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25 July 2024
Anglo American Interim Results 2024
Strong operational performance delivers $5.0 billion of
underlying EBITDA
•
Underlying EBITDA* of $5.0 billion: improved
cost performance largely offset a 10% lower product basket
price
•
Copper and Iron Ore performance and margins
particularly strong, contributing $3.5 billion of EBITDA
•
Unit costs improved by 4%, reflecting weaker
currencies, operational improvements and effective cost
control
•
$0.7 billion loss attributable to equity
shareholders, impacted by a $1.6 billion impairment of
Woodsmith due to the decision to slowdown the project's
development
•
Net debt* of $11.1 billion, with leverage steady
at 1.1x annualised EBITDA
•
On track to reduce annual costs by c.$1.7 billion
and reduce capex by c.$1.6 billion over 2024-26
•
$0.5 billion interim dividend, equal to $0.42 per
share, consistent with 40% payout policy
Duncan Wanblad, Chief Executive of Anglo
American, said: "I am very
encouraged by a strong operational performance that delivered
steady volumes and a 4% improvement in unit costs, while still
facing weak cyclical markets for PGMs and diamonds. We are on track
to reduce our annual run rate costs by $1.7 billion and reduce
capital spend by $1.6 billion over the 2024-2026 period. We
are moving at pace to create a much more agile and structurally
profitable mining company focused on our exceptional quality Copper
and Premium Iron Ore businesses, which both continue to perform
very strongly, while maintaining our growth optionality in crop
nutrients. We are committed to completing the key elements of this
transformation by the end of 2025, creating a simpler, highly
valued mining company with extensive growth options and
considerable strategic flexibility.
"In the first six months of this
year, I am very sad to report that we lost two colleagues who died
in an accident at our Amandelbult PGMs mine in South Africa. We
offer our deepest condolences to their families, friends and
colleagues. We are absolutely committed to workforce safety and we
are working to ensure that every colleague returns home safe and
well each day. More broadly, we continue to make progress on
safety, achieving our lowest ever injury rate and a 23% improvement
compared to just two years ago.
"Our focus on operational
performance is delivering results, most notably in our Copper and
Premium Iron Ore businesses, with EBITDA margins* of 53% and 43%
respectively. Copper is tracking well, Minas-Rio achieved its
strongest first half production for several years, and Kumba
continues to perform strongly while we work with Transnet on rail
reliability. The Steelmaking Coal business has also improved its
production and cost performance, though the incident at Grosvenor
will set production back. Most importantly, everyone there is safe.
Our process to divest that business is well under way with
continued strong interest from a large number of potential new
owners.
"Underlying EBITDA for the half year
of $5.0 billion at a 33% EBITDA margin* reflects a 10% lower
product basket price, partly offset by a 4% improvement in unit
costs, with broadly flat production volumes. Net debt increasing
marginally to $11.1 billion reflects tight discipline to optimise
capital allocation and free cash flow. Our decision to temporarily
slowdown the Woodsmith crop nutrients project and thereby push out
its production timing has resulted in a
$1.6 billion impairment of the project. As we progress
our portfolio transformation, we expect to substantially reduce our
overhead and other non-operational costs in phases, but weighted
towards the end of the process to minimise business
risk.
"We are transforming Anglo American
by focusing on our world-class asset base in copper, premium iron
ore and crop nutrients, thereby accelerating the recognition of
value inherent in our business. From that compelling platform, I
believe our proven project delivery capabilities, global
relationship networks and longstanding reputation as a responsible
mining company will together help us unlock the outstanding mineral
endowment options within our portfolio and other growth
opportunities that we will aim to secure over time. We have taken
clear and decisive action to deliver value in the long term
interests of our shareholders and other stakeholders, from a
portfolio that will deliver the products that underpin the energy
transition, improving global living standards and food
security."
Six months ended
|
30 June 2024
|
30 June
2023
|
Change
|
US$ million, unless otherwise
stated
|
Revenue
|
14,464
|
15,674
|
(8)
%
|
Underlying EBITDA*
|
4,980
|
5,114
|
(3)%
|
EBITDA margin*
|
33%
|
31%
|
|
Attributable free cash
flow*
|
506
|
(466)
|
n/a
|
(Loss)/Profit attributable to equity
shareholders of the Company
|
(672)
|
1,262
|
n/a
|
Basic underlying earnings per share*
($)
|
1.06
|
1.38
|
(23)%
|
Basic earnings per share
($)
|
(0.55)
|
1.04
|
n/a
|
Interim dividend per share
($)
|
0.42
|
0.55
|
(24)%
|
Group attributable ROCE*
|
14%
|
18%
|
|
Terms with this symbol * are defined
as Alternative Performance Measures (APMs). For more information,
refer to page 83.
Sustainability
performance
Key
sustainability performance
indicators(1)
Anglo American tracks its strategic
progress using KPIs that are based on our seven pillars of value:
safety and health, environment, socio-political, people,
production, cost, and financial. In addition to the financial
performance set out above and our operational performance on pages
7-33, our performance for the first four pillars is set out
below:
Pillar of value
|
Metric
|
30 June 2024
|
30 June
2023
|
Target
|
Target achieved
|
Safety and health
|
Work-related fatal
injuries
|
2
|
1
|
Zero
|
Not achieved
|
|
Total recordable injury frequency
rate (TRIFR) per million hours(2)
|
1.69
|
1.91
|
Reduction year on year
|
On track
|
|
New cases of occupational
disease(2)
|
9
|
3
|
Reduction year on year
|
Not achieved
|
Environment
|
GHG emissions - Scopes 1 &
2
(Mt
CO2e)(3)
|
5.0
|
5.1
|
Reduce absolute GHG emissions by 30%
by 2030
|
On track
|
|
Fresh water withdrawals
(ML)(3)
|
17,261
|
14,096
|
Reduce fresh water abstraction in
water scarce areas by 50% by 2030
|
On track for 2030 target
|
|
Level 4-5 environmental
incidents
|
0
|
0
|
Zero
|
On track
|
Socio-political
|
Social Way 3.0
implementation(4)
|
73%
|
66%
|
Full implementation of the Social
Way 3.0 by end 2022
|
Behind schedule
|
|
Number of jobs supported
off site(5)
|
139,300
|
114,500
|
|
|
|
Local procurement spend
($bn)(6)
|
6.2
|
6.5
|
|
|
|
Taxes and royalties
($m)(7)
|
2,481
|
2,828
|
|
|
People
|
Women in
management(8)
|
35%
|
33%
|
To achieve 33%
by 2023
|
Achieved
|
|
Women in the workforce
|
26%
|
25%
|
|
|
|
Voluntary labour turnover
|
4%
|
3%
|
< 5%
|
On track
|
(1) Sustainability performance indicators for the six months ended
30 June 2024 and the comparative period are not externally
assured.
(2) TRIFR data
for the prior period has been restated following adjustments to
working hours identified through the year end assurance process.
Prior period data related to new cases of occupational disease has
been restated due to cases identified in H1 2023 that were not
confirmed until H2 2023.
(3) Data for
current and prior period is to 31 May 2024 and 31 May 2023,
respectively. Prior period comparatives have been restated to
reflect data model updates and the results of external assurance
findings at 31 December 2023.
(4) Current
and prior period data presented is at 31 December 2023 and 2022,
respectively. 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 Thriving Communities commentary on page 5.
(5) Jobs
supported since 2018, in line with the Sustainable Mining Plan
Livelihoods stretch goal. Current and prior period data presented
is at 31 December 2023 and 2022, respectively.
(6) 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.
(7) 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.
Prior period comparatives have been restated to reflect data model
updates.
(8) Management
includes middle and senior management across the Group.
Sustainable Mining Plan
Anglo American's longstanding and
holistic approach to sustainability helps to build trust with our
employees and stakeholders across society, reduces operational risk
and in many cases delivers direct financial value for our business.
Our reputation as a responsible mining company supports our ability
to access future resource development opportunities, both from the
significant endowments within our business and more broadly -
critical to delivering our growth ambitions.
Our Sustainable Mining Plan is
designed to be a flexible, living plan and we 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 reviewing the Sustainable Mining Plan to reflect the Group's
future portfolio composition that was announced in May 2024. We are
also using this opportunity to ensure that our sustainability
ambitions deliver tangible value to our many stakeholders and will
set out an update when we have completed the review, likely only
once the portfolio transformation has made significant progress.
Progress against the existing Sustainable Mining Plan targets is
discussed below.
Zero mindset
Occupational safety
Anglo American's number one value is
safety, and it is our first priority, always. We are committed to
preventing our people from being harmed at work. Keeping our
workforce safe is an unremitting endeavour and comes foremost
in everything we do. We are unconditional about safety and
train, equip and empower our people to work safely, because we
believe that everybody, everywhere should return home safe and well
at the end of their working day.
In 2024, we continued to focus on
three key safety levers that we believe are critical to improving
front line safety: supporting operational leaders to spend more
time in the field; using our Operating Model principles to deliver
planned work; and implementing our new Contractor Performance
Management framework across the business. Following the achievement
of a record low total recordable injury frequency rate (TRIFR) of
1.78 in 2023, we continued to make solid progress in our safety
journey, with our TRIFR further improving to 1.69 in the six months
to 30 June 2024 (30 June 2023: 1.91). While encouraged by this
continued improvement, we are deeply saddened to have lost two
colleagues at Dishaba mine, part of the Amandelbult PGMs complex in
South Africa, who were fatally injured after falling down a raised
ore-pass. We also lost a colleague at the independently managed,
joint venture Jwaneng diamond mine in Botswana. Full investigations
are currently under way to understand the circumstances behind
these incidents and we extend our deepest condolences to families,
friends and colleagues.
Following the underground fire that
started at the Grosvenor steelmaking coal mine in Australia on 29
June 2024, all emergency protocols were followed and the
workforce was safely evacuated without injury. Our primary focus
continues to be the safety and well-being of our workforce and
local communities. The mine has been stabilised and we are
re-establishing comprehensive underground gas monitoring, prior to
being able to assess the steps towards a safe re-entry into the
mine.
Alongside our continued use of
innovative technologies to help make Anglo American a safer and
healthier place to work, we are building an ever stronger safety
culture, based on the established concept of Visible Felt
Leadership. This programme is focused on ensuring all leaders, at
all levels in the organisation, are spending sufficient time in the
field having quality interactions with our workforce. These
interactions are helping to deliver considerable improvements in
work conditions and execution methods, as well as empowering our
employees and contractors to speak up if they have concerns about
the safety of their work activities.
Applying the principles of our
Operating Model across all our activities, but particularly to our
maintenance work, has played a major role in lowering injury levels
across the Group. Planned maintenance allows for better
identification and mitigation of risk and ensures work is
appropriately resourced and executed, with the right people with
the correct skills completing the work safely.
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. Our Contractor Performance
Management programme is a three-year initiative, started in 2023,
which has been designed to ensure that the work our contractors
undertake is well planned, aligned with our Operating Model and
meaningfully risk assessed and resourced with the right
skills.
Occupational health
Our health and well-being strategy,
aligned with the World Health Organization (WHO) Healthy Workplace
model, has been updated to include Total Worker Health concepts
that integrate actions to support the health and well-being of our
workforce and host communities. This integrated strategy
incorporates our WeCare well-being programme and other social
performance activities, including our livelihoods support
programmes. It requires us to work synergistically to support our
people and achieve our health and well-being goals.
Occupational diseases
In the six months to 30 June 2024,
there were 9 reported new cases of occupational disease, all of
which were related to noise exposure (30 June 2023: 3, 2 of which
were 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 risk assessment and
preventative management strategies, continuous environment
monitoring, and comprehensive worker occupational health
surveillance. These activities are an ongoing focus at Anglo
American and, as we continue to improve the rigour of our reporting
processes and proactive case management, we may detect further
historic cases of occupational disease.
