social
Way 3.0 by end 2022
|
Behind schedule
|
|
Number of jobs supported
off site(4)
|
139,308
|
114,534
|
|
|
|
Local procurement spend
($bn)(5)
|
13.0
|
13.6
|
|
|
|
Taxes and royalties
($m)(6)
|
5,081
|
5,893
|
|
|
People
|
Women in management
|
34%
|
32%
|
To achieve 33%
by 2023
|
Achieved
|
|
Women in the workforce
|
26%
|
24%
|
|
|
|
Voluntary labour turnover
|
3.5%
|
3.6%
|
< 5%
|
On track
|
(1)The
following sustainability performance indicators for the year ended
31 December 2023 and the comparative period are externally assured:
work-related fatal injuries; TRIFR; GHG emissions; and fresh water
withdrawals.
(2)Fresh
water withdrawal data can vary year on year due to seasonal
variations in hydrological cycles, production profiles and
operational requirements. The fresh water savings projects and
initiatives remain on track to achieve our 2030 water reduction
targets, with a reduction to date of 22% against the 2015 baseline
(48,666 ML).
(3)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
Socio-political commentary on page 4.
(4)Jobs
supported since 2018, in line with the Sustainable Mining Plan
Livelihoods stretch goal.
(5) Local
procurement is defined as procurement from businesses that are
registered and based in the country of operation - also referred to
as in-country procurement - and includes local procurement
expenditure from the Group's subsidiaries and a proportionate share
of the Group's joint operations, based on shareholding.
(6)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, being the amounts remitted by 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.
Safety
Anglo American's number one value
is safety, and it is our first priority, always. We are committed,
and believe it is possible, to prevent our people from being harmed
at work. Safety is foremost in everything we do; we train, equip
and empower our people to work safely, because we believe that
everybody, everywhere should return home safe at the end of their
working day.
In 2023, we renewed our focus on
three key safety levers: supporting operational leaders to spend
more time in the field; using our Operating Model principles to
deliver planned work, with risk identification and mitigation at
the heart of that work; and implementing our new Contractor
Performance Management framework across the business. We have made
solid progress in our safety journey, recording our lowest total
recordable injury frequency rate (TRIFR) of 1.78 in 2023 (2022:
2.19). While encouraged by this improvement, we were deeply
saddened to lose three colleagues at our managed operations: one at
our Kumba iron ore business in South Africa, and two at our Los
Bronces copper operation in Chile.
Alongside our continued use of
innovative technologies to help make Anglo American a safer and
healthier place to work, we are building a stronger safety culture,
based on the established concept of Visible Felt Leadership (VFL).
VFL involves connecting operational leaders on a one to one or
small group basis around a task or activity and ensuring that it is
done safely and effectively. Unlike traditional 'top-down'
interventions, which were generally regarded by both leaders and
frontline workers as "looking to see what's wrong", our approach to
VFL recognises people for doing the right things, and encourages
them to stand up for safety and speak up if they see something that
doesn't look or feel right.
To deliver safe, responsible
production, we know that we need to be better at how we work with
our contractors and how we support their safety on our sites,
ensuring they too feel valued and respected as a critical
contributor to everyone's safety. We have, therefore, launched a
new Contractor Performance Management framework which has been
designed as an end to end approach: it incorporates people,
processes and systems and provides the foundation for safe and
stable production by creating a psychologically and physically
safe, healthy and productive work environment for employees,
contractors and suppliers.
Health
In 2023, we continued to implement
our Health and Well-being strategy in line with the World Health
Organization (WHO) Healthy Workplace model and framework covering
employee health. This strategy, supported by our WeCare well-being
and livelihoods support programmes, requires us to work together
to support our people and achieve our
health and well-being goals.
Occupational diseases
In 2023, there were 15 reported new
cases of occupational disease, of which 14 were related to noise
exposure (2022: 5, all related to noise exposure). A significant
challenge in reporting occupational disease is that many hazards do
not cause immediate symptoms or measurable health harms.
Occupational disease is often not detectable or definable until
many years after exposure. This means cases reported in a given
year are most likely to reflect accumulated past working
conditions. This latency challenge underscores the importance of
long term environment monitoring, comprehensive worker occupational
health surveillance, and proactive risk assessment - preventative
management strategies that are an ongoing focus at Anglo
American.
Occupational exposures
At the beginning of 2023, we
changed the definition of our occupational exposure metrics to
reduce the threshold of definitions of exposure to inhalables and
carcinogens in line with the Occupational
Health and Safety Act 85 (1993) South Africa. This change to
the reporting basis has led to an increase in the number of
exposure incidents captured, resulting in 2023 data being
incomparable to that reported in 2022.
Although it is not possible to
compare year-on-year exposure levels, there has been a reduction in
the number of employees exposed to occupational hazards above the
occupational exposure limit over the course of 2023. Occupational
noise exposure enhancements were driven by acoustic improvements at
both PGMs and Copper. Advancements in relation to employees exposed
to inhalables and carcinogens were largely driven by enhanced local
exhaust ventilation controls at our PGMs processing operations and
retrofitting of diesel exhaust after-treatment systems on a range
of diesel-powered equipment at our underground
operations.
Environment
Our Sustainable Mining Plan
includes commitments to be a leader in environmental stewardship.
By 2030, we aim to reduce greenhouse gas (GHG) emissions (Scopes 1
and 2) by 30%; achieve a 50% reduction in fresh water abstraction
in water scarce areas; and deliver net-positive impacts in
biodiversity across our managed operations.
In addition to our GHG emissions
reduction aims, we also have a target to be carbon neutral across
our operations by 2040, and an ambition to at least halve our Scope
3 emissions, also by 2040. We continue to make encouraging
progress, with Scope 1 and 2 GHG emissions 6% lower than the prior
year, despite the increase in production volumes. In Peru, our
Quellaveco copper mine was supplied with 100% renewable electricity
supply from April 2023, completing the transition for all our
operations in South America. With our operations in Australia
moving to renewable supply from 2025, we are on target to be
drawing approximately 60% of our global grid supply from renewables
from 2025. In southern Africa, we are developing a regional
renewable energy ecosystem through our partnership with EDF
Renewables, known as Envusa Energy. In 2023, Envusa Energy made
significant progress towards the delivery of solar and wind power
to our operations. The three Koruson 2 projects, on the border of
the Northern and Eastern Cape provinces, are expected to reach a
key milestone - financial close - with the lenders consortium and
EDF Renewables, imminently.
Methane emissions from our
steelmaking coal operations represent the largest component of our
Scope 1 emissions and we continue to explore ways to manage and
abate these emissions. We have invested significantly, in excess of
$100 million per annum, in methane capture infrastructure at our
underground steelmaking coal operations. In 2023, across these
operations, we abated approximately 60% of methane emissions,
including 5.3 million tonnes of CO2e emissions
through the capture and delivery of methane to gas-fired power
stations with our partner and operator, EDL.
As part of our ambition to reduce
our Scope 3 emissions by at least 50% by 2040, we are focusing on
hard-to-abate sectors such as steel - from which most of our value
chain emissions derive. In 2023, we agreed several MoUs with our
customers, including H2 Green Steel, Meranti and Baowu, with a
focus on reducing emissions within the steel value chain. The
collaborations focus on accelerating the adoption of less carbon
intensive production technologies, such as DRI and EAF, using Anglo
American's premium quality iron ore products from the Kumba mines
in South Africa and Minas-Rio mine in Brazil.
With more than 80% of our global
assets located in water scarce areas, we need to reduce our
dependence on fresh water and are working on technologies to help
us do that. Our combined technologies of coarse particle recovery
(CPR) and hydraulic dewatered stacking (HDS) are demonstrating a
new way to safely dispose of mining waste and accelerate our
progress towards ending wet tailings storage, while also increasing
production and reducing energy consumption. Following an 18-month
pilot period at our El Soldado copper mine's technology-testing hub
in Chile, the two processes, working in tandem with each other,
have accelerated dewatering times significantly and yielded water
recoveries of c.80%, while considerably lowering the liquefaction
risk of stored tailings, as well as delivering significant energy
savings. Full-scale CPR plants are at advanced stage
of commissioning at Mogalakwena (PGMs) and Quellaveco
(Copper).
Socio-political
We continue working to strengthen
and broaden our social performance competencies through embedding
the Social Way 3.0 (launched in 2020) across Anglo American. The
Social Way is our asset-level system for managing impacts to
stakeholders, related risks to the business and delivery of
socio-economic benefits. The Social Way 3.0 is a critical
foundation of our business and an enabler of our sustainability
commitments. We believe it is one of the most robust and
comprehensive social performance management systems in the mining
sector.
While we did not meet our ambitious
goal of full implementation of the Social Way 3.0 at all sites by
the end of 2022, we continued to progress embedding the system and
have implemented a significant majority of the core elements. Half
of the assets assessed have achieved the implementation goal, and
we continue to work with those needing to make more progress. In
early 2023, we re-baselined the site-level implementation pathways
and challenged our teams to set realistic but ambitious goals for
delivery, focusing on the most material elements that mattered to
our stakeholders. By the end of 2023, our operations reported 96%
delivery against those implementation pathways, and we expect this
to continue in 2024 as we embed the implementation and use it to
deliver value for our stakeholders and business. 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.
Since the launch of our Sustainable
Mining Plan, we have supported 139,308 off site jobs 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.
The success of our business is
shared with a wide range of stakeholders, including national
governments and host communities, through the significant corporate
tax, mining tax and royalty payments that we make. Total taxes and
royalties borne and taxes collected amounted to $5,081 million, a
14% decrease compared with the prior year, reflecting lower profit
before tax and revenues.
People
Tightly linked to our safety
imperative and our Values, we strive to create a workplace that
places people at its heart. We are committed to promoting an
inclusive and diverse environment where every colleague is valued
and respected for who they are, and has the opportunity to fulfil
their potential.
By the end of 2023, we exceeded our
consolidated target of 33% female representation across the
business for our management population, reaching 34%. However, for
female representation for those on the Executive Leadership Team
and for those reporting into an Executive Leadership Team member,
we achieved 25% and 29%, respectively. The company is committed to
building female representation in our Executive Leadership Team and
those reporting to them. We have seen positive improvements year on
year on other key performance metrics such as the percentage of
women in the workforce which increased to 26% in 2023 (2022:
24%).
We were recognised for our work on
reducing gender inequalities in the workplace by being included in
The Times' Top 50 Employers for Gender Equality Index for the
second year in a row; both Anglo American plc and our PGMs
business, Anglo American Platinum, were also included in the
Bloomberg Gender Equality Index in 2023. Anglo American was once
again included in the Top Employer listings in both South Africa
and the UK. In January 2023, Anglo American became the first mining
company, and the third company in the world, to secure a global
living wage accreditation from the Fair Wage Network, formally
recognising our status as a committed living wage employer across
the Group.
Living with Dignity - building a
safe and inclusive culture
Building a safe and inclusive
culture has been a longstanding focus Anglo American as part of our
commitment to our people and the communities in which we operate.
We are committed to listening to our people and the community
stakeholders who support our business every day.
We deeply understand the unique
role our business plays in society, and we believe that this
extends beyond our mine fences. 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 dignity harms, including
gender-based and domestic violence.
