30 April 2024
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AGM 2024 - Address to
Shareholders
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Anglo American plc held its Annual
General Meeting for shareholders in London today. The following
remarks were made by the Chairman and the Chief
Executive.
Stuart Chambers, Chairman of Anglo American plc, made the
following remarks:
Good morning, ladies and gentlemen
and welcome to Anglo American's 2024 Annual General
Meeting.
Notice of the meeting was published
to shareholders on 18 March 2024, and a quorum is present. I
therefore declare this meeting duly constituted.
I will now introduce the rest of
your Board. Starting on my far left are Magali Anderson and Hilary
Maxson, two of our independent non-executive directors.
Next to Hilary is John Heasley, our
finance director. John was appointed finance director on 1 December
2023. Prior to John's appointment he served as the CFO of The
Weir Group PLC, the FTSE100 listed global engineering company,
since 2016. As CFO, John played a significant role in Weir's
transformation to focus on mining and the strategic delivery of
technologies that improve productivity and sustainability in the
mining industry, as well as driving performance improvement
programmes.
Next to me is our chief executive,
Duncan Wanblad. To my immediate right is Richard Price, our
Legal & Corporate Affairs Director and Company Secretary, and
then Ian Tyler, our Senior Independent Director. Next to Ian
are independent non-executive directors, Hixonia Nyasulu,
Nonkululeko Nyembezi, and Ian Ashby. Unfortunately, Marcelo Bastos
was unable able to travel to London this week for medical
reasons.
Ensuring we have the right mix of
skills, experience and diversity at Board level that reflects the
breadth of our business is critical to effective governance. To
that end, our Board appointments are sequenced to reflect the areas
of expertise that we feel we need as we look ahead at the
trajectory of the business.
You can find the biographies for
each director in our Notice of AGM and I trust that you agree with
me in noting the high calibre and diverse experience of our Board
members.
Later, I will be asking you to vote
on the election of John Heasley for the first time as an executive
director and the usual annual re-election of all other
directors.
Now, before I ask Duncan Wanblad,
our chief executive, to give you an overview of recent performance,
allow me to share some of my perspectives on your company, Anglo
American.
There is no doubt that 2023 was a
challenging year for our business. The macro picture across
geopolitics and the global economy has become more uncertain than
has been the case for many years and we experienced high levels of
inflation and cyclical lows in our PGMs and diamond
businesses.
Against this background, we have
taken clear steps to improve both competitiveness and resilience.
Duncan and his team are focused on achieving safe, repeatable and
consistent operational performance, streamlining global business
support activities to be more effective, while continuing to
progress an enviable sequence of highly attractive growth options
in the most sought-after products, led by copper.
Let me now turn to performance, and
starting, as always, with safety, which is absolutely our number
one priority. Keeping our people safe is an unremitting endeavour
and I am pleased to see that our injury frequency rate has
continued to improve, to its lowest ever level in 2023, and that
trend has carried on into this year.
However, it is profoundly saddening
to report that in 2023 we lost three colleagues following two
accidents at our managed operations. A death is always a terrible
loss and we are committed to creating a workplace where every
colleague returns home safe and well at the end of their working
day.
Turning to the business itself.
Central to the measures we set out in 2023 to improve the
resilience of the business is our portfolio - with world-class
assets aligned to the three megatrends of the energy transition,
uplifting global living standards, and the provision of food
security for a growing global population. Although the near term
environment remains challenging in parts, these long term demand
trends have rarely looked better and we expect them to support our
business for decades to come.
Mined products are essential for the
prosperity of our planet and society and we absolutely recognise
our vital role in ensuring they are delivered responsibly. I am
delighted that in 2023 we achieved full ramp up of Quellaveco, our
new copper mine in Peru, which represents our blueprint for success
in delivering improved sustainability outcomes.
We are applying these learnings and
capabilities at our Woodsmith project here in the UK and also at
Sakatti, our polymetallic greenfield option in Finland. These
assets represent the future of mining in terms of minimal surface
footprint and positive sustainable impact.
Our adoption and development of
technology, coupled with what we believe is differentiated
expertise in positive ESG-related outcomes, are critical to the
approach we are taking to sustainability and how we deliver the
greatest value to our operations - this is our FutureSmart Mining ™
programme that you have heard us talk about for some
time.
We are progressing well towards our
climate-related targets. Our largest remaining source of Scope 2
emissions is in our South African business, where we are
implementing a regional renewables strategy. Together with EDF
Renewables - one of the world's true leaders in renewables
infrastructure investment, we formed Envusa Energy to develop 3 to
5 GW of wind and solar to support energy reliability and grid
resilience, also bringing what we expect to be significant
socio-economic benefits to the area. By way of a reminder in
relation to the rest of the world, as of April 2023 all of our
operations in South America draw their electricity from renewable
sources, and our Australia assets are moving to renewable supply
from 2025.
