TIDMAAL
RNS Number : 6774X
Anglo American PLC
05 May 2021
5 May 2021
Anglo American plc
Annual General Meeting - Address to shareholders
Anglo American plc held its Annual General Meeting for
shareholders today in London and via webcast. The following remarks
were made by the Chairman and the Chief Executive.
Stuart Chambers, Chairman of Anglo American plc, made the
following remarks:
Before I ask Mark Cutifani, our chief executive, to give you an
overview of recent performance and an update on what you can expect
in the next year or two, allow me to share some of my perspectives
on your company, Anglo American.
In a year like no other, Anglo American showed considerable
resilience, acting quickly to safeguard our workforce and putting
measures in place to help keep our people and our communities safe,
while sustaining our operations.
You may have heard us talk about our WeCare programme; this is
the programme that Mark and his team put together in response to
the challenges posed by Covid-19 for our employees and our host
communities: working to protect physical health and mental health,
supporting many aspects of the lives and livelihoods in our local
communities, while also helping to tackle the scourge of gender
based and domestic violence in many countries.
As we are often the major employer and economic engine in the
areas where we operate, we engaged widely to ensure we could also
continue to provide the wide range of essential services that many
of our communities rely on, including the provision of water,
electricity, housing and food; support for teachers, students and
small business; as well as additional hospital facilities, medical
equipment and PPE.
Turning to safety, lockdowns in various countries certainly put
additional pressure on our mining operations, with shutdowns
followed by the re-opening and ramping up of operations posing
particular safety risks. It is testament to the integrity of our
safety systems and processes that in 2020 we achieved our best-ever
safety performance.
Against that backdrop, though, it was greatly upsetting that two
people died in work-related incidents during the year. That is two
too many. We are putting increased resources behind our Elimination
of Fatalities Taskforce, which has urgent work to do and I am
encouraged by the headway it is making. Through its work, we are
gaining a better understanding of how serious incidents happen,
which is helping us to prioritise actions to eliminate risk at the
workplace, as well as travelling to and from work.
Covid-19 notwithstanding, climate change is the major issue of
our time, and we have a clear role to play in helping to bring
about a lower carbon economy. We already have in place a holistic
set of ambitious goals contained in our Sustainable Mining Plan.
These goals include a 30% improvement in energy efficiency, a 50%
reduction in fresh water use, and a 30% cut in greenhouse gas
emissions, all by 2030. Last year, we added to these goals our
commitment to be carbon neutral across our operations by 2040.
Concerning technology, our employees are proud of Anglo
American's progress, and our FutureSmart Mining(TM) programme is
playing a major part in getting us to the targets I just mentioned,
introducing new technologies and digitised approaches that are
making mining safer and transforming our environmental and societal
footprint. We are also helping to stimulate the hydrogen economy,
including through investments and partnerships to use platinum
group metals as the catalyst for new generations of
hydrogen-powered electric transport.
Anglo American's resurgence in performance led by Mark Cutifani
and the executive team continues. We now have a significantly
improved portfolio of half the number of assets now producing more
product on a copper-equivalent basis, with production per employee
more than doubling. Furthermore, your company, Anglo American, has
one of the industry's most compelling growth profiles across the
truly diversified mix of metals and minerals that are required for
a cleaner, greener world and to satisfy global consumer demand.
Looking to the future, our new Quellaveco copper mine in Peru
will boost our supply of one of the modern world's most-needed
energy-transition metals, while the Woodsmith crop nutrients
project in the UK that we acquired last year further diversifies
our portfolio. You will also have noticed our announcement of a few
weeks ago to demerge our thermal coal operations in South Africa,
subject to the approval of shareholders at the General Meeting that
follows this AGM.
Mark will cover our financial performance in more detail but,
just briefly, Anglo American continues to generate healthy cash
flows that we are using to re-invest in our business and to deliver
sustainable cash returns to you, our shareholders.
Looking ahead, there continues to be strong demand for the many
essential metals and minerals that we provide. At the same time,
however, expectations of mining companies are being raised. As the
world also transitions towards a low carbon economy, we must
continue to act responsibly - bringing our employees, host
communities, host governments and customers - and of course our
shareholders - along with us.