We continue to build on this
important work as part of our WeCare global lives and livelihoods
programme and, in 2022, established our Living with Dignity Hub in
South Africa to bring our policies to life in an independent unit
dedicated to providing ongoing and committed support to our
employees, contractors and their families. The Hub handles all
formal complaints of dignity harms - including 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. We are proud of the
results we have seen from the Hub, which has handled over 429 cases
since opening and a consistent increase in reports as awareness
rises, establishing itself as the primary support centre to get
help when it is most needed.
Sustainable Mining Plan
Our Sustainable Mining Plan is
designed to be a flexible, living plan and we will continue to
evolve it as we learn and make progress and as technologies
develop, while also ensuring 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 of
the Sustainable Mining Plan that we feel may benefit from being
updated to align more closely with our stakeholder expectations or
deliver improved sustainability outcomes 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 2023
Operational performance
Production volumes increased by 2%
on a copper equivalent basis, primarily driven by the ramp-up of
our Quellaveco copper mine in Peru, a strong operational
performance at our Minas-Rio iron ore operation in Brazil,
as well as higher production from our Steelmaking Coal
operations in Australia. Production was lower at De Beers, as
the Venetia mine transitions from open pit to underground
operations, and at PGMs due to lower production from the Kroondal
joint operation (now sold) and planned infrastructure closures at
Amandelbult. Lower grades impacted production at
Los Bronces (Copper Chile).
Total copper production of 826,200
tonnes increased by 24% (2022: 664,500 tonnes), primarily
driven
by Quellaveco (Copper Peru), which reached
commercial production levels in June 2023 and delivered 319,000
tonnes of copper in the year. Copper Chile's production
of 507,200 tonnes was 10% lower (2022: 562,200 tonnes),
principally driven by Los Bronces, where production decreased
by 20% to 215,500 tonnes (2022: 270,900 tonnes) due to lower grades
and ore hardness. Collahuasi's attributable production was
marginally higher at 252,200 tonnes (2022: 251,100 tonnes) due to
planned higher grades and the ongoing commissioning of a fifth ball
mill that started at the end of October.
Nickel production increased
marginally to 40,000 tonnes (2022: 39,800 tonnes), reflecting
improved operational stability.
Total PGM production decreased by
5% to 3,806,100 ounces (2022: 4,024,000 ounces), principally due to
lower production from the Kroondal joint operation (now sold),
planned infrastructure closures at Amandelbult and lower grades at
Mogalakwena, partially offset by higher production at
Unki.
De Beers' rough diamond
production decreased by 8% to 31.9 million carats (2022:
34.6 million carats), due to planned lower production levels
at Venetia as the operation transitions to underground.
Iron ore production was broadly in
line with the prior year at 59.9 Mt (2022: 59.3 Mt). Minas-Rio
production increased by 12% to 24.2 Mt (2022:
21.6 Mt), the best performance since the start of the
operation in 2014, reflecting an integrated focus on stable and
capable operating performance. At Kumba, production decreased by 5%
to 35.7 Mt (2022: 37.7 Mt), as underperformance by the
third-party logistics provider, Transnet, resulted in production in
the fourth quarter being reduced to align to lower rail capacity
and alleviate mine stockpile constraints.
Steelmaking coal production
increased by 7% to 16.0 Mt (2022: 15.0 Mt), reflecting a
steady step-up in performance from the Aquila underground operation
due to its largely automated longwall, and increased production at
the open cut operations which were impacted by unseasonal wet
weather in 2022. Moranbah continues to operate through
challenging strata conditions.
Manganese ore production was in
line with the prior year at 3.7 Mt (2022: 3.7 Mt).
Group copper equivalent unit costs
increased by 4% as inflationary pressures, particularly labour and
electricity, were partially offset by the benefit of favourable
exchange rates and ramp-up of production from Quellaveco which
started operations in July 2022. Excluding the favourable impact of
foreign exchange, unit costs increased by 7%.
Financial performance
Anglo American's profit
attributable to equity shareholders decreased to $0.3 billion
(2022: $4.5 billion). Underlying earnings were
$2.9 billion (2022: $6.0 billion), while operating
profit was $3.9 billion (2022: $9.2 billion).
Underlying EBITDA*
Group underlying EBITDA decreased
by $4.5 billion to $10.0 billion
(2022: $14.5 billion). Financial results were impacted by
lower prices in PGMs, as well as diamonds, which were predominantly
driven by mix. As a result, the Group Mining EBITDA margin*
of 39% was lower than the prior year (2022: 47%). Our strong
balance sheet and ongoing focus on cost control and cash generation
has allowed us to continue to invest appropriately in our future
growth options. 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
Underlying EBITDA* reconciliation
for the year ended 31 December 2022 to year ended
31 December 2023
The reconciliation of underlying
EBITDA from $14.5 billion in 2022 to $10.0 billion
in 2023 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.
Price
Average market prices for the
Group's basket of products decreased by 13% compared to 2022,
reducing underlying EBITDA by $4.8 billion. The PGMs basket price
decreased by 35%, primarily driven by rhodium and palladium, which
decreased by 58% and 37% respectively. Alongside this, the weighted
average realised price for steelmaking coal reduced by 14%
and the De Beers consolidated average realised price for diamonds
fell by 25%, predominantly driven by mix.
Foreign exchange
Favourable foreign exchange
benefited underlying EBITDA by $1.0 billion, primarily
reflecting the favourable impact of the weaker South African rand
on costs.
Inflation
The Group's weighted average CPI
was 5% in 2023 as inflation continued to increase in all
regions, albeit lower than the 8% in 2022. The impact of CPI
inflation on costs reduced underlying EBITDA by $0.7 billion
(2022: $0.9 billion).
Net cost and volume
The net impact of cost and volume
was a $0.1 billion decrease in underlying EBITDA, driven by
lower sales volumes at De Beers due to weaker market sentiment, and
lower sales at Copper Chile primarily as a result of lower grades
and ore hardness at Los Bronces impacting production and costs. In
addition, above-CPI inflationary pressures contributed to higher
costs across the Group, particularly in South Africa at both PGMs
and Kumba. These were largely offset by the ramp-up of volumes at
Quellaveco and improved sales at Minas-Rio due to higher production
volumes.
Other
The $0.1 billion favourable
movement in underlying EBITDA from other factors was primarily
driven by smaller increases to environmental restoration provisions
at Copper Chile than in the prior year, partially offset by
the impact of lower sales volumes and cost pressures at our
associates and joint operations.
Underlying earnings*
Group underlying earnings
decreased to $2.9 billion (2022: $6.0 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*
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortisation
|
|
|
Net finance costs and income tax
expense
|
|
|
Non-controlling
interests
|
|
|
|
|
|
Depreciation and
amortisation
Depreciation and amortisation
increased by 10% to $2.8 billion
(2022: $2.5 billion), largely due to Quellaveco
commencing commercial production in June 2023, as well as a higher
carrying value of our Steelmaking Coal assets due to the impairment
reversal recognised in 2022.
Net finance costs and income tax
expense
Net finance costs, before special
items and remeasurements, were $0.6 billion (2022: $0.3
billion). The increase was principally driven by the impact of
higher floating interest rates on the Group's interest
expenses.
The underlying effective tax rate
(ETR) was higher than the prior year at 38.5% (2022: 34.0%),
impacted by the relative levels of profits arising in the Group's
operating jurisdictions as well as the revaluation of deferred
taxes in Chile following the enactment of
the Mining Royalty Bill during the year, which contributed a 1.2
percentage point increase to the Group's ETR. The tax charge for
the year, before special items and remeasurements, was $2.3 billion
(2022: $3.6 billion), reflecting lower profit
before tax.
Non-controlling
interests
The share of underlying earnings
attributable to non-controlling interests of $1.1 billion
(2022: $1.6 billion) principally relates to minority
shareholdings in Kumba (Iron Ore), Copper and PGMs.
Special items and
remeasurements
Special items and remeasurements
(after tax and non-controlling interests) are a net charge of $2.6
billion (2022: net charge of $1.5 billion),
principally relating to the impairments after tax and
non-controlling interests of $1.6 billion recognised in De
Beers and $0.5 billion recognised in Barro Alto
(Nickel).
Full details of the special items
and remeasurements recorded are included in note 10 to the
Condensed financial statements.
Net debt*
|
|
|
$ million
|
2023
|
2022
|
Opening net debt* at 1
January
|
|
|
Underlying EBITDA* from subsidiaries
and joint operations
|
|
|
Working capital movements
|
|
|
Other cash flows from
operations
|
|
|
Cash flows from
operations
|
|
|
Capital repayments of lease
obligations
|
|
|
|
|
|
Dividends from associates, joint
ventures and financial asset investments
|
|
|
|
|
|
Distributions paid to
non-controlling interests
|
|
|
Sustaining capital
expenditure
|
|
|
Sustaining attributable free cash
flow*
|
|
|
Growth capital expenditure and
other(2)
|
|
|
Attributable free cash
flow*
|
|
|
Dividends to Anglo American plc
shareholders
|
|
|
Acquisitions and
disposals
|
|
|
Foreign exchange and fair value
movements
|
|
|
Other net debt
movements(3)
|
|
|
Total movement in net
debt*
|
|
|
Closing net debt* at 31
December
|
|
|
(1) Includes cash outflows of
$403 million (2022: outflows of $14 million), relating to
interest payments on derivatives hedging net debt, which are
included in cash flows from derivatives related to financing
activities.
(2) Growth capital expenditure and other
includes $133 million (2022: $129 million) of expenditure on
non-current intangible assets.
(3) Includes the purchase of shares
(including for employee share schemes) of $274 million;
Mitsubishi's share of Quellaveco capital expenditure of $129
million; other movements in lease liabilities (excluding variable
vessel leases) increasing net debt by $120 million; and
contingent and deferred consideration paid in respect of
acquisitions completed in previous years of $128 million. 2022
includes the purchase of shares under the 2021 buyback programme 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.
Net debt (including related
derivatives) of $10.6 billion increased by $3.7 billion
since 31 December 2022, which includes a working capital cash
outflow of $1.2 billion, primarily due to a reduction in
payables. The Group generated sustaining attributable free cash
flow of $0.1 billion. Further funding includes growth
capital expenditure of $1.3 billion and dividends paid to
Anglo American plc shareholders of $1.6 billion. Net debt at
31 December 2023 represented gearing (net debt to total
capital) of 25% (2022: 17%). Net debt to EBITDA ratio of
1.1x (2022: 0.5x) remains well within our target range of <1.5x
at the bottom of the cycle.
Cash flow
Cash flows from
operations
Cash flows from operations
decreased to $8.1 billion (2022: $11.9 billion),
reflecting a reduction in underlying EBITDA from subsidiaries and
joint operations, and a working capital build of
$1.2 billion (2022: build of $2.1 billion).
Payables reduced by $0.8 billion, largely driven by the impact
of lower PGM prices on the valuation of the Purchase of Concentrate
(POC) creditor as well as the PGM customer prepayment. Receivables
increased by $0.4 billion led by higher price and volume
across Iron Ore and Copper. Inventory was flat in the year, with
price and volume led reductions at PGMs offsetting a build at De
Beers driven by weak demand for diamonds and the impact of
logistics constraints on Kumba's inventory levels.
|
|
|
|
Year ended
|
Year ended
|
|
|
|
|
|
|
Development and
stripping
|
|
|
|
|
|
Proceeds from disposal of property,
plant and equipment
|
|
|
|
|
|
|
|
|
Total capital
expenditure
|
|
|
Capital expenditure remained in
line with prior year at $5.7 billion as higher sustaining
capital was offset by reduced growth capital.
