TIDMANTO
RNS Number : 4808N
Antofagasta PLC
20 May 2020
NEWS RELEASE, 20 MAY 2020
CHAIRMAN'S COMMENTS ON THE
DATE OF THE 2020 ANNUAL GENERAL MEETING
Antofagasta plc (the "Company") today released a statement from
its Chairman, Jean-Paul Luksic, on the date of the Company's Annual
General Meeting ("AGM"). In compliance with the UK Government's
COVID-19 Measures limiting public gatherings [shareholders will not
be able to attend the AGM in person and] this year's AGM will be
purely functional in format to comply with the relevant legal
requirements. There will be no speeches, presentations or Q&A
at the AGM, and no directors or senior management will be in
attendance.
A video and copy of a presentation that was planned to be made
by Iv á n Arriagada, the Company's CEO, at the AGM on the Company's
sustainability performance in 2019 and response to the outbreak of
COVID-19 can be found on the Company's website.
Following the announcement on 18 May of the revision of the
final dividend amount, the payment date will now be 27 May.
"Dear shareholders,
Due to the COVID-19 health emergency and the UK Government's
compulsory measures limiting public gatherings, this year's AGM
will be purely functional in format to comply with the relevant
legal requirements. The Company will ensure that the necessary
quorum requirement is satisfied and that the resolutions set out in
the AGM Notice are proposed and voted upon. Shareholders were
invited to submit questions and vote on all AGM resolutions in
advance of the AGM; responses to questions received and the results
of the poll on each of the resolutions proposed in the AGM Notice
will be published later today.
As we all know, we are currently living in unprecedented times
and over the last few months the onset of COVID-19, has introduced
global challenges of an unparalleled nature. I would like to begin,
therefore, by describing how Antofagasta is facing the current
emergency and ensuring a safe and healthy environment for our
workforce and local communities. I will also provide a brief
overview of the Company's strategy and performance, and make some
comments on the macro environment in which we are operating.
The safety and health of our employees and the communities in
which we operate has always been our top priority. Since the
outbreak of COVID-19 we have implemented several measures across
our operations to prevent the spread of infection and launched a $6
million fund to support local communities, as well as working
alongside government to deliver a coordinated response to the
emergency. We are constantly reviewing the situation to ensure we
are responding effectively to all health, operational and financial
concerns.
Our operations are continuing to produce copper at or close to
their originally expected levels of production with about
two-thirds of the workforce currently on-site. Yet a significant
rise in the number of new COVID-19 cases since 13 May and, the
declaration of quarantine for all of the Santiago area on 15 May,
increases the risk of the Company being restricted from moving its
workforce to and from its operations. For now, strict social
distancing, health monitoring and company-arranged chartered
transport to and from the mine sites help maintain a safe working
environment. However, we have largely suspended the Los Pelambres
Expansion and other growth projects to further limit the risk of
infection. We are committed to operating safely, providing
employment, supporting our suppliers and contributing to the
economic and social recovery of Chile.
Even though our growth projects are currently on hold, I
continue to believe in the future of the copper industry. This
means having a long-term approach to planning and a willingness to
invest in new projects throughout the commodity cycle, while
continuously developing a strong corporate culture, a sense of
organisational purpose and a clear strategy. This is encompassed in
our Purpose, Developing Mining for a Better Future. In 2019 the
Board adopted a new strategic framework designed to underpin
Antofagasta's long-term success. The framework is built around five
pillars: growth, our people, safety and sustainability of our
operations, innovation, and competitiveness.
With regards to our operating performance, 2019 was a good year
marked by the Company's best safety performance ever, record
production of 770,000 tonnes of copper and an above-target
reduction in cash costs. Our financial performance was also healthy
with EBITDA increasing by 9.5% and net earnings for the year at
$501.4 million. However, the Board's concerns regarding the
complexity of the pandemic at both a national and international
level, has led it to revise its original final dividend
recommendation. The Board has therefore taken a prudent decision
and reduced the final dividend and so the total dividend for the
year will now be 17.8 cents per share, equivalent to a pay-out
ratio of 35%.
On safety, I am particularly pleased to report that we suffered
no fatalities during the year and that the programmes we have
implemented have significantly improved our safety performance, as
measured by other indicators such as Lost Time Injury Frequency
Rate (LTIFR). This progress has been consistent across almost all
our operations and reflects the work we have undertaken over the
past five years since we implemented our new safety management
system.
We have during 2019 and the beginning of this year signed new
power contracts at Los Pelambres, Centinela and Antucoya for
renewable power, which will supply 100% of the power the Mining
Division uses as of 2022. This will help us achieve our greenhouse
gas emissions reduction target set in 2018.
Despite last year's positive results, 2019 was a challenging
year in other ways. Since October 2019, Chile has undergone a
period of social tension with street demonstrations and demands for
social improvements, followed by instances of violence by small
groups. We condemn violence and strongly believe that the best way
to achieve social advancement and cohesion is through dialogue, as
well as taking measures that help the country grow and develop. In
order to address these issues, the government and opposition
parties have agreed to hold a referendum this year on the adoption
of a new constitution.
