Plain-text annual report
Integrated
Annual Report
2021
Our Purpose
Re-imagining
mining to
improve
people’s lives
Transforming the very nature of
mining for a safer, smarter, more
sustainable future.
Using more precise technologies, less energy and
less water, we are reducing our environmental
footprint for every ounce, carat and kilogram of
precious metal or mineral.
We are combining smart innovation with the
utmost consideration for our people, their families,
local communities, our customers, and the world
at large – to better connect precious resources in
the ground to all of us who need and value them.
And we are working together to develop better
jobs, better education and better businesses,
building brighter and healthier futures around our
operations in our host communities and ultimately
for billions of people around the world who
depend on our products every day.
Group performance
Revenue
Underlying EBITDA◊
$41.6 bn
$20.6 bn
2021
$41.6 bn
2020
$25.4 bn
2021
$20.6 bn
2020
$9.8 bn
Operating profit
Underlying earnings per share◊
$17.6 bn
2021
$17.6 bn
2020
$5.6 bn
$7.22
2021
$7.22
2020
$2.53
Profit attributable to equity
shareholders
Net debt◊
$8.6 bn
2021
$8.6 bn
2020
$2.1bn
$3.8 bn
2021
$3.8 bn
2020
$5.5 bn
Total dividends per share
Attributable free cash flow◊
$4.19
2021
$4.19
2020
$1.00
$7.8 bn
2021
$7.8 bn
2020
$1.2 bn
Group attributable ROCE◊
Number of fatalities
43%
2021
43%
2020
17%
1
2021
2020
1
2
Total recordable case frequency
rate (TRCFR)
Level 4-5 environmental incidents
2.24
2021
2.24
2020
2.14
0
2021
2020
0
0
Cover image
At our Sakatti polymetallic project in northern Finland,
women make up 43% of the workforce. Featured is
safety, health and environment (SHE) field co-ordinator
Liisa Kropsu during winter drilling activities.
◊ Alternative Performance Measures
Words with this symbol ◊ are defined in the Alternative Performance Measures
section of the Integrated Annual Report on pages 270 to 275.
Contents
Portfolio
22
Innovation
30
People
50
Strategic Report
02 Our business at a glance
04 Chairman’s statement
06 Chief Executive’s statement
08 Our Business Model
10 Purpose to value
12 Creating value for all
stakeholders
14 How we make decisions
15
Understanding our
stakeholders
Our material matters
Looking at global trends
Reflecting stakeholder
views in our Board
decision making
Key decisions made
in 2021
16
18
20
21
Innovation
22 Portfolio
30
50 People
58 Capital allocation
60 Managing risk effectively
68 Key performance
indicators
70 Marketplace review
72 Group financial review
76 De Beers
80 Base Metals
86 Platinum Group Metals
(PGMs)
90 Bulk Commodities
98 Crop Nutrients
100 Corporate and other
101 Non-financial information
disclosures and footnotes
102 Disclosures related to the
recommendations of the
TCFD
104 Streamlined energy and
carbon reporting
Governance
106 Chairman’s introduction
108 Directors
112 Executive management
114 Board roles and
responsibilities
116 Board operations
117 Board activity
120 Board effectiveness
122 Stakeholder engagement
124 Sustainability Committee
report
126 Nomination Committee
report
128 Audit Committee report
135 Directors’ remuneration
report
139 At a glance
142 Directors’ remuneration
policy
146 Annual report on directors’
remuneration
162 Statement of directors’
responsibilities
Financial statements
and other financial
information
164 Independent auditors’ report
173 Primary statements
177 Notes to the financial
statements
256 Financial statements of the
Parent Company
259 Summary by operation
261 Key financial data
262 Exchange rates and
commodity prices
Ore Reserves and Mineral
Resources
264 Estimated Ore Reserves
266 Estimated Mineral Resources
Other information
268 Glossary of terms
270 Alternative performance
measures
276 Production statistics
279 Quarterly production
statistics
280 Non-financial data
282 Directors’ report
286 Shareholder information
IBC Other Anglo American
publications and legal
disclaimers
Basis of reporting
The Anglo American plc Integrated Annual Report for the year ended 31 December 2021 is
produced in compliance with UK regulations. Additionally, we have compiled this report using
the Guiding Principles and Content Elements set out in the International Integrated Reporting
Council’s Framework.
Integrated Reporting aims to demonstrate how companies create value sustainably over
time, for a range of stakeholders – consistent with Anglo American’s Purpose, business
approach and strategy. This report, therefore, includes a comprehensive overview of our
material matters, in the eyes of our stakeholders, and the impact these matters have on the
value we create.
Measuring performance
Throughout the Strategic Report we use a range of financial and non-financial measures to
assess our performance. A number of the financial measures are not defined under IFRS so
they are termed ‘Alternative Performance Measures’ (APMs). We have defined and explained
the purpose of each of these measures on pages 270–275, where we provide more detail,
including reconciliations to the closest equivalent measure under IFRS. These APMs should be
considered in addition to, and not as a substitute for, or as superior to, measures of financial
performance, financial position or cash flows reported in accordance with IFRS.
Units
‘Tonnes’ are metric tonnes, ‘Mt’ denotes million tonnes, ‘kt’ denotes thousand tonnes, ‘Mct’
denotes million carats and ‘koz’ denotes thousand ounces; ‘$’ and ‘dollars’ denote US dollars
and ‘cents’ denotes US cents.
Forward-looking statements and third-party information
This document includes references to the Anglo American Group, forward-looking statements
and third-party information. For information regarding the Anglo American Group, forward-
looking statements and such third-party information, please refer to the IBC of this document.
Non-financial information disclosures
Non-financial information in this report includes subsidiaries and joint operations over
which the Anglo American Group has management or acts as operator. It does not
include independently managed operations, such as Collahuasi and Samancor, nor
does it include De Beers' non-managed joint operations in Namibia and Botswana,
unless specifically stipulated.
We comply with all relevant non-financial reporting requirements, including those
contained in sections 414CA and 414CB of the Companies Act 2006; the Financial
Stability Board's Taskforce on Climate-related Financial Disclosures (TCFD); and
the Streamlined Energy and Carbon Reporting (SECR) rules. The tables on pages
101–104 are intended to guide stakeholders to where the relevant non-financial
information is included within our Strategic Report and other externally available
Anglo American plc publications.
Our reporting suite
You can find this report and others, including the Sustainability
Report, the Climate Change Report, the Tax and Economic
Contribution Report, and the Ore Reserves and Mineral Resources
Report, on our corporate website.
→ For more information, visit:
www.angloamerican.com/investors/annual-reporting
Social channels
AngloAmerican
@angloamerican
Anglo American
angloamerican
angloamericanplc
01
Anglo American plc Integrated Annual Report 2021 Our business at a glance
Anglo American is a leading global mining
company, with a world class portfolio of mining
and processing operations and undeveloped
resources, with more than 106,000 people
working for us around the world, in 15 countries.
We provide many of the essential metals and minerals that are fundamental
to the transition to a low carbon economy and enabling a cleaner, greener,
more sustainable world, as well as meeting the growing consumer-driven
demands of the world’s developed and maturing economies. And we do so
in a way that not only generates sustainable returns for our shareholders,
but that also strives to make a real and lasting positive contribution to society
as a whole.
→ For more information, see our Tax and Economic Contribution Report
See www.angloamerican.com/tec-report-2021
North America
800 employees(2)
$69 m wages and benefits paid(3)
$42 m taxes and royalties(4)
$112 m local procurement spend(5)
Canada
1
→ Our overview video gives a complete introduction
to what we do and our ambitions for the future
See https://youtu.be/6TKaHzCT4YY
Brazil
4,100 employees(2)
$120 m wages and benefits paid(3)
$524 m taxes and royalties(4)
$1,029 m local procurement spend(5)
Peru
750 employees(2)
$57 m wages and benefits paid(3)
$22 m taxes and royalties(4)
$1,176 m local procurement spend(5)
Chile
4,300 employees(2)
$378 m wages and benefits paid(3)
$959 m taxes and royalties(4)
$1,829 m local procurement spend(5)
1
Peru
3
Chile
Brazil
2 1
Product groups*
Diamonds
Copper
Nickel
Platinum Group Metals
Iron Ore
Metallurgical Coal
Manganese
Crop Nutrients
* Number within dot denotes number of operations, shown by product.
02
Anglo American plc Integrated Annual Report 2021Strategic Report Base Metals
Diamonds
$1,100 million
Underlying EBITDA◊
5%
Group underlying EBITDA◊
32.3 Mct
Production (100% basis)(1)
Copper
$4,011 million
Underlying EBITDA◊
Nickel
$320 million
Underlying EBITDA◊
PGMs
$7,099 million
Underlying EBITDA◊
19%
Group underlying EBITDA◊
2%
Group underlying EBITDA◊
34%
Group underlying EBITDA◊
2 greenfield projects
Peru (Quellaveco) and Finland
(Sakatti)
41.7 kt
Production: Nickel
4,299 koz
Production: PGMs
647 kt
Production
Bulk Commodities
Metallurgical Coal
$962 million
Underlying EBITDA◊
Manganese
$315 million
Underlying EBITDA◊
Iron Ore
$6,871 million
Underlying EBITDA◊
33%
Group underlying EBITDA◊
5%
Group underlying EBITDA◊
3.7 Mt
Production: Manganese ore
40.9 Mt
Production: Iron ore – Kumba
14.9 Mt
Production: Metallurgical
22.9 Mt
Production: Iron ore – Minas-Rio
Crop Nutrients
$(41) million
Underlying EBITDA◊
Woodsmith is a greenfield project
Corporate and other
$(3) million
Underlying EBITDA◊
→ More detailed information
and maps can be found in
the business unit reviews
See pages 76–100
Finland
United Kingdom
1
Europe
2,800 employees(2)
$452 m wages and benefits paid(3)
$402 m taxes and royalties(4)
$619 m local procurement spend(5)
Other Africa
6,600 employees(2)
$334 m wages and benefits paid(3)
$721 m taxes and royalties(4)
$495 m local procurement spend(5)
Singapore
Shanghai
Australia/Asia
2,800 employees(2)
$484 m wages and benefits paid(3)
$416 m taxes and royalties(4)
$1,570 m local procurement spend(5)
2
Botswana
2
Namibia
Zimbabwe
1
Australia
1
5
South Africa
1
2
5
1
South Africa
41,450 employees(2)
$1,813 m wages and benefits paid(3)
$4,049 m taxes and royalties(4)
$3,148 m local procurement spend(5)
See page 101 for footnotes.
03
Anglo American plc Integrated Annual Report 2021 Chairman’s statement
“We have a critical role to supply
many of the metals and minerals
essential to decarbonise energy
and transport, and to do so
responsibly.”
Re-imagining mining to
improve people’s lives
That responsibility includes supporting
a ‘Just Transition’, helping to create
environmentally and socially sustainable jobs
that are consistent with addressing the most
urgent issue of climate change.
In another year of Covid-19 related uncertainties, Anglo American
performed strongly, doing our utmost to keep people safe and
healthy while sustaining operations near capacity and keeping our
major capital projects on track. We also made further headway in
transitioning our portfolio towards those products that are essential
for a low carbon future and that support a growing global consumer
population, including by exiting our thermal coal operations.
Safety
We continue to pay unremitting attention to safety. Notably, there were
no fatal incidents anywhere in the Group for a period of 11 months
to August when, regrettably, we lost one colleague at our major
development project in Peru. A death is a terrible loss for family, friends
and colleagues and we will continue to increase our efforts to keep
everyone safe.
Disappointingly, we saw the key indicator of the injury rate plateau
after many years of progressive improvement, highlighting the work
we still need to do to reach zero harm, particularly as we learn to live
with Covid-19 at our operations. One of the things that is demonstrably
making a difference is our Elimination of Fatalities programme. We are
putting increased resources behind that, and I am encouraged by its
headway. Through this work, we are gaining a better understanding
of how serious incidents happen, helping us to prioritise actions to
eliminate risk at the workplace, as well as travelling to and from work.
Helping our people through Covid-19
We have continued to help protect our people and host communities
from the ongoing impacts of Covid-19. Through our comprehensive
WeCare response programme, we support the physical and mental
health of those who work for us, while also ensuring we can still
provide the wide range of essential services on which many of our
host communities rely.
As vaccines were approved during the first half of the year, we made
available $30 million of support towards the global roll-out of Covid-19
vaccines across our operational footprint. Our own efforts to vaccinate
our workforce in South Africa – representing almost half of our global
employees – through our established health infrastructure and to
support the government’s vaccination programme, have proven vital in
boosting protection from the virus. Looking beyond the pandemic, we
also made a special contribution of $100 million to the Anglo American
Foundation to fund longer term health, social and environmental
projects in our host communities and countries of operation.
Sustainable mining
Climate change is the defining challenge of our time, and
Anglo American is committed to playing its part in addressing it, across
our value chain. Our Sustainable Mining Plan includes commitments
04
Anglo American plc Integrated Annual Report 2021Strategic Report to be a leader in environmental stewardship. It already embraces
a holistic set of ambitious goals, which are aligned to the UN’s
Sustainable Development Goals (SDGs).
By 2030, we have goals to reduce GHG emissions (Scopes 1 and 2)
by 30% against a 2016 baseline; improve energy efficiency by 30%;
achieve a 50% net reduction in freshwater abstraction in water scarce
areas; and deliver net-positive impacts in biodiversity wherever we
operate. To these targets, we added a target to be carbon neutral
across our operations by 2040 and, last year, our ambition to reduce
our Scope 3 emissions by 50%, also by 2040.
to society, stakeholders’ expectations of mining companies are rising.
We welcome scrutiny and seek to ensure that all those who work for
Anglo American have a clear understanding of the role the company
plays and their role as individuals to live up to each of our Values, to
embrace our culture and be guided by our Purpose.
Over the past few years, the Board has been engaging more closely
with front-line employees. Our Global Workplace Advisory Panel held
two meetings during the year and is proving valuable in promoting
understanding of the interests of employees and directors alike, building
on the range of other engagement mechanisms across the Group.
We are making good progress towards these goals, as detailed in our
Climate Change Report and Sustainability Report.
Our Board
In tune with our Purpose of re-imagining mining to improve people’s
lives, we set out some years ago a very different future for mining
that we refer to as FutureSmart Mining™. This integrated approach
to technology and digitalisation is designed to deliver a broad
range of sustainability outcomes, including across the three pillars of
environment, social and governance (ESG). This work spans many of
our physical mining processes, acting as a catalyst for self-sustaining
regional economic activity and advocating for policies that support
decarbonisation and ethical sourcing of raw materials, as examples.
Portfolio and performance
Our portfolio of assets is ever more focused on the materials that
will enable both the move to a lower carbon economy and meeting
demand from the world’s growing consumer population.
Our Quellaveco copper mine in Peru is on schedule for commissioning
in mid-2022 and will boost our supply of one of the modern world’s
most-needed energy-transition metals. Meanwhile, construction of the
Woodsmith fertiliser project in the UK is progressing while we finalise its
design configuration to suit Anglo American’s greater ambitions for the
asset over the long term.
In June, we demerged to our shareholders our thermal coal operations
in South Africa and we finalised our exit from thermal coal production
operations in January 2022, upon completing the sale of our minority
shareholding in Cerrejón, in Colombia.
Today, Anglo American has one of the industry’s most compelling
organic growth profiles – volume growth of 35%(6) over the coming
decade – across the diversified mix of metals and minerals that are
required for a transition to a cleaner, greener world.
For 2021, we saw strong demand and prices for many of our products
as economies recovered from the widespread disruption of 2020,
though with some faltering in the second half as labour shortages led to
supply chain issues and, in turn, slower growth, most notably in China.
At the same time, energy and fuel prices have surged, contributing to
the highest inflation rates we have seen in the major economies for
more than a decade.
Improved operational performances at PGMs, De Beers and Iron Ore
contributed to a 5% production increase, while acknowledging some
weakness in the comparatives for Metallurgical Coal and PGMs in
2020. Combined with strong prices, we delivered a record financial
performance in 2021, generating underlying EBITDA of $20.6 billion.
The Board has recommended a final dividend of $1.18 per share, in
line with our 40% of underlying earnings payout policy, and a further
special dividend of 50 cents per share, bringing total dividends for the
year, including the special dividend paid in September, to $4.19 per
share. Combined with our $1 billion share buyback programme, our
total cash return to shareholders in respect of 2021 exceeds $6 billion.
Anglo American’s Total Shareholder Return (TSR) for the year was 35%,
second amongst the UK-listed mining majors and almost double that of
the FTSE 100 at 18%.
We have significantly refreshed the composition of the Board to
ensure we reflect an appropriate mix of skills, experience and diversity
to suit the evolving nature of the business and the expectations of
society. Succession planning for all directors is a critical and ongoing
cycle of work.
As part of that renewal, there were several non-executive director
changes during the year. Elisabeth Brinton joined the Board on
1 March 2021, followed by Hilary Maxson on 1 June, and Ian Tyler
on 1 January 2022.
Anne Stevens and our senior independent director, Byron Grote, will
step down from the Board at the next AGM in April 2022, having both
served for nine years. On behalf of the Board, I thank them for their
extensive contributions.
In 2021, we again took great care to assure continuity in the Board’s
proceedings. A full schedule of meetings, including those of the
Board’s committees, was held as planned, albeit the majority in a virtual
environment. More information on the Board’s discussions and decision
making can be found on pages 117–119.
Chief executive succession
I would like to take this opportunity to pay tribute, on behalf of the Board
but also personally, to Mark Cutifani, who will be stepping down as
chief executive at the conclusion of the AGM in April 2022 after almost
a decade at the helm. He is a truly inspiring and authentic leader who
has led his executive team with distinction through thick and thin to
transform Anglo American’s performance and prospects, helping build
a culture of self-belief and resilience. His legacy in the areas of safety,
the power of engagement, and his determination to create a very
different and sustainable future for mining, enabled through technology,
deserves particular recognition.
Following a rigorous global process to identify Mark’s successor,
including those candidates on our internal succession plan, the
Board concluded that Duncan Wanblad is the stand-out successor,
bringing his 30 years of international mining experience and deep
understanding of Anglo American, its culture and its context. Duncan
has been integral to the reshaping of the company and is uniquely
qualified to take Anglo American forward.
Thanks
I would like to thank all our employees, the senior management team
and Board for their adaptability and resilience and their unremitting
efforts in helping drive our business forward in accordance with our
Purpose and Values.
Our Strategic Report
Our 2021 Strategic Report, from pages 2 to 104, was reviewed and
approved by the Board on 23 February 2022.
Governance
Today, ESG considerations could not be more mainstream but nor are
they new to Anglo American. From our portfolio choices, to how we
mine, process and transport our products and contribute more broadly
Stuart Chambers
Chairman
See page 101 for footnotes.
05
Anglo American plc Integrated Annual Report 2021 Chief Executive’s statement
A safer, smarter
future for mining
Mining’s critical contribution to modern life
is ever clearer and we must ensure we are
attuned to the health of our planet and the
needs and expectations of society.
At Anglo American, our Purpose is to re-imagine mining to improve
people’s lives in a way that meets those expectations, while enhancing
our competitiveness and opportunities to create enduring value for our
shareholders and our diverse stakeholders.
As the pandemic evolves, we continue to do the right thing by our
employees and our communities through our global WeCare response
programme, focused on protecting both physical and mental health
and lives and livelihoods. As vaccines became available during 2021,
we volunteered $30 million of support towards their roll-out, in support
of our host governments. And looking beyond the pandemic, we have
donated $100 million to create a special endowment to support the
incredible work of the Anglo American Foundation.
Safety and health
We understand that ‘People are the business’, and so we have no
doubt about our most important priority: keeping our colleagues safe
and well.
We continue to make progress in reducing fatal incidents and with our
broader safety processes and procedures. Sadly, however, we still lost
one colleague in a vehicle incident at our major project in Peru. Our
total injury frequency rate also tracked up marginally, after multiple
years of progressive improvement, reflecting the changed operating
configurations necessary to manage Covid-19 that tend to disrupt
planned work routines. The increase in the first half of the year reduced
in the second half as we reinforced the importance of these new
routines across the business.
On fatal incidents, our Elimination of Fatalities Taskforce has supported
a 93% reduction in fatal incidents since 2013 and we have extended
this work to our non-managed joint operations, as they reported three
fatal incidents in the year. For us, every loss of life is a tragedy, and we
will continue to mobilise our resources across the Group to support our
zero harm imperative.
We also look beyond safety, working towards everyone being better
off and healthier having worked for Anglo American. This drives
our thinking and the commitment to quality of life and sustainable
livelihoods across the company. Our work to tackle the scourge of
gender based and domestic violence exemplifies our approach.
Our health focus remains on helping keep our people protected from
Covid-19. In many ways, the pandemic has proven more challenging
this year than last, particularly in those countries where vaccination
roll-outs have been slower and uptake lower. We have provided
significant monetary and other support to accelerate vaccination
rates, including by using our own health facilities and encouraging
vaccination at the earliest opportunity.
Financial performance
In a year of two distinct halves, we recorded strong demand and prices
for many of our products as economies recouped lost ground, spurred
06
by stimulus measures. Copper and the platinum group metals and
premium quality iron ore for greener steelmaking, supported by an
improving market for diamonds, all contributed to a record financial
performance, generating underlying EBITDA of $20.6 billion.
We generated attributable free cash flow of $7.8 billion due largely to
a strong price environment in the first half which moderated for many
products in the second half. Our return on capital employed of 43%
was well above our targeted 15% through-the-cycle return, as it should
be in times of strong pricing. We are resolutely committed to capital
discipline and to maintaining a strong and flexible balance sheet. At the
end of 2021, net debt of $3.8 billion, or 0.2 x underlying EBITDA, reflects
the strong cash generation of the business, partly offset by the growth
investments we are making.
The proposed final dividend of $1.18 per share, in line with our 40%
payout policy, in addition to a special dividend of $0.50 per share, will
bring our total return to shareholders in respect of 2021 to $6.2 billion,
including our share buyback, equal to $4.99 per share. Upon payment,
Anglo American will have returned more than $12.3 billion to
shareholders since 2017. On a relative basis, our strong TSR for the
year of 35% almost doubled that of the FTSE100 index.
Operating performance
We continue to deliver significant operational improvements, through
our Organisation and Operating models raising efficiency and
productivity – and through the deployment of FutureSmart Mining™.
Improved operational performances, in PGMs, De Beers and Kumba
(Iron Ore) in particular, contributed to a 5% volume increase – while
recognising our operational challenges in PGMs and Metallurgical
Coal in the prior year – supporting a 13-point increase of our mining
EBITDA margin.
Since 2013, we have delivered $4.6 billion of annual underlying
EBITDA improvement and we have increased our near term
performance improvement target to $3.5–4.5 billion for the six-year
period to 2023 as we accelerate the delivery of our P101 business
improvement and technology programmes, and bringing our organic
growth projects on stream.
Strategy: Portfolio
Anglo American offers an increasingly differentiated investment
proposition centred around sustainable performance and high quality,
responsible growth of 35%(6) over the next decade. First and foremost
is our Quellaveco copper project in Peru, expected to come on stream
in mid-2022, where we have also increased early production plans to
create additional value.
The greater proportion of our output and investment capital is
focused on what we call future-enabling products – with thermal coal
moving out of the portfolio, replaced by growth in Copper, PGMs and
Crop Nutrients. We are well positioned to run the business sustainably
and – being disciplined with our capital – to grow production as a
foundation for future returns.
Looking at the overall direction of our business and how we integrate
the full breadth of sustainability considerations, our products are
aligned with demand from an increasingly electrified and connected
world: a greener world of renewable energy, the emerging hydrogen
Anglo American plc Integrated Annual Report 2021Strategic Report “Together, we have transformed
our company’s competitive
position and led the way
towards a safer, smarter, more
sustainable future that delivers
enduring value for all our
stakeholders, and our planet.”
economy, and tighter emissions standards; more sustainable crop
production; cleaner steel; and the infrastructure and consumer
demands of a fast growing population.
Our sequence of organic growth opportunities is central to the long
term sustainability of our business, and we will be agile and disciplined
in assessing external opportunities to supplement that pipeline and
that fit our future-enabling trajectory.
Strategy: Innovation
Our industry is on the cusp of significant change led by the accelerating
pace of technological innovation. Digitalisation, artificial intelligence
and automation are all opening up opportunities for safer, more
productive, and environmentally and socially sustainable mining,
embodied through our FutureSmart Mining™ programme. This is a
future where we eliminate workplace fatalities, we radically improve our
productivities and the way we use land, energy and water, and where
our communities thrive – with better health, education and employment
– long beyond the life of any mine.
FutureSmart Mining™ brings together step-change innovations in
technology and digitalisation to drive targeted safety and sustainability
outcomes, as set out in our Sustainable Mining Plan, and providing the
foundations for ongoing business improvements.
Our Sustainable Mining Plan focuses on our three pillars of Healthy
Environment, Thriving Communities, and Trusted Corporate Leader,
each with three stretch goals that are deliberately ambitious and are
designed to challenge us to lead and innovate. Our environmental
commitments include a target of reaching carbon neutrality across our
operations by 2040, and we have added our ambition to reduce our
Scope 3 emissions by 50% in the same timeframe.
The transition to a low carbon world requires significant change, and
while that change presents major opportunities for many, it presents
risks and anxieties for others. We have a role in supporting host
communities to thrive through and beyond this change. Together with
our partners, we aim to be part of creating environmentally and socially
sustainable jobs, sectors and economies in support of a ‘Just Transition’.
create safe, inclusive, and diverse workplaces that encourage high
performance and innovative thinking. We know that for people to give
their best, we need to understand their viewpoints and address any
concerns they may raise about working for us.
A few years ago, we expanded our efforts through both listening to
employees and adding their perspectives to the Board’s deliberations
on culture through our Global Workforce Advisory Panel. The Panel is
made up of employees from each of the countries where the Group
has a significant presence and is currently chaired by our senior
independent director, Byron Grote.
Our distinct Organisation Model has made our work safer and more
productive, enabling continuous improvement through connection
and synchronisation of work. It is our more than 106,000 people who
deliver our performance every day and who are our best ambassadors,
engaging with each other and our array of stakeholders, and
supporting our ambitions.
Thank you
There has been no greater privilege for me than leading
Anglo American and our incredible people over the last nine years.
Together, we have transformed our company’s competitive position
and led the way towards a very different future for mining – a safer,
smarter, more sustainable future that delivers enduring value for all
our stakeholders.
By delivering on our promises, we have established the credibility and
capabilities that are the foundation for Anglo American’s next phase
of growth. I can think of no better leader than Duncan Wanblad to pick
up the baton and pursue the many opportunities that lie ahead for our
business. 2022 marks the start of a new and exciting chapter as we
create the new Anglo American.
I thank the Board for its support of everything we are aiming to achieve,
the executive team for their tenacity and friendship, every one of our
employees for their sheer resilience, and all our stakeholders for their
spirit of engagement.
Strategy: People
The modern mining industry that we are helping to shape places
people even more at its heart. People are central to everything we do,
and each individual has expectations of us. Workforce engagement
is a priority for every leader at Anglo American and we strive to
Mark Cutifani
Chief Executive
See page 101 for footnotes.
07
Anglo American plc Integrated Annual Report 2021 Our Business Model
Our inputs
How we create shared value
Anglo American draws upon a
number of key inputs that, through
targeted allocation, development,
extraction and marketing,
create sustainable value for our
shareholders and our diverse range
of stakeholders.
→ For our KPIs
See pages 68–69
Ore Reserves and Mineral Resources: We have
high quality and long life mineral assets across
our businesses and across a wide geographic
footprint, providing a suite of organic options for
delivering value over the long term. Our Discovery
teams work to discover mineral deposits in a safe
and responsible way to replenish the resources
that underpin our future success.
Other natural resources: Mining and processing
activities have long been major users of water and
energy. Our technical and social expertise combine
to provide advice and support to our operations to
mitigate their water and energy requirements, while
also developing new technologies that have the
potential to significantly reduce our physical and
environmental footprint.
Know-how: We link our industry-leading technical
and market knowledge across the Group to realise
even greater value from our resource base and
optimise mine production plans to ensure we
provide products reliably to our customers around
the world, meeting their specific technical and
logistical requirements.
Relationships with stakeholders: Open and
honest engagement with our stakeholders is
critical in gaining and maintaining our social and
regulatory licences to operate. Working within
our social performance framework, it is our goal
to build and sustain constructive relationships
with our host communities and countries that are
based on mutual respect, transparency and trust.
Plant and equipment: Our procurement and
technical teams form strong relationships with
major suppliers to deliver tailored equipment
and other solutions to enable best-in-class
operating performance and cost-effectiveness.
We implement local procurement policies that
support suppliers based in the host communities
close to our operations – making a significant
socio-economic contribution, as well as lowering
logistics costs.
Financial: Our strong focus on productivity, cost
discipline and working capital management
helps to drive sustainable positive cash flows.
Our financial resources are allocated to where
they can deliver optimal financial returns for our
shareholders.
Materiality and risk
Identifying and understanding our
material matters and risks is critical in the
development and delivery of our strategy.
→ For our material matters
See pages 16–17
→ For our principal risks
See pages 60–67
Governance
Our governance controls ensure that
we respond effectively to those matters
that have the potential to cause financial,
operational and reputational harm
to our business, while acting ethically
and with integrity for the benefit of
all our stakeholders.
→ For our Governance Report
See pages 105–162
Our Values
08
Our value chain
We will invest in those points in the value
chain that provide us with the best return
on our investment, while striving to meet the
highest environmental, social and governance
standards. Sustainable financial value can
only be created by protecting the value of our
natural and human resources.
Discover: Our geologists search for and
discover new sources of the minerals that
make our modern lives possible. We benefit
from developing and using world class
expertise and leading technologies, often that
we have developed ourselves, to find deposits
we can develop and mine in a safe and
sustainable way.
Plan and build: Before we put a spade in the
ground, our geologists and engineers work
together using virtual mine planning systems
to design the most effective, cost-efficient
and environmentally sound construction and
operational mine plan.
Mine: In extracting the products that we all
need in our daily lives, we draw on over 100
years of mining experience. Safety comes first:
our whole way of working is focused on zero
harm. We plan for the lifecycle of the mine
and beyond and use our own technologies for
reducing waste and protecting environments.
Process: By processing, converting and refining
our raw materials, we produce what customers
need. Our processing technologies also enable
us to reduce waste, save water, increase
efficiency, drive innovation and, by adding
value to our products, support economic
growth in the areas we mine.
Move and market: After processing, we then
transport our metals and minerals to where they
are needed, to our customers. We use the latest
technologies to co-ordinate and optimise our
global shipping needs. And we use our scale
and detailed knowledge of the demand and
uses for our products to offer our customers
a stable supply to their exact specifications –
adding value for them every step of the way
and, ultimately, for billions of consumers who
rely on our products every day.
End of life plan: We don’t only plan for the
lifecycle of the mine – we also take great care
to look beyond and determine the rehabilitation
of the site and the real benefits that will be
felt by local communities, long after the site
is closed.
Anglo American plc Integrated Annual Report 2021Strategic Report How we measure the value we create
Safety and health
Environment
Socio-political
People
Production
Cost
Financial
→ For our pillars of value See page 10
Outputs
Our direct commercial outputs are many of the metals and
minerals that enable a cleaner, greener, more sustainable
world and that meet the fast growing consumer-driven
demands of developed and maturing economies: diamonds,
copper, nickel, platinum group metals, and the steelmaking
ingredients of iron ore and metallurgical coal, while crop
nutrients are in development.
Mining and processing activities also result in the unavoidable
disturbance of land, generation of mineral residue, use of
fresh water and energy, as well as atmospheric emissions and
water discharges. We strive to minimise our footprint through
our innovative technologies that are designed to support our
approach to sustainable mining.
Revenue
Attributable free cash flow
$41.6 bn
(2020: $25.4 bn)
$7.8 bn
(2020: $1.2 bn)
CO2 equivalent emissions
(Scopes 1 and 2)
14.8 Mt
(2020: 16.1 Mt)
Group attributable ROCE
Total water withdrawals
Total wages and benefits paid(3)
43%
(2020: 17%)
177 Mm3
(2020: 197 Mm3)
$3.7 bn
(2020: $3.3 bn)
Production in 2021
– Diamonds: 32.3 Mct
– Platinum: 2,400 koz refined
– Iron ore: 63.8 Mt
– Palladium: 1,628 koz refined
– Metallurgical coal: 14.9 Mt
– Rhodium: 347 koz refined
– Manganese ore: 3.7 Mt
– Copper: 647 kt
– Nickel (from Nickel
and PGMs): 64.0 kt
Outcomes
As we strive to deliver attractive and sustainable returns, we
are also focused on the many forms of value creation we can
offer to our diverse range of stakeholders. Through our business
activities – employing people, paying taxes to governments
and procuring from host communities – we make a significant
and positive contribution to the countries where we operate.
Beyond our direct mining activities, we create and sustain
jobs, build infrastructure, support education and help improve
healthcare for employees and local communities.
Why? Anglo American is a responsible global business and our
employees want and expect us to play our part and do the right
thing. This approach is central to maintaining our social licence
to operate and being a truly sustainable business.
→ For more on delivering value for our stakeholders
See pages 12–13
→ To download our 2021 Tax and Economic Contribution Report
Visit www.angloamerican.com/tec-report-2021
Anglo American’s Values and behaviours are at the heart of everything we
do. Guided by our Purpose and our Values, we enable high performance
and purposeful action.
Our Values and the way in which we, as individuals, are expected to behave
are the foundation of our Code of Conduct.
See page 101 for footnotes.
09
Anglo American plc Integrated Annual Report 2021 Purpose to value
Our Purpose
Re-imagining mining to improve people’s lives
Transforming the very nature of mining for
a safer, smarter, more sustainable future.
Our Values
Anglo American’s Values and behaviours
are at the heart of everything we do.
Guided by our Purpose and our Values, we
enable high performance and purposeful
action. Our Values and the way in which
we, as individuals, are expected to behave
are the foundation of our Code of Conduct.
Our strategy
Guided by our Purpose, our strategy is to
secure, develop and operate a portfolio of
high quality and long life mineral assets,
to deliver sustainable value for all our
stakeholders and leading shareholder
returns. We achieve this through innovative
practices and technologies – in the hands
of our world class people.
rtfolio
o
P
Capital allocation
Underpinning our strategy, we have
a value-focused approach to capital
allocation, with clear prioritisation.
→ For more on capital allocation
See pages 58–59
I
n
n
o
v
a
t
i
o
n
Our Purpose
Re-imagining
mining to improve
people’s lives
Peopl e
Measuring delivery of our strategy
We track our strategic progress holistically –
spanning non-financial and financial performance
– and throughout the year, using KPIs that are
based on our seven pillars of value:
Safety and health
To do no harm to our workforce
Environment
To minimise our impact on the environment
Socio-political
To partner in the benefits of mining with
local communities and government
People
To create a sustainable competitive
advantage through capable people
and an effective, purpose-led, high
performance culture
Production
To sustainably produce valuable product
Cost
To be competitive by operating as
efficiently as possible
Financial
To deliver sustainable returns to
our shareholders
Delivering sustainable value for all our stakeholders
We are working together to develop better jobs, better education
and better businesses, building brighter and healthier futures
around our operations in our host countries and ultimately for
billions of people who depend on our products every day.
→ For more on value delivered to our stakeholders in 2021
See pages 12–13
→ To download our 2021 Tax and Economic Contribution Report
Visit www.angloamerican.com/tec-report-2021
– Employees
– Host countries
– Suppliers
– Communities
– Customers
– Investors
– Natural environment
Balanced reward
Anglo American’s directors’ remuneration policy is designed
to encourage delivery of the Group’s strategy and creation of
stakeholder value in a responsible and sustainable manner,
aligned to our Purpose.
The main elements of the remuneration package are basic
salary, annual bonus and Long Term Incentive Plan (LTIP).
→ For more on remuneration
See pages 135–161
10
Anglo American plc Integrated Annual Report 2021Strategic Report Portfolio
The quality and long life of our mineral assets
are the foundations of our global business.
We actively manage our asset portfolio to
improve its overall competitive position, providing
products that support a fast growing population
and a cleaner, greener, more sustainable world.
→ For more on Portfolio
See pages 22–29
Innovation
Across every aspect of our business, we are
thinking innovatively about how we work to
ensure the safety of our people, enhance our
sustainability performance, and deliver industry-
leading margins and returns. We are developing
a replicable model of differentiated practices and
capabilities that is designed to deliver superior
value to all our stakeholders from assets that are
in our hands.
→ For more on Innovation
See pages 30–49
People
Our people are critical to all that we do: we
create working environments and an inclusive
and diverse culture that encourages and
supports high performance and innovative
thinking. The partnerships we build, both within
Anglo American and with our stakeholders –
locally and globally – are central to maintaining
our regulatory and social licences to operate
and our sustained commercial success.
→ For more on People
See pages 50–57
11
Anglo American plc Integrated Annual Report 2021 Creating value for all stakeholders
Anglo American is re-imagining mining to
improve people’s lives.
Mining has a safer, smarter, more sustainable future. Using more
precise technologies, less energy and less water, we are reducing
our environmental footprint for every ounce, carat and kilogram of
precious metal or mineral.
We are combining smart innovation with the utmost consideration for
our people, their families, local communities, our customers, and the
world at large – to better connect precious resources in the ground to
all of us who need and value them.
And we are working together to develop better jobs, better education
and better businesses, building brighter and healthier futures around
our operations in our host countries and ultimately for billions of people
around the world who depend on our products every day.
Employees
Host countries
People are our business, and that means our first priority
is always employee safety.
Our people are critical to all that we do. And always front of mind are
the safety and health of our employees and contractors; we train,
equip and empower our people to work safely every day. We believe,
too, that creating an inclusive and diverse working environment
and culture that encourages and supports high performance and
innovative thinking gives our business a competitive advantage.
Playing our role in society
Anglo American contributes to economies and society both directly
and indirectly, through the taxes and royalties we pay, the jobs we
create, the local workforces we upskill, the local business opportunities
we generate, and the education and community health initiatives
we support.
$7.1 bn
Total taxes and royalties borne and collected
$3.7 bn
Total wages and benefits paid
→ For more information
Visit www.angloamerican.com/employees
→ To download our 2021 Tax and Economic Contribution Report
Visit www.angloamerican.com/tec-report-2021
Suppliers
Responsible sourcing aligned to our Purpose
Our approach to responsible sourcing defines the minimum
sustainability requirements and decent work principles required by
all 17,000+ suppliers to Anglo American. Our vision is to create a
more inclusive supply chain as we seek to generate more equitably
shared and sustainable prosperity in our host provinces, where over
70,000 jobs are supported by our procurement worldwide.
→ For more information
Go to page 49
$10.0 bn
spent with local suppliers in 2021
88%
of total supplier spend of $11.4 bn
12
Anglo American plc Integrated Annual Report 2021Strategic Report Communities
Global CSI expenditure by region(1)
Helping to create thriving communities
We are committed to delivering a lasting,
positive contribution to our host communities,
beyond the life of our mines. This starts with
understanding and responding to their needs
and priorities. We manage the relationship
with our host communities through our
recently updated social performance system,
the Social Way 3.0.
→ For more information
Go to pages 47–49
Customers
Understanding our customers’ needs
We work closely with our customers, who are
increasingly interested in sourcing responsible
materials. We are targeting all of our mining
operations to be audited against recognised
responsible mining certification systems
by 2025. To date, seven Anglo American
managed operations have either completed
IRMA assessments or are in the process of
being assured: Unki; Mototolo Concentrator;
Amandelbult; Kolomela; Sishen; Minas-Rio
and Barro Alto. In addition, two operations
have undergone the Responsible Jewellery
Council certification and we have adopted the
Copper Mark certification at Los Bronces and
El Soldado while they await being assured
against IRMA.
Africa
Americas
United Kingdom
Australia
Rest of World
$’000
73,100
60,400
2,400
1,100
1,000
Total
138,000
(1) Discrepancies may occur due to rounding.
53%
44%
2%
1%
1%
$138 m
Total Corporate Social
Investment (CSI)
Natural environment
Protecting our natural environment
We apply ecosystem-thinking to
address the interconnectivity of nature,
our environment and the ecosystems
in which we operate to deliver positive
environmental outcomes and address
global challenges such as climate change.
Investors
Delivering sustainable financial returns
Underpinning our strategy, we have
a value-focused approach to capital
allocation, with clear prioritisation:
sustaining capital to maintain asset
integrity; payment of base dividends,
and then the allocation of discretionary
capital to either growth investments,
upgrades to our portfolio, or additional
returns to shareholders.
→ For more information
Visit www.angloamerican.com/investors
▲ In 2019, our Unki PGMs mine in Zimbabwe was
the first in the world to publicly commit to a third-
party audit to determine its performance against
IRMA’s Standard. Pictured is control room operator
and production foreman John Mambanda in the
concentrator plant control room.
→ For more information
Visit www.angloamerican.com/about-us
Some of the targets we have set include:
– Pathway to carbon neutrality, with
all operations targeted to be carbon
neutral (Scopes 1 and 2 emissions)
by 2040
– Net-positive biodiversity and
conservation outcomes
– Reducing freshwater withdrawals by
50% in water scarce areas by 2030.
$6.2 bn
Total returns to shareholders
8%*
Dividend yield
35%
TSR performance
Stay up to date
For more on our performance in the year,
see the video link.
Visit https://youtu.be/dqSfiru4OdU
* Calculated using average share price ($40.17) for the year ended 31 December 2021.
13
Anglo American plc Integrated Annual Report 2021 Strategic Report
How we make decisions
In line with best-practice corporate reporting,
Anglo American’s Integrated Annual Report
includes a comprehensive assessment
of the principal risks facing the business,
as well as those matters that we and our
stakeholders believe have a material bearing
on the success of the business in the near
and long term – beginning with safety and
environmental sustainability.
Insightful and considered strategic decision making
Insights
Stakeholder engagement and topics raised
→ See page 15
Material matters
→ See pages 16–17
Global trends
→ See pages 18–19
Principal risks
→ See pages 60–67
By engaging with our stakeholders and being aware of their
perspectives, and by understanding the risks we know we face, we are
better placed to make informed decisions that help support the delivery
of our strategy.
Board review
– Chief executive and senior management team formulate the
Group’s long term strategy
– In addition to regular discussion on strategic topics, the Board
dedicates a full meeting to a discussion of the Group’s strategy,
addressing critical short, medium and long term issues
– Board approves critical strategic decisions and endorses the
Group’s strategy
– Board reviews progress of delivery of Group’s strategic goals,
as well as periodic business unit strategic reviews.
→ For more on Board activity
See pages 117–119
Strategy
To secure, develop and operate a portfolio of high quality and long
life mineral assets, from which we will deliver leading shareholder
returns. We achieve this through innovative practices and
technologies – in the hands of our world class people – towards
our common Purpose.
Capital allocation
Underpinning our strategy, we have a value-focused approach
to capital allocation, with clear prioritisation: sustaining capital to
maintain asset integrity; payment of base dividends, and then the
allocation of discretionary capital to either growth investments,
upgrades to our portfolio, or additional returns to shareholders.
→ For more on our Strategy
See pages 10–11
→ For more information on our capital allocation approach
See pages 58–59
Determining what is important
Identifying and evaluating matters that are of common material
interest to our stakeholders and to our business, and understanding
how they may affect our ability to create value over time, are
integral to our planning processes and help support the delivery
of Anglo American’s strategy.
At the heart of decision making
Consideration of the wide spectrum of stakeholder and
environmental interests is firmly embedded into Anglo American’s
culture, governance structures and management systems and is
guided by our Purpose. Stakeholder concerns and considerations
therefore feature prominently in the discussions of our Board
meetings and those of its committees.
14
Anglo American plc Integrated Annual Report 2021
The Board, through its role in setting the tone from the top, provides
leadership to the Group and is responsible for promoting and
safeguarding the long term success of the business, supporting the
executive management team in its formulation and implementation
of the Group’s strategy.
The duties of directors with regard to ensuring there is effective
dialogue between the Group and its shareholders and stakeholders
are broadening in scope, while society’s expectations of company
boards also continue to grow. At Anglo American, those matters
considered by the Board and our stakeholders to be of material
importance, and the views of our stakeholders in relation to those
matters, are integral to the Board’s discussions and decision making,
including in relation to the Group’s strategy and its evolution.
Understanding our stakeholders
Healthy stakeholder relationships help us
to better communicate how our business
decisions, activities and performance are
likely to affect or be of significant interest to
our stakeholders, and provide the opportunity
to co-create effective and lasting solutions to
business and other challenges.
In addition to the stakeholders listed below, in some instances, we work
with representatives from multi-stakeholder initiatives to provide a more
collaborative and holistic view on the issues facing our industry.
Stakeholder
How we engage
What was important in the year
Investors
The Group, through its investor relations team, has an active engagement programme
with its key financial audiences, including institutional shareholders.
– The Group’s continued response to Covid-19
– Sustainability, including climate change strategy,
Any significant concerns raised by a shareholder are communicated to the Board. The
Board receives a briefing at each meeting from the investor relations team. The chairman
also hosts meetings with some of the company’s largest institutional investors through
the year.
targets and progress (e.g. carbon neutrality)
– Our exit from thermal coal operations
– Progress of major projects
Employees
and unions
The Group undertakes global employee engagement surveys, the results of which are
communicated to executive management and the Board. The Group’s Global Workforce
Advisory Panel meets during the year to discuss a range of topics. Feedback from the
meetings is shared with the Board and the Group Management Committee.