Sustaining capital expenditure
increased to $4.4 billion (2022: $4.1 billion),
driven by additional stay-in-business expenditure for Copper Chile
related to the Collahuasi desalination plant project, the new
tailings filtration plant for Minas-Rio (Iron Ore) in Brazil, and
increased expenditure at Quellaveco as it transitioned into
operations.
Growth capital expenditure of $1.3
billion primarily related to the Woodsmith project and the
remaining spend on completing Quellaveco. This was lower than the
prior year (2022: $1.6 billion) as the Quellaveco project was
successfully delivered in July 2022, and reached commercial
production levels in June 2023.
Attributable free cash
flow*
The Group's attributable free cash
flow decreased to an outflow of $1.4 billion
(2022: inflow of $1.6 billion), mainly due to lower
cash flows from operations of $8.1 billion
(2022: $11.9 billion) and an increase in net interest
to $0.7 billion (2022: $0.3 billion). This was
partially offset by decreased tax payments of $2.0 billion
(2022: $2.7billion) and a reduction in dividends paid to
non-controlling interests to $1.0 billion (2022: $1.8
billion).
In line with the Group's
established dividend policy to pay out 40% of underlying earnings,
the Board has proposed a final dividend of $0.41 per
share (2022: $0.74 per share), equivalent to $0.5 billion
(2022: $0.9 billion).
Net cash inflows on disposals of
$0.2 billion principally relate to the settlement of the deferred
consideration balance relating to the sale of the Rustenburg
operations (PGMs) completed in November 2016.
Balance sheet
Net assets decreased by $2.3
billion to $31.6 billion (2022: $34.0 billion), reflecting
dividend payments to Company shareholders and non-controlling
interests as well as foreign exchange movements, partially offset
by the profit in the year, which was impacted by the impairments at
De Beers and Nickel.
Attributable ROCE decreased to 16%
(2022: 30%). Attributable underlying EBIT decreased to $5.4
billion (2022: $9.7 billion), reflecting the impact of lower
realised prices for the Group's products and inflationary cost
pressures. Average attributable capital employed increased to
$33.2 billion (2022: $32.0 billion), primarily due
to capital expenditure, largely at Quellaveco and Collahuasi
(Copper), and shipping vessel lease additions and revaluations
(Corporate and Other), partly offset by the reduction in
capital employed following the De Beers and Nickel impairments
recorded in 2023.
Liquidity and funding
Group liquidity stood at
$13.2 billion (2022: $16.1 billion), comprising
$6.1 billion of cash and cash equivalents (2022: $8.4 billion)
and $7.2 billion of undrawn committed facilities (2022: $7.7
billion).
During the first half of 2023, the
Group issued $2.0 billion of bond debt. In March 2023, the
Group issued €500
million 4.5% Senior Notes due 2028, €500 million 5.0% Senior Notes due
2031 and, in May 2023, $900 million 5.5% Senior Notes due
2033. These were swapped to US dollar floating interest rate
exposures in line with the Group's policy.
Consequently, the weighted average
maturity on the Group's bonds was broadly in line with the prior
year at 7.4 years (2022: 7.7 years).
In the second half of 2023, the
Group refinanced its $4.7 billion revolving credit facility
maturing in March 2025, to a one year $1 billion facility
maturing in November 2024, and a $3.7 billion five year
facility maturing in November 2028.
Attractive growth
options
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.
Growth
projects (metrics presented on a 100%
basis unless otherwise indicated)
Progress and current expectations
in respect of our key growth projects are as follows:
|
|
|
|
|
Operation
|
Scope
|
Capex
$bn
|
Remaining capex
$bn
|
First production
|
Copper
|
|
|
|
|
Collahuasi
|
Commissioning of the fifth ball
mill, adding c.15 ktpa (44%
share), started at the end of October 2023 and is
ongoing.
Investment in additional crushing
capacity and flotation cells is expected to add additional
production of c.10 ktpa (44% share) on average from
2026.
Additional debottlenecking options remain under
study and are expected to add c.15 ktpa (44% share) from 2025 to
2028. Beyond that, studies and permitting are required to be
finalised for a fourth processing line in the plant and mine
expansion that would add up to c.150 ktpa (44% share).
|
Fifth ball mill c.0.1 (44%
share)
Additional crushing capacity and
flotation cells c.0.2 (44% share)
|
0.0
0.2 (44% share)
Expansion studies ongoing. Subject
to permitting and approvals
|
2023
2026
|
Crop Nutrients
|
|
|
|
|
Woodsmith
|
New polyhalite (natural mineral
fertiliser) mine being developed in North Yorkshire, UK. Expected
to produce POLY4 - a premium quality, comparatively low carbon
fertiliser suitable for organic use. Final design capacity of c.13
Mtpa is expected, subject to studies and approval.
|
Refer to page 32 for more
information on project progress
|
Life-extension projects
(metrics presented on a 100% basis unless
otherwise indicated)
Progress and current expectations
in respect of our key life-extension projects are as
follows:
|
|
|
|
|
Operation
|
Scope
|
Capex
$bn
|
Remaining capex
$bn
|
Expected first production
|
Diamonds
|
|
|
|
|
Venetia
|
4 Mctpa underground replacement for
the open pit. First production recently achieved with ramp-up over
the next few years as development continues.
|
2.3
|
0.8
|
Achieved in June 2023
|
Jwaneng
|
9 Mctpa (100% basis) replacement for
Cuts 7 and 8. The Cut-9 expansion of Jwaneng will extend the life
of the mine to 2036.
|
0.4 (19.2% share)
|
0.2 (19.2% share)
|
2027
|
Iron Ore
|
|
|
|
|
Kolomela
|
High grade iron ore replacement
project of c.4 Mtpa. The
development of a new pit, Kapstevel South, and associated
infrastructure at Kolomela to sustain output of
10-11Mtpa.
|
0.4
|
0.0
|
First ore is expected in
2024
|
PGMs
|
|
|
|
|
Mototolo/
Der Brochen
|
Project leverages the existing
Mototolo infrastructure, enabling mining to extend into the
adjacent and down-dip Der Brochen resource to extend life of asset
to 2074.
|
0.2
|
0.2
|
2024
|
Mogalakwena
|
Evaluating various options to
support possible future underground operations of the mine through
progressing the drilling, twin exploration decline and studies for
underground operations.
|
Projects under review with a number
of options being considered
|
Technology
projects(1)
The Group plans to invest
c.$0.1-0.3 billion per year on projects to support
the FutureSmart MiningTM
programme and the delivery of Anglo American's
Sustainable Mining Plan targets, particularly those that relate to
safety, energy, emissions and water. The Group is currently
optimising the technology programme, focusing only on those
technologies that will bring the most benefit to the operating
assets and development projects, as well as determining the most
effective manner to execute these programmes. For more information
on our technology, please refer to our Integrated Annual Report
2023, page 44, due to be published on the Group's website on 4
March 2024.
(1) Expenditure relating to technology
projects is included within operating expenditure, or if it meets
the accounting criteria for capitalisation, within Growth capital
expenditure.
The Board
Changes during 2023 to the
composition of the Board are set out below.
On 1 April 2023, Magali
Anderson joined the Board as a
non-executive director and member of the Board's Sustainability
Committee.
On 1 December 2023, Stephen Pearce
stepped down from the Board and as Finance Director, following his
decision to retire from the Group in February 2024. John Heasley
joined Anglo American as Finance Director and as an executive
director on the Board on 1 December 2023.
At the date of this report, four
(40%) of the 10 Board directors are female and two (20%) identify
as minority ethnic. 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
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 are unchanged from those reported in 2022 and
relate to the following:
-Catastrophic and natural catastrophe risks
-Product
prices
-Cybersecurity
-Geopolitical
-Community
and social relations
-Safety
-Climate
change
-Corruption
-Regulatory
and permitting
-Water
-Pandemic
-Operational performance
-Future
demand
The Group is exposed to changes in
the economic environment, including tax rates and regimes, as with
any other business. Details of any key risks and uncertainties
specific to the period are covered in the business reviews on pages
15-34. 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 2023 year end are set out in
detail in the strategic report section of the Integrated Annual
Report 2023, published on the Group's website www.angloamerican.com, on 4 March
2024.
Operational and financial
metrics
|
|
|
|
|
|
|
|
|
|
|
|
Production
volume
|
Sales
volume
|
Price
|
Unit
cost*
|
Group
revenue*
|
Underlying
EBITDA*
|
|
Underlying
EBIT*
|
Capex*
|
ROCE*
|
|
|
|
|
|
|
|
|
|
|
|
Copper Total
|
826
|
843
|
384
|
166
|
7,360
|
3,233
|
44%
|
2,451
|
1,684
|
20%
|
Prior year
|
664
|
641
|
385
|
154
|
5,599
|
2,182
|
39%
|
1,595
|
2,031
|
16%
|
Copper Chile
|
507
|
505
|
384
|
200
|
4,615
|
1,452
|
31%
|
893
|
1,268
|
22%
|
Prior year
|
562
|
563
|
386
|
157
|
4,991
|
1,952
|
40%
|
1,387
|
1,217
|
32%
|
Los Bronces(5)
|
216
|
217
|
n/a
|
304
|
1,724
|
114
|
7%
|
(94)
|
552
|
n/a
|
Prior year
|
271
|
268
|
-
|
214
|
2,185
|
533
|
24%
|
306
|
725
|
-
|
Collahuasi(6)
|
252
|
248
|
n/a
|
113
|
2,197
|
1,372
|
62%
|
1,124
|
678
|
n/a
|
Prior year
|
251
|
256
|
-
|
87
|
2,180
|
1,512
|
69%
|
1,259
|
419
|
-
|
Other operations(7)
|
40
|
40
|
n/a
|
n/a
|
694
|
(34)
|
(5)%
|
(137)
|
38
|
n/a
|
Prior year
|
40
|
39
|
-
|
-
|
626
|
(93)
|
(9)%
|
(178)
|
73
|
-
|
Copper Peru
(Quellaveco)(8)
|
319
|
339
|
384
|
111
|
2,745
|
1,781
|
65%
|
1,558
|
416
|
19%
|
Prior year
|
102
|
78
|
379
|
136
|
608
|
230
|
38%
|
208
|
814
|
2%
|
(1) Excludes 444 kt third-party
sales (2022: 422 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. El
Soldado mine C1 unit costs increased by 21% to 316 c/lb
(2022: 262 c/lb).
(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. The Group's share of project capex was
$138 million (on a 100% basis, $230 million). In 2022, the
Group's share was $633 million (on a 100% basis,
$1,055 million).
Operational performance
Copper Chile
Copper production of
507,200 tonnes was 10% lower than the prior year (2022:
562,200 tonnes), due to lower grades and ore hardness at Los
Bronces.
At Los Bronces, production
decreased by 20% to 215,500 tonnes (2022: 270,900 tonnes), due
to lower ore grade (0.51% vs 0.62%) and continued ore
hardness, as well as an electrical sub-station fire that
interrupted plant facilities' power supply for 16 days. The
unfavourable ore characteristics in the current area of mining will
continue to affect the operation until the next phase of the mine,
where the grades are expected to be higher and the ore softer.
Development work for this phase is now under way and is expected to
benefit production from early 2027 (refer to 'Operational
outlook' below for further details).
At Collahuasi, Anglo American's
attributable share of copper production increased marginally to
252,200 tonnes (2022: 251,100 tonnes), due to planned higher
grades (1.17% vs 1.11%) and the ongoing commissioning of a
fifth ball mill that started at the end of October, partially
offset by lower copper recovery.
