Anglo American expects to incur significant one-off expenses from its portfolio restructuring this year, which could cost the group up to $1bn (R18.5bn).
According to a production report on Thursday, the miner expects $300m in restructuring costs as it reconfigures its business to focus solely on premium iron ore, copper and crop nutrients.
Added to this are the hefty taxes and transaction costs associated with the sale of Anglo’s steelmaking coal assets and the demerger of Anglo American Platinum (Amplats), estimated at $200m and $400m-$500m, respectively.
This year is “undoubtedly a year of portfolio and organisational transition for Anglo”, said CEO Duncan Wanblad, who emphasised that the portfolio simplification would improve the group’s investment proposition, particularly amid ongoing trade wars and economic uncertainty.
“While the impact of tariffs on the global economy is uncertain in the short term, we have conviction in the strong longer-term outlook for our products, which have scope to become even more important to the changing global economy in coming years,” he said.
Copper is expected to play a critical role in the green energy transition, electrification of the automotive sector and the growth of data centres, while long-term demand for copper, iron ore and crop nutrients is underpinned by industrialisation.
“Our restructuring and cost-savings programme remains on track, giving us confidence that we are well on our way to reshaping our business and embedding far greater resilience, both through the cycle and in the current volatile macro environment,” Wanblad said.
As part of its restructuring, Anglo has already received $870m for its Jellinbah coal mine, with another $2.05bn on the way when US miner Peabody Energy acquires the remaining steelmaking coal assets.
Anglo aims to conclude this deal, as well as the sale of its nickel business to MMG Singapore Resources for $350m, in the third quarter of this year, while the divestment of Amplats is set for the end of next month, subject to shareholder approval on April 30.
Anglo has already cut an 11.9% stake out of its original 79% shareholding in Amplats and plans to retain 19.9% of the company once the demerger is concluded.
The first quarter saw the group finalise a new long-term sales agreement with the government of Botswana, a step towards selling diamond unit De Beers. However, with diamond markets under pressure from low prices — largely owing to the popularity of lab-grown diamonds — the search continues for a buyer.
Wanblad assured investors the company was “committed to completing the divestment at the right time and when market conditions allow”.
The mining giant reported lower first-quarter output for most of the minerals it produces but maintained its full-year production guidance.
Copper production slipped 15% year on year to 168,900 tonnes in the quarter to end-March, owing to a weaker performance at the group’s Chilean operations.
However, the group was optimistic that Chilean production would rebound in the second half, as it looked to secure “definitive agreements” with Chilean state-owned copper miner Codelco to develop a joint mine plan for Los Bronces and Andina later this year.
Full-year copper production guidance was maintained at 690,000-750,000 tonnes.
Iron ore production was also in line with guidance, with output rising 2% to 15-million tonnes thanks to a strong performance at Minas-Rio, the group’s Brazilian unit.
In SA, Anglo subsidiary Kumba Iron Ore posted a 7% increase in sales thanks to an improved operational performance at the Saldanha Bay port compared to last year.
Kumba produced 9-million tonnes of iron ore during the quarter, down 3% from a year ago, as a dip in output from the Sishen mine was offset by higher volumes from Kolomela.
Kumba CEO Mpumi Zikalala cited improvements in Transnet’s rail performance and the group’s reconfiguration last year, with new separation technology implemented at Sishen promising to improve the production of premium grade ore.
Note: April 24 2025
This story has been updated with new information throughout.
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