Anglo American Plc · LSE:AAL
Anglo American — H1 2022 Earnings Presentation
97 slides from Anglo American's earnings presentation, Jul 28, 2022
Slide 1: 2022 Interim Results
2022 Intel 28 July 2022 Anglo American
Slide 2: Introductory comments
Introductory comments Stuart Chambers Chairman 2 Anglo American
Slide 3: Cautionary statement
Cautionary statement Disclaimer: This presentation has been prepared by Anglo American plc (“Anglo American”) and comprises statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward- the written materials/slides for a presentation con
Slide 4: H1 2022 results agenda
H1 2022 results agenda H1 2022 overview and look ahead Duncan Wanblad The numbers Stephen Pearce Enabling the future - sustainably Duncan Wanblad 4 Anglo American Mogalakwena PV Field
Slide 5: Focusing on our strategic priorities
Focusing on our strategic priorities 1 Safety 2 Stability 3 Sustainability 4 Growth 5 Anglo American
Slide 6: SHE performance – focussed on a safe & healthy future
SHE performance – focussed on a safe & healthy future Safety Health Environment Group TRIFR1,2 Fatalities1 Occupational health – new cases1,3 Level 3 & above significant incidents1,4 3.17 101 96 2.66 6 2.21 2.36 2.14 2.24 39 30 2 9 16 1 1 1 5 4 2 2 1 0 0 2017 2018 2019 2020 20211 H1 2022 2017 2018 2
Slide 7: Striving for a healthy environment & thriving communities
Striving for a healthy environment & thriving communities Energy GHG emissions Social mGJ Mt CO2 equivalent emissions5 Social Way Implementation6 97 18 18 84 87 85 16 16 81 15 49% 23% 91% 96% 89% Social Way 3.0 standards far exceed Social 33 5 Way 2.0 2017 2018 2019 2020 2021 May 2017 2018 2019 2020
Slide 8: Operating context in 2022
Operating context in 2022 Covid & absenteeism Weather Work routines impacted Extreme rainfall at many key operations High levels of Covid-related absenteeism Low water availability at Los Bronces Supply chains Inflation Heavy mining equipment supply delays High inflation & recessionary risks Tight l
Slide 9: H1 2022 summary
H1 2022 summary EBITDA7 Production8 $8.7 bn 9% Mining EBITDA margin9 Unit cost10 52% 18% 9 Anglo American
Slide 10: H1 2022 – operating performance
H1 2022 – operating performance Diamonds Base Metals11 Solid demand recovery Mitigating water challenges Strong unit cost performance Production tracking to plan TracrTM assures provenance Stable Nickel performance PGMs Bulks Wet weather impacts Mogalakwena Wet weather & covid impacts Robust process
Slide 11: The numbers
The numbers Stephen Pearce Anglo American
Slide 12: H1 2022 financial results
H1 2022 financial results EBITDA7 EPS7 Net debt $8.7 bn $3.11 /sh $4.9bn Unit cost10 Shareholder returns12 ROCE13 18% $1.5bn 36% 40% of underlying earnings 12 Anglo American
Slide 13: Robust EBITDA supported by strong pricing
Robust EBITDA supported by strong pricing Diamonds Base Metals 11 $0.9bn $1.4bn 53% mining EBITDA margin9 49% mining EBITDA margin9 $8.7 bn 14 PGMs Bulks $2.7bn $3.9bn 55% mining EBITDA margin9 55% mining EBITDA margin9 13 Anglo American
Slide 14: Solid H1 impacted by macros and operational factors
Solid H1 impacted by macros and operational factors EBITDA7 $bn $0.1bn cumulative 2017-H1 2022 (1.5) 0.4 (0.4) (1.4) (0.5) 12.1 108 10.7 8.7 H1 2021 Price15 Currency CPI16 Cost & Other H1 2022 volume17 14 Anglo American
Slide 15: Inflationary headwinds driven by strong prices
Inflationary headwinds driven by strong prices H1 2022 unit cost performance10 FY unit cost outlook 6% (5)% (2)% Volumes expected to be flat YoY 7% Further cost inflation expected in H2… 18% 12% …but mitigated by weaker producer currencies Volumes CPI Input costs FX Other18 H1 2022 15 Anglo American