Production at El Soldado decreased
by 2% to 39,500 tonnes (2022: 40,200 tonnes). Planned higher
grades were offset by an existing geotechnical fault that was
exacerbated by record levels of rain during the third quarter,
resulting in the temporary closure of the mine. The production
impact was partially mitigated by processing lower grade ore from
stockpiles.
Chile´s central zone, where Los
Bronces is located, faced dry conditions during the first half of
the year followed by heavy precipitation. The increase in
precipitation and the decision to place the smaller and less
efficient of the two plants at the Los Bronces operation (the 'Los
Bronces plant') on care and maintenance during 2024, has
significantly reduced the risk in relation to water availability
for Los Bronces in 2024. For Collahuasi, which is
located
in the north of the country, the
outlook for 2024 remains dry; a desalination water solution is
expected to be operational from 2026.
Copper Peru
Quellaveco produced 319,000
tonnes (2022: 102,300
tonnes), reflecting the progressive
ramp-up in production volumes since first production in July 2022,
with commercial production achieved in June 2023.
Following first production from the
molybdenum plant in April 2023, commercial production was achieved
in November 2023.
With the mine operational, focus
is on the commissioning of the coarse particle recovery plant,
which started in November 2023, and will treat flotation tails,
leading to improved metal recoveries.
Markets
|
|
|
|
|
|
|
|
|
Average market price
(c/lb)
|
|
|
Average realised price (Copper Chile
- c/lb)
|
|
|
Average realised price (Copper Peru
- c/lb)
|
|
|
The differences between the market
price and the realised prices are largely a function of provisional
pricing adjustments and the timing of sales across the
year. At Copper Chile, 114,500 tonnes of copper
were provisionally priced at 386 c/lb at
31 December 2023 (31 December 2022: 166,900
tonnes provisionally priced at 379 c/lb). At Copper Peru, 39,000 tonnes of copper were
provisionally priced at 385 c/lb at 31 December 2023 (31
December 2022: 74,800 tonnes provisionally priced at
380 c/lb).
Copper prices were relatively
stable during 2023, with LME prices averaging 385 c/lb, down 4%
from last year (2022: 399 c/lb). Concerns over China's
property sector weighed on market sentiment and copper prices,
masking the solid underlying demand growth from China during the
year, particularly from electric vehicles and the renewable energy
sector. Copper prices remained sensitive to fluctuations in the
strength of the US dollar throughout much of 2023, with prices
benefiting in December from expectations that US interest rates
have now peaked. Copper demand is well supported by ongoing global
decarbonisation efforts and the infrastructure associated with the
energy transition. However disruptions, mostly from social and
environment concerns, continue to impact global mine
supply.
Financial performance
Underlying EBITDA for Copper
increased by 48% to $3,233 million (2022: $2,182 million), driven
by the successful ramp-up of Quellaveco in Peru, partly offset by
an 8% increase in unit costs and 19% lower sales from Los
Bronces.
Copper Chile
Underlying EBITDA decreased by 26%
to $1,452 million (2022: $1,952 million), driven by lower sales and
higher unit costs. C1 unit costs increased by 27% to 200 c/lb
(2022: 157 c/lb), reflecting the impact of lower production, cost
inflation and a stronger Chilean peso, partially offset through
cost control and higher by-product credits.
Capital expenditure increased by 4%
to $1,268 million (2022: $1,217 million), mainly driven by
expenditure at Collahuasi on the desalination plant and the fifth
ball mill.
Copper Peru
The significant increase in
underlying EBITDA to $1,781 million (2022: $230 million), reflects
higher sales volumes and lower unit costs, as the operation ramped
up. C1 unit costs decreased by 18% to 111 c/lb
(2022: 136 c/lb), reflecting the benefit of higher production
volumes.
Capital expenditure decreased by
49% to $416 million (2022: $814 million), reflecting the completion
of major project spend for the construction of Quellaveco, which
was successfully delivered in July 2022.
Operational outlook
Copper Chile
Los Bronces
Los Bronces is currently mining a
single phase impacted by ore hardness, and with expected lower
grades. Additional mining phases and intermediate ore stockpiles
that would typically provide operational flexibility have not been
developed as a result of delays in mine development, permitting and
operational challenges.
While the operation works through
the challenges in the mine, and until the economics improve, the
older, smaller (c.40% of production volumes) and more costly Los
Bronces processing plant will be placed on care and maintenance
from mid-2024. This value over volume decision will enable the
business to significantly reduce operating costs and improve
competitiveness, at both the mine and the plant, reduce overheads,
reduce capital spend as well as reduce reliance on external water
sources (such as transportation via truck). The expected annualised
unit cost saving from this action is c.30-40 c/lb.
The development of the first phase
of the Los Bronces integrated water solution is also ongoing, which
will secure a large portion of the mine's water needs through
a desalinated water supply from the beginning of 2026.
Los Bronces remains a world class
copper deposit, accounting for more than 2% of the world's known
copper resources. The environmental permit for the Los Bronces open
pit expansion and underground development was issued by the
authorities in November 2023. Development work for the next higher
grade, softer ore phase of the mine, Donoso 2, is now under way and
is expected to benefit production and unit costs from early
2027. Pre-feasibility studies for the Los Bronces underground
expansion are ongoing and are expected to be finalised in
mid-2025.
Collahuasi
Collahuasi is a world class orebody
with significant growth potential. Near term grades are expected to
be c.1.05% TCu, with the exception of 2025 where the grade
temporarily declines to c.0.95% TCu. Various debottlenecking
options are being studied that are expected to add c.25,000 tonnes
per annum (tpa) (our 44% share) between 2025-2028. Beyond that,
studies and permitting are under way for a fourth processing line
in the plant and mine expansion that would add up to 150,000 tpa
(our 44% share). Timing of that expansion is subject to the
permitting process; assuming permit approval in 2027, first
production could follow from c.2032.
A desalination plant is currently
under construction that will meet a large portion of the mine's
water requirements when complete in 2026, and has been designed to
accommodate capital-efficient expansion as the fourth processing
line project progresses.
El Soldado
Following the exacerbation of the
geotechnical fault at El Soldado by the heavy rainfall in 2023, the
mine plan was revised in the third quarter of 2023. Production in
2024 is expected to be broadly comparable to 2023, before declining
to 30,000-35,000 tpa as the mine reaches end of life by mid-2028.
Following receipt of the environmental permit for phase 5, options
are being evaluated that may enable a life extension.
Copper Chile
These impacts are reflected in the
three-year guidance provided on pages 35-36, which is unchanged
from the December 2023 Investor Update presentation.
Production guidance for Chile for 2024
is 430,000-460,000 tonnes, subject to
water availability. 2024 unit cost guidance is c.190
c/lb.
Copper Peru
A localised geotechnical fault in
one of the phases previously scheduled for mining in 2024
necessitated a revised mining plan in the latter part of 2023, as
it was determined that a change in the inter-ramp angle of that
phase was required to ensure safety standards. While this stripping
work progresses, other lower grade phases will be mined. As a
result, access to higher grade sectors that were previously planned
to be mined in 2024 have been rephased to 2027. However, as a
result of further optimisation work within the revised mine plan,
an additional c.25,000 tonnes of copper is expected to be mined
over the next five years. Given the current copper market outlook,
higher real term prices for these volumes may be achieved; thereby
negating, or even benefiting, the NPV impact of the revised mine
plan.
While current focus remains on
embedding safe, consistent and stable operational performance,
there is significant expansion potential that could sustain
production beyond the initial high grade area. The first step,
subject to permitting, would be an increase in throughput rates to
150,000 tonnes per day (tpd) (from the currently permitted level of
127,500 tpd), with limited capital required and no additional water
required. Beyond that, different expansion alternatives are under
study, including a possible third ball mill. There is also
interesting regional potential that our Discovery team is
progressing - including the adjacent Mamut area, c.10 km
away.
These impacts are reflected in the
three-year guidance provided on pages 35-36, which is unchanged
from the December 2023 Investor Update
presentation. Production guidance for Peru for 2024 is
300,000-330,000 tonnes and 2024 unit cost guidance is c.110 c/lb.
Production in Peru will be weighted to the second half of the year,
primarily as a result of the grades temporarily declining to
between 0.6-0.7% TCu in the first half of
the year.
Nickel
Operational and financial
metrics
|
|
|
|
|
|
|
|
|
|
|
|
Production
volume
|
Sales
volume
|
Price
|
Unit
cost*
|
Group
revenue*
|
Underlying
EBITDA*
|
|
Underlying
EBIT*
|
Capex*
|
ROCE*
|
|
|
|
|
|
|
|
|
|
|
|
Nickel
|
40,000
|
39,800
|
7.71
|
541
|
653
|
133
|
20%
|
62
|
91
|
6%
|
Prior year
|
39,800
|
39,000
|
10.26
|
513
|
858
|
381
|
44%
|
317
|
79
|
24%
|
(1) Realised price.
(2) C1 unit cost.
Operational performance
Nickel production increased
marginally to 40,000 tonnes (2022: 39,800 tonnes), reflecting
improved operational stability.
Markets
|
|
|
|
|
|
|
|
|
Average market price
($/lb)
|
|
|
Average realised price
($/lb)
|
|
|
Differences between the market
price (which is LME-based) and our realised price (the ferronickel
price) are due to the discounts to the LME price, which depend on
market conditions, supplier products and consumer
preferences.
The average LME nickel price of
$9.74/lb was 16% lower than prior year (2022: $11.61/lb),
mainly due to significant supply growth of refined nickel
products in Indonesia and China, along with the impact of higher
interest rates on consumer inventory levels, resulting in consumer
destocking and widening market discounts for ferronickel.
Offsetting this, global nickel consumption grew strongly year on
year, particularly in China, which saw record volumes of nickel
consumed in the stainless steel and battery sectors.
Financial performance
Underlying EBITDA decreased by 65%
to $133 million (2022: $381 million), primarily as a result of
lower realised prices. C1 unit costs increased by 5%
to 541 c/lb (2022: 513 c/lb), reflecting the
stronger Brazilian real and the impact of higher costs of
production due to lower grade ore, including
planned maintenance costs to secure asset integrity and
availability.
Capital expenditure increased by
15% to $91 million (2022: $79 million), mainly driven by higher
deferred stripping costs capitalised.
Within special items and
remeasurements, total impairments of $779 million (before tax) were
recognised at Barro Alto in 2023 following revisions to the pricing
outlook and the long term cost profile of the asset.
Operational outlook
Following safety improvements
within the mine plan, certain geotechnical parameters have been
revised, so the amount of material accessed from higher grade areas
of the mine has reduced. The next higher grade area of the pit is
currently going through permitting, with production expected from
2028 to blend with the lower grade areas of the existing pit. Also,
bulk ore sorting has not yet delivered the scale that had
previously been anticipated. While studies are ongoing to calibrate
and adapt the technology, these benefits are no longer incorporated
into guidance due to their early maturity. Additional drilling is
under way to increase coverage and enhance confidence levels within
the geological models.
These impacts are reflected in the
three-year guidance provided on pages 35-36, which is unchanged
from the December 2023 Investor Update presentation. Production
guidance for 2024 is 36,000-38,000 tonnes, and 2024 unit cost
guidance is c.600 c/lb.