Healthy environment
Our existing Sustainable Mining Plan
includes commitments to be a leader in environmental stewardship.
These include our aims, by 2030, to reduce operational 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.
Climate change
In addition to our existing 2030
operational emissions reduction target, we have stated our aim to
achieve carbon neutrality across our operations by 2040, and an
ambition to halve our Scope 3 emissions, also by 2040. We continue
to make progress across the current portfolio in reducing our
emissions, with our Scope 1 and 2 GHG emissions lower than the
prior period. Since 2023, our managed operations in South America
have been supplied with 100% renewable electricity and the managed
operations in Australia are scheduled to move to renewable supply
from 2025. At this stage, 60% of the global grid supply for the
current Anglo American portfolio would be drawn from renewable
sources. We continue to make progress towards addressing Anglo
American's largest remaining current source of Scope 2 emissions -
our electricity supply in southern Africa. Our jointly owned
renewable energy venture with EDF Renewables, known as Envusa
Energy, completed the project financing for the first three wind
and solar projects in South Africa in February 2024. These three
renewable energy projects, known as the Koruson 2 cluster and
located on the border of the Northern and Eastern Cape provinces of
South Africa, are designed to have a total capacity of 520 MW of
wind and solar electricity generation.
Methane emissions from the
Australian steelmaking coal operations represent the largest
component of our current Scope 1 emissions and we continue to
work hard to capture, use and abate those emissions. We have
invested significantly over several years, in excess of $100
million per annum, in methane capture infrastructure at our
underground steelmaking coal operations. This investment has
allowed those operations to capture gas before and during mining.
In 2023, this resulted in approximately 60% of methane emissions,
the equivalent of about 5.3 million tonnes of CO2e,
being abated and has provided gas to adjacent power stations with
our partner and operator, EDL, providing power for the local
area.
We have set an ambition to achieve
carbon neutrality across our controlled ocean freight activities by
2040, with an interim 30% reduction in emissions by 2030. The
delivery in Q1 2024 of the final two vessels of a 10-strong
chartered fleet of Capesize+ liquefied natural gas (LNG)
dual-fuelled bulk carriers, marks a significant milestone towards
achieving our commitment to more sustainable shipping. The
LNG-dual-fuelled vessels offer an estimated 35% reduction in
emissions compared to ships fuelled by conventional marine oil fuel
and are the most efficient vessels of their type today.
Water
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 a number of projects
and technologies to help us achieve our freshwater reduction
targets.
At 31 December 2023, Anglo American
had reduced fresh water withdrawals by 22%, compared with the 2015
baseline. Although this is encouraging, progress is not always
linear due to factors such as variable operational requirements and
changing precipitation levels.
In the five months to 31 May 2024,
fresh water withdrawals increased to 17,261 ML (31 May 2023: 14,096
ML), owing to higher water use across most sites, driven
principally by an increase in production at Steelmaking Coal,
adverse hydrological conditions at several operations and an
increase in dewatering, particularly at Kumba (Iron Ore). While
annual variability is expected until such time as major fresh water
savings and replacement projects are delivered, we believe we are
still on track to meet our 2030 target of a 50% reduction in fresh
water withdrawals in water scarce areas.
Biodiversity
As custodians of the land and
ecosystems around our operations, we seek to improve the footprint
of our operations and direct our efforts towards delivering
positive and lasting environmental outcomes for host communities
and our wide range of stakeholders. Within our Sustainable Mining
Plan we have a commitment to deliver Net Positive Impact on
biodiversity across Anglo American by 2030, compared with the 2018
baseline.
We have now completed detailed
biodiversity baseline assessments across all our managed
operations, defining and assessing significant biodiversity
features including key habitats and species, as well as identifying
those ecosystems that require protection and restoration. Detailed
biodiversity management programmes have been developed for each
site and have been independently reviewed by our NGO
partners.
We have continued to refine our
measurement processes to develop, in partnership with two long term
NGO partners, a new science-based metric called Quality Habitat
Hectares (QHH) that will help us to measure our contribution to
internal and global biodiversity targets, as well as
nature-positive outcomes. QHH enables an objective assessment of
quantity and quality that are reliable and replicable through
incorporating the extent, type and condition of ecosystems and
species impacted in and around our operations.
We believe that the development of a
metric such as QHH represents a significant advancement in the
metals and mining sector, offering a new tool for measuring and
reporting on nature related impacts and dependencies. This metric
can serve as a catalyst for enhancing transparency and
accountability across industries, encouraging businesses to
disclose their interactions with nature more openly. By adopting
such measures, companies can align their approach with the
mitigation hierarchy, which prioritises avoiding, minimising, and
compensating for biodiversity impacts.
Thriving communities
We continue working to strengthen
and broaden our social performance competencies through embedding
our social performance management system - the Social Way - across
Anglo American. Through the implementation of the Social Way -
which we believe is one of the most robust and comprehensive social
performance management systems in the mining sector - and through
our collaborative regional development initiatives, we are working
actively to support local and regional economies, as well as the
lives and livelihoods of the communities where we
operate.
Since the launch of our Sustainable
Mining Plan, we have supported more than 139,000 off site jobs
through livelihoods programmes. One example of where we are
offering support beyond traditional social investment is our Impact
Finance Network, which provides tailored technical assistance to
help match third-party impact capital to host-region, non-mining
impact businesses and enterprises. Since 2021, we have supported a
pipeline of over 100 businesses across southern Africa and South
America, having helped close deals with a cumulative value of
$65 million, and support for over 20,000 livelihoods. Building
off the work in southern Africa, we now have a strong footprint in
South America. We are into our third year of operation in Chile,
are about to launch the post-pilot phase in Peru, and intend to
roll out a pilot in Brazil before the end of 2024.
While we did not meet our ambitious
goal of full implementation of the Social Way at all sites by the
end of 2022, we continue to progress embedding the system and have
implemented a significant majority of the core elements. In 2023,
we re-baselined the site-level implementation pathways and by the
end of the year, our operations reported 96% delivery against those
implementation pathways. The Social Way is critical to underpinning
many of our ambitious 2030 Sustainable Mining Plan targets,
demonstrating our commitment to partnering with host communities
and governments.
Trusted corporate leader
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 our
management population, reaching 34%. For the six months to 30 June
2024, the percentage of females in management increased to 35%. We
have also seen positive improvements in other key performance
metrics such as the percentage of women in the workforce which
increased to 26% in the period (30 June 2023: 25%).
To demonstrate the high standards to
which we operate, we have been at the forefront of developing and
adopting some of the most trusted sustainability certification
programmes for the mining sector, including the Initiative for
Responsible Mining Assurance (IRMA) and the Responsible Jewellery
Council (RJC).
Having met our Sustainable Mining
Plan interim target in 2022 of having half of our operations
undergo third-party audits against recognised responsible mine
certification systems, we continue to work towards our 2025 target
for audits of all operations.
Some of the most recent achievements
for our sites that were assessed against IRMA's comprehensive
mining standard include:
-
Our Mototolo and Amandelbult mines in South Africa
became the first PGMs mines in the country to complete the audit -
achieving the IRMA 75 and IRMA 50 level of performance,
respectively;
-
Confirmation from IRMA that the Unki PGMs mine in
Zimbabwe retained its IRMA 75 level of performance; and
-
Our Minas-Rio and Barro Alto mines in Brazil are
the first iron ore and nickel-producing mines in the world to
complete an IRMA audit. Both mines achieved the IRMA 75 level of
performance.
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 $2.5 billion, an
11% decrease compared with the first half of 2023, reflecting lower
revenues and profit before tax.
Operational and financial review of Group results for the
six months ended 30 June 2024
Operational performance
Production
|
H1
2024
|
H1
2023
|
% vs H1
2023
|
Copper (kt)(1)
|
394
|
387
|
2%
|
Iron ore
(Mt)(2)
|
30.7
|
30.7
|
0%
|
Platinum group metals
(koz)(3)
|
1,755
|
1,844
|
(5)%
|
Diamonds
(Mct)(4)
|
13.3
|
16.5
|
(19)%
|
Steelmaking coal (Mt)
|
8.0
|
6.9
|
16%
|
Nickel (kt)(5)
|
19.5
|
19.6
|
(1)%
|
Manganese ore (kt)
|
1,140
|
1,811
|
(37)%
|
(1) Contained metal basis. Reflects copper production from the
Copper operations in Chile and Peru only (excludes copper
production from the Platinum Group Metals business).
(2) Wet
basis.
(3) Produced
ounces of metal in concentrate. 5E + gold (platinum, palladium,
rhodium, ruthenium and iridium plus gold). Reflects own mined
production and purchase of concentrate.
(4) Production
is on a 100% basis, except for the Gahcho Kué joint operation which
is on an attributable 51% basis.
(5) Reflects
nickel production from the Nickel operations in Brazil only
(excludes 7.3 kt of H1 2024 nickel production from the Platinum
Group Metals business).
Production volumes decreased by 1%
on a copper equivalent basis, as Manganese was impacted by a
suspension to the Australian operations due to the impact of
tropical cyclone Megan in the first half of 2024, the disposal of
Kroondal at PGMs, and the decision to intentionally lower
production at De Beers in response to weaker rough diamond demand.
This is offset by Steelmaking Coal, as the underground operations
were impacted by longwall moves in the first half of 2023, and
higher throughput at Copper Peru since commercial production was
reached in June 2023.
Group copper equivalent unit costs
decreased by 4% driven by weaker local currencies. Excluding the
favourable impact of foreign exchange, unit costs were flat as high
unit costs at De Beers, due to intentional lower production and the
ramp up of Venetia underground, and higher costs at Copper Peru, as
the asset has now moved into commercial production, were offset by
effective cost control measures at Copper Chile and favourable unit
costs at Steelmaking Coal, driven by higher production.
For more information on each
Business' production and unit cost performance, please refer to the
following pages 16-33.
Financial performance
Anglo American's profit/(loss)
attributable to equity shareholders decreased to a loss of
$0.7 billion (30 June 2023: profit of
$1.3 billion). Underlying earnings were $1.3 billion
(30 June 2023: $1.7 billion), while operating profit
was $1.5 billion (30 June 2023: $3.0 billion).
Underlying EBITDA*
Group underlying EBITDA decreased by
$0.1 billion to $5.0 billion (30 June
2023: $5.1 billion). Financial results were impacted by
lower iron ore prices and sales, and the effect of the cyclone at
Manganese, largely offset by higher copper prices, price-driven POC
normalisation at PGMs and effective progress in our cost-out
programmes. The reductions in cost and normalisation of POC drove
an improvement in the Group's underlying EBITDA margin* to 33%
(30 June 2023: 31%). Our ongoing focus on cost control and
cash generation has positioned us well as we execute our strategy.
A reconciliation of 'Profit before net finance costs and tax', the
closest equivalent IFRS measure to underlying EBITDA, is provided
within note 4 to the Condensed financial statements.
Underlying EBITDA* by
segment
|
Six months
ended
|
Six months
ended
|
$
million
|
30 June 2024
|
30 June
2023
|
Copper
|
2,038
|
1,492
|
Iron Ore
|
1,413
|
1,775
|
Crop Nutrients
|
(22)
|
(20)
|
PGMs
|
675
|
667
|
De Beers
|
300
|
347
|
Steelmaking Coal
|
592
|
615
|
Nickel
|
28
|
110
|
Manganese
|
11
|
138
|
Corporate and other
|
(55)
|
(10)
|
Total
|
4,980
|
5,114
|
Underlying EBITDA* reconciliation
for the six months ended 30 June 2023 to
six months ended 30 June 2024
The reconciliation of underlying
EBITDA from $5.1 billion in 2023 to $5.0 billion
in 2024 shows the major controllable factors (e.g. cost and
volume), as well as those outside of management control (e.g.
price, foreign exchange and inflation), that drive the Group's
performance.