Slide 16: Re-iterating full year capex guidance
Re-iterating full year capex guidance Capex19 6.1-6.6 $bn 1.6-2.1 Higher sustaining spend reflects Covid recovery & projects e.g. Collahuasi desal 2022 growth capex includes $0.6bn for 2.6 Woodsmith Growth 0.8 ~4.5 Expect seasonal pick-up in H2 Sustaining 1.8 H1 2022 2022F 16 Anglo American
Slide 17: Robust cash generation and resilient balance sheet
Robust cash generation and resilient balance sheet Net debt $bn 4.9 Build in working cap – mainly inventory 1.0 0.8 3.8 Attractive shareholder returns from (3.1) record 2021 earnings 2.2 Investments in disciplined, value-adding growth 12% gearing 2021 Working Cash Shareholder Growth H1 2022 First su
Slide 18: Transparent taxes & royalties in host countries
Transparent taxes & royalties in host countries $3.5 bn Taxes and royalties20 UK $0.3bn Paid in host country 6%20 increase from H1’21 Other Africa Australia/Asia Brazil $0.5bn $0.4bn $0.2bn Queensland royalty increase Chile $0.8bn impacts H2 profitability South Africa Chilean tax stability agreement
Slide 19: Balanced capital allocation framework
Balanced capital allocation framework H1 2022 allocation of capital Sustaining attributable free cash flow21 H1 2022 dividend at 40% of underlying earnings12 Growth capex19 19 Anglo American
Slide 20: Our balanced offering: ongoing capital discipline as we invest in growth
Our balanced offering: ongoing capital discipline as we invest in growth Strong balance sheet Attractive returns Quality growth 0.3x 40% payout >90% H1 2022 base, through the cycle growth capex in future-enabling net debt:EBITDA7 dividend12 & high margin products19 20 Anglo American
Slide 21: Enabling the future - sustainably
Simple conversion of existing divider. Looks a bit old fashioned now I think compared to the rest of the fresh, modern style Enabling the future - sustainably Duncan Wanblad
Slide 22: Our diversified portfolio is suited to future demand trends
Our diversified portfolio is suited to future demand trends Suite of future-enabling products within a geographically diversified portfolio Copper equivalent production8 Attributable capital employed22 Steelmaking Diamonds Other Coal Chile 13% Transition 24% & Peru enabling Australia 9% High quality
Slide 23: A carbon neutral world requires metals and minerals
A carbon neutral world requires metals and minerals Energy transition is Supply is constrained metals and minerals intensive ~17 >10 years to bring on new mines Copper demand (Mt) for the energy transition from key sectors in a 1.5°C scenario23 ~6 ~60 new Quellaveco size copper mines needed by 2040
Slide 24: Metals & minerals must be produced sustainably
Metals & minerals must be produced sustainably 2040 Scopes 1 & 2 carbon neutrality target24 2040 Scope 3 50% cut ambition25 ~80% reduction if steel industry achieves a 1.5°C pathway Fossil fuels Thermal coal mines exit Electricity purchased Production growth in Steel future-enabling products making
Slide 25: nuGen zero emission haulage solution
nuGenTM Zero emission haulage solution World’s largest hydrogen powered mine haul truck 2MW 220 tonne truck with payload of 290 tonnes 900,000 litres of diesel saved per truck each year Up to 80% reduction in open pit diesel emissions To be cost competitive with diesel truck Combining nuGenTM with o
Slide 26: Catalysing South Africa's grid decarbonisation through renewables ecosystem
Catalysing South Africa’s grid decarbonisation through renewables ecosystem Partnership with EDF Renewables Increased grid capacity (3 – 5 GW) Investment majority funded by equity partners & debt financing Supporting Just Transition 26 Anglo American