Platinum Group Metals
(PGMs)
Operational and financial
metrics
|
|
|
|
|
|
|
|
|
|
|
|
Production
volume
PGMs
|
Sales
volume
PGMs
|
Basket
price
|
Unit
cost*
|
Group
revenue*
|
Underlying
EBITDA*
|
Mining
EBITDA
margin*(5)
|
Underlying
EBIT*
|
Capex*
|
ROCE*
|
|
koz(1)
|
koz(2)
|
$/PGM oz(3)
|
$/PGM oz(4)
|
$m
|
$m
|
|
$m
|
$m
|
|
PGMs
|
3,806
|
3,925
|
1,657
|
968
|
6,734
|
1,209
|
30%
|
855
|
1,108
|
15%
|
Prior year
|
4,024
|
3,861
|
2,551
|
937
|
10,096
|
4,417
|
54%
|
4,052
|
1,017
|
86%
|
Mogalakwena
|
974
|
1,011
|
1,718
|
884
|
1,740
|
778
|
45%
|
601
|
519
|
n/a
|
Prior year
|
1,026
|
1,010
|
2,451
|
826
|
2,466
|
1,548
|
63%
|
1,380
|
394
|
-
|
Amandelbult
|
634
|
668
|
1,934
|
1,189
|
1,294
|
323
|
25%
|
276
|
75
|
n/a
|
Prior year
|
713
|
700
|
2,883
|
1,127
|
2,010
|
1,036
|
52%
|
982
|
74
|
-
|
Other operations(6)
|
853
|
894
|
1,587
|
973
|
1,453
|
246
|
17%
|
151
|
514
|
n/a
|
Prior year
|
911
|
842
|
2,615
|
928
|
2,270
|
1,033
|
46%
|
922
|
549
|
-
|
Processing and
trading(7)
|
1,346
|
1,352
|
n/a
|
n/a
|
2,247
|
(138)
|
(6)%
|
(173)
|
n/a
|
n/a
|
Prior year
|
1,375
|
1,309
|
-
|
-
|
3,350
|
800
|
24%
|
768
|
-
|
-
|
(1) Production
reflects own-mined production and purchase of metal in concentrate.
PGM volumes consist of 5E metals and gold.
(2) Sales
volumes exclude tolling and third-party trading activities.
PGM volumes consist of 5E metals and
gold.
(3) Average
US$ 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, our 50% share
of Modikwa (joint operation), and our 50% share of Kroondal
until the disposal of our interest in the joint operation on 1
November 2023. Other operations margin includes unallocated
market development, care and maintenance, and corporate
costs.
(7) Includes purchase of concentrate from
joint operations and third parties for processing into refined
metals, tolling and third-party trading activities, with the
exception of production and sales volumes which exclude tolling and
trading. The disposal of our 50% interest in Kroondal on 1
November 2023, resulted in Kroondal moving to a 100% third-party
POC arrangement, until it transitions to a toll arrangement
expected at the end of H1 2024.
Operational performance
Total PGM production decreased by
5% to 3,806,100 ounces (2022: 4,024,000 ounces), primarily due to
lower production from the Kroondal joint operation (now sold),
planned infrastructure closures at Amandelbult and lower grades at
Mogalakwena, partially offset by higher production from
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
2,460,200 ounces (2022: 2,649,200 ounces).
Amandelbult production decreased by
11% to 634,200 ounces (2022: 712,500 ounces) due to
planned infrastructure closures and poor ground conditions at
Dishaba.
Mogalakwena production decreased by
5% to 973,500 ounces (2022: 1,026,200 ounces), largely as
a result of lower grades, and lower throughput from unplanned
maintenance, despite moving into a higher grade, lower waste area
towards the end of the year.
Production from other operations
decreased by 6% to 852,500 ounces (2022: 910,500 ounces), mainly
due to lower production from Kroondal, reflecting both a planned
ramp-down of the operation and the disposal of our 50% interest,
effective 1 November 2023; Kroondal has now transitioned to a 100%
third-party purchase of concentrate arrangement. This arrangement
is then expected to transition to a toll arrangement at the end of
the first half in 2024.
Purchase of concentrate
Purchase of concentrate decreased
by 2% to 1,345,900 ounces (2022: 1,374,800 ounces), primarily due
to lower production from Kroondal in light of the planned
ramp-down of the operation.
Refined production and sales
volumes
Refined PGM production (excluding
toll-treated metal) was broadly unchanged at 3,800,600 ounces
(2022: 3,831,100 ounces).
PGM sales volumes increased
marginally to 3,925,300 ounces (2022: 3,861,300
ounces) as inventory was drawn down to mitigate the lower
production.
Markets
|
|
|
|
|
|
|
|
|
Average platinum market price
($/oz)
|
965
|
961
|
Average palladium market price
($/oz)
|
1,336
|
2,111
|
Average rhodium market price
($/oz)
|
6,611
|
15,465
|
Realised basket price ($/PGM
oz)
|
1,657
|
2,551
|
Following record pricing in
2021-2022, a general easing of supply concerns that had arisen post
Russia's invasion of Ukraine and end-user destocking saw sharp
falls in palladium and rhodium prices. This drove the average
realised PGM basket price down by 35% in 2023 to $1,657 per
PGM ounce (2022: $2,551 per PGM ounce).
The average rhodium market price of
$6,611 per ounce was 57% lower than in 2022, impacted in
the first half of the year by persistent selling of excess stock
from the glass industry, which had shifted to a lower rhodium,
higher platinum mix. Palladium declined 37%, averaging
$1,336 per ounce, as robust Russian metal flows met automotive
industry destocking. Platinum was broadly flat at $965 per
ounce. The minor PGMs, iridium and ruthenium, continued to make
historically large contributions to the basket price. By the end of
the year, PGM pricing was firmly into the cost curve, and several
producers responded by restructuring existing mines or mothballing
future plans.
Financial performance
Underlying EBITDA decreased to
$1,209 million (2022: $4,417 million), primarily driven by a lower
basket price, which resulted in lower POC margins and affected the
cost of POC inventory. Additionally, own-mined unit costs increased
by 3% to $968/PGM ounce (2022: $937/PGM ounce), due to lower
production and higher inflation, partly offset by the weaker South
African rand.
Capital expenditure increased by 9%
to $1,108 million (2022: $1,017 million), as planned higher
stay-in-business expenditure was partially offset by the weaker
South African rand.
Operational outlook
PGM prices remain at low levels and
the prevailing macro-economic conditions and uncertainty have
prompted the difficult but necessary action to reconfigure our PGM
business to ensure the long term sustainability and competitive
position of our operations.
There is an intentional strategy at
the concentrators to produce higher grade concentrate which results
in the same PGM content, but from lower concentrate volume. This
reduces required primary furnace capacity and allows us to place
the Mortimer smelter on care and maintenance - reducing both
operating and capital expenditure while enhancing overall
processing competitiveness.
Overall, sustainable cost reduction
initiatives will deliver annual cost savings of c.$0.3 billion from
a 2023 baseline, and in 2024, the business is targeting an
all-in-sustaining cost of c.$1,050/3E oz.
Furthermore, in line with lower
capital expenditure and near term asset optimisation, work on the
option for the third concentrator at Mogalakwena will not be
progressing, nor will the expansion opportunities at both
Amandelbult and Mototolo.
These extensive measures will
improve the positioning of our world-class PGM assets for the long
term, securing the highly attractive value proposition of
Mogalakwena.
These impacts are reflected in the
three-year guidance provided on pages 35-36, which is unchanged
from the December 2023 Investor Update presentation. PGM metal in
concentrate production guidance for 2024 is 3.3-3.7 million ounces,
with own-mined output of 2.1-2.3 million ounces and purchase of
concentrate of 1.2-1.4 million ounces. Refined PGM production
guidance for 2024 is 3.3-3.7 million ounces. Refined production is
usually lower in the first quarter than the rest of the year, due
to the annual stock count and planned processing maintenance.
Production remains subject to the impact of Eskom
load-curtailment.
Unit cost guidance for 2024 is
c.$920/PGM ounce.
De Beers - Diamonds
Operational and financial
metrics(1)
|
|
|
|
|
|
|
|
|
|
|
|
Production
volume
|
Sales
volume
|
Price
|
Unit
cost*
|
Group
revenue*
|
Underlying
EBITDA*
|
EBITDA
margin(6)
|
Underlying
EBIT*
|
Capex*
|
ROCE*
|
|
'000
cts
|
'000
cts(2)
|
$/ct(3)
|
$/ct(4)
|
$m(5)
|
$m
|
|
$m
|
$m
|
|
De Beers
|
31,865
|
24,682
|
147
|
71
|
4,267
|
72
|
48%
|
(252)
|
623
|
(3)%
|
Prior year
|
34,609
|
30,355
|
197
|
59
|
6,622
|
1,417
|
52%
|
994
|
593
|
11%
|
Botswana
|
24,700
|
n/a
|
168
|
31
|
n/a
|
412
|
n/a
|
349
|
74
|
n/a
|
Prior year
|
24,142
|
-
|
193
|
32
|
-
|
614
|
-
|
537
|
70
|
-
|
Namibia
|
2,327
|
n/a
|
515
|
246
|
n/a
|
159
|
n/a
|
123
|
35
|
n/a
|
Prior year
|
2,137
|
-
|
599
|
293
|
-
|
181
|
-
|
149
|
34
|
-
|
South Africa
|
2,004
|
n/a
|
109
|
97
|
n/a
|
26
|
n/a
|
5
|
403
|
n/a
|
Prior year
|
5,515
|
-
|
134
|
42
|
-
|
413
|
-
|
315
|
378
|
-
|
Canada
|
2,834
|
n/a
|
85
|
48
|
n/a
|
35
|
n/a
|
(6)
|
63
|
n/a
|
Prior year
|
2,815
|
-
|
100
|
50
|
-
|
(10)
|
-
|
(68)
|
48
|
-
|
Trading
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
(104)
|
(3)%
|
(111)
|
2
|
n/a
|
Prior year
|
-
|
-
|
-
|
-
|
-
|
589
|
10%
|
582
|
4
|
-
|
Other(7)
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
(456)
|
n/a
|
(612)
|
46
|
n/a
|
Prior year
|
-
|
-
|
-
|
-
|
-
|
(370)
|
-
|
(521)
|
59
|
-
|
(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 27.4 million carats (2022:
33.7 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 businesses 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 $3.6 billion (2022: $6.0 billion).
(6) Total De
Beers EBITDA margin shows mining EBITDA margin on an equity basis,
which excludes the impact of non-mining activities, third‑party
sales, purchases, trading downstream and corporate.
(7) Other includes Element Six,
brands and consumer markets, and corporate.
Markets
After strong demand in 2021 and
2022, global rough diamond demand fell significantly in 2023. With
polished diamond inventories rising and increases in inflation and
interest rates, jewellery retailers took a cautious approach to
purchasing new stock. US consumer demand for natural diamonds was
impacted by macro-economic challenges as well as rising supply of
lab-grown diamonds - however, while sales of lab-grown diamonds to
consumers increased, wholesale lab-grown prices continued to fall
sharply, supporting further differentiation from natural diamonds.
In China, economic challenges led to low consumer confidence,
which lead to marginal consumer demand contraction off the subdued
levels seen in 2022. In contrast, consumer confidence and demand
growth in India were robust in 2023, especially towards the end of
the year.
The retail slowdown led to already
inflated midstream polished diamond inventories increasing over the
course of the year, resulting in downward pressure on polished
diamond wholesale prices. In response, the midstream industry in
India implemented a voluntary moratorium on rough diamond imports
into the country between 15 October and 15 December. De Beers
supported its Sightholders by offering full flexibility for rough
diamond allocations for Sight 9 and Sight 10 as the midstream
sought to re-establish equilibrium. This resulted in very low rough
diamond sales in the fourth quarter.