$
billion
|
|
H1 2023 underlying EBITDA*
|
5.1
|
Price
|
(0.6)
|
Foreign exchange
|
0.2
|
Inflation
|
(0.3)
|
Net cost and volume
|
0.7
|
Other
|
(0.1)
|
H1 2024 underlying EBITDA*
|
5.0
|
Price
Average market prices for the
Group's basket of products decreased by 10% compared with the first
half of 2023, reducing underlying EBITDA by $0.6 billion. This was
driven by the weighted average realised price for iron ore which
reduced by 11%, alongside the PGMs basket price which decreased by
24%, primarily driven by rhodium and palladium which decreased by
49% and 34%, respectively. The decrease was predominantly in H2
2023, with prices fairly stable through H1 2024.
This was partly offset by a 9% increase in the copper weighted
average realised price and the price-driven normalisation of POC at
PGMs.
Foreign exchange
Favourable foreign exchange
benefited underlying EBITDA by $0.2 billion, primarily
reflecting the favourable impact of the weaker Chilean
peso.
Inflation
The Group's weighted average CPI was
4% in the first six months of 2024, as inflation continued to
increase in all regions, albeit lower than the 6% in 2023 over the
same period. The impact of CPI inflation on costs reduced
underlying EBITDA by $0.3 billion (30 June 2023:
$0.5 billion).
Net cost and volume
The net impact of cost and volume
was a $0.7 billion increase in underlying EBITDA, driven by
effective cost-out programmes across the Group, alongside higher
sales volumes at PGMs from a drawdown of finished goods, and higher
sales at Steelmaking Coal driven by higher production due to
longwall moves in 2023.
Other
The $0.1 billion unfavourable
movement was driven by the temporary suspension of
the Australia-based Manganese operations since mid-March 2024 as a
result of the impact of tropical cyclone Megan and losses relating
to PGM's share in AP Ventures. This was partly offset by a
fair value gain of a non-diamond royalty right at De
Beers.
Underlying earnings*
Group underlying earnings decreased
to $1.3 billion (30 June 2023: $1.7 billion),
driven by higher depreciation and amortisation, higher finance
costs and slightly 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*
|
Six months
ended
|
Six months
ended
|
$
million
|
30 June 2024
|
30 June
2023
|
Underlying EBITDA*
|
4,980
|
5,114
|
Depreciation and
amortisation
|
(1,517)
|
(1,265)
|
Net finance costs and income tax
expense
|
(1,644)
|
(1,550)
|
Non-controlling interests
|
(529)
|
(629)
|
Underlying earnings*
|
1,290
|
1,670
|
Depreciation and
amortisation
Depreciation and amortisation
increased by 20% to $1.5 billion (30 June
2023: $1.3 billion), largely due to Quellaveco commencing
commercial production in June 2023 and an increase in shipping
leases.
Net finance costs and income tax
expense
Net finance costs, before special
items and remeasurements, were $0.4 billion (30 June
2023: $0.2 billion). The increase was principally driven by
the impact of higher floating interest rates on the Group's
interest expense coupled with higher gross debt, as well as Copper
Peru commencing commercial production in June 2023 resulting in the
cessation of interest capitalised on the project.
The underlying effective tax rate
was higher than the prior period at 40.3% (30 June
2023: 37.0%), impacted by the relative levels of profits
arising in the Group's operating jurisdictions. The tax charge for
the period, before special items and remeasurements, was $1.2
billion (30 June 2023: $1.2 billion).
Non-controlling interests
The share of underlying earnings
attributable to non-controlling interests of $0.5 billion
(30 June 2023: $0.6 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 $2.0
billion (30 June 2023: net charge of $0.4 billion),
principally relating to the impairments of $1.6 billion
recognised in Woodsmith (Crop Nutrients) and restructuring costs
linked to the strategic change programme across the Group of
$0.3 billion.
Full details of the special items
and remeasurements recorded are included in note 11 to the
Condensed financial statements.
Net
debt*
$ million
|
2024
|
2023
|
Opening net debt* at 1 January
|
(10,615)
|
(6,918)
|
Underlying EBITDA* from subsidiaries
and joint operations
|
4,802
|
4,685
|
Working capital movements
|
562
|
(701)
|
Other cash flows from
operations
|
(203)
|
(53)
|
Cash flows from operations
|
5,161
|
3,931
|
Capital repayments of lease
obligations
|
(200)
|
(125)
|
Cash tax paid
|
(884)
|
(1,096)
|
Dividends from associates, joint
ventures and financial asset investments
|
142
|
208
|
Net
interest(1)
|
(476)
|
(303)
|
Distributions paid to
non-controlling interests
|
(300)
|
(362)
|
Sustaining capital
expenditure
|
(2,197)
|
(2,024)
|
Sustaining attributable free cash flow*
|
1,246
|
229
|
Growth capital expenditure and
other(2)
|
(740)
|
(695)
|
Attributable free cash flow*
|
506
|
(466)
|
Dividends to Anglo American plc
shareholders
|
(503)
|
(905)
|
Acquisitions and
disposals
|
16
|
197
|
Foreign exchange and fair value
movements
|
1
|
(2)
|
Other net debt
movements(3)
|
(493)
|
(704)
|
Total movement in net debt*
|
(473)
|
(1,880)
|
Closing net debt* at 30 June
|
(11,088)
|
(8,798)
|
(1)Includes cash outflows of $243 million (30 June
2023: outflows of $196 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 $46 million
(30 June 2023: $59 million) of expenditure on non-current
intangible assets.
(3)Includes the purchase of shares (including for employee share
schemes) of $111 million; Mitsubishi's share of
Quellaveco's capital expenditure of $26 million; other movements in
lease liabilities (excluding variable vessel leases) increasing net
debt by $132 million; and contingent and deferred consideration
paid in respect of acquisitions completed in previous years of $58
million. 30 June 2023 includes the purchase of shares
(including for employee share schemes) of $187 million;
Mitsubishi's share of Quellaveco capital expenditure of
$83 million; other movements in lease liabilities (excluding
variable vessel leases) increasing net debt by $89 million; and
contingent and deferred consideration paid in respect of
acquisitions completed in previous years of $124
million.
Net debt (including related
derivatives) of $11.1 billion increased by $0.5 billion from
31 December 2023. Net debt at 30 June 2024
represented gearing (net debt to total capital) of 26%
(31 December 2023: 25%). The net debt to EBITDA ratio of
1.1x (31 December 2023: 1.1x) remains unchanged, and well
within our target range of <1.5x at the bottom of the
cycle.
Cash flow
Cash flows from operations and Cash
conversion*
Cash flows from operations increased
to $5.2 billion (30 June 2023: $3.9 billion),
reflecting the impact of a working capital reduction of
$0.6 billion (30 June 2023: build of
$0.7 billion) and an increase in underlying EBITDA from
subsidiaries and joint operations. Receivables decreased by
$0.7 billion, led by a lower iron ore price, coupled with
lower Copper sales volumes more than offsetting the higher copper
price. Inventory reduced by $0.1 billion, driven by a
sell-down of finished diamonds inventory. This was partly offset by
a decrease in payables of $0.3 billion, owing to lower costs
and the impact of lower coal prices on royalties at Steelmaking
Coal and phasing on consumable and marketing spend at De
Beers.
These factors contributed to the
Group's cash conversion increasing to 86% (30 June 2023: 52%).
Capital expenditure*
|
Six months
ended
|
Six months
ended
|
$
million
|
30 June 2024
|
30 June
2023
|
Stay-in-business
|
1,370
|
1,242
|
Development and stripping
|
531
|
510
|
Life-extension projects
|
301
|
274
|
Proceeds from disposal of property,
plant and equipment
|
(5)
|
(2)
|
Sustaining capital
|
2,197
|
2,024
|
Growth projects
|
694
|
636
|
Total capital expenditure
|
2,891
|
2,660
|
Capital expenditure increased to
$2.9 billion (30 June 2023: $2.7 billion), driven by both
higher sustaining and growth capital compared to the prior
period.
Sustaining capital expenditure
increased to $2.2 billion (30 June
2023: $2.0 billion), driven by additional
stay-in-business expenditure for the tailings filtration plant at
Minas-Rio (Iron Ore) in Brazil, desalination plant project at
Collahuasi, and increased expenditure at Quellaveco as the project
has transitioned to commercial production.
Growth capital expenditure was $0.7
billion (30 June 2023: $0.6 billion), primarily related to the
Woodsmith project (Crop Nutrients).
Attributable free cash
flow*
The Group's attributable free cash
flow increased to an inflow of $0.5 billion (30 June
2023: outflow of $0.5 billion), mainly due to an
increase in cash flows from operations to $5.2 billion
(30 June 2023: $3.9 billion), decreased tax payments
of $0.9 billion (30 June 2023: $1.1billion) and a
reduction in distributions paid to non-controlling interests to
$0.3 billion (30 June 2023: $0.4 billion). This was
partly offset by an increase in capital expenditure to $2.9 billion
(30 June 2023: $2.7 billion) and in net interest paid to $0.5
billion (30 June 2023: $0.3 billion). This attributable free
cash flow was then used in the funding of dividends paid to
Anglo American plc shareholders of $0.5 billion.
Shareholder returns
In line with the Group's established
dividend policy to pay out 40% of underlying earnings, the Board
has approved an interim dividend of 40% of first half underlying
earnings, equal to $0.42 per share (30 June 2023: $0.55
per share), equivalent to $0.5 billion (30 June 2023:
$0.7 billion).
Balance sheet
Net assets decreased by $0.8 billion
to $30.9 billion (31 December 2023: $31.6 billion),
reflecting dividend payments to Company shareholders and
non-controlling interests, foreign exchange movements as well as
the loss in the period, which was impacted by the impairment at
Crop Nutrients.
Attributable ROCE*
Attributable ROCE decreased to 14%
(30 June 2023: 18%). Annualised attributable underlying
EBIT decreased to $4.6 billion (30 June 2023: $5.9
billion), reflecting the impact of lower realised prices for the
Group's products, inflationary cost pressures and higher
depreciation and amortisation. Average attributable capital
employed increased to $33.7 billion (30 June
2023: $33.1 billion), primarily due to capital
expenditure, largely at Platinum Group Metals and Steelmaking Coal,
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
$15.7 billion (31 December 2023: $13.2 billion),
comprising $8.6 billion of cash and cash equivalents
(31 December 2023: $6.1 billion) and $7.1 billion of
undrawn committed facilities (31 December 2023: $7.2
billion).
During the first six months of 2024,
the Group issued $2.9 billion of bond debt. In March 2024, the
Group issued €500 million 3.75% Senior Notes due June 2029 and €750
million 4.125% Senior Notes due March 2032, and in April 2024, $1.0
billion 5.75% Senior Notes due April 2034 and $500 million 6%
Senior Notes due April 2054. 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 increased to 7.8 years
(31 December 2023: 7.4 years).
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, improving global living standards, and that help
address food security. In addition to a strong pipeline of organic
growth projects, Anglo American also continues to progress
opportunities with industry partners in respect of adjacent assets
where there is significant value to be unlocked.
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 production of c.10
ktpa (44% share) on average from 2026.