Every business unit has formal points of contact for union engagement and material
matters are routinely reported to various boards. In 2021, we signed our first
collaboration/dialogue agreement with IndustriaALL Global Union. We also participated
in the first Tripartite working group on gender-based violence.
Communities Our Social Way 3.0 engagement requirements and the community engagement forums
that form part of our Sustainable Mining Plan are at the heart of how we engage with our
local communities.
The Sustainability Committee receives a report on social performance and community
issues at each meeting. The Board is also updated on specific community engagement
via presentations from business unit leaders and visits operations, with such visits often
including engagement with local community representatives.
We have a Groupwide procedure for reporting social incidents and grievances and all
Level 4–5 social incidents are reported to, and discussed by, the Board.
– Safety and health
– Controls and protective measures related to Covid-19
– Mental health and well-being
– Changed working conditions and effective virtual working
– Reinforcing critical controls for working safely
– Proposed changes to our operations, working conditions
or practices
– The future of work
– Response to Covid-19
– Collaborative Regional Development
– Community health
– Livelihoods and job creation
– Community education
– Land access and resettlement
– Community engagement forums
– Social incidents
Suppliers and
contractors
The Group engages with suppliers through several channels, including: supplier events;
local and host community procurement forums; supplier capability development
initiatives; various digital platforms; and our responsible sourcing programme.
– Covid-19 supply risk mitigation measures – including
highlighting new modern slavery and labour rights risks
within the supplier network.
Material matters are reported to the Board through the chief executive’s reports. Material
supply contracts are approved by the Board. Reports to the Board from the technical
director and business unit leaders contain updates on contractor management.
Civil society
(NGOs, faith
groups and
academia)
The Group’s engagement includes one-on-one interactions (including with the chief
executive); various multi-stakeholder initiatives and partnerships; and open and
ongoing dialogue on tax transparency. The Group hosts SDG accountability dialogues
which bring together a cross-section of stakeholders (including NGOs) around our
performance related to SDGs. Any key concerns or trends from these engagements are
reported to relevant executive and/or Board structures.
Anglo American participates in the global Mining and Faith Reflections Initiative
and the South African multi-faith ‘courageous conversations’ initiative and also has
longstanding partnerships with NGOs such as TechnoServe, Fauna & Flora International
and WorldVision.
Customers
Our Marketing business engages with customers through direct personal engagements
and via business and industry forums.
The CEO of Marketing provides an annual update to the Board on the Group’s Marketing
strategy and activities, including customer engagement. The Board also receives a
regular update on commodity markets from the Marketing team.
– Increasing procurement opportunities for host
community suppliers
– Promoting transparency and access to information
– Protecting the safety, health, well-being, human rights and
dignity of workers employed by contracting companies
and suppliers
– Climate change and mitigating the environmental impacts
of mining
– Responsible governance and respect for human rights
– The role of mining companies in addressing the impacts
of Covid-19
– Investing in social and community development
– Inequality
– Gender-based violence
– Mining and the future of work
– The circular economy
– International and industry tax reforms, transparency,
and sustainability
– Progress on our sites achieving responsible mining
standard certification
– Delivery of product on agreed terms
– Evidence of materials traceability, environmentally and
socially responsible practices and risk management
– Participation in responsible mining certification systems,
such as the Initiative for Responsible Mining Assurance (IRMA)
and the Responsible Jewellery Council (RJC)
Governments
and
multilateral
institutions
Group engagement includes: face-to-face meetings with local and national government
representatives; dialogue and ongoing advocacy work – both directly and through
industry bodies; and participation in inter-governmental and multilateral processes.
– Compliance with mining licence and related requirements
– Contribution to national and international
developmental priorities
The Board receives a report on key geo-political developments in the Group’s operating
jurisdictions at each meeting, as well as updates from the chief executive
on government engagement.
– Taxation policy, including national and international tax reforms
relating to digitalisation, transparency, and the environment
– Wider sustainability and development agenda, including
climate change
– The role of mining companies in addressing the impacts
of Covid-19
– Permitting of new technology in areas of influence
Industry
associations
The Group participates in more than 130 industry associations worldwide. The Group’s
participation is directed by our International and Government Relations Policy. The chief
executive reports any matters of significance to the Board.
– Contributing constructively in business initiatives, with
the aim of enhancing the collective business interest
– Contributing to shared responses to challenges faced
by governments and societies in host jurisdictions
– General knowledge sharing on our approach to
managing material issues
15
Anglo American plc Integrated Annual Report 2021
Our material matters
Identifying and evaluating matters that are of
common material interest to our stakeholders
and to our business, and understanding
how they may affect our ability to create
value over time, are integral to our planning
processes and help support the delivery of
Anglo American’s strategy.
Our process for determining those matters involves consultation,
analysis and approval.
Following the externally facilitated integrated materiality process
that took place in 2020, which incorporated in-depth interviews with
a range of internal and external stakeholders, the 2021 materiality
process consisted of desktop research and an external consultation
survey. The desktop research included a review of the Group Risk
register, global media coverage and analyst reports on Anglo American
and the mining sector, and an analysis of minuted Board and executive
discussions. The external consultation survey was conducted with
a wide range of stakeholders, including investors, communities,
customers, suppliers, governments, civil society and industry groups.
How we make decisions continued
Material matters in 2021
The matters identified through our materiality process are naturally
numerous and wide-ranging. In order for us to report against these
material matters effectively and demonstrate how they affect the
delivery of our strategy, we have set them out under the headings
listed in the tables below and opposite. The global pandemic that
emerged in early 2020 continued to feature in the desktop research
and stakeholder survey, and we have therefore not sought to categorise
it in the table, but instead recognise its impact across many aspects of
our business throughout this report. No changes to the material matters
determined in 2020 through the in-depth stakeholder interview process
were identified through the 2021 materiality process.
Each material matter covers a number of topics and issues, and some
also intersect with specific principal risks facing the Group, as identified
in the Group Risk Register. Principal risks are those risks, or combination
of risks, that would threaten the business model, future performance,
solvency or liquidity of Anglo American and are shown with the
following symbol (‡). An analysis of the Group’s principal risks, including
mitigation strategies, can be found on pages 60–67 of this report.
All topics shown in the tables below and opposite are considered
important by our stakeholders and by the Group, with those topics
considered of the highest importance and most material highlighted
in bold.
→ Further analysis of our materiality process can be found on the
Anglo American plc website
www.angloamerican.com/sustainability/approach-and-policies
Matters identified as material to our stakeholders and our business
Material matters
Description
Adopting a
zero mindset
Areas of impact
Pillars of value
Strategic elements
Portfolio
Innovation
People
Protecting the safety and health of employees, contractors, local
communities and other stakeholders is a fundamental responsibility
for Anglo American and all mining companies. A safe and healthy
workforce translates into an engaged, motivated and productive one that
mitigates operational stoppages, and reduces potential legal liabilities.
We recognise that the end of a mine’s operational life is far from being
the end of its social and environmental impact and we work to ensure
we close mines in a way that leaves a positive, healthy and sustainable
legacy. The monitoring and management of tailings storage facilities
(TSFs) and of water consumption and discharge are not only a major
factor in legal compliance and permitting, but also play a significant role
in improving the balance of value from mining for our local stakeholders.
Topics included
Occupational safety and
health‡; responsible mine
closure and divestment;
and mineral residue
management (tailings)‡
Tackling
climate change
Areas of impact
Pillars of value
Strategic elements
Portfolio
Innovation
16
GHG emissions‡; energy‡;
and the impact of
climate change on
Anglo American‡
Climate change is the defining challenge of our time and there is
increasing focus across society on efforts to reduce emissions of carbon
dioxide and other greenhouse gases (GHGs). Understanding the effects
of climate change on our business and how they may impact our value
chain – as well as how we can reduce our own carbon footprint – is vital
if we are to mitigate and adapt to its impacts, as well as optimise the
opportunities associated with the transition to a low carbon future.
We produce many of the metals and minerals that are essential to a
low carbon economy, including PGMs for hydrogen fuel cells and green
hydrogen production, copper for EVs and renewable energy capacity,
and nickel for EV batteries. We have set a target to be carbon neutral
(Scopes 1 and 2) across our operations by 2040, with a 30% reduction
(on a 2016 baseline) by 2030. We have also stated our ambition to
reduce our Scope 3 emissions by 50%, also by 2040.
Anglo American plc Integrated Annual Report 2021Strategic Report
Protecting our
natural environment
Areas of impact
Pillars of value
Strategic elements
Innovation
Playing our role
in society
Areas of impact
Pillars of value
Strategic elements
Portfolio
Innovation
People
Helping our
people thrive
Areas of impact
Pillars of value
Strategic elements
People
Driving business
performance
Areas of impact
Pillars of value
Strategic elements
Innovation
People
Adapting to the
world around us
Areas of impact
Pillars of value
Strategic elements
Portfolio
Innovation
We are stewards of the land and ecosystems around our operations and
are focused on a net zero mindset of causing no harm to the environment,
and delivering net positive outcomes for biodiversity and a lasting positive
legacy for society. Our vision is a healthy environment, where not only do
we minimise impact, but we deliver positive and lasting environmental
outcomes – in biodiversity, for example.
Circular economy;
biodiversity; water‡;
waste management;
and air quality
Local communities and host governments rightly expect mining to bring
significant economic benefits, and our goal is to leave host communities
and governments better off than when we arrived. Anglo American
aims to create thriving communities by acting as a catalyst for enduring
economic prosperity through employment, and by creating a more
inclusive supply chain that generates shared sustainable prosperity in
the communities around our operations, and a collaborative approach to
regional development to drive sustained economic diversification.
Acting in an ethical, responsible and transparent manner is fundamental
to Anglo American realising the significant business benefits gained from
building trust as a corporate leader through constructive relationships
with all our business stakeholders, and to maintaining our social licence
to operate.
To deliver on our strategic business objectives, we rely on a capable
and engaged workforce that behaves ethically and responsibly,
consistent with Anglo American’s Values and Code of Conduct –
essential for us to maintain our social licence to operate. We aim to
foster a purpose-led high performance, inclusive culture, through an
organisational structure that is fit for purpose, resourcing this structure
by attracting and retaining the best talent and empowering leadership
to deliver the desired outcomes.
Social performance
(including community
relations, socio-economic
development and cultural
heritage); ethical value
chain; responsible and
inclusive supply chain; total
economic contribution
(including tax); business
conduct and ethics‡; and
human rights
Future of work; inclusion
and diversity; talent
attraction and retention;
learning and development
The mining sector continues to face operating cost inflation, including
labour costs, energy and input costs and the natural effect of ore grade
degradation. In order to deliver our disciplined growth strategy and to
maintain and improve our competitive position, Anglo American must
continue to deliver on its financial improvement targets, successfully
deploying technologies and other innovations to mine ever more safely
and productively, and minimise the number of unplanned operational
stoppages that affect production and unit costs.
Effective corporate governance is also key to sustained business
performance, with the appropriate processes and systems in place to
ensure clear and consistent application, and succession planning to
ensure effective leadership continuity.
As a number of emerging economies have developed greater economic
maturity, so the need for food supply and infrastructure (e.g. housing and
transport) grows. Likewise, as disposable incomes increase, so demand
for metals used in a wide array of consumer products will continue to
increase. Economic growth in those economies could positively affect
demand for the Group’s products. Similarly, economic volatility may result
in fluctuating demand for those products. Demand may also be affected,
on both the upside and downside, by technological developments,
product substitution and/or fundamental shifts in market forces and
consumer sentiment.
Anglo American operates, or is otherwise active, in several countries that
have experienced, or currently experience, political instability and where
the regulatory environment for the mining industry is uncertain.
Operational and cost
performance‡; capital
allocation; innovation and
technology; data security
and privacy‡; corporate
governance
Geo-political context‡;
societal expectations‡;
transparency (e.g. tax,
supply chain); policy
advocacy; macro-economic
environment‡
Pillars of value
Strategic elements
Safety and health
Socio-political
Production
Financial
Portfolio
Innovation
People
Environment
People
Cost
→ For our pillars of value
→ For our strategic elements
See pages 10
See pages 22-57
17
Anglo American plc Integrated Annual Report 2021
How we make decisions continued
Looking at global trends
In considering the evolution of our long term strategic
context, we identify and analyse a wide range of trends
that are likely to influence our business.
What are they?
Climate change is the defining challenge of our time
and there is increasing focus across society on efforts
to reduce emissions of carbon dioxide and other
greenhouse gases (GHGs). There is also growing
awareness of the implications of climate change and
the need to mitigate and adapt to its possible impacts
across the economy.
The global response includes a transition towards
renewable power generation, electrification of transport,
development of low carbon industrial processes and
changes to agricultural practice. There is also a move
towards more efficient use of materials, building more
sustainable and/or circular supply chains.
At the same time, many countries are tightening air
quality standards to mitigate other harmful emissions,
while there is an increasing focus on measures to protect
water supplies, biodiversity and local ecosystems.
What does it mean for our industry?
An increased demand for the metals and minerals
essential to the low carbon transition and a broadening
awareness of the vital role that mining has to play.
Low carbon technologies, such as renewable power
generation infrastructure and electric vehicles (EVs)
powered by batteries and fuel cells, generate additional
demand for many metals, including copper, nickel,
platinum group metals (PGMs) and steelmaking raw
materials (iron ore and metallurgical coal).
A focus on reducing the GHG footprint of the mining
value chain, including for carbon intensive downstream
sectors such as the steel industry. Steel will remain an
essential building block of the modern economy,
irrespective of pressure to develop lower carbon
methods of steel production. Pathways to decarbonise
the steel industry include technologies that will favour
higher quality iron ore and increased use of
recycled material.
What are they?
Several developing economies, most notably China,
have experienced a period of rapid urbanisation and
industrialisation over the past two decades, also resulting
in an unprecedented number of households entering the
wealthier middle class.
More recently, the economic fall-out of the pandemic
has reversed poverty reduction efforts in some regions,
increasing levels of inequality.
Several countries and regions are expected to
experience greater economic maturity in the coming
decades, particularly India, south east Asia and
South America, as well as Africa.
In the developed world and globally, patterns of
consumption may also change due to changing
demographics, including changes to fertility rates and
ageing populations.
What does it mean for our industry?
As the global population grows (at least for the next
four decades, current rate c.80 million per year) and
as economies develop, so the need for food supply
and infrastructure (e.g. housing and transport) grows,
resulting in higher demand for crop nutrients, steel and
base metals. Likewise, as disposable incomes increase,
so demand for metals used in a wide array of consumer
products will further increase.
Adoption of circular economy practices. The mining
industry has a role to play in supporting the development
of more sustainable supply chains for basic raw materials.
This includes an industry drive to balance ore extraction
and resource management activities to ensure raw
material supply from both primary production and
recycling.
Delivering value through our strategy
We produce many of the metals and minerals that are
essential to the low carbon transition, including PGMs
for hydrogen fuel cells and green hydrogen production,
copper for EVs and renewable energy capacity, and
nickel for EV batteries.
Our exit from thermal coal operations, the commissioning
of the Quellaveco copper project in mid-2022, and the
recently acquired Crop Nutrients business represent the
latest phase of our portfolio trajectory towards future
enabling products.
We have set a target to be carbon neutral (Scopes
1 and 2) across our operations by 2040, with a 30%
reduction (on a 2016 baseline) by 2030. We aim to
achieve this through efficiency improvements, a migration
to renewable power supply across our operations and the
implementation of a number of low carbon technologies
through our FutureSmart Mining™ programme.
In addition, we have set an ambition to reduce our
Scope 3 (value chain) emissions by 50% by 2040.
Emissions from the steel value chain make up the
significant majority of our Scope 3 emissions and we
are working closely with our customers and the broader
industry to help achieve this ambition.
→ For more on our Portfolio
See pages 22–29
→ For more on our Innovation
See pages 30–49
And, as purchasing power increases, so too does the
appetite for luxury goods and services. Demand for
consumer-facing luxury products, such as those that
use diamonds and PGMs, is expected to grow.
Delivering value through our strategy
Anglo American has a diversified product portfolio,
increasingly focused on products that enable advanced
and lower carbon economic development and that
serve the needs of the expanding global consumer class.
We have exposure to some of the largest resource
bases in both PGMs and diamonds. We also have world
class copper resources in Los Bronces and Collahuasi,
as well as the Quellaveco copper project in Peru. We
have exposure to nickel through Barro Alto, and as a
by-product of our PGMs mines. Our premium quality
iron ore and metallurgical coal resources are well
placed to support demand for cleaner steelmaking and
our Crop Nutrients business is positioned to support
sustainable, low carbon food production.
Our innovative market development and investment
programmes aim to stimulate demand for our products,
in particular for PGMs and diamonds.
→ For more on Portfolio
See pages 22–29
→ For more on Innovation
See pages 30–49
1.
Climate change and
the environment
2.
Macro-economics and
demographics
18
Anglo American plc Integrated Annual Report 2021Strategic Report We assess trends in terms of their potential impact on the value of our
business, while also considering the value created for, and impact on,
all our stakeholders, and the timeframe over which they could develop
in significance. We recognise that individual trends do not unfold
in isolation and that when they converge there is potential for more
pronounced effects.
Our strategy positions us well to navigate the many dimensions of our
external context and, as trends develop, is flexible enough to allow us
to adapt as required. Our high quality and diversified portfolio of assets,
relentless approach to innovation, and talented people – combined
with business decisions guided by our Purpose – set us up to take
advantage of commercial and other opportunities, thereby unlocking
our full potential for sustainable value creation.
3.
Emerging technologies
4.
Geopolitical shifts
Innovation in material science has the potential to
significantly impact demand, presenting both risks and
opportunities for metals and materials. For example,
there is growing potential for use of PGMs in fuel cells
and for applications in medical science.
Delivering value through our strategy
Innovation is at the heart of our strategy, focused on
safety, sustainability and operating performance.
FutureSmart Mining™ uses innovative mining methods
and technologies to overcome challenges of water
availability, lower grades and increasing energy
requirements, reducing our environmental footprint as
well as reducing capital intensity and operating costs.
Our participation across the value chain allows us to
apply our innovations in technology and sustainability
more widely, looking beyond upstream production to
examine other opportunities in the value chains in which
we participate. For example, De Beers is a pioneer in
blockchain-based traceability, applying the technology
to the diamond value chain.
→ For more on Innovation
See pages 30–49
What are they?
New technologies are constantly emerging, focused on
improving existing solutions, solving global challenges,
or addressing society’s unmet needs. These have the
potential to significantly disrupt the status quo in some
sectors of the economy, while unlocking opportunities for
new products and services.
Important areas of technological development include
those related to digital and big data, the application
of automation and artificial intelligence, and the
opportunities presented by blockchain and the use
of cryptocurrencies.
Meanwhile, innovation in the material sciences will
continue to influence applications for metals and
minerals, as new-use cases drive demand.
Increasing sustainability challenges, notably access to
water and clean energy, are often at the root of many
of these emerging technologies.
What does it mean for our industry?
Automation, digital and big data are changing the way
mineral resources are explored and developed, helping
to alleviate the growing challenge of identifying and
developing Tier 1 assets. Technology will play a major
role in identifying new resources, managing costs of
production, improving productivity, and minimising the
environmental impact of mining.
Blockchain technologies, enabling secure, centralised
and transparent data, will change the nature of industry
supply chains, and will support the needs of our
customers and consumers for whom the provenance
of materials is increasingly important.
What are they?
The rapid economic growth of China and the
expectation that it will overtake the US as the world’s
largest economy (in GDP purchasing power parity
terms) are shifting the balance of economic and
political influence from West to East. A resulting shift in
patterns of global trade and emerging regional tensions
have seen the emergence of new regional trade
agreements, as well as more widespread use of
protectionist trade measures.
Rising inequality and a perceived failure of established
democracies to deliver a higher quality of life has, in
some countries, seen a rise in support for populist
leaders at the expense of more liberal norms. In some
cases this has heightened localised conflict, civil unrest,
human migration and risks to businesses with supply
chains exposed to those jurisdictions.
What does it mean for our industry?
The re-alignment of regional trading blocs and greater
socio-political complexity can shift centres of demand
and consequently the flow of raw materials to them.
Where trade restrictions have been imposed, these often
target strategically important raw materials, bringing a
renewed focus on supply chain resilience and alternative
sources of supply. This offers both challenge and
opportunity to the mining industry.
In countries where sources of mineral supply are located,
the rise of populist leaders can introduce uncertainty
to the legislative and regulatory environment, while
constitutional change can lead to delays in licensing
and permitting, and higher taxes and royalties, all of
which can affect operational continuity and influence
investment in those countries.
Delivering value through our strategy
Our Marketing business focuses on providing tailored
materials solutions for our customers and, by drawing
together our longstanding relationships, market insight
and analytics capability, we can respond to demand
shifts and redirect flows to fulfil the needs of our
customers and stakeholders.
Our successful track record of developing and operating
projects in multiple jurisdictions makes Anglo American
a partner of choice for countries looking to develop
their natural resource endowments. Our innovation-
led pathway to sustainable mining – FutureSmart
Mining™ and, within it, our Sustainable Mining Plan –
helps us to work with governments to advocate for
progressive regulatory frameworks that encourage
and support investment in modern, sustainable mining.
We have sought to invest, over many years, in long
term relationships and the sustainable economic
development within host communities so that we
have the relationships in place to manage periods
of complexity.
→ For more on Innovation
See pages 30–49
→ For more on our Marketing business
See pages 40–41
19
Anglo American plc Integrated Annual Report 2021 How we make decisions continued
Reflecting stakeholder views
in our Board decision making
Anglo American has long understood the role
of its business in society. In 2017, we began to
formalise that role by validating our underlying
Purpose with our employees, while also
consulting stakeholders and shareholders,
culminating in a Board discussion to
encapsulate that Purpose as: re-imagining
mining to improve people’s lives.
Anglo American provides many of the raw materials our modern
society needs, combining integrity, creativity and innovation with
due consideration for all our stakeholders to better connect precious
resources to the people who need and value them. We work together
to provide our people with better jobs, a better education and better
businesses, and we are building brighter and healthier futures around
our operations, in our host countries and ultimately for billions of people
around the world who depend on our products every day.
Understanding our employees
Our people are critical to everything we do. We create safe, inclusive
and diverse working environments that encourage and support high
performance and innovative thinking. We are acutely aware that to get
the best from our people we need to understand their viewpoints and
address any concerns they may raise about working for us.
We consider workforce engagement to be a priority for every leader at
Anglo American and we run regular surveys available to all employees
to identify areas where, for example, we need to do more to ensure that
colleagues feel cared for and respected. In 2019, we established a
Global Workforce Advisory Panel, with the intention of giving employees
more of a voice in the boardroom so their views can be better
understood and considered when decisions are being made about
the future of the business. In 2021, the panel managed to meet twice,
albeit remotely, and the panel chair, our senior independent director,
Byron Grote, shared the key messages from those meetings with the
Board. The People and Governance sections of this report provide more
detail on these engagements and explain the resultant outcomes.
→ For more information
See pages 122–123
Our Values
Safety, Care and Respect, Integrity, Accountability, Collaboration,
and Innovation guide our behaviour and shape our culture, and
are fundamental to creating enduring benefit for all our employees,
shareholders, and stakeholders in a way that demonstrably improves
people’s lives.
Section 172 statement
The Anglo American plc Board is cognisant of its legal duty to act in
good faith and to promote the success of the Group for the benefit
of its shareholders and with regard to the interests of a broad range
of stakeholders. These include the likely consequences of any
decisions we make over different time horizons; the need to foster the
relationships we have with all our stakeholders; the interests of our
employees; the impact our operations have on the environment and
local communities; and the desire to maintain a reputation for high
standards of business conduct. New directors appointed to the Board
in 2021 received tailored, individual briefings on these duties, and the
Board received updates in 2021.
As a major global mining company, the Board understands that our
wide range of stakeholders (identified on page 15) is integral to the
sustainability of our business, underpinning our licence to operate.
In addition, the Board is conscious that expectations around our
performance and contribution to society – from local to global – are
both diverse and continuously evolving.
By listening to, understanding and engaging with our stakeholders,
the Board endeavours to live up to their expectations, by staying true
to our Purpose, acting in accordance with our Values, and delivering
our strategy.
Stakeholder considerations are integral to the discussions at Board
meetings and the decisions we make take into account any potential
impacts on them and the environment. Like any business, we are aware
that some of the decisions we make may have an adverse impact on
certain stakeholders.
20
In 2018, the Board approved, and is holding management to account
for delivery of, our Sustainable Mining Plan – a key component of our
FutureSmart Mining™ programme. We are committed to a series of
ambitious medium and longer term goals that are designed to support
the UN’s SDGs. These goals are designed to make a comprehensive
and lasting contribution that we expect will positively transform how our
stakeholders experience our business.
The Board and its committees took a broad range of factors and
stakeholder considerations into account when making decisions in the
year. Decisions are made within the context of the long term factors
that may impact the Group, including key competitive trends and
disruptions; technology capability; and climate change considerations.
For more detail on Board activity in the year, see pages 117–119. For
more on the global trends that influence the mining industry and our
business, see pages 18–19, and for more on our approach to climate
change, see pages 43–45. A summary of some of the key decisions
made by the Board during the year is to be found on page 21.
The Board (through its Sustainability Committee) monitors progress
towards our Sustainable Mining Plan targets and how these may affect
future decision making.
Anglo American plc Integrated Annual Report 2021Strategic Report Key decisions made in 2021
Exit from thermal coal operations
Increasing our decarbonisation ambitions
The Board supports Anglo American’s portfolio trajectory towards
supplying future-enabling metals and minerals, being those required
for the transition to a low carbon economy and, more broadly, that meet
the demands of a growing global consumer population. Today, more
than 90% of our growth capital is allocated to future-enabling products,
such as copper, PGMs, diamonds and crop nutrients, as well as high
quality iron ore. High quality metallurgical coal is also essential during
the transition by supporting cleaner steelmaking today, while we work
with steel customers to develop less energy- and carbon-intensive
steelmaking technologies. Consistent with this approach, we have been
reducing our exposure to thermal coal over many years, culminating in
early 2022 when, following the demerger of our remaining coal mines
in South Africa in 2021, and the sale of our shareholding in Cerrejón in
Colombia, we completed our exit from thermal coal operations.
→ For more information on our Portfolio
See pages 22–29
In tandem with aligning our portfolio towards meeting the demands and
expectations of a lower carbon world, we are transforming our operations
towards carbon neutrality, including by adopting technologies to switch
our mine vehicles and other machinery away from diesel power. The
Board has put its full weight behind the decarbonisation of our value
chains, and Anglo American’s role in the global arena in advocating
for policies that support decarbonisation and ethical sourcing of raw
materials. By 2030, we have a target to reduce GHG emissions (Scopes
1 and 2) by 30% against a 2016 baseline, with eight of our assets being
carbon neutral by that date. To that we added a target to be carbon
neutral across our operations by 2040 and, in 2021, our ambition to
reduce our Scope 3 emissions by 50%, also by 2040.
→ For more information on our approach to climate change
See pages 43–45
→ For more information on the Board’s discussions on climate change
See page 125
Attractive shareholder returns
Chief executive succession
Our commitment to a sustainable base dividend forms a critical part
of our disciplined approach to capital allocation. Following a record
financial performance and despite some faltering in the global recovery,
due to supply shortages and a surge in energy prices that propelled
inflation, the Board has recommended a final dividend of $1.18 per
share, as well as a special dividend of $0.50 per share. This will bring
total dividends paid and proposed in respect of 2021 to $4.19 per
share. Combined with our $1 billion share buyback programme,
our total cash return to shareholders for 2021 exceeds $6 billion.
Anglo American’s TSR for 2021 was 35%, second amongst the
UK-listed mining majors and almost double that of the FTSE 100
at 18%.
Succession planning for all directors is an ongoing cycle of work, and
we continue to refresh the composition of the Board to ensure we reflect
an appropriate mix of skills, experience and diversity to suit the evolving
nature of the business and society’s expectations. As part of that
process, Mark Cutifani is stepping down as chief executive in April 2022
after almost a decade at the helm. Mark and his executive team have
transformed the company’s performance and prospects. Following a
rigorous global process, including a strong list of candidates on our
internal succession plan, the Board concluded that Duncan Wanblad
(pictured) is the stand-out successor, bringing his 30 years of
international mining experience, and deep understanding of our
Group, its culture and its context, to take Anglo American forward.
→ For more information on our approach to capital allocation
→ For more information on our Board succession planning
See pages 58–59
See pages 126–127
Anglo American plc Integrated Annual Report 2021
21
Strategic Report
Portfolio
The quality and long life of our mineral assets are the
foundations of our global business. We actively manage
our asset portfolio to improve its overall competitive
position, continuing our trajectory towards future-
enabling metals and minerals that are essential to
decarbonise energy and transport and that support a
growing global consumer population.
Material matters discussed in this section
– Adapting to the world around us
– Tackling climate change
– Playing our role in society
– Driving business performance
▲ Installation of the first Caterpillar 7495 electric shovel at our Quellaveco copper
project in the south of Peru. Quellaveco is introducing three of these massive
shovels, each weighing 1,390 tonnes, which will play a key part in the switch-over
from diesel-powered equipment, which is responsible for the great majority of
carbon emissions at our mining operations.
22
Anglo American plc Integrated Annual Report 2021
Anglo American plc Integrated Annual Report 2021
23
Portfolio continued
▲ In South America, our operations are switching to renewable sources of power, such as wind turbines and solar, for all of their energy requirements.
A cleaner, greener,
future–enabling portfolio
Tackling climate change is the defining
challenge of our time. Our underlying
principle is to reduce carbon going into the
atmosphere, both through how we operate
and the metals and minerals we produce.
A future-enabling portfolio
Mining has a vital role to play in providing the metals and minerals
needed to help address climate change, and more broadly by
modern society and its ever-growing global consumer population.
For several years, we have been re-aligning our portfolio towards
future-enabling products, many of which are critical to the
technologies needed for the world to move away from fossil fuels
towards low carbon energy and transport. Today, having exited our
thermal coal operations, a large majority of current production (c. 85%)
is of products that enable a more sustainable future and that cater to
global consumer demand. That trend is set to continue in the coming
years as we bring new copper and PGMs production on stream
and introduce low carbon fertiliser into our global customer offering.
We also continue to re-align our portfolio in line with our ambitious
targets of becoming carbon neutral, and our ambition to reduce
Scope 3 emissions by 50%, by 2040.
Each of our products improves people’s lives in different ways. The
production of steel is currently carbon-intensive, but our high quality
iron ore, nickel and metallurgical coal products support efficient – and
therefore lower emitting – steelmaking now and are well positioned
to support the transition to lower carbon steel production methods
centred around hydrogen. Our Crop Nutrients business’s POLY4
fertiliser product has many positive environmental properties, while
demonstrating considerable crop yield and quality benefits over
other bulk fertiliser products. Diamonds, though they have a limited
role in the transition to a low carbon economy – have important
industrial applications, such as in cutting, drilling, and the production of
supermaterials that improve the efficiency, performance and reliability
of industrial tools and technology.
c.85%
of our production supports a more
sustainable future and caters to
global consumer demand.
24
Anglo American plc Integrated Annual Report 2021Strategic Report Portfolio evolution
Transition-enabling
Transition-enabling
~75%
Future-enabling
~75%
Future-enabling
~85%
Future-enabling
~85%
Future-enabling
Portfolio at end-2019
Key
Diamonds
Diamonds
Copper
Copper
Nickel
Nickel
PGMs
Diamonds
PGMs
Copper
Iron Ore
Nickel
Manganese
Manganese
Metallurgical Coal
PGMs
Iron Ore
Current portfolio
Metallurgical Coal
Metallurgical Coal
Manganese
Iron Ore
Thermal Coal
Thermal Coal
Thermal Coal
Copper –
Metal of the moment, and the future
Platinum Group Metals –
Unrivalled in their diversity of applications
Anglo American is particularly well-positioned in copper, which, along
with steel, is the world’s two most important industrial metal. Prized for its
conductivity, it has a crucial role in the transition from fossil fuels to more
sustainable energy sources, including solar and wind. This and other
unique properties make copper a critical element as society addresses
the challenges of climate change, energy efficiency and the raising of
living standards for the growing global urban population. It is vital to the
effort to move to a cleaner, greener world – particularly in renewable
energy and the electrification of transport.
“Prized for its conductivity, copper has
a crucial role in the transition from
fossil fuels to more sustainable energy
sources, including solar and wind.”
Copper is used in everything from household appliances to wind
turbines and electric vehicles. Around 60% of total global copper
demand is destined for electrical applications – wire, cables and
connectors, including in vehicles and consumer electronics. A further
20% is used in construction, with pipes and roof sheets particularly
benefiting from copper’s resistance to corrosion. The metal’s thermal
conductivity and malleability mean it is used extensively in air
conditioning and refrigeration.
Copper is increasingly used in the automotive industry, and as an
enabler of the hydrogen economy. Battery electric and hybrid electric
vehicles typically contain three to four times more copper than internal
combustion engine (ICE) vehicles – while ‘pure electric’ vehicles such
as fuel-cell vehicles (FCEVs) powered by hydrogen have even higher
loadings of the metal.
With the Covid-19 pandemic continuing to have a profound impact
on people’s lives, copper-nickel alloys are being used increasingly in
anti-microbial touch-surface applications, as they combine excellent
strength, durability and corrosion resistance. There is also growing use
of copper-alloy compositions to kill disease-causing bacteria, including
certain hospital superbugs.
→ For more information on our Copper assets
See pages 26–27
The PGMs suite – platinum, palladium, rhodium, ruthenium, iridium
and osmium – is unparalleled in its versatility of applications.
Anglo American is a leading primary producer of these precious metals,
which are enabling the transition from traditional energy sources
and helping to reshape our world through their role in facilitating the
emerging hydrogen economy.
PGMs’ main application today is in the automotive industry. Platinum,
palladium and rhodium are used in catalytic converters in traditional
ICE vehicles and hybrids to reduce pollutants from car exhaust
gases. PGMs also play an essential role in zero-emissions powertrain
technologies for FCEVs.
With more urgent concerns about the effect of fossil fuels on the
environment, and high energy costs, there is growing interest in
PGMs-based technologies to generate, as well as use, hydrogen as
an alternative energy source. As an example, in our PGMs operations
at Mogalakwena, we will soon be using solar power to produce green
hydrogen, which will, in turn, be used to displace diesel in our mine haul
trucks. While in its early stages, this demonstrates the wide potential of
PGMs to enable the commercialisation of hydrogen generation and
usage as a clean energy source.
A less well-known application for PGMs is in the preservation of
perishable food produce. Latest research indicates that around one-
third of the food produced annually for human consumption is wasted.
Food loss and waste are also responsible for the release of 4.4 Gt of
GHG emissions per year.
To help address this challenge, our PGMs business has two different
partners aiming to commercialise solutions that extend the shelf life of
fresh produce through the removal of ethylene using PGM-containing
catalysts. Anglo American has joined forces with Japanese precious
metals company Furuya Metal and, through a dedicated joint venture,
is developing a series of catalysts designed to decompose ethylene
and volatile organic compounds, in a simple and cost-effective way.
‘It’s Fresh’, a portfolio company of AP Ventures – in which our PGMs
business is an investor – has also developed a solution for the removal
of ethylene from perishable food, which when placed near products
such as fruit or vegetables, safely absorbs the ethylene via the process
of chemical absorption, or chemisorption, and thereby slows down the
ripening process and extends shelf life and usability.
→ Learn more about our Platinum vision
Visit www.angloamericanplatinum.com/products-services-and-development/
platinum-group-metals
25
Anglo American plc Integrated Annual Report 2021 Portfolio continued
Anglo American is a leading global mining company and
our products are the essential ingredients in almost every
aspect of modern life.
Our portfolio of world class competitive operations, development
projects and undeveloped resources provides many of the metals
and minerals that enable a cleaner, greener, more sustainable world
through a lower carbon global economy and that meet the fast
growing consumer-driven demands of developed and maturing
economies. We are a responsible producer of diamonds (through
De Beers), copper and nickel, platinum group metals, and the
steelmaking ingredients of iron ore and metallurgical coal. The exit
from the last of our thermal coal operations, the commissioning of the
Quellaveco copper project in Peru (expected in mid-2022), and the
ongoing development of our recently acquired Woodsmith project
(Crop Nutrients business) represent the latest phase of our portfolio
trajectory towards future enabling products.
The scale and diversity of our portfolio allow us to optimise our financial
resources, technical expertise and supplier relationships to deliver on
our potential, and to the benefit of all our stakeholders. The portfolio’s
depth and breadth create a measured risk profile that is financially
resilient in a low carbon world, and support strong returns through
spreading our investments across diverse asset geographies and
end markets.
Building strategic advantage
The primary source of competitive advantage in the mining industry is
to own high quality, high margin, long life assets of scale, with positions
that can be further enhanced if those assets deliver products into
structurally attractive markets.
The evolution of the Anglo American portfolio is guided by our strategy.
Specific choices with respect to our portfolio are governed by a set of
strategic principles. These principles also inform our capital allocation
and investment appraisal processes, ensuring consistency of strategic
decision making across the Group, and embedding climate-related
considerations at all stages.
In assessing our asset portfolio, the strategic principles we consider
include:
– The stand-alone quality of individual assets, including their relative
cost position, asset life and growth potential
– Our global competitive position within the individual product groups
– The additional value potential generated through leveraging our
internal capabilities.
Our product groups
Future-enabling metals and minerals constitute approximately 85% of
current production. That trend is set to continue in the coming years as
we bring new copper and PGMs production on stream and introduce
low carbon fertiliser into our global customer offering.
Diamonds
De Beers is a global leader in diamonds, producing around a third of
the world’s rough diamonds, by value. Within its portfolio, De Beers
(Anglo American: 85% interest), in partnership with the Government of
the Republic of Botswana, has one of the richest diamond mines in the
world at Jwaneng, and one of the largest resources, in terms of total
carats, at Orapa.
De Beers’ major diamond mining assets have large, long life and
scalable resources and we are continuing to invest in the existing
operations to extend mining activities. The Cut-9 expansion of Jwaneng
will extend the life of the mine by increasing its depth to 800 metres;
in Namibia, an additional custom-built diamond recovery vessel is
expected to go into production in 2022; and in South Africa, Venetia is
transitioning to an underground operation, extending the life of mine
to 2047.
The lack of significant kimberlite discoveries globally over recent years,
combined with the ongoing trend of growth in consumer demand for
diamond jewellery in both mature and developing markets, points to
good prospects for the diamond business. The continued investment in
diamond mining support technologies will enhance De Beers’ portfolio
of high quality and high margin assets and the ability of the business to
flex production to prevailing demand.
Through its differentiated rough diamond distribution model, which
includes Sightholders, De Beers has a range of insights into its
customers’ demand patterns. The company seeks to stimulate
consumer demand for diamonds through its De Beers Forevermark
and De Beers Jewellers brands and through its participation in the
Natural Diamond Council.
Although diamonds have a limited role in the transition to a low
carbon economy, our mined diamond production is highly aligned
with a low carbon future – aiming to be carbon neutral by 2030 – while
continuing to contribute significantly to the local economies that
host our mines, most notably in Botswana and Namibia. De Beers
has a longstanding commitment to sustainability and environmental
protection and restoration.
Base Metals
Copper
Anglo American has a world class position in copper, built around
its interests in two of the world’s largest copper mines – Los Bronces
Asset quality: Differentiated portfolio
Revenue by product(1)
2%2% 2%
7%
33%
13%
15%
26%
Diamonds
(De Beers)
Copper
PGMs
Iron Ore
Other
Met coal
Nickel
Manganese
Capital employed by geography(2)
13%
23%
9%
12%
21%
Chile and Peru
Brazil
South Africa
22%
Botswana and Namibia
Australia
Other
(1) Revenue by product based on business unit. Sales of products purchased from third parties by the Group’s Marketing business included within Other.
(2) Attributable basis.
26
Anglo American plc Integrated Annual Report 2021Strategic Report
(a 50.1% owned and managed operation) and Collahuasi
(44% interest in the independently managed joint operation), with
Reserve Lives of 36 years and 86 years, respectively. The tier one
Quellaveco copper project we are developing in Peru – due to start
production in mid-2022 – is one of the world’s largest untapped
copper orebodies and is expected to add around 300,000 tonnes per
annum of copper equivalent production (100% basis) on average
in the first 10 years of production. The resource base of these assets
underpins our future near-asset growth opportunities, in addition to the
polymetallic Sakatti deposit, which is being evaluated extensively by
our Discovery and Base Metals teams in Finland.
Copper is critical to decarbonisation, in particular to the transition
of the global energy system. Increased electrification and the shift
from carbon intensive to renewable power generation are resulting
in significant changes to energy grids and distribution systems, all of
which require additional copper.
The copper mining industry is expected to struggle to meet longer
term demand growth, including from hybrid and electric vehicles and
renewable energy, as declining grades and more challenging physical
and environmental conditions, along with tougher licensing and
permitting requirements, are expected to limit the industry’s ability to
deliver new copper supply.
Nickel
Anglo American produces two types of nickel. Our Barro Alto and
Codemin nickel assets (both 100% owned) are located in Brazil and
produce ferronickel, the majority of which is used in the production of
high quality stainless and heat resistant steels. Together, these assets
have the capacity to produce up to 45,000 tonnes of nickel per year.
Our PGMs operations in South Africa produce nickel sulphate as a
by-product, amounting to 22,300 tonnes in 2021. Nickel sulphate is a
critical input in lithium ion batteries used in multiple carbon abatement
technologies, including battery electric vehicles (BEVs).
Platinum Group Metals (PGMs)
Our PGMs business (held through an effective 79.2% interest in
Anglo American Platinum Limited) is a leading producer of PGMs –
platinum, palladium, rhodium, iridium, ruthenium and osmium. We mine,
process and refine the PGM basket of six precious metals from its high
quality resource base, located in the biggest known PGM deposit in
the world – the Bushveld Complex in South Africa. We also own and
operate Unki mine – one of the world’s largest PGM deposits outside
of South Africa, on the Great Dyke in Zimbabwe. Our flagship mine,
Mogalakwena, is one of the world’s highest margin PGM producers, in
part due to being the only large open pit PGM mine that exists today.
We are continuing to reposition the business around a leaner, best-
in-class operating footprint at our Mogalakwena, Amandelbult and
Mototolo mines in South Africa, and Unki mine in Zimbabwe, alongside
our joint operation interests in the Kroondal and Modikwa mines
in South Africa. On 31 January 2022, we announced that we had
disposed of our 50% interest in Kroondal to the other 50% owner,
Sibanye-Stillwater, conditional on a number of regulatory approvals –
see page 86 for more details.
Demand for PGMs is forecast to remain healthy, helped by the ongoing
trend towards cleaner-emission vehicles, driven by more stringent
global emissions legislation. Strong demand from the automotive
industry is likely to be augmented by growing opportunities for
emerging new applications, including hybrid and hydrogen fuel cell
electric transport, while emerging economies such as India offer the
potential of developing, from a relatively low base, into significant
platinum jewellery markets. The versatility of the six metals is highlighted
too in the breadth of applications for the lesser-known PGMs.
We are well positioned to proactively stimulate demand for PGMs,
including through targeted campaigns in emerging jewellery markets;
through direct investment in a number of companies developing new
technologies that are expected to drive industrial demand for PGMs;
and creating new investment demand for these precious metals as a
store of value.
→ For more on how we are developing the market for PGMs
See page 40
▲ ‘Minor PGMs’ such as iridium and osmium are now being used in
combination with platinum in the fight against cancer.
The ‘minor PGMs’ – a wide range of uses
Beyond platinum, palladium and rhodium, the minor PGMs
also have an important role to play in our modern world.
Ruthenium is a highly corrosion-resistant PGM and is a
catalyst in many chemical and electrochemical processes. It
is widely used, either on its own or alloyed with platinum and
palladium, to impart hardening and other qualities to make
electrical contacts with extreme wear resistance. Its many
electrical and chemical properties make it widely used in
micro-electronics, particularly in the manufacture of thick-film
semiconductors and hard disks.
While the applications described above account for around
50% of production, ruthenium has a variety of other
applications. Ruthenium oxide is used in the chemical industry
to coat the anodes of electrochemical cells for chlorine
production, and in catalysts for ammonia and acetic acid
production. In the medical arena, broadening applications
include cancer chemotherapy, while ruthenium isotopes are
used in eye-tumour radiotherapy. Ruthenium compounds are
also being used in solar cells to create energy in the ever-
expanding photovoltaic (PV) field.
Iridium is one of the rarest elements on Earth, and the
most corrosion-resistant material known. It has the highest
density of all the elements. As with other metals in the PGMs
suite, iridium is commercially recovered as a by-product
of PGMs and nickel refining. It is used in special alloys,
including with sister metals such as platinum and osmium.
Iridium is widely used as a chemical and electro-chemical
catalyst, for instance in chloralkali electrodes. Because
of its anti-corrosion properties, it is used when corrosion
resistance at high temperatures is needed, for example in the
manufacture of crucibles, in which crystals for the electronics
industry are grown, as well as in top-specification spark
plugs and electrodes for the production of chlorine in the
chloralkali process.
Osmium was, for many years, considered the ‘Cinderella’
of the PGMs suite because of its very limited range of
applications. It is now, however, the subject of growing interest.
Most widely known in the past for being a component in the
production of very hard, and frequently PGM-based, alloys
for fountain-pen tips and electrical contacts, osmium is today
experiencing a wider range of applications, including in the
chemical industry as a catalyst.