Overall, during the fourth quarter,
industry conditions began to stabilise. Retail demand improved over
the end of year holiday season, especially in the United States,
helping to ease midstream inventory pressure. However, with ongoing
macro-economic uncertainty, it is anticipated that recovery in
rough diamond demand will be gradual.
Operational performance
Mining
Operational performance was strong
in 2023. The new Venetia underground project delivered first
production in June and will ramp up over the next few
years.
Rough diamond production decreased
to 31.9 million carats (2022: 34.6 million carats), due to planned
lower production levels at Venetia as the operation transitions to
underground.
In Botswana, production was broadly
stable, with a 2% increase to 24.7 million carats (2022: 24.1
million carats), driven by the planned treatment of higher grade
ore at Orapa.
Namibia production increased by 9%
to 2.3 million carats (2022: 2.1 million carats), primarily driven
by a full year of production from the Benguela Gem vessel
(commissioned in March 2022) and the ongoing ramp-up and expansion
of the mining area at the land operations.
South Africa production decreased
by 64% to 2.0 million carats (2022: 5.5 million carats), due
to the planned completion of the Venetia open pit in December 2022.
Venetia continues to process lower grade surface stockpiles, while
the new underground project commenced operations in June, and will
ramp up over the next few years as development
continues.
Production in Canada was stable at
2.8 million carats (2022: 2.8 million carats), with higher
throughput offset by planned treatment of lower grade
ore.
Financial performance
Due to the downturn in industry
conditions from 2022 to 2023, total revenue decreased to $4.3
billion (2022: $6.6 billion), with rough diamond sales decreasing
to $3.6 billion (2022: $6.0 billion). Total rough diamond
sales volumes decreased by 19% to 24.7 million carats (2022:
30.4 million carats). The average realised price decreased by 25%
to $147/ct (2022: $197/ct), reflecting a larger proportion of lower
value rough diamonds being sold, as well as
a 6%, decrease in the average rough price
index.
Underlying EBITDA decreased to $72
million (2022: $1,417 million) as a result of significantly
lower sales volumes, coupled with a lower average realised price
(impacted by both the mix of products sold and a lower average
rough price index) which negatively impacted margins in the trading
business. The current year results incorporate an inventory
write-down of $0.2 billion on rough stock. The increase in unit
cost to $71/ct (2022: $59/ct), was primarily driven by lower
production volumes from Venetia as the underground operations
ramp up.
Capital expenditure increased
by 5% to $623 million (2022: $593 million), due to the ramp-up
of the Venetia underground project as well as the continued
execution of other life-extension projects, including Jwaneng
Cut-9.
An impairment of $1.6 billion
(before tax and non-controlling interests) to the carrying value of
De Beers has been recognised within special items and
remeasurements, reflecting the near term adverse macro-economic
outlook and industry-specific challenges. Please refer to note 9 in
the financial statements for further details.
De Beers and the Government of the
Republic of Botswana have signed Heads of Terms setting out the key
terms for a new 10-year sales agreement for Debswana's rough
diamond production (through to 2034) and the new 25-year Debswana
mining licences (through to 2054). De Beers and the Government of
Botswana are working together to progress and then implement the
formal new sales agreement and related documents including the
mining licences. In the interim, the terms of the most recent sales
agreement remain in place. The new arrangements constitute a
related party transaction under the UK Listing Rules, given that
both Anglo American and the Government of Botswana are shareholders
in De Beers, and therefore will be subject to approval by Anglo
American's shareholders in due course.
De Beers Jewellers delivered a
stable sales performance given the global macro-economic headwinds
and challenging Chinese sector.
Market outlook
Industry conditions are expected to
remain challenging in the short term, but the long term outlook is
favourable. Midstream and retail demand stabilised towards the end
of 2023, but inventories of rough diamonds reportedly grew at
producers globally. Over the course of 2024, assuming a measured
approach from producers to the
release of upstream inventory, the
high midstream inventory levels seen in 2023 are expected
to decline as retailers replenish their stocks.
Limited consumer demand growth and
ongoing retailer caution are anticipated ahead of an expected
return to growth into 2025.
The ongoing focus on diamond
provenance - especially given the expected introduction of Russian
diamond import restrictions by G7 nations - has the potential to
reinforce demand for De Beers' rough diamonds, supported by the
blockchain Tracr™ platform. The global supply of rough diamonds is
anticipated to continue to decline owing to the maturity of major
mines and limited new discoveries.
The wholesale prices of lab-grown
diamonds are falling sharply, leading to financial challenges at
some leading lab-grown diamond producers. These price declines are
expected to lead to further substantial reductions in retail prices
(with De Beers' Lightbox brand testing significantly lower prices
for its products). This will further reinforce consumers'
understanding of the fundamental differences between lab-grown and
natural diamond jewellery.
2025 guidance was reduced at the
December investor update, reflecting the ramp-up profile at Venetia
underground as well as deferral of an expansion project at Gahcho
Kué (Canada) into 2026.
Venetia is processing lower grade
surface stockpiles while the operation transitions to underground.
This will continue as the underground production slowly ramps up
following the first production blast in mid-2023. It is expected to
ramp up to steady-state levels of c.4 million carats per annum
(Mctpa) production over the next few years.
Near term unit cost will be
impacted by a low carat profile from Venetia as the underground
project ramps up and is subsequently expected to reach a
steady-state of c.$75/ct from 2026.
These impacts are reflected in the
three-year guidance provided at the December 2023 Investor Update
presentation, which is unchanged. Production guidance for 2024 is
29-32 million carats (100% basis) and 2024 unit cost guidance
is c.$80/ct. However, De Beers will assess
options to reduce production in response to prevailing market
conditions.
Iron Ore
Operational and financial
metrics
|
|
|
|
|
|
|
|
|
|
|
|
Production
volume
|
Sales
volume
|
Price
|
Unit
cost*
|
Group
revenue*
|
Underlying
EBITDA*
|
|
Underlying
EBIT*
|
Capex*
|
ROCE*
|
|
|
|
|
|
|
|
|
|
|
|
Iron Ore Total
|
59.9
|
61.5
|
114
|
38
|
8,000
|
4,013
|
50%
|
3,549
|
909
|
34%
|
Prior year
|
59.3
|
58.0
|
111
|
38
|
7,534
|
3,455
|
45%
|
2,962
|
834
|
28%
|
Kumba Iron Ore(4)
|
35.7
|
37.2
|
117
|
41
|
4,680
|
2,415
|
52%
|
2,136
|
538
|
71%
|
Prior year
|
37.7
|
36.7
|
113
|
40
|
4,580
|
2,211
|
48%
|
1,894
|
674
|
66%
|
Iron Ore Brazil
(Minas-Rio)
|
24.2
|
24.3
|
110
|
33
|
3,320
|
1,598
|
48%
|
1,413
|
371
|
24%
|
Prior year
|
21.6
|
21.3
|
108
|
35
|
2,954
|
1,244
|
41%
|
1,068
|
160
|
18%
|
(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, stock and realised price could differ to Kumba's stand-alone reported results due to
sales to other Group companies.
Kumba
Production decreased by 5%
to 35.7 Mt (2022: 37.7 Mt), driven by a 6%
decrease at Sishen to 25.4 Mt (2022: 27.0 Mt) and a
4% decrease at Kolomela to 10.3 Mt (2022: 10.7 Mt). The
under-performance by the third-party logistics provider, Transnet,
resulted in production in the fourth quarter being reduced to align
to lower rail capacity and alleviate mine stockpile
constraints. Sales volumes were 37.2 Mt, slightly higher than the
prior year (2022: 36.7 Mt), driven by improved performance at
Saldanha Bay port, despite the low levels of finished stock at
the port.
As a result of actively managing
inventory, total finished stock decreased to
7.1 Mt(1) (2022: 7.8 Mt(1)), with stock at the mines
decreasing to 6.5 Mt(1), which remains above desired
levels. However, due to rail under-performance, stock at the port
is very low, having decreased to 0.6 Mt(1) (2022: 0.8 Mt(1)).
(1)Production and sales volumes, stock and realised price are
reported on a wet basis and could differ to Kumba's stand-alone
results due to sales to other Group companies.
Minas-Rio
Production increased by
12% to 24.2 Mt (2022: 21.6 Mt), the best performance since the start of Minas-Rio
operations in 2014, reflecting an integrated focus on
stable and capable operating performance
across the operation. The strong mining performance was underpinned
by improved mine access and equipment availability, which led to
higher mine movement and enabled an improved performance at the
plant due to the quality of ore feed, as well as increased crushing
circuit availability.
Markets
|
|
|
|
|
|
|
|
|
Average market price (Platts 62% Fe
CFR China - $/tonne)
|
120
|
120
|
Average market price (MB 65% Fe
Fines CFR - $/tonne)(1)
|
132
|
139
|
Average realised price (Kumba export
- $/tonne) (FOB wet basis)
|
117
|
113
|
Average realised price (Minas-Rio -
$/tonne) (FOB wet basis)
|
110
|
108
|
(1)As
publication of the Metal Bulletin (MB) 66 index has ceased, the
reference benchmark is the MB 65 index from 2023. 2022 updated to
reflect MB 65 price.
Kumba's FOB realised price of
$117/wet metric tonne (wmt) was 15% higher than the equivalent
Platts 62% Fe FOB Saldanha market price (adjusted for moisture) of
$102/wmt. This was driven by premiums for higher iron
content (at 63.7%) and relatively
high proportion of lump sold (approximately 66%) alongside
provisional pricing benefits.
Minas-Rio's pellet feed product is
higher grade (with iron content of 67% and lower impurities) so the
MB 65 Fines index is used when referring to the Minas-Rio product
since the cessation of the MB 66 index. The Minas-Rio realised
price of $110/wmt was 11% higher than the equivalent MB 65 FOB
Brazil index (adjusted for moisture) of $99/wmt, reflecting the
premium for our high-quality product as well as provisional pricing
benefits.
Financial performance
Underlying EBITDA for Iron Ore
increased by 16% to $4,013 million (2022: $3,455 million),
principally driven by a 6% increase in sales volumes and 3%
increase in the realised iron ore price.
Kumba
Underlying EBITDA increased by 9%
to $2,415 million (2022: $2,211 million), driven by the higher
average realised price as well as slightly higher sales volumes.
Unit costs increased by 3% to $41/tonne (2022: $40/tonne) due
to lower production volumes and high cost inflation, partly offset
by a weaker South African rand.
Capital expenditure decreased by
20% to $538 million (2022: $674 million), mainly as a result
of lower deferred stripping capitalisation due to lower waste
volumes at Kolomela and a weaker South African rand.
Minas-Rio
Underlying EBITDA increased by 28%
to $1,598 million (2022: $1,244 million), reflecting higher
sales volumes and a higher realised price, as well
as lower unit costs. Unit costs decreased by 6% to $33/tonne (2022: $35/tonne),
primarily reflecting higher production volumes, partially offset by the stronger
Brazilian real.
Capital expenditure was 132% higher
at $371 million (2022: $160 million), mainly
as construction is under way for a new tailings
filtration plant that will reduce the deposition rate on the
tailings facility and extend its life. In addition, there was
higher spend on projects to improve recoveries in the flotation
circuit.