Mark Cutifani, Chief Executive of Anglo American plc, made the
following remarks:
Thank you, Stuart, and good afternoon, everyone.
You will have heard others say this, but Covid-19 really has
tested the world to its limits and we know it's not over yet. And
so, 2020 was an extraordinary year and it reminded us just how
important it is that we look after each other and those around us,
both in our personal and professional lives.
As a company, we moved quickly this time last year to put in
place a global and multi-faceted response that we call our WeCare
programme, as the Chairman touched on. We knew we needed to help
protect lives and livelihoods for our employees and host
communities - both in terms of their health and wellbeing, and
their economic prosperity. Our employees are rightly proud of what
we did and how we conducted our business. There is no doubt our
approach brought us together as a company and in particular
reinforced our relationships with many stakeholders, particularly
our local communities and our broader regional and Federal
authorities.
The Covid-19 pandemic has impacted every one of us and I'm
delighted how Anglo American responded as a family of more than
95,000 citizens and community members; we absolutely stayed true to
our Purpose of re-imagining mining to improve people's lives and to
our values. We stayed true to who we are.
Turning to safety, our determination to ensure that every
employee returns home safely at the end of each day drives our
thinking and behaviours.
In 2020, we recorded our best-ever safety performance, with our
lowest fatality and total recordable-injury numbers. We have
transformed our safety performance and, in the past five years
alone, we have continued the journey with another 40% reduction in
total injuries and an 82% reduction in fatal incidents. However, we
still have a long way to go as we are still reporting serious
safety incidents. In May last year, five colleagues were seriously
injured in an incident underground at Grosvenor in Australia, while
two colleagues, both in South Africa, lost their lives at work in
2020. While we have made real progress, we can never say we have
had a good year unless we have zero fatal incidents.
On the financials, our performance for the year showed the
resilience and quality of our diversified business. After a tough
start to the year, underlying EBITDA of $9.8 billion reflected a
remarkable second half turnaround, a decrease of just 2% on the
previous full year results,, while our mining EBITDA margin
increase to 43% - despite the lower full year production volumes.
The full year results reflected solid cost control, a strong
contribution from our Marketing business, and price strength later
in the year. Return on capital employed of 17% exceeded our
targeted 15% through-the-cycle return, and we delivered a strong
Total Shareholder Return of 16.2%. Total dividends for the year,
amounting to $1.00 per share, are in line with our policy of paying
out 40% of underlying earnings, again with a strong second half
weighting. Subject to your approval today, the second half final
dividend of 72 cents will be paid to shareholders on Friday.
We remain absolutely committed to capital-allocation discipline
and maintaining a strong and flexible balance sheet. It is always
about balance as we invest in sustaining and improving our existing
assets for earnings reliability and near term growth, repositioning
the portfolio to improve returns for the longer term and returning
cash to shareholders on a sustainable basis. In our business it is
about consistent and sustainable Capital Returns and Returns of
Capital to our shareholders.
Operationally, we continue to deliver material business
improvements, building on the stable platform provided by our
Operating Model. As you have heard me say before, the first step
was for the operating model to set a stable base, from which we
push for P101 levels of performance, or beyond best in class, to
set new benchmarks across our operational processes.
More recently, the team has delivered another $2 billion in
terms of annual EBITDA run-rate improvement through our
efficiencies and operational delivery. This focus on continuous
improvement is as much about improving returns as it is to protect
the business from internal and external headwinds like increasing
mine depths and global inflation.
And then, off the stable foundation and enhanced performance, we
are implementing a number of technologies to drive additional value
through cost efficiency, and growth in throughput and margins - as
well as delivering our growth projects - and we are on track to
deliver our targeted $3-4 billion annual run-rate improvement over
the five year period to end 2022.
Panning out from the year behind us to looking at our broader
strategic progress, let me touch on each of our three strategic
pillars, beginning with Portfolio.
We have re-shaped and upgraded the quality of our diversified
portfolio over the last several years, today providing us with a
well-sequenced range of high quality and return growth options. We
have carefully sequenced the execution of our projects to protect
our balance sheet while providing significant margin accretive
production growth over the next 5 years and beyond.
We have also continued to transition our portfolio towards those
products that support a low carbon economy and consumer demand
trends, and our growth projects accelerate that trajectory. Our
transformation is not about diversification for diversification's
sake, the growth in quality production in market segments with high
growth and margin potential is the key driver in our portfolio
thinking.