Slide 27: Quellaveco copper project: started up on time & budget
Quellaveco copper project: started up on time & budget A FutureSmart mine in Peru $5.5bn capex19 – including $0.6bn Covid impact <4 yrs construction, despite ~2 yrs Covid disruption Modern and sustainable mining in action: • Autonomous drilling and hauling – a first for Peru – with Integrated Operat
Slide 28: Quellaveco: ramping up over next 12 months
Quellaveco: ramping up over next 12 months Next steps Processing plant commissioning in progress • 2 processing lines: each 50% throughput • Line 1 started up • Start of line 2 commissioning expected Q3 Shipments commence post licence receipt26 28 Anglo American
Slide 29: Quellaveco: a world-class asset
Quellaveco: a world-class asset Detailed engineering Long life 50% 36 yr life at approval based on reserves28 Copper production growth Expansion potential +300ktpa ~1.5Bt over first 10 years27 resource28 29 Anglo American
Slide 30: Diversified, world class assets with value-enhancing growth
Diversified, world class assets with value-enhancing growth Largest diamond Strong organic optionality producer by value ~1Mt copper producer Brownfield expansion options PGMs Sakatti copper polymetallic project in Finland #2 producer; #1 processor Woodsmith fertiliser project in the UK High grade i
Slide 31: Our investment proposition
Q&A Our investment proposition Competitive Differentiated Sustainable assets capabilities returns Strong cost position Technology-led Disciplined capital allocation Long-term growth options Sustainability leader EBITDA margins of 45-50%29 To ask a question: UK +44 20 3481 4247 / SA +27 10 500 3945 /
Slide 32: Footnotes
Footnotes 1. Recordable incidents. Data relates to subsidiaries and joint operations over which Anglo American has 16. Inflation variance calculated using CPI on prior period cash operating costs that have been impacted management control. Since 2018 data for fatalities, TRIFR and environmental metr
Slide 33: Appendix
Appendix 33 Anglo American Rope Shovel at Mogalakwena
Slide 34: Simplified earnings & guidance
Simplified earnings & guidance 34 Anglo American Papujune Dome at Quellaveco
Slide 35: H1 2022 simplified earnings by BU
H1 2022 simplified earnings by BU De Beers Steelmaking $m (unless stated) (Diamonds) Copper Nickel PGMs Iron Ore1 Coal Other 2 Total Sales volume (mined share) 15.3Mct3 265kt 16.8kt 1,349koz4 28.3Mt 5.2Mt5 Average benchmark price n/a $9,766/t6 $27,602/t6 n/a $150/t $452/t7 Product premium/(discount)
Slide 36: H1 2022 simplified earnings by BU - notes
H1 2022 simplified earnings by BU - notes PGMs basket price Iron Ore realised price Steelmaking Coal blended price Own mined Realised Sales PGMs basket price Volume Revenue Total iron ore Kumba Minas-Rio Market price Volume Platinum $965/oz 606koz $585m Market price28 $150/t $140/t $174/t HCC $467/t
Slide 37: Guidance summary
Guidance summary Earnings Capex¹ Other Volumes See slide 38-39 2022 $6.1-6.6bn Quellaveco copper project Growth $1.6-2.1bn Unit costs See slide 40 • Includes Woodsmith ~$0.6bn • 2022 capex3: 100% $0.8-1.1bn; our share $0.5-0.7bn $2.8-3.0bn Sustaining ~$4.5bn 2022 depreciation (previously $3.0bn-3.2b
Slide 38: Production outlook
Production outlook Units 2019 2020 2021 H1 2022 2022F 2023F 2024F Diamonds1 Mct 31 25 32 17 32-34 30-33 30-33 Copper2 kt 638 647 647 273 660-750 910-1,020 910-1,020 Nickel3 kt 43 44 42 20 40-42 41-43 42-44 Platinum Group Metals4 Moz 4.4 3.8 4.3 2.0 3.9-4.3 4.1-4.5 4.1-4.5 Iron ore5 Mt 66 62 64 28 60
Slide 39: Production outlook – supplementary guidance