Kumba
Kumba is committed in its support
of key measures being undertaken by the National Logistics Crisis
Committee to improve the logistics network. However, following an
extended period of under-performance by the third-party logistics
provider, Transnet, and the amount of work required to turn the
situation around, the logistics network is expected to remain
constrained over the near term. The decision has been made to
reduce production to align with this reduced rail capacity and
ensure a balanced value chain. Production is therefore expected to
remain at 35-37 Mtpa for the period 2024 to 2026. Unit costs are
expected to be between $38-40/tonne during this three-year period,
benefiting from Kumba's business reconfiguration and cost
optimisation programme, in line with the lower production
profile.
These impacts are reflected in the
three-year guidance provided on pages 35-36, which is unchanged
from the December 2023 Investor Update presentation. Production
guidance for 2024 is 35-37 Mt, subject to third-party rail and port
performance, and 2024 unit cost guidance is c.$38/tonne.
Minas-Rio
Following the record quarterly
production in the fourth quarter of 2023, focus is on embedding
consistent, stable and strong operating performance, while
increasing the maturity of capital projects to sustain and grow
production volumes. Beyond the three-year guidance period,
production growth will be supported by projects to debottleneck the
plant and increase recoveries and throughput. Optionality is also
being evaluated to maximise long term value in light of the
agreement to acquire and integrate the contiguous Serra da
Serpentina high grade iron ore resource.
In parallel, Minas-Rio is focused
on increasing tailings storage capacity. The tailings filtration
plant project is on track for completion by early 2026 and
alternative, additional disposal options continue to be
studied.
In mid-2025, Minas-Rio will
undertake the next pipeline inspection of the 529 km pipeline that
carries iron ore slurry from the plant to the port. Improvements
were made to the inspection strategy that extended its duration to
ensure the rigour of data collection while also incorporating some
additional plant maintenance to coincide with the operational
stoppage. Pipeline inspections take place every five years and are
validated by external consultants and agreed with the Brazilian
Environmental Authorities.
These impacts are reflected in the
three-year guidance provided on pages 35-36, which is unchanged
from the December 2023 Investor Update presentation. Production
guidance for 2024 is 23-25 Mt and 2024 unit cost guidance is
c.$35/tonne.
Steelmaking Coal
Operational and financial
metrics
|
|
|
|
|
|
|
|
|
|
|
|
Production
volume
|
Sales
volume
|
Price
|
Unit
cost*
|
Group
revenue*
|
Underlying
EBITDA*
|
|
Underlying
EBIT*
|
Capex*
|
ROCE*
|
|
|
|
|
|
|
|
|
|
|
|
Steelmaking Coal
|
16.0
|
14.9
|
261
|
121
|
4,153
|
1,320
|
32%
|
822
|
619
|
27%
|
Prior year
|
15.0
|
14.7
|
304
|
107
|
5,034
|
2,749
|
55%
|
2,369
|
648
|
85%
|
(1) Production volumes are saleable
tonnes, excluding thermal coal production of 1.1 Mt
(2022: 1.6 Mt). Includes production relating to
third-party product purchased and processed at Anglo American's
operations, and may include some product sold as thermal
coal.
(2)
Sales volumes
exclude thermal coal sales of 1.7 Mt (2022: 1.7 Mt).
Includes sales relating to third-party product purchased
and processed by Anglo American.
(3) Realised price is the weighted average
hard coking coal and PCI export sales price achieved at managed
operations.
(4) FOB unit
cost comprises managed operations and excludes
royalties.
Operational performance
Production increased to 16.0 Mt
(2022: 15.0 Mt), reflecting a steady step-up in performance from
the Aquila underground operation due to its largely automated
longwall, and increased production at Dawson and Capcoal open cut
operations which were impacted by unseasonal wet weather in
2022.
The increased production was partly
offset by challenging operating conditions at the Moranbah and
Grosvenor longwall operations.
Markets
|
|
|
|
|
|
|
|
|
Average benchmark price - hard
coking coal ($/tonne)(1)
|
296
|
364
|
Average benchmark price - PCI
($/tonne)(1)
|
219
|
331
|
Average realised price - hard
coking coal ($/tonne)(2)
|
269
|
310
|
Average realised price - PCI
($/tonne)(2)
|
214
|
271
|
(1) Represents average spot
prices.
(2) Realised
price is the export 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
increased to 91% of average benchmark price (2022: 85%), as a
result of the timing of sales.
The average benchmark price for
Australian HCC was $296/tonne (2022: $364/tonne). At the start of
2023, steelmaking coal prices rose in response to supply impacts in
Queensland arising from flooding and a rail outage. Prices declined
during the second quarter amid supply recovery, but increased
in the second half of 2023 following low spot availability of
premium HCC as labour strikes and production issues impacted
Australian supply. Seaborne supply from Australia was further
reduced by a cyclone event affecting Queensland port operations in
December. Strong demand from Indian steelmakers for imported
steelmaking coal was driven by a healthy domestic steel
industry that resulted in a substantial year-on-year increase
in crude steel production.
Financial performance
Underlying EBITDA decreased to
$1,320 million (2022: $2,749 million), as a result of a 14%
decrease in the weighted average realised price for steelmaking
coal and a 13% increase in unit costs to $121/tonne
(2022: $107/tonne), reflecting the impact of high inflation
and additional operating activity. Furthermore, 2022 included a
$343 million receipt from the Group's self-insurance
entity.
Capital expenditure decreased to
$619 million (2022: $648 million), reflecting lower life-extension
expenditure following the completion of the Aquila project in
2022.
Operational outlook
Following an extensive review
during the course of 2023 on realistic opportunities to improve
productivity, debottleneck the operations and leverage technology,
a downwardly revised pathway has been developed to
progressively ramp-up towards 20 Mtpa of steelmaking coal
production. This pathway also incorporates the more stringent
safety operating protocols implemented by the Queensland regulator
in recent years, as well as the more complex geotechnical strata
conditions that the Moranbah and Grosvenor underground longwall
operations are navigating.
These impacts are reflected in the
three-year guidance provided on pages 35-36, which is unchanged
from the December 2023 Investor Update presentation. Export
steelmaking coal production guidance for 2024 is 15-17 Mt and 2024
unit cost guidance is c.$115/tonne. The next longwall moves
scheduled at Moranbah and Grosvenor are both in the third quarter
of 2024. A walk-on/walk-off longwall move is scheduled at Aquila
during the second quarter with the impact on production expected to
be minimal.
Manganese
Operational and financial
metrics
|
|
|
|
|
|
|
|
|
|
Production
volume
|
Sales
volume
|
Group
revenue*
|
Underlying
EBITDA*
|
|
Underlying
EBIT*
|
Capex*
|
ROCE*
|
|
|
|
|
|
|
|
|
|
Manganese
|
3.7
|
3.7
|
670
|
231
|
34 %
|
145
|
n/a
|
81%
|
Prior year
|
3.7
|
3.6
|
840
|
378
|
45 %
|
312
|
-
|
138%
|
Operational performance
Attributable manganese ore
production was flat at 3.7 Mt (2022: 3.7 Mt).
Financial performance
Underlying EBITDA decreased by 39%
to $231 million (2022: $378 million), primarily driven by the
weaker average realised manganese ore price, partially offset by
lower operating costs.
The average benchmark price for
manganese ore (Metal Bulletin 44% manganese ore CIF China)
decreased by 22% to $4.75/dmtu (2022: $6.06/dmtu). Prices were on a
declining trend throughout much of the year as supply improved,
while demand continued to soften in the second half of 2023. Prices
stabilised during December, however, ending the year at
$4.17/dmtu.
Crop Nutrients
Operational and financial
metrics
|
|
|
|
|
|
|
|
|
|
Production
volume
|
Sales
volume
|
Group
revenue*
|
Underlying
EBITDA*
|
|
Underlying
EBIT*
|
Capex*
|
ROCE*
|
|
|
|
|
|
|
|
|
|
Crop Nutrients
|
n/a
|
n/a
|
225
|
(60)
|
n/a
|
(61)
|
641
|
n/a
|
Prior year
|
-
|
-
|
254
|
(44)
|
-
|
(45)
|
522
|
-
|
Woodsmith project
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
641
|
n/a
|
Prior year
|
-
|
-
|
-
|
-
|
-
|
n/a
|
522
|
-
|
Other(1)
|
n/a
|
n/a
|
225
|
(60)
|
n/a
|
(61)
|
n/a
|
n/a
|
Prior year
|
-
|
-
|
254
|
(44)
|
-
|
(45)
|
-
|
-
|
(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
Woodsmith, a large scale, long-life Tier 1 asset 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 mineral
transport system (MTS) tunnel, thereby minimising any environmental
impact on the surface. It will be granulated at a materials
handling facility to produce a comparatively low carbon fertiliser
- known as POLY4 - that will then be exported from the port
facility, where we have priority access, to a network of customers
around the world.
Progress update
Woodsmith project
Throughout 2023, we saw continued
good progress on the core infrastructure, with capital expenditure
of $641 million (2022: $522 million). Sinking activities
at the two deep shafts continue to progress well. The service shaft
is now c.745 metres deep, having reached the expected depth for the
year. Sinking activities on the production shaft began in January
2023 as planned, at 120 metres below the surface, and following a
successful ramp-up to planned sinking rates, is now at a depth of
c.510 metres.
Excavation of the three shallow
shafts that will provide both ventilation and additional access to
the Mineral Transport System (MTS) tunnel is complete. The MTS
tunnel is also progressing to plan and has now reached c.27.5 km of
the total 37 km length.
During 2024, a key focus area for
shaft sinking will be on progress through a strata called the
Sherwood sandstone, where we expect sink rates to decrease due to
the expected hardness of the rock and potential water fissures.
This is planned for in progress rates, and the intersection of the
strata is expected around mid-2024. On the tunnel boring machine,
there is a planned 3-4 month maintenance pause from the second
quarter of 2024, during which the tunnel will be connected to the
final intermediate shaft, providing further tunnel access and
ventilation.
In parallel to the core
infrastructure development, we are enhancing the project's
configuration to allow a higher production capacity and more
efficient, scalable mining methods over time. The required studies
for this are progressing well and will ensure that additional
infrastructure is optimally designed to enable future optionality
and maximise long term value over the expected multi-decade asset
life.
The project is planned to be
submitted for a Board approval decision on Full Notice to Proceed
in the first half of 2025, following conclusion of the study
programme.
Capital expenditure of $0.9 billion
is approved for 2024, the bulk of which will continue to be
invested on shaft sinking and tunnel boring
activities.
The project is expected to deliver
first product to market in 2027, with a final design capacity of 13
Mtpa, subject to studies and approval.
Market development -
POLY4
POLY4 provides farmers, through one
core product, with a fertiliser solution to tackle the three
key challenges facing the food industry today - the increasing
demand for food from less available land; the need to reduce the
environmental impact of farming; and the deteriorating health of
soils.
In tackling these challenges, the
fertiliser industry will evolve and need new solutions. POLY4
represents a new solution, helping farmers to deliver balanced,
nutrient-efficient and environmentally responsible crop nutrition
practices that are required at scale.
POLY4 offers farmers superior
performance compared to existing fertiliser products: demonstrated
crop yield improvement of 3-5% across a wide variety of crops and
soil types, improved crop quality and resilience to drought and
disease, and help in preserving the health of a farmer's greatest
asset - their soil. The use of POLY4 can also help minimise the
nutrients lost to the environment by improving the ability of crops
to take up and utilise available nutrients - i.e. improving a
plant's nutrient-use efficiency. Furthermore, its granular form
offers a more flexible and convenient in-field application for
farmers, compared with common existing fertilisers. All this, while
also being low carbon relative to comparable products, and
certified for organic agriculture.