Mining companies must invest
significantly in their future resources otherwise there is no
future business. Anglo American continues to balance investment in
its future projects while delivering cash returns to you, our
shareholders. 2023 was a more difficult year, not least due to
geopolitical and economic headwinds, and their effect on PGMs and
diamonds revenues in particular, as well as a number of operational
constraints relating to third party logistics, permitting delays
and the need to catch up with mine planning after the disruptions
of the pandemic. This resulted in a negative Total Shareholder
Return for the year.
In line with our payout-based
dividend policy, the Board recommended a final dividend of 41 cents
per share, equal to 40% of underlying earnings, bringing total
dividends for the year to 96 cents per share, or $1.2
billion.
For 2024 and beyond, I am confident
that the management team, under Duncan's leadership, has taken
action and has a pathway forward to build greater resilience and
enhance value both now and longer term, for the benefit of you and
all our stakeholders. I was pleased to see a marked improvement in
share price performance in the first quarter of this year - and I
believe that recognises some of the actions we have taken and the
sheer quality and potential of our copper portfolio as the copper
price starts to reflect the impact of the underlying supply and
demand trends.
We therefore believe that Anglo
American's shareholders are really very well positioned on an
absolute and relative basis to benefit from these
trends.
Finally, and before I hand over to
Duncan, let me also cover the proposal we received from BHP two
weeks ago and that you will have seen the Board reject in the
clearest terms last Friday. Having considered the proposal with its
advisers, the Board unanimously agreed that the proposal is
opportunistic and fails to value the company's prospects, while
significantly diluting the relative value upside participation of
Anglo American's shareholders relative to BHP's
shareholders.
The proposed structure is also
highly unattractive, creating substantial uncertainty and execution
risk borne almost entirely by Anglo American, you - our
shareholders, and our other stakeholders. Duncan and his team have
defined clear strategic priorities - of operational excellence,
portfolio, and growth - to deliver full value potential and they
are entirely focused on that delivery.
Duncan Wanblad, Chief Executive of Anglo American plc, made
the following remarks:
Thank you, Stuart and good morning,
everyone.
Safety is always our number one
priority, so let me start there.
We continue to make progress,
achieving our lowest ever injury rate in 2023. On behalf of the
whole organisation, though, I offer our deepest condolences to the
family members and friends of our colleagues who lost their lives
during the year. Clearly, with three fatalities from two accidents
in the year, we have more work to do. But I am encouraged that our
programmes are delivering results, and I am committed to achieve
our goal of zero harm.
While rigorously investigating each
of these tragic incidents and sharing learnings internally, we are
also committed to sharing those learnings across the industry so
that action can be taken to help prevent repeats.
Be in no doubt, we simply will not
rest until we reach and maintain zero.
Let me now talk through some of the
operational performance and financials.
When we look back at 2023 as a
whole, the macro picture across geopolitics and the global economy
was certainly volatile, with prolonged inflationary pressure that
continued to impact costs across our industry.
Overall, our basket price was down
13% last year, with PGMs and Diamonds alone resulting in a $5.5bn
reduction in revenues compared to 2022; and the operating leverage
impact of that being significant with the Group's EBITDA reducing
by $4.5bn.
Of course, we took action to manage
costs, with unit costs up only 4% against a backdrop of double
digit mining inflation.
Cash generation was impacted by
profit flow-through and a working capital build - mainly in
diamonds and PGMs. This resulted in an increase in net debt of
$3.7bn after funding growth capex and dividends. Leverage remains
within our target range at 1.1x.
While such years are to be expected
in a cyclical business, and we run our balance sheet to absorb
these periods, we are taking appropriate action to ensure robust
ongoing cash generation and balance sheet strength.
To set the scene in terms of where
we stand today and our strategic priorities moving
forward…
The vast majority of our products
are aligned towards the three megatrends of the energy transition
to a low carbon economy; meeting the expectations of a growing
global population, in terms of improving living standards; and food
security.
Although the near term environment
is really challenging in parts, these long term demand trends have
rarely looked better. I am excited by the future, and I am
confident that we have the strategy and capabilities to make it
happen.
In terms of our strategy, we have
three clear priorities.
Firstly, and most importantly,
operational excellence. Our mine plans are at the very core of our
business, and we need to deliver on these and improve the
competitiveness of our assets through efficiency and cost
management.