Potentially the most important development for osmium is
that it is now being used in combination with other PGMs,
such as platinum and iridium, in the fight against cancer. In
this field, there is also increasing interest in osmium in its own
right. As an illustration, Anglo American is a co-sponsor of the
University of Warwick’s research into anti-cancer therapies;
this has led to the discovery of an organo-metal compound,
named Organo-Osmium FY26, which attacks cancer cells’
weakest parts, and may become a significant contributor to
anti-cancer treatments.
27
Anglo American plc Integrated Annual Report 2021 Portfolio continued
Bulk Commodities
Steel is an essential material for almost all infrastructure and provides
the backbone of the low carbon economy and wider, long term socio-
economic development. Steelmaking is currently carbon intensive,
but our high quality iron ore and metallurgical coal products support
efficient – and therefore lower emitting – steelmaking today and are
well positioned to support the transition of the sector to lower carbon
production methods centred around hydrogen.
Iron Ore
Anglo American’s iron ore operations provide customers with high iron
content ore, a large percentage of which is direct-charge product for
steelmaking blast furnaces. In South Africa, we have a 70% shareholding
in Kumba Iron Ore, whose Sishen and Kolomela mines produce high
grade and high quality lump ore and also a premium fine ore.
In Brazil, our Minas-Rio operation (100% ownership), consisting of
an open pit mine and beneficiation plant, produces a high grade
pellet feed product, with low levels of contaminants. The iron ore is
transported through a 529 km pipeline to the iron ore handling and
shipping facilities (50% owned) at the port of Açu.
As steel producers in China and elsewhere face ever-tighter emissions
regulation and are seeking ways to make their furnaces cleaner and
more efficient, so the demand for higher quality iron ore products
increases. The lump iron ore produced from Kumba’s operations
commands a premium price, owing to its excellent physical strength
and high iron content (64–65% average Fe content). Minas-Rio’s
pellet feed product also commands a premium price, as its ultra-low
contaminant levels and high iron content (c.67% Fe content) are sought
after by steel producers who are seeking to minimise emissions while
boosting productivity.
Metallurgical Coal
We are the world’s third largest exporter of metallurgical coal for
steelmaking and our operations, located in Australia, serve customers
throughout Asia, Europe and South America.
Our tier one metallurgical coal assets include the Moranbah and
Grosvenor metallurgical coal mines (both 88% ownership), located
in Queensland. The mines are underground longwall operations
and produce premium quality hard coking coal. More stringent
environmental and safety regulations have led to a requirement for
many steel producers to run cleaner, larger and more efficient blast
furnaces which, combined with a number of mine closures in recent
years, results in increased global structural demand for high quality
coking coal, such as that produced by our Australian mines.
Anglo American has completed its exit from thermal coal operations,
having demerged to shareholders our remaining thermal coal
operations in South Africa during 2021, and completed the sale of
our 33.3% shareholding in Cerrejón in Colombia in January 2022.
Manganese
We have a 40% shareholding in Samancor joint venture (managed
by South32, which holds 60%), with operations based in South Africa
and Australia.
Crop Nutrients
Anglo American is progressing the development of the Woodsmith
project in the north east of England to access the world’s largest known
deposit of polyhalite, a natural mineral fertiliser product containing
potassium, sulphur, magnesium and calcium.
Our fertiliser product – known as POLY4 – will be exported to a network
of customers overseas from our dedicated port facility at Teesside.
As we develop the mine and associated infrastructure, we are also
developing demand for its product. POLY4 continues to demonstrate
the significant benefits of its multi-nutrient, low chloride characteristics
on the full breadth of crops at commercial scale. Beyond its crop
yield and quality benefits over other bulk fertiliser products, the
value of the product is also expected to be enhanced by its positive
environmental properties – a very low carbon footprint given minimal
processing requirements, its natural ability to improve soil health, and its
certification for organic use.
28
This long-life asset fits well with our established strategy of securing
and developing world class assets, particularly in the context of
Anglo American’s trajectory towards products that support a fast
growing global population – in this case, to meet ever growing demand
for food – and enable a cleaner, greener, more sustainable world.
Portfolio update
We continue to refine and upgrade the quality of our asset portfolio to
ensure that our capital is deployed effectively to generate enhanced
and sustainable returns for our shareholders.
Anglo American has transformed the quality and performance of its
portfolio since 2013, halving the number of assets while producing
more physical product. This transformation has been achieved
through extensive operational self-help and other efficiency work,
together with the sale, placing onto care and maintenance, or closure
of less attractive assets, resulting in a step-change in our operational
performance, profitability and cash flow generation.
Portfolio management
During 2021, our focus was on continuing to improve our competitive
position, progressing the construction of the Quellaveco copper
project in Peru, completing our exit from thermal coal operations and
progressing the technical review of the Woodsmith polyhalite project.
On 4 June 2021, Anglo American demerged its thermal coal operations
in South Africa into a newly incorporated company, Thungela
Resources Limited, that was subsequently admitted to trading on both
the Johannesburg and London stock exchanges on 7 June 2021.
And, on 11 January 2022, Anglo American completed the sale of
its 33.3% shareholding in Cerrejón to Glencore plc for a total cash
consideration of approximately $0.3 billion, before adjustment for
dividends received in 2021. The completion of this transaction
represents the final stage of our responsible exit from thermal
coal operations.
At our Woodsmith polyhalite project, our detailed technical review to
ensure the technical and commercial integrity of the mine design and
its associated transportation and port infrastructure, is largely complete.
Several aspects of the project have been identified for modification
that will bring the project up to Anglo American’s safety and operating
integrity standards, as well as optimise the value of the asset for the
long term.
Anglo American expects to make changes to the design of the mine
infrastructure, including the installation of additional ventilation earlier in
the development of the underground mining area to enable the use of
only continuous miners. These configuration modifications will result in
a different and longer construction schedule.
The technical review also confirmed the high quality and potential
of the project, with the scale and quality of the polyhalite orebody
supporting the project’s forecast first quartile operating cost position
and strong margins.
→ For more on the Woodsmith project
See pages 98–99
Projects
Anglo American offers one of the most attractive organic growth
profiles in the mining industry and is set to deliver 35%(6) growth over the
next decade.
Strict value criteria are applied to the assessment of Anglo American’s
growth options and, for major greenfield projects, we expect to
sequence their development and consider including partners where
appropriate. The Group will continue to maintain optionality to progress
with holistic value-accretive projects.
The Quellaveco copper project in Peru remains on track, despite the
challenges posed by Covid-19 to date, with first production expected
in mid-2022. Total project costs are estimated at $5.4–5.5 billion
See page 101 for footnotes.
Anglo American plc Integrated Annual Report 2021Strategic Report (100% basis), excluding the impact of additional Covid-19 related
disruption. The construction of a full scale coarse particle recovery
plant, expected to be completed in 2023 at a cost of $0.2 billion, will
allow retreatment of coarse particles from flotation tailings to improve
recoveries by c.3% on average over the life of the mine.
Longer term, the Group has a number of organic growth options
under consideration, including expansions at the Mogalakwena PGMs
complex in South Africa, the Collahuasi copper joint operation in Chile,
the Moranbah-Grosvenor metallurgical coal mines in Australia, and the
Sakatti polymetallic project in Finland.
→ For more on the progress of our Quellaveco project
See pages 83–84
Discovery
Discovery and Geosciences, including our exploration activities,
is consolidated and centrally co-ordinated, covering near-asset
and greenfield discovery activities, projects and operations. The
integrated team represents a strategic differentiator, enabling the
detailed understanding of our world class assets to inform our pursuit
of discoveries.
Anglo American was founded on world class mineral discoveries.
Building on the Group’s strategy and long track record of discovery
success, our strategy continues to shape a global, diversified, risk-
balanced portfolio focused on new discovery search spaces and
mineral system thinking. This effort is enhancing our position as a
discoverer of superior-value deposits that have the potential to
improve materially our production profile, over time.
Quality discovery portfolio
We are concentrating on the discovery of mineral deposits in existing
and new district-scale positions that are capable of delivering:
– Sustainable returns to the business, on a material scale
– Further improved diversification and optionality for the business,
especially with respect to metals and minerals that will enable a
cleaner, greener, decarbonised world.
Our robust and diverse discovery portfolio includes:
Near-asset discovery projects
Our near-asset discovery projects are focused on the district-scale
mineral tenure around Anglo American’s existing operations. These
have yielded, for example, several discoveries in the Los Bronces district
in Chile. Notably, at Los Bronces Underground, discovered in 2006,
ongoing drilling over the past five years has yielded an increase in
reported Mineral Resources by more than 240% to c.4.1 billion tonnes
grading 1.13% TCu (see Ore Reserves and Mineral Resources Annual
Report 2021 for full details). In other districts such as Quellaveco (Peru),
Mogalakwena (South Africa), and Sakatti (Finland), new copper and
PGM prospects respectively have been identified and are currently
being evaluated.
Greenfield discovery projects
Greenfield discovery projects are those that identify and secure
district-scale mineral tenure covering strategic, highly prospective
search space in established and frontier settings. Our greenfield
discovery focus includes copper, nickel, PGMs and diamonds. The
mineral-system focus also brings the potential for co/by-products,
including gold, cobalt, silver, molybdenum and zinc. The Group has
active greenfield programmes in Australia (Queensland and Western
Australia), Canada, Greenland, South America (Brazil, Chile, Ecuador
and Peru), Europe, and sub-Saharan Africa (Angola, Botswana,
Namibia and Zambia).
▲ Construction work in progress at Quellaveco’s futuristic-looking
Papujune processing plant.
State of the art Quellaveco – on track for
start-up in 2022
At Quellaveco in the south of Peru, we are building a model
mine for the 21st century. A mine where many operations will
be fully digitalised and automated, which uses minimal fresh
water, and which is being developed in close collaboration
with our host communities and with the utmost care for the
environment. Notably, in line with Anglo American’s policy
of sourcing all its South American operations’ energy needs
from non-fossil sources, Quellaveco’s mains power supply will
come entirely from renewables from 2022.
Construction progress
We saw the achievement of several major milestones at
the project in 2021 and construction on all work fronts is
reaching the final stages. The Vizcachas Dam – part of the
infrastructure that will provide water to both the operation
and local communities – is now commissioned, and the
95 km water pipeline to site is on track to complete in the first
quarter of 2022. Significant progress has been made on the
primary crusher, and the overland ore transport conveyor
belt to the processing plant is being installed. We are close
to completing the construction of the processing plant, and
pre-commissioning of the first of two milling lines began in
January 2022. In the tailings area, the starter dam is built to
its full elevation and, at the port, works to expand the existing
port facilities remain on track to allow copper concentrate
shipments to begin in 2022.
Rolling out innovative technologies
Our technicians are rolling out a range of autonomous, or
automation-ready, vehicles and equipment. This includes a
fleet of 27 specialised mining trucks, 22 of which are already
working on site following the start of pre-stripping in April.
These are being complemented by high capacity electric
rope shovels and hydraulic mining shovels, further increasing
production rates and lowering greenhouse gas emissions.
We are also deploying six autonomous drills, drilling a first hole
from a remote control room, in June 2021.
Anglo American is also studying whether Quellaveco could
utilise technologies such as bulk ore sorting (BOS) and
hydraulic dry stack (HDS), in addition to the full scale coarse
particle recovery (CPR) plant that is targeted for construction
at the site. BOS is designed to deliver improved feed
grade to plants through early rejection of waste, improving
energy efficiencies; CPR is a complementary technology
that allows material to be ground to a larger particle size,
and also improves copper recovery, energy efficiency and
water recovery; while HDS is a dry-storage technology that
assists the water-recycling process and forms part of our
investigations to moving towards safer ‘dry’ tailings storage.
29
Anglo American plc Integrated Annual Report 2021 Strategic Report
Innovation
Across every aspect of our business, we are
thinking innovatively to ensure the safety of our
people, to enhance the sustainability of our
business, and to deliver enduring value in its
many forms for all our stakeholders.
Material matters discussed in this section
– Adopting a zero mindset
– Tackling climate change
– Protecting our natural environment
– Playing our role in society
– Driving business performance
▲ Installing the power module, designed and built by our Technical team, into the 290 tonne
capacity hydrogen heavy haul hybrid truck we are building at our Mogalakwena PGMs mine.
This unique, fuel-cell and battery-powered truck is set to enter service in 2022, and be the
forerunner of a fleet of such trucks at seven of our operations by 2030.
30
Anglo American plc Integrated Annual Report 2021
Anglo American plc Integrated Annual Report 2021
31
Innovation continued
▲ Stephina Seemola, a Community Health worker, tests local resident, Emma Tselapedi, for diabetes in Sunsloot Village, Mogalakwena.
Collaborative Regional
Development
How to foster economic and social
development in a way that delivers enduring
benefits to the communities where mining
companies have operations has been a
longstanding challenge for the mining industry.
All too often, interventions have been sporadic,
mine-dependent, inadequately resourced,
and lacking scale, resulting in under-delivery
and lack of follow-through. We are working to
change this.
Recognising that a new approach is needed if we are to translate
well-meaning aspiration into long term improvement of people’s
lives, Collaborative Regional Development (CRD) is Anglo American’s
innovative partnership model to catalyse scalable and sustainable
development across our operating regions.
Why we can’t go it alone
Although Anglo American is a major development actor in several
regions where we have mines or mining projects, experience has
taught us that we need to forge cross-sectoral partnerships if regional
development is to be strengthened. Our approach, therefore, is rooted
in listening and truly engaging with our many constituencies – which
is why CRD is a collaborative model that includes neighbouring
communities, government, business, development partners,
and academia.
Optimising our technological leadership
As a widely acknowledged technological leader in the mining industry,
innovation is also at the heart of our approach. In addition to exploring
in sectors such as agriculture, tourism and mining supplies, we are
also looking at regional development benefits stemming from new
technologies being introduced across Anglo American, including our
growing expertise in renewable energy and its role in the production
of ‘green hydrogen’.
For each CRD study, we undertake a comprehensive analysis of the
region's assets, including climate, soils, skills, infrastructure and historical
and natural heritage, to identify and then evaluate untapped potential
in a systematic, data-driven way. This feeds into a rigorous six-phased
approach to regional development that is not only data-driven but is
based on multi-sector engagement and collaboration.
32
Anglo American plc Integrated Annual Report 2021Strategic Report “We joined the Impact Catalyst in 2021. Since
then, there have been many times when we
have engaged in robust discussions over the
best way forward to resolving some of the
critical challenges we face. However, it is hard
to think of any other company, government
or development actor that is leveraging its
unique expertise in regional socio-economic
development as systematically and on such
an international scale as Anglo American.”
Joanne Bate, Chief Operations Officer
The Industrial Development Corporation South Africa
“The major shift is that we aim to
empower communities to achieve long
term economic prosperity by changing
the role of mining to be the catalyst,
rather than the sole economic activity.”
→ Themba Mkhwanazi, CEO of Bulk Commodities, discusses how
collaboration can be the catalyst for a better Northern Cape
Visit www.southafrica.angloamerican.com/our-stories/making-
collaboration-the-catalyst-for-a-better-northern-cape
Another focus of the Impact Catalyst initiative is empowering youth,
particularly those whose development is being hampered by systemic
factors beyond their control, such as historically low educational levels,
widespread poverty, and Covid-19.
Social and economic development is harder to deliver than physical
infrastructure development, but the effects are more impactful and
longer lasting. Anglo American’s strong cross-sector relationships,
and our ability to pull levers where others can’t, bring a unique lens to
the business of uplifting regional economies and allow us to introduce
tailor-made programmes. A key area we have identified where we can
make a real difference, at scale, to economic upliftment, is agriculture
– and our CRD programme in Limpopo is a front-runner, with our
social performance and supply chain teams working collectively with
several partners to create logistics value chains that will help form the
backbone of sustainable regional agricultural ecosystems.
5,500+
premature deaths potentially averted
3.6 m
people supported
33
▲ In November 2021, we launched Moquegua Crece CRD programme, our
CRD programme in Peru’s Moquegua region. Pictured are (left to right)
Gaelle Dupuis, who is Manager of Institutional Relations and Sustainability at
Engie Energia Peru; Governor Regional Moquegua Zenón Cuevas Pare; and
Anglo American vice-president – corporate affairs Diego Ortega Meneses.
The Impact Catalyst
Our Sustainable Mining Plan (SMP) aims to deliver outstanding
sustained business performance, while making a net-positive impact
on our host communities and the environment. Integral to delivering
certain commitments within the SMP, our CRD projects reflect the
longevity of our commitment; they are designed to provide sustainable
job opportunities that are independent of our mines, so that host
communities can prosper long after mine gates close for the last time.
The Impact Catalyst is our first CRD partnership, initiated by
Anglo American and co-founded with fellow mining company, Exxaro,
and other South African and international organisations, and it is
already delivering significant socio-economic change on a regional
scale across Limpopo and the Northern Cape in South Africa.
Focused currently on areas of greatest need such as southern Africa
and South America, we are now applying CRD in Australia and the
UK. We are also creating a series of sister organisations tailored by
jurisdiction and context, each with a unique set of partners, including
the International Finance Corporation (IFC), Mitsubishi, and the
Moquegua regional government in Peru – all connected through our
common Purpose.
The Impact Catalyst in Limpopo
The Impact Catalyst is already established as an important
development actor in South Africa’s Limpopo, a mainly rural province
that is one of the country’s poorest, with high rates of unemployment
and under-employment, and health and education systems that
experience many challenges. Launched in 2019 following extensive
spatial analysis of the region, we are implementing several initiatives
with a variety of partners to build and increase capacity in areas such
as regional development planning, education, health, agriculture, and
the environment.
Projects include a five-year community-orientated primary care
programme. Working with the University of Pretoria and other partners,
we are relieving the intense pressure on doctors by bringing healthcare
professionals into homes to identify critical health issues and support
the care of community members. We aim to help provide community
health support for 3.6 million people through the programme, which we
project could avert more than 5,500 premature deaths – and save the
health service c.$40 million a year.
We are also bringing technology into people’s everyday lives by rolling
out projects focused on increasing broadband access for schools;
already we have improved online teaching significantly through
bringing internet connectivity to around 73,000 learners.
Anglo American plc Integrated Annual Report 2021 Innovation continued
Our approach to Innovation
Across every aspect of our business,
from mineral exploration to delivering our
products to our customers, we are thinking
innovatively to ensure the safety of our
people, to enhance the sustainability of our
business, and to deliver enduring value in
its many forms for all our stakeholders.
The combination of our innovative Marketing business, best-in-class
operational improvements provided by the stable platform of our
Operating Model and through our P101 programme, and FutureSmart
Mining™ – our innovation-led pathway to sustainable mining – is
fundamentally changing the way we extract, process and market
metals and minerals, providing our next step-change in operating and
financial performance.
a
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i
t
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a
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g i n i n g m i n i n g to improve people’s liv
O p e r a ting Model
e
s
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e
S
m
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g
™
Innovation
P101
Marketing
Our Marketing business optimises the value
from our mineral resources and market
positions. We do this by fully understanding
and addressing our customers’ specific
needs and optimising our capabilities in the
financial and physical markets to drive the
right commercial decisions across the value
chain – from mine to market.
→ For more information
See pages 40–41
Operating Model
We believe we can build a long term
sustainable competitive advantage by
securing access to the best resources and
through operating assets more effectively
(productive) and more efficiently (cost
competitive) than our competitors.
Our Operating Model is the foundation to
support us by providing structure, stability
and predictability in the way that we plan
and execute every task. Unplanned work is
inherently more costly, and less safe, than
planned work.
→ For more information
See page 42
P101
P101 is our transformational asset
productivity programme that builds on the
stability provided by our Operating Model.
It is about improving the performance of
our most value-accretive mining and other
processes to best-in-class benchmarks,
then pushing the capability boundary
further, establishing new benchmarks for the
industry in terms of efficiency and the way
we work.
→ For more information
See page 42
34
Anglo American plc Integrated Annual Report 2021Strategic Report
FutureSmart Mining™
FutureSmart Mining™ is our blueprint for the future of our business.
The intrinsic links between technology, digitalisation and many of
our sustainability outcomes are driving the innovations that will
transform the nature of mining and how our stakeholders experience
our business. A future in which broad, innovative thinking, enabling
technologies, and collaborative partnerships are helping to shape
an industry that is safer, more sustainable and efficient, and better
harmonised with the needs of our host communities and society.
This is about transforming our physical and societal footprint.
Technology and digitalisation
Through embracing step-change technologies,
our mining operations are becoming safer and
more water- and energy-efficient. Through
digitalisation, and the application of big data
and artificial intelligence, FutureSmart Mining™
is enhancing our performance across the entire
mining value chain, from the discovery of new
mineral deposits, to mining equipment and
processing techniques, to tailoring products to
our customers.
→ For more on technology and digitalisation
See pages 36–37
Sustainability
Our Sustainable Mining Plan, integral to
FutureSmart Mining™, is built around three
Global Sustainability Pillars and sets out our
commitment to stretching goals – driving
sustainability outcomes through technology,
digitalisation and our innovative approach to
sustainable economic development.
→ For more on our Sustainable Mining Plan
See pages 38–39
35
Anglo American plc Integrated Annual Report 2021 Innovation continued
Technology and digitalisation
By integrating data intelligence and technology
with our Sustainable Mining Plan commitments,
we are creating new systems that optimise
value for our stakeholders. We expect this
integrated and holistic approach to deliver
increasingly significant safety, environmental
and social benefits, while reinforcing the
ethical credentials of our products.
FutureSmart Mining™ has systemic thinking at its core – with real
value being realised through multiple new technologies working
together. The framework for our approach to technology and
digitalisation is set out as follows:
Concentrating the Mine™
Water-less Mine
We are optimising mining processes through technologies that
target the required metals and minerals more precisely, with
reduced water, energy and capital intensity, and producing less
waste. These technologies include bulk ore sorting (BOS), coarse
particle recovery (CPR), fines flotation, dry processing and novel
classification, with their implementation integrated into resource
development planning.
With 75% of our assets located in water constrained areas, we
must reduce our dependence on water and associated tailings
facilities. We will always need water, but we can get closer to full
recovery recycling. Through an integrated system of technologies
including CPR and hydraulic dry stack (HDS), we are reducing
fresh water usage, moving to closed loop and ultimately dry
processing in our operations, thereby eliminating the need for wet
tailings and instead creating stable, dry, economically viable land.
Progress in 2021
Progress in 2021
A full-scale BOS unit, which will deliver improved grade feed
to plants through the early rejection of waste, reducing energy
consumption, water usage, and unit costs in the process, is
now operational at our PGMs business’s Mogalakwena North
Concentrator. A modular ultra-fines recovery plant has also been
constructed there, which will address the industry-wide challenge
of reducing ultra-fine mineral losses, with the potential to increase
recovery rates by up to 3%.
A Sensor Fusion Loop trial is currently under way in South Africa.
The unique facility, which optimises up to 10 different sensors
to sort ore materials at the pre-processing stage, incorporates
a 200-metre belt that can process the equivalent of 700–800
tonnes of rock per hour and could generate as much as a 5%
improvement in metal yield.
At our El Soldado mine, a pilot CPR plant has, in just eight months,
exceeded targets in energy unit consumption, enabling a 16%
increase in copper production without the need for additional
energy. The innovative flotation process, which permits material
to be ground to a larger particle size, allowing the early rejection
of coarse waste and greater water recovery, has already begun
producing the coarse waste which will be used in the nearby
HDS pilot plant. A full scale CPR plant is under construction at
the Mogalakwena North concentrator (PGMs), with start-up
anticipated at the start of the third quarter of 2022. CPR has
been approved at Quellaveco (Copper) to treat flotation tails.
Construction and commissioning are planned following start-up
of the main plant in mid-2022.
36
Anglo American plc Integrated Annual Report 2021Strategic Report Modern Mine
Intelligent Mine
Safety is our number one priority and we are committed to
achieving zero harm, so that all of our colleagues return home
safely, every day. We are developing a new generation of
engineered controls to reduce exposure to risk in work processes.
We are using existing modernisation technologies, introducing
remotely operated machinery – such as automated drilling – and
continuous hard rock cutting, to remove people from harm’s way.
We are transforming how we make best use of data, through
integrated digital tools for planning, simulation, execution, and
monitoring, from resource definition to the output of processing
plants. Our integrated digital transformation platform (known
as VOXELTM) is bringing the full mining value chain together in a
digital form to help our people make data-driven decisions in the
most efficient manner, predicting outcomes and driving safety,
environmental and productivity improvements.
Progress in 2021
Progress in 2021
Anglo American's first fleet of autonomous mining trucks has
been deployed at our Quellaveco copper project, marking a new
milestone in Peru. Currently, there are 22 fully autonomous trucks
on site, with plans for a full fleet of 27 automated trucks by the
second half of 2022. In addition, the first fully autonomous drill
was successfully deployed in the second quarter of 2021, drilling
a 16-metre hole in under 15 minutes. The commissioning of the
autonomous hauling and drilling is enabling the mining operation
to hit its P101 targets across the board sooner than anticipated.
VOXELTM enables us to fully optimise our mining operations through
an integrated system of digital twins that span the entire mining
value chain. Throughout 2021, we have completed a variety of
deployments at sites in PGMs, De Beers, Copper and Iron Ore,
including solutions for mining, processing, and asset strategy
and reliability.
Advanced Process Control (APC) automates complex work and
offers up to 40% improvement in stability and productivity through
greater data-driven decision making in real time. Substantial
process automations have been delivered at Minas-Rio (Iron Ore),
Los Bronces (Copper), Kumba (Iron Ore) and Mogalakwena
(PGMs). Our ambition is to deliver 95% APC control over all
automatable processes by the end of 2022.
In the first quarter of 2021, in Santiago in Chile, an Integrated
Remote Operation Centre (IROC), the first of its kind for
Anglo American, began operating, using artificial intelligence (AI),
augmented reality, and remote-operation technology to enable
Los Bronces copper mine to be run remotely from the IROC.
37
Anglo American plc Integrated Annual Report 2021 Innovation continued
Sustainable Mining Plan
Our Sustainable Mining Plan, integral to FutureSmart Mining™, is built around
three Global Sustainability Pillars and sets out our commitment to stretching
goals – driving sustainability outcomes through technology, digitalisation and
our innovative approach to sustainable economic development.
Environment
Social
Healthy Environment
Thriving Communities
Maintain a healthy environment by creating water-less,
carbon neutral operations and delivering positive
biodiversity outcomes.
Build thriving communities with better health, education
and levels of employment.
Climate change
To be carbon neutral across our operations.
Health and well-being*
Relevant SDG targets for health to be achieved in our
host communities.
2030: Reduce absolute GHG emissions (Scopes 1 and 2) by 30%. Improve
energy efficiency by 30%. Be carbon neutral across 8 of our sites.
2022: Baseline established and strategies in place at every site to achieve
the SDG 3 health targets.
2040: Be carbon neutral across all of our operations.
2040: Ambition to reduce Scope 3 emissions by 50%.
Biodiversity
To deliver net positive impact (NPI) across Anglo American.
2021: NPI methodology, biodiversity value assessments and site-specific
indicators in place at high risk environments. Establish biodiversity
frameworks, processes and resources to enable mitigation across the
mining lifecycle. Formalise partnerships to support NPI.
2030: Deliver NPI on biodiversity across Anglo American.
Water
To operate water-less mines in water scarce catchments.
2030: Reduce the withdrawal of fresh water by 50% in water scarce areas.
2025: Operations to be halfway to closing the gap between baselines
and 2030 targets.
2030: SDG 3 targets for health to be achieved in our host communities.
Education
All children in host communities to have access to excellent
education and training.
2021: Baselines and strategies in place at every site.
2025: Schools in host communities to perform within the top 30% of state
schools nationally.
2030: Schools in host communities to perform within the top 20% of state
schools nationally.
Livelihoods
Shared, sustainable prosperity in our host communities.
2021: Baselines and strategies in place at every site.
2025: Three jobs created/supported off site for every job on site.
2030: Five jobs created/supported off site for every job on site.
Critical
foundations
These form the common and
minimum requirements for each of
our operations and our business as
a whole. The Critical Foundations
are essential to the long term
credibility and success of both the
Sustainable Mining Plan and our
social licence to operate.
Leadership and culture
We are a leader in an industry critical to all our futures
– our products are changing the world. We foster
a culture combining technological innovation with
utmost consideration for our employees and everyone
we interact with.
Human rights
We respect the UN and other international agreements
recognising human rights. We work with governments
at all levels and other authorities to ensure human rights
are understood and protected as we strive to improve
lives and livelihoods in our host communities.
Zero harm
Zero harm is always our primary objective. We are
getting there through creating an environment where
every employee feels confident enough to do the right
thing by speaking out each time they encounter a
situation they feel is potentially unsafe.
Inclusion and diversity
This is a business-critical issue for us. We believe
we must draw from the widest possible talent pool,
and especially ensure continuing higher female
representation at all levels, if we are to enhance our
performance and maintain a competitive advantage.
*Due to the ongoing effects of the Covid-19 pandemic, the Board’s Sustainability Committee agreed to extend the targets from 2021 to 2022.
38
Anglo American plc Integrated Annual Report 2021Strategic Report Governance
Trusted Corporate Leader
Develop trust, provide ethical value chains and improve
accountability to the communities we work with.
Local accountability*
Transform the relationship between mines, communities,
and wider society.
2022: Establish accountability forums at all mine sites.
2025: High quality dialogue and programmes resulting from forums.
2030: Establish open and accountable dialogue, leading to greater
mutual trust.
National and international accountability*
Transform the relationship between mines, communities,
and wider society.
2022: Governments and civil society agree to participate in stakeholder
accountability forums, and agree benchmarks/indices and responsibilities.
2025: Continued dialogue on reporting and responsibilities.
2030: Recognition of benefits and challenges of responsible mining; a more
consensual working relationship between Anglo American and society.
Policy advocacy
Collaboratively take a lead on issues that affect our business
and society’s wider goals.
2021: Finalise advocacy plans to support key sustainability issues. Provide
university scholarships in good governance for stakeholders in regions
where we operate.
2025: Regular involvement in priority policy and governance debates.
2030: Recognition of our leadership on policy advocacy. Strong levels of
engagement in policy debates.
Ethical value chains*
Support and reinforce positive human rights and sustainability
outcomes through our value chain.
Mine certification and responsible sourcing
2022: Half of operations to undergo third-party audits against
responsible mine certification systems. Responsible sourcing standard
fully implemented.
2025: All operations to undergo third-party audits against responsible
mine certification systems.
Group standards and processes
Our Group standards and processes include our Code of Conduct,
Human Rights policy and underlying standards, and Responsible
Sourcing Standards for Suppliers, which are aligned with global initiatives
such as the UN’s SDGs and the Kimberley Process for diamonds.
Compliance with legal requirements
Meeting applicable legal requirements is an essential part of our business
globally and is critical to building trust in all of our stakeholders.
Collaborative Regional Development
Our innovative partnership model to catalyse
independent, scalable and sustainable economic
development in regions around our operations – the
objective being to improve lives by creating truly thriving
communities that endure and prosper well beyond the
life of the mine.
Regional Spatial Analysis
This innovative approach starts by identifying
socio-economic development opportunities
with the greatest potential in a region via
spatial planning and analysis.
Planning and implementation in partnership
The information from the regional spatial
analyses enables us to develop plans,
secure funding and implement sustainable
development opportunities.
Five-year site plans
We have tailored five-year local plans for each of
our sites and Group functions to address the unique
challenges across our operations. Each one is
developed to support our Global Sustainability Pillars
and stretch goals as well as our critical foundations and
Collaborative Regional Development.
Sustainable Development Goals
Our Sustainable Mining Plan is built around three Global
Sustainability Pillars designed to support the UN’s SDGs.
Each pillar has three Stretch Goals that we must reach by
2030 and further goals and ambitions that we will add
to these as we progress. They are deliberately ambitious
and designed to challenge us to lead and innovate.
Healthy Environment
Thriving Communities
Trusted Corporate Leader
39
Anglo American plc Integrated Annual Report 2021 Innovation continued
Working with German steelmaker Salzgitter Flachstahl, we are
conducting research into feed materials, including iron ore pellets
and lump ores, suitable for use in direct reduced iron (DRI) steelmaking
based on natural gas and hydrogen – a more sustainable, less
carbon-intensive steel production method. With Bahrain Steel, the
world’s leading iron ore merchant pelletiser, we are converting pellet
feed from our Minas-Rio operation into high quality iron ore pellets
also suitable for DRI steelmaking, a new addition to our high quality
iron ore product offering.
Anglo American has also joined forces with representatives from
62 companies, universities, and organisations from 15 countries as
part of an alliance initiated by China’s Baowu, the world’s leading
steel producer, with the objective of advancing the engineering and
industrialising of low carbon steelmaking technologies.
Our decarbonisation efforts extend to the way we connect our mines
with customers. We are exploring a comprehensive range of long
term actions designed to guarantee sustainable shipping operations,
complemented by regular performance and emissions reporting.
As part of this approach, we have set an ambition to achieve carbon
neutrality by 2040 for the ocean freight activities we control, with an
interim 30% reduction in emissions by 2030 against a 2020 baseline.
Developing new applications for our products
As demand trends shift over time, we work to nurture additional sources
of sustainable demand for our products – particularly those for which
we are a leading global producer. Our integrated approach includes
advancing, financing and backing new technologies – from the spark
of an idea, through commercialisation, to engineering and sustaining
scale – supporting entrepreneurial projects and scientific research,
while advocating for responsible policy frameworks that enable a
favourable long term investment environment. The role of PGMs in the
hydrogen economy is one such example in our portfolio.
Through our PGMs Market Development team, we actively support the
advancement of hydrogen solutions in several industries, including
bringing together participants from across the transport value chain
to promote the adoption of PGM-containing FCEVs, particularly well
suited for heavy duty forms of transport.
In particular, we are facilitating the creation of consortia to promote the
development of hydrogen freight corridors in a number of geographies,
especially in South Africa, one of the world’s leading producers of
PGMs. These projects are aimed at supporting the introduction of
hydrogen as a transport fuel for the difficult to decarbonise sectors of
high mileage and heavy duty truck and van fleets.
→ For more on the 'Hydrogen Valley' in South Africa
See page 44
We are also capitalising on our experience through a range of
collaborations and focused investments, including via PGM-focused
venture capital fund AP Ventures LLP, which today manages a total of
$395 million in assets – to explore potential applications for hydrogen
technology in the steel production process.
Our venture building programme, introduced in 2021, brings together
our capabilities to drive more sustainable, diversified and innovation-
led demand growth for PGMs. This involves taking innovative ideas with
potential for scale and creating enterprises around them, developing
the strategy, brand, team and growth capital they need to succeed.
During 2021, we entered into partnerships to develop carbon neutral
feedstocks, with a focus on technology development and ways to
improve the commercial viability of solutions with the potential to
reduce the environmental impact of the entire CO2 supply chain.
Our Marketing business
We have transformed the way we sell our products to customers, by
building long term direct commercial relationships and providing a
seamless mine-to-market value chain.
Our Marketing business is designed to optimise the value from our
mineral resources and market positions for the benefit of all our
stakeholders, including by demonstrating the high sustainability
standards we are committed to. Our customers, serving many of the
world’s most critical industries, are at the heart of the processes that
connect our metals and minerals with those who ultimately need
and value them. By understanding, addressing, and anticipating
our customers’ specific needs, and evolving our capabilities in the
financial and physical markets, we are taking an active role in building
tailored materials solutions and successfully bringing them to market
for our customers.
Our approach
We offer a reliable supply of essential natural resources, whether
from our own mine portfolio or through complementary third-party
production from qualified partners. Our broad range of integrated
product solutions – which are responsibly produced, sourced and
delivered – optimally fulfil customer requirements, and are supported
by consistently high quality service.
We take a market-led approach to our mining and processing
decisions and, through integrated planning, drive efficiencies across
our value chain. This allows us to anticipate and respond to changes in
demand, commercialising the products our customers need and want
at any given time. Our trading activities allow us to use our scale and
market insight to ensure security of supply and to help mitigate risk for
our customers.
We have continued to build out our sourcing and origination network
to expand our supply capabilities, allowing us to enhance our resource
flows across a broad range of products – with a focus on those, such
as copper and high quality iron ore, that are key to the energy transition
– with an offering that is extensive, yet flexible, and consistent with the
attributes of our equity portfolio. This safeguards our licence to operate
while helping small-scale miners bring their products to market with the
benefits of Anglo American’s scale and marketing platform.
With the Covid-19 pandemic continuing to affect industry dynamics
worldwide, our marketing capabilities have been central to our ability to
balance supply and demand for our customers, and to respond to the
challenges of an uncertain world.
Sustainability at the heart of our product offering
With growing emphasis from consumers and society more broadly
on the importance of an ethical and lower carbon value chain, we
have accelerated our product assurance efforts. Our customers,
acknowledging that the energy transition will be a metals-intensive
shift, are increasingly seeking robust assurance about responsible
production. We are building on Anglo American’s established
sustainable mining credentials to put in place a consistent and
comprehensive approach to sustainability screening, due diligence
and post-deal management of sustainability risks and opportunities
and, as part of our SMP commitments, we aim to have all of our mines
verified against a responsible mining standard by 2025.
We are focused on building on the long term relationships we have
with our customers and, by joining forces with them and like-minded
partners, are shaping an offering that channels the increasing global
demand for future-enabling metals and minerals into a requirement for
traceable, ethical and sustainable value chains.
Decarbonisation of our value chain
As part of the global response to the challenges of climate change, we
have focused on our long term customer relationships to encourage
innovative collaborations aimed at advancing decarbonisation
efforts for hard to abate sectors, such as steelmaking. With most of our
Scope 3 emissions connected to the steelmaking industry, we have
placed a particular emphasis on developing partnerships towards
industry-wide decarbonisation.
40
Anglo American plc Integrated Annual Report 2021Strategic Report ▲ In June 2021, our Shipping team successfully trialled the use of sustainable biofuel to power a chartered Capesize vessel from Singapore to South Africa.
Shipping – navigating the transition to
cleaner ocean freight
Anglo American’s key emissions commitments, as set out in our most
recent Climate Change Report and embodied by our Sustainable
Mining Plan, include achieving carbon neutral mining operations by
2040. In 2021, we have extended our efforts by setting an ambition to
reduce our Scope 3 emissions by 50%, also by 2040, and to achieve
carbon neutrality across our controlled ocean-freight activities by the
same time, with an interim 30% reduction in emissions by 2030.
Anglo American has already attained high standards in vessel
efficiency across its chartered fleet, which today transports more
than 70 million tonnes of dry bulk products per year to customers
around the world. We are now exploring a comprehensive framework
of complementary sustainability measures, to be backed by regular
and validated emissions performance reporting. Vessel retrofits, the
use of voyage optimisation software, and support for technology
development to help enable the switch from conventional fuel oil to
sustainable marine fuels, are all part of our efforts to decarbonise
ocean-freight activities.
In 2020 and 2021, we awarded contracts to build a total of 10 new
liquefied natural gas (LNG)-fuelled Capesize+ vessels for our chartered
fleet. Anticipated environmental benefits include a c.35% reduction
in carbon emissions compared with standard marine fuel, while also
using new technology to eliminate the release of unburnt methane, or
so-called ‘methane slip’.
Anglo American is also participating in industry efforts to accelerate
the development of alternative low carbon and zero carbon fuels.
We conducted a successful trial using sustainable biofuel, converted
from waste cooking oil from Singapore’s food and beverage industry,
to power a chartered Capesize ship during a voyage from Singapore
to South Africa, with the aim to bring biofuel into our marine fuel mix.
We are also part of a consortium, led by Japan’s Itochu, that is studying
the viability of green ammonia to fuel ocean-going vessels.
Recognising the potential of hydrogen in enabling a carbon
neutral pathway for ocean freight, we recently joined forces with
Hydrogenious Maritime AS, a joint venture between Hydrogenious
LOHC Technologies, a portfolio company of AP Ventures (in which
Anglo American is invested) and Johannes Østensjø dy AS. The two
companies will collaborate to explore the use of emission-free liquid
organic hydrogen carrier-based applications for Anglo American’s
chartered fleet. We are also exploring opportunities to align our efforts
on the development of zero carbon fuel for maritime operations to
larger hydrogen supply chains in South Africa and Chile.
As well as significant investment, collaboration is vital in bringing
about effective solutions and in achieving a zero-emissions maritime
sector. As a partner of the Global Maritime Forum, we contribute
to a series of cross-industry forums. In 2021, we joined more than
200 industry players as a signatory of the Call to Action for Shipping
Decarbonisation, calling for decisive government action to enable full
decarbonisation of international shipping by 2050.
41
Anglo American plc Integrated Annual Report 2021 Operating Model
We believe we can build a long term sustainable competitive
advantage by securing access to the best resources and through
operating assets safely, more effectively (productive), and more
efficiently (cost-competitive) than our competitors.
The Anglo American Operating Model is the foundation to support us
by providing structure, stability and predictability in the way that we plan
and execute every task. Unplanned work is inherently more costly, and
less safe, than planned work. We have successfully implemented the
Operating Model across all managed assets and cemented a strong
foundation for safe and sustainable business performance. We are now
leveraging the power of our digital transformation platform, VOXELTM,
to digitise our Operating Model, enabling integrated data, streamlined
business processes and enhanced management systems.
We continue to build organisation capability across the core disciplines
of operational planning, work management and performance
improvement, supported by a comprehensive set of advanced learning
resources which enable all our employees to understand, adopt and
sustain our Operating Model.
P101
P101 is our transformational asset productivity programme that
builds on the stability provided by our Operating Model. It improves
the performance of our most value-accretive processes in our value
chain to achieve best-in-class benchmarks, then pushes the capability
boundary further, establishing new industry benchmarks in terms of
effectiveness, efficiency and sustainability.
Our programmatic approach includes P101 sprints – which seek to
identify, prioritise, and ultimately eliminate operational instability and
system constraints that prevent the realisation of full value from assets
– with more than 20 sprints already deployed across eight operations.
By applying structured business improvement methods within the
‘Analyse and Improve’ process from the Operating Model at Minas-Rio,
for example, we have optimised the primary crusher control system
to reduce micro-stoppages by 50% and enable a 75% reduction in
overload events on the overland conveyor.
Adopting a P101 mindset has resulted in significant productivity
improvements across the Group. Within our mining operations,
Capcoal in Australia operated their primary rope shovel at an Overall
Equipment Effectiveness (OEE) of 88%; Mogalakwena achieved a 25%
improvement in shovel performance; and Minas-Rio in Brazil achieved
6,000 direct operating hours and greater than 110% nominal payload
across their truck fleet. Similarly, within our processing operations,
improved plant stability and capability at Los Bronces resulted in some
of the highest throughput performances on record, with the Confluencia
plant achieving an operating time of 95%, as well as new production
records at our PGMs smelting and refining operations.
Our focus on sustaining performance improvements is paramount.
We systematically codify and standardise high performance through
Anglo American’s Best Practice Principles. Compiled by technical and
operational experts, these resources provide a structured approach
to accelerate how we embed operational excellence across our
operations to deliver and sustain P101 performance.
While we have delivered a material operational turnaround in recent
years, we believe there is still significant value to be delivered from
the continued implementation of our Operating Model, P101, and
the benefits from technology roll-out and our integrated digital
transformation platform, VOXELTM, as well as the delivery of growth
projects. By 2023, we expect to deliver $3.5–4.5 billion annual of
underlying improvement, before inflation, relative to 2017.
FutureSmart Mining™
FutureSmart Mining™ has systemic thinking at its core – with the
greatest value being realised through multiple new technologies
working together.
42
Innovation continued
▲ Bulk ore sorting machinery in operation at El Soldado mine site.
El Soldado – transitioning from mine to
technology hub
El Soldado may be one of Anglo American’s smaller assets,
with an estimated life of mine of just six years, but it is enjoying
a remarkable renaissance as a FutureSmart Mining™ hub for
piloting certain of our mining and processing technologies.
A great benefit of this experimental hub is that we are able to
trial a number of emerging technologies simultaneously, in real
time and at scale. These include:
Bulk ore sorting (BOS) – BOS pre-concentrates mined ore.
Composition-sensing technology detects the concentration
of the elements of interest (copper, in this case), as well as the
amount of waste material, within the ore-bearing material. The
500 tonne per hour demonstration plant is fully operational
and has led to a 7–10% increase in feed grade, and higher
plant throughput, while significantly reducing energy and
water consumption per pound of copper produced. BOS
plants are also now operating at our Los Bronces (Copper),
Barro Alto (Nickel) and Mogalakwena (PGMs) mines.
Coarse Particle Recovery (CPR) – CPR technology allows
larger-size particles of material to be processed, reducing
the need for grinding to a smaller size and, thereby lowering
energy consumption while also making it easier to drain the
water from the material and recycle it, as well as create drier
tailings. CPR is a key initiative to increase throughput and
productivity and has already realised energy-intensity savings
(i.e. per pound of copper) of around 16%. The El Soldado
plant, which was commissioned in the first quarter of 2021, is
using a single 5-metre diameter HydroFloat™ cell, the largest
in the world, to treat 100% of mill throughput. Full scale plants
are under construction at Mogalakwena (PGMs), approved
for Quellaveco (Copper), and in planning at Los Bronces
(Copper) and Minas-Rio (Iron Ore).
Hydraulic Dry Stack (HDS) – HDS is a patented dry-storage
technology, developed by Anglo American, which utilises
the ‘throw-away’ free-draining sands and slurry from CPR
and other processes. In the HDS process, the slurry and
sand are combined into a layered ‘sandwich’ for the dry
stacking of waste material. This significantly increases water
recovery and recycling volumes, thereby reducing freshwater
consumption, while creating stable, re-usable land instead of
a traditional wet tailings storage facility. HDS plants are being
considered for Collahuasi (Copper), Mogalakwena (PGMs)
and Amandelbult (PGMs).