Further debottlenecking options
remain under study and are expected to add c.15 ktpa (44% share)
with capex 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) from ~2032. The desalination plant that is currently under
construction has been designed to accommodate capital efficient
expansion in light of the growth potential at the asset.
|
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
|
Quellaveco
|
The plant throughput is permitted
to a level of 127.5 ktpd and a recent change in legislation has
increased the permit allowance from 5% to 10%, enabling throughput
of up to c.140 ktpd. In light of this, studies are underway for an
incremental expansion to c.140 ktpd, potentially by late 2026. A
subsequent increase to c.150 ktpd, which was already considered in
the development of the greenfield project, is in the
pre-feasibility study stage, and subject to further permitting,
that could benefit production from 2027. No additional water rights
will be required. Further local and regional expansion potential at
Quellaveco is also being evaluated.
|
Expansion studies ongoing. Subject
to permitting and approvals.
|
Sakatti
|
Polymetallic greenfield project in
Finland containing copper, nickel, platinum, palladium, gold,
silver and cobalt. Expected to
deliver c.100 ktpa copper equivalent
production from a state-of-the-art mine design with minimal surface
footprint. The EIA was approved by the Finnish authorities in 2023
and the Natura 2000 assessment is progressing.
|
|
Studies ongoing. Subject to
permitting and approvals.
|
c.2033
|
Los Bronces
|
The underground project will partly
replace lower grade open pit tonnes with higher grade underground
tonnes. It is located 5km from the existing pit and will use the
same plant and tailings deposit capacity used by the current
operation, without requiring any additional fresh water.
The underground development was
permitted as part of the wider Los Bronces Integrated Project
permit granted in 2023. Studies are under way with the aim being to
develop a modern operation with minimal surface impact while
maximising value delivery from the project.
|
|
Studies ongoing. Subject to
approvals.
|
Early 2030s
|
Premium iron ore
|
|
|
|
|
Minas-Rio
|
The acquisition of the neighbouring
Serpentina resource from Vale is currently expected to complete in
Q4 2024, subject to regulatory conditions. At completion, Vale will
contribute Serpentina and $157.5 million in cash to acquire a 15%
shareholding in the enlarged Minas-Rio, subject to normal
completion adjustments.
Serpentina is of a higher iron ore
grade than Minas-Rio's ore and contains predominantly softer
friable ore that together are expected to translate into lower unit
costs and capital requirements.
The combination of Minas-Rio with
the scale and quality of the Serpentina endowment also offers
considerable expansion opportunities, including the potential to
double production towards 60Mtpa. Vale will also have an option to
acquire an additional 15% shareholding in the enlarged Minas-Rio
for cash (at fair value calculated at the time of exercise of the
option), if and when certain events relating to a future expansion
occur.
Near-term access to the Serpentina
ore as well as the potential future expansion are both subject to
obtaining normal licenses, which are expected to take a number of
years.
|
|
Subject to studies, permitting and
approvals.
|
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 21 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 achieved in 2023 with ramp-up over
the next few years as development continues.
|
2.3
|
0.6
|
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 by 9 years to 2036.
|
0.4 (19.2% share)
|
0.1 (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 mined in June
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 c.2074.
|
0.3
|
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.
|
Studies 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 2023 Integrated Annual
Report, page 44.
(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
There have been no changes to the composition of the Board in the
six months to 30 June 2024.
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 relate to the following:
-
Catastrophic (tailings dam failure; geotechnical
failure; mineshaft failure; and fire and explosion) and natural
catastrophe risks
-
Product prices
-
Cybersecurity
-
Geopolitical
-
Community and social relations
-
Safety
-
Corruption
-
Operational performance (including interruption to
power supply and the failure of critical third-party owned and
operated infrastructure)
-
Regulatory and permitting
-
Water
-
Climate change
-
Pandemic
-
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
16-33. Details of relevant tax matters are included in note 7 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.
Copper
Operational and financial metrics
|
Production
volume
|
Sales
volume
|
Price
|
Unit
cost*
|
Group
revenue*
|
Underlying
EBITDA*
|
EBITDA
margin*
|
Underlying
EBIT*
|
Capex*
|
ROCE*
|
|
kt
|
kt(1)
|
c/lb(2)
|
c/lb(3)
|
$m(4)
|
$m
|
|
$m
|
$m
|
|
Copper Total
|
394
|
391
|
429
|
152
|
3,875
|
2,038
|
53%
|
1,564
|
855
|
25%
|
Prior period
|
387
|
389
|
393
|
179
|
3,493
|
1,492
|
43%
|
1,176
|
878
|
19%
|
Copper Chile
|
247
|
242
|
437
|
176
|
2,455
|
1,196
|
49%
|
893
|
620
|
33%
|
Prior period
|
249
|
238
|
393
|
205
|
2,263
|
691
|
31%
|
418
|
657
|
20%
|
Los Bronces(5)
|
97
|
92
|
n/a
|
241
|
873
|
369
|
42%
|
244
|
146
|
n/a
|
Prior period
|
113
|
103
|
-
|
310
|
843
|
128
|
15%
|
24
|
340
|
-
|
Collahuasi(6)
|
125
|
127
|
n/a
|
119
|
1,204
|
782
|
65%
|
654
|
463
|
n/a
|
Prior period
|
114
|
114
|
-
|
114
|
1,014
|
565
|
56%
|
447
|
297
|
-
|
Other operations(7)
|
24
|
23
|
n/a
|
n/a
|
378
|
45
|
12%
|
(5)
|
11
|
n/a
|
Prior period
|
23
|
21
|
-
|
-
|
406
|
(2)
|
0%
|
(53)
|
20
|
-
|
Copper Peru (Quellaveco)(8)
|
147
|
149
|
415
|
112
|
1,420
|
842
|
59%
|
671
|
235
|
17%
|
Prior period
|
138
|
151
|
394
|
132
|
1,230
|
801
|
65%
|
758
|
221
|
18%
|
(1)Excludes 168 kt third-party sales (30 June 2023:
178 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 decreased by 26% to 224c/lb (30 June 2023:
301c/lb).
(8)Figures on a 100% basis (Group's share: 60%).
Operational performance
Copper Chile
Copper production of 246,500 tonnes
was broadly in line with the prior period (30 June 2023:
249,400 tonnes), due to planned higher throughput and grades
at Collahuasi and El Soldado, offset by planned lower grade at
Los Bronces.
At Los Bronces, production decreased
by 14% to 97,100 tonnes (30 June 2023: 112,500 tonnes), due to
planned lower ore grade (0.48% vs 0.52%) and throughput associated
with continued ore hardness. As previously disclosed, the
unfavourable ore characteristics in the current mining area will
continue to impact operations 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 it
is expected to benefit production from early 2027 (refer to
'Operational outlook' below for further details). As planned, in
line with our broader focus on improving cash generation, the
older, smaller (c.40% of plant capacity) and more costly Los
Bronces processing plant will be placed on care and maintenance by
the end of July, in light of the current unfavourable ore
characteristics in the mine.
At Collahuasi, Anglo American's
attributable share of copper production increased by 9% to 125,000
tonnes (30 June 2023: 114,400 tonnes), due to higher
throughput driven by the fifth ball mill that started up in Q4 2023
and planned higher grade (1.13% vs 1.07%), partially offset by
lower copper recovery.
Production at El Soldado increased
by 8% to 24,400 tonnes (30 June 2023: 22,500 tonnes) due to
planned higher grade (0.94% vs 0.84%).
The central zone of Chile, where Los
Bronces and El Soldado are located, experienced record levels of
rain and snow - with the wettest June and also the most snowfall in
over 20 years. While both operations were impacted, there has been
limited disruption, despite the extent of snowfall.
Copper Peru
Quellaveco production increased by
7% to 147,300 tonnes (30 June
2023: 137,800 tonnes), reflecting the higher
throughput reached since commercial production was achieved in
June 2023, despite the impact of planned lower grades during
the first six months of 2024. Operational performance is tracking
well against the revised mine plan.
Focus is on the ramp up of the
coarse particle recovery plant that treats flotation tails, leading
to improved metal recoveries.
Markets
|
|
|
|
30 June 2024
|
30 June
2023
|
Average market price
(c/lb)
|
412
|
394
|
Average realised price (Copper Chile
- c/lb)
|
437
|
393
|
Average realised price (Copper Peru
- c/lb)
|
415
|
394
|
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, 72,800 tonnes of copper were provisionally priced at
432 c/lb at 30 June 2024 (30 June 2023: 134,500
tonnes provisionally priced at 377 c/lb). At Copper Peru, 64,600
tonnes of copper were provisionally priced at 410 c/lb at
30 June 2024 (30 June 2023: 91,700 tonnes
provisionally priced at 377 c/lb).
Copper prices were firmer during the
first six months of 2024, with LME prices
averaging 412 c/lb, up 5% from last year (30 June 2023: 394
c/lb). Investor flows into base metals helped drive copper prices
higher, reaching an all-time nominal high in May, offsetting slower
physical demand growth from China during the second quarter. Copper
prices remain well supported by ongoing global decarbonisation
efforts and energy transition infrastructure investment.
Financial performance
Underlying EBITDA for Copper
increased by 37% to $2,038 million (30 June 2023: $1,492
million), driven by the higher copper price and improved cost
performance.
Copper Chile
Underlying EBITDA increased by 73%
to $1,196 million (30 June 2023: $691 million), driven by
higher copper prices, the benefit of a weaker Chilean peso, lower
costs and slightly higher copper sales volumes. C1 unit costs
decreased by 14% to 176 c/lb (30 June 2023: 205 c/lb),
reflecting effective cost control and the benefit of a weaker
Chilean peso.
Capital expenditure decreased by 6%
to $620 million (30 June 2023: $657 million), driven by a
weaker Chilean peso and lower expenditure at Los Bronces, partially
offset by expected higher expenditure at Collahuasi on the
desalination plant project.
Copper Peru
Underlying EBITDA increased by 5% to
$842 million (30 June 2023: $801 million), driven by higher
copper prices and lower unit costs. C1 unit costs decreased by 15%
to 112 c/lb (30 June 2023: 132 c/lb),
reflecting the benefit of increased molybdenum production
offsetting higher costs due to entering commercial
production.
Capital expenditure increased by 6%
to $235 million (30 June 2023: $221 million), due to higher
sustaining capital in the current period as the asset commenced
commercial production in June 2023. This is partly offset by
decreased growth capital following project completion.
Operational outlook
Copper Chile
Los Bronces
Los Bronces is currently mining a
single phase with expected lower grades. Stripping of additional
mining phases is progressing according to plan, aiming to mitigate
previous delays in mine development, permitting and operational
challenges.
Los Bronces is a world class copper
deposit, accounting for more than 2% of the world's known copper
resources. While the operation effectively 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, now
scheduled for the end of July 2024. This value over volume decision
will enable the business to build on the strong cost performance
from the first half of 2024, with some cost savings from the
expected plant closure already being achieved, improving the
asset's competitive position.
The development of the first phase
of the Los Bronces integrated water security project is also
ongoing, which will secure a large portion of the mine's water
needs through a desalinated water supply from 2026.
Pre-feasibility studies to advance
the permitted Los Bronces open pit expansion and underground
development are progressing 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. Until then, the operation continues to
progress mitigation measures to optimise and reduce water
consumption and secure third-party sources.
El Soldado
Production in 2024 is expected to be
broadly comparable to 2023, before declining to 30,000-35,000 tpa
until end of mine life which is expected by mid-2028. Options to
extend the life of the mine beyond 2028 are being
evaluated.
Copper Chile
These impacts are reflected in the
unchanged guidance provided on pages 34-35. Production guidance for
Chile for 2024 is 430,000-460,000 tonnes, subject to water
availability and is weighted to the first half of the year owing to
the planned closure of the Los Bronces plant by the end of July.
2024 unit cost guidance is c.190 c/lb(1). The first half
unit cost of 176 c/lb was lower than guidance, reflecting the
benefit of a weaker Chilean peso.
Copper Peru
A localised geotechnical fault in
one of the high grade 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. This stripping work
is progressing well, with other lower grade phases being mined,
until the high grade phase is accessed in 2027.
