Anglo American, one of the world’s largest diversified mining companies, had a difficult year at its operations, but paid its investors a 53% higher final dividend.
The company, which has the bulk of its investments in SA, is closing in on the disposal of its export-focused thermal coal business in SA, said CEO Mark Cutifani.
The preferred option was to list the business but there was interest from third parties in buying the assets, he said during a media call to talk about the group’s annual results.
Anglo would undertake intense scrutiny of any potential suitor to see if they could maintain the business, keep jobs, maintain environmental business and have the financial muscle to invest in the assets to ensure long-term sustainability, Cutifani said.
The long-flagged disposal of the thermal coal assets is expected to be concluded during 2022, he said.
Anglo, which is building its large new $2.8bn Quellaveco copper project and Sirius Minerals fertiliser mine in the UK, reported a 41% fall in attributable profit for the year to end-December of $2.1bn.
Anglo is in the second year of its growth phase, which by 2023 will deliver a 20% output growth on a copper equivalent base when compared to 2018, said CFO Stephen Pearce.
Net debt grew to $5.6bn from $4.6bn, with $1.8bn spent on the Quellaveco and Sirius projects among key factors in the increase, but Pearce pointed out Anglo reduced net debt by $2bn during the second half of the year.
Anglo will spend between $1.5bn and $2bn a year on growth projects by the end of 2023.
Anglo declared a final dividend of $0.72 a share compared to $0.47 a year ago.
Earnings before interest, tax, depreciation and amortisation (ebitda), which is essentially an operating profit metric, was 2% lower at $9.8bn.
On a copper equivalent basis to assess the group's entire production performance, output was down 10% for the year.
The 85% held De Beers business took a severe beating from the Covid-19 pandemic, which disrupted production in Botswana — its largest source of rough diamonds — and SA, and, more importantly cut sales by more than a quarter during 2020.
Rough diamond output fell by a fifth to 25-million carats.
The ebitda contribution to Anglo from De Beers fell to $417m from $558m a year earlier.
The coal business, which includes thermal coal from SA and Colombia, and metallurgical coal from Australia, generated just $35m of ebitda for Anglo, compared to $1.8bn a year ago as coronavirus-related disruptions, strikes and operational difficulties were experienced during the year.
It was not all negative, with the iron ore business, which includes a 70% stake in JSE-listed Kumba Iron Ore and the Minas Rio mine in Brazil, generating ebitda of $4.6bn compared to $3.4bn a year earlier.
Anglo American Platinum, an 80% held company, was saved from blushes by very strong platinum group metal (PGM) prices that offset the severe disruptions to its refined output because of ongoing problems with its converter plants during 2020,
As the second-highest contributor to Anglo, the PGM business delivered $2.6bn of ebitda compared to $2bn a year ago.
Copper bumped up its ebitda to $1.9bn from $1.6bn with output rising just 1% to 674,000 tonnes.
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