The three technologies, when combined, are already
delivering significant energy savings and water recovery
rates – critically important in drought-prone countries – while
facilitating a shift away from traditional ‘wet’ tailings storage
facilities, to ‘dry’ stacking of waste material.
Anglo American plc Integrated Annual Report 2021Strategic Report Throughout 2021, we have implemented numerous research and
development projects at pilot or full scale at our operations, with many
of those projects key to achieving our climate change ambitions. For
example, we are developing a proof of concept 200-tonne hydrogen-
powered mine haul truck – the world’s first to be powered using green
hydrogen – which is currently being trialled at our Mogalakwena
PGMs mine in South Africa, as well as a renewables programme,
which aims to fund and deliver renewable energy to our operations in
southern Africa.
→ For more on progress in 2021
See pages 36–37
Climate change
Climate change is the defining challenge of our time and our
commitment to being part of the solution to climate change is
embedded across the business. We continue to align our portfolio
with the needs of a low carbon world; we are transforming
our operations towards carbon neutrality; we are pushing for
decarbonisation along our value chains; and we are considering
carefully the social and wider environmental inter-relationships
associated with our decarbonisation journey.
Our approach to climate- related risk
At Anglo American, we recognise the reality of climate change, while
acknowledging that the longer term impacts to the business remain
uncertain. As a consequence, our risk management processes embed
climate change in the understanding, identification and mitigation of
risk. We have complied with the TCFD recommendations for reporting
on climate-related risks, as detailed on pages 102–103 of this report.
The nature of climate change means that climate-related risk
cannot be managed independently of wider business strategy.
Anglo American is well placed to respond to the challenges and
opportunities we face as the climate changes, including being
strategically and physically resilient for the future.
– Methane capture: improved methane drainage and the introduction
of oxidation technology to substantially abate ventilation air methane
and enhance the safety of our operations
– Energy efficiency: Through the ongoing roll-out of business
improvements and our step-change FutureSmart MiningTM
technologies such as bulk ore sorting, coarse particle recovery
and digitalisation projects.
In 2021, approximately 46% of Anglo American’s total electrical energy
needs were met by renewable energy sources. In 2021, our managed
operations in Chile switched to electricity sourced exclusively from
renewable sources. We have also signed contracts in both Peru and
Brazil that will allow all of our operations in South America to run on
renewable electricity, such that by 2023, we expect to be drawing
56% of our grid supply from renewables.
Decarbonising our value chains
We are committed to playing our part to mitigate the impact of our
value chain emissions, while recognising that the nature of Scope 3
emissions is that they are largely outside our direct control. Emissions
from the steel value chain make up the significant majority of our
Scope 3 emissions and, informed by our assumptions on the speed
of decarbonisation of the steel value chain, we have an ambition to
reduce our Scope 3 emissions by 50% by 2040.
We also believe that industry-wide engagement and co-operation
that spans our customers and other stakeholder groups – and includes
our leadership of, and participation in, industry associations – is
fundamental to our efforts to facilitate a sustainable energy transition.
Our focus has been on collaborating to accelerate the use of
hydrogen and high quality input products (premium quality iron ore
and metallurgical coal) in steelmaking, as well as carbon capture and
storage technologies, including at some of our operations. We also
work with trade associations, suppliers and customers to identify and
support technologies and projects which can reduce our products’
downstream carbon footprint.
→ For more on Anglo American’s principal risks, including Climate change
See pages 60–67
→ For more on how we help achieve greener steelmaking,
See page 92
Our work to reduce greenhouse gas (GHG) emissions
Our commitment to helping address climate change is underpinned
by our work to reduce our operational GHG emissions. Having already
introduced a target in 2018 to reduce absolute GHG emissions by 30%
and improve our energy efficiency by 30% by 2030 against a 2016
baseline, we are now targeting carbon neutrality across our operations
by 2040, with eight sites set to be carbon neutral by 2030. And in 2021,
we announced our ambition for a 50% reduction in Scope 3 emissions,
also by 2040, against a 2020 baseline.
Delivering on our ambitions
A pathway to carbon neutrality
Our Energy and CO2 Management (ECO2MAN) programme has
been a central part of the way we have understood and then driven
reductions in our operational (Scopes 1 and 2) GHG emissions since
2011. The programme has enabled us to analyse our activities and
identify operational levers for reducing energy consumption and
GHG emissions.
Our ongoing programme for operational emissions reductions is built
around four levers:
– Renewable electricity: sourcing 100% clean grid supply for
our operations through the procurement or development of
renewable energy
– Low carbon power sources: developing integrated green
hydrogen production and enabling fuel switching at major
opencast mines, together with the electrification or alternative
low carbon fuels for other major diesel use applications
Portfolio evolution and resilience
We have evolved our portfolio in recent years towards a greater
focus on future-enabling metals and minerals such as copper, PGMs,
nickel and premium quality iron ore. These are critical products for
renewable electricity generation and distribution, for the electrification
of transportation (in all its forms) and for other innovative and emerging
technologies such as smart grids and the hydrogen economy.
The exit from the last of our thermal coal operations, the commissioning
of the Quellaveco copper project in Peru (expected mid-2022), and
the ongoing development of our Crop Nutrients business represent the
latest steps in the evolution of our portfolio.
We assess Anglo American’s financial and strategic resilience across
a range of scenarios, including a 3°C, 2°C and 1.5°C pathway. For
this assessment, we focus on existing assets and organic growth
opportunities, upon which we overlay key risks and opportunities across
our portfolio for the scenarios.
Anglo American’s business model and product portfolio are expected
to remain resilient across all scenarios, given our exposure to metals
and minerals that support both the energy transition and global
consumer demand trends, the high quality of our assets, and strong
organic growth optionality.
Policies and governance
Anglo American applies a principled and consistent approach
throughout our climate change governance and management
systems. We embed our climate change principles in all aspects of
our business to ensure that they remain aligned with our commitments
and ambitions.
43
Anglo American plc Integrated Annual Report 2021 South Africa’s Hydrogen Valley
In South Africa, the Hydrogen Valley initiative is showing the possibilities
that can be unlocked through a Just Transition to a lower carbon world.
The hydrogen valley concept has already been proven in a number of
other countries as an engine for advancing the commercial viability of
emerging green technologies and their ability to reduce emissions.
The initiative was announced in March 2021, when Anglo American
signed a collaboration agreement with South Africa’s Department of
Science and Innovation (DSI), energy and services company ENGIE,
the South African National Development Institute (SANEDI) and clean
energy solutions provider Bambili Energy. Under the agreement, the
parties committed to conducting a feasibility study for the construction
▲ Power engineer Carl Van Den Ordel makes adjustments to equipment
during the construction of the hydrogen plant at our Mogalakwena PGMs mine.
Innovation continued
of hydrogen hubs stretching more than 800 kilometres: from our
Mogalakwena PGMs mine in the Bushveld complex in the north
east of South Africa, along the industrial and commercial corridor
to Johannesburg, and on to Durban, the country’s major Indian
Ocean port.
In October 2021, the DSI published the Hydrogen Valley Feasibility
Study Report following the completion of the feasibility study.
This milestone brings the launch of the Hydrogen Valley one step
closer after South Africa’s cabinet recently approved the National
Hydrogen Society Roadmap and phase 3 of the country’s Economic
Reconstruction and Recovery Plan.
The core elements of phase 3 of the Economic Reconstruction and
Recovery Plan – ‘reconstruct’ and ‘transform’ – entail building a
sustainable, resilient and inclusive economy. Consistent with these
goals, South Africa’s Hydrogen Valley has the potential to unlock
growth, rejuvenate industry and enable exports of green hydrogen.
The feasibility study identified three possible hubs: Johannesburg,
extending to Rustenburg and Pretoria; Durban, encompassing the
city itself and Richards Bay; and Limpopo province, centred around
Mogalakwena. It also recommended that developers prioritise nine key
pilot projects across these hubs that span the transport, industrial and
construction sectors.
Examples of the critical role that PGMs are playing in the emerging
hydrogen economy include their application as the catalyst in FCEVs
and in the production of hydrogen itself from water. There is also our
groundbreaking project to develop the first fully operational hydrogen
fuel cell electric mine haul truck at Mogalakwena.
In collaboration with our partners, we are working to revitalise and
decarbonise key industrial sectors, develop cleaner technologies,
forge new business opportunities and create jobs. Aligned with the
South African Hydrogen Society Roadmap, the Hydrogen Valley
initiative is exploring the integration of hydrogen into the national
economy by capitalising on South Africa’s position as one of the
world’s leading producers of PGMs and the country’s significant
solar and wind energy potential.
Policy approach
Our approach to climate change is based on five key policy principles:
– Building internal agility and ensuring resilience to climate change
– Driving energy and carbon savings throughout our business
– Understanding and responding to the carbon lifecycle risks and
opportunities of our products
– Developing and implementing collaborative solutions with
our stakeholders
– Contributing our skills and knowledge to the development of
responsible public policy.
To give greater definition to our approach, we detailed the public
policy positions on a range of climate-related issues.
→ For the latest independent assessment and our detailed response, see
www.angloamerican.com/industry-association-audit
Governance and executive remuneration
The Board’s Sustainability Committee is responsible for assessing
climate change related topics. The committee oversees, on behalf
of the Board, material policies, processes and strategies designed to
manage climate-related risks and opportunities.
Matters relating to climate change are included in quarterly reports
to the committee, and as stand-alone items on the agenda where
necessary. The chair of the Sustainability Committee provides a
summary of the committee’s discussions at the Board, which addresses
the most material issues considered by the committee.
In 2021, the Board agreed to direct its climate change focus to the
workstreams that underpin our carbon neutrality targets and ambitions
and to devote more time to the circular economy and its consequences
for Anglo American’s strategy.
The executive team is accountable for aligning our business practices
with our climate change commitments and ambitions. We currently
have measures in our Long Term Incentive Plan (LTIP) awards that are
directly linked to the reduction of operational GHG emissions, energy
efficiency and the reduction of freshwater abstraction.
44
Anglo American plc Integrated Annual Report 2021Strategic Report Performance
In 2021, our Group emission intensity was 6.5 kt CO2equivalent
emissions per tonne of copper equivalent production. In 2021,
our operations were responsible for a total of 14.8 million tonnes
of CO2-equivalent emissions (Mt CO2e) (2020: 16.1 Mt CO2e), of
which 9.0 Mt CO2e were Scope 1 emissions and 5.7 Mt CO2e were
Scope 2 emissions. This represents an 8% decrease compared with
2020, owing to a reduction in Scope 2 emissions from our Chilean
operations, where grid supply was sourced from 100% renewables
from the start of the year; a decrease in Scope 1 emissions due to
the temporary suspension of operations at certain metallurgical coal
assets in Australia; and the lower emissions reported by the thermal
coal assets in South Africa, where data is included up to the end of
May 2021. Our total energy consumption increased to 85 million GJ
(2020: 81 million GJ).
In 2021, we undertook a Groupwide Scope 3 emissions assessment,
covering the period 1 January 2020 to 31 December 2020. The
emissions from this period were 115 Mt CO2e. We plan to carry out this
detailed assessment every two years.
→ For more information on our Scope 3 emissions, see
www.angloamerican.com/climate-change-report-2021
Protecting our natural environment
We are committed to being stewards of the natural environment in
which we operate. We seek to minimise the footprint of our operations
on the land and ecosystems. Today, digital technologies provide us with
dynamic new tools to not only monitor our impact on the environment,
but also to predict and mitigate risks. We direct our efforts towards
delivering positive and lasting environmental outcomes for our host
communities and the planet as a whole.
We do this through ecosystem-thinking and by using nature-based
solutions, managing a range of interconnected issues – from climate
and biodiversity to social impact and health, including using our digital
transformation platform, known as VOXELTM, to predict environmental
impacts and help us adjust operational planning accordingly. Our
environmental work involves protecting the biodiversity of areas in
which we operate, accounting for and optimising our water use,
supporting the circular economy throughout the value chain and across
our business, and addressing quality of the air around our operations.
Our approach and policies
Aligned with our Purpose, Values, and internationally recognised
safety, health and environmental standards (ISO 45001 and 14001),
our Safety, Health and Environmental (SHE) Policy embodies three
guiding principles: zero mindset; no repeats; and non-negotiable
minimum standards.
In February 2021, we launched our refreshed SHE Way V.2, the
management framework that we use to implement the SHE Policy.
The new standard was released with a set of eight technical
specifications to support practitioners in SHE Way implementation
and more than 30 tools to enable consistent best practices in applying
the new requirements.
In addition, we developed the SHE Way Readiness Assessment to
replace our Self-Assessment. It now serves as an internal assessment
tool for the SHE Way, an internal audit tool for ISO 45001 and
ISO 14001 certifications and a preparatory assessment for external
ISO certification audits.
→ For more information on the SHE Policy, see
www.angloamerican.com/sustainability/approach-and-policies
In spite of the continuing challenges posed by Covid-19, in 2021 we
made significant progress:
– We continued to work in partnership with NGOs, international
institutions and governments to advance our biodiversity agenda
and gain expert insight and were pleased to join the Taskforce on
Nature-related Financial Disclosures (TNFD), which is committed to
facilitate action and reporting on evolving nature-related risks.
– Kumba Iron Ore has agreed with our principal tyre supplier to
collaborate on a circular-aligned solution for end-of-life mining tyres.
The objective is to create a sustainable business that can benefit a
range of stakeholders in the Northern Cape and beyond by creating
tyre-derived products and markets.
Learning from environmental incidents
We classify incidents on five levels, according to their impact. Our chief
executive reports all Level 3–5 incidents (from moderate to significant) to
the Board, which discusses them through its Sustainability Committee.
In 2021, for the ninth consecutive year, we saw no Level 5
environmental incidents at our managed operations. We recorded no
Level 4 incidents and one Level 3 incident.
Water
Water stewardship is an integral part of our business and we welcome
this role as we work to meet the Sustainable Mining Plan’s water goals.
Around the world, we operate in water stressed and water scarce areas,
factors that are becoming more acute due to climate change.
We work with our stakeholders to not only minimise risk but
unlock opportunities in a changing world. Our approach to water
management is embedded in our business plans and aligned with the
Social Way, which recognises that access to water is a priority for our
stakeholders. We are guided in our work by our Group Water Policy and
the Group Water Management Standard. The standard incorporates
water issues into the lifecycle of any project, from site selection and
early studies, through design to operation, closure and post-closure.
In 2021, our water team continued to work with each of our operations
and business units to identify opportunities to achieve our Sustainable
Mining Plan goal of reducing Groupwide freshwater withdrawals
in water scarce areas by 50% by 2030. Using the World Resources
Institute’s Aqueduct tool, 83% of our sites are in areas with medium to
high water stress.
We have increased water efficiency (recycling and reuse) across the
Group. In 2020, we attained our SMP target of 75% efficiency and,
in 2021, our efficiency reached a new peak of 83%. There was one
Level 3 incident reported in 2021, the first since January 2020. Total
water withdrawals amounted to 177 million m3.
Mineral residue management
The management and storage of waste rock and processed mineral
residue – known as ‘tailings’ – remains a critical issue for the global
mining industry. We are determined to meet the social, safety and
environmental challenges of mineral residue management, both
by developing practical technological solutions, and encouraging
industry-wide conversation on the subject, while implementing leading
practice across our Group.
→ For more information and disclosure, see
www.angloamerican.com/tailings
Our approach and policies
We are an industry leader in our approach to managing tailings safely.
Our Group Technical Standard addresses the risks of both tailings
and water-retaining facilities, as well as waste rock dumps. The
Standard sets out requirements for design, monitoring, inspection and
surveillance, which we follow as a minimum practice in each jurisdiction
where we operate. While the Standard is recognised as industry-
leading, it will continue to evolve beyond best practice to set even
higher standards.
The Global Industry Standard on Tailings Management (GISTM),
published in August 2020, represented a vital step forward for the
global mining industry. It was the product of the Global Tailings
Review, which was co-convened by the United Nations Environment
Programme (UNEP), Principles for Responsible Investment (UNPRI),
and the International Council on Mining and Metals (ICMM).
45
Anglo American plc Integrated Annual Report 2021 Innovation continued
▲ In July 2021, representatives from our longstanding partner in biodiversity conservation, Fauna & Flora International, travelled to our Crop Nutrients’ Woodsmith site
in north east England. During their visit, Crop Nutrients’ environmental officer Charlie Bell and our chief executive Mark Cutifani took part in eDNA sampling.
Woodsmith – re-imagining mining responsibly
and sensitively
Our approach to environmental stewardship applies ecosystem-
thinking to promote enduring, positive environmental outcomes for
the areas in which we operate. To achieve the vision articulated in the
Healthy Environment pillar of our Sustainable Mining Plan, we work
diligently to protect the biodiversity of those areas, minimise our water
use, reduce the amount of waste we generate, and address air quality
and noise.
We are developing our Crop Nutrients’ Woodsmith mine in a particularly
biodiversity-sensitive place: the North York Moors National Park in north
east England. As the polyhalite deposit can only be accessed from
within the National Park, extensive steps were taken from the outset
to limit the mine’s impact on the surrounding environment and its
delicate ecosystems.
Woodsmith’s entire infrastructure has been planned and designed for
minimal intrusion on this unique protected landscape. The mining area
will be underground, and the mined ore will not be visible on surface,
as it will be transported by conveyor through a 37-kilometre tunnel to
the Teesside port materials-handling facility. All mineshaft workings
too are being completely hidden underground, and the number and
size of the buildings on the surface have been reduced to a minimum.
46
The buildings are designed to look like agricultural barns, in keeping
with the surrounding rural environment, which together with extensive
landscaping and planting, will ensure the mine site is screened and
blends in with the surrounding area.
We have long believed that our responsibilities extend well beyond the
mine fence. Since our acquisition of the Woodsmith project in 2020,
we have worked particularly closely with our longstanding partner,
Fauna & Flora International, as well as with other organisations and
authorities, on our biodiversity commitments in general and how we
can provide assistance to support local projects designed to safeguard
and enhance the natural environment.
One such project is centred on nearby Cropton Forest, home to a
variety of wildlife and watercourses. Here, we are providing financial
assistance to a recently created enclosed beaver sanctuary, a project
led by Forestry England. Although it is too early to assess what the
lasting effects will be, the re-introduction of beavers elsewhere has
shown that their dam building helps to slow the flow of watercourses,
reducing the risk of flooding for downstream communities – while also
bringing benefits for insects, birds, amphibians and bats through the
ponds and lakes created by the dams.
Anglo American plc Integrated Annual Report 2021Strategic Report In 2021, we continued to update our Group Technical Standard. We
are developing a detailed plan based on a gap analysis and specific
reviews of our sites. This work demonstrated a need to make some
adjustments to align fully with the GISTM.
Throughout the year, we worked to update, enhance and standardise
our critical control systems for all of our tailings facilities. We made
significant progress during the year and are now rolling out the new
systems at our largest facilities. We have rolled out an electronic
dashboard system across our operations and plan to augment this
current functionality to include remote instrument monitoring, live-feed
data reporting and integration with critical controls.
The evolving use of satellite, drone and remote monitoring solutions
continue to provide us with vital additional modalities on top of physical,
on-site inspections. During 2021, we prepared to launch monitoring
using Interferometric Synthetic Aperture Radar (InSAR) satellite
technology. InSAR uses radar signals reflected off a surface to measure
deformations over time. The results can be viewed on site or at the
business unit and Group executive level. During the year, we reviewed
the technology and shortlisted vendors, with a view to implementing
InSAR across our operations in 2022.
Playing our role in society
As a global business, we see it as our role to make a positive
contribution to society. We are continuing to implement our industry-
leading social performance management system for the global
extractive sector, the Anglo American Social Way 3.0. It represents
a comprehensive and innovative approach to how we interact with
our host communities that prioritises respect and mutual benefit for
all stakeholders.
Through our Collaborative Regional Development (CRD) approach,
we work to catalyse independent, scalable and sustainable economic
development in regions around our operations to support our
Sustainable Mining Plan commitments. We also transparently and
continuously engage stakeholders to collaboratively find solutions
to the most pressing issues of our time. We set our standards high,
embedding them into our Code of Conduct. We also have high
expectations of our suppliers, and provide guidance and support to
emerging companies to meet those expectations, ensuring we address
sustainability matters throughout the entire value chain.
Social performance
Social performance encompasses our interactions, activities
and outcomes with respect to local communities and other local
stakeholders in those areas affected by our activities.
Our approach and policies
The Social Way 3.0 provides a social performance management
framework for all Anglo American-managed sites, at all phases of
development. Aligned with our Purpose and our strategic business
objectives, the Social Way 3.0 embeds international standards and
best practice and sets out clear minimum requirements to:
– Engage with affected and interested stakeholders
– Avoid, prevent, and, where appropriate, mitigate and remediate
adverse social impacts
– Maximise development opportunities.
We have made the Social Way 3.0 publicly available for other
companies to use, and, just as importantly, so stakeholders know
what our standards are and what they can expect of us.
Assessing performance
External, independent assessors carry out annual assessments across
all our managed operational sites, as well as De Beers’ non-managed
joint ventures.
The launch of the Social Way 3.0 in 2020 required us to embark on our
most ambitious social performance training programme. Since 2020,
we have trained more than 2,000 people at our sites across multiple
functions and levels of leadership, from the Group Management
Committee to on-site social performance practitioners.
We are now more than two years into our three-year transition to the
Social Way 3.0 and, in 2021, we built on lessons learned from the first
year of its roll-out to update our assurance framework assessment
requirements and site guidance. Throughout the year, our sites
progressed with their transition plans, which set out specific activities
to implement the Social Way 3.0. We have set a goal of implementing
the Social Way 3.0 by the end of 2022.
At the end of 2021, 49% of all Social Way 3.0 foundational
requirements were satisfied.
Engaging our local communities
Our Sustainable Mining Plan site-level local accountability goal has
been incorporated into our Social Way stakeholder engagement
requirements. By 2022, we plan to have in place community
engagement forums at every mine site to improve our accountability
to local communities and involve them proactively on those aspects
of our operations that affect them.
We continue to establish these community engagement forums and
are strengthening the approach where similar forums are already in
place. The impacts of Covid-19 and local stakeholder sensitivities have
presented a challenge for some of our sites. While we aim to establish
community engagement forums at every mine site by 2022, we are
also committed to taking the time needed to build awareness, support
and capacity for the forums to be effective.
Grievances and incidents
We define a grievance as a complaint from an external stakeholder
relating to the site, its policies, activities, real or perceived impacts,
or the behaviour of its employees or contractors. Grievances are
an expression of dissatisfaction with the company on the part of
stakeholders. Grievances can be expressed through physical action
(such as protests or road blockages); verbally (in the course of
discussions with site employees); or in writing.
Stakeholder grievances are caused by incidents: the unwanted events
related to site activities that have an adverse impact on the health and
safety, economic welfare, personal and political security and/or cultural
heritage of stakeholders. An incident with social consequences may
arise from a site’s technical failure or accident, or a failure to anticipate,
prevent or mitigate an impact. Our objective is to avoid incidents, but
encourage stakeholders to raise their grievances or concerns with
us in a free and open manner. Because of this, we do not measure
the number of grievances as a metric of performance but prefer
to focus on incidents: the root cause of the complaint. We rate the
‘seriousness’ of incidents according to the consequences experienced
by stakeholders, the most significant being Level 5. During 2021,
we recorded no incidents categorised as Level 4 and no incidents
categorised as Level 5.
Human rights
We are committed to upholding human rights across our operations
and our value chains. To continually improve in this important area, we
are embedding human rights as a foundation of the approaches and
standards that we apply throughout our business.
Our approach and policies
Our Group Human Rights Policy is aligned with the United Nations (UN)
Guiding Principles on Business and Human Rights, and our
commitment to the UN Global Compact Principles. Our Human Rights
Framework underpins the policy, describes how it links to our standards,
such as the Social Way 3.0, and outlines our salient human rights
risks. We are also a signatory of the Voluntary Principles on Security
and Human Rights and the Business Network on Civic Freedoms and
Human Rights Defenders.
We have embedded our approach to human rights and our
expectations for suppliers in our Responsible Sourcing Standard for
Suppliers. As we seek to ensure that our supply chain remains ethical
and free of modern slavery, at a minimum we require every supplier that
we onboard to comply with specific standards related to the industries
or sectors in which they do business. We have also communicated with
suppliers key principles to manage additional pandemic-related risks
within their supply chain.
47
Anglo American plc Integrated Annual Report 2021 Innovation continued
Cash value distributed to stakeholders
Suppliers(1)
Providers of capital
Taxes and royalties
Employees
Corporate social investment
Total
$ billion
11.4
8.1
7.1
3.7
0.1
30.4
(1) Includes $5.4 billion of capital expenditure.
Taxes borne and collected: developed vs. developing countries
Developing
Developed
Total
$’000
6,349
785
7,134
38%
27%
23%
12%
–
89%
11%
The economic value we add
By employing people, paying and collecting taxes and spending
money with suppliers, we make a significant positive contribution to
both our host communities and their regional and national economies.
Most of these are in developing countries. Thanks to the multiplier
effect, our total economic contribution extends far beyond the direct
value we add.
In 2021, we distributed $30.4 billion of cash value to our stakeholders,
as detailed in the charts above.
Social investment
In 2021, our Corporate Social Investment (CSI) reached $138 million
(2020: $125 million), which represents 0.8% of underlying earnings
before interest and taxes (EBIT), less underlying EBIT of associates and
joint ventures.
Since the beginning of the pandemic in 2020, we have increased our
CSI investment and slightly readjusted our funding priorities, investing
more in health.
Anglo American Foundation
Building on the extensive in-kind support and financial contributions
as part of our WeCare Covid-19 support programme, in 2021
we donated $100 million to create a special endowment for the
Anglo American Foundation. The Anglo American Foundation is
focused on accelerating progress towards the UN SDGs, placing a
particular importance on programmes that empower women, youth
and vulnerable groups. By partnering with non-profit, public and
private organisations, the Anglo American Foundation supports health,
education, economic and environmental projects aligned with the
goals of our Sustainable Mining Plan – itself designed to align with the
UN SDGs.
To date, we have published five Modern Slavery Statements in
compliance with the UK Modern Slavery Act 2015 and one Modern
Slavery Statement in compliance with the Australian Modern Slavery
Act 2018.
With great respect for the close connection of Indigenous Peoples to
the land, we remain committed to obtaining and maintaining Free, Prior
and Informed Consent (FPIC) for all relevant projects, in line with the
2013 ICMM Position Statement on Indigenous Peoples and Mining and
IFC Performance Standard 7.
Governance and performance
Consistent with the UN Guiding Principles on Business and Human
Rights, we are performing a methodical review of human rights due
diligence processes at an operational level to identify gaps and
develop more robust guidance for operations. This follows a project
conducted in 2020, in which we assessed human rights due diligence
gaps in our processes at the corporate level. We are addressing the
gaps that we identified by updating corporate processes and, where
relevant, adding further due diligence requirements to the five-year
sustainable mining plans of our corporate functions.
The most common human rights factors that arose in our grievance
and incident management processes across the Group included
sexual harassment at work and stakeholder access to water. With
regard to incidents involving sexual harassment, we are working with
stakeholders to change behaviours and communicate and enforce a
zero-tolerance approach. In incidents regarding water provision, we
took all necessary steps to restore the main water supply as quickly as
possible, making provision for an emergency supply in the meantime.
Socio-economic contribution
We are committed to working with other businesses and organisations
that support local economies. This includes, but is not restricted to,
helping businesses and organisations to strengthen the skills and
capabilities needed to enable an area to diversify its economic
activities beyond mining and become more resilient. Partnering with
governments, communities, other private sector companies, academia,
financial development institutions and NGOs through our CRD work,
we jointly identify opportunities for long term social and economic
development, which we then collectively deliver.
Our approach and policies
The socio-economic contribution we make to the communities in which
we operate takes various forms:
– The royalties and taxes we pay (and collect on behalf of
governments) add economic value to a country
– Business operations that deliver economic value to communities,
enhanced by policies on inclusive procurement, local recruitment
and supporting local suppliers
– Long-running socio-economic development interventions, in
collaboration with local partners, which address local needs,
building and strengthening sustainable local economies that are
less dependent on our mines.
Taking a long term view, we design our operations and community
development initiatives so that communities and economies continue
to thrive, even after our mines have closed.
48
Anglo American plc Integrated Annual Report 2021Strategic Report Global CSI expenditure by type(1)
Community development
$’000
65,500
Education and training28,825
28,800
Health and welfare
21,400
Water and sanitation
Other
6,500
4,700
Institutional capacity development
3,700
Disaster and energency relief
Environment
3,300
2,200
Sports, art, culture and heritage
1,900
Total
138,000
(1) Discrepancies may occur due to rounding.
Global CSI expenditure by region(1)
Africa
Americas
United Kingdom
Australia
Rest of World
Total
$’000
73,100
60,400
2,400
1,100
1,000
138,000
(1) Discrepancies may occur due to rounding.
Supply chain
Our approach to responsible sourcing is aligned to our Purpose.
We expect all suppliers to meet applicable laws – while sharing our
commitment to improve people’s lives, society and our environment.
Our programme defines minimum sustainability requirements and
decent work principles required by our 17,000+ suppliers. This allows
us to prioritise ethical decision making when selecting and managing
the suppliers we work with, and to support and uphold fundamental
human rights through our supply chain.
Our approach and policies
As a condition of working with us, suppliers must comply at a minimum
with all relevant laws and industry regulations, and we expect them to
meet the Anglo American policies, site requirements and other supply
conditions, including our Responsible Sourcing Standard.
Managing sustainability risk
Global supply chains can generate economic growth and contribute
significantly to social development – many businesses, therefore, seek
to diversify sources of supply or further integrate into new jurisdictions or
local economies. However, some markets or regions may not have safe
workspaces and labour protection as a non-negotiable imperative,
there is an increased risk of potential for human rights violations,
including the use of child labour, modern slavery, forced labour and
human trafficking.
Our responsible sourcing programme enables us to identify some
of these risks and help our suppliers make ethical decisions when
purchasing goods and services.
During 2021, we further improved our approach to assessing
sustainability risk for new and existing suppliers. We also continued to
explore ways to incorporate third-party information to identify new or
emerging sustainability risks in existing suppliers.
For example, as part of our responsible sourcing programme, we
engaged Dow Jones to run checks on all 17,000+ suppliers with which
we have worked in the past 18 months against various external risk
data and adverse media sources. We will perform additional due
diligence on the <1% of suppliers that these checks identified as posing
risks, helping to focus our supplier due diligence on the greatest risks.
In 2021, our operations spent approximately $11.4 billion with
suppliers, of which $10.0 billion was with local suppliers. Our
expenditure with designated suppliers (Black Economic Empowerment
in South Africa, indigenous communities in Canada and Aboriginal
suppliers in Australia) was $2.6 billion, representing 23% of total
supplier expenditure, including $0.9 billion with host communities in
the direct vicinity of our operations.
Engaging with suppliers
Mindful of the ongoing disruption that Covid-19 has caused to supplier
businesses since 2020, we received assessments from 163 suppliers
(2020: 432). This complements our efforts since 2018, with over
1,200 supplier assessments reviewed for risk.
Due to restrictive measures, the number of on-site supplier assessments
during the year was reduced to three (2020: four) and, similarly, plans
for face-to-face supplier workshops were deferred until they are
deemed safe to resume.
47%
21%
16%
5%
3%
3%
2%
2%
1%
53%
44%
2%
1%
1%
49
Anglo American plc Integrated Annual Report 2021 Strategic Report
People
Our people are critical to all that we do. The partnerships
we build, both within Anglo American and with our
stakeholders – locally and globally – are central to
maintaining our regulatory and social licences to
operate and our commercial success.
Material matters discussed in this section
– Adopting a zero mindset
– Helping our people thrive
– Playing our role in society
▲ Resource co-ordinator Kelebogile Gopane (left) and Operating Model master
scheduler Nango Chuma at the Operating Model office at Kumba Iron Ore’s
Kolomela mine in South Africa.
50
Anglo American plc Integrated Annual Report 2021
Anglo American plc Integrated Annual Report 2021
51
People continued
▲ At our Crop Nutrients business in the UK, mine rescue training is held at Skinningrove Mining Museum to ensure colleagues are
well prepared to deal with any incidents on site.
Supporting safety
improvements through
culture change
Safety remains our first priority and is our
most important value, and it is embedded
in our culture at Anglo American. It is how
we aim to deliver an injury- and fatality-
free workplace, and ultimately achieve our
Purpose of re-imagining mining to improve
people’s lives.
Our safety journey gained further traction in 2018 when we set out
our Purpose, and since then we have strengthened our behaviours
and systems and listened to what our colleagues have told us they
need to support a cultural shift toward purpose-led, high performing
teams delivering safe, responsible production.
The journey starts with our Purpose
Led from the top, with both the Board and Group Management
Committee as active champions, our Purpose was co-created with
colleagues across the company. We then had to ask ourselves: ‘what is
the culture we need to deliver on our Purpose?’
Our answer was that we needed a culture where safety is integral to
making full-impact decisions at all levels of the organisation, whereby
a multitude of factors, including safety, the environment, community
impact, production and financial aspects are taken into consideration.
We have brought this to life for colleagues through refreshed
behaviours that define how we can all live our Values every day.
89%*
Colleagues who feel
connected to our Purpose
* 2021 Global Colleague Survey conducted in Sept/Oct 2021
which had 27,758 respondents (45% response rate).
52
Anglo American plc Integrated Annual Report 2021Strategic Report Making mining operations safer
Safety remains our overriding and continuous focus. This has led to
a dramatic and sustained decrease in losses of life, and a steady
decrease in serious injuries. Everybody in the business is a safety
leader and our aim is to make everyone determined to bring about,
and sustain, a ‘zero mindset’ future. Safety leaders and safety teams
are in place at all levels of Anglo American, and we continue to improve
rules, procedures and standards to ensure effective management
and control.
These initiatives are being buttressed by the development and
adoption of new technologies, along with a focus on remote-working
practices that are greatly reducing the number of people in close
proximity to the working face of mining operations. Building further
on this, our Elimination of Fatalities programme is enabling a more
thorough understanding of the causes of fatal incidents, in parallel
with supporting a focused programme to address the management of
fatal risks, including high potential incidents (HPIs) and high potential
hazards (HPHs), currently an area of concern.
Culture, or ‘how we do things around here’, is central to our
understanding of how to eliminate fatalities permanently. Increasingly,
we are looking at how we can integrate human factors into the design
of safety systems and processes so that it’s easy for people to make
the right safety choices. We’ve also taken our Values behaviours a step
further and asked, ‘what does that mean in terms of a safety practice?’
– and we now have a set of safety leadership practices that support the
right behaviours – at all levels – that will help to enhance safety maturity.
“One crucial lesson we learned from the
employee engagement surveys from the outset
was that we needed to pay considerably more
attention to psychological safety, and how we
should be driving this across our company.”
Independent verification and measurement
Over the past three years, we have consistently tracked colleague
sentiment through quarterly and annual engagement surveys. The
surveys are enabling us to build a picture of how extensively our Values
are lived. Measured against the global average, our overall figures are
very high.
The data-driven findings are given high priority by senior management
and are discussed at Board level; after each survey, action plans are
put in place, at both the Group and business unit level, to address areas
of our cultural development identified as needing more attention – such
as psychological safety.
90%*
73%*
Colleagues who feel
physically safe
Colleagues who feel
psychologically safe
Psychological safety
Psychological safety is a prerequisite for creating the culture we want
and is intrinsic to embedding a safety-conscious mindset in every
colleague. It is about every individual feeling confident enough to be
able to speak up, contribute ideas, share information, and be heard and
empowered to reach their potential, knowing they will be listened to and
have the support of others if they raise any concerns – and won’t suffer
any negative consequences as a result.
One crucial lesson we have learned from the employee engagement
surveys is that we need to pay more attention to supporting leaders
to create an environment of psychological safety in their teams, and
across the organisation.
So, today, we have a Psychological Safety Steering Group, composed
of HR, safety, and employee engagement representatives from across
our business. This is supported by a four-stage model aimed at creating
an inclusive, learning, contributing, and challenging workplace. In turn,
our Inclusion and Diversity team regularly interrogates matters around
psychological safety, including on challenges around learning and
innovation. We are also doing regression analysis to understand the
common drivers of, and connections between, psychological safety
and physical safety. More broadly, we are embedding psychological
safety into an array of other programmes, including our Safety 365
engagement programme which had a theme in 2021 of ‘Safe to
always be safe’.
→ Read more about our mission to be completely injury- and fatality-free
Visit www.southafrica.angloamerican.com/our-stories/focus-on-
eliminating-fatalities
▲ During the pandemic, we provided employees with smartwatches which
alert the wearer if they are in too close proximity to a colleague.
▲ At Crop Nutrients’ Woodsmith site, Mark Cutifani addresses employees on
our annual Global Safety Day in October 2021.
53
Anglo American plc Integrated Annual Report 2021 People continued
Total number of fatal injuries and fatal injury
frequency rate (FIFR) 2014–2021
Fatal injuries
12
10
8
6
4
2
0
2014
2015
2016
2017
2018
2019
2020
2021
Fatal injuries
FIFR
Lost-time injuries, medical treatment cases and total recordable
case frequency rate (TRCFR) 2014–2021
Injuries
2,000
1,750
1,500
1,250
1,000
750
500
250
0
FIFR
0.050
0.045
0.040
0.035
0.030
0.025
0.020
0.015
0.010
0.005
0.000
TRCFR
6.00
5.00
4.00
3.00
2.00
1.00
0.00
2014
2015
2016
2017
2018
2019
2020
2021
Lost-time injuries
Medical treatment cases
TRCFR
In 2021, we recorded 554 occupational injuries, increasing by 25%
compared with 2020 (444). Disappointingly, our TRCFR increased
by 5% to 2.24 (2020: 2.14), after multiple years of progressive
improvement, partially attributable to ongoing Covid-19 related
challenges to scheduling and conducting planned work. We will
continue to work towards a step change in the reduction of injuries.
We continued to focus on improving our safety performance by
strengthening our culture and implementing various operationally
targeted safety interventions. These included CEO safety summits
with senior leaders from across the business units; instituting
minimum mandatory critical controls for common fatal risks; sharing
of lessons learned and actions taken from incidents across the
organisation; safety stand-downs (voluntary events to pause
production and talk with employees about safety); employee-
engagement sessions; and enhanced reporting and progress
tracking of safety-improvement initiatives.
Health
The ongoing global threat of Covid-19 continued to dominate our
health efforts throughout 2021. While specific aspects of our response
varied by country, a major part of our work in this area was dedicated to
testing and vaccination support.
Despite the intensity of our pandemic efforts, our teams around the
world also delivered on our main health initiatives, such as our work
on HIV. In addition, we developed our health and well-being strategy
and worked towards ‘smart health’ through the launch of our health
digitalisation strategy.
Safety comes foremost in everything we do; we train,
equip and empower our people to work safely every day.
We believe, too, that creating an inclusive and diverse
working environment and culture that supports high
performance and innovative thinking gives our business
a competitive advantage.
Adopting a zero mindset
Our main priority is to protect the health and safety of our people, the
communities around our operations and the environment. And we
have shown consistent improvement across the business – with a 93%
reduction in fatal incidents, a 99% reduction in health incidents and a
97% reduction in environment incidents all achieved since 2013.
In 2021, we placed a renewed emphasis on safety. We continued our
work towards eliminating fatalities and addressing systemic safety
risks across our operations, aligned with our Operating Model, which
supports us to do the right work, at the right time, in the right way, to
deliver safe and responsible production. We also increased our focus
on building safety capability and supporting the right safety behaviours.
Our Group Safety function has been further strengthened in 2021, with
targeted initiatives in place to help us reach our safety goals.
Our approach and policies
While we have seen an improvement in our overall safety record,
sadly fatal incidents continue to occur. Our Elimination of Fatalities
programme is designed to address systemic safety risk areas across
the Group.
The programme covers a wide range of topics from culture and
operational leadership, to specific safety risks, such as the use of
explosives and emergency response and light vehicles, with our
business units implementing the actions or minimum requirements
set out by each site review, standard or procedures.
Our approach to safety is governed by our SHE policy and the
management framework that we use to implement the policy – the
SHE Way. In February 2021, we refreshed the SHE Way to include
a set of eight technical specifications to support practitioners in
SHE Way implementation and more than 30 tools to enable consistent
best practices in applying the new requirements.
→ For more information on the SHE Policy
See page 45
Anglo American’s safety, health and environment results affect the
performance-based remuneration of all employees in the business, and
health and safety targets are included within the annual performance
incentives for executive directors and senior management.
Group safety performance
In the first seven months of the year, we experienced zero work-related
loss of life incidents at our managed operations, the second-longest
fatal-free period in our 100+ year history.
It is with deep sadness that we report the loss of one colleague in a
work-related incident at our managed operations. In August, Carlos
Gonzalo Rodríguez Delgado lost his life in a vehicle accident at the
Quellaveco project in Peru. At our non-managed joint ventures, two
colleagues were fatally injured in separate incidents in October at
Kroondal, a PGMs business managed by Sibanye-Stillwater. Tebogo
Motlogelwa lost his life in an underground vehicle incident. Philisande
Wilburforce Xabanisa was fatally injured following a fall of ground
incident. In addition, a third loss of life occurred at Samancor’s Wessels
mine, managed by South32, where Desmin Mienies lost his life in an
electrical incident. We extend our deepest condolences to the family,
friends and colleagues of Carlos, Tebogo, Philisande and Desmin.
A thorough investigation was conducted at the Quellaveco project
to identify the cause(s) of the incidents and to share lessons learned
across the Group, with the aim of preventing repeat or similar incidents.
Our independent joint ventures are leading investigations into their
three tragic incidents.
54
Anglo American plc Integrated Annual Report 2021Strategic Report
Our approach and policies
Our overarching approach to health is covered by the SHE Policy and
SHE Way, our Safety, Health and Environment management framework.
See page 45 for more on this.
Our health and well-being strategy, which we finalised in 2021,
is aligned with World Health Organization (WHO) principles. It covers
employee health, the physical work environment, mental health,
community health, social context and workplace culture.
Our concern for employee health extends beyond the workplace.
Guided by the health and well-being strategy, our health function
applies evidence-based interventions aimed at reducing risks
associated with unhealthy habits, such as smoking or following a
poor diet.
Our Workplace Health Standard defines the minimum that needs to be
done to effectively manage occupational exposure risk, occupational
diseases, occupational injuries, and overall well-being and mental
health. All of our operations have completed self-assessments against
the requirements of the Standard, which we introduced in 2020, and
have developed action plans to address any identified gaps.
Performance
Responding to Covid-19
Throughout the year, we worked to prevent the spread of Covid-19
among our employees and in our host communities. Our pandemic
efforts are part of WeCare, a global lives and livelihoods support
programme introduced in 2020 that demonstrates our Purpose in action.
In addition to the significant testing capability put in place across our
sites in 2020, we have also placed a significant focus on vaccinations
as the best proven means at our disposal of preventing the spread of
Covid-19, and worked with partners in government around the world
to strengthen the capacity to vaccinate our workers, contractors and
host communities.
Occupational exposure
In 2021, there were 16 reported new cases of occupational disease
(2020: 30). We remain committed to reducing exposure to noise, which
remains our single greatest occupational health risk. We have as
many as 26,000 employees in workplaces where noise levels exceed
permissible exposure levels. All employees and contractors working
in such environments are issued with, and are trained in how to use,
appropriate protective equipment to prevent occupational illness.
Throughout the year, we also worked closely with our colleagues
from the Data Analytics Team to identify and monitor critical noise
controls using our digital transformation platform, VOXELTM. The data
that we receive from this work helps to improve our understanding of
the performance and effectiveness of our controls. The insight that it
provides allows us to identify opportunities for control improvements on
our journey to eliminate occupational exposure to noise and associated
noise-induced hearing loss.
Managing HIV and TB
We have been a corporate leader in the fight against HIV/AIDS for
more than 20 years. From providing free testing and treatment to all our
employees, to making a Group-level policy commitment against stigma
and HIV/AIDS discrimination, we have made a significant contribution
towards the elimination of HIV and AIDS. In 2016, we aligned our
HIV/AIDS targets to UNAIDS 90/90/90 strategy, which means that:
90% of our people living with HIV know their HIV status; 90% of those
diagnosed with HIV are receiving sustained anti-retroviral therapy; and
90% of those receiving anti-retroviral therapy have viral suppression,
meaning the viral load is so low as to be undetectable.
While we have made significant progress on the first two targets,
Covid-19 continues to have a severe impact on people’s ability and
willingness to access preventative healthcare. As a result, while 87%
of our employees in southern Africa knew their status at year end, this
was lower than in the previous year (2020: 89%), and 3% short of our
target of 90%. We did, however, meet our second target, with 93% of
our employees living with HIV receiving anti-retroviral therapy. In 2021,
128 new cases of HIV were reported, and zero HIV/AIDS-related deaths.
This translates into an incidence rate of 0.01%.
▲ Receiving his jab at De Beers’ Venetia mine in Limpopo is
Khuinana Alfred Ngoepe, thought to be the oldest person in
South Africa to receive a vaccine against Covid-19.