There is significant expansion
potential that could sustain production beyond the initial high
grade area. Currently, the plant throughput is permitted to a level
of 127,500 tonnes per day (tpd) and a recent change in legislation
has increased the permit allowance from 5% to 10%, enabling
throughput to increase from 133,800 tpd to c.140,000 tpd. In light
of this, studies are underway for an incremental expansion to
c.140,000 tpd, potentially by late 2026. A subsequent increase
to c.150,000 tpd is in the pre-feasibility study stage, and subject
to further permitting, that could benefit production from 2027. No
additional water rights will be 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
unchanged guidance provided on pages 34-35. Production guidance for Peru for 2024 is 300,000-330,000
tonnes. Production in Peru is weighted to the second half of
the year as a higher grade area of the mine is accessed. 2024 unit cost guidance is c.110 c/lb(1). The
first half unit cost of 112 c/lb, was slightly higher than
guidance, reflecting the weighting of production volumes to the
second half of the year.
(1) The copper
unit costs are impacted by FX rates and pricing of by-products,
such as molybdenum. 2024 unit cost guidance was set at c.850
CLP:USD for Chile and c.3.7 PEN:USD for Peru.
Iron Ore
Operational and financial
metrics
|
Production
volume
|
Sales
volume
|
Price
|
Unit
cost*
|
Group
revenue*
|
Underlying
EBITDA*
|
EBITDA
margin*
|
Underlying
EBIT*
|
Capex*
|
ROCE*
|
|
Mt(1)
|
Mt(1)
|
$/t(2)
|
$/t(3)
|
$m
|
$m
|
|
$m
|
$m
|
|
Iron Ore Total
|
30.7
|
29.5
|
93
|
37
|
3,296
|
1,413
|
43%
|
1,171
|
495
|
21%
|
Prior period
|
30.7
|
30.3
|
105
|
36
|
3,660
|
1,775
|
48%
|
1,554
|
382
|
30%
|
Kumba Iron Ore(4)
|
18.5
|
18.1
|
97
|
39
|
1,988
|
888
|
45%
|
742
|
266
|
47%
|
Prior period
|
18.7
|
19.0
|
106
|
39
|
2,169
|
1,105
|
51%
|
975
|
277
|
69%
|
Iron Ore Brazil (Minas-Rio)
|
12.3
|
11.4
|
86
|
33
|
1,308
|
525
|
40%
|
429
|
229
|
14%
|
Prior period
|
12.0
|
11.4
|
104
|
32
|
1,491
|
670
|
45%
|
579
|
105
|
20%
|
(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 2% to 18.5
Mt (30 June 2023: 18.7 Mt), driven by a 12% decrease at
Kolomela to 5.3Mt (30 June 2023: 6.0Mt) partly offset by a 3%
increase at Sishen to 13.2 Mt (30 June
2023: 12.8 Mt). Kumba reduced production in the fourth
quarter of 2023 to alleviate mine stockpile constraints, followed
by an operational reconfiguration implemented in the first quarter
of 2024 to align with Transnet's rail capacity. Sales volumes were
18.1 Mt, 5% below the prior period (30 June 2023: 19.0
Mt), reflecting the impact of equipment challenges at Saldanha Bay
port, which were partly mitigated by a proactive mini-shut and
stacker reclaimer repairs in April.
As a result of rail and port
challenges during the first half of the year, total finished stock
increased by 1.1 Mt to 8.2 Mt, with stock at the mines increasing
by 0.9 Mt to 7.4 Mt, above desired levels.
Consequently, stock at the port remains low at 0.8 Mt, an increase
of only 0.2 Mt in the first six months of the year.
Minas-Rio
Production increased by 2% to 12.3
Mt (30 June 2023: 12.0 Mt), reflecting the strongest half-year
performance since 2020 and a record second quarter. This
performance was a result of good preparation at the mine at the end
of 2023, with high stock levels available to secure the ore feed,
despite the highest rainfall in the last six years and lower mining
fleet availability. Production also benefitted from an improved
performance at the crushing circuit and beneficiation
plant.
Markets
|
|
|
|
30 June 2024
|
30 June
2023
|
Average market price (Platts 62% Fe
CFR China - $/tonne)
|
118
|
118
|
Average market price (MB 65% Fe
Fines CFR - $/tonne)
|
131
|
132
|
Average realised price (Kumba export
- $/tonne) (FOB wet basis)
|
97
|
106
|
Average realised price (Minas-Rio -
$/tonne) (FOB wet basis)
|
86
|
104
|
The Platts 65-62 differential
averaged $13/dmt in the first half compared to $14/dmt in the same
period of last year. Lump premium averaged $0.13/dmtu during the
first half of 2024, largely unchanged over the comparative period.
Persistent margin pressure at mills and a focus on cost reduction
rather than productivity kept premia in line with 2023
levels.
Kumba's FOB realised price of
$97/wet metric tonne (wmt) was broadly in line with the equivalent
Platts 62% Fe FOB Saldanha market price (adjusted for moisture) of
$96/wmt. The premiums for higher iron content (at 64.1%) and lump
product (approximately 64%) were partially offset by the impact of
provisionally priced sales volumes.
Minas-Rio's pellet feed product is
higher grade (with iron content of c.67% and lower impurities) so
the MB 65 Fines index is used when referring to the Minas-Rio
product. The Minas-Rio realised price of $86/wmt FOB was 9% lower
than the equivalent MB 65 FOB Brazil index (adjusted for moisture)
of $94/wmt, impacted by provisional pricing which more than offset
the premium for our high quality product, including higher (~67%)
Fe content.
Financial performance
Underlying EBITDA for Iron Ore
decreased by 20% to $1,413 million (30 June 2023: $1,775
million), principally driven by a 3% decrease in sales volumes and
11% decrease in the realised iron ore price.
Kumba
Underlying EBITDA decreased by 20%
to $888 million (30 June 2023: $1,105 million), driven by a
lower average realised price and lower sales volumes. Unit costs
were flat at $39/tonne (30 June 2023: $39/tonne), as the
benefit of the mine and cost optimisation work and a slightly
weaker South African rand were offset by lower
production.
Capital expenditure decreased by 4%
to $266 million (30 June 2023: $277 million), reflecting
planned lower growth and life-extension spend, partly offset by
higher deferred stripping capitalisation.
Minas-Rio
Underlying EBITDA decreased by 22%
to $525 million (30 June 2023: $670 million), primarily due to
lower realised prices and higher unit costs. Unit costs increased
by 3% to $33/tonne (30 June 2023: $32/tonne), primarily due to
maintenance costs associated with the mining fleet, partially
offset by cost reduction initiatives.
Capital expenditure was 118% higher
at $229 million (30 June 2023: $105 million), primarily due to
the construction of the new tailings filtration plant, which is
expected to start-up in 2026.
Operational outlook
Kumba
Production is expected to remain at 35-37 Mtpa(1) for
the period 2024 to 2026, in line with the expected third-party
logistics constraint and to help ensure a balanced value chain.
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 unchanged
guidance provided on pages 34-35. Production guidance for 2024 is
35-37 Mt, subject to third-party rail and port availability and
performance, and 2024 unit cost guidance is
c.$38/tonne(2). The first half unit cost of $39/tonne is higher than
guidance, reflecting the slightly stronger South African rand and
the remaining benefit of the cost-out programme that will be
realised in the second half of the year, as planned.
(1) Production and
sales volumes, stock and realised price are reported on a wet basis
and could differ from Kumba's stand-alone results due to sales to
other Group companies.
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. 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 unchanged
guidance provided on pages 34-35. Production guidance for 2024 is
23-25 Mt and 2024 unit cost guidance is
c.$35/tonne(2).The first half unit cost of $33/tonne is
lower than guidance, reflecting the benefit of slightly higher
volumes in the first half of the year.
(2) 2024 unit cost
guidance was set at c.19 ZAR:USD for Kumba
and c.5.0 BRL:USD for Minas-Rio.
Crop Nutrients
Operational and financial
metrics
|
Production
volume
|
Sales
volume
|
Group
revenue*
|
Underlying
EBITDA*
|
EBITDA
margin*
|
Underlying
EBIT*
|
Capex*
|
ROCE*
|
|
|
|
$m
|
$m
|
|
$m
|
$m
|
|
Crop Nutrients
|
n/a
|
n/a
|
86
|
(22)
|
n/a
|
(22)
|
500
|
n/a
|
Prior period
|
-
|
-
|
93
|
(20)
|
-
|
(20)
|
307
|
-
|
Woodsmith project
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
500
|
n/a
|
Prior period
|
-
|
-
|
-
|
-
|
-
|
n/a
|
307
|
-
|
Other(1)
|
n/a
|
n/a
|
86
|
(22)
|
n/a
|
(22)
|
n/a
|
n/a
|
Prior period
|
-
|
-
|
93
|
(20)
|
-
|
(20)
|
-
|
-
|
(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 two 1.6 km deep mine shafts (a service
shaft and a production shaft) and transported to the port area in
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 innovatively processed and
granulated at a materials handling facility to produce a low carbon
fertiliser (relative to comparable products) - 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
In the first half of the year, the
focus has been on continuing to progress core infrastructure
activities of shaft sinking and tunnel boring, with good progress
being made.
The service shaft is at a depth of
745 metres and has been undergoing preparatory works ahead of
intersecting the Sherwood sandstone strata, expected in the second
half of 2024. The sandstone is a key focus area for shaft sinking
due to the expected hardness of the rock and potential for water
fissures. The production shaft has reached a depth of 712 metres,
and the tunnel has reached 29.2km of the total 37 km
length.
On 14 May 2024, the Group announced
that in order to support deleveraging of its balance sheet, it will
be slowing the pace of development of the Woodsmith project in the
near-term. Crop Nutrients is identified as one of the three key
pillars of the Group's more focused portfolio, and as such the
focus will shift to preserving the long-term value of this high
quality asset, and enabling the project's future development. To
that end, work is under way to identify and secure one or more
strategic syndication partners for Woodsmith.
Forecast capital expenditure for
2024 remains c.$0.9 billion, focused on core infrastructure, with
$500 million spent during the half (30 June 2023: $307
million). Capital expenditure for 2025 and 2026 is c.$0.2 billion
and nil, respectively. Operating expenditure for 2025 and 2026 is
expected to be c.$0.2 billion and c.$0.1 billion,
respectively.
A detailed review has been conducted
to identify the critical value-adding works to be executed during
the slowdown period to de-risk the overall project schedule,
preserve progress on areas that will be entering a period
of care and maintenance, and further optimise certain scopes
of the project ready for ramp-up when conditions allow.
Shaft sinking activities are planned
to continue on the service shaft to progress through the key
Sherwood sandstone strata, subject to capital allocation
priorities. Sinking activities on the production shaft have now
been paused and will enter a phase of care and maintenance. The
tunnel has reached the final intermediate shaft at Ladycross. The
tunnel boring machine is undergoing a planned maintenance stop
during which time the tunnel and Ladycross shaft will be connected.
Following this, tunnel boring activities will continue at a
significantly reduced pace. During the slowdown period, key permits
will be maintained to allow project ramp-up in due
course.
The study programme, focused on
enhancing the project's configuration, enabling efficient, scalable
mining methods over time, and optimising additional infrastructure,
is being rescoped to fit the revised funding and syndication plan,
with critical technical studies planned to complete prior to future
project approval and restart. The expected final design capacity
remains c.13 Mtpa, subject to studies and approval.
The reduced pace of construction
will result in an extended development schedule and, primarily due
to this, an impairment charge of $1.6 billion has been recognised
to the carrying value of the asset within 'special items and
remeasurements'.
We will continue to fund our
Thriving Communities programmes that focus on vulnerable young
people. We will also engage regularly with local stakeholders and
community partners to ensure that they are informed of changes to
the project and any concerns are addressed. We are currently
working closely with a number of local organisations on a social
response plan that will help people affected by the slowdown to
find new roles in the local area through our partnerships with
other businesses, suppliers and local councils.
