Diversified miner Anglo American has put more projects into its growth pipeline, taking its total value to $85-billion, $15-billion up on the previously quoted $70-billion.
Anglo American CEO Cynthia Carroll told the media that half of the $85-billion was earmarked for South America and some 45% for mainly South Africa and also Southern Africa.
Carroll was talking to the media after presenting a set of strong results that saw Anglo American’s core operating profit rise 45% to R5.9-billion in the six months to June 30.
She had earlier put up a spirited defence of Anglo American’s strong South African presence in the face of analysts’ queries.
Twenty new projects, she said, had been added to more than 70 projects in the pipeline of future options that included 14 South African and Southern African projects in the approved category valued at $4.8-billion, and another $3-billion at the unapproved stage.
The company’s diversified project growth pipeline that fitted the cycles right acrossball mill jual ada di indonesia the emerging developing-country spectrum would enable the company to more than double its production in the next decade.
“Our growth profile sets us apart,” says Carroll.
Anglo American South Africa executive director Godfrey Gomwe reported that seven bidders had prequalified for the 450 MW discard coal-fired power project that Anglo American was facilitating in Emalahleni, from which South Africa’s first large-scale conventional independent power pro- ducer is set to win a 25-year agreement to ‘wheel’ all the power pro- duced to Anglo American Platinum.
Group CFO Rene Medori, in reply to Mining Weekly, said that mining cost inflation in South Africa was higher than in any of thecrushing machines manufacturers in usa other geographies in which Anglo American operated.
That was so because of the 26% electricity tariff increase a year over three years and also the level of wage increases, which were from 4% to 5% above the consumer price increase.
“Clearly, it’s a major challenge,” he added.
As a consequence, the company had constantly to be on the lookout for asset optimisation and cost improvement to mitigate the inflationary pressure.
But Carroll hastened to add that there were challenges in all of the geographies in which Anglo American operated and that she was a strong believer in South Africa and in its employee base, which she regarded as “absolutely outstanding”.
“If you look at our pmetal crushers in indiaerformance in the first half of this year in, let’s say, Kumba Iron Ore, it’s really very, very impressive.
“Our thermal coal business is getting stronger all the time with the demand potential out of India.
“I would say that we have to keep working at it. Nothing’s automatic, but we have challenges everywhere,” Carroll commented to Mining Weekly.
Earlier, Carroll had taken some stick from Bank of America Merrill Lynch analyst Jason Fairclough, who drew attention to Anglo American having almost half of its eggs in the South Africa basket, where there are elements of the ruling African National Congress party that were “very focused” on pushing the mine nationalisation debate.
Fairclough wanted to know how Carroll managed the fallout from that, to which Carroll reiterated her stand that nationalisation does not work and that the mining industry contributes 8.6% of South Africa’s gross domestic product (GDP) as a whole and Anglo American alone 2.5% of GDP.
“We’ve received consistent readings from the South African government and expressions of an absolute position on mine nationalisation from the Minister, the President and the Deputy President, and we continue to believe in South Africa,” Carroll said, adding that Anglo American’s “real growth” was still to come and that its focus was to become “the leading global mining company”.
The company had certainly been moving down the cost curve, with 100% of its iron-ore and metallurgical coal and virtually all of the export thermal coal being in the lower half of the cost curve.
The company had delivered far greater total shareholder returns and all that remained was to do so on a continuous basis.
Carroll also put up a strong defence of the company’s position in platinum after an analyst suggested that there would be a big uplift in the value of Anglo American if Anglo American Platinum were to be unbundled.
She said Anglo American believed that platinum-group metals (PGMs) were highly attractive and had “fantastic” long-term fundamentals in that PGMs provided material exposure to late cycle development of the emerging countries and the shift towards carbon-reduction technologies.
The company’s platinum portfolio represented the world’s best tier-one resource position.
Safety in platinum mining was up 70%, the number of employees had been reduced by 30 000 and costs were flat for three consecutive years.
Platinum demand was positioned at 4% a year for the next ten years and the supply outlook was constrained.
Gomwe drew attention to the R100-million fund that Anglo American Platinum had announced to encourage research and development into alternative uses of platinum to realise the green economy, in general, and the development of the fuel cell, in particular.
In the six months to June 30, the company’s underlying earnings rose 40% to $3.1-billion and profit attributable to shareholders rose 93% to $4-billion. Net debt is at $6.8-billion.
Kumba maintained iron-ore levels despite first-quarter rains and thermal coal exports from South Africa rose 5%.
Nickel production was enhanced by the Barro Alto project and refined platinum production increased 17% to 1.2-million ounces.
Cost cutting yielded $1.3-billion and the sale of noncore businesses was reported to be largely complete, having provided $3.3-billion in cumulative proceeds to date.
The drive towards zero harm is being continued to address the disappointing safety performance, which resulted in ten lives being lost in the six months.