Production outlook – supplementary guidance Units 2019 2020 2021 H1 2022 2022F 2023F 2024F Chile: 560-600 Chile: 590-650 Chile: 590-650 Copper2 kt 638 647 647 273 Peru: 100-150 Peru: 320-370 Peru: 320-370 Pt: 1.8 Pt: 1.99 Pt: 0.92 Pt: 1.8-2.0 Pt: 1.9-2.1 Pt: 1.9-2.1 Platinum Group Metals – M&C by Mo
Slide 40: Unit costs performance by Business Unit
Unit costs performance by Business Unit De Beers (US$/ct)1 Copper (C1 USc/lb)2 Nickel (C1 USc/lb) 58 59 ~65 150 ~147 487 ~495 120 377 2021 H1 2022 2022F 2021 H1 2022 2022F 2021 H1 2022 2022F PGMs (US$/PGM oz)3 Iron Ore (FOB US$/t)4 Steelmaking Coal (US$/t)5 868 948 ~950 40 ~40 160 33 105 ~110 2021 H
Slide 41: Earnings sensitivities
Earnings sensitivities Impact of 10% Sensitivity Analysis – H1 20221 change in price / FX Commodity / Currency 30 June spot Average realised EBITDA ($m) Copper (c/lb)2 374 401 254 Nickel ($/lb)3 10.48 11.59 64 Platinum ($/oz) 915 964 62 Palladium ($/oz) 1,981 2,147 102 Rhodium ($/oz) 14,000 17,131 1
Slide 42: Capex guidance reiterated
Capex guidance reiterated Capex¹ ($bn) Woodsmith ~0.6 1.2-1.7 Growth 1.0-1.5 1.5-2.0 Collahuasi ~0.5 ~0.4 desal Collahuasi ~0.8 ~0.2 Lifex ~0.7 desal ~0.6 ~3.0 Baseline ~3.5 + ~3.4 ~3.3 sustaining Lifex 2022F 2023F 2024F Long-term (real) Totals 6.1-6.6 6.0-6.5 5.6-6.1 (excl. Woodsmith) (excl. Woodsm
Slide 43: Life extension capex
Life extension capex Major components of lifex¹ ($bn) Guidance ~0.7 ~0.8 ~0.6 Mototolo – Der Brochen (PGMs) ~0.1 Kolomela (Iron Ore) ~0.2 ~0.2 ~0.1 Venetia (Diamonds) ~0.3 ~0.3 ~0.3 2022F 2023F 2024F Lifex projects – subject to disciplined capital allocation framework Forecast Returns Capex (pa) Vol
Slide 44: Key projects driving growth capex
Key projects driving growth capex Major components of growth capex¹ ($bn) Guidance 1.0-1.5 1.2-1.7 1.5-2.0 + 0.6 Woodsmith ~0.22 ~0.1 ~0.5 Mogalakwena (PGMs) Quellaveco 2 (Copper) ~0.62 ~0.4 Moranbah-Grosvenor ~0.2 Sishen (Iron Ore) (Steelmaking Coal) ~0.1 Collahuasi 5th ball mill 3 (Copper) ~0.13 ~
Slide 45: Attractive greenfield and brownfield options
Attractive greenfield and brownfield options Growth capex¹ ($bn) Long life greenfields and fast returning brownfields Capex Volume (pa) From¹ Forecast Returns Payback IRR Margin Quellaveco (Copper) ~$2.8bn2 +300kt2 2022 ~4 years >15% >50% Marine Namibia (Diamonds) $0.2bn3 +0.5Mct3 2022 ~3 years >25%
Slide 46: Technology & innovation will transform the physical footprint of mining
Technology & innovation will transform the physical footprint of mining $0.2–0.5bn pa technology capex to more precisely target metal & mineral with less water, waste & energy Initiative Application Impact Progress • Mogalakwena (PGMs) North Concentrator (~70% of complex feed) and Los Bronces (Coppe
Slide 47: Quellaveco financial modelling
Quellaveco financial modelling Ownership Anglo American 60%, Mitsubishi 40% Fully consolidated with a 40% minority interest Accounting treatment Shareholder loans from minority shareholder consolidated in Anglo American net debt Project capex (nominal)1 $5.5 billion (100% basis - Anglo American shar
Slide 48: Quellaveco accounting – ramp up & commercial production
Quellaveco accounting – ramp up & commercial production Ramp up from first production 12 months from first production 2022 Production 100-150kt C1 unit cost - nominal ~$1.35/lb1 • Inventory recognised when first ore extracted, at cost of production, including element of waste stripping Accounting tr
Slide 49: Quellaveco accounting - debt
Quellaveco accounting - debt After the initial $0.8bn equity injection by Mitsubishi, the project was funded 60:40 through shareholder debt Group net debt by the end of the project is expected to include ~$1.9bn debt from Mitsubishi (40% of shareholder debt); which is funded from their 40% share of