Keeping our people safe through the
Covid-19 pandemic
Since the Covid-19 pandemic first began in early 2020, we
have worked on multiple fronts to protect our people and host
communities as part of our WeCare programme. Our primary
goals throughout the pandemic have been to minimise
the risk of transmission in the workplace and to provide
employees with the medical care and treatment they need,
should they contract the virus.
As part of our WeCare programme, we aim to make it easy for
people to know whether they have contracted Covid-19 and
to get the right medical care and treatment if they do. Daily
symptoms checking and rapid testing enable quicker isolation
for those who are ill, as well as improved contact tracing. As
a result, our case rates have been lower than the national
average in each of our operating countries.
Since the pandemic began, we have supported the treatment
of over 33,000 employees who tested positive for the virus,
including 804 who were admitted to hospital. We established
our own Covid-19 PCR testing capability, with 29 laboratories
in eight countries conducting around 500,000 tests, and
purchased and distributed around 1,000 pulse oximeters and
600 oxygen concentrators to support employees.
To help support government efforts, we have made available
up to $30 million to support the global roll-out of Covid-19
vaccines across our operational footprint. Our support
includes contributions towards the procurement of vaccines
by host governments, as well as logistical support and health
and other infrastructure required to facilitate the efficient roll-
out of vaccines. To keep our workplace safe, our aim is for as
many of our people as possible to be vaccinated as quickly
as possible. As vaccine uptake is driven by three main factors:
confidence, complacency and convenience, we continue to
address each of these issues in innovative ways.
To ensure social distancing on site or in the office, we have
also made use of the latest smart technology. This includes
deploying smartwatches that vibrate if employees come too
close to one another. The watches use Bluetooth technology
to allow us to measure workers’ proximity to each other in real
time in our underground operations. In our corporate offices,
we have also issued smart identification passes that perform
a similar role in warning employees when they are in too close
proximity. Data generated is collated in the Covid-19 contact
tracing app – part of the digital transformation platform,
VOXELTM – which then has the added advantage of helping
assess potential close contacts in the workplace if a colleague
tests positive for Covid-19.
55
Anglo American plc Integrated Annual Report 2021 People continued
An inclusive and diverse environment
Our goal is to create an inclusive workplace where every colleague can
bring their whole self to work and fulfil their potential. We have a robust
strategic approach in place which focuses on valuing and respecting
our diverse and unique colleagues, inclusive leadership, providing an
involving, fair and supportive workplace and having a safe, effective
and enabling work environment.
Our zero-tolerance approach
We are committed to eliminating all forms of bullying, harassment
and victimisation across our organisation, through our global policy
and Stand Up for Everyone campaign. Our zero-tolerance approach
extends to include domestic violence and abuse that might occur
outside the immediate workplace. We provide mandatory bullying,
harassment and victimisation training for our colleagues to ensure
they are aware of our zero-tolerance approach, are familiar with
our reporting structures, and feel confident to act as inclusion and
diversity advocates.
Our training is intersectional in focus and explores case studies across
different diversity characteristics. We also provide inclusive leadership
training to all senior leaders and managers, helping them to understand
and role-model consciously inclusive behaviours, and facilitate a
psychologically and physically safe environment for their teams.
In 2021, we continued to build on the significant progress we have
made within inclusion and diversity over the last four years. While there
is always more to do, we have made a positive difference in key areas,
such as psychological safety; domestic violence; bullying, harassment
and victimisation; and mental wellness. We will continue to embed and
launch initiatives that will allow us to realise our vision of a truly inclusive
workplace where each of us can reach our full potential.
Diversity performance
We report on our gender pay gap in UK operations, in line with
legislative requirements. As of 4 April 2021, our UK average (mean)
gender pay gap for Anglo American Services Ltd (UK) was 44% and
our median pay gap was 36%. This was primarily due to the high
representation of men in the most senior management roles in our
UK head office – an issue mirrored across our sector, and one that we
continue to address.
We continue to make progress against our gender representation goal
of 33% female representation by 2023 at all management levels, in
every business unit and Group function. We have set a similar target for
33% of our Group Management Committee and those reporting to the
committee to be women by 2023.
At 31 December 2021, there were five female directors and seven
male directors serving on the Board. In 2021, on average, the Group
had 28 female senior managers and 70 male senior managers and
14,630 female and 48,970 male employees. The proportion of women
at management level grew to 31% (2020: 27%).
At year end, the proportion of our permanent employees aged under
30 was 9%, 72% were aged between 30 and 50, and the remaining
19% were over 50 years of age.
In South Africa, historically disadvantaged South Africans held 73% of
our management positions (2020: 68%).
Employee engagement and workplace relations
We recognise that there are many different aspects to employee
engagement. These include our success in building a diverse and
inclusive working environment, and the steps we take to engage
employees directly.
Established in 2019, our Global Workforce Advisory Panel helps the
Board to better understand the views of our workforce, in line with the
recommendations of the UK Corporate Governance Code. The Panel
is made up of employee representatives from each country where we
have a significant presence, and is chaired by our senior independent
director, Byron Grote.
For 2021, the TB incidence was 152 per 100,000 compared with
138 per 100,000 in 2020, reflecting the fact that controls, such as mask
wearing and social distancing, were less adhered to with time, and that
access to health services was restricted when the second and third
waves of Covid-19 hit southern Africa.
Helping our people thrive
We aim to attract the best people in the industry, putting them into the
right roles to suit their talents, and meet our business objectives – now
and into the future. Empowering our employees through professional
and personal development opportunities, we give them the support
they need to thrive and, by continuously engaging with our employees,
we are able to build relationships based on trust. Living our Values, we
aim to be an inclusive workplace where everyone – without exception –
can bring their full selves to work.
Attracting, retaining and developing our talent
Organisation Model
As a company, we firmly believe that how we deliver results is
inextricably linked to the outcomes we deliver. Our Organisation
Model ensures we have the right people in the right roles doing the
right value-adding work, with clear accountabilities minimising work
duplication and increasing organisation capability and effectiveness.
Along with our Values and our Operating Model, the Organisation
Model supports the delivery of positive outcomes through a set of
structures, systems and processes. The model creates consistency
in how we approach organisational issues, by providing a common
language about organisations and management.
One of the key components of the Organisation Model is leadership
and team effectiveness, which touches on all employees. Our
structured process streamlines the way work is aligned to business
outcomes, assigned and monitored, as well as how feedback is given to
teams and individuals. Team+, our performance optimisation approach,
uses shared targets and commitments to promote active collaboration
and collective responsibility. This approach directly supports over
10,000 senior employees.
A focus on continuous learning
In today’s talent-driven business environment, learning and
development are more important than ever. We strive to enable
continuous learning and a passion for breakthrough performance
and innovative thinking, driven by agile development approaches that
unlock the full capabilities of our people. This leads us to develop more
integrated learning journeys and experiences, including learning in the
flow of work, learning from each other, and through formal channels.
Learn+, our main learning platform, offers a single, user-friendly
interface that makes it easy for our employees to access a growing
range of online learning resources. This experience-based platform
feeds from other areas to provide learning experiences, with a focus not
only on what people learn, but how learning can be delivered in the line
of work, at the time of need.
Drawing on expertise from across the business, the Technical Academy
looks to transform our technical skills and capabilities using the latest
approaches – from immersive technologies to scenario-based training
– to create uniquely engaging learning content.
Our Leadership Academy is a talent and development engine
designed to accelerate the development of our most talented people.
Since March 2020, the Leadership Academy moved to virtual delivery,
which has made it increasingly accessible to more leaders while
significantly reducing both our CO2 emissions and costs.
In 2021, Anglo American spent $65 million on direct training activities,
an increase of 5% (2020: $62 million).
We continued to see increased utilisation of our online learning
infrastructure across the Group, with 460,000 items viewed (up 60%
from 2020) and 175,000 courses completed (up 50% from 2020).
In addition, 2,550 were shared (up 110% from 2020), reflecting an
ongoing trend of moving towards more peer-to-peer learning.
56
Anglo American plc Integrated Annual Report 2021Strategic Report In 2021, we shared the results and Groupwide actions from the global
employee engagement survey undertaken in September 2021, with
all colleagues and the Board. Almost 28,000 employees answered
questions in the survey, which covered engagement; culture and
values; physical and psychological safety; strategic direction and
purpose; leadership; and inclusion and diversity. The survey suggested
an employee engagement score of 91%.
We continued to review our Code of Conduct and Group policies in
the year. We developed and revised 21 Group policies, a process that
included subject matter experts performing risk reviews for areas within
their fields of specialisation. Of these policies, 16 are existing and five
have been newly developed. Among other policies, we have new
guidelines for recognising and preventing domestic violence and a
policy recognising the right to flexible working arrangements.
Our employee voluntary turnover rate for the year was 3.5%
(2020: 2.8%). New hires represented 8% of our permanent employees
in 2021, compared with 11% in the prior year.
We regularly communicate with our employees about the Code of
Conduct and our Values – Safety, Care and Respect, Collaboration,
Accountability, Innovation, and Integrity.
Supporting labour rights
We have signed the United Nations Global Compact, and our Human
Rights Policy commits us to the labour rights principles set out in the
core conventions of the International Labour Organization. These
include the right to freedom of association and collective bargaining,
non-discrimination, and the eradication of child and forced labour.
Our Responsible Sourcing Standard stipulates that all suppliers shall
respect all labour and human rights throughout their own value chain.
Business integrity
Our Business Integrity Policy sets out the standards of conduct we
require at every level within our business – including our subsidiaries
and those joint operations we manage – in combating all types of
corrupt behaviour.
To bolster adherence to the policy, we require assurance aligning with
the ‘three lines’ model: first line – risk owners/managers; second line –
risk control and compliance; third line – risk assurance.
In 2021, approximately 71% of our permanent workforce was
represented by worker organisations and covered by collective
bargaining agreements. In 2021, we signed a dialogue agreement
with IndustriALL Global Union, the union federation that represents
most national mineworkers unions. There were no recorded incidents
of industrial action lasting more than one week in 2021 at our
managed operations.
We developed and launched several new training processes and
materials, including conducting virtual Code of Conduct training for
more than 10,000 participants. We also continued to innovate to make
our training methods more engaging and impactful – introducing
gaming methods and developing animated materials. For face-to-face
training, we introduced more customised content using real-world
case studies.
We engage with our industry on business ethics in order to both share
and learn from best practices. We are also a member of the board of
the Extractive Industries Transparency Initiative (EITI).
Benchmarking anti-corruption initiatives
We continue to deepen our collaboration with the Transparency
International (TI) Corporate Anti-Corruption Benchmark and play
a more active role in transparency programmes.
During 2021, we implemented several of the TI’s recommendations.
These include developing a skilled and independent investigation team
and refining our third-party risk management process.
Whistleblowing
The Group operates a multilingual whistleblowing facility which uses
a reporting platform provided by a third party service provider. The
whistleblowing programme is called YourVoice and continues to
facilitate confidential and anonymous reporting of a wide range of
concerns about politically unethical, unlawful or unsafe conduct or
practices that conflict with our Values and Code of Conduct.
During 2021, we received more than 700 reports through YourVoice,
a 30% increase from 2020. We attribute the increase to a heightened
awareness of the channel as a result of our proactive engagement
with stakeholders, a growing culture of trust to raise concerns with
confidence, and the promotion of this channel through other relevant
Groupwide initiatives.
Of those allegations closed, 25% were substantiated or partially
substantiated. Corrective actions were taken against allegations
substantiated in accordance with our policies.
There were no reported incidents of under-age or forced labour at our
operations during 2021.
The future of work
The accelerated pace of global change is shaping a transition in the
nature of work, and the workforce, that presents opportunities and
challenges for us all. We are committed to being a leader in the public
debate and to addressing the expectations concerning our industry.
This includes working together with our stakeholders to achieve
technological advancements and step-changes in the approach that
our industry takes to sustainability.
Through our Future of Work programme, we embrace the evolution of
this change by taking a long term approach to planning for the roles
and skills that we will need in the future. We seek to anticipate major
internal and external drivers of change in our workplace, including the
nature of our work and how we perform it. We are guided on every step
of this journey by our deep responsibility to society and our commitment
to work with our employees and communities to create sustainable
positive impact.
As the pace of change in our industry, and indeed the world, continues
to increase, this organisational capability will help us to be proactive,
giving us a competitive advantage. Using this insight, we can ensure we
have the appropriate people and strategies in place to deliver business
expectations, today and into the future. Our objective is to provide
our people with the tools they will need to step up to roles that have
evolved, and completely new ones.
Building a purpose-led culture
We understand that ethical reputation is a critical asset for building trust
with our stakeholders. We expect our employees and business partners
to behave ethically, always. We expect them to consistently show care
and respect for colleagues, communities and the environment in which
we operate. These expectations are at the heart of our culture and are
embedded in our Code of Conduct and Business Integrity Policy.
Our Code of Conduct is a single point of reference for everyone
associated with us, providing a comprehensive understanding of our
policies and procedures. It sets out how we behave in line with our
Values, and how we live our Purpose.
57
Anglo American plc Integrated Annual Report 2021 Capital allocation
sh flo w a ft e r
taining c a p it a l
a
C
s
u
s
.
1
t
o
2
.
C
b
a
o
s
m
e
m
d
i
i
t
v
i
m
e
n
t
d
e
n
d
Balance sheet
flexibility
3. Discretio n a r
y
capital op t i o n s
Future project
options
Portfolio
upgrade
Additional
shareholder returns
Commitment to base dividends
Our clear commitment to a sustainable base dividend remains a critical
part of the overall capital allocation approach and is demonstrated
through our dividend policy of a 40% payout ratio based on underlying
earnings, paid each half year.
Our dividend policy provides shareholders with increased cash
returns upon improvement in earnings, while retaining balance sheet
flexibility during periods of lower earnings. The Group paid dividends
of $0.9 billion in May 2021 (in relation to second half 2020 underlying
earnings), and $2.1 billion in September 2021 (in relation to first half
2021 underlying earnings).
In September 2021, in addition to the base dividend, the Group paid a
special dividend of $1.0 billion equal to $0.80 per share.
Anglo American also returned $0.8 billion to shareholders in 2021,
as part of a $1.0 billion on-market share buyback programme that
completed on 11 February 2022, at an average price of £28.84
per share.
In line with the Group’s established dividend policy to pay out 40%
of underlying earnings, the Board has proposed a dividend of
$1.18 per share (2020: $0.72 per share), as well as a special dividend
of $0.50 per share, bringing the total dividends paid and proposed in
respect of 2021 to $4.19 per share (2020: $1.00 per share), equivalent
to $5.2 billion (2020: $1.2 billion). The timetable for the special dividend
will follow the same timetable as for the payment of Anglo American’s
final dividend. For further information, please refer to the ‘Notice of
Final Dividend’ set out on page 92 of the 2021 preliminary results
press release.
A strong focus on
capital discipline
Underpinning our strategy, we have a
value-focused approach to capital allocation,
with clear prioritisation: first to sustaining our
operations and maintaining asset integrity
(including Reserve Life); secondly to the base
dividend to our shareholders, determined on a
40% underlying earnings-based payout ratio.
All remaining capital is then allocated to discretionary capital options
which include organic and inorganic growth options, as well as
additional shareholder returns. In all cases, discretionary projects are
robustly assessed against financial and non-financial metrics, including
their delivery of net positive benefit to our shareholders and the
communities in which we operate, and their ability to improve and
upgrade our portfolio in line with the transition to a low carbon economy
and global consumer demand trends.
Capital allocation is prioritised to ensure we maintain balance sheet
flexibility, with our near term objective to ensure the Group’s net debt
does not exceed 1.5 x underlying EBITDA, using bottom of the cycle
pricing, without there being a clear plan to recover. Further detail on
balance sheet discipline and our credit can be found on page 75.
Capital is allocated in support of the execution of our strategy. Our
Sustainable Mining Plan outlines ambitious targets that our projects
must support to ensure a healthy environment, thriving communities
and Anglo American’s position as a trusted corporate leader.
→ For more on our Sustainable Mining Plan
See pages 38–39
Surplus capital is returned to shareholders in the form of either special
dividends or through a share buyback programme.
Sustaining capital
We continue to focus on capital discipline and sustaining capital
efficiency, while maintaining the operational integrity of all our
assets. Sustaining capital comprises stay-in-business, capitalised
development and stripping, and life extension expenditure, less the
proceeds from disposals of property, plant and equipment.
For 2022–2024, we expect baseline sustaining capital expenditure
to be within a range of $3.3–3.5 billion per annum. In addition,
c.$1.1 billion is being allocated to the Collahuasi desalination project
across 2022–2024, and $0.6–0.8 billion per annum is allocated to life
extension expenditure, primarily driven by the Venetia Underground
project at De Beers, Kolomela’s Kapstevel South project (Kumba Iron
Ore) and the recently approved Der Brochen project at our PGMs’
Mototolo mine.
58
Anglo American plc Integrated Annual Report 2021Strategic Report
Discretionary capital options
Strict value criteria are applied to the assessment of Anglo American’s
growth options and, for major greenfield projects, we expect to
sequence their development and consider including partners where
appropriate. The Group will continue to maintain optionality to progress
with holistic, value-accretive projects.
The Quellaveco copper project in Peru remains on track, despite the
challenges posed by Covid-19 to date, with first production expected in
mid-2022. Total project costs are estimated at $5.4–5.5 billion (100%
basis), excluding the impact of potential additional Covid-19 disruption.
Anglo American has conducted a detailed technical review of the
Woodsmith project (Crop Nutrients) since mid-2020 to ensure the
technical and commercial integrity of the full scope of its design. Now
largely complete, the review has confirmed that a number of elements
of the project’s design would benefit from modification to bring it up
to Anglo American’s safety and operating integrity standards and to
optimise the value of the asset for the long term.
The Woodsmith team is further developing the engineering to optimise
the configuration of the project, recognising the multi-decade life
of the mine. Particular attention is on those aspects identified at the
outset of Anglo American’s ownership – namely, the sinking of the two
main shafts, the development of the underground mining area, and
the changes required to accommodate both increased production
capacity and the more efficient and scalable mining method of using
only continuous miners; such improvements will also require the
installation of additional ventilation earlier in the development of the
underground mining area.
Ahead of the full project execution phase, the Woodsmith team, led
by new CEO Tom McCulley, is working through the detailed design
engineering throughout 2022 and is expected to make a number
of changes to the phasing of work, particularly in relation to the two
main shafts. The capital budget for 2022 is therefore expected to be
reduced by approximately $0.1 billion to $0.6 billion to accommodate
these changes.
Anglo American expects that the improvements it is making to the
project will result in an enhanced configuration and therefore a different
and longer construction schedule. Anglo American’s capital budget
for the development of Woodsmith will reflect such scope and timing
changes to ensure that its exacting standards are met and the full
commercial value of the asset is realised. Once the detailed design
engineering is complete, and the capital budget and schedule are
drawn up, the full project will be submitted to the Board.
In January 2022, Anglo American Platinum entered into transaction
agreements for the sale of its 50% interests in the Kroondal and
Marikana pool-and-share agreements (the ‘PSAs’) to Sibanye-Stillwater
(Sibanye). The transaction is subject to regulatory approvals, including
section 11 consent for the transfer of the mining right and approvals by
the Competition Authorities, as well as the delivery of 1.35 million 4E
ounces of metal in concentrate by the Kroondal PSA (100% basis).
We continue to progress studies on organic growth opportunities to
improve the existing business. For example, expansion options are
currently being considered for the Mogalakwena PGMs complex to
expand production of the mine through technology development
and deployment, and the optimal mine plan to deliver feed to the
concentrators. At the Collahuasi copper joint operation, Phase 1 of the
expansion is focused on near term P101 optimisation opportunities,
the implementation of a fifth ball mill (approved) and a restart of
leaching activities to add around 50,000 tonnes of production a year
(44% basis). Further phase expansions are in early stage study to
increase production by up to an additional 100,000 tonnes per annum
(44% basis). Finally, in Metallurgical Coal, a feasibility study into the
expansion of the processing facilities at Moranbah mine to increase
saleable tonnes of high quality metallurgical coal by c.2.5 Mtpa
(Anglo American share 88%) is under way, which, if approved, would
be expected to complete in 2025.
Our integrated FutureSmart Mining™ approach to driving sustainability
outcomes through technology and digitalisation is central to our
progress. We are investing $0.2-0.5 billion per annum of discretionary
capital in technology and innovation to drive improvements across
our business, including bulk ore sorting, coarse particle recovery and
hydraulic dry stack.
→ For more on our technology developments
See pages 36–37
Group capital expenditure
Capital expenditure increased to $5.2 billion (2020: $4.1 billion),
as comprehensive response plans mitigated the impact of the
Covid-19 pandemic, which affected spend in 2020, and ensured
business continuity.
Sustaining capital expenditure increased to $3.4 billion
(2020: $2.6 billion), driven by the roll-over of deferred expenditure from
2020 owing to Covid-19 related restrictions and the effect of stronger
local currencies in our countries of operation.
On 4 June 2021, Anglo American demerged its thermal coal operations
in South Africa into a newly incorporated company, Thungela
Resources Limited, that was subsequently admitted to trading on both
the Johannesburg and London stock exchanges on 7 June 2021.
Growth capital expenditure increased to $1.8 billion (2020: $1.4 billion),
largely due to higher expenditure incurred at the Woodsmith polyhalite
project of $0.5 billion (2020: $0.3 billion) following the acquisition of the
project in the first half of 2020.
And on 11 January 2022, Anglo American completed the sale of
its 33.3% shareholding in Cerrejón to Glencore plc for a total cash
consideration of $0.3 billion, before adjustment for dividends received
in 2021. The completion of this transaction represents the final stage of
Anglo American’s previously announced responsible exit from thermal
coal operations.
Net cash received from disposals was $0.1 billion (2020: $0.4 billion),
being deferred and contingent consideration in respect of previous
divestments by PGMs and Copper, partially offset by the net cash
disposed in 2021 through the demerger of the Group’s South African
thermal coal operations.
On 20 December 2021, Anglo American Platinum announced the sale
of its 49% interest in Bokoni. The transaction is subject to the fulfilment
or waiver of notable conditions precedent and is expected to complete
during 2022.
We expect total capital expenditure to increase compared with 2021 to
between $5.6–6.6 billion per annum in 2022 to 2024.
Capital expenditure
$ million
Stay-in-business
Development and stripping
Life extension projects
Proceeds from disposal of property,
plant and equipment
Sustaining capital
Growth projects
Total
Capitalised operating cash flows
Total capital expenditure
2021
2,068
904
474
(17)
3,429
1,752
5,181
12
5,193
2020
1,566
769
296
(7)
2,624
1,438
4,062
63
4,125
59
Anglo American plc Integrated Annual Report 2021 Managing risk effectively
The effective management of risk is
integral to good management practice and
fundamental to living up to our Purpose and
delivering our strategy. By understanding,
prioritising and managing risk, Anglo American
safeguards our people, our assets, our Values
and reputation, and the environment, and
identifies opportunities to best serve the
long term interest of all our stakeholders.
As understanding our risks and developing
appropriate responses are critical to our future
success, we are committed to an effective,
robust system of risk identification, and an
effective response to such risks, in order to
support the achievement of our objectives.
How does risk relate to our strategy?
Risks can arise from events outside of our control or from operational
matters. Each of the risks described on the following pages can have
an impact on our ability to deliver our strategy.
Viability statement
Context
An understanding of our business model and strategy is key to the
assessment of our prospects. Our strategy is to:
– Secure, develop and operate a portfolio of high quality and long
life assets that deliver sustainable shareholder returns
– Implement an innovation-led approach to sustainable mining from
discovery to delivering products to customers
– Create an inclusive and diverse working environment to encourage
and support a high performance culture and innovative thinking.
The assessment process and key assumptions
Assessment of the Group’s prospects is based upon the Group’s
strategy, its financial plan and principal risks. During 2021, the focus
was on ongoing steps to ensure Covid-19-safe working environments,
driving efficiencies through the operations and upgrading the quality
of our portfolio in order to improve cash flow generation, strengthening
the balance sheet and creating sustainable value through disciplined
allocation of capital.
A financial forecast covering the next three years is prepared based
on the context of the strategic plan and is reviewed on a regular basis
to reflect changes in circumstances. The financial forecast is based
on a number of key assumptions, the most important of which include
product prices, exchange rates, estimates of production, production
costs and future capital expenditure. In addition, the forecast does
not assume the renewal of existing debt or the raising of new debt.
A key component of the financial forecast and strategic plan is the life
of mine plans created for each operation, providing expected annual
production volumes over the anticipated economic life of mine.
The principal risks are those that we believe could prevent the Group
from delivering its strategic objectives. A number of these risks are
deemed catastrophic to the Group’s prospects, including the impacts
of a tailings dam failure, fire and slope wall failure risks, and have been
considered as part of the Group’s viability.
Assessment of viability
The assessment of viability has been made with reference to the
Group’s current position and expected performance over a three
year period, using budgeted product prices and expected foreign
exchange rates. Financial performance and cash flows have then been
subjected to stress and sensitivity analysis over the three-year period
using a range of severe, but plausible, downside scenarios. Scenarios
were selected for stress testing based upon an assessment of the
Group’s principal risks, and each includes a risk deemed catastrophic
to the Group. Risks chosen for modelling were those considered to have
the greatest financial impact upon the Group’s financial statements,
and have been linked to the principal risks below. The scenarios
tested include:
– Product price reductions of up to 20% from conservative budget
prices over three years, with no offsetting foreign exchange rate
improvement (Principal Risks 2 and 13)
Details of our business model are found on pages 8–9 and more on
our strategy is provided on pages 10–11.
– Operational incidents that have a significant impact on production
at key sites in the Group (Principal Risks 1, 4, 6, 8 and 9)
Restrictions on the Group’s operations from Covid-19 peaked during
the first half of 2020, significantly easing thereafter following effective
adoption of Covid-19-safe working practices by the Group, which
were strengthened by our working with host governments. Although
price performance and volatility showed significant variation across
our diversified product portfolio in 2021, the Group’s realised basket
price across all commodities exceeded the prior year’s, though ongoing
geo-political and macro-economic uncertainties are expected to
cause continued commodity price volatility. Against that background,
the Board maintains a cautious appetite for major new projects and
investments. Large greenfield projects are likely to be considered for
syndication with other investors at the appropriate stage of a project’s
development, and for value, as a means of reducing our risk profile and
capital requirements.
– The impact of a cyber attack upon the Group’s key information
technology systems (Principal Risks 3 and 6)
– Technology developments affecting demand for diamonds
(Principal Risks 2 and 13)
– Technology developments in the automobile industry affecting
demand for PGMs (Principal Risks 2 and 13)
– The impact of a reduction in water supply in Chile, being a physical
risk associated with climate change (Principal Risks 7 and 12)
– The impact of Covid-19 upon the Group’s operations (Principal
Risks 10).
The Group’s liquidity (defined as cash and undrawn committed
facilities) was $17.1 billion, comprising cash and cash equivalents
of $9.1 billion (see note 20 to the Consolidated financial statements),
and undrawn committed facilities of $8.0 billion (see note 23 to the
Consolidated financial statements) as at 31 December 2021. The
most ‘severe’ scenario considered by management, albeit unlikely,
considers the financial impact of economic pricing downsides
60
Anglo American plc Integrated Annual Report 2021Strategic Report Risk appetite
We define risk appetite as ‘the nature and extent of risk Anglo American
is willing to accept in relation to the pursuit of its objectives’. We look at
risk appetite from the context of severity of the consequences should
the risk materialise, any relevant internal or external factors influencing
the risk, and the status of management actions to mitigate or control the
risk. A scale is used to help determine the limit of appetite for each risk,
recognising that risk appetite will change over time.
If a risk exceeds appetite, it will threaten the achievement of objectives
and may require a change to strategy. Risks that are approaching the
limit of the Group’s risk appetite may require management actions
to be accelerated or enhanced to ensure the risks remain within
appetite levels.
For catastrophic and operational risks, our risk appetite for exceptions
or deficiencies in the status of our controls that have safety implications
is very low. Our internal audit programme evaluates these controls with
technical experts at operations and the results of that audit work will
determine the risk appetite evaluation, along with the management
response to any issues identified.
→ For more on the risk management and internal control systems
and the review of their effectiveness
See pages 133–134
Summary
Our risk profile evolved in 2021. The global economy partly recovered
from the negative impacts of the Covid-19 pandemic, which helped
ease macro-economic risks. Conversely, we consider political risks
to have increased as a result of the potential for armed conflict
involving major world powers as well as national political tensions
in certain countries, elevated partly due to the Covid-19 pandemic.
An outcome of our periodic reviews of risks impacting the business
was that we elevated two risks to Principal Risks – (1) community and
social relations and (2) regulatory and permitting, both of which are
influenced by an evolving socio-political landscape and stakeholder
expectations. Climate change is the defining challenge of our era and
our unequivocal commitment to being part of the global response
presents both opportunities and risks. A number of our Principal Risks
are directly or indirectly related to climate change and our strategies to
reduce its impact on our business and the planet.
Our catastrophic risks are the highest priority risks, given the
potential consequences.
throughout the assessment period, and two operational incidents
materialising in a single year at the start of the assessment period,
with no mitigating actions taken by management. This scenario would
create both an immediate and prolonged adverse impact, resulting
in negative attributable free cash flows throughout the assessment
period. The Group has a range of management actions available in
such a scenario to preserve resilience, including accessing lines of
credit, reducing capital expenditure, reviewing capital allocation and
production profiles, and raising debt while maintaining the shareholder
return policy.
Viability statement
The directors confirm they have a reasonable expectation that the
Group will continue in operation and meet its liabilities as they fall due
for the next three years. This period has been selected as the volatility
in commodity markets makes confidence in a longer assessment of
prospects highly challenging.
Emerging risks
We define an emerging risk as a risk that may become a principal risk
in time but is not expected to materialise in the next five years.
Emerging risks that are currently being monitored are:
– Future demand for metals and minerals deviating from assumptions
as a result of efforts to reduce global warming
– Failure to replace Ore Reserve depletion in key business units
through exploration, projects or acquisitions
– Liabilities incurred as a result of environmental impairments
– Failure to deliver certain elements of the Sustainable Mining Plan
which could cause reputational damage, threaten the organisation’s
licence to operate, affect future growth, and may also result in
increased costs and a negative effect on the Group’s financial results
– Unexpected mine-closure liabilities that have the potential to
increase costs.
The above risks are closely monitored and actively managed to
minimise their threat.
Principal risks
We define a principal risk as a risk or combination of risks that would
threaten the business model, future performance, solvency or liquidity
of Anglo American. In addition to these principal risks, we continue
to be exposed to other risks related to currency, inflation, community
relations, environment, litigation and regulatory proceedings, changing
societal expectations, infrastructure and human resources. These
risks are subject to our normal procedures to identify, implement and
oversee appropriate mitigation actions, supported by internal audit
work to provide assurance over the status of controls or mitigating
actions. These principal risks are considered over the next three years
as a minimum, but we recognise that many of them will be relevant for
a longer period.
→ For more on principal risks
See pages 62–67
Catastrophic risks
We also face certain risks that we deem catastrophic risks. These are
very high severity, very low likelihood events that could result in multiple
fatalities or injuries, an unplanned fundamental change to strategy or
the way we operate, and have significant financial consequences. We
do not consider likelihood when assessing these risks, as the potential
impacts mean these risks must be treated as a priority. Catastrophic
risks are included as principal risks.
→ For more on catastrophic risks
See page 62
61
Anglo American plc Integrated Annual Report 2021 Managing risk effectively continued
Risk appetite: Operating within the limits of
our appetite.
Commentary: These very high impact but very low
frequency risks are treated with the highest priority.
Pillars of value:
Risk appetite: Operating within the limits of
our appetite.
Commentary: We believe macro-economic
uncertainty has reduced in 2021 as a result of
partial global economic recovery following the
Covid-19 pandemic. However, future uncertainties
remain that may result in price volatility in the
products mined, and marketed, by Anglo American.
Pillars of value:
Root cause: Any of these risks may result from
inadequate design or construction, adverse
geological conditions, shortcomings in
operational performance, natural events such
as seismic activity or flooding, and failure of
structures or machinery and equipment.
Impact: Multiple fatalities and injuries, damage
to assets, environmental damage, production
loss, reputational damage and loss of licence to
operate. Financial costs associated with recovery
and liability claims may be significant. Regulatory
issues may result and community relations may
be affected.
Mitigation: Technical standards exist that provide
minimum criteria for design and operational
performance requirements, the implementation
of which is regularly inspected by technical
experts. Additional assurance work is conducted
to assess the adequacy of controls associated
with these risks.
Root cause: Factors that could contribute to this
risk include armed conflict involving major world
powers, trade war between major economies,
economic slowdown in a leading economy and a
disrupted recovery from the Covid-19 pandemic as
a result of new variants being resistant to vaccines.
Impact: Low product prices can result in lower
levels of cash flow, profitability and valuation.
Debt costs may rise owing to ratings agency
downgrades and the possibility of restricted
access to funding. The Group may be unable to
complete any divestment programme within the
desired timescales or achieve expected values. The
capacity to invest in growth projects is constrained
during periods of low product prices – which may, in
turn, affect future performance.
Mitigation: Maintaining a conservative balance
sheet and proactive management of debt
facilities and the delivery of cash improvement
and operational performance targets are the key
mitigation strategies for this risk. Regular updates of
economic analysis and product price assumptions
are discussed with executive management and
the Board.
Principal risks
1. Catastrophic
and natural
catastrophe risks
We are exposed to
the following risks we
deem as potentially
catastrophic: tailings dam
failure; slope wall failure;
mineshaft failure; and fire
and explosion.
2. Product prices
Global macro-economic
conditions leading to
sustained low product
prices and/or volatility.
62
Anglo American plc Integrated Annual Report 2021Strategic Report Pillars of value:
Safety and health
Environment
Socio-political
People
Production
Cost
Financial
3. Cyber security
Loss or harm to our
technical infrastructure
and the use of technology
within the organisation
from malicious or
unintentional sources.
4. Political
Global, regional and
national political
tensions and disputes
may negatively impact
our business.
Root cause: Attacks motivated by fraud and/or
access to sensitive data or information.
Risk appetite: Operating within the limits of
our appetite.
Commentary: During 2021, we further
strengthened our control environment. Our controls
responded as planned and no cyber attack attempt
resulted in negative impacts for Anglo American.
Pillars of value:
Risk appetite: Operating within the limits of
our appetite.
Commentary: Global economic conditions can
have a significant impact on countries whose
economies are exposed to commodities, placing
greater pressure on governments to find alternative
means of raising revenues, and increasing the risk
of social and labour unrest.
Pillars of value:
Impact: Theft or loss of intellectual property,
financial losses, increased costs, reputational
damage and operational disruption.
Mitigation: We have a dedicated Global
Information Management Security team with
appropriate specialist third-party support to
oversee our network security. We have achieved
UK Cyber Essentials Certification and an ongoing
cyber awareness programme is in place across
the Group.
Root cause: Geo-political disputes between
major economic countries, regional and national
political tensions. The effectiveness of national
governance in countries in which we operate
may be compromised by corruption, weak policy
framework and ineffective enforcement of the law.
Impact: Global supply chains may be impacted
by the threat of or actual disputes between
major economies. Regional and national political
tensions may result in social unrest affecting
our operations and employees. Uncertainty
over future business conditions leads to a lack
of confidence in making investment decisions,
which can influence future financial performance.
Increased costs can be incurred through
additional regulations or resource taxes, while the
ability to execute strategic initiatives that reduce
costs or divest assets may also be restricted,
all of which may reduce profitability and affect
future performance. These may adversely affect
the Group’s operations or performance of those
operations.
Mitigation: Anglo American has an active
engagement strategy with governments,
regulators and other stakeholders within the
countries in which we operate, or plan to operate,
as well as at an international level. We make
significant efforts to contribute to public policy
objectives such as socio-economic development
to demonstrate the broader value of our
presence. We assess portfolio capital investments
against political risks and avoid or minimise
exposure to jurisdictions with unacceptable risk
levels. We actively monitor regulatory and political
developments at a national level, as well as global
themes and international policy trends, on a
continuous basis. See page 15 for more detail on
how we engage with our key stakeholders.
63
Anglo American plc Integrated Annual Report 2021 Managing risk effectively continued
Principal risks continued
5. Community and
social relations
Failure to maintain healthy
relationships with local
communities and society
at large.
Root cause: Failure to identify, understand and
respond to community and societal needs
and expectations.
Impact: A breakdown in trust with local communities
and society at large threatens Anglo American’s
‘licence to operate’, potentially leading to increased
costs, future growth being impacted, business
interruption and reputational damage.
Mitigation: The Anglo American Social Way is
our integrated management system for social
performance, adopted and implemented at all
managed sites.
Risk appetite: Operating within the limits of
our appetite.
Commentary: Through the Social Way, we
ensure that policies and systems are in place at
all Anglo American managed sites to support
effective engagement with communities, avoid or
minimise adverse social impacts, and maximise
development opportunities. For further information
on how we engage with key stakeholders, see
page 15.
Pillars of value:
Risk appetite: Operating within the limits of
our appetite.
Commentary: We continue to experience an
overall improvement in our safety performance.
During 2021, there was one work-related fatality
in our managed operations, compared with two in
2020. Management remains fully committed to the
elimination of fatalities.
Pillars of value:
Risk appetite: Operating within the limits of
our appetite.
Commentary: For more information on our
Sustainable Mining Plan and climate change
policy, see pages 38–39 and 43–44 , and for
further information on how we engage with key
stakeholders, see page 15.
Pillars of value:
6. Safety
Failure to eliminate
fatalities.
7. Climate change
Climate change is the
defining challenge of our
era and our commitment
to being part of the global
response presents both
opportunities and risks.
64
Root cause: Fatalities may result from operational
leaders, employees and contractors failing to
apply safety rules and poor hazard identification
and control, including non-compliance with
critical controls.
Impact: A fatal incident is devastating for the
bereaved family, friends and colleagues. Over
the longer term, failure to provide a safe working
environment threatens our licence to operate.
Mitigation: All operations continue to implement
safety improvement plans, with a focus on:
effective management of critical controls required
to manage significant safety risks; learning from
high potential incidents and hazards; embedding
a safety culture; and leadership engagement
and accountability. Our Elimination of Fatalities
Taskforce oversees targeted improvement
initiatives to further improve safety performance.
Root cause: We are committed to the alignment
of our portfolio with the needs of a low carbon
world in a responsible manner; however, different
stakeholder expectations continue to evolve and
are not always aligned. Long term demand for
metals and minerals mined and marketed by
Anglo American may deviate from assumptions
based on climate change abatement initiatives.
Changing weather patterns and an increase in
extreme weather events may impact operational
stability and our local communities. Our Scopes 1
and 2 carbon emission reduction targets are partly
reliant on new technologies that are at various
stages of development, and our Scope 3 reduction
ambition is reliant on the adoption of greener
technologies in the steel making industry.
Impact: Potential loss of stakeholder confidence,
negative impact on reputation, financial
performance and valuation.
Mitigation: We have articulated our climate change
plans, policies and progress and engage with key
stakeholders to ensure they understand them.
Our Sustainable Mining Plan includes operation-
specific and Group targets for reductions in carbon
emissions, power and water usage.
Anglo American plc Integrated Annual Report 2021Strategic Report Pillars of value:
Safety and health
Environment
Socio-political
People
Production
Cost
Financial
8. Regulatory and
permitting
Failure to comply with
permitting and other
mining regulations.
9. Operational
performance
Unplanned operational
stoppages affecting
production and
profitability.
Root cause: Regulations impacting the mining
industry are evolving as a result of political
developments, changes in societal expectations
and the public perception of mining activities.
Failure to comply with management processes
will threaten the ability to adhere to regulations
and permits.
Impact: Delays to projects and disruption to
existing operations, delays in deploying new
technologies that support future growth and
sustainability objectives, legal claims and
regulatory actions, fines and reputational
damage.
Mitigation: All operations must comply with
our Minimum Permitting Requirements, which
is a management system to ensure necessary
permits and other regulatory requirements are
identified and embedded in life of asset plans and
management routines. Through our Sustainable
Mining Plan we make considerable efforts to
meet community aspirations for socio-economic
development and carefully manage the
environmental impacts of our business to avoid
causing harm and nuisance.
Root cause: Failure to implement and embed
our Operating Model, maintain critical plant,
machinery and infrastructure, and operate in
compliance with Anglo American’s Technical
Standards will affect our performance levels.
We are also exposed to risks of interruptions of
power supply and the failure of third-party-owned
and -operated infrastructure, e.g. rail networks
and ports. Our operations may also be exposed
to natural catastrophes and extreme weather
events.
Impact: Inability to achieve production, cash
flow or profitability targets. There are potential
safety-related risks associated with unplanned
operational stoppages, along with a loss of
investor confidence.
Mitigation: Implementation of our Operating
Model and compliance with Technical Standards,
supported by operational risk management
and assurance processes, is the key mitigation
against this risk. Regular tracking and monitoring
of progress against the underlying production and
EBITDA targets is undertaken.
Risk appetite: Operating within the limits of
our appetite.
Commentary: Annual assessments of compliance
with the Anglo American Minimum Permitting
Requirements are undertaken, as well as periodic
independent audits.
Pillars of value:
Risk appetite: Operating within the limits of
our appetite.
Commentary: There were no material unplanned
operational incidents in 2021.
Pillars of value:
65
Anglo American plc Integrated Annual Report 2021 Managing risk effectively continued
Principal risks continued
Root cause: Human population growth,
urbanisation, changes in land use, loss
of biodiversity, exploitation of the natural
environment, viral disease from animals, and
increased global travel and integration are all
contributory causes of health pandemics.
Risk appetite: Operating within the limits of
our appetite.
Commentary: For more information on our
response to the Covid-19 pandemic, see page 55.
Pillars of value:
Impact: As has been witnessed by the Covid-19
pandemic, widespread consequences include
the physical and mental health and well-being
of our people and local communities; economic
shocks and disruption; social unrest; an increase
in political stresses and tensions, a rise in criminal
acts and the potential for increased resource
nationalism.
Mitigation: Anglo American actively monitors
global pandemic-potential diseases. In the event
of a pandemic, our Group Crisis Management
Team is activated at an early stage to direct the
Group’s response, prioritising the well-being of our
people, their families and our host communities,
and ensuring the continuity of the operations.
Root cause: Anglo American has operations
in some countries where there is a higher
prevalence of corruption.
Impact: Potential criminal investigations,
adverse media attention and reputational
damage. A possible negative impact on
licensing processes and valuation.
Mitigation: A comprehensive anti-bribery and
corruption policy and programme, including risk
assessment, training and awareness, with active
monitoring, are in place.
Risk appetite: Operating within the limits of
our appetite.
Commentary: A Group Compliance Committee
oversees the organisation’s anti-bribery
management system to ensure its continuing
suitability, adequacy and effectiveness.
Pillars of value:
10. Pandemic
Large scale outbreak
of infectious disease
increasing morbidity and
mortality over a wide
geographic area.
11. Corruption
Bribery or other forms of
corruption committed by
an employee or agent of
Anglo American.
66
Anglo American plc Integrated Annual Report 2021Strategic Report Pillars of value:
Safety and health
Environment
Socio-political
People
Production
Cost
Financial
12. Water
Inability to obtain or
sustain the level of water
security needed to
support operations over
the current life of mine
plan or future growth
options.
13. Future demand
Demand for metals
and minerals produced
and marketed by
Anglo American may
deviate from our
assumptions.
Root cause: Poor water resource management
or inadequate on-site storage, combined with
reduced water supply at some operations as
weather patterns change, can affect production.
Water is a shared resource with local communities
and permits to use water in our operations are
at risk if we do not manage the resource in a
responsible and sustainable manner.
Impact: Loss of production and inability to
achieve cash flow or volume improvement
targets. Damage to stakeholder relationships or
reputational damage can result from failure to
manage this critical resource.
Mitigation: Various projects have been
implemented at operations most exposed to this
risk, focused on: water efficiency; water security;
water treatment; and discharge management; as
well as alternative supplies. New technologies are
being developed that will reduce water demand.
Root cause: Technological developments and/or
product substitution leading to reduced demand,
growth in the circular economy and shifts in
consumer preferences.
Impact: Potential for negative impact on revenue,
cash flow, profitability and valuation.
Mitigation: Regular reviews of production and
financial plans, as well as longer term portfolio
decisions, are based on extensive research. Our
businesses invest in marketing and other activities
to enhance the inherent value of the products we
produce, including building consumer confidence
in the ethical provenance of our products.
Risk appetite: Operating within the limits of
our appetite.
Commentary: This continues to be a risk to the
majority of our operations. For more information on
our Sustainable Mining Plan, see pages 38–39.
Pillars of value:
Risk appetite: Operating within the limits of
our appetite.
Commentary: We monitor new business
opportunities in line with our strategy to secure,
develop and operate a portfolio of high quality
and long life mineral assets, from which we will
deliver leading shareholder returns.