Through our global agronomy
programme, we have conducted over 1,800 field demonstrations to
date, on over 80 crops, and our research continues to reinforce
these superior qualities and characteristics of
POLY4.
The ongoing focus of 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.
We have continued to develop our
routes to market partnerships in key high-value regions, working
closely with our distribution partners, and also engaging deeper
into the value chain to ensure we deliver what is needed at the
farm gate. Through our ongoing engagements with some 350 value
chain partners to date - including top retailers in the United
States, large distributors and co-operatives in Europe, and major
blenders and mega farms in Brazil - we are working across the full
value chain to introduce POLY4 to the market. We have also already
engaged more than 570 influencers in the industry, including major
universities, farming associations, and academic research
institutes, to ensure that the industry recognises the benefits
that POLY4 will bring at scale into the marketplace.
POLY4 has significant value beyond
its multi-nutrient content, and our innovative marketing strategy
will ensure that we unlock the full potential of our
product.
Corporate and Other
Financial metrics
|
|
|
|
|
|
Group
revenue*
|
Underlying
EBITDA*
|
Underlying
EBIT*
|
Capex*
|
|
|
|
|
|
Corporate and Other
|
440
|
(193)
|
(403)
|
59
|
Prior year
|
554
|
(440)
|
(593)
|
14
|
Exploration
|
n/a
|
(107)
|
(107)
|
3
|
Prior year
|
-
|
(155)
|
(162)
|
2
|
Corporate activities and unallocated
costs(1)
|
440
|
(86)
|
(296)
|
56
|
Prior year
|
554
|
(285)
|
(431)
|
12
|
(1) Revenue
within Corporate activities and unallocated costs primarily relates
to third-party shipping activities, as well as the Marketing
business's energy solutions activities.
Financial overview
Exploration
Underlying EBITDA was a $107
million loss (2022: $155 million loss) following a decrease in
other expenses due to timing differences in copper. Exploration
expenditure across the Group was broadly in line with the prior
year.
Corporate activities and
unallocated costs
Underlying EBITDA was a
$86 million loss (2022: $285 million loss), this
improved result was driven primarily by the Group's self-insurance
entity and corporate cost savings. The positive year-on-year
variance reflects the finalisation of the Grosvenor gas ignition
claim and the Moranbah overpressure event claim in 2022 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. There have been no equivalent insurance claim
settlements in the current year. Corporate cost savings of $0.3 bn
were realised and are partially recognised in the overheads of the
underlying businesses.
Guidance summary
Production and unit
costs
|
|
|
|
|
|
|
Unit costs
2024F
|
Production volumes
|
|
Units
|
2024F
|
2025F
|
2026F
|
Copper(1)
|
c.157 c/lb
|
kt
|
730-790
|
690-750
|
760-820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PGMs - metal in
concentrate(3)
|
c.$920/PGM ounce
|
|
3.3-3.7
|
3.0-3.4
|
3.0-3.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PGMs - refined(4)
|
|
Moz
|
3.3-3.7
|
3.0-3.4
|
3.0-3.4
|
Diamonds(5)
|
c.$80/ct
|
Mct
|
29-32
|
30-33
|
32-35
|
|
|
|
|
|
|
Iron ore(6)
|
c.$37/tonne
|
Mt
|
58-62
|
57-61
|
58-62
|
|
|
|
|
|
|
Steelmaking Coal(7)
|
c.$115/tonne
|
Mt
|
15-17
|
17-19
|
18-20
|
|
|
|
|
|
|
Further commentary on the
operational outlook at each business is included within the
respective business reviews on pages 15-34.
Note: Unit costs exclude royalties,
depreciation and include direct support costs only. FX rates used
for 2024F unit costs: c.850 CLP:USD, c.3.7 PEN:USD, c.5.0 BRL:USD,
c.19 ZAR:USD, c.1.5 AUD:USD.
(1) Copper business 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. 2024 Chile: 430-460 kt; Peru 300-330 kt.
2025 Chile: 380-410 kt; Peru: 310-340 kt. 2026 Chile: 440-470 kt;
Peru 320-350 kt. Chile production guidance is lower for the next
three years impacted by Los Bronces due to lower grades and
continued ore hardness, with the smaller and less efficient of the
two processing plants being put on care & maintenance in 2024,
as well as the impact of a revised mine plan at El Soldado. In
2025, grades decline at all operations in Chile. In 2026,
production benefits from improved grades at Collahuasi. Production
guidance in Chile for 2024 and 2025 is subject to water
availability. Peru production in 2024 will be weighted to the
second half of the year, primarily as a result of the grades
temporarily declining to between 0.6-0.7% TCu in the first half of
the year as the geotechnical fault requires changes to be made to
the angle of the slope in the mining pit wall. Chile 2024 unit cost
is c.190 c/lb. Peru 2024 unit cost is c.110 c/lb.
(2) Nickel operations in Brazil only. The
Group also produces approximately 20 kt of nickel on an annual
basis from the PGM operations. Nickel production is impacted by
declining grades.
(3) Unit cost is per own mined 5E + gold
PGMs metal in concentrate ounce. Production is 5E + gold PGMs
produced metal in concentrate ounces. Includes own mined production
and purchased concentrate volumes - please see split in above
table. The average metal in concentrate split by metal is Platinum:
c.45%; Palladium: c.35% and Other: c.20%. Metal in conc entrate
production from own mined remains broadly at 2023 levels (excluding
Kroondal), but POC volumes will be lower as POC agreements reach
their contractual conclusion. Kroondal is expected to move from
100% third-party POC to a toll arrangement (4E metals) at the end
of H1 2024. In 2025, the Siyanda POC agreement will transition to a
tolling arrangement (4E metals). At the end of 2026, the
Sibanye-Stillwater toll agreement concludes (impacting POC due to
the minor metal volumes retained). Production remains subject to
the impact of Eskom load-curtailment.
(4) 5E + gold produced refined ounces.
Includes own mined production and purchased concentrate volumes.
Refined production in 2024 is expected to be lower in the first
quarter than the rest of the year, due to the annual stock count
and planned processing maintenance. Production remains subject to
the impact of Eskom load-curtailment.
(5) Production is on a 100% basis except
for the Gahcho Kué joint operation, which is on an attributable 51%
basis. De Beers will assess options to reduce production in
response to prevailing market conditions. Venetia continues to
transition to underground operations, it is expected to ramp-up to
steady-state levels of c.4Mctpa production over the next few years.
2026 production benefits from an expansion at Gahcho Kué. Unit cost
is based on De Beers' share of production. Near term unit cost will
be impacted by a low carat profile from Venetia as the underground
ramps up and is subsequently expected to reach a steady-state of
c.$75/ct from 2026.
(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. 2024 Kumba: 35-37 Mt; Minas-Rio: 23-25 Mt. 2025 Kumba:
35-37 Mt; Minas-Rio: 22-24 Mt (impacted by pipeline inspection).
2026 Kumba: 35-37 Mt; Minas-Rio: 23-25 Mt. Kumba production is
subject to the third-party rail and port availability and
performance. The UHDMS plant remains under review and is not
captured in guidance. Kumba 2024 unit cost is c.$38/tonne.
Minas-Rio 2024 unit cost is c.$35/tonne.
(7) Steelmaking Coal FOB/tonne unit cost
comprises managed operations and excludes royalties. Production
excludes thermal coal by-product and reflects the challenging
operating environment of the longwalls due to the gas, depth and
strata as well as the operating protocols. In 2024, the next
longwall moves scheduled at Moranbah and Grosvenor are both in the
third quarter, and a walk-on/walk-off longwall move is scheduled at
Aquila during the second quarter with the impact on production
expected to be minimal.
Capital
expenditure(1)
|
|
|
|
|
2024F
|
2025F
|
2026F
|
Growth
|
~$1.2bn
Includes ~$0.9bn Woodsmith
capex
|
~$1.3bn
Includes ~$1.0bn Woodsmith
capex
|
~$1.3bn
Includes ~$1.0bn Woodsmith
capex
|
Sustaining
|
~$4.5bn
Reflects ~$3.4bn baseline, ~$0.7bn
lifex projects and ~$0.4bn Collahuasi desalination
plant(2)
|
~$4.4bn
Reflects ~$3.5bn baseline, ~$0.7bn
lifex projects and ~$0.2bn Collahuasi desalination
plant(2)
|
~$4.0bn
Reflects ~$3.5bn baseline and
~$0.5bn lifex projects
|
Total
|
~$5.7bn
|
~$5.7bn
|
~$5.3bn
|
Further details on Anglo American's
high quality growth and life-extension projects, including details
of the associated volumes benefit, are disclosed on pages
12-13.
Long term sustaining capital
expenditure is expected to be $3.0-3.5 billion per
annum(3),
excluding life-extension projects.
Other guidance
-2024
depreciation: $3.0-3.2 billion
-2024
underlying effective tax rate: 40-42%(4)
-Long term
underlying effective tax rate: 35-39%(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.
Guidance includes unapproved projects and is, therefore, subject to
the progress of project studies, and unapproved Woodsmith capex
of ∼$1
billion per annum is included after 2024. Refer to the 2023 results
presentation for further detail on the breakdown of the capex
guidance at project level.
(2) Attributable share of Collahuasi
desalination capex at 44%.
(3) Long term
sustaining capex guidance is shown on a 2023 real basis.
(4)
Underlying
effective tax rate is highly dependent on a number of factors,
including the mix of profits and any relevant tax reforms impacting
the countries where we operate, and may vary from
guidance.
For further information, please
contact:
|
|
Media
|
Investors
|
UK
James Wyatt-Tilby
james.wyatt-tilby@angloamerican.com
Tel: +44 (0)20 7968 8759
|
UK
Paul Galloway
paul.galloway@angloamerican.com
Tel: +44 (0)20 7968 8718
|
Marcelo Esquivel
marcelo.esquivel@angloamerican.com
Tel: +44 (0)20 7968 8891
|
Emma Waterworth
emma.waterworth@angloamerican.com
Tel: +44 (0)20 7968 8574
|
Rebecca Meeson-Frizelle
rebecca.meeson-frizelle@angloamerican.com
Tel: +44 (0)20 7968 1374
|
Juliet Newth
juliet.newth@angloamerican.com
Tel: +44 (0)20 7968 8830
|
South Africa
Nevashnee Naicker
nevashnee.naicker@angloamerican.com
Tel: +27 (0)11 638 3189
|
Michelle Jarman
michelle.jarman@angloamerican.com
Tel: +44 (0)20 7968 1494
|
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
copper, nickel, platinum group metals, diamonds (through De Beers),
and premium quality iron ore and steelmaking coal - 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 22 February 2024, 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.
Disclaimer
This document is for information
purposes only and does not constitute, nor is to be construed as,
an offer to sell or the recommendation, solicitation,
inducement or offer to buy, subscribe for or sell shares in
Anglo American or any other securities by Anglo American
or any other party. Further, it should not be treated as giving
investment, legal, accounting, regulatory, taxation or other advice
and has no regard to the specific investment or other objectives,
financial situation or particular needs of any
recipient.
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
included in this document is sourced from third party sources
(including, but not limited to, externally conducted studies and
trials). 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.
©Anglo American Services (UK) Ltd
2024. 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