Slide 50: Map of Quellaveco
Map of Quellaveco ~165km to port 50 Anglo American
Slide 51: Business Units results
Business Units results 51 Anglo American Benguela Gem – Cape Town
Slide 52: Diamonds – strong demand & operational performance
Diamonds – strong demand & operational performance Average Realised Underlying Mining Production1 Sales (Cons.)2 price index price3 Unit cost4 EBITDA margin5 Capex H1 2022 16.9Mct 15.3Mct 140 $213/ct $59/ct $944m 53% $250m vs. H1 2021 10% 20% 28% 58% ~ 0% 55% 11pp 22% Underlying EBITDA ($m) 0 (61) 9
Slide 53: Copper – solid performance despite water constraints
Copper – solid performance despite water constraints Realised Underlying Mining Production Sales1 price1 Unit cost2 EBITDA3 margin3 Capex4 H1 2022 273kt 265kt 401c/lb 150c/lb $1,166m 47% $953m vs. H1 2021 17% 13% 13% 29% 40% 19pp 24% Underlying EBITDA ($m) 1,935 (228) 123 (112) 1,718 (411) (141) 1,1
Slide 54: Nickel – strong pricing underpins earnings
Nickel – strong pricing underpins earnings Realised Underlying Mining Production1 Sales1 price Unit cost EBITDA margin Capex H1 2022 19.6kt 16.8kt 1,159c/lb 487c/lb $239m 59% $32m vs. H1 2021 5% 16% 61% 39% 77% 18pp 220% Underlying EBITDA ($m) (6) (13) 278 (45) 239 6 162 135 H1 2021 Price FX Inflati
Slide 55: PGMs – solid margins drive earnings
PGMs – solid margins drive earnings Realised Underlying Mining Production1 Sales2 basket price2 Unit cost3 EBITDA margin4 Capex H1 2022 1,988koz 2,044koz $2,671/PGM oz $948/PGM oz $2,732m 55% $394m vs. H1 2021 4% 20% 7% 9% 38% 16pp 9% Underlying EBITDA ($m) 4,383 (947) 3,481 134 (89) (684) 2,732 (65
Slide 56: Iron Ore Total – impacted by lower prices
Iron Ore Total – impacted by lower prices Realised price Unit cost Underlying Mining Production1 Sales1 (FOB)1 (FOB)1 EBITDA margin Capex H1 2022 27.5Mt 28.3Mt $135/t $40/t $2,298m 51% $427m vs. H1 2021 14% 8% 36% 21% 53% 19pp 54% Underlying EBITDA ($m) 4,910 (2,216) 2,810 153 (37) (374) 2,298 (138)
Slide 57: Kumba (Iron Ore) – lower prices drive earnings
Kumba (Iron Ore) – lower prices drive earnings Realised price Unit cost Underlying Mining Production1 Sales1 (FOB)1,2 (FOB)1 EBITDA margin Capex H1 2022 17.8Mt 19.6Mt $135/t $43/t $1,570m 54% $355m vs. H1 2021 13% ~ 0% 38% 8% 48% 15pp 69% Underlying EBITDA ($m) 3,033 (1,692) 1,492 1,570 (20) 93 (15)
Slide 58: Minas-Rio (Iron Ore) – impacted by prices & operational performance
Minas-Rio (Iron Ore) – impacted by prices & operational performance Realised price Unit cost Underlying Mining Production1 Sales1 (FOB)1 (FOB)1 EBITDA margin Capex H1 2022 9.8Mt 8.7Mt $134/t $35/t $728m 45% $72m vs. H1 2021 15% 22% 33% 59% 61% 28pp 6% Underlying EBITDA ($m) 1,877 (524) 1,318 (18) (1
Slide 59: Steelmaking Coal – focused on a safe & stable ramp-up
Steelmaking Coal – focused on a safe & stable ramp-up Realised Underlying Mining Production1 Sales1 price2 Unit cost3 EBITDA margin Capex H1 2022 4.8Mt 5.2Mt $397/t $160/t $1,399m 63% $265m vs. H1 2021 22% 13% 245% 29% n/a 76pp 3% Underlying EBITDA ($m) 1,399 283 1,053 63 44 (18) 1,121 (94) H1 2021
Slide 60: Liquidity
Liquidity 60 Anglo American Stacker Reclaimer at Kolomela
Slide 61: Strong liquidity & limited near-term debt maturities
Strong liquidity & limited near-term debt maturities Liquidity11 Debt repayments ($bn)1 $17.3bn 2.0 1.8 +$9.2bn cash 1.4 +$8.1bn undrawn committed facilities 1.2 1.2 1.0 0.9 0.8 0.7 Majority of cash held centrally in US dollars 0.6 0.5 0.5 0.4 0.3 Strong Investment Grade credit metrics and ratings w
Slide 62: Portfolio overview
Portfolio overview 62 Anglo American Copper pipes
Slide 63: Portfolio overview – key assets