Specifically, I am pleased to tell you that we are firmly on
track to deliver first production from the new Quellaveco copper
mine in Peru during 2022. Last year's addition of the Woodsmith
crop nutrients project in the UK, and the proposed demerger of our
remaining thermal coal operations in South Africa early in June,
all take us further down that road - being a producer of high
quality products in favourable markets, that are also fundamental
to decarbonisation and the demands of a growing global consumer
population - from food and everyday essentials to luxury and
special market products.
This is a very differentiated business when you look across our
sector.
To our "Portfolio", we apply "Innovation" and, in tune with our
Purpose, we have set out a very different future for mining that we
refer to as FutureSmart Mining(TM). Our integrated approach to
technology, digitalisation and sustainability is designed to drive
step-changes in safety, environmental and social - or community -
and governance outcomes across our business. We are applying
technologies that more precisely target the desired metals or
minerals, requiring less water, energy and land along with capital
intensity, while producing less waste. In parallel, we are
digitising at pace, transforming data into predictive intelligence,
leading towards safer, systemised and self-learning operations.
Our technology progress is part of why we have been able to add
a commitment to carbon neutral operations by 2040 to our already
wide-ranging and stretching Sustainable Mining Plan goals.
Importantly, this is more than a target - we have plans to get
there. And we have plans to get 8 of our sites (roughly a third of
our business) to carbon neutrality by 2030. We are tackling the
challenges head-on, recognising that time is a commodity none of us
have. To that end, you may have seen last month that we have now
secured 100% renewable electricity supply across our South American
operations, cutting our CO(2) emissions at those sites by up to
70%.
The tools and processes we have today will not take us all the
way to carbon neutrality - so, new energy technologies, including
hydrogen, will play a crucial role. In a first for our industry, we
will trial a hydrogen fuel-cell haul truck at our Mogalakwena PGMs
mine later this year, proving up a technology that can drastically
reduce diesel usage and its associated emissions from mines all
over the world. This is another game-changer.
And the third leg of our strategy is, of course, our People -
who represent the substance behind all of our changes and
transformation. That may sound trite, but it is an often-overlooked
truth. So, first, to all of our employees, I say "thank you".
We strive to create safe, inclusive and diverse working
environments that encourage high performance and innovative
thinking. How we build a team-based culture is built on engagement
and participation. For every individual to give their best they
need to know we mean what we say and we do what we mean. I believe
we made further good progress in 2020 - a year more than ever when
we needed to be engaging and listening, both for outbound
communication and inbound feedback and commitment.
I am also pleased to report that we are making good progress in
addressing what has long been a challenge in our industry - gender
diversity. In the last five years, the proportion of women in
senior management roles has increased from 15% to 27%, as we head
towards our 2023 target of 33%. And across the company, women now
represent 23% of the workforce, up from 18% in 2015. While it is
important to have a target to aim for, this is actually about
creating the right environment to develop and retain the best
talent - and doing so sustainably. Our low turnover of well below
the 5% level shows us we are getting this right so far. Progress,
and still a long way to go.
Reflecting on Anglo American today, I see a continuously
improving business, building resilience and delivering industry
leading results, and well positioned to meet the high expectations
of our full breadth of business and societal stakeholders.
This is also a purposeful business, with strong values and
leaders working hard to model our values through behaviours. We all
have a responsibility to work together to help rebuild economies
and protect our natural world. We believe that, through our mix of
high-quality and responsibly produced products, we are playing our
part in building a more sustainable modern world, and in ensuring
mining has a safer, smarter future.
We have the resources and the assets, we have the innovative
mindset and we have the people. We have shown what we can do -
delivering industry-leading returns since 2013. And we have set the
foundations to outperform to 2030 and beyond.
Thank you.
Check against delivery.