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.
The ongoing focus of market
development activities has been 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
engaged deeper into the food value chain working with our
distribution partners, leading UK retailers, large distributors,
major blenders, influencers, farming associations, and research
institutions to help ensure we deliver what is needed at the farm
gate. Through our global agronomy programme, we have conducted over
1,900 field demonstrations to date, on over 80 crops, and our
research continues to reinforce these superior qualities and
characteristics of POLY4.
During the project slowdown period,
the focus of marketing work will be on the key commercial and
technical relationships that are already well established,
maintaining presence in our key selling regions and consolidating
the data that we have around product characteristics.
Woodsmith remains a Tier 1 resource
entirely aligned with the demand trends of decarbonisation and food
security. Anglo American has high confidence, backed by its proven
track record in project delivery, to develop the Woodsmith project
once the balance sheet is suitably deleveraged and the pathway to
syndication is clear.
Platinum Group Metals
(PGMs)
Operational and financial
metrics
|
Production
volume
PGMs
|
Sales
volume
PGMs
|
Basket
price
|
Unit
cost*
|
Group
revenue*
|
Underlying
EBITDA*
|
EBITDA
margin*
|
Underlying
EBIT*
|
Capex*
|
ROCE*
|
|
koz(1)
|
koz(2)
|
$/PGM
oz(3)
|
$/PGM
oz(4)
|
$m
|
$m
|
|
$m
|
$m
|
|
PGMs
|
1,755
|
1,974
|
1,442
|
976
|
2,796
|
675
|
24%
|
481
|
455
|
17%
|
Prior period
|
1,844
|
1,807
|
1,885
|
993
|
3,531
|
667
|
19%
|
505
|
449
|
20%
|
Mogalakwena
|
452
|
518
|
1,428
|
859
|
737
|
290
|
39%
|
190
|
271
|
n/a
|
Prior period
|
461
|
462
|
1,930
|
961
|
898
|
437
|
49%
|
355
|
210
|
-
|
Amandelbult
|
285
|
320
|
1,601
|
1,211
|
511
|
119
|
23%
|
92
|
27
|
n/a
|
Prior period
|
299
|
309
|
2,174
|
1,200
|
676
|
206
|
30%
|
187
|
29
|
-
|
Other operations(5)
|
315
|
487
|
1,361
|
933
|
523
|
15
|
3%
|
(31)
|
157
|
n/a
|
Prior period
|
438
|
414
|
1,815
|
954
|
773
|
235
|
30%
|
186
|
210
|
-
|
Processing and trading(6)
|
704
|
649
|
n/a
|
n/a
|
1,025
|
251
|
24%
|
230
|
n/a
|
n/a
|
Prior period
|
646
|
622
|
-
|
-
|
1,184
|
(211)
|
(18)%
|
(223)
|
-
|
-
|
(1)Production reflects own-mined production and purchase of metal
in concentrate. PGM volumes consist of 5E metals and
gold.
(2)Sales volumes exclude tolling and third-party trading
activities. PGM volumes consist of 5E metals and gold.
(3)Average US$ 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)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.
(6)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 in H2 2024.
Operational performance
Total PGM production decreased by 5%
to 1,755,100 ounces (30 June 2023: 1,844,300 ounces) primarily
due to lower production from the Kroondal joint operation (now
sold), difficult ground conditions at Mototolo and operational
challenges at Amandelbult.
Own mined production
PGM production from own-managed
mines (Mogalakwena, Amandelbult, Unki and Mototolo) and equity
share of joint operations decreased by 12% to 1,051,500 ounces
(30 June 2023: 1,198,700 ounces) due to the disposal of
Kroondal. Second quarter production was 9% higher than the first
quarter, positioning the business well into the second half of the
year.
Amandelbult production decreased by
5% to 284,700 ounces (30 June 2023: 299,400 ounces)
primarily due to operational challenges at the concentrator as a
result of blending open pit ore in the first quarter. However,
there were early-stage improvements in the second quarter driven by
operational efficiencies which allowed for higher grades and
throughput from underground material.
Mogalakwena production decreased by
2% to 452,100 ounces (30 June 2023: 461,400 ounces) primarily
due to blending low grade stockpiles as the new bench cut sequence
progressed during the second quarter, which resulted in higher
waste tonnes extracted in the short term.
Production from other operations
decreased by 28% to 314,700 ounces (30 June 2023: 437,900
ounces) mainly due to the disposal of Kroondal, difficult ground
conditions at Mototolo as a section of the mine nears the end of
its life and the planned, temporary mining of a low-grade section
at Unki.
Purchase of concentrate
Purchase of concentrate increased by
9% to 703,600 ounces (30 June 2023: 645,600 ounces) reflecting
the transition of Kroondal to a 100% third-party purchase of
concentrate arrangement. Normalising the comparative period to
include 100% of Kroondal results in a 6% decrease, reflecting lower
third-party receipts, as well as the planned ramp-down at
Kroondal.
Refined production and sales
volumes
Refined PGM production (excluding
toll-treated metal) increased by 5% to 1,781,500 ounces
(30 June 2023: 1,699,800 ounces) driven by a draw
down of work-in-progress inventory compared to the same period last
year. There was no Eskom load-curtailment during the first half of
the year.
PGM sales volumes increased by 9% to
1,973,600 ounces (30 June 2023: 1,807,300 ounces) resulting
from higher refined production and due to a draw down of finished
goods compared to the same period last year.
Markets
|
|
|
|
30 June 2024
|
30 June
2023
|
Average platinum market price
($/oz)
|
945
|
1,009
|
Average palladium market price
($/oz)
|
976
|
1,505
|
Average rhodium market price
($/oz)
|
4,602
|
8,957
|
Realised basket price ($/PGM
oz)
|
1,442
|
1,885
|
Average PGM prices in H1 2024 were
considerably lower than in H1 2023, driving a 24% decrease in the
realised basket price to $1,442/oz (30 June 2023: $1,885/oz).
This was driven largely by decreases in the realised prices of
rhodium, palladium and platinum by 49%, 34% and 4%
respectively.
Platinum's average price in the
first half of 2024 suffered due to a stronger dollar compared to
the same period in 2023, albeit strong investor demand on signs of
a tightening supply and demand balance and surging prices for gold
and silver have provided support through the period. The palladium
price has, despite periodic rallies, continued to trend lower
during most of this period on poor speculative sentiment. Rhodium's
large year-on-year fall was driven by events in the first half of
2023, when it fell sharply on glass industry stock disposals, to
hit a four-year low as of mid-year. After that, prices stabilised,
before modestly strengthening in the first half of 2024 on solid
automotive buying.
Sales of light vehicles that require
PGM catalytic converters continued to rise in the first half of
2024, adding around 2% on the same period in 2023. This was despite
slowing growth in the overall light vehicle sector this year
compared with 2023 due to the fading of pent-up demand and some
other consumer headwinds. Helping combustion sales was a moderation
to the growth in sales of battery-electric vehicles. Plug-in hybrid
electric vehicles continue to take share, at around 6% in 2024 so
far, from 4% last year.
Financial performance
Underlying EBITDA increased to $675
million (30 June 2023: $667 million) primarily driven by the
price-driven normalisation of POC, higher sales as a result of
higher refined production, a draw down of finished goods, and
effective early results from the cost-out programme. This was
partly offset by a 24% decrease in the basket price, which impacted
revenue. The cost savings, alongside favourable foreign exchange,
contributed to own-mined unit costs decreasing by 2% to $976/PGM
ounce (30 June 2023: $993/PGM ounce).
Capital expenditure of $455 million
(30 June 2023: $449 million) was broadly flat, as planned
lower stay-in-business expenditure was offset by planned higher
spend on lifex projects, predominantly at Mogalakwena and
Mototolo.
Operational outlook
PGM prices remain at low levels and
the prevailing macro-economic conditions and uncertainty prompted
the difficult but necessary action to reconfigure our PGM business
in the first half of 2024 to ensure the long term sustainability
and competitive position of our operations.
The consultation process for section
189A restructuring has been completed and the Mortimer Smelter
placed on care and maintenance at the end of April
2024.
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.
These extensive measures will
improve the positioning of these world-class PGM assets for the
long term, securing the highly attractive value proposition of
Mogalakwena.
These impacts are reflected in the
unchanged guidance provided on pages 34-35. 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. Production remains
subject to the impact of Eskom load-curtailment.
Unit cost guidance for 2024 is
c.$920/PGM ounce(1). The first half unit cost of
$976/PGM ounce is higher than guidance, reflecting lower production
and the slightly stronger South African rand. The remaining benefit
of the cost-out programme will be realised in the second half of
the year, as planned, which together with higher production will
deliver guidance.
(1) Unit cost
is per own mined 5E + gold PGMs metal in concentrate ounce. 2024
unit cost guidance was set at c.19 ZAR:USD.
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*(7)
|
|
'000
cts
|
'000
cts(2)
|
$/ct(3)
|
$/ct(4)
|
$m(5)
|
$m
|
|
$m
|
$m
|
|
De Beers
|
13,312
|
11,945
|
164
|
85
|
2,247
|
300
|
13%
|
150
|
264
|
(4)%
|
Prior period
|
16,520
|
15,303
|
163
|
63
|
2,831
|
347
|
12%
|
190
|
302
|
5%
|
Botswana
|
9,697
|
n/a
|
145
|
36
|
n/a
|
177
|
n/a
|
150
|
32
|
n/a
|
Prior period
|
12,728
|
-
|
175
|
30
|
-
|
274
|
-
|
242
|
30
|
-
|
Namibia
|
1,194
|
n/a
|
435
|
270
|
n/a
|
84
|
n/a
|
66
|
18
|
n/a
|
Prior period
|
1,231
|
-
|
550
|
223
|
-
|
102
|
-
|
84
|
20
|
-
|
South Africa
|
1,103
|
n/a
|
93
|
107
|
n/a
|
(13)
|
n/a
|
(41)
|
164
|
n/a
|
Prior period
|
1,205
|
-
|
130
|
68
|
-
|
54
|
-
|
50
|
202
|
-
|
Canada
|
1,318
|
n/a
|
80
|
51
|
n/a
|
41
|
n/a
|
23
|
28
|
n/a
|
Prior period
|
1,356
|
-
|
89
|
46
|
-
|
23
|
-
|
1
|
32
|
-
|
Trading
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
58
|
3%
|
56
|
-
|
n/a
|
Prior period
|
-
|
-
|
-
|
-
|
-
|
61
|
2%
|
58
|
1
|
-
|
Other(8)
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
(47)
|
n/a
|
(104)
|
22
|
n/a
|
Prior period
|
-
|
-
|
-
|
-
|
-
|
(167)
|
-
|
(245)
|
17
|
-
|
(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
12.7 million carats (30 June
2023: 17.3 million carats). Total sales volumes
(100%) include De Beers Group's joint arrangement partners'
50% proportionate share of sales to entities outside De Beers Group
from Diamond Trading Company Botswana and Namibia Diamond Trading
Company.
(3)Pricing for the mining 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 $2.0 billion (30 June 2023:
$2.5 billion).
(6)De Beers EBITDA margin includes the impact of mining as well
as non-mining activities, third‑party sales, purchases, trading,
brands and consumer markets and corporate. Mining EBITDA margin for
De Beers is 40% (30 June 2023: 50%).
(7) De Beers' attributable ROCE is based on the prior 12 months,
rather than the annualised half year performance, owing to the
seasonality of sales and underlying EBIT profile of De
Beers.
(8)Other includes Element Six, brands and consumer markets,
and corporate.