Pillars of value:
67
Anglo American plc Integrated Annual Report 2021 Key performance indicators
Safety and health
Strategic element: Innovation, People
Work-related
fatal injuries(7)
Target: Zero harm
ER
Total recordable case
frequency rate(7)
Target: Year-on-year reduction
ER
New cases of
occupational disease(7)
Target: Year-on-year reduction
Workforce noise
exposure(7)
Target: Year-on-year reduction
Workforce inhalable
hazard exposure(7)
Target: 10% year-on-year
reduction
Number of work-related
fatal injuries
TRCFR
NCOD
Employees and contractors
potentially exposed to
noise > 85 dBA
Employees and contractors
potentially exposed to inhalable
hazards over OEL
2021
2020
2019
2018
1
2
4
5
2021
2.24
2020
2.14
2019
2.21
2018
2.66
2021
2020
2019
16
30
39
2018
101
2021
30,832
2020
33,253
2019
29,958
2018
29,016
2021
1,796
2020
1,994
2019
2,151
2018
2,249
Environment
Strategic element: Innovation
Energy consumption(7)
Target: Improve energy
efficiency by 30% by 2030
GHG emissions(7)
Target: Reduce by 30%
by 2030
ER
Total water withdrawals(7)(8)
Target: Reduce the withdrawal
of fresh water in water scarce
areas by 50%
Level 4-5
environmental incidents(7)
Target: Zero
Measured in million GJ
Measured in million tonnes of
CO2 equivalent emissions
Measured in million m3
Number of Level 4-5
environmental incidents
2021
2020
2019
2018
85
81
87
84
2021
14.8
2020
16.1
2019
17.7
2018
16.2
2021
177
2020
197
2019
181
2018
187
2021
2020
2019
0
0
0
2018
1
Socio-political
Social Way 3.0 implementation(9)
Target: Full compliance with the Social Way 3.0 by end 2022
Taxes and royalties
borne and collected(4)
Strategic element: Innovation
Jobs supported by
enterprise development
initiatives(10)
Local procurement(5)
In 2021, 49% of Social Way 3.0 requirements fulfilled
Spend in $ billion
Cumulative from 2018–2021
Spend in $ bn
2021
147,374
2020
137,777
2019
132,082
2018
125,095
2021
10.0
2020
10.0
2019
2018
9.1
2.1
Strategic element: People
2021
2020
49
23
2021
2020
7.1
3.8
People
Voluntary labour
turnover
Target: <5%
Women in
management
Target: 33% by 2023
Women in
workforce
Percentage of full-time
employees
Women in management
(B5 and above) (%)
Women as a percentage
of total workforce
2021
2020
2019
2018
3.5
2.8
2.9
2.9
2021
2020
2019
2018
31
27
24
23
2021
2020
2019
2018
23
23
21
20
See page 101 for footnotes
68
Anglo American plc Integrated Annual Report 2021Strategic Report
Production
Production volumes
Copper equivalent production 2021 vs 2020 5% increase
Strategic element: Portfolio, Innovation
De Beers – million carats
Copper – thousand tonnes
Nickel – thousand tonnes
2021
32.3
2020
25.1
2019
30.8
2018
35.3
2021
647
2020
647
2019
638
2018
668
2021
41.7
2020
43.5
2019
42.6
2018
42.3
Iron ore (Kumba) – million tonnes
(wet basis)
Iron ore (Minas-Rio) –
million tonnes (wet basis)
Metallurgical coal (export coking
and PCI) – million tonnes
PGMs – thousand ounces
(5E+Au)
2021
4,299
2020
3,809
2019
4,441
2018
5,187
2021
22.9
2020
24.1
2019
23.1
2018
3.4
2021
14.9
2020
16.8
2019
22.9
2018
21.8
2021
40.9
2020
37.6
2019
43.1
2018
43.8
Cost
Strategic element: Portfolio, Innovation
Unit cost of production
Copper equivalent unit cost 2021 vs 2020: 16% increase in $ terms
De Beers – $/carat
Copper – c/lb
Nickel – c/lb
PGMs – $/PGM ounce
2021
2020
2019
2018
58
57
63
60
2021
120
2020
113
2019
126
2018
134
2021
377
2020
334
2019
380
2018
361
2021
868
2020
713
2019
705
2018
731
Kumba – $/tonne
(wet basis)
Iron ore Brazil – $/tonne
(wet basis)
Metallurgical coal – $/tonne
2021
2020
2019
2018
39
31
33
32
2021
2020
2019
24
21
21
2018
n/a
2021
105
2020
2019
2018
86
63
64
Financial
Attributable return
on capital employed
(ROCE)
ER
Underlying earnings
per share (EPS)
ER
Attributable free
cash flow(11)
ER
Group attributable ROCE
Group underlying EPS
Group attributable free cash flow
($ million)
2021
2020
2019
2018
43
17
19
19
2021
7.22
2020
2.53
2019
2.75
2018
2.55
2021
7,803
2020
1,209
2019
2,324
2018
3,157
Strategic element: Portfolio, Innovation
→ For full description and calculation methodology
See pages 268–275
ER
KPIs with this symbol are linked to executive remuneration; for more
information, see the remuneration report on pages 135–161.
69
Anglo American plc Integrated Annual Report 2021
Marketplace review
Review of 2021
Relaxation of Covid-19 rules prompts rapid global economic recovery
The relaxation of Covid-19 restrictions – in conjunction with the
roll-out of mass vaccination programmes and significant levels of
monetary and fiscal stimulus by many governments around the world –
precipitated a rapid resurgence of global economic activity in 2021: the
IMF estimates that global growth was 5.9% during the year.
The extent of this economic rebound was particularly pronounced in
Europe and the US where, following contractions of 6.3% and 3.4%
in 2020, annual growth rates of 5% and 6% respectively returned in
2021. Such rapid economic expansion was also observed across
major emerging markets, with growth of 8% in China and 9.5% in India.
However, this recovery generally slowed during the second half of
the year.
Higher inflation in Europe and the US also emerged as part of the
recovery, exacerbated by sustained pandemic-induced bottlenecks in
global supply chains.
The US Federal Reserve has begun to normalise monetary policy
in response to these price pressures, in particular by reducing
quantitative-easing programmes. This shift in monetary policy has
contributed to a strengthening of the dollar against a number of major
currencies during the year. Since the start of 2021, our producing
regions generally saw favourable movements, with the dollar firming by
6% to 9% against the Australian dollar, South African rand and Brazilian
real, and by around 20% to the Chilean peso – providing further upside
to profitability beyond the effects of higher prices.
Domestic inflationary pressures, foreign exchange movements
and the prospects of further US monetary tightening have required
more significant monetary policy responses among some emerging
markets, including in Brazil where interest rates have been increased
by 500 basis points since August in an effort to stem the tide of capital
outflows, pushing the economy into recession.
Markets review
Overall, a gradual recovery from Covid-19 has led to positive demand
growth, with supply slowly adjusting to meet this increased demand.
This has been positive for in almost all the products Anglo American
produces once again, particularly in rhodium, copper and iron ore.
Diamonds
The industry recovery from the effects of Covid-19 continued into 2021.
Strong diamond jewellery sales growth rates were experienced in both
the US and China in the first half and, while other regions experienced
a weaker rebound initially, owing to the uneven timing and effects of
the pandemic, the second half saw a more positive recovery trend
across the entire diamond value chain. This culminated in the US
holiday season seeing unprecedented growth rates in consumer
demand, attributed to accumulated savings through the lockdowns
of 2020, pent-up demand for weddings and engagements, a strong
desire for diamonds as gifts of love and appreciation, and less luxury
travel. Overall, consumer demand for diamond jewellery saw a solid
positive increase on the prior year, surpassing pre-pandemic levels. This
demand strength translated into improved demand for polished and
rough diamonds, as supply into retail remained tight throughout 2021.
Overall, the outlook for diamond fundamentals continues to be positive.
On the demand side, economic growth and a rise in digital and
branded consumer propositions are expected to support diamond
sales. The closure of certain non-De Beers mines and a lack of large
projects entering production in the near term will likely keep global
rough diamond supply below pre-Covid-19 levels.
Platinum Group Metals (PGMs)
Developments during the year reinforced some of the key long term
trends influencing demand for PGMs, including substitution to more
affordable platinum away from palladium in petrol vehicles, continuing
growth in the proportion of BEVs at the expense of PGM-consuming
ICE vehicles, and expanding production of platinum-consuming FCEVs,
albeit from a low base.
Consumption of PGMs in the key automotive sector showed diverging
trends across the metals, with demand for platinum rising by 18%, while
palladium and rhodium declined by a modest 1% and 2% respectively.
Although global production of ICE vehicles in 2021 did not rebound
to the extent anticipated, largely due to a shortage of semiconductor
chips, platinum use was boosted by price-related substitution of the
metal for palladium in petrol vehicles in some markets, as well as an
increase in platinum loadings in heavy duty diesel vehicles in China due
to tightening emissions legislation.
Meanwhile, a break from the sustained increase in global average
palladium and rhodium loadings in light duty petrol vehicles observed
since 2016, owing to platinum substitution and thrifting in China
following the phase-in of recent legislation, led to a slight softening in
automotive demand for these metals.
Indexed 2021 prices
.
0
1
=
1
2
0
2
y
r
a
u
n
a
J
1
,
x
e
d
n
I
e
c
i
r
P
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
Jan 2021
Anglo American basket price
De Beers price index
Copper
Source: Anglo American Commodity Research
Nickel
PGMs basket
Iron ore (Platts 62% CFR China)
Hard coking coal (FOB Australia)
Dec 2021
70
Change in average annual price
(2021 vs 2020)
Anglo American
Hard coking coal
Nickel
Copper
De Beers price index
PGMs basket ($)
Iron ore
43%
82%
34%
51%
11%
39%
46%
Anglo American plc Integrated Annual Report 2021Strategic Report
In the first half of the year, China’s restrictions on coal imports translated
to low Australian metallurgical coal benchmark prices. However,
trade flows adjusted over time and prices recovered to reach levels
comparable with other international price benchmarks; hard coking
coal prices climbed to a record high of $409/tonne FOB Australia in
September and averaged $226/tonne for the year.
Reflecting the speed of blast furnace restarts, raw materials pricing and
availability, and intensifying pressures to reduce steelmaking carbon
intensity, pig iron production growth was lower than crude steel output,
with stronger growth in less carbon-intensive scrap and direct reduced
iron. While steel is an essential enabler of economic development,
efforts to reduce carbon emissions from the steelmaking process will
have a bearing on total demand for iron ore and metallurgical coal,
as well as on relative demand and pricing for the higher grade, lower
emitting products, such as lump and high grade concentrate, that
Anglo American produces.
Fertilisers
The fertiliser sector saw significant price increases throughout
2021, driven largely by supply issues. However, strong pricing for
agricultural products has meant that farmer affordability of fertiliser
has not been affected.
Over the longer term, continued growth in both the world’s population
and its wealth means that more crops must be grown to meet food
requirements, albeit with limited increases – and potentially decreases
– to the world’s available agricultural land area. Crop yield and quality,
and soil health, are therefore important, with the balanced use of
sustainable, low carbon fertilisers being key to meeting global demand
for food.
Outlook
The outlook for 2022 is likely to be substantially shaped by inflationary
conditions and the responses of central banks, the strength of
private consumption and investment patterns in the aftermath of
unprecedented policy stimulus, as well as near term geo-political
and trade friction uncertainties. This could present policymakers with
difficult choices, particularly in the event that currently strong economic
performance deteriorates and elevated rates of inflation persist.
Longer term, while the drive to decarbonise the global economy
presents opportunities for responsible producers of the metals and
minerals critical to its success, it can also put pressure on economic
growth drivers and the success of individual sectors. Along with geo-
political shifts, demographics and emerging technologies, uncertainties
continue on many fronts. We continue to monitor, analyse and adapt,
with our diversified portfolio of future-enabling products and our
commitment to sustainable mining positioning Anglo American well to
capitalise on global trends and deliver enduring value.
In the other segments, industrial demand increased for each of the
three main PGMs (between 4% and 13%), buoyed by recovering
economic activity, which helped to partly offset less positive
developments in jewellery and investment. In total, demand for
platinum, excluding that met by recycled metal, contracted by 9%
to 5.0 million ounces; rhodium fell by 4% to 0.7 million ounces, while
palladium was almost unchanged at 6.9 million ounces.
Mined supply of refined platinum and rhodium rebounded strongly,
increasing by 22% and 19% respectively, as South African output
recovered following Covid-19 related disruption and built-up
pipeline inventory was processed. Palladium mined supply growth
was a more modest 10%, with supply from Russia being affected by
operational issues.
While PGM prices were significantly stronger for the year on average:
79% for rhodium, 23% for platinum and 9% higher for palladium, the
second half was notably weaker, with prices for all three metals at a
lower level at the end of the year than at the beginning.
Base metals
Base metals once again saw electrification trends influencing the
market. Copper prices were strong throughout the year with the price
averaging 423 c/lb, an increase of 51%, and the highest calendar
year nominal price. Global refined copper demand is estimated to
have risen by 4.1% in 2021, with all of this growth coming from outside
China as most economies made strong recoveries from the Covid-19
lockdowns of 2020. Refined copper consumption was stable in China,
as its property market softened in the second half of the year.
Supply growth for copper was constrained, with ongoing mine
depletion and a need for high quality, large scale new projects to enter
production to meet growing demand. Mined copper supply increased
slightly to reach 21.6 Mt, while refined copper supply is estimated to
have increased by just 2.7%, resulting in low exchange inventories
throughout the year.
Copper prices have also been supported by increasingly positive
investor sentiment, amid a growing realisation of its key role within the
global energy transition. The required shift to copper-intensive power
generation – such as wind and solar – and the electrification of vehicles
and heavy industries are expected to support robust copper demand in
the medium and long term.
Global nickel consumption increased by 14% following a recovery in
all major demand sectors. Outside of the immediate supply/demand
picture, longer term trends began to crystallise in 2021, most notably
the rising sales of BEVs. Demand from the battery sector increased
by 67% and is widely expected to remain the fastest-growing nickel
demand segment. Stainless steel production also recovered in 2021
and was 12% higher than the prior year, driving a 10% increase in
nickel demand from the sector. A notable development on the supply
side was the announcement that Indonesian nickel pig iron (NPI)
producers would pursue matte production (which can feed into the
battery value chain), diversifying the demand streams that Indonesian
nickel can serve.
Bulk commodities
Over the year, bulk commodities followed economic development and
were subject to geo-political changes. Global crude steel production
reached a new record in 2021, with production estimated to have
increased by 4.3%. The strongest growth was in Europe and the
Americas. In China – the world’s largest steel producer – production
rose to a record level in May before weakening economic sentiment
and a faltering real estate sector started to weigh on output.
Fuelled by the strong growth in China earlier in the year, to which supply
struggled to respond, iron ore prices reached a new high, with the
benchmark price (CFR China 62% Fe) peaking at $233/tonne in May.
For the year as a whole, prices averaged $160/tonne – the highest
level since 2011.
71
Anglo American plc Integrated Annual Report 2021 Group financial review
Anglo American’s profit attributable to equity
shareholders increased significantly to $8.6 billion
(2020: $2.1 billion). Underlying earnings were
$8.9 billion (2020: $3.1 billion), while operating profit
was $17.6 billion (2020: $5.6 billion).
Improved operational performances at PGMs, De Beers and Kumba
(Iron Ore) contributed to a 5% production increase on a copper
equivalent basis(12). This was driven in part by the easing of certain
Covid-19 related restrictions that impacted production throughout
2020, as well as improved mining performance and processing
stability at PGMs, planned higher rough diamond production at
De Beers in response to strong consumer demand, and improved plant
availability at Kumba. These improvements were partially offset by
the continued suspension of longwall operations at Grosvenor, which
was subsequently restarted in February 2022, operational issues and
geological conditions at Moranbah (Metallurgical Coal), unplanned
maintenance at Minas-Rio (Iron Ore), and licensing delays at Nickel.
In response to the pandemic, comprehensive safeguarding measures
remain in place at operations, which have helped a return to more
normal operating levels, with production generally maintained at
approximately 95%(13) of normal capacity across the year.
Financial performance
Underlying EBITDA◊ ($ billion)
Operating profit ($ billion)
Underlying earnings◊ ($ billion)
Profit attributable to equity shareholders
of the Company ($ billion)
Basic underlying earnings per share◊ ($)
Basic earnings per share ($)
Total dividend and buyback per share ($)
Group attributable ROCE◊
2021
20.6
17.6
8.9
8.6
7.22
6.93
4.99
43%
2020
9.8
5.6
3.1
2.1
2.53
1.69
1.00
17%
Underlying EBITDA◊ reconciliation 2020–2021
1.1
1.2
20.6
(0.2)
(1.0)
(0.5)
$ billion
20
10.2
10
9.8
0
2020
Price
Forex
Inflation
Covid-19
volume
recovery
Net
cost and
volume
Other
2021
Underlying EBITDA◊
Group underlying EBITDA increased by $10.8 billion to $20.6 billion
(2020: $9.8 billion). The Group Mining EBITDA margin◊ of 56%
was significantly higher than the prior year (2020: 43%), due to the
increase in the price for the Group’s basket of products and improved
production at PGMs, De Beers and Kumba (Iron Ore), partly offset by
unfavourable exchange rates and higher input costs across the Group.
A reconciliation of ‘Profit before net finance costs and tax’, the closest
equivalent IFRS measure to underlying EBITDA, is provided within note 2
to the Consolidated financial statements.
Underlying EBITDA◊ by segment(1)
De Beers
Copper
Nickel
PGMs
Iron Ore
Metallurgical Coal
Manganese
Crop Nutrients
Corporate and other
Total
2021
1,100
4,011
320
7,099
6,871
962
315
(41)
(3)
20,634
2020
417
1,864
206
2,555
4,565
50
304
1
(160)
9,802
(1) Following the demerger of Thungela, the Group has re-assessed its reportable segments
to include thermal coal operations in Corporate and other. Prior period comparatives have
been restated. See note 2 to the Consolidated financial statements for further details.
The reconciliation of underlying EBITDA from $9.8 billion in 2020 to
$20.6 billion in 2021 shows the controllable factors (e.g. cost and
volume), as well as those outside of management control (e.g. price,
foreign exchange, inflation and the impact of the pandemic), that drive
the Group’s performance.
Price
Average market prices for the Group’s basket of products increased
by 43% compared to 2020, increasing underlying EBITDA by
$10.2 billion. Higher realised prices were achieved across all of our
products, with the dollar PGM basket increasing by 36%, primarily
driven by rhodium which increased by 85% in the year, as well as iron
ore and copper which increased by 41% and 52% respectively.
Foreign exchange
The unfavourable year-on-year foreign exchange impact on underlying
EBITDA of $1.0 billion was due to stronger local currencies in our
countries of operation, principally the South African rand.
Inflation
The Group’s weighted average CPI for the year was 5.0%, compared
with 2.9% in 2020, as inflation increased in all countries of operation.
The impact of inflation on costs reduced underlying EBITDA by
$0.5 billion.
Covid-19 volume recovery
The positive $1.1 billion effect on the Group’s underlying EBITDA
reflects the easing of Covid-19 related restrictions that impacted global
demand in 2020 (particularly in the first half), as well as the continued
strong recovery in the diamond market. The ongoing cost of disruption
to production owing to enhanced preventative Covid-19 safety
measures and supply chain interruptions is included within net cost
and volume.
See page 101 for footnotes.
72
Anglo American plc Integrated Annual Report 2021Strategic Report
Special items and remeasurements
Special items and remeasurements (after tax and non-controlling
interests) are a net charge of $0.4 billion (2020: net charge of
$1.0 billion), including tax special items and remeasurements arising
in Iron Ore Brazil (Iron Ore) and Nickel of $0.3 billion; impairment
charges of $0.6 billion at Moranbah/Grosvenor, Dawson and Capcoal
(Metallurgical Coal); and a loss of $0.4 billion on the demerger of the
South African thermal coal operations (Corporate and other), offset
by impairment reversals of $1.0 billion mainly related to Minas-Rio
(Iron Ore).
Full details of the special items and remeasurements recorded are
included in note 8 to the Consolidated financial statements.
Net cost and volume
The net effect of cost and volume was a $1.2 billion increase in
underlying EBITDA, as strong PGM sales due to higher refined volumes
following the successful restart of PGMs’ converter plant (ACP) Phase
A unit more than offset operational issues at Metallurgical Coal,
unplanned maintenance at Minas-Rio and above-CPI cost increases
across the Group.
Other
The $0.2 billion negative movement in underlying EBITDA from other
factors was largely driven by a change in inventory value estimation
methodology at PGMs (see note 7 to the Consolidated financial
statements for more detail) and unfavourable foreign exchange
movements at Samancor (Manganese). This was partially offset by a
decrease in environmental restoration provisions at Copper Chile as
a result of recent market volatility affecting the discount rate. Despite
no underlying earnings from thermal coal assets in the second half of
the year, high thermal coal prices in the first half of 2021, as well as the
impact of Covid-19 disruptions in 2020, resulted in higher EBITDA than
for the full year 2020.
Underlying earnings◊
Group underlying earnings increased to $8.9 billion (31 December
2020: $3.1 billion), driven by the significantly higher underlying EBITDA,
partly offset by a corresponding increase in income tax expense and
earnings attributable to non-controlling interests.
Reconciliation from underlying EBITDA◊ to underlying earnings◊
Underlying EBITDA◊
Depreciation and amortisation
Net finance costs and
income tax expense
Non-controlling interests
Underlying earnings◊
2021
20,634
(2,844)
2020
9,802
(2,752)
(5,783)
(2,745)
(3,082)
8,925
(1,170)
3,135
Depreciation and amortisation
Depreciation and amortisation increased by 3% to $2.8 billion,
reflecting the increased production of the Group.
Net finance costs and income tax expense
Net finance costs, before special items and remeasurements, were
$0.3 billion (2020: $0.8 billion). The decrease was principally driven by
foreign exchange gains and a decrease in other net fair value losses.
The underlying effective tax rate was 31.4% (2020: 31.2%). The
underlying effective tax rate was impacted by the relative levels of
profits arising in the Group’s operating jurisdictions. Over the longer
term, the underlying effective tax rate is expected to be in the range of
31% to 35%. The tax charge for the period, before special items and
remeasurements, was $5.3 billion (2020: $1.8 billion).
Non-controlling interests
The share of underlying earnings attributable to non-controlling
interests of $3.1 billion (2020: $1.2 billion) principally relates to minority
shareholdings in Kumba (Iron Ore), PGMs and Copper.
73
Anglo American plc Integrated Annual Report 2021 Group financial review continued
Net debt◊
$ million
2021
2020
Opening net debt◊ at 1 January(1)
(5,530)
(4,535)
Underlying EBITDA◊ from subsidiaries and joint operations
Working capital movements
Other cash flows from operations
Cash flows from operations
Capital repayments of lease obligations
Cash tax paid
Dividends from associates, joint ventures and financial asset investments(2)
Net interest(3)
Dividends paid to non-controlling interests
Sustaining capital expenditure(4)
Sustaining attributable free cash flow◊
Growth capital expenditure and other(4)
Attributable free cash flow◊
Dividends to Anglo American plc shareholders
Acquisitions
Disposals
Foreign exchange and fair value movements
Other net debt movements(5)
Total movement in net debt◊
Closing net debt◊ at 31 December
19,808
1,059
(279)
20,588
(336)
(4,341)
236
(245)
(2,838)
(3,437)
9,627
(1,824)
7,803
(4,047)
—
63
(227)
(1,904)
9,284
(1,534)
248
7,998
(195)
(1,606)
226
(358)
(668)
(2,675)
2,722
(1,513)
1,209
(904)
(520)
384
17
(1,181)
1,688
(3,842)
(995)
(5,530)
(1) Opening net debt and prior year comparatives have been restated following an amendment to the definition of net debt to exclude all variable vessel lease contracts that are priced with
reference to a freight index. For more information please refer to note 20 to the Consolidated financial statements.
(2) Excludes dividends received from Cerrejón of $240 million now presented within ‘other net debt movements’.
(3)
(4)
(5)
Includes cash inflows of $101 million (2020: inflows of $29 million), relating to interest receipts on derivatives hedging net debt, which are included in cash flows from derivatives related to
financing activities.
Included within sustaining capital expenditure is $8 million (2020: $51 million) of capitalised operating cash flows relating to life extension projects. In addition to Growth capex, ‘Growth capital
expenditure and other’ includes $4 million (2020: $12 million) of capitalised operating cash flows relating to growth projects and $68 million (2020: $63 million) of expenditure on non-current
intangible assets.
Includes the purchase of shares under a buyback of $814 million; the purchase of shares for other purposes (including for employee share schemes) of $270 million; Mitsubishi’s share of
Quellaveco capital expenditure of $530 million; new leases entered into (less capital repayments of lease obligations) of $369 million; dividends received from Cerrejón of $240 million; and
contingent and deferred consideration paid in respect of acquisitions completed in previous years of $117 million. 2020 includes Mitsubishi’s share of Quellaveco capital expenditure of
$526 million; $253 million of debt recognised on the acquisition of Sirius Minerals Plc; the purchase of shares under a buyback of $223 million; and the purchase of shares for other purposes
(including for employee share schemes) of $162 million.
Cash flow
Cash flows from operations
Cash flows from operations increased to $20.6 billion
(2020: $8.0 billion), reflecting an increase in underlying EBITDA from
subsidiaries and joint operations, and a working capital reduction of
$1.1 billion (2020: increase of $1.5 billion). A reduction in inventories
of $0.3 billion was driven by a change in the inventory value estimation
methodology that reduced the cost of purchased concentrate at PGMs
(see note 7 to the Consolidated financial statements for more detail).
Increases in payables of $1.4 billion was driven by a higher customer
pre-payment within PGMs and provisionally priced sale adjustments
within Iron Ore. These were partly offset by an increase in receivables
of $0.6 billion, mainly owing to increased base metal prices.
Attributable free cash flow◊
The Group’s attributable free cash flow increased to $7.8 billion
(2020: $1.2 billion) due to higher cash flows from operations of
$20.6 billion (2020: $8.0 billion). This was partially offset by increased
capital expenditure of $5.2 billion (2020: $4.1 billion), higher tax
payments of $4.3 billion (2020: $1.6 billion) and increased dividends
paid to non-controlling interests of $2.8 billion (2020: $0.7 billion).
Shareholder returns
In line with the Group’s established dividend policy to pay out 40% of
underlying earnings, the Board has proposed a dividend of $1.18 per
share (2020: $0.72 per share), as well as a special dividend of
$0.50 per share, bringing the total dividends paid and proposed in
respect of 2021 to $4.19 per share (2020: $1.00 per share), equivalent
to $5.2 billion (2020: $1.2 billion). The timetable for the special dividend
will follow the same timetable as for the payment of Anglo American’s
final dividend. For further information, please refer to the ‘Notice of Final
Dividend’ set out on page 92 of the 2021 preliminary results press
release.
The Group has made significant progress in deleveraging and
strengthening the balance sheet and, given the levels of cash
generated in the business, along with the further value potential in
Anglo American, excess cash was paid out to shareholders in the
second half of the year. In September 2021, in addition to the interim
base dividend, the Group paid a special dividend of $1.0 billion
equal to $0.80 per share. Anglo American also returned $0.8 billion to
shareholders in 2021, as part of a $1.0 billion on-market share buyback
programme that completed on 11 February 2022, at an average price
of £28.84 per share.
74
Anglo American plc Integrated Annual Report 2021Strategic Report Acquisitions
The Group completed no material acquisitions in the year. In the
prior year, on 17 March 2020, the Group completed the acquisition
of Sirius Minerals Plc for a cash consideration of $0.5 billion.
Bond maturity profile(1)
$ billion
Disposals
On 4 June 2021, the Group demerged its thermal coal operations in
South Africa into a newly incorporated company, Thungela Resources
Limited (Thungela), that was subsequently admitted to trading on
both the Johannesburg and London stock exchanges on 7 June 2021.
The demerged assets included net cash of $0.2 billion. Following the
demerger, no further production from South African thermal coal was
reported by Anglo American.
Net cash received from disposals was $0.1 billion (2020:$0.4 billion),
being deferred and contingent consideration in respect of previous
divestments by PGMs and Copper, partially offset by the net cash
disposed in 2021 through the demerger of the Group’s South African
thermal coal operations.
Net debt◊
Net debt (including related derivatives) of $3.8 billion has decreased
by $1.7 billion since 31 December 2020, driven by robust cash
flows from operations of $20.6 billion. The Group generated strong
sustaining attributable free cash inflows of $9.6 billion, used in part to
fund growth capital expenditure of $1.8 billion and dividends paid to
Anglo American plc shareholders of $4.0 billion. New leases entered
into, including for the Group's London head office, added $0.7 billion
to net debt.
Net debt at 31 December 2021 represented gearing (net debt to
equity) of 10% (2020: 14%).
Balance sheet
Net assets increased by $2.0 billion to $34.8 billion (2020: $32.8 billion),
reflecting the profit for the period, offset by dividend payments to
Company shareholders and non-controlling interests.
Attributable ROCE◊
Attributable ROCE increased to 43% (2020: 17%). Attributable
underlying EBIT was higher at $13.5 billion (2020: $5.3 billion),
reflecting the impact of significantly higher realised prices achieved for
the Group’s products and the easing of Covid-19 related restrictions
that impacted sales in 2020. Average attributable capital employed
increased to $31.4 billion (2020: $30.5 billion), primarily due to growth
capital expenditure, largely at Quellaveco (Copper) and Woodsmith
(Crop Nutrients).
2.1
0.9
1.8
1.5
1.0
0.9
0.6
0.7
1.2
0.6
1.2
0.5
0.7
0.4
0.5
0.5
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030 2031
2050
Matured in 2021
Existing bonds
Bonds repurchased in 2021
2021 new issuance
(1) Bond maturity profile based on contractual repayments at hedge rates
Liquidity and funding
Group liquidity remains conservative at $17.1 billion (2020:
$17.5 billion), comprising $9.1 billion of cash and cash equivalents
(2020: $7.5 billion) and $8.0 billion of undrawn committed facilities
(2020: $10.0 billion).
In March 2021, the Group issued $500 million 2.250% Senior Notes
due 2028, and $500 million 2.875% Senior Notes due 2031, as part
of the Group’s routine financing activities.
In June 2021, the Group bought back US dollar denominated
bonds with maturities in 2025. The Group used $1.0 billion of cash
to retire $0.9 billion of contractual repayment obligations (including
derivatives hedging the bonds).
The weighted average maturity on the Group’s bonds decreased
marginally to 6.2 years (31 December 2020: 6.3 years).
The Group has an undrawn $4.7 billion revolving credit facility due to
mature in March 2025.
In April 2020, the Group signed a new $2.0 billion revolving credit
facility with an initial maturity date of April 2021. After the Group’s
$1.0 billion bond issuance in March 2021, the Group issued a notice
of cancellation for the facility, which became effective in March 2021
and, accordingly, this facility is no longer available.
75
Anglo American plc Integrated Annual Report 2021
Canada
Gahcho Kué
Botswana and Namibia
Damtshaa (2)(3)
South Africa
Key
Diamond operations
Debmarine Namibia
Orapa
(2)
Jwaneng
Namdeb
Letlhakane
(2)
Venetia
De Beers
Anglo American owns 85% of De Beers, a
world leading diamond company. The balance
of 15% is owned by the Government of the
Republic of Botswana (GRB). De Beers and
its partners produce around one-third of the
world’s rough diamonds, by value.
Our business
De Beers sells the majority of its rough diamonds through 10 Sight
sales each year to Sightholders, with the balance being sold via its
Auctions business to registered buyers. It licenses its diamond brand
De Beers Forevermark and markets and sells polished diamonds
and diamond jewellery via its De Beers Forevermark and De Beers
Jewellers businesses.
De Beers recovers diamonds from four countries: Botswana, Canada,
Namibia and South Africa.
In Botswana, via a 50:50 joint operation with the GRB – known as
Debswana – the company recovers diamonds from three mines(3),
including Jwaneng, one of the world’s richest diamond mines by value.
This mine’s high grade ore contributes around 70% of Debswana’s
revenue. The $2 billion Cut-9 expansion of Jwaneng will extend the life
of the mine to 2036 and is expected to yield an estimated 57 million
carats(4) of rough diamonds. De Beers and the GRB have agreed to a
further six-month extension to the existing sales agreement due to the
ongoing impact of Covid-19.
76
Management
Bruce Cleaver
CEO
De Beers
2021 Summary
0
Fatalities
$1,100 m
Underlying EBITDA
2.03
TRCFR(1)
47%
Mining EBITDA margin
32,276
Production volume ('000 carats)
(1) TRCFR relates to managed operations only.
(2) All managed as one operation, the ‘Orapa Regime’.
(3) Damtshaa was placed onto extended care and maintenance in 2021.
(4) Refer to Anglo American plc Ore Reserves and Mineral Resources Report
2021 for additional information.
Anglo American plc Integrated Annual Report 2021Strategic Report In Namibia, De Beers operates in 50:50 partnership with the Namibian
government, recovering both land-based diamonds (Namdeb) and
offshore diamonds (Debmarine Namibia). Namibia has the richest
known marine diamond deposits in the world, with Diamond Resources
estimated at approximately 79 million carats(4) in approximately
1.1 million k (m2) of seabed. Marine diamond deposits represent
around 75% of the partnership’s total diamond production and 94%
of Diamond Resources.
In South Africa, the Venetia operation is the country’s largest producer
of diamonds, contributing about half of South Africa’s annual diamond
production, by volume. Open pit mining is scheduled for completion
in 2022 and the transition is already well under way to convert to
underground mining. The $2.1 billion Venetia Underground project is
expected to extend the life of the mine to 2047 and yield an estimated
88 million carats(4).
In Canada, De Beers has a 51% interest in, and is the operator of,
Gahcho Kué open pit mine in the Northwest Territories. It began
commercial production in 2017 and has a 9-year life, producing
an average of 5 million carats a year, yielding an estimated total of
44 million carats (100% basis)(4).
De Beers also develops industrial supermaterials through Element Six,
which includes the production of laboratory grown diamonds for
Lightbox Jewelry. De Beers offers diamond grading and testing services
through De Beers Institute of Diamonds.
Rough diamond production by country*
Russia
Botswana
Angola
Canada
South Africa
Namibia
DRC
Other
Total
$10.7 bn
* Data relates to 2020 and is rough diamond production by value.
Diamond jewellery demand by country*
USA
China
Japan
India
Gulf
Rest of world (excluding top five)
Total
$68.3 bn
* Data relates to 2020 and is diamond jewellery value at retail prices. Data for China
does not include Hong Kong, Macau and Taiwan.
28%
20%
10%
9%
9%
7%
4%
13%
51%
11%
7%
6%
4%
22%
77
▲ The Benguela Gem diamond recovery vessel in Cape Town.
Benguela Gem – the world’s biggest
custom-built diamond recovery vessel
For more than a century, diamonds have been mined
on the Atlantic shoreline of what is today Namibia. Over
the past two decades, however, marine production has
overtaken that from land-based operations, and now
accounts for about 75% of Namdeb’s total output, while
94% of its Diamond Resources are marine deposits.
The marine side of Namdeb’s business, Debmarine
Namibia, operates a fleet of six diamond recovery vessels.
Diamonds are retrieved from the ocean floor using
advanced drilling and crawler-mining technology, with
most being processed on board – and the company’s
leadership in this field is set to be further consolidated
through taking delivery of the world's biggest custom-built
diamond recovery vessel, the Benguela Gem.
Behind the construction of the vessel is a truly international
taskforce. The project is being managed by De Beers
Marine South Africa; the ship was designed in Norway
and Poland; the electrical systems were designed in the
Netherlands; it was built in Romania; and is being fitted out,
including installation of the mission equipment (comprising
mainly a sub-sea crawler, treatment plant, and the
crawler’s launch and recovery system), in South Africa.
The project has been technically complex, and keeping it
on schedule, and within budget – despite all the Covid-19
related complications – has demanded the latest
management and organisational structures, systems and
processes; the application of advanced technologies;
and an extraordinary degree of collaboration between
the many different teams involved.
A key factor behind its success was the project team’s
developing a project-maturity matrix from the outset to
assess engineering and commercial risk to the project.
This enabled the feasibility design to be advanced
in a manner that reduced technical, cost-estimate
and schedule risk. Another factor was the advanced
operational-readiness programme, which included
training and crewing staff for the vessel (161 people), as
well as maintenance systems development and spares
procurement. Building the mission equipment at the same
time as the vessel was being constructed also brought
down the time to completion.
The Benguela Gem, which is expected to operate for at
least 30 years, arrived in Cape Town in September 2021,
and the mission equipment outfitting was completed in
December 2021. The vessel is now in the final stages of
commissioning and is expected to go into production at the
end of the first quarter of 2022, two months ahead of plan.
Anglo American plc Integrated Annual Report 2021 De Beers continued
Safety
2021 Results
Production volume ('000 cts)(1)
Sales volume ('000 cts)(1)(2)
Price ($/ct)(1)(3)(4)
Unit cost ($/ct)(1)(4)(5)
Revenue – $m(1)(6)
Underlying EBITDA – $m(1)(4)
Mining EBITDA margin(1)(7)
Trading margin
Underlying EBIT – $m(1)(4)
Capex – $m(1)(4)
Attributable ROCE(1)
Fatalities(8)
TRCFR(8)
Energy consumption – million GJ(8)
GHG emissions – Mt CO2 equivalent(8)
Total water withdrawals – million m3(9)
2021
32,276
33,357
146
58
5,602
1,100
47%
11%
620
565
7%
0
2.03
4.1
0.43
11.6
2020
25,102
21,380
133
57
3,378
417
54%
3%
0
381
0%
0
2.18
3.8
0.42
10.1
Employee numbers(10)
10,000
10,700
(1) Prepared on a consolidated accounting basis, except for production, which is stated
on a 100% basis, except for the Gahcho Kué joint operation in Canada, which is on an
attributable 51% basis.
(2) Total sales volumes on a 100% basis were 36.3 million carats (31 December 2020:
22.7 million carats). Total sales volumes (100%) include De Beers Group’s joint arrangement
partners’ 50% proportionate share of sales to entities outside De Beers Group from
Diamond Trading Company Botswana and Namibia Diamond Trading Company.
(3) Pricing for the mining business units is based on 100% selling value post-aggregation of
goods. Realised price includes the price impact of the sale of non-equity product and, as a
result, is not directly comparable to the unit cost.
(4) Results by country can be found in the Summary by operation on pages 259–260.
(5) Unit cost is based on consolidated production and operating costs, excluding depreciation
and operating special items, divided by carats recovered.
Includes rough diamond sales of $4.9 billion (31 December 2020: $2.8 billion).
(6)
(7) Total De Beers EBITDA margin shows mining EBITDA margin on an equity basis, which
excludes the impact of non-mining activities, third-party sales, purchases, trading
downstream and corporate.
(8) Data is for De Beers’ managed operations.
(9) Data is for De Beers’ managed operations and other managed entities. 2020 figures have
been restated.
(10) Average number of employees, excluding contractors and associates' and joint ventures'
employees, and including a share of employees within joint operations, based on
shareholding.
During 2021, De Beers experienced no work-related loss of life
incidents at its managed operations. The TRCFR improved by 7%
to 2.03 (2020: 2.18).
De Beers started to pilot its Pioneering Brilliant Safety (PBS) framework,
rolling it out at three sites during the year, with the aim of moving safety
maturity to ‘Beyond Zero’, so that ‘Safety First’ becomes inherent in every
day life. The strategy includes Leadership and Culture Development
and Competency Development, as well as creating an environment
where everyone can feel psychologically safe and are proactive in
identifying high potential hazards (HPHs). Implementation of the
Elimination of Fatalities (EoF) programme and related workstreams
continued in 2021, in support of the PBS framework. De Beers achieved
96% (>95% target) for the EoF workstreams.
Environmental performance
Energy use increased by 8% to 4.1 million GJ (2020: 3.8 million GJ)
and GHG emissions by 2% to 0.43 Mt CO2e (2020: 0.42 Mt CO2e),
principally due to the recovery of mining operations after the Covid-19
related disruptions which impacted production across all De Beers’
operations in 2020. The increase in both energy usage and emissions
was mitigated by the progress made in implementing energy-efficiency
projects at Venetia and Gahcho Kué, the switch to renewable electricity
purchases in the UK and US and by rooftop solar power installations at
a number of sites.
Financial and operational review
Total revenue increased significantly to $5.6 billion(1) (2020:
$3.4 billion), with rough diamond sales rising to $4.9 billion*
(2020: $2.8 billion), driven by positive sentiment and strong demand
for diamond jewellery in key consumer markets. With midstream
capacity recovering, despite the second wave of Covid-19 infections
in India in the second quarter of 2021, on a consolidated basis, rough
diamond sales volumes were significantly higher at 33.4 million carats
(2020: 21.4 million carats). The average realised price rose by 10%
to $146/ct (2020: $133/ct), primarily as a result of positive market
sentiment which gave rise to an 11% strengthening of the average
rough price index. Revenue also increased within De Beers’ other
businesses, including Element Six.
Underlying EBITDA increased to $1,100 million (2020: $417 million),
reflecting the improvement in sales driven by the recovery in demand.
Unit costs were broadly flat at $58/ct (2020: $57/ct), as the benefit
of higher production volumes was offset by an increase in input costs
and unfavourable exchange rates.
Capital expenditure increased by 48% to $565 million (2020:
$381 million), as spend returned to more normalised levels following
the deferral of sustaining projects during 2020 in response to Covid-19.
The execution of Venetia Underground (in South Africa) and Jwaneng
Cut-9 (in Botswana) life extension projects continued to progress, and
the mine life extension of the Namibian land operations was approved
during the year. The new AMV3 vessel for Namibia, now named the
Benguela Gem (the largest and most advanced diamond recovery
vessel ever built), arrived in Cape Town in September 2021 to complete
preparations for commissioning in the first quarter of 2022.
* Total revenue and rough diamond sales for 2019 were $4.6 billion and
$4.0 billion respectively.
78
Anglo American plc Integrated Annual Report 2021Strategic Report
Brands and consumer markets
2021 saw a strong recovery in consumer demand for De Beers’
branded diamond jewellery from De Beers Jewellers and De Beers
Forevermark, with both achieving double digit retail growth
year-on-year. De Beers also continued to expand its retail stores in
2021, including its new flagship store in Old Bond Street, London
and new stores in China and Qatar.
In August 2021, De Beers Group announced a new ‘One De Beers’
approach and its focus on establishing De Beers as a ‘purpose-
led’ brand. De Beers has now launched a new brand campaign
built around a widening interpretation of the phrase ‘I do’, itself the
embodiment of one of the most time-honoured expressions of intent
and values.
Operational and market outlook
Expectations for retail restocking in early 2022 are encouraging
following the strong retail sales of diamond jewellery over the holiday
season. The growth in consumer demand for diamond jewellery is
expected to continue, driven by the US, primarily due to continued
economic recovery, higher accumulated savings and postponed
marriages. Rough diamond demand is expected to remain steady
as the midstream continues to operate with lower stock levels,
manufacturing below full capacity but using a faster manufacturing
cycle. While there continue to be risks relating to the effects of Covid-19
across the pipeline, geo-political uncertainty and cost inflation
pressures, sentiment in the midstream is expected to remain positive on
the back of anticipated strong US retailer restocking in the first quarter.
The longer term evolution of the diamond value chain continues,
including a sustained focus on inventory balance, the efficient
distribution of diamonds throughout the pipeline, increased online
purchasing, and a greater focus on the provenance and sustainability
credentials of companies and their products. De Beers is well
positioned to take advantage of these changes. The long term outlook
for diamond jewellery demand remains positive.
Production guidance for 2022 is 30–33 million carats (100% basis),
subject to trading conditions and the extent of further Covid-19 related
disruptions. Unit cost guidance for 2022 is c.$65/ct, reflecting the
impact of inflation.
Markets
The diamond industry continued to recover from the impacts of the
Covid-19 pandemic during 2021. In the first half of the year, consumer
sales of diamond jewellery in the US and mainland China posted
positive growth not only on the Covid-19 affected sales in 2020, but
also in comparison to 2019 before the onset of the pandemic. Other
global consumer markets initially saw a less pronounced rebound due
to the uneven timing of pandemic impacts across the world, but the
second half of 2021 saw a more positive recovery trend across the
entire international diamond value chain.
The ongoing increase in consumer demand led to strong growth rates
in consumer sales of diamond jewellery in the US, with holiday season
sales increasing by about a third compared to 2020. The strength of
demand was the result of an accumulation of savings by US consumers
through the various lockdowns and restrictions on movement seen
earlier in the pandemic; a pent-up demand for weddings and
engagements; a strong desire for diamonds as meaningful gifts that
symbolise personal connection; less luxury travel; and supported by
ongoing marketing campaigns (including an increase in marketing
effectiveness from De Beers).
The positive demand trends in retail underpinned the increased
demand for polished diamonds and as a result, stocks of polished
diamonds in cutting centres steadily declined during the course of the
year. Lower supply and steady demand for polished diamonds from
retailers supported growth in polished diamond prices.
As downstream and midstream demand conditions continued to
improve, rough diamond production and prices increased throughout
the year, following the significant reductions seen at the start of the
pandemic. Midstream sentiment and rough diamond demand were
robust throughout 2021.
Operational performance
Mining and manufacturing
Rough diamond production increased by 29% to 32.3 million
carats (2020: 25.1 million carats) primarily due to the lower levels
of production in 2020 as a result of the impact of Covid-19 related
lockdowns and lower demand due to the pandemic. Despite the
operational issues and heavy rains in southern Africa in the first quarter
of 2021, production was increased to meet the stronger demand for
rough diamonds.
In Botswana, production was 35% higher at 22.3 million carats
(2020: 16.6 million carats) as production was increased in response
to stronger prevailing demand. Production at Jwaneng increased
by 71% to 12.9 million carats (2020: 7.5 million carats) due to the
planned treatment of higher grade ore, and as a result of Covid-19
related lockdowns in the previous year. Production at Orapa increased
marginally by 5% to 9.4 million carats (2020: 9.0 million carats), despite
the impact of heavy rainfall at the beginning of the year and the
planned closure of Plant 1 in late 2020.