The slides used by Mr Cutifani to illustrate his remarks are
available at
https://www.angloamerican.com/investors/investor-presentations
A recording of the meeting will be available on the Anglo
American website at
https://www.angloamerican.com/investors/shareholder-information/agm/agm2021
For further information, please contact:
Media Investors
UK UK
James Wyatt-Tilby Paul Galloway
james.wyatt-tilby@angloamerican.com paul.galloway@angloamerican.com
Robert Greenberg
Marcelo Esquivel robert.greenberg@angloamerican.com
marcelo.esquivel@angloamerican.com
Katie Ryall Emma Waterworth
katie.ryall@angloamerican.com emma.waterworth@angloamerican.com
South Africa
Nevashnee Naicker
nevashnee.naicker@angloamerican.com
Sibusiso Tshabalala
sibusiso.tshabalala@angloamerican.com
Nomonde Ndwalaza
Nomonde.ndwalaza@angloamerican.com
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,
development projects and undeveloped resources, provides many of
the metals and minerals that enable a cleaner, greener, more
sustainable world and that meet the fast growing consumer-driven
demands of developed and maturing economies. With our people at the
heart of our business, we use innovative practices and the latest
technologies to mine, process, move and market our products to our
customers - and to discover new resources - safely and
sustainably.
As a responsible producer of diamonds (through De Beers),
copper, platinum group metals, the steelmaking ingredients of iron
ore and metallurgical coal, and nickel - with crop nutrients in
development and thermal coal operations planned for divestment - we
are committed to being carbon neutral across our operations by
2040. We work together with our business partners and diverse
stakeholders to unlock sustainable 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
Forward-looking statements:
This announcement includes forward-looking statements. All
statements other than statements of historical facts included in
this announcement, including, without limitation, those regarding
Anglo American's financial position, business, acquisition and
divestment strategy, dividend policy, plans and objectives of
management for future operations (including development plans and
objectives relating to Anglo American's products, production
forecasts and Ore Reserves and Mineral Resource estimates) and
environmental, social and corporate governance goals and
aspirations, are forward-looking statements. By their nature, such
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Anglo American, or industry results,
to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements.
Such forward-looking statements are based on numerous
assumptions regarding Anglo American's present and future business
strategies and the environment in which Anglo American will operate
in the future. Important factors that could cause Anglo American's
actual results, performance or achievements to differ materially
from those in the forward-looking statements include, among others,
levels of actual production during any period, levels of global
demand and commodity market prices, mineral resource exploration
and development capabilities, recovery rates and other operational
capabilities, safety, health or environmental incidents, the
effects of global pandemics and outbreaks of infectious diseases,
the outcome of litigation or regulatory proceedings, the
availability of mining and processing equipment, the ability to
produce and transport products profitably, the availability of
transportation infrastructure, the impact of foreign currency
exchange rates on market prices and operating costs, the
availability of sufficient credit, the effects of inflation,
political uncertainty and economic conditions in relevant areas of
the world, the actions of competitors, activities by courts,
regulators and governmental authorities such as in relation to
permitting or forcing closure of mines and ceasing of operations or
maintenance of Anglo American's assets and changes in taxation or
safety, health, environmental or other types of regulation in the
countries where Anglo American operates, conflicts over land and
resource ownership rights and such other risk factors identified in
Anglo American's most recent Annual Report. Forward-looking
statements should, therefore, be construed in light of such risk
factors and undue reliance should not be placed on forward-looking
statements.
These forward-looking statements speak only as of the date of
this announcement. Anglo American expressly disclaims any
obligation or undertaking (except as required by applicable law,
the City Code on Takeovers and Mergers, the UK Listing Rules, the
Disclosure and Transparency Rules of the Financial Conduct
Authority, the Listings Requirements of the securities exchange of
the JSE Limited in South Africa, the SIX Swiss Exchange, the
Botswana Stock Exchange and the Namibian Stock Exchange and any
other applicable regulations) to release publicly any updates or
revisions to any forward-looking statement contained herein to
reflect any change in Anglo American's expectations with regard
thereto or any change in events, conditions or circumstances on
which any such statement is based. Nothing in this announcement
should be interpreted to mean that future earnings per share of
Anglo American will necessarily match or exceed its historical
published earnings per share.
Certain statistical and other information about Anglo American
included in this announcement is sourced from publicly available
third-party sources. As such, it has not been independently
verified and presents the views of those third parties, though
these may not necessarily correspond to the views held by Anglo
American and Anglo American expressly disclaims any responsibility
for, or liability in respect of, such information.
Legal Entity Identifier: 549300S9XF92D1X8ME43
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