Portfolio overview – key assets1 Diamonds (De Beers) Gahcho Kué Copper 3.2Mcts2 Woodsmith project ~10Mtpa3 PGMs Iron ore Steelmaking coal Nickel Crop nutrients Barro Alto 34kt Quellaveco Marine Namibia Jwaneng/Orapa ~300kt4 1.1Mcts2 22.3Mcts2 Moranbah-Grosvenor 3.1Mt8 Collahuasi Veneti
Slide 64: A differentiated portfolio of high quality assets
A differentiated portfolio of high quality assets Revenue by product1 % PGMs 29 Iron Ore 23 Diamonds (De Beers) 18 Copper 13 Steelmaking Coal 11 Nickel 2 Manganese 2 Corporate & Other 2 1. Group revenue by product based on business unit. 64 Anglo American
Slide 65: Commodity outlook – medium to long term
Commodity outlook – medium to long term • Global economic recovery and growing disposable income drives higher consumer demand Diamonds • Global supply of rough diamonds expected to slightly decline due to lack of significant recent discoveries • Demand is robust in the long term and accelerated dec
Slide 66: De Beers: world leader in diamonds
De Beers: world leader in diamonds Best-in-class business… …focused on consumers Mining EBITDA margin1 Global Diamond Jewellery Demand3 49% USA % 54 China 11 Gulf 4 Trading margin (typical level)2 India 5 Rest of world 26 ~7% Self purchases4 Millennials4 LGD price drops continue5 ~39 % ~64
Slide 67: A growing, world class copper business
A growing, world class copper business Quality assets with growth High value portfolio with long term potential Collahuasi 277 ktpa 1 (our share) ~1 Mtpa 1 Reserve life 86 years2 from ~2023 at mid to low Q2 cost position Los Bronces 328 ktpa 1 647 ~950 ~1,000 Reserve life 36 years2 20213 2023F Long
Slide 68: World leader in PGMs
World leader in PGMs Own mined production Own mined production Asset focused - by volume - by revenue 1. Mogalakwena 2. Amandelbult 63% 54% Mining EBITDA margin Mining EBITDA margin 3. Processing purchased concentrate1 27% Platinum % 46 Rhodium % 45 EBITDA margin1 Palladium 35 Palladium 30
Slide 69: PGMs market
PGMs market Platinum demand1 Basket price driven by Pd and Rh % Automotive 35 Jewellery 22 Industrial 43 ICE vehicles vast majority of light vehicles2 Rhodium +469% Global light duty vehicle production outlook (million vehicles) 106 Battery 82 Hybrid (Pt, Pd, Rh) PGM Basket Gasoline (Pd,
Slide 70: 5E Platinum group metals
5E Platinum group metals Platinum Palladium Rhodium Global mined supply1 ~2 ~6 ~2 ~7 ~0.3 ~0.7 Our supply ~90% of demand is autocatalysts demand Industrial Pt & Pd convert harmful See previous slide for demand data carbon monoxide & Pt & Pd interchangeable in autocats 14% hydrocarbons to CO2 ~$1.6bn
Slide 71: Structural trends favouring high quality bulks
Structural trends favouring high quality bulks Iron Ore: high quality products Steelmaking Coal: premium products Kumba production Minas-Rio production High quality portfolio ~64 % Fe ~67 % Fe ~80 % of which 66% is lump Pellet feed products Hard coking coal (typical level)2 Production (Mt)1 Producti
Slide 72: Woodsmith: a clear strategic fit
Woodsmith: a clear strategic fit Quality asset Competitive product Progressing project infrastructure 27 year life1 ~10Mtpa ~$1.1bn4 invested to date Based on Ore Reserves POLY4 produced post ramp up Key permits in place $40-50/t unit cost Low carbon, organic2 ~$0.6bn4 2022 capex >50% margin potenti
Slide 73: Our transformation journey
Our transformation journey 73 Anglo American Reforestation at Airton Costa, Codemin in Brazil
Slide 74: Our improvement journey
Our improvement journey Portfolio restructuring P101 cost & volume Technical reconfiguration Incremental growth & debottlenecking Operating Model & processes New projects Mining EBITDA margin1 Margin based on long- term consensus commodity prices (which are ~35% lower than the H1 2022 basket price)