Secondly, we are working at pace to
improve our portfolio - this means creating a simpler portfolio
where every asset is there on merit and has a role to play, in
terms of being either a cash generator to fund shareholder returns
and growth in other areas, or as a growth engine to secure business
longevity and future cash generation capacity.
And thirdly, over the longer term,
we are focused on delivering our highly value-accretive growth
options aligned to the long-term trends we have
highlighted.
The execution of our strategy is
underpinned by the application of what we believe to be a
differentiated set of capabilities, spanning sustainability and
social impact, technology and belief in the importance of
customer-centric marketing, built over many decades of establishing
and operating businesses in developing and developed markets. These
capabilities provide us with - we believe - distinct competitive
advantage and they are integral to our day-to-day operations as
well as our ability to achieve our portfolio improvement and growth
objectives.
That competitive advantage shows in
how we bring through our development projects. Quellaveco is the
blueprint for success in partnering for long-term mutual benefit -
it is a real triumph that we successfully delivered such a project
and testament to all the capabilities we brought to bear over many
years. We are applying these same capabilities and taking them
further at Woodsmith here in the UK and also at Sakatti in Finland.
These are prime examples of what modern mining looks like, in terms
of minimal footprint and positive stakeholder and sustainability
outcomes, reinforcing our ability to be the partner of
choice.
We now have a more prioritised
approach to technology to better realise the benefits from our
investment in FutureSmart Mining™ of recent years. We have learnt a
lot - with several promising opportunities, such as coarse particle
recovery and our transformational dry stack solution for tailings
among others - and we are focused on the technologies that can
deliver the greatest value to our operations and make the biggest
difference.
Turning to each of our three
strategic priorities. Firstly, operational stability and effective
cost management represent our biggest margin levers, supported by
sustainable production plans that prioritise value and thereby
enhance margins and returns. Our commitment to our Operating Model
is designed to achieve safer, repeatable and consistent
outcomes.
We are also starting to see the
benefits of the work that we did during 2023 to reset our
organisational design and set up more effective governance with
less duplication and increased accountability at the
operations.
We expect these actions to come
together to deliver $1 billion in annual opex savings. These are
now well progressed and on track to hit run-rate later in 2024, as
well as $1.6bn in capex savings over the next 3 years, as we work
towards positioning our assets squarely in the bottom half of the
cost curve.
Portfolio improvement is the second
strategic priority, and as we continue to go through the assets
systematically, we also assess portfolio role and fit.
As everyone knows, share prices and
commodity prices can bounce around materially every day, but with a
capital cycle that extends over many years, those decisions need to
have a deep-seated value logic.
We see portfolio improvement as a
major value lever and we are working to remove complexity from this
business, but any changes need to be for value. We will update you
on progress when we can.
Finally, we have highly attractive
project options that we own and that offer considerable growth
potential in value. We are progressing a well-sequenced pipeline in
Copper and at Woodsmith - and we have now created really valuable,
longer dated optionality in high quality iron ore through Minas-Rio
and the adjacent Serpentina deposit that we can develop at the
right time.
There are more of these adjacencies
in our portfolio where there could be significant value to be
unlocked, such as at Los Bronces and Collahuasi, and we continue to
progress those discussions.
We will look to syndicate the risk
and capital on large greenfield projects for value, as we did so
successfully with Quellaveco, and we plan to do so for Woodsmith -
again at the right time, with the right strategic
partner.
We are working towards delivering
the three clear strategic priorities that we set out in February to
convert Anglo American once and for all into a compelling
investment proposition, through the cycle. We are making good
progress and you are starting to see that come through.
It is my firm belief that the short,
medium and long term plans we have outlined provide significant
value upside potential for our shareholders through higher margins
and cash generation, with attractive growth in the right products -
particularly in copper - and improving returns
potential.
Thank you.
Following a number of questions from
shareholders and their proxies, Stuart Chambers closed the meeting,
by adding:
The final results will be announced
to the stock exchanges later this afternoon and will be published
on our website. Details of the proxy votes already received for
each resolution are shown on the screen behind me.
I am pleased to say that we have
received strong support for all 19 resolutions based on the shares
already voted that represent approximately 65% of the share
capital.
Ladies and gentlemen, that concludes
the business of this meeting. Thank you all for your attendance
today and I now declare the meeting closed.
Check against delivery.
For further information, please
contact:
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
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
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or any entity within it is structured, managed or controlled. Anglo
American subsidiaries, and their management, are responsible for
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operational adaptation and implementation of Group policies,
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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
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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,
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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
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of the securities exchange of the JSE Limited in South Africa, the
SIX Swiss Exchange, the Botswana Stock Exchange and the Namibian
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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
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expressly disclaims any responsibility for, or liability in respect
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