In Namibia, production was broadly in line at 1.5 million carats
(2020: 1.4 million carats), reflecting an increase from the remobilisation
of most vessels in late 2020, partly offset by planned maintenance.
In South Africa, production increased by 41% to 5.3 million carats
(2020: 3.8 million carats), owing to the impact of the Covid-19
lockdowns in the first half of 2020 and the planned processing of
higher grade ore from the final cut of the Venetia open pit.
In Canada, production was marginally lower at 3.2 million carats
(2020: 3.3 million carats), mainly due to a temporary Covid-19 related
shutdown in the first quarter of 2021.
79
Anglo American plc Integrated Annual Report 2021 Chile and Peru
Quellaveco
Collahuasi
Brazil
El Soldado
Los Bronces
Chagres
Barro Alto
Codemin
Key
Copper operations
Nickel operations
Smelter
Project
Base Metals
From our three mining operations in Chile,
we produce copper, essential to modern living
and the future of clean energy and transport.
Our products include copper concentrate,
copper cathode and associated by-products
such as molybdenum and silver. Our copper
interests in Chile will soon be complemented
by our new mine that we are developing in
Peru – Quellaveco.
Our nickel assets, based in Brazil, produce
ferronickel – a key ingredient in the production
of stainless steel.
Management team
Ruben Fernandes
CEO
Base Metals
Aaron Puna
CEO
Anglo American, Chile
Adolfo Heeren
Wilfred Bruijn
CEO
Anglo American, Peru
CEO
Anglo American, Brazil
80
Anglo American plc Integrated Annual Report 2021Strategic Report 2021 Summary – Copper
0
1.55
Copper
Fatalities Copper Chile
TRCFR Copper Chile
Our business
1
2.93
Fatalities Quellaveco
TRCFR Quellaveco
$4,011 m
Underlying EBITDA(1)
62%
Mining EBITDA margin(1)
647 kt
Production volume
2021 Summary – Nickel
0
Fatalities
1.26
TRCFR
$320 m
Underlying EBITDA
45%
Mining EBITDA margin
41,700 kt
Production volume
▲ This photovoltaic (PV) facility, built over a tailings pond,
supplies solar energy to power the new hydrogen plant
at Las Tórtolas, part of the Los Bronces mine complex
in Chile.
(1)
Includes Copper Chile and Quellaveco.
In Chile, we have interests in two major copper operations: a 50.1%
interest in Los Bronces mine, which we manage and operate, and a
44% share in the independently managed Collahuasi mine; we also
manage and operate the El Soldado mine and the Chagres smelter
(50.1% interest in both).
In Peru, we have a 60% interest in the Quellaveco project. We approved
the project for development in mid-2018 and we are progressing on
track for first production in mid-2022, ramping up to full output the
following year. During the first 10 years, production is expected to
average 300,000 tonnes of copper equivalent per year, with a first
quartile cash cost.
Uses of copper
Copper’s unique properties make it a vital material for urban and
industrial growth, as well as a critical component in the efforts to move
to a cleaner, greener world – in terms of both renewable energy and
electric transport.
Around 60% of total global demand is for electrics – wire, cables
and connectors, including in vehicles and consumer electronics.
A further 20% is used in construction; for example, water pipes and
roof sheets benefit from copper’s resistance to corrosion. Copper’s
thermal conductivity and malleability mean it is used extensively in air
conditioning and refrigeration. It may also be used in places such as in
hospitals, owing to its anti-bacterial qualities. Its visual qualities account
for many other applications – in buildings and everyday objects.
In the future, a growing volume of copper will likely be used in
low-emission vehicles – battery electric; hydrogen fuel cell; and
hybrid electric vehicles all contain substantially more copper than
conventional vehicles.
Copper demand by region – refined consumption
China
Europe
Asia excl. China
North America
Middle East
Russia and the Caspian
South America and Caribbean
Africa
Global total
Source: Wood Mackenzie
24.5 Mt
Copper demand by sector – total consumption
Construction
Electrical network
Consumer and general
Transport
Industrial machinery
Global total
30.6 Mt. Includes direct use scrap
Source: Wood Mackenzie
52%
16%
15%
10%
3%
2%
1%
1%
29%
27%
22%
11%
11%
81
Anglo American plc Integrated Annual Report 2021 Base Metals continued
Safety
Copper Chile
Copper Chile reported no fatalities in 2021 and the TRCFR decreased
by 2% to 1.55 (2020: 1.58). Although there were no significant
operational impacts from Covid-19 related disruptions, the pandemic
continued to be a threat, with the potential to add stress, fatigue and
loss of focus that can lead to safety incidents. To address this, several
awareness campaigns and ongoing actions have been instigated, as
well as studying the findings of investigations relating to the issue.
A number of other safety initiatives were implemented, including
improvements to the process of reporting high potential hazards, safety
transformation, a digital control monitoring project and to the quality of
Learning from Incidents (LFI) investigations in addition to the ongoing
integration of the Group’s Operational Risk Management process and
Elimination of Fatalities programme.
Quellaveco
Regrettably, during 2021, Quellaveco recorded one loss of life when
Carlos Gonzalo Rodríguez Delgado was fatally injured in a traffic
incident. The TRCFR increased by 33% to 2.93 (2020: 2.20). Safety
performance was negatively affected in the first half of the year as
employees and contractors returned to site after the second wave of
Covid-19. Workforce availability was affected by the need to isolate
the increasing number of Covid-19 cases which, in turn, impacted work
plans, including the reassignment of supervisors to different work fronts.
Focused efforts in the second half of the year, including the return to
face-to-face meetings and increased supervision of work activities,
resulted in a significant improvement in the safety performance at
the site.
The implementation of Advanced Driver Assistance Systems has
started on site, with 80% of the target met for the first phase of real-time
monitoring of speed and driver fatigue status. Implementation of the
Group’s Elimination of Fatalities programme is progressing. Quellaveco
has also placed a strong focus on the recognition of safe behaviour
at monthly LFI meetings. Quellaveco has developed 35 safety
technical standards for the operating stage of the project based on the
Anglo American’s global technical standards and Peruvian legislation.
Environmental performance
Copper Chile
At Copper’s Chilean operations, energy use increased by 13% to
12.8 million GJ (2020: 11.3 million GJ) while GHG emissions decreased
by 65% to 0.37 Mt CO2e (2020: 1.07 Mt CO2e). Energy use increased
mainly due to maintaining copper production while the operations
were processing planned lower average copper grades. The decrease
in GHG emissions was driven by the renewable power purchase
agreement commencing in January 2021, in terms of which our three
Copper operations in Chile were supplied wholly with renewable power.
Quellaveco
Energy use more than doubled to 1.6 million GJ (2020: 0.6 million GJ),
and GHG emissions increased to 0.12 Mt CO2e (2020: 0.05 Mt CO2e),
reflecting the expansion of construction activity following the Covid-19
related lockdowns in the prior year.
▲ Hydrogen technology advisor Maria Loreto Maturana at the
launch of the hydrogen generator module at the Las Tórtolas
flotation plant.
Hydrogen begins to power
Chile’s future
As a country poorly endowed with conventional energy
sources, but rich in renewable energy, Chile has big
plans for hydrogen. With huge solar and wind power
potential, and strong official backing from the Ministry of
Energy, Chile is determined to become a leading global
hydrogen supplier and is the first country in South America
to have a concrete national strategy for generating green
hydrogen, with more than 40 green hydrogen projects
under development.
Anglo American’s own energy plans dovetail with much
of this. In 2021, our managed assets in the country shifted
to electricity sourced exclusively from renewable resources
and all our managed operations in Chile are now running
on renewable electricity.
A key milestone on our own journey to carbon neutrality
was reached in August 2021, when our Copper business
launched Chile’s first hydrogen plant for zero-carbon
vehicles at its Los Bronces operation, as part of a pilot
programme that has introduced a gas-powered forklift
crane at the Las Tórtolas flotation plant, where green
hydrogen is produced by splitting water into hydrogen
and oxygen using an electrolyser.
Hydrogen technology advisor Maria Loreto Maturana
explained: “The two-year pilot project, though modest in
scale, is the home of the first hydrogen refuelling station
and fuel cell vehicle plant in Chile. It represents the first
step of our journey towards decarbonisation of our mining
operations in the country and is a crucial test for Anglo
American’s plans to use hydrogen as part of its efforts to
achieve carbon neutrality in our Chilean operations.”
The plant’s hydrogen generator module, which is powered
using solar energy in combination with re-used water
from the flotation process, has a production capacity of
2 kilograms of hydrogen a day. It powers both the forklift
support vehicle, which is expected to reduce Las Tórtolas’s
annual CO2 emissions by 24 tonnes, as well as a
stationary fuel cell that will re-inject energy into the local
electricity grid.
CEO Anglo American, Chile, Aaron Puna observes: "Chile
has set out to be a world leader in the production of green
hydrogen, and we want to work with the government in
accelerating this ‘win-win’ agenda, which will also help
Anglo American to reach its own goal of carbon neutrality
across its global operations by 2040.”
82
Anglo American plc Integrated Annual Report 2021Strategic Report 2021 results – Copper Chile
Production volume (kt)
Sales volume (kt)(1)(2)
Unit cost (c/lb)(1)(3)
Group revenue – $m(1)(4)
Underlying EBITDA – $m(1)
Mining EBITDA margin(5)
Underlying EBIT – $m(1)
Capex – $m(1)
Attributable ROCE
Fatalities
TRCFR
Energy consumption – million GJ
GHG emissions – Mt CO2 equivalent
Total water withdrawals – million m3
2021
647
641
120
6,433
4,112
63%
3,530
996
81%
0
1.55
12.8
0.37
33.5
2020
647
648
113
4,199
1,921
45%
1,285
645
36%
0
1.58
11.3
1.07
35.8
Employee numbers
4,300
3,800
(1) Results by asset and the consolidated results for Copper can be found in the Summary
by operation on pages 259–260.
(2) Excludes 432 kt third-party sales (31 December 2020: 453 kt).
(3) C1 unit cost includes by-product credits.
(4) Group revenue is shown after deduction of treatment and refining charges (TC/RCs).
Total Copper Chile prior year comparatives have been restated from a gross to net
presentation. See note 7 to the Consolidated financial statements for more details.
(5) Excludes impact of third-party sales.
2021 results – Quellaveco
Capex – $m(1)
Fatalities
TRCFR
Energy consumption – million GJ
GHG emissions – Mt CO2 equivalent
Total water withdrawals – million m3
Employee numbers
2021
777
1
2.93
1.6
0.12
0.7
750
2020
788
0
2.20
0.6
0.05
1.5
400
(1) Figures on a 100% basis (Group’s share: 60%), except capex which represents the Group’s
share after deducting direct funding from non-controlling interests. Full year capex on a
100% basis is $1,295 million (2020: $1,314 million), of which the Group’s share is
$777 million (2020: $788 million). Capex presented relates to the main project. An
additional amount of $30 million (2020: $10 million) was spent at the site, mainly on CPR.
Financial and operational review – Copper
Underlying EBITDA more than doubled to $4,011 million
(2020: $1,864 million), underpinned by record copper prices.
Copper production of 647,200 tonnes was in line with the prior
year (2020: 647,400 tonnes). Planned lower grades were fully
offset by continued strong plant performance at Collahuasi and the
implementation of water management initiatives at Los Bronces.
Unit costs increased by 6% to 120 c/lb (2020: 113 c/lb), reflecting
a stronger Chilean peso and high levels of local inflation impacting
production and selling costs, partly offset by an increase in waste
stripping capitalised and higher by-product credits.
Capital expenditure increased by 23% to $1,773 million (2020:
$1,443 million), reflecting adverse movements in the Chilean peso
and higher capitalised waste stripping as a result of resuming mine
development activity following the impact of the pandemic in 2020.
Markets
Average market price (c/lb)
Average realised price (c/lb)
2021
423
453
2020
280
299
The difference between the market price and realised price is largely
a function of provisional pricing adjustments, with 162,361 tonnes
of copper provisionally priced at 442 c/lb at 31 December 2021
(2020: 140,599 tonnes provisionally priced at 352 c/lb), and the timing
of sales across the year.
The average LME copper price increased by 51%, due to a strong
recovery in economic activity following the initial waves of the Covid-19
outbreak in 2020. While demand rebounded sharply in 2020 in China,
momentum in 2021 was led by the US and Europe, as China faced
headwinds in its real estate sector. The strength of demand for copper,
like many commodities, was reinforced by government measures
which were implemented to help offset the effects of the pandemic
and, during the year, this was further affected by the supply-chain
bottlenecks in major economies. Copper supply growth continued to
be constrained, resulting in declines in reported inventories to multi-
year lows. Demand for the metal has benefited from copper’s key
role in global decarbonisation efforts, with growth in copper-intensive
applications, such as wind and solar power generation. Investment
fund interest in copper also contributed to price strength, as prices
reached a record high of 486c/lb in May 2021, although concerns
about inflation and potential interest rate rises have tempered
further advances.
Operational performance – Copper
Copper production was in line with the prior year at 647,200 tonnes
(2020: 647,400 tonnes).
At Los Bronces, production increased marginally by 1% to
327,700 tonnes (2020: 324,700 tonnes) due to higher water
availability owing to water management initiatives, partially offset by
planned lower grades (0.70% vs. 0.81%). C1 unit costs increased
by 6% to 158 c/lb (2020: 149 c/lb), with the benefit of higher
waste stripping capitalised and higher by-product credits, offset by
the stronger Chilean peso and inflation, as well as cost increases
associated with water management.
At Collahuasi, Anglo American’s attributable share of copper
production of 277,200 tonnes was a record and slightly above the
prior year (2020: 276,900 tonnes). C1 unit costs decreased by 2% to
61 c/lb (2020: 62 c/lb), reflecting the benefit of higher production and
by-product credits, offset by the stronger Chilean peso and inflation.
Production at El Soldado decreased by 8% to 42,300 tonnes
(2020: 45,800 tonnes) due to lower grades in accordance with the
mine plan (0.73% vs. 0.84%). C1 unit costs of 206 c/lb are broadly
in line with the prior year (2020: 204 c/lb), with the impact of lower
production volumes, the stronger Chilean peso and inflation being
offset by an increase in waste stripping capitalised.
Chile´s central zone continues to face severe drought conditions.
While production impacts during 2021 have been fully mitigated by the
successful implementation of water management initiatives, record low
levels of precipitation during the year have reduced water availability
for Los Bronces in the first half of 2022 and have been factored into our
production guidance.
Quellaveco update
The project is on track to achieve first production in mid-2022, in line
with the original project schedule despite the challenges presented by
the Covid-19 pandemic to date.
2021 saw the achievement of several major milestones and, as
at February 2022, construction on all work fronts is reaching the
final stages. The Vizcachas Dam – part of the infrastructure that will
provide water to both the operation and local communities – is now
commissioned and turned over to the operating team, and the 95 km
water pipeline to site is on track to complete in the first quarter of 2022.
In the mine, pre-stripping started in April 2021, moving 24 million tonnes
in the year, and first ore was reached and excavated in October. The
majority of the mine equipment fleet is now assembled, being the first
in Peru to use fully automated haul trucks and drills, and all three rope
shovels are operation-ready. Significant progress has been made on
83
Anglo American plc Integrated Annual Report 2021
Base Metals continued
Nickel
Our business
Our nickel assets are wholly owned, consisting of two ferronickel
production sites: Barro Alto and Codemin. Our Nickel business has the
capacity to produce around 45,000 tonnes per annum of nickel, whose
primary end use is in the global stainless steel industry.
Uses of nickel
The stainless steel industry uses two-thirds of the world’s nickel
production and virtually all ferronickel produced each year. The
balance is used mainly in the manufacture of alloy steel and other
non-ferrous alloys.
Stainless steel is a key input in high-tech construction, and most
stainless steels contain about 8–10% nickel. As an alloying element,
nickel enhances important properties of stainless steel such as
formability, weldability and ductility, while increasing corrosion
resistance in certain applications.
Global primary nickel demand by sector
Stainless steel
Batteries
Non-ferrous alloys
Plating
Alloy steel
Foundry
Other
Global total
2.7 Mt
Source: Wood Mackenzie
69%
11%
7%
6%
3%
2%
2%
Safety
Our Nickel business has not had a fatal incident since 2012. In 2021,
the TRCFR decreased by 17% to 1.26 (2020: 1.51). There were no
production interruptions due to Covid-19 and the protocols to control
it were well assimilated in operations, with minor operational impacts.
Our resilient safety culture programme continued to progress well,
despite restrictions on face-to-face events, as did the integration of
the Group’s Operating Model and Operational Risk Management
processes. The implementation of the Elimination of Fatalities
programme remains a priority, particularly accelerating the completion
of improvements to surface mobile equipment and vehicles. Another
priority is to better integrate contractors into the Anglo American Safety
Management System.
Environmental performance
Energy use decreased by 2% to 20.8 million GJ (2020: 21.3 million GJ)
while GHG emissions increased by 11% to 1.38 Mt CO2e (2020: 1.24 Mt
CO2e). Solar and wind energy contracts were signed to supply
electricity to our Brazilian operations, demonstrating our commitment
to minimise GHG emissions. Those contracts together will supply
1,954 GWh per year of clean and renewable energy, equivalent
to100% of the electricity consumption of our Nickel operations.
the primary crusher, with commissioning due to begin in the first quarter
of 2022. The overland ore transport conveyor belt to the processing
plant is being installed following completion of excavation work in the
tunnel section of the conveyor route. We are also nearing construction
completion at the processing plant, and pre-commissioning of the
first of two milling lines began in January 2022. In the tailings area, the
starter dam is built to its full elevation, and at the port, works to expand
the existing port facilities remain on track to allow copper concentrate
shipments to begin in 2022.
During January and early February 2022, Peru has been experiencing
its third wave of Covid-19 following the spread of the Omicron variant
throughout the country. While almost all of the on-site workforce is
fully vaccinated and serious illness has been rare, progress has been
negatively impacted by reduced workforce availability and the need
to isolate the increasing number of Covid-19 cases identified on
site. To date, this disruption has not materially impacted the project
schedule or capital estimate; however, the camp has, at times, reduced
to 50% occupancy rates, compared with 95% in December 2021
and early January 2022, and the full impact will depend on how
long these challenging conditions last. As a result of this, production
guidance for 2022 has been revised (see operational outlook below)
and the total project capital expenditure estimate has been tightened
to $5.4–5.5 billion (previously $5.3–5.5 billion), of which the Group’s
share is c.$2.8 billion.
Capital expenditure in 2021 (on a 100% basis) was $1.3 billion,
of which the Group’s share is $0.8 billion. Guidance for 2022
remains $0.8–1.1 billion (100% basis), of which the Group’s share is
$0.5–0.7 billion.
In 2022, focus is shifting to commissioning and operational
readiness, which is aligned with the Anglo American Operating
Model. The operating team is largely in place, along with a dedicated
commissioning team implementing an integrated commissioning
plan. All key obtainable permits have been received, and we are
on track to obtain operational permits that become available as
infrastructure is completed. In addition, key operational contracts are
placed or under negotiation. The local Moqueguan workforce has
been key to the success of the project and, as we near the close-out
of construction activities, we are working closely with government and
local communities to manage the demobilisation and support future
employment opportunities for the local workforce.
Revised mine design and planning at the Quellaveco district has led to
an 18% increase in Ore Reserves, with estimated contained copper of
c.8.9 million tonnes at 0.53% TCu, and a resultant six-year increase in
the Life of Mine to 36 years.
Operational outlook – Chile
Production guidance for Chile for 2022 is 560,000–600,000 tonnes,
subject to the extent of further Covid-19 related disruptions and water
availability. C1 unit cost guidance for Chile for 2022 is c.145c/lb,
reflecting lower production volumes, the impact of inflation, higher input
costs and water purchases, as well as lower by-product credits.
Operational outlook – Quellaveco
We expect to achieve first production in mid-2022, followed by a
12-month ramp-up to full capacity. Production guidance for Quellaveco
for 2022 is 100,000–150,000 tonnes (previously 120,000–160,000
tonnes). Both the schedule and production guidance remain subject to
the extent of current and ongoing Covid-19 related disruption. C1 unit
cost guidance for 2022 is c.125 c/lb, based on ramp-up production
volumes. It is, therefore, highly dependent on production start date
and is subject to further Covid-19 impacts. Unit costs are expected to
average c.95c/lb over the first five years once the operation reaches full
production capacity from 2023.
All guidance, project progress and capital expenditure remain
subject to the extent of ongoing and further Covid-19 related
disruption. Quellaveco expects to deliver around 300,000 tonnes per
year of copper equivalent production on average in its first 10 years
of operation.
84
Anglo American plc Integrated Annual Report 2021Strategic Report ▲ Nickel-containing alloys are crucial in the production
of smartphones, laptops and other portable devices.
Nickel – an essential element in
all our futures
Nickel is the fifth most common element on Earth, with
known reserves of around 94 million tonnes. It occurs
principally as two types of deposits: laterites that can
be mined by open pit methods, and sulphides that are
found underground.
Anglo American produces two categories of nickel. Our
Barro Alto and Codemin open pit operations in Brazil mine
laterite deposits and then process the nickel-bearing ore
to produce up to 45,000 tonnes of nickel a year. Our PGMs
operations in southern Africa produce c.22,000 tonnes of
nickel annually as a co-product.
Steel is a critical foundational material for almost all
infrastructure, including high tech construction of buildings,
industrial plants, bridges and tunnels, and will provide the
backbone of the low carbon economy and wider, long term
socio-economic development. Each year, approximately
two-thirds of all refined nickel output goes into the
production of high quality, heat- and corrosion-resistant
stainless steels, which typically contain 8–10% nickel.
A further 25% is used in the manufacture of alloy steels
and non-ferrous alloys, with nickel’s special formability,
weldability and ductility properties enhancing the quality of
these products. Most of the remaining demand for nickel-
containing alloys is from chemical plants; for ‘superalloys’
that can withstand extreme temperatures and are used
in the aviation industry; from the electronics sector, for
smartphones, laptops and other portable devices; and for
chromium plating.
As developing nations, and especially China, continue
with their industrialisation and urbanisation programmes,
nickel offtake is steadily increasing. Adding to growing
demand for the metal in energy-storage systems such as
wind turbines and solar panels, nickel is a critical input in
lithium-ion batteries used in multiple carbon-abatement
technologies, including BEVs, which continue to increase
their share of the automotive sector. Lithium-ion batteries
offer greater energy density and storage at lower cost,
delivering longer range, currently a major restraint to EV
uptake. Already, the lithium-ion battery packs in today’s
BEVs each contain around 35 kilograms of nickel – and
they are likely to need higher amounts of the metal in
future as vehicle manufacturers constantly seek more
powerful batteries.
2021 Results – Nickel
Production volume (t)
Sales volume (t)
Unit cost (c/lb)(1)
Group revenue – $m(2)
Underlying EBITDA – $m
Mining EBITDA margin
Underlying EBIT – $m
Capex – $m
Attributable ROCE
Fatalities
TRCFR
Energy consumption – million GJ
GHG emissions – Mt CO2 equivalent
Total water withdrawals – million m3
2021
41,700
42,100
2020
43,500
43,000
377
710
320
45%
261
29
21%
0
1.26
20.8
1.38
7.0
334
534
206
36%
79
33
5%
0
1.51
21.3
1.24
8.0
Employee numbers
1,400
1,400
(1) C1 unit cost.
(2) Nickel prior year revenue has been restated. See note 2 to the Consolidated financial
statements for more details.
Financial and operational review
Underlying EBITDA increased by 55% to $320 million (2020:
$206 million), reflecting higher realised nickel prices and continued
operational stability. C1 unit costs increased by 13% to 377 c/lb
(2020: 334 c/lb) as a result of lower production volumes and higher
input and selling costs, partly offset by energy sales and a favourable
Brazilian real.
Capital expenditure decreased by 12% to $29 million (2020:
$33 million), primarily due to lower capitalised waste stripping.
Markets
Average market price (c/lb)
Average realised price (c/lb)
2021
839
773
2020
625
563
Differences between the market price (which are LME-based) and
our realised price (the ferronickel price) are due to the discounts
(or premiums) to the LME price, which depend on market conditions,
supplier products and consumer preferences.
The average LME nickel price of 839 c/lb was 34% higher
(2020: 625 c/lb), as demand outstripped supply, with demand
benefiting from the easing of Covid-19 restrictions globally, and
particularly robust consumption in stainless steel and batteries
(electric vehicles and energy storage) end-markets.
Operational performance
Nickel production decreased by 4% to 41,700 tonnes (2020:
43,500 tonnes), due to licensing delays in the second half of the year
(the relevant licences only being received towards the end of the final
quarter of the year) and planned lower ore grades.
Operational outlook
Production guidance for 2022 is 40,000–42,000 tonnes, subject to the
extent of further Covid-19 related disruption.
C1 unit cost guidance for 2022 is c.450 c/lb, reflecting the impact of
inflation, higher input costs and marginally lower production volumes.
85
Anglo American plc Integrated Annual Report 2021
South Africa and Zimbabwe
Unki
Bushveld Complex
Key
Platinum operations
South Africa: Bushveld Complex
Mogalakwena
Modikwa
Mototolo
Amandelbult
Kroondal
Johannesburg
Platinum Group
Metals (PGMs)
Our PGMs business (held through an effective
79.2% interest in Anglo American Platinum
Limited) is a leading producer of PGMs,
essential metals for cleaning vehicle exhaust
emissions and as the catalyst in electric fuel
cell technology.
Our business
We wholly own and operate three mining operations in South Africa’s
Bushveld complex: Mogalakwena – the world’s largest open pit PGMs
mine – Amandelbult and Mototolo. We also own and operate Unki mine
– one of the world’s largest PGM deposits outside of South Africa, on
the Great Dyke in Zimbabwe. We own smelting and refining operations,
located in South Africa, which treat concentrates from our wholly
owned mines, joint operations and third parties. In 2021, we also had
an interest in two jointly owned and independently managed mines –
Modikwa and Kroondal, both located in South Africa.
On 20 December 2021, Anglo American Platinum announced the sale
of its 49% interest in Bokoni. The transaction is subject to the fulfilment
or waiver of notable conditions precedent and is expected to complete
during 2022. In January 2022, Anglo American Platinum entered into
transaction agreements for the sale of its 50% interests in the Kroondal
(1) PGMs production is shown on a 5E+Au basis, i.e. platinum, palladium,
rhodium, ruthenium and iridium plus gold.
86
Management
Natascha Viljoen
CEO
Platinum Group Metals
2021 Summary
0
Fatalities
$7,099 m
Underlying EBITDA
2.60
TRCFR
62%
Mining EBITDA margin
4,299 koz
Production volume – PGMs 5E+Au(1)
Anglo American plc Integrated Annual Report 2021Strategic Report ▲ Technician Hendrik Lottering (left) and projects manager
Juan Pieterse using the ConMon system at the Mogalakwena
North Concentrator.
Constant online condition monitoring
comes into its own
Remote condition monitoring is a vital aspect of our
P101 transformational asset-productivity programme.
It is being implemented across the Group in order to
monitor critical equipment remotely on a continuous basis
and to enable our data analytics teams to automate
analysis of the data. The data analysis gives us insight into
what equipment is showing signs of deterioration, how
best to rectify the fault conditions, and the length of the
equipment’s remaining life.
The Constant Online Condition Monitoring (ConMon)
system in operation at Mogalakwena is helping to take
performance beyond existing benchmarks to reach
new best-in-class P101 levels of productivity and is
assisting in significantly reducing losses caused by
maintenance downtime.
At Anglo American, we know that unplanned work can
also be up to six times as expensive – and up to 75% less
safe – than planned work. Technical and Sustainability
principal De Wet Strydom observes: “We are striving for
a more proactive, predictive maintenance approach to
reduce unplanned downtime. ConMon is an important tool
in the monitoring and safeguarding of critical machines
by providing early warning of issues and preventing
unplanned outages.”
The ConMon system is able to identify potential failures
up to six months in advance and equipment risks can then
be prioritised. Crucially, defects can be dealt with during
planned shutdowns.
ConMon has been installed on key equipment such as the
rope shovel and the Mogalakwena North Concentrator
crusher and in both areas has already led to substantial
savings in avoided expenditure. At the crusher, ConMon
detected worrying trends in vibration and temperature
on rollers and bearings. This vital information enabled
operations to be halted safely, without equipment being
damaged, and in ample time to make repairs.
The cost of the planned total shutdown came to around
$11 million, instead of an estimated c.$70 million if the
initial failure had continued unmonitored, while not having
to carry out unplanned downtime on the rope shovel
translated to avoided expenditure of c.$1.3 million.
Platinum net demand by sector
Industrial
Automotive
Jewellery
Investment
Total
5 million ounces
Source: Johnson Matthey, adapted by Anglo American
Palladium net demand by sector
Automotive
Industrial
Jewellery
Investment
Total
6.9 million ounces
Source: Johnson Matthey, adapted by Anglo American
50%
26%
22%
2%
80%
14%
1%
0%
and Marikana pool-and-share agreements (the ‘PSAs’) to Sibanye-
Stillwater (Sibanye). The transaction is subject to regulatory approvals,
including section 11 consent for the transfer of the mining right and
approvals by the Competition Authorities, as well as the delivery of
1.35 million 4E ounces of metal in concentrate by the Kroondal PSA
(100% basis).
Uses of PGMs
PGMs are used in an extensive range of applications. In the automotive
industry, they are in demand through both their use in catalytic
converters and in FCEV technology. Platinum, palladium and rhodium
enable catalytic converters to reduce pollutants from car exhaust
gases, and demand for PGMs from the car industry is expected to
continue to grow, supported by stricter emissions regulations. FCEVs
provide a zero-emissions powertrain technology, particularly well suited
to heavy duty, long range and fleet vehicles.
With rising concerns about the environment and energy costs, there
is also growing interest in platinum-based fuel cells as an alternative
energy source. In some cases, platinum-based fuel cells are proving
to be more cost-effective, cleaner and more reliable than alternatives
such as diesel generators. Fuel cell mini-grid electrification technology
is an attractive, cost-competitive alternative to grid electrification in
remote rural areas and could accelerate access to electricity.
Platinum is also widely used in jewellery owing to its purity, strength,
resistance to fading and ability to hold precious stones securely.
Platinum, palladium and rhodium each have a wide range of other
uses in the chemical, electrical, medical, glass and petroleum industries.
PGMs enable efficient production of goods, ranging from glass to
fertilisers, as well as a diverse range of other products, such as cancer
treatment drugs. Ruthenium is used as a catalyst in many chemical and
electrochemical processes, with electrical and chemical properties that
make it widely used in semiconductors and hard disks. Iridium is also
widely used as a chemical and electrochemical catalyst, for instance in
chloralkali electrodes. Being highly corrosion-resistant, it is also used to
make crucibles, in which crystals for the electronics industry are grown.
We are committed to developing demand for PGMs and invest both
directly and through AP Ventures, an independent venture capital fund
with a mandate to invest in the development of new applications for the
full suite of PGMs. We are also a major participant in the Platinum Guild
International (PGI), which plays a key role in supporting and growing
platinum jewellery demand. Meanwhile, new technology and legislation
continue to drive demand for PGMs in the vehicle manufacturing
industry – through their application in both catalytic converters and
fuel cells.
87
Anglo American plc Integrated Annual Report 2021 Platinum Group Metals (PGMs) continued
Safety
Markets
PGMs reported no work-related fatalities at the own-managed
operations in 2021, achieving 471 fatality-free days to 31 December
2021. Tragically, however, two people died in October at Kroondal,
which at that time was an independently managed joint operation.
We are working closely with our joint-operation partners to continue
to improve safety performance at all operations.
The TRCFR for PGMs’ managed operations deteriorated to 2.60
(2020: 2.40). Mogalakwena and the Precious Metals Refinery had
their best performances ever but, for most of the remaining operations,
an increase in total injuries was recorded. PGMs has focused plans
in place to address the root cause of the injuries and is working
relentlessly to improve performance and ensure every employee goes
home safely at the end of their shift.
Annual average PGM prices were significantly higher than the
prior year, with a multitude of price records in the first half of 2021
giving way to lower prices in the second half, reflecting supply
and demand dynamics. In the first half of the year, demand was
supported by a recovering global economy and optimism over the
automotive production outlook; it moderated in the second half as the
semiconductor shortage curtailed automotive production. Meanwhile,
supply was disrupted by the temporary closure of two Russian mines
early in the year, but increased later on due to robust South African
refined production and a recovery in Russian refined production.
The average realised basket price increased by 36% in dollar terms
to $2,761 per PGM ounce (2020: $2,035 per PGM ounce), with all
PGMs contributing.
2021 Results
PGM production volume (koz)(1)(2)
PGM sales volume (koz)(2)(3)
Unit cost ($/PGM oz)(2)(4)
Group revenue – $m(2)(5)
Underlying EBITDA – $m(2)
Mining EBITDA margin(6)
Processing and trading margin
Underlying EBIT – $m(2)
Capex – $m(2)
Attributable ROCE
Fatalities
TRCFR
Energy consumption – million GJ
GHG emissions – Mt CO2 equivalent
Total water withdrawals – million m3
2021
4,299
5,214
868
14,502
7,099
62%
24%
6,753
894
140%
0
2.60
20.8
4.52
42.6
2020
3,809
2,869
713
6,604
2,555
51%
19%
2,270
571
48%
1
2.40
18.1
3.94
43.9
Employee numbers
31,400
31,500
(1) Production reflects own-mined production and purchase of metal in concentrate.
PGM volumes is 5E metals and gold.
(2) Results by asset can be found in the Summary by operation on pages 259–260.
(3) Sales volumes exclude the sale of refined metal purchased from third parties and toll
material. PGMs is 5E metals and gold.
(4) Total cash operating costs (includes on-mine, smelting and refining costs only) per own
mined PGM ounce of production.
(5) Prior year comparative has been restated. See note 7 to the Consolidated financial
statements for more details.
(6) The total PGMs mining EBITDA margin excludes the impact of the sale of refined metal
purchased from third parties, purchase of concentrate and tolling.
Environmental performance
PGMs’ total energy consumption increased by 15% to 20.8 million
GJ (2020: 18.1 million GJ) and GHG emissions increased by 15% to
4.52 Mt CO2e (2020: 3.94 Mt CO2e), principally due to a 13% increase
in production and more extended run times on the ACP than in the prior
year. The Eskom Grid Emission Factor was increased retrospectively
from 1.04 to 1.06 tonnes CO2e emissions per MWh from July 2021,
resulting in additional unplanned GHG emissions for the six months
to December 2021.
PGMs continues to invest in energy reduction and energy efficiency
opportunities at its operations, switching to low carbon energy sources
and developing renewable energy projects to transition its energy mix.
Projects in support of the Group’s carbon neutrality targets include the
development of a hydrogen fuel cell powered heavy haul truck at the
Mogalakwena mine, the continued development of a large scale solar
PV facility, with construction expected to commence in the final quarter
of 2022, as well as several other smaller scale projects to increase the
business’s renewable energy supply.
Financial and operational review
Underlying EBITDA increased to $7,099 million (2020: $2,555 million),
as a result of a 36% increase in the PGM basket price, driven mainly by
the higher average rhodium price, as well as an 82% increase in sales
volumes. EBITDA was slightly reduced by a change in inventory value
estimation methodology, resulting in a $0.4 billion reduction in the value
of inventory, with a corresponding increase in operating costs (see note
7 to the Consolidated financial statements for more detail). Unit costs
increased by 22% to $868/PGM ounce (2020: $713/PGM ounce),
reflecting the stronger South African rand and input cost inflation, partly
offset by higher production volumes following the Covid-19 lockdowns
and ACP shutdown in 2020.
Capital expenditure increased by 57% to $894 million (2020:
$571 million) due to lower capital expenditure in the first half of 2020
as a consequence of deferred projects due to the impact of Covid-19.
Average platinum market price ($/oz)
Average palladium market price ($/oz)
Average rhodium market price ($/oz)
US$ realised basket price ($/PGM oz)(1)
2021
1,086
2,388
20,109
2,761
2020
885
2,197
11,220
2,035
(1) Based on sold ounces (own mined and purchased concentrate). Excludes the impact of the
sale of refined metal purchased from third parties.
88
Anglo American plc Integrated Annual Report 2021Strategic Report
Operational performance
Total PGM production increased by 13% to 4,298,700 ounces
(2020: 3,808,900 ounces), primarily reflecting a strong recovery
from the Covid-19 impacts in the prior period.
Own-mined production
PGM production from own-managed mines (Mogalakwena,
Amandelbult, Unki and Mototolo) and equity share of joint operations
increased by 12% to 2,858,300 ounces (2020: 2,549,000 ounces)
following a robust recovery from the Covid-19 impacts in the prior year.
Mogalakwena PGM production increased by 3% to 1,214,600 ounces
(2020: 1,181,600 ounces), largely driven by mining efficiencies
resulting from P101 initiatives, leading to higher throughput at the
concentrators, despite overall lower grade.
Amandelbult PGM production increased by 27% to 773,200 ounces
(2020: 608,100 ounces), due to an improved underground mining
performance, leading to increased stability and higher throughput at
the concentrator, as well as a recovery from the impacts of Covid-19.
Production from other operations increased by 15% to 870,500 ounces
(2020: 759,300 ounces), reflecting the strong recovery from the
impacts of Covid-19. During the year, the concentrator debottlenecking
projects at Unki and Mototolo were successfully completed.
Purchase of concentrate
Purchase of concentrate, excluding tolling, increased by 14% to
1,440,400 ounces (2020: 1,259,900 ounces), reflecting the strong
recovery from the impact of Covid-19 at joint operations and third
parties.
Refined production and sales volumes
Refined PGM production (excluding toll-treated metal) increased to
a record 5,138,400 ounces (2020: 2,713,000 ounces), reflecting the
strong recovery in the ACP Phase A unit’s performance following its
successful rebuild in 2020, as well as strong performance across all
processing assets.
The build-up in work-in-progress inventory following the temporary
closure of the ACP has largely been processed and refined. The
ACP Phase B unit rebuild was completed in January 2022 and
recommissioning is expected to commence in the first quarter of 2022.
PGM sales volumes increased to 5,214,400 ounces (2020: 2,868,500
ounces), due to the higher refined production and the drawdown of
refined inventory from minor metals to supplement sales. This was
partially offset by the rebuild in 3E refined inventory to normalised levels.
Operational outlook
PGM metal in concentrate production guidance for 2022 is
4.1–4.5 million ounces, with own-mined output accounting for c.65%.
Refined PGM production guidance for 2022 is 4.2–4.6 million ounces,
subject to the impact of Eskom load-shedding. Both are subject to the
extent of further Covid-19 related disruption. Unit cost guidance for
2022 is c.$900/PGM ounce, reflecting the impact of inflation and
higher input costs, including labour and electricity.
89
Anglo American plc Integrated Annual Report 2021 South Africa
Australia
Samancor Manganese – Hotazel
Kolomela
Sishen
Samancor Manganese – Metalloys(1)
Samancor’s Groote Eylandt
Mining Company (GEMCO)
Grosvenor (MC)
Moranbah North (MC)
Jellinbah (MC/TC)
Capcoal (MC/TC)(2)
Grasstree/Aquila (MC)(2)
Dawson (MC/TC)
1
Brazil
Minas-Rio
Ferroport Açu port (50% ownership)
Key
Iron Ore operation
Metallurgical Coal operations
Manganese operations
Other
(1) Metalloys was placed onto extended
care and maintenance in 2020.
(2) Part of the Capcoal complex.
Management team
Themba Mkhwanazi
CEO
Bulk Commodities
Wilfred Bruijn
CEO
Anglo American, Brazil
Mpumi Zikalala
CEO
Kumba Iron Ore
Tyler Mitchelson
CEO
Metallurgical Coal
Bulk
Commodities
Anglo American's iron ore operations
provide customers with high grade iron ore
products which help our steel customers
meet ever-tighter emissions standards. In
South Africa, we own 70% of Kumba Iron
Ore, while in Brazil we own the integrated
Minas-Rio operation.
Our high quality metallurgical coal assets,
located in Australia, produce premium
quality hard coking coal to our customers
in the steelmaking industry.
In Manganese, we have a 40% shareholding
in the Samancor joint venture (managed by
South32, which holds 60%). The manganese
operations are located in South Africa and
Australia, producing ore products for the
steel industry.
90
Anglo American plc Integrated Annual Report 2021Strategic Report 2021 Summary – Kumba
0.8
TRCFR
62%
Mining EBITDA margin
0
Fatalities
$4,311 m
Underlying EBITDA
40.9 Mt
Production volume
2021 Summary – Minas-Rio
0
Fatalities
2.24
TRCFR
$2,560 m
61%
Underlying EBITDA
Mining EBITDA margin
22.9 Mt
Production volume (wet basis)
2021 Summary Metallurgical Coal
4.12
TRCFR
33%
Mining EBITDA margin
0
Fatalities
$962 m
Underlying EBITDA
14.9 Mt
Production volume
2021 Summary – Manganese
$315 m
Underlying EBITDA
41%
Mining EBITDA margin
3.7 Mt
Production volume – ore
Iron Ore
Our business
Kumba operates two open pit mines – Sishen and Kolomela – both
located in the Northern Cape of South Africa, producing high grade
(64–65% average Fe content) and high quality lump ore and a
premium fine ore. Around 69% of Kumba’s production is lump, which
commands a premium price, owing to its excellent physical strength
and high iron content. Kumba is serviced by an 861 km rail line to the
Atlantic coast at Saldanha Bay, managed by Transnet.
Our Marketing teams work closely with our customers to blend and
match our products with their needs – before shipment from Saldanha
Bay to China, Japan, Europe, the Middle East and the Americas.
Our integrated iron ore operation in Brazil, Minas-Rio, consists of an
open pit mine and beneficiation plant, which produces a high grade
(c. 67% Fe) pellet feed product, with low levels of contaminants. The
iron ore is then transported through a 529 km pipeline to the iron ore
handling and shipping facilities at the port of Açu.
Uses of iron ore
Iron ore is the key raw material in steel.
Steel is the world’s most important engineering and construction
material. Over half of the world’s steel is consumed by the construction
industry, which includes buildings and infrastructure, such as railways
and roads. Steel is also used to manufacture vehicles, machinery,
household appliances and many other items associated with
everyday life.
The world’s largest steel-producing country is China, making it easily
the biggest importer of iron ore.
Mined iron ore by region
Australia
Brazil
China
Europe (incl. CIS)
India
North America
Africa
Other
Other South America
Total
2,376 Mt
Source: Wood Mackenzie Q4 LT market outlook
38%
17%
11%
10%
10%
6%
3%
3%
2%
91
Anglo American plc Integrated Annual Report 2021China Europe (incl. CIS) Other Asia India Middle EastNorth AmericaSouth America 59%13%10%9%3%3%2%Iron Ore – consumption by regionAfrica1%Total2,233 MtSource: Wood Mackenzie Q4 LT market outlookOther0% Bulk Commodities continued
Kumba Iron Ore
2021 Results – Kumba Iron Ore(1)
Production volume (Mt)(2)
Sales volume (Mt)(2)
Unit cost ($/t)(3)
Group revenue – $m
Underlying EBITDA – $m
Mining EBITDA margin
Underlying EBIT – $m
Capex – $m
Attributable ROCE
Fatalities
TRCFR
Energy consumption – million GJ
GHG emissions – Mt CO2 equivalent
Total water withdrawals – million m(3)
2021
40.9
40.3
39
6,958
4,311
62%
3,960
417
140%
0
0.80
8.7
0.99
11.2
2020
37.6
40.4
31
4,880
2,702
55%
2,386
354
84%
0
1.74
8.1
0.91
10.6
Employee numbers
6,100
6,200
(1) Sales volumes and realised price differ to Kumba’s stand-alone reported results due to sales
to other Group companies.
(2) Production and sales volumes are reported as wet metric tonnes. The comparative has
been restated as Kumba previously reported on a dry basis. Product is shipped with c.1.6%
moisture from Kumba.
(3) Unit costs are reported on an FOB wet basis. The comparative has been restated as Kumba
previously reported on a dry basis. Unit costs for total iron ore are a blended average.
Safety
Kumba has not had a loss of life incident since May 2016. In 2021, the
TRCFR decreased by 54% to 0.8 (2020: 1.74), the lowest on record.
This commitment to safe, sustainable and responsible mining has been
achieved through increased safety leadership visibility, high risk work
verifications and fatigue management.
In 2021, Kumba achieved 99% compliance with the critical control
monitoring plan, a key element of the Elimination of Fatalities
programme which is central to safety performance.
Technology is playing an increasingly important role in monitoring and
managing safety behaviour. During the year, Kumba introduced several
new technologies, including pit-wall monitoring; berm monitoring;
piloting remote earth moving; behaviour monitoring to manage
haul truck driver speed and capability; and Passport 360, enabling
onboarding with single induction, real-time contractor management.
Environmental performance
In 2021, Kumba’s GHG emissions increased by 9% to 0.99 Mt CO2e
(2020: 0.91 Mt CO2e) and energy consumption increased by 7%
to 8.7 million GJ (2020: 8.1 million GJ), reflecting the increase in
production as operations recovered from Covid-19 related restrictions
in 2020.
▲ Steel is essential to construction and renewable energy
infrastructure, supporting a growing population and a
cleaner world.
A pathway to greener steelmaking
Of all the industrial processes that have a critical impact
on our world, steelmaking, along with cement, is one of
the most polluting activities, accounting for up to 9% of all
direct fossil fuel emissions according to the World Steel
Association – and one whose emissions are among the
hardest to abate.