The situation has been exacerbated by COVID-19 and Chile must
now face the challenge of addressing the social issues and
improving people's wellbeing. We must all work together, including
the government and the opposition, to resolve the country's
challenges, and mining, as one of the main contributors to Chile's
economy, is part of the solution. When the mining industry is
successful, the whole country benefits through higher tax revenues,
higher levels of employment, better jobs and improved
infrastructure.
As an industry and business that plans for the long term, we
value certainty and stability. Making sure our interests are
properly aligned with those of our stakeholders is critical to the
long-term sustainability of our operations, given that when we are
successful as a company our stakeholders benefit as well. This
includes our employees and contractors, local communities,
suppliers, customers, shareholders and the government and
regulators. I am particularly proud of the work the team has done
over the year to strengthen our community relations and I am even
more proud for how they are handling the impact of COVID-19.
Turning to corporate governance, in 2019 we adopted the new
version of the UK Corporate Governance Code that was published in
July 2018 and the 2020 Directors' and CEO Remuneration Policy,
which will be tabled for approval at the AGM. Our reporting
outlines how we have applied the principles of the Code and
corporate governance best practice in a way that can be
meaningfully evaluated by our stakeholders. This not only reflects
the emphasis of the new Code and its broader view on governance,
but it also allows everyone concerned to understand the particular
circumstances of our Company and how we apply the Code.
The Board's ability to deliver long-term sustainable success
relies on a detailed understanding and reflection of the views of
our workforce and stakeholders in Chile, where our corporate
headquarters, senior management team and all our operating
companies are located. The Company's governance structures include
a network of arrangements to ensure that the outlook and interests
of stakeholders are represented in the boardroom and are considered
as part of deliberations.
Diversity and succession planning have been a key focus of the
Board for a number of years. In June last year we reported with
great sadness the passing of our Non-Executive Director, Gonzalo
Menendez, who was crucial to Antofagasta's development for nearly
40 years. As General Manager of the Transport Division in the early
1980s, he was responsible for turning it into a profitable
business, and later as a Director, he played a significant role in
the Company's expansion and transformation into the mining company
it is today. The Board will miss his wise counsel and advice.
Following nine years of dedicated service, Tim Baker, a
Non-Executive Director of the Company since 2011, will not stand
for re-election as a Director at the AGM. I would like to thank Mr
Baker for the significant contribution he has made to the Company
as a Director and member of all Board Committees. The Company has
benefited enormously not only from Mr Baker's vast mine operating
experience, but also from his dedicated stewardship of the
Remuneration and Talent Management Committee from 2011 until
2019.
We are delighted to have appointed two new Directors to the
Board over the last year. Michael Anglin was appointed in May 2019
and has joined the Remuneration and Talent Management Committee and
Projects Committee as of September 2019. Mr Anglin has an
international career with extensive experience in project
development and mining operations. Tony Jensen was appointed to the
Board and the Audit and Risk Committee on 13 March 2020. Mr Jensen
has over 35 years of mining experience in operations, finance and
business development in the US and Chile, and will stand for
election by shareholders at the AGM. Following this AGM, six of the
Board's ten Directors will be independent.
The copper price during the first months of this year has been
impacted by the uncertainty around global trade and the COVID-19
pandemic, reducing copper to a low of $2.14/lb in late March. It is
now trading slightly higher in the $2.25-2.40/lb range, and it is
unclear how it will trade over the balance of the year given the
potential for a worldwide recession. However, in the longer term we
continue to believe the fundamentals for copper are strong and that
future demand will remain strong. The world's need for copper will
grow with the advancement of renewable energies and greener
transportation systems, at a time when new sources of copper supply
are becoming rarer.
I believe the commodity price volatility we have experienced
over the past few years highlights the strength of our Company. We
plan for the long term. We deliver considered growth. We manage our
costs tightly. We maintain a strong balance sheet, put the safety
of our people and communities at the heart of all that we do, and
invest in the future. This approach will remain at the core of our
strategy for the coming years.
The future will bring opportunities as well as new challenges.
We face many uncertainties as the COVID-19 global emergency
continues to unfold. In addition to the health crisis, we are
facing one of the most severe economic contractions in many
decades. In times like these we must focus on our Purpose, running
safe and efficient operations, controlling costs, and managing
innovation and development programmes, so that we may advance
towards a more sustainable world.
Finally, let me close by taking this opportunity to thank all
our employees and contractors working across the Company during
these challenging times. Their contribution has helped make the
Company what it is today and together we shall face the new
challenges the future brings."
Investors Media - London
- London
Andrew Lindsay alindsay@antofagasta.co.uk Carole Cable antofagasta@brunswickgroup.com
Telephone +44 20 7808 0988 Telephone +44 20 7404 5959
Andres Vergara avergara@antofagasta.co.uk Will Medvei antofagasta@brunswickgroup.com
Telephone +44 20 7808 0988 Telephone +44 20 7404 5959
Media - Santiago
Pablo Orozco porozco@aminerals.cl
Paola Raffo praffo.van@aminerals.cl
Telephone +56 2 2798 7000
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