Markets
Following a challenging 2023, demand
for rough diamonds recovered slightly at the start of 2024
following the cessation of the voluntary moratorium on rough
diamond imports into India in late 2023 and improved demand for
diamond jewellery over the year-end retail selling season in the
United States. However, with midstream polished inventories
remaining higher than normal and continued cautious restocking from
retailers, demand for rough diamonds deteriorated in the second
quarter of the year.
Global consumer demand for natural
diamond jewellery in the first half of 2024 experienced very
different trends within the key consumer countries. In China, the
ongoing economic challenges, particularly within the property
market and low consumer confidence, have delayed the expected
recovery from the sharp decline in 2023, with jewellery retailers
largely selling from existing stocks rather than placing new
orders. Consumer demand in the United States continued to be
affected by economic uncertainty, soft consumer confidence and
lab-grown diamonds. Conversely, in India, strong economic growth
underpinned positive natural diamond jewellery demand
growth.
The bifurcation of natural and
lab-grown diamonds accelerated. Wholesale lab-grown diamond prices
continue to fall with retailers, including Lightbox Jewelry,
having to repeatedly reduce their prices to remain competitive,
affecting their top-line performance and shifting retailer
financial incentives increasingly towards natural diamond
jewellery.
Operational performance
Mining
Rough diamond production reduced to
13.3 million carats (30 June 2023: 16.5 million carats). This
reflects the decision to intentionally lower production and change
short term plant feed mix in response to the weaker rough diamond
demand due to the higher than average levels of inventory in the
midstream and cautious retailer restocking.
In Botswana, production was reduced
by 24% to 9.7 million carats (30 June 2023: 12.7 million
carats), driven by intentional lower production and short-term
changes in plant feed at Jwaneng and Orapa.
Namibia production decreased by 3%
to 1.2 million carats (30 June 2023: 1.2 million carats), with
planned lower production at Debmarine Namibia, partially offset by
planned mining of areas with higher grades and recoveries at
Namdeb.
South Africa production decreased by
8% to 1.1 million carats (30 June 2023: 1.2 million carats),
due to planned processing of lower grade stockpiles at Venetia
whilst the underground operations ramp-up over the next few
years.
Production in Canada was broadly
flat at 1.3 million carats (30 June 2023: 1.4 million
carats).
Financial performance
Total revenue decreased to $2.2
billion (30 June 2023: $2.8 billion), with rough diamond sales
decreasing to $2.0 billion (30 June 2023: $2.5 billion).
Total rough diamond sales volumes decreased by 22% to 11.9 million
carats (30 June 2023: 15.3 million carats). The average
realised price is broadly flat at $164/ct (30 June 2023:
$163/ct), reflecting a larger proportion of higher value rough
diamonds being sold, offset by a 20% decrease in the average rough
price index.
Underlying EBITDA decreased to $300
million (30 June 2023: $347 million), driven by reduced sales
volumes and high unit costs due to intentional lower production and
the ramp up of Venetia underground. Earnings benefitted from
strategic progress on announced business streamlining, with a fair
value gain of $127 million recognised in the period in relation to
a non-diamond royalty right.
De Beers has focused on managing its
rough diamond inventory levels through the softer trading
conditions by reducing production to supply into demand.
Capital expenditure decreased by 13%
to $264 million (30 June 2023: $302 million), reflecting
phasing of life extension spend for the Venetia underground
project. Investment in the ramp-up of the Venetia underground
project continues as well as the execution of other life-extension
projects, including Jwaneng Cut-9.
De Beers and the Government of the
Republic of Botswana have previously 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 for the purposes of the
current UK Listing Rules given the Government of the Republic of
Botswana holds a 15% interest in De Beers and is therefore deemed a
related party of Anglo American. In line with the requirements
under the current UK Listing Rules, Anglo American had previously
communicated that the new arrangements would be subject to approval
by Anglo American's shareholders. As part of the recently announced
changes to the UK Listing Rules which come into effect on 29 July
2024, not only has the requirement for shareholder approval been
removed with respect to related party transactions, the threshold
at which a shareholder is deemed a related party has been increased
from 10% to 20%. This means that from 29 July 2024 the new
arrangements will not require approval by Anglo American's
shareholders and will cease to qualify as a related party
transaction for the purposes of the new UK Listing Rules. As such,
Anglo American does not propose to seek shareholder approval for
the new arrangements.
Corporate strategy
De Beers communicated its new
Origins strategy at the end of May, with a focus on four key
pillars underpinned by a plan to streamline the business
sustainably by reducing overhead costs by $100 million per year.
These comprised i) focusing upstream investments on the major
projects that will deliver the highest returns; ii) integrating the
midstream to deliver greater efficiency; iii) resetting the
downstream by reinvigorating category marketing and evolving
proprietary brands through scaling up De Beers Jewellers and
refocusing Forevermark solely on the fast-growing Indian market;
and iv) pivoting synthetics, with Lightbox suspending production of
lab-grown diamonds for jewellery allowing Element Six to focus on
its position as a world-leading provider of synthetic diamond
technology solutions.
Brands and consumer markets
De Beers Jewellers delivered
positive performance in design-led pieces across high jewellery and
collections, while bridal and solitaire demand remained challenged
by macro-economic headwinds and slower Chinese recovery.
New natural diamond marketing
collaborations were established with world-leading diamond
jewellery retailers: Signet in the US and Chow Tai Fook in China.
The collaborations focus on driving long term desirability for
natural diamonds in two of the world's leading consumer countries
for natural diamonds. The collaborations will also benefit from
promotional messages being amplified through the wide reach of
these leading retail businesses.
De Beers also announced the
introduction of DiamondProof, a new device to be used
on the jewellery retail counter for rapidly distinguishing between
natural diamonds and lab-grown stones, supporting retailers in
communicating the attributes of natural diamonds, providing
customers with enhanced confidence in the authenticity of their
natural diamond purchase and deterring undisclosed lab-grown
diamonds from entering the natural supply chain.
Market outlook
Weaker demand is expected to
continue for some time, given the prevailing levels of midstream
inventories. This is expected to be followed by a gradual recovery
as demand from the United States, India and other countries draws
down midstream inventories. Retailer re-stocking is expected to be
supported by new natural diamond marketing, increasing engagement
rates, improving macro-economic conditions and consumer
confidence.
The wholesale prices of lab-grown
diamonds continue to fall, exacerbated by ballooning stocks of
lab-grown diamonds in India. In turn, lab-grown diamond retail
prices remain on a downward trajectory, and it is expected that
these trends will further reinforce consumers' understanding of the
fundamental differences between lab-grown and natural diamond
jewellery. Given the rapidly deteriorating economics of selling
lab-grown diamonds as their prices continue to drop, there are also
signs that retailers in the United States are returning their focus
to natural diamonds.
In addition, there is a growing
focus on diamond provenance which has the potential to reinforce
demand for De Beers' ethically sourced rough diamonds,
supported by provenance data registered on the blockchain Tracr™
platform, particularly given enhanced sanctions on Russian diamond
import restrictions by G7 nations expected to be introduced in
September 2024.
Operational
outlook
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 production over
the coming years.
Production in 2026 is expected to
benefit from an expansion project at Gahcho Kué
(Canada).
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
guidance provided on pages 34-35. Production guidance for 2024 has
been revised lower to 23-26 million carats (previously 26-29
million carats), following the finalisation of discussions with our
production partners, as the business responds to the prolonged
period of lower demand, higher than normal levels of inventory in
the midstream, and a focus on working capital. Production remains
subject to trading conditions.
2024 unit cost guidance is
consequently revised to c.$95/carat(1) (previously
c.$90/carat). The first half unit cost
of $85/carat is lower than this guidance, reflecting the
impact of lower production volumes in the second half of
the year.
(1) Unit cost
is based on De Beers' share of production volume. 2024 unit cost guidance was set at c.19
ZAR:USD.
Steelmaking Coal
Operational and financial
metrics
|
Production
volume
|
Sales
volume
|
Price
|
Unit
cost*
|
Group
revenue*
|
Underlying
EBITDA*
|
EBITDA
margin*
|
Underlying
EBIT*
|
Capex*
|
ROCE*
|
|
Mt(1)
|
Mt(2)
|
$/t(3)
|
$/t(4)
|
$m
|
$m
|
|
$m
|
$m
|
|
Steelmaking Coal
|
8.0
|
7.9
|
265
|
125
|
2,108
|
592
|
28%
|
346
|
257
|
20%
|
Prior period
|
6.9
|
6.9
|
274
|
135
|
2,000
|
615
|
31%
|
371
|
273
|
26%
|
(1)Production volumes are saleable tonnes, excluding thermal coal
production of 0.5 Mt (30 June 2023: 0.8 Mt).
Includes production relating to third-party product purchased and
processed at Anglo American's operations, and may include some
product sold as thermal coal.
(2) Sales volumes exclude thermal coal sales of 0.7 Mt
(30 June 2023: 0.8 Mt). Includes sales relating to
third-party product purchased and processed by Anglo
American.
(3)Realised price is the weighted average hard coking coal and
PCI export sales price achieved at managed operations.
(4)FOB unit cost comprises managed operations and excludes
royalties.
Operational performance
Production increased to 8.0 Mt
(30 June 2023: 6.9 Mt), reflecting higher production from the
underground operations, which were impacted by longwall moves
during the first half of 2023.
The increased production was partly
offset by ongoing challenges with difficult strata conditions at
the Moranbah and Aquila longwall operations.
Markets
|
|
|
|
30 June 2024
|
30 June
2023
|
Average benchmark price - hard
coking coal ($/tonne)(1)
|
276
|
294
|
Average benchmark price - PCI
($/tonne)(1)
|
164
|
261
|
Average realised price - hard coking
coal ($/tonne)(2)
|
274
|
280
|
Average realised price - PCI
($/tonne)(2)
|
200
|
236
|
(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 99% of average benchmark price (30 June 2023:
95%), primarily as a result of the timing of sales.
The average benchmark price for
Australian HCC in the first half of 2024 was $276/tonne
(30 June 2023: $294/tonne). At the start of 2024, coal loading
operations at Queensland ports were disrupted by high sea swells,
exacerbated by the arrival of cyclone Kirrily. However,
metallurgical coal exports from Australia regained momentum in the
following months as weather conditions improved. Consequently,
quarterly prices softened from $308/tonne in the first quarter to
$242/tonne in the second quarter.
Demand for premium seaborne
metallurgical coal from Indian steelmakers remained robust due to
strong crude steel output, but this demand was primarily met
through long-term contracts, with limited observable spot buying.
In China, interest in importing seaborne Australian coking
coal remained very low due to a persistent lack of import
arbitrage.
Financial performance
Underlying EBITDA decreased to $592
million (30 June 2023: $615 million), as a result of a 3%
decrease in the weighted average realised price for steelmaking
coal, which is partly offset by the 7% decrease in unit costs to
$125/tonne (30 June 2023: $135/tonne). Unit costs
benefited from the higher production in the period and a marginally
weaker Australian dollar.
Capital expenditure decreased to
$257 million (30 June 2023: $273 million), reflecting lower
life-extension spend at Aquila as some spend remained in H1 2023
after the completion of the project in 2022, and a reduction in
capitalised development costs at Moranbah in line with the mine
advance.
Operational outlook
Production has been suspended at the
Grosvenor mine following an underground fire that started on
29 June 2024. The workforce was safely evacuated from the mine
without injury. The mine has been stabilised and we are
re-establishing comprehensive underground gas monitoring, prior to
being able to assess the steps towards a safe re-entry into the
mine. The procedures are expected to take several months as a
result of the likely damage underground. The other steelmaking coal
mines are operating normally.
Export steelmaking coal production
guidance for 2024 is 14-15.5 Mt. A planned longwall move at
Moranbah is expected to take place during Q4 2024. A
walk-on/walk-off longwall move at Aquila, that will have a minimal
production impact, is scheduled in Q3 2024.
