Anglo American PLC, profile and history

Anglo American PLC is a global mining company with a portfolio that includes bulk commodities (iron ore, manganese, and metallurgical coal, base metals including copper and nickel and precious metals and minerals including platinum and diamonds). Anglo American has mining operations in Africa, Europe, North and South America, Asia, and Australia.

The Company is separated into different segments which include De Beers, Copper, Platinum Group Metals, Iron Ore, Steelmaking Coal, Nickel, Manganese and Crop Nutrients. De Beers is involved in the diamond business, which offers rough and polished diamonds. The Company’s Copper projects are the following: Quellaveco copper, Los Bronces, El Soldado, and Collahuasi. Its Platinum Group Metals is responsible for five mining operations in South Africa’s Bushveld complex (Mogalakwena, Amandelbult and Mototolo, and Unki mine in Zimbabwe). Its Iron Ore operations are in Brazil and South Africa. Its Steelmaking Coal business is based on five operating mines and other development projects and joint-venture interests. Its Nickel operations can be found in Brazil with two ferronickel production sites: Barro Alto and Codemin.

Anglo American PLC: History and Performance Overview

History

Anglo American PLC is headquartered in London, England and is the world’s biggest producer of platinum, as well as a major producer of diamonds, copper, nickel, iron ore, polyhalite and steelmaking coal.

The company has a primary listing on the London Stock Exchange and is part of the FTSE 100 Index. The company has a secondary listing on the Johannesburg Stock Exchange. It was ranked the 274th largest public company in the world in the 2020 Forbes Global 2000.

The company’s history goes back to 1917 when Ernest Oppenheimer, a Jewish German émigré, founded the Anglo American Corporation (AAC) in Johannesburg, South Africa. The gold mining company started with investments from the American bank J.P. Morgan & Co. and £1 million raised from UK and US sources. The AAC was the majority stakeholder in the De Beers company in 1926.

In the late 1940s and 1950s, AAC developed the Free State goldfields and the Vaal Reefs mine. In 1945, it expanded into the coal industry after it bought Coal Estates. When Oppenheimer died in Johannesburg twelve years later, his son succeeded him as the head of the company and also became chairman of De Beers.

In the 1960s, the AAC became a major investor in the Hudson Bay Mining and Smelting Company in Canada while by the end of the 1960s it acquired Scaw Metals and expanded into the steel industry. From 1967 to 1975, it created other ventures such as the Mondi Group (timber, pulp, and paper), Amgold and Amcoal.

In 1982, Gavin Relly succeeded Harry Oppenheimer after he retired as chairman of the AAC. Julian Ogilvie Thompson took over as the chairman of De Beers two years later. In 1990, he would become chairman and chief executive of the AAC.

In 1999, Anglo American Corporation merged with Minorco to become Anglo American PLC, with a primary listing on the London Stock Exchange and a secondary listing on the Johannesburg Stock Exchange.

July 2023 results

The mining giant reported a weaker first-half performance in its interim results due to challenging macroeconomic conditions. The FTSE 100 company said that due to macroeconomic headwinds and lower product prices, its EBITDA (Earnings before interest, taxes, depreciation, and amortisation) was at $5.1bn for the period, which marked a 41% fall year-on-year. There was a 13% fall in revenue to $15.67bn for the six months ending the 30^th of June.

Equity shareholder profit was $1.26bn, 66% lower, while earnings per share dropped 56% to $1.38.

The board confirmed an interim dividend of 55 US cents per share, which was 56% lower on the half-year distribution it made in 2022.

Net debt came in at $8.8bn, with a ratio of 0.9x annualised underlying EBITDA.

The Anglo American PLC highlighted its focus on value-adding growth investments and that its target was to limit 2023 capital expenditure by $0.3bn.

In terms of its operations, Anglo American emphasised the progress made by its Quellaveco project which is expected to produce between 310,000 and 350,000 metric tonnes of copper by the end of 2023.

Chief Executive Officer Duncan Wanblad said that “Anglo American’s portfolio quality, product and geographic diversification together with strong organic growth optionality over the next decade provide positive differentiation and position our business to capitalise on highly attractive structural supply and demand trends.” He added that the company’s determination is focused on continuing its successful performance across all its operations with a strong focus on employee safety and health.

Wanblad discussed the challenging environment but also highlighted how the longer-term demand outlook for future-enabling metals and minerals” was powerful.

He explained that the company’s objective was to grow the business value by responding to these future demands. He said that the majority of the biggest economies will continue with decarbonization programms while the global population will grow by up to two billion people over the next 25 years, who will require higher living standards.

Appointment of CEO

Anglo American Platinum, which is a company subsidiary, announced the appointment of Craig Miller as its Chief Executive Officer, effective from 1 October 2023. The appointment was made after Natascha Viljoen took the role of Chief Operating Officer at Newmont Corporation earlier this year.

Anglo American also announced the appointment of John Heasley as its finance director, after Stephen Pearce announced his retirement in May. Heasley, was the CFO of the Weir Group, and is anticipated to bring his experience in the mining industry and financial expertise. He will join the executive leadership team by the end of 2023, ensuring that transition during the end of the year financial reporting is smooth and efficient.

2023 Q3 interim report

Anglo American Plc reported consistent total production in the third quarter (Q3) of 2023, compared to the same period in 2022. There was a 42% increase in copper production because of Quellaveco mine’s increased production which was offset by De Beers operations transitioning underground operations and its performance at Moranbah and Grosvenor.

The overall production volumes were up by 4% quarter-on-quarter, supported by steelmaking coal operations at Aquila and Grosvenor, operational developments in the Platinum Group Metals (PGMs) business, and increased volumes from Quellaveco. The rise in volume was offset by maintenance programs and the ongoing transition to underground operations at Venetia.

Chilean copper production decreased due to the hardness of ore and an electrical substation fire at Los Bronces. This led to a minor revision in the operation guidance at Chile.

Disclaimer:
This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced or hyperlinked in this communication.

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