Slide 75: A transformed business…
A transformed business… Covid disruption Production index1 Productivity index2 86% Productivity2 Cu Eq unit cost3 Portfolio 5% restructuring 108 Unit costs3 Operating Model and technical improvements ~60% Number of assets 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 1. Copper equivalent pr
Slide 76: Innovation & technology
Innovation & technology 76 Anglo American Hydrogen Truck at Mogalakwena
Slide 77: A sustainable future for mining
A sustainable future for mining 1900 Today Future 40kg Cu: 0.5% Cu 6m 3 water 24t waste 160 KWhr Reduced footprint 4% Cu 3m3 water 1t waste 10 KWhr 1t ore 8t ore Ore-only extraction Carbon neutral Water-less Ever increasing scale Precise. Predictable. Reliable 77 Anglo American
Slide 78: Operational excellence underpins transformation
Operational excellence underpins transformation Operating Model: delivering stable & predictable outcomes Stabilisation at Work is planned, scheduled and properly resourced higher performance Stable and consistent performance Stabilisation at still Further improvement higher impacting stability perf
Slide 79: Innovative technologies: Bulk Ore Sorting
Innovative technologies in development & roll-out Bulk Ore Sorting Sensors determine ore content prior to processing Delivers improved feed grade to plants Waste rejected early: • Grade uplift: +5% to 20% • Energy, water & cost savings Capital cost $10m to $80m (volume dependent) Deployed in Copper,
Slide 80: Innovative technologies: Coarse Particle Recovery
Innovative technologies in development & roll-out Coarse Particle Recovery Flotation process changed An enabler for hydraulic dry stacking Allows material to be crushed to larger particle size: • Throughput increase: +15% to 20% • 20% energy reduction per tonne1 • Up to 85% water recovery with hydra
Slide 81: Innovative technologies: Hydraulic Dry Stacking
Innovative technologies in development & roll-out Hydraulic Dry Stacking Low cost, safe, geotechnically stable dry tailings • Eliminate risk of liquefaction • Increases water recovery ~ 85% • Can be repurposed, benefiting host communities and biodiversity Hydraulic Dry Stacking demonstration at El S
Slide 82: Innovative technologies: nuGen Zero Emissions Haulage Solution
Innovative technologies in development & roll-out nuGen™ Zero Emissions Haulage Solution Developing world’s largest hydrogen powered mine haul truck, including associated refuelling infrastructure • Launched prototype in Q2 2022 • 50% to 70% reduction in emissions (Scopes 1 and 2 for open pit mines)
Slide 83: Innovative technologies: Advanced Process Control
Innovative technologies in development & roll-out Advanced Process Control (APC) • Uses process models, replaces manual control of processes • Optimises process performance • Up to 40% improvements in stability & productivity at certain operations • 4% reduction in water consumption at Los Bronces g
Slide 84: Innovative technologies: Integrated Data Solutions
Innovative technologies in development & roll-out Integrated Data Solutions Industry-first dedicated digital platform to deliver data-driven insights for mining operations Integrated suite of applications across the mining value chain • Creating a set of Digital Twins • Enabling each application to
Slide 85: Innovative technologies: Sustainability: Carbon Neutrality
Innovative technologies in development & roll-out Sustainability: Carbon Neutrality • Vent-air methane abatement • Developing improved Regenerative Thermal Oxidation and other technologies • Addressing ~10-15% of Scopes 1 & 2 emissions • Energy storage • Novel “flow” battery technologies • Energy ec