2024 unit cost guidance is
$130-140/tonne(1), impacted by second half costs at
Grosvenor despite no associated production. The first half unit cost of $125/tonne is higher than the
c.$115/tonne guidance prior to the Grosvenor incident, due to lower
than expected production from the higher fixed cost underground
operations at Moranbah and Aquila.
(1) 2024 unit
cost guidance was set at c.1.5
AUD:USD.
Nickel
Operational and financial
metrics
|
Production
volume
|
Sales
volume
|
Price
|
Unit
cost*
|
Group
revenue*
|
Underlying
EBITDA*
|
EBITDA
margin*
|
Underlying
EBIT*
|
Capex*
|
ROCE*
|
|
t
|
t
|
$/lb(1)
|
c/lb(2)
|
$m
|
$m
|
|
$m
|
$m
|
|
Nickel
|
19,500
|
19,000
|
6.85
|
505
|
331
|
28
|
8%
|
24
|
50
|
8%
|
Prior period
|
19,600
|
19,100
|
9.04
|
550
|
383
|
110
|
29%
|
72
|
41
|
12%
|
(1)Realised price.
(2)C1 unit cost.
Operational performance
Nickel production was stable at
19,500 tonnes (30 June 2023: 19,600 tonnes), reflecting
operational stability at both sites.
Markets
|
|
|
|
30 June 2024
|
30 June
2023
|
Average market price
($/lb)
|
7.94
|
10.98
|
Average realised price
($/lb)
|
6.85
|
9.04
|
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
$7.94/lb in the first half of 2024 was 28% lower than the same
period of 2023 (30 June 2023: $10.98/lb). The price weakness
was driven by increased supply from Indonesia and a sharp increase
in visible stockpiles highlighting the refined market surplus.
Demand nevertheless remains very strong globally, helped by solid
demand from batteries and stainless steel.
Financial performance
Underlying EBITDA decreased by 75%
to $28 million (30 June 2023: $110 million), as significantly
lower realised prices more than offset the benefit of C1 unit
costs. The C1 unit costs decreased by 8% to 505c/lb (30 June 2023: 550c/lb), driven by energy cost efficiencies and
one-off costs in 2023.
Capital expenditure increased by 22%
to $50 million (30 June 2023: $41 million), mainly driven by
higher deferred stripping capitalisation.
Operational outlook
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.
Additional drilling is under way to increase coverage and enhance
confidence levels within the geological models.
These impacts are reflected in the
unchanged guidance provided on pages 34-35. Production guidance for
2024 is 36,000-38,000) tonnes. 2024 unit cost guidance is c.550
c/lb(1). The first half unit cost of
505c/lb is lower than guidance, reflecting the benefit of
slightly higher volumes in the first half of the year and lower
input costs, primarily from energy cost efficiencies.
(1) 2024 unit
cost guidance was set at c.5.0
BRL:USD.
Manganese
Operational and financial
metrics
|
Production
volume
|
Sales
volume
|
Group
revenue*
|
Underlying
EBITDA*
|
EBITDA
margin*
|
Underlying
EBIT*
|
Capex*
|
ROCE*
|
|
Mt
|
Mt
|
$m
|
$m
|
|
$m
|
$m
|
|
Manganese
|
1.1
|
1.2
|
219
|
11
|
5
%
|
(35)
|
-
|
(53)%
|
Prior period
|
1.8
|
1.8
|
346
|
138
|
40 %
|
96
|
-
|
95%
|
Operational performance
Attributable manganese ore
production has decreased 37% to 1.1 Mt (30 June 2023: 1.8 Mt),
due to the temporary suspension of the Australian operations since
mid-March 2024 as a result of the impact of tropical cyclone Megan.
The weather event caused widespread flooding and significant damage
to critical infrastructure. Operational recovery has focused on
re-establishing critical services, dewatering targeted mining pits
and in June, a phased return to mining activities has commenced.
Engineering studies are under way on the infrastructure
restoration.
The sale of the South African
manganese alloy smelter, which has been on care and maintenance
since March 2020, is subject to certain conditions and is expected
to complete by the end of 2025.
Financial performance
Underlying EBITDA decreased
by 92% to $11 million (30 June
2023: $138 million), primarily driven by
a 34% decrease in export sales from the
Australian operations, 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)
increased by 7% to $5.54/dmtu (30 June 2023: $5.19/dmtu).
Prices have been on an increasing trend following cyclone damage to
critical infrastructure at the Australian operation in May, which
has removed more than 10% of manganese mined supply and up to a
third of high-grade supply.
Corporate and Other
Financial metrics
|
Group
revenue*
|
Underlying
EBITDA*
|
Underlying
EBIT*
|
Capex*
|
|
$m
|
$m
|
$m
|
$m
|
Corporate and Other
|
231
|
(55)
|
(216)
|
15
|
Prior period
|
254
|
(10)
|
(95)
|
28
|
Exploration
|
n/a
|
(60)
|
(60)
|
-
|
Prior period
|
-
|
(65)
|
(65)
|
-
|
Corporate activities and unallocated
costs(1)
|
231
|
5
|
(156)
|
15
|
Prior period
|
254
|
55
|
(30)
|
28
|
(1)Revenue within Corporate activities and unallocated costs
primarily relates to third-party shipping activities, as well as
the Marketing business' energy solutions activities. Refer to note
4 to the Condensed financial statements for more detail.
Financial overview
Exploration
Exploration expenditure was $60
million, marginally lower than the prior period (30 June 2023:
$65 million), reflecting corporate savings and timing of spend
during 2024.
Corporate activities and unallocated costs
Underlying EBITDA was
$5 million (30 June 2023: $55 million), driven by lower
earnings from the Marketing business' energy solutions activities
and proportionately lower corporate costs recognised in the
underlying business. These were partly offset by strong performance
within the Marketing business' shipping activities alongside
further corporate cost reduction activities since mid-2023. The
targeted annual run-rate reduction of $0.5 billion in corporate
costs was delivered in the first six months of 2024.
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
|
|
|
|
|
|
|
Iron ore(2)
|
c.$37/t
|
Mt
|
58-62
|
57-61
|
58-62
|
|
|
|
|
|
|
PGMs - metal in
concentrate(3)
|
c.$920/oz
|
Moz
|
3.3-3.7
|
3.0-3.4
|
3.0-3.4
|
|
|
|
|
|
|
Own mined
|
|
Moz
|
2.1-2.3
|
2.1-2.3
|
2.1-2.3
|
Purchase of concentrate
|
|
Moz
|
1.2-1.4
|
0.9-1.1
|
0.9-1.1
|
|
|
|
|
|
|
PGMs -
refined(4)
|
|
Moz
|
3.3-3.7
|
3.0-3.4
|
3.0-3.4
|
Diamonds(5)
|
c.$95/ct
|
Mct
|
23-26
|
30-33
|
32-35
|
(previously
c.$90/ct)
|
|
(previously
26-29)
|
Steelmaking
Coal(6)
|
$130-140/t
|
Mt
|
14-15.5
|
17-19
|
18-20
|
|
|
|
|
|
|
Nickel(7)
|
c.550
c/lb
|
kt
|
36-38
|
35-37
|
35-37
|
|
|
|
|
|
|
Further commentary on the
operational outlook at each business is included within the
respective business reviews on pages 16-33.
Note: Unit costs exclude royalties,
depreciation and include direct support costs only. 2024 unit cost guidance was set at: 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 subject to water availability and 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 by the
end of July 2024. In 2025, grades decline at all operations in
Chile. In 2026, production benefits from improved grades at
Collahuasi. Peru production in 2024 is weighted to the second half
of the year, as a higher grade area of the mine is accessed. Chile
2024 unit cost is c.190 c/lb. Peru 2024 unit cost is c.110
c/lb.
(2) 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. 2024 unit cost guidance for Kumba is c.$38/tonne
and for Minas-Rio is c.$35/tonne.
(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%. POC volumes decline as agreements reach their
contractual conclusion. Kroondal is expected to move from 100%
third-party POC to a toll arrangement (4E metals) in H2 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. 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, and remains
subject to trading conditions. Production has been revised lower as
the business responds to the prolonged period of lower demand,
higher than normal levels of inventory in the midstream, and a
focus on working capital. 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 and has consequently been
revised higher reflecting the lower production. Near term unit cost
is impacted by a low carat profile from Venetia as the underground
ramps up and is subsequently expected to reach a steady-state of
c.$75/ct from 2026.
(6)Steelmaking Coal FOB/tonne unit cost comprises managed
operations and excludes royalties. Production excludes thermal coal
by-product and reflects the challenging operating environment of
the longwalls due to the gas, depth and strata as well as the
operating protocols. 2024 production guidance excludes Grosvenor in
the second half of the year given the current uncertainties. 2025
and 2026 production guidance includes c.4.0Mtpa of production from
Grosvenor. A planned longwall move at Moranbah is expected to take
place during Q4 2024. A walk-on/walk-off longwall move at Aquila,
that will have a minimal production impact, is scheduled in Q3
2024.
(7) Nickel operations in Brazil only. The Group also produces
approximately 20 kt of nickel on an annual basis from the PGM
operations. Nickel production is impacted by declining
grades.
Capital expenditure ($bn)(1)
|
2024F
|
2025F
|
2026F
|
Growth
|
c.$1.2bn
Includes ~$0.9bn Woodsmith capex
|
c.$0.5bn
Includes ~$0.2bn Woodsmith
capex(2)
|
c.$0.3bn
Includes nil Woodsmith capex(2)
|
Sustaining
|
c.$4.5bn
Reflects c.$3.4bn baseline, c.$0.7bn lifex projects and
c.$0.4bn Collahuasi desalination
plant(3)
|
c.$4.4bn
Reflects c.$3.5bn baseline, c.$0.7bn lifex projects and
c.$0.2bn Collahuasi desalination
plant(3)
|
c.$4.0bn
Reflects c.$3.5bn baseline and
c.$0.5bn lifex projects
|
Total
|
c.$5.7bn
|
c.$4.9bn
|
c.$4.3bn
|
Further details on Anglo American's
high quality growth and life-extension projects, including details
of the associated volumes benefit, are disclosed on pages
12-14.
Long term sustaining capital
expenditure is expected to be $3.0-3.5 billion per
annum(4), excluding life-extension projects.
Other guidance
-
2024 depreciation: $3.0-3.2 billion
-
2024 underlying effective tax rate:
40-42%(5)
-
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. Refer to the H1 2024 results presentation for
further detail on the breakdown of the capex guidance at
project level. Given the current uncertainties, no adjustment
has been made to the guidance for Grosvenor, which is currently
suspended, with c.$0.2bn pa of capex included in
2024-26.
(2)Woodsmith: operating costs for 2025 and 2026 are expected to
be c.$0.2 billion and c.$0.1billion, respectively.
(3)Collahuasi desalination capex shown includes related
infrastructure, with other water management projects included in
baseline sustaining. Attributable share of capex at 44%.
(4)Long term sustaining capex guidance is shown on a 2023 real
basis.
(5) 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
Tyler Broda
tyler.broda@angloamerican.com
Tel: +44 (0)20 7968 1470
|
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
|
Michelle Jarman
michelle.jarman@angloamerican.com
Tel: +44 (0)20 7968 1494
|
South Africa
Nevashnee Naicker
nevashnee.naicker@angloamerican.com
Tel: +27 (0)11 638 3189
|
|
|
|
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 25 July 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.
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and Anglo American expressly disclaims any responsibility for, or
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©Anglo American Services (UK) Ltd
2024. TM and TM are trade marks of Anglo
American Services (UK) Ltd.
Anglo American plc
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Incorporated in England and Wales under the Companies Act
1985.
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Entity Identifier: 549300S9XF92D1X8ME43