Slide 86: Sustainability performance
Sustainability performance 86 Anglo American Minas-Rio Seedling Nursery
Slide 87: Our Purpose 'Re-imagine mining to improve people's lives'
Our Purpose ‘Re-imagine mining to improve people’s lives’ 87 Anglo American
Slide 88: Our Sustainable Mining Plan at the heart of our strategy
Our Sustainable Mining Plan at the heart of our strategy 88 Anglo American
Slide 89: Active route to a more sustainable world
Active route to a more sustainable world 2020 2021-22 2030 2040 Carbon 8% SA Thermal Coal demerger completed2 30% 30% energy improvement in absolute reduction neutrality efficiency1 Cerrejón sale of shareholding completed2 energy efficiency3 in GHG emissions3 across our operations4 22% 100% 8 sites
Slide 90: Operations carbon neutral by 2040
Operations carbon neutral by 2040 Scopes 1 & 2 - GHG emissions South America renewable energy Three Solar PV plants in 2030 goal – 30% reduction of South Africa GHG emissions vs 20161 Hydrogen trucks pilot Regionally integrated solar and Southern Africa wind in South Africa electrical supply Carbon
Slide 91: Ambition: 50% reduction in Scope 3 emissions by 2040
Ambition: 50% reduction in Scope 3 emissions by 2040 Scope 3 GHG emissions Production growth in future enabling Thermal coal products mines divested Our ambition: Steelmaking 50% coal reduction Iron ore Production growth Steel value chain outpaces steel value decarbonisation chain decarbonisation ta
Slide 92: Summary inventory of our Scope 3 emissions
Summary inventory of our Scope 3 emissions Scope 3 - GHG emissions 115Mt 77% of our emissions driven by Total Scope 3 emissions steel industry Leased Investments Capital Business Transportation Use of sold assets goods travel & distribution products Purchased Transportation Franchises Operational Em
Slide 93: Industry leading dam safety management
Industry leading dam safety management Managing tailings safely Tailings dams in our portfolio1 Group Technical Specialists Internal risk assurance Downstream/ Independent Technical other Review Panel BU Technical Standard expert Engineer of Record Upstream Southern Australia Operation Africa 6 leve
Slide 94: ESG integrated into management remuneration
ESG integrated into management remuneration SHE targets in annual bonus 20% All employees incentivised on safety Critical tasks include Sustainable Mining Plan roll-out target LTIPs include metrics incentivising delivery of: ESG targets in LTIPs • Reduction in GHG emissions reductions • Improved ene
Slide 95: A sustainable, responsible & transparent business
A sustainable, responsible & transparent business ESG ratings Overall score 78/100 ‘A’ rated ‘Prime’ rated Overall score of 4.5 (out of 5), #4 out of 81 companies assessed On par with peers Industry leader which puts us in the top percentile in the mining & metals category and in joint second place
Slide 96: Measuring our ESG progress: 2022 targets
Measuring our ESG progress: 2022 targets1 Pillar of value Metric H1 2022 H1 20212 Target Target achieved Safety & health Work-related fatal injuries3 1 0 Zero Not achieved Total recordable injury frequency rate per million hours3 2.36 2.34 Year-on-year reduction Not achieved New case of occupational
Slide 97: Investor Relations
Investor Relations Paul Galloway paul.galloway@angloamerican.com Tel: +44 (0)20 7968 8718 Emma Waterworth emma.waterworth@angloamerican.com Tel: +44 (0)20 7968 8574 Michelle Jarman michelle.jarman@angloamerican.com Tel: +44 (0)20 7968 1494 97 Anglo American Kolomela Drone Survey