To support a pathway to limit global warming to 1.5°C,
the steel industry must rapidly shift away from heavily
energy-intensive traditional blast furnace and basic
oxygen furnace (BF-BOF) processes to less carbon-
intensive approaches based on feeding electric arc
furnaces (EAFs) with either direct reduced iron (DRI-EAF)
or recycled steel (scrap-EAF).
DRI is a technically proven production method estimated
to be almost 30% less carbon-intensive than the BF-BOF
steelmaking process. And it has the potential to be the
lowest-carbon primary steelmaking method of all, if
based on ‘green’ hydrogen, which is produced through
electrolysis in which renewable electricity is used to split
hydrogen from oxygen in water. However, there are still
significant barriers to overcome before this process can
become commercially viable, including the cost of the
technology, the huge amounts of energy needed, and
the challenge of rapidly scaling up DRI capacity and
hydrogen infrastructure.
As a producer of high quality iron ore and metallurgical
coal products that support efficient steelmaking today,
Anglo American is also providing momentum to the shift
to cleaner steel. In July 2021, we signed an agreement
with German steelmaker Salzgitter Flachstahl to
collaborate on the decarbonisation of the steelmaking
industry. Together, we will research efficient feed materials
suitable for use in DRI steelmaking, including iron ore
pellets and lump iron ore.
Then, in September, our Marketing team signed a three-
year agreement with Bahrain Steel, a longstanding
customer, to explore ways of bringing our product to market
more efficiently. Under this agreement, Bahrain Steel will
convert up to 2 million tonnes annually of Minas-Rio’s
pellet feed into high grade iron ore pellets. This enhanced
product, which Anglo American will supply to steelmakers
worldwide, is a significant addition to our high quality
product portfolio.
92
Anglo American plc Integrated Annual Report 2021Strategic Report
Financial and operational review
Underlying EBITDA increased by 60% to $4,311 million (2020:
$2,702 million), driven by a higher average realised FOB iron ore
export price of $161/tonne (2020: $113/tonne), partly offset by the
stronger South African rand. Unit costs of $39/tonne (2020: $31/tonne)
reflected the stronger rand, as well as input cost inflation.
Total sales volumes were in line with the prior year at 40.3 Mt (2020:
40.4 Mt) due to third-party logistics constraints. Production increased
by 9%, reflecting the Covid-19 related lockdowns in the first half of
2020, as well as improved equipment availability and reliability.
Capital expenditure increased by 18% to $417 million (2020:
$354 million), owing to the effect of the stronger South African rand
and spend related to the Kapstevel South pit life extension project
at Kolomela and the Ultra High Dense Media Separation (UHDMS)
technology growth project at Sishen as these projects ramp up.
Minas-Rio
2021 Results – Minas-Rio
Production volume (Mt)(1)
Sales volume (Mt)
Unit cost ($/t)
Group revenue – $m(2)
Underlying EBITDA – $m
Mining EBITDA margin
Underlying EBIT – $m
Capex – $m
Attributable ROCE
Markets
Average market price
(Platts 62% Fe CFR China –$/tonne)
Average realised price
(Kumba export – $/tonne)
(FOB wet basis)
2021
160
2020
109
Fatalities
TRCFR
161
113
Energy consumption – million GJ
GHG emissions – Mt CO2 equivalent
Total water withdrawals – million m3
2021
22.9
23.0
24
4,146
2,560
61%
2,399
211
42%
0
2.24
5.1
0.26
32.2
2020
24.1
23.8
21
3,025
1,863
62%
1,705
163
30%
0
1.87
5.2
0.20
35.3
Kumba’s FOB realised price of $161/wet metric tonne was 18%
higher than the equivalent Platts 62% Fe FOB Saldanha market
price (adjusted for moisture) of $136/wet metric tonne. This reflects
the premium for the higher iron content at 64.1% and relatively high
proportion (approximately 69%) of lump that the product portfolio
attracts (which helps steel mills reduce emissions). There was also a
benefit of $3/tonne (2020: $7/tonne) related to marketing activities.
Operational performance
Despite third-party logistical constraints, production increased by 9%
to 40.9 Mt relative to 2020, which was impacted by Covid-19 related
disruptions (2020: 37.6 Mt). The increase was partly driven by improved
plant availability and reliability in 2021. Production at Sishen increased
by 9% to 28.0 Mt (2020: 25.8 Mt) and at Kolomela by 8% to 12.8 Mt
(2020: 11.9 Mt).
Operational outlook
Production guidance for 2022 is 39–41 Mt, subject to the extent
of further Covid-19 related disruption and third-party rail and
port performance.
2022 unit cost guidance is c.$41/tonne, reflecting the impact of
inflation and higher input costs.
Employee numbers
2,600
2,500
(1) Production is Mt (wet basis). Product is shipped with c.9% moisture.
(2) Prior year comparative has been restated. See note 7 to the Consolidated
financial statements.
Safety
Minas-Rio has not had a fatal incident since 2015. In 2021, the TRCFR
increased by 20% to 2.24 (2020: 1.87). Strict Covid-19 related
mobilisation protocols and quarantine for suspected cases affected
the scheduling of operations and shutdowns which, in turn, made
managing safety controls more complex. Good progress is being made
on the ongoing programme to increase awareness around safety
culture, despite restrictions on face-to-face events; the integration of the
Anglo American Operating Model and Operational Risk Management
process also continued. Implementation of the Elimination of Fatalities
programme remains a priority, particularly accelerating the completion
of improvements to surface mobile equipment and vehicles. A further
priority is to better integrate contractors into the Anglo American Safety
Management System.
Environmental performance
Minas-Rio’s energy use decreased to 5.1 million GJ (2020: 5.2 million
GJ) while GHG emissions increased to 0.26 Mt CO2e (2020: 0.20
Mt CO2e). Solar and wind energy contracts were signed to supply
electricity to our Brazilian operations, demonstrating our commitment
to minimise GHG emissions. Those contracts together will supply
1,954 GWh per year of clean and renewable energy, equivalent
to100% of Minas-Rio’s current electricity consumption.
93
Anglo American plc Integrated Annual Report 2021
Bulk Commodities continued
Financial and operational review
Underlying EBITDA increased by 37% to $2,560 million (2020:
$1,863 million), reflecting a higher average realised price, partly
offset by lower volumes resulting from unplanned maintenance at
the beneficiation plant. Unit costs increased by 16% to $24/tonne
(2020: $21/tonne), as higher input costs, principally consumables
and electricity, increased maintenance costs and lower production
volumes more than offset the benefit of the weaker Brazilian real.
Capital expenditure was 29% higher at $211 million (2020:
$163 million), as planned higher expenditure, including P101
initiatives, was partly offset by the weaker Brazilian real.
Markets
Average market price
(MB 66% Fe Concentrate CFR
– $/tonne)
Average realised price
(Minas-Rio – $/tonne) (FOB wet basis)
2021
2020
185
150
120
107
Minas-Rio’s pellet feed product is also higher grade (with iron
content of 67% and lower impurities) than the reference product
used for the Platts 62% Fe CFR China index. The Metal Bulletin (MB)
66 index, therefore, is used when referring to Minas-Rio product.
The Minas-Rio realised price of $150/wet metric tonne was 6% higher
than the equivalent MB 66 FOB Brazil index, (adjusted for moisture,
of $142/wet metric tonne). This reflects the premium quality of the
product, as well as a benefit of $5/tonne (2020: $13/tonne) related
to marketing activities.
Operational performance
Production decreased by 5% to 22.9 Mt (2020: 24.1 Mt), due to
lower plant availability as a result of unplanned maintenance at the
beneficiation plant.
Operational outlook
Production guidance for 2022 is 24–26 Mt, subject to the extent of
further Covid-19 related disruption.
2022 unit cost guidance is c.$25/tonne, reflecting the impact of
inflation and higher input costs.
▲ The Minas-Rio mine site in Minas Gerais, Brazil.
Innovative ultrafines technology
increases production at Minas-Rio
Our Minas-Rio site in Conceição do Mato Dentro, Minas
Gerais, is more than a mine and beneficiation plant; it is
also becoming a testing-ground for new and emerging
minerals-processing technologies designed to enhance
and sustain the production of high quality iron ore pellet
feed (c.67% Fe content).
Traditionally, iron ore content has been removed from
lower grade ore-bearing material through flotation, a
physical-chemical process of separating particles of
different granulations, which are induced or repelled when
in contact with water. At Minas-Rio, we have introduced
magnetic separation to the flotation process. This is a
disruptive technology that uses magnetic separators to
concentrate fine and ultrafine iron particles (ultrafines).
The technology allows us to do away with expensive
flotation columns that necessitate prior mud removal to
work efficiently and is enabling higher metal recovery,
along with lower levels of contaminants.
Minas-Rio’s magnetic separation plant is due to start
operations in October 2022, with metal recovery expected
to increase by c.4%. This enhanced treatment of the ore,
brought about by greater efficiencies in the concentration
process, will boost overall iron ore output. Pellet feed
production is now projected to increase by 1.5 million
tonnes per year (Mtpa) – against c.700,000 tpa using
conventional flotation methods. Moreover, this has been
achieved without the need to raise the feed rate of the
plant, while the volume of tailings directed to the dam has
also been reduced by 1.5 Mtpa.
From a financial viewpoint, innovative magnetic separation
ultrafines technology is proving to be a great success. We
anticipate that this refinement to the flotation process will
provide a more than $300 million uplift to profitability over
the life of the mine. And we are now studying whether the
technology could be applied at our Kumba iron ore assets
in South Africa.
This technology also offers safety and environmental
benefits, as less waste is sent to tailings, thereby minimising
the need for ‘wet’ tailings storage facilities.
94
Anglo American plc Integrated Annual Report 2021Strategic Report Environmental performance
GHG emissions decreased by 14% to 6.37 Mt CO2e (2020: 7.40 Mt
CO2e), primarily due to the winding down of operations and a
subsequent decline in the pre-drainage of gas for mining activities at
Grasstree, as well as the impact of the temporary cessation of mining
at Grosvenor, following the gas ignition incident in May 2020.
Energy use increased by 9% to 9.3 million GJ (2020: 8.5 million GJ),
primarily due to a change in mine plan that led to longer haul distances
at the Dawson open cut mine and increased strip ratios at both
Dawson and Capcoal’s open cut mine. Metallurgical Coal continues
to progress its tender process for the supply of green energy at all sites
by the end of 2023, when the current electricity supply contract is due
to end.
Financial and operational review
Underlying EBITDA increased to $962 million (2020: $50 million),
driven by an 83% increase in the weighted average realised price for
metallurgical coal, partially offset by 16% lower sales volumes, and
22% increase in unit costs to $105/tonne (2020: $86/tonne), reflecting
the impact of lower production and the stronger Australian dollar. The
volume and cost performances were principally affected by the impact
of the underground incident at Grosvenor in May 2020, where longwall
production received approval to restart in February 2022 and is now
operational again, as well as the temporary suspension at Moranbah
during the first half of 2021 in response to elevated gas levels.
Capital expenditure decreased by 5% to $649 million (2020:
$683 million) due to reduced capitalised stripping at Grasstree,
partly offset by the Aquila life extension project (replacing production
from Grasstree), where longwall production commenced in
February 2022.
Markets
Average benchmark price – hard
coking coal ($/tonne)(1)
Average benchmark price – PCI ($/tonne)(1)
Average realised price – hard coking coal
($/tonne)(2)
Average realised price – PCI ($/tonne)(2)
2021
226
164
211
138
2020
124
78
112
84
(1) Represents average spot prices.
(2) Realised price is the sales price achieved at managed operations.
Average realised prices differ from the average market prices owing to
differences in material grade and timing of contracts. Hard coking coal
price realisation increased to 93% of benchmark (2020: 90%), driven
by the return of premium quality hard coking coal production from
Moranbah in the second half of the year, in a higher price environment.
The average market price for Australian hard coking coal increased by
82% to $226/tonne (2020: $124/tonne). Coking coal prices in the first
half of 2021 were impacted by the ban on Australian-originated coal
into Chinese ports and the Covid-19 outbreak in India, but recovered
strongly in the second half of the year, due to a reduction of supply from
Australian and North American producers, while demand from Asian
steelmakers outside China remained strong, with steel production
supported by robust margins.
Metallurgical Coal
Our business
We are the world’s third largest exporter of metallurgical coal for
steelmaking and our operations serve customers throughout Asia,
Europe and South America. Our tier one assets include the Moranbah
and Grosvenor (both 88% ownership) metallurgical coal mines,
located in Queensland, Australia.
Uses of metallurgical coal
Metallurgical coal is used principally in blast-furnace steelmaking
production; around 70% of global steel output is produced using
this method and, currently, there are no viable at scale substitutes
for metallurgical coal in the steelmaking process.
Emerging markets, particularly in the Asia-Pacific region, continue to
drive demand for metallurgical coal – helping to generate the steel
needed for infrastructure, housing, transport and machinery.
Metallurgical coal consumption by region
China
Other Asia
Europe (incl. CIS)
South America
North America
Other
Africa
Total
1,196 Mt
Source: Wood Mackenzie, Global Metallurgical Coal December 2021
Metallurgical coal production by region
China
Australia
Europe (incl. CIS)
North America
Other Asia
Other
Africa
Total
1,193 Mt
Source: Wood Mackenzie, Global Metallurgical Coal December 2021
68%
16%
10%
2%
2%
2%
0%
64%
15%
10%
8%
2%
1%
1%
Safety
Metallurgical Coal was fatality-free during 2021. The TRCFR decreased
by a further 13% to 4.12 (2020: 4.72), reflecting the focus across
our operations on visible leadership and improvements in work
planning through the Anglo American Operating Model. As part of
the Learning From Incidents process, Metallurgical Coal aims to more
fully understand the impact of human factors on safety, as well as start
rolling out the high risk work activity process which aims to build critical
control verification down to the coal mine worker and embed it as part
of our documented process. Metallurgical Coal continued to implement
its Elimination of Fatalities (EoF) projects during the year, with the focus
on learning, safety culture, risk management, and process safety.
In 2021, we developed a series of functional strategies in areas
such as standardisation of systems; learning; health and well-being;
operational risk management and assurance; technology for safety;
and capability building. These strategies have been mapped against
our EoF projects and priority focus areas and are being managed
against the Anglo American Operating Model framework.
95
Anglo American plc Integrated Annual Report 2021 Bulk Commodities continued
Operational performance
Production decreased by 11% to 14.9 Mt (2020: 16.8 Mt), principally
due to the suspension of longwall operations at Grosvenor since
May 2020 following the underground gas incident, and at Moranbah
from 21 February 2021 until 3 June 2021, in response to elevated gas
levels. Operations at Moranbah were further impacted by challenging
geological conditions during the second half of the year. Open cut
operations returned to pre-Covid-19 production levels, having been
scaled back at Dawson and Capcoal since mid-2020 in response to
reduced demand for the products. At Grosvenor, development activities
have progressed well and the longwall restarted operations in the
first quarter of 2022, following approval from Resources Safety and
Health Queensland.
Operational outlook
Following confirmation of the restart at Grosvenor, while export
metallurgical coal production guidance for 2022 is 20–22 Mt, due to
the impact of Covid-19 in early 2022 and a later than expected restart
of operations at Grosvenor, production is expected to be towards the
lower end of the guidance range. As a result, unit cost guidance for
2022 is revised to c.$85/tonne (previously c.$80/tonne and compared
to 2021 unit costs of $105/tonne). These figures are subject to the
extent of any further Covid-19 related disruptions.
2021 Results – Metallurgical coal
Production volume (Mt)(1)
Sales volume (Mt)(2)
Price ($/t)(3)
Unit cost ($/t)(4)
Group revenue – $m
Underlying EBITDA – $m
Mining EBITDA margin
Underlying EBIT – $m
Capex – $m
Attributable ROCE
Fatalities
TRCFR
Energy consumption – million GJ
GHG emissions – Mt CO2 equivalent
Total water withdrawals – million m3
2021
14.9
14.1
200
105
2020
16.8
16.9
109
86
2,899
1,909
962
33%
450
649
15%
0
4.12
9.3
6.37
20.9
50
3%
(468)
683
(15)%
0
4.72
8.5
7.40
21.0
Employee numbers
1,900
2,000
(1) Production volumes are saleable tonnes and exclude thermal coal production of 1.7 Mt
(2020: 2.0Mt).
(2) Sales volumes exclude thermal coal sales of 2.1 Mt (2020: 2.3 Mt).
(3) Realised price is the weighted average hard coking coal and PCI sales price achieved
at managed operations.
(4) FOB cost per saleable tonne, excluding royalties and study costs.
▲ Automation systems engineer Patrick Halpin in Moranbah’s
Remote Operations Centre.
Moranbah – a technological leader
in remote longwall operations
At our Metallurgical Coal operations in Australia, we
continue to record breakthrough performances in the
development and implementation of autonomous longwall
technology and remote operations.
Working in close collaboration with other operating
teams and disciplines in the business unit, as well as with
outside specialists, Metallurgical Coal’s Underground
Technology and Automation team is making industry-
leading advances in technology. They have developed
a series of industry-first safety and production systems,
designed specifically for underground longwall operations,
which work together to unlock the constraints traditionally
posed by autonomous longwall operations and deliver
a significant step-change in the safety and efficiency
of underground mining. They are enabling up to 100%
machine automation of longwall operations, with a team
of operational and engineering experts monitoring the
process, and analysing the data to drive safer operations,
better decisions and achieve best-in-class performance.
There is inherent risk in underground coal mining, and we
see autonomous, remote-control operation of our longwall
operations in Australia as the key development in enabling
people to be removed from potentially hazardous areas
underground. We are making a material and measurable
difference to safety both through designing specific
systems with an array of safety applications that remove
the requirement for manual operation, and by moving
operators away from the longwall face to new, purpose-
built Remote Operations Centres (ROCs) on the surface of
the mine.
The first of a planned series of ROCs is in service at
Moranbah. More than 90% of the mine’s longwall shears
are now controlled from the ROC, which is equipped
with industry-first automation systems and a monitoring
network of cameras to safely guide the cutting of coal with
greater capacity and consistency.
Moranbah has become Australia’s most capable
remote-operated underground metallurgical coal
operation and is consistently achieving best-in-industry
productivity performance. It is providing the blueprint for
all Metallurgical Coal’s longwall operations, including
Grosvenor, where operations have restarted with all new
longwall equipment, and Aquila mine, which commenced
longwall production in February 2022.
96
Anglo American plc Integrated Annual Report 2021Strategic Report
Manganese
Uses of manganese
The most significant use of manganese is steel production, which
consumes more than 85% of all manganese mined. The ore is
particularly useful in increasing steel’s resistance to oxidation; it can also
improve the overall strength, durability and workability of the material.
2021 Results – Manganese(1)
Production volume (Mt)
Sales volume (Mt)
Group revenue – $m
Underlying EBITDA – $m
Mining EBITDA margin
Underlying EBIT – $m
Attributable ROCE(2)
2021
3.7
3.7
768
315
41%
250
104%
2020
3.6
3.6
697
304
44%
245
78%
(1) Production, sales and financials include ore and alloy.
(2) Attributable ROCE for 2020 has been updated to include allocation of corporate costs.
Financial and operational review
Underlying EBITDA increased by 4% to $315 million (2020:
$304 million), benefiting from a 6% increase in manganese ore
sales volumes, driven by higher South African production, partially
offset by increased costs due to the stronger South African rand
and Australian dollar.
Markets
The average benchmark price for manganese ore (Metal Bulletin
44% manganese ore CIF China) increased by 12% to $5.21/dmtu
(2020: $4.67/dmtu), largely due to stronger demand and weather
related supply disruptions that affected South African producers.
Operational performance
Attributable manganese ore production increased by 5% to 3.7
Mt (2020: 3.5 Mt), reflecting the impact of Covid-19 lockdowns in
South Africa in 2020. There was no manganese alloy production as
the South African smelter has been on care and maintenance since
the Covid-19 lockdown in 2020. During the fourth quarter of 2021,
an agreement was entered into to divest the Metalloys business (the
smelter in South Africa) and that transaction is expected to complete
during 2022.
97
Anglo American plc Integrated Annual Report 2021 United Kingdom
Woodsmith
Key
Crop Nutrients operation
Crop Nutrients
Management
Tom McCulley
CEO
Crop Nutrients
2021 Summary
0
Fatalities
$(41) m
Underlying EBITDA
2.59
TRCFR
Anglo American is developing the Woodsmith
project in the north east of England to access
the world’s largest known deposit of polyhalite,
a natural mineral fertiliser product containing
potassium, sulphur, magnesium and calcium –
four of the six nutrients that every plant needs
to grow.
Crop Nutrients
The Woodsmith project is located approximately 3 km south of Whitby,
where polyhalite ore will be extracted via two 1.6 km deep mine shafts
and transported to Teesside on an underground conveyor belt in a
37 km tunnel, thereby minimising impact on the surface. It will then be
granulated at a materials handling facility to produce a low carbon
fertiliser product – known as POLY4 – that will be exported from our
dedicated port facility to a network of customers around the world.
As a result of the highly efficient mine and conveyor design and the
minimal processing requirements of the polyhalite ore, our POLY4
product will benefit from an extremely low carbon footprint, as well as
being certified for organic use.
Aside from the world class nature of the orebody and the quality of the
operation we are developing, the addition of POLY4 to our product
range aligns well with our portfolio trajectory towards those products
that support a low carbon economy and global consumer demand –
in this case, for food.
98
Anglo American plc Integrated Annual Report 2021Strategic Report Woodsmith project
Market development – POLY4
The ongoing focus of the market development activities is to develop
and implement detailed sales and marketing strategies for each
region and to support customers with their own market development
activities in order to further promote POLY4 to the end users of the
product – farmers.
We are accelerating the number of commercial scale on-farm
demonstrations, with around 800 now in progress or complete. The
demonstrations continue to validate the efficacy of the product and
the improvements it can deliver to farmers in terms of crop yield, quality
or both. In addition, POLY4 has been shown in studies to enhance soil
health through resilience to compaction, erosion and run-off, as well
as improving nutrient availability to crops, helping to reduce nutrient
waste into watercourses. POLY4 offers farmers a solution to agricultural
efficiency and sustainability challenges, through its naturally low
chloride multi-nutrient composition, its suitability for organic use and
ultra low carbon profile, generating up to 85% fewer carbon emissions
than the equivalent conventional nutrient products, with little to no
waste generated in its production.
2021 Results – Crop Nutrients
Group revenue – $m(2)
Underlying EBITDA – $m(2)
Capex – $m
Fatalities
TRCFR
Energy consumption – million GJ
GHG emissions – Mt CO2 equivalent
Total water withdrawals – million m3
Employee numbers
2021
114
(41)
530
0
2.59
0.2
0.01
0.1
600
2020(1)
107
1
292
0
0.81
0.1
0.01
0.2
300
(1) Prior year comparative data for Crop Nutrients is presented from the date of acquisition;
17 March 2020.
Includes results from the interest in The Cibra Group, a fertiliser distributor based in Brazil.
(2)
Development of the project continued to progress, with capital
expenditure of $530 million (2020: $292 million). Excavation of the
mineral transport tunnel had passed 18 km by the end of the year,
beyond the intermediate access shaft site at Lockwood Beck. The
Lockwood Beck shaft is complete, having reached its target depth of
383 m, and shaft lining is currently under way. At the mine head itself,
shaft boring has started in the services shaft, while progress is also
being made on the production shaft infrastructure.
Anglo American has conducted a detailed technical review of the
project since mid-2020 to ensure the technical and commercial
integrity of the full scope of its design. Now largely complete, the review
has confirmed that a number of elements of the project’s design would
benefit from modification to bring it up to Anglo American’s safety and
operating integrity standards and to optimise the value of the asset for
the long term.
The Woodsmith team is further developing the engineering to optimise
the configuration of the project, recognising the multi-decade life
of the mine. Particular attention is on those aspects identified at the
outset of Anglo American’s ownership – namely, the sinking of the two
main shafts, the development of the underground mining area, and
the changes required to accommodate both increased production
capacity and the more efficient and scalable mining method of using
only continuous miners; such improvements will also require the
installation of additional ventilation earlier in the development of the
underground mining area.
Ahead of the full project execution phase, the Woodsmith team, led
by new CEO Tom McCulley, is working through the detailed design
engineering throughout 2022 and is expected to make a number
of changes to the phasing of work, particularly in relation to the two
main shafts. The capital budget for 2022 is therefore expected to be
reduced by approximately $0.1 billion to $0.6 billion to accommodate
these changes.
Anglo American expects that the improvements it is making to the
project will result in an enhanced configuration and therefore a different
and longer construction schedule. Anglo American’s capital budget
for the development of Woodsmith will reflect such scope and timing
changes to ensure that its exacting standards are met and the full
commercial value of the asset is realised. Once the detailed design
engineering is complete, and the capital budget and schedule are
updated, the full project will be submitted to the Board.
Safety
The Woodsmith project recorded zero fatalities (2020: zero) and a
TRCFR of 2.59 (2020: 0.81).
Environmental performance
Across the Woodsmith project, energy use was in line with the prior
year at 0.2 million GJ (2020: 0.1 million GJ). GHG emissions were also
in line with the prior year at 0.01 Mt CO2e (2020: 0.01 Mt CO2e). The
percentage contribution of renewable energy to overall electricity use
increased to 37% (2020: 21%), owing to securing 100% renewable
mains supply for all but one of the project sites.
99
Anglo American plc Integrated Annual Report 2021 Corporate and other
Segment total
Prior year
Exploration
Prior year
Corporate activities and unallocated costs
Prior year
Thermal Coal – South Africa(6)
Prior year
Thermal Coal – Colombia(7)
Prior year
Production
volume(1)
Sales
volume(2)
Price(3)
Unit cost(4)
n/a
—
n/a
—
n/a
—
5.7
16.5
3.6
4.1
n/a
—
n/a
—
n/a
—
5.3
16.6
3.4
4.5
n/a
—
n/a
—
n/a
—
77
57
65
46
n/a
—
n/a
—
n/a
—
46
38
34
39
Group
revenue◊(5)
$m
1,126
1,550
n/a
—
354
191
553
1,150
219
209
Underlying
Underlying
EBITDA◊
$m
(3)
(160)
(128)
(101)
(63)
(44)
101
(15)
87
—
EBIT◊
$m
Capex◊
$m
(289)
(395)
(132)
(102)
(270)
(129)
70
(81)
43
(83)
125
205
n/a
—
44
21
81
184
n/a
—
(1) Production volumes are saleable tonnes. South African production volumes include export primary production, secondary production sold into export markets, production sold domestically
at export parity pricing and excludes other domestic production of 5.6 Mt (2020: 14.0 Mt).
(2) South African sales volumes include export primary production, secondary production sold into export markets and production sold domestically at export parity pricing and exclude
domestic sales of 5.3 Mt (2020: 12.4 Mt) and third-party sales of 6.4 Mt (2020: 9.4 Mt).
(3) Thermal Coal – South Africa realised price is the weighted average export thermal coal price achieved. Excludes third-party sales from locations other than Richards Bay.
(4) Thermal Coal – South Africa FOB cost per saleable tonne from the trade operations, excluding royalties and study costs.
(5) Total segment and Thermal Coal – South Africa prior year comparatives have been restated. See note 7 to the Consolidated financial statements for more details.
(6) Thermal Coal – South Africa mining activity included until the demerger on 4 June 2021, with prior year comparison up to 31 December 2020. Production in 2021 was 65% below 2020,
reflecting the partial year of ownership, partly offset by Covid-19 related restrictions in 2020.
(7) Represents the Group’s attributable share from its 33.3% shareholding in Cerrejón. The sale of Anglo American’s interest in Cerrejón was completed on 11 January 2022 following receipt of
the relevant regulatory approvals. The agreement is effective 31 December 2020 and, therefore, economic benefits from 1 January 2021 have not accrued to Anglo American. Metrics reflect
earnings and volumes from the first half of the year only, before the agreement was entered into. Production in 2021 was 13% below 2020, reflecting the partial year recognised, partly offset by
Covid-19 related restrictions in 2020.
Financial overview
Exploration
Exploration’s underlying EBITDA loss was $128 million (2020:
$101 million loss), driven by increased exploration activities across
most product groups reflecting Covid-19 related restrictions in 2020.
Corporate activities and unallocated costs
Underlying EBITDA was a $63 million loss (2020: $44 million loss),
driven primarily by an increase in corporate costs across various
technical and strategic projects, partially offset by an increase in profits
on third-party shipping.
Thermal Coal – South Africa
Underlying EBITDA was $101 million (2020: $15 million loss), with
underlying EBITDA no longer reported by Anglo American from 4 June
2021, the date of the demerger of the South Africa thermal coal
operations. Anglo American’s Marketing business continues to support
Thungela in the sale and marketing of its products, and sales and
purchases under the offtake agreement are reported on a net basis
together with the Group’s other third-party trading activities within
corporate activities and unallocated costs.
Thermal Coal – Colombia
Underlying EBITDA increased to $87 million. The sale of our 33.3%
shareholding in Cerrejón was completed on 11 January 2022, with the
sale agreement having an economic effective date of 31 December
2020. After the sale was agreed in June 2021, no further underlying
EBITDA was recorded, with an impairment charge being recognised to
offset reported earnings in the first half of the year (see note 13 of the
Consolidated financial statements for more detail).
100
Anglo American plc Integrated Annual Report 2021Strategic Report Non-financial information disclosures and footnotes
Non-financial information
Reporting requirement
Policies and standards
Outcomes and additional information
Page reference
Environmental matters
Safety, Health and Environment (SHE) Way
and Policy
Climate Change Policy
Protecting our natural environment
45
Disclosures related to the recommendations
of the TCFD
Employees
Human rights
Social matters
Energy and GHG Emissions Standard
Climate change
Water Policy and Water
Management Standard
Mineral Residue Technical
Management Standard
Code of Conduct
SHE Way and Policy
HIV/AIDS Policy
Human Rights Policy
The Social Way 3.0
Water
Mineral residue management
Building a purpose-led culture
Safety
Health
Human rights
Social performance
Responsible Sourcing Standard for Suppliers
Supply chain
Supply Chain Local Procurement Policy
Supply chain
Anti-corruption and anti-bribery
Code of Conduct
Building a purpose-led culture
Business Integrity Policy
Business integrity
Principal risks and impact of
business activity
Non-financial KPIs
Our Business Model
Our material matters
Managing risk effectively
Key performance indicators
43-44,
102-103
43-44
45
45
57
54
54-55
47-48
47-48
49
49
57
57
08-09
16-17
60-67
68-69
Footnotes
(1) With the exception of Gahcho Kué, which is on an attributable 51% basis.
(2) Throughout this Strategic Report, ‘employees’ is the average number of Group employees, excluding employees of contractors, associates and joint ventures, and including a proportionate
share, based on the percentage shareholding, of employees within joint operations.
(3) Wages and benefits are the payments made to the Group’s employees, excluding employees of contractors, associates and joint ventures, and including a proportionate share, based on the
percentage shareholding, of payments made to employees within joint operations.
(4) Taxes and royalties include all taxes and royalties both borne and collected by the Group. This includes corporate income taxes, withholding taxes, mining taxes and royalties, employee taxes
and social security contributions and other taxes, levies and duties directly incurred by the Group, as well as taxes incurred by other parties (e.g. customers and employees) but collected and
paid by the Group on their behalf. Figures disclosed are based on cash remitted, net of entities consolidated for accounting purposes, plus a proportionate share, based on the percentage
shareholding, of joint operations. Taxes borne and collected by associates and joint ventures are not included.
(5) Local procurement is defined as in-country procurement and includes local procurement expenditure from the Group’s subsidiaries and a proportionate share of the Group’s joint operations,
based on shareholding.
(6) Copper equivalent volume growth vs. 2021 copper equivalent production.
(7) Data relates to subsidiaries and joint operations over which Anglo American has management control. Data excludes De Beers’ joint operations in Namibia and Botswana.
(8) During 2021, the 2018–2019 water withdrawal data was restated using the site-specific water balances that were prepared during 2020. All water withdrawal data is now aligned with the
(9)
ICMM definitions and is, therefore, now directly comparable with the data for 2020 and 2021.
In 2020, we launched a new integrated social performance management system (Social Way 3.0), which has raised performance expectations and has resulted in continued improvement in
our social performance. Sites are expected to have implemented the Social Way 3.0 by the end of 2022. While sites are assessed annually against all requirements applicable to their context,
for consistency during the transition period the metric reflects performance against the Social Way foundational requirements.
(10) Anglo American supports jobs through training, mentoring and capacity development. The number of jobs supported includes existing jobs (in activities supported by the intervention) and
newly created jobs through the programmes. Jobs supported are measured as full time equivalent jobs.
(11) Attributable free cash flow includes expenditure on non-current intangible assets (excluding goodwill).
(12) Copper equivalent production and unit cost is normalised to reflect the demerger of the South Africa thermal coal operations, the sale of our shareholding in Cerrejón and the closure of the
manganese alloy operations.
(13) Production capacity excludes Grosvenor.
101
Anglo American plc Integrated Annual Report 2021 Disclosures related to the recommendations of the TCFD
Anglo American’s response to the risks posed by climate change
is multi-disciplinary and is covered throughout our reporting suite
– including the Integrated Annual Report, the Sustainability Report,
our Climate Change Report, published in October 2021, and our
2020 CDP Climate Change response. In line with the UK Listing Rules,
we confirm that the disclosures included in the Integrated Annual
Report 2021 are consistent with the TCFD Recommendations and
Recommended Disclosures.
While we endeavour to include as much information as possible on
our approach to climate change in the Integrated Annual Report,
the Climate Change Report offers more comprehensive disclosure,
including detail on the assumptions behind our scenario analysis
and approach to achieving our GHG emission reduction ambitions.
Our 2020 CDP Climate Change response provides more detail
pertaining to risk, opportunity and technical data. References in the
table below, therefore, include the Integrated Annual Report, Climate
Change Report and our 2020 CDP Climate Change response, all of
which are available on our website.
→ For more on our Climate Change Report 2021, see
www.angloamerican.com/climate-change
→ For more on our 2020 CDP Climate Change response, see
www.angloamerican.com/cdp-response
The table below offers guidance on where to find information relating to
each of the TCFD’s recommendations.
Governance
Disclose the organisation’s governance around climate-related risks and opportunities.
Recommended disclosures
References
a) Describe the Board’s
oversight of climate-related
risks and opportunities.
Integrated Annual Report: Page 14 describes the insights the Board takes into account when reviewing and endorsing the Group’s
long term strategy and related decisions. Climate change considerations are included within the material matters (pages 16-17),
our analysis of global trends (pages 18-19), our capital allocation decisions (page 58-59) and within our principal risks – specifically
risks 7, 12 and 13 (pages 60-67). Page 21 shows the key decisions made by the Board in relation to our climate change targets
and ambitions. Pages 43-44 describe our policies and governance processes related to climate change. Page 125 describes the
discussions and decisions taken by the both the Board and its Sustainability Committee in the year.
Climate Change Report: Page 35 gives further details on the Group’s climate change policy approach, including references to our
industry association memberships. Page 37 describes the Board’s climate change capability.
b) Describe management’s
role in assessing and
managing climate-related
risks and opportunities.
Integrated Annual Report: Page 14 describes the insights the chief executive and senior management take into account when
formulating the Group’s long term strategy. Climate change considerations are included within the material matters (pages 16-17), our
analysis of global trends (pages 18-19), our capital allocation decisions (pages 58-59) and within our principal risks (pages 60-67).
Pages 43-44 describe our policies and governance processes related to climate change, including climate-related targets within
executive remuneration. Pages 146–150 of the Remuneration Report detail progress against climate-related targets and the impact on
executive remuneration in the year.
Climate Change Report: Page 35 gives further details on the Group’s climate change policy approach, including references to our
industry association memberships, as well as an overview of governance and management systems related to climate change.
Page 37 identifies management responsible for the oversight and delivery of the Group’s climate change goals and ambitions and
details the role of the Group’s Climate Change Steering Committee.
Strategy
Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy and financial
planning where such information is material.
Recommended disclosures
References
a) Describe the climate-related
risks and opportunities the
organisation has identified
over the short, medium, and
long term.
Integrated Annual Report: Page 18 describes the potential impacts of climate change on both Anglo American and the mining industry,
as well as the opportunities the Group believes it can realise through its strategic choices. Pages 24-29 describe the Group’s portfolio
strategy and how that has been influenced by the threat of climate change. Pages 36-37 describe the technological innovations being
delivered across the Group to reduce energy and water consumption and page 40 describes the efforts of our Marketing business
to deliver products that help enable our customers to achieve their climate change ambitions. The principal risks related to climate
change and water are described on pages 60-67.
Climate Change Report: Pages 15-19 describe the transitional and physical impacts we believe climate change will have on
our business.
2020 CDP Climate Response: Further detailed analysis of our risks and opportunities is available in our 2020 CDP responses to
questions C 2 risks and opportunities.
Integrated Annual Report: Pages 24-29 describe the Group’s portfolio evolution and how that has been influenced by the threat of
climate change. Pages 36-37 describe the technological innovations being delivered across the Group to reduce energy and water
consumption and page 40 describes the efforts of our Marketing business to deliver products that help enable our customers to
achieve their climate change ambitions. Pages 58-59 describe how climate change considerations are embedded in our capital
allocation decisions.
Climate Change Report: Pages 20-21 give further details on the role we believe our products have to play in a low carbon future.
Pages 22-30 describe our strategy to deliver our Scope 1, 2 and 3 GHG emission reduction ambitions.
2020 CDP Climate Response: Further detailed analysis of our risks and opportunities is available in our 2020 CDP responses to
questions C 2 risks and opportunities.
Integrated Annual Report: Page 43 gives an overview of the range of scenarios we have used to assess Anglo American’s strategic
and financial resilience, as well as an assessment of our resilience.
Climate Change Report: Pages 15-19 give a detailed overview of Anglo American’s strategic and financial resilience to a 3°C, 2°C
and 1.5°C scenario, including potential impacts on cash flow (upside and downside).
b) Describe the impact
of climate-related risks
and opportunities on the
organisation’s businesses,
strategy, and financial
planning.
c) Describe the resilience of
the organisation’s strategy,
taking into consideration
different climate-related
scenarios, including a 2°C
or lower scenario.
102
Anglo American plc Integrated Annual Report 2021Strategic Report
Risk management
Disclose how the organisation identifies, assesses, and manages climate-related risks.
Recommended disclosures
References
a) Describe the organisation’s
processes for identifying
and assessing climate-
related risks.
Integrated Annual Report: Page 43 describes our approach to climate-related risk. Pages 60-67 describe the Group’s risk identification
process and has more detail on climate change and water, both considered principal risks.
Climate Change Report: Pages 13-14 describe our understanding, assessment and management of climate-related risks.
CDP Climate Response 2020: Question C2.2, processes for identifying and assessing climate-related risks.
b) Describe the organisation’s
processes for managing
climate-related risks.
Integrated Annual Report: Page 43 describes our approach to climate-related risk. Pages 60-67 describe the Group’s principal risks
and have more detail on climate change and water, and how we manage and mitigate those risks. Our Portfolio (pages 22-29) and
Innovation (pages 30-49) sections of this report provide detail on the strategic portfolio choices we have made and the technological
innovations we are delivering across the Group to reduce energy and water consumption.
Climate Change Report: Pages 13-14 describe our understanding, assessment and management of climate-related risks. Page 37
identifies management responsible for the oversight and delivery of the Group’s climate change goals and ambitions and details the
role of the Group’s Climate Change Steering Committee.
CDP Climate Response 2020: Questions C2.1, C2.2 and C2.3.
c) Describe how processes for
identifying, assessing and
managing climate-related
risks are integrated into the
organisation’s overall risk
management.
Integrated Annual Report: Pages 60-67 describe the Group’s principal risks and have more detail on climate change and water, and
how we manage and mitigate those risks.
Climate Change Report: Pages 13-14 describe our understanding, assessment and management of climate-related risks. Page 35
gives an overview of governance and management systems related to climate change. P37 details the role of the Group’s Climate
Change Steering Committee.
CDP Climate Response 2020: Questions C2.1, C2.2 and C2.3.
Metrics and targets
Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.
Recommended disclosures
References
a) Disclose the metrics used
by the organisation to
assess climate-related risks
and opportunities in line
with its strategy and risk
management process.
b) Disclose Scope 1, Scope
2, and, if appropriate,
Scope 3, greenhouse gas
(GHG) emissions and the
related risks.
c) Describe the targets used
by the organisation to
manage climate-related
risks and opportunities and
performance against targets.
Integrated Annual Report: Pages 22-29 describe the Group’s portfolio strategy and how that has been influenced by the threat of
climate change. Pages 43-45 show the metrics used by the Group when assessing climate-related risks and opportunities.
Climate Change Report: Pages 20-21describe the strategic fit of the Group’s portfolio of products in a low carbon world. Pages 22-30
describe the metrics used by the Group when assessing climate-related risks and opportunities.
CDP Climate Response 2020: Questions C2.2a, C2.3a, C2.4a and C11.3a.
Integrated Annual Report: Page 45 shows our Scopes 1, 2 and 3 GHG emissions. Page 282 shows current and historical Scopes 1 and
2 emissions by business unit.
Climate Change Report: Pages 22-25 show our Scopes 1 and 2 GHG emissions and detail the ways in which we believe we will meet
our GHG reduction targets. Pages 26-30 show our Scope 3 GHG emissions and detail the ways we believe we can meet our reduction
ambition.
Integrated Annual Report: Pages 38 and 43 describe our climate-related goals and ambitions.
Climate Change Report: Pages 22-25 show our Scopes 1 and 2 GHG emissions targets. Pages 26-30 show our Scope 3 GHG
emissions reduction ambitions.
103
Anglo American plc Integrated Annual Report 2021 Streamlined energy and carbon reporting
Scope 1 emissions – Global
Scope 2 emissions – Global
Total Scopes 1 and 2 emissions – Global
Group emission intensity
Scope 3 emissions – Global*
Total Scopes 1 and 2 emissions from UK-based entities
2021
9.0
5.7
14.8
6.48
n/a
0.01
2020 Commentary
10.0 Measured in Mt CO2e
6.1 Measured in Mt CO2e
16.1 Measured in Mt CO2e
7.63 Measured in kt CO2e per tonne CuEq production
114.8 Measured in Mt CO2e
0.02 Measured in Mt CO2e
Energy use from UK-based entities
95,449,856
78,374,406 Measured in kWh
Energy use – Global**
85
81 Measured in million GJ
* Scope 3 emissions for the year ended 31 December 2021 not available at time of publication. Anglo American published its first detailed Scope 3 emissions assessment in 2019. Subsequently,
as the thinking on value chain emissions has matured, so we have continued to develop our knowledge and understanding of Scope 3 emissions. Building on our preliminary methodology, we
have identified the areas in which we could be more specific in our assessment of emissions, reducing, where practical, double counting, and reflecting the contribution that our specific activities
make to Scope 3 emissions. Throughout the process we have engaged our key stakeholders and worked with The Carbon Trust to test our thinking and alight on a methodology which we
believe provides us with the most complete, transparent and granular assessment of our Scope 3 emissions. See pages 26–30 of our Climate Change Report 2021 for more details.
** Global energy use is presented in million GJ as this is the measurement the Group uses internally. The equivalent energy use figure in kWh is 23,557,666,458 (2020: 22,597,826,595 kWh).
Further information:
Disclosure of our energy and Scopes 1, 2 and 3 emission reduction
targets can be found on page 43.
Disclosure of the principal energy efficiency initiatives deployed by the
Group to meet those targets can be found on page 43.
Methodologies used to calculate energy use and emissions data can
be found on pages 268–269.
Assurance of data:
As a member of the International Council on Mining and Metals (ICMM),
Anglo American is committed to obtaining specific assurance over
specified assertions related to the Sustainability Report, including data
related to GHG emissions and energy use.
IBIS ESG Consulting Africa (Pty) Ltd (IBIS) was commissioned by
Anglo American to conduct an independent third-party assurance
engagement in relation to its Sustainability Report for the year
ended 31 December 2021. This data has been reproduced in the
Anglo American plc Integrated Annual Report, 2021.
See pages 71-72 of the Anglo American plc Sustainability Report for
more details on the assurance process and conclusions.
→ For more information, see our Sustainability Report 2021
www.angloamerican.com/sustainability-report-2021
104
Anglo American plc Integrated Annual Report 2021Strategic Report Governance
This section of the Integrated Annual Report provides
an overview of the means by which the Company
is directed and controlled. The Board is there to
support and challenge management and to ensure
that we operate in a manner that promotes the long
term success of Anglo American. Over the next few
pages we describe the ways in which we seek to
achieve this.
Contents
106 Chairman’s introduction
108 Directors
112 Executive management
114 Board roles and responsibilities
116 Board operations
117 Board activity
122 Stakeholder engagement
124 Sustainability Committee report
126 Nomination Committee report
128 Audit Committee report
135 Directors’ remuneration report
142 Directors’ remuneration policy
146 Annual report on directors’ remuneration
162 Statement of directors’ responsibilities
162 Responsibility statement
Anglo American plc Integrated Annual Report 2021
105
Chairman’s introduction
“It is the Board’s duty to ensure our
governance systems are robust
and have the flexibility to match
the evolving expectations of
shareholders and society.”
This section of the Integrated Annual Report
provides an overview of the means by which
the Company is directed and controlled.
The Board is there to support and challenge
management and to ensure that we operate in
a manner that promotes the long term success
of Anglo American. Over the next few pages
we describe the ways in which we seek to
achieve this.
Board composition
We made a number of changes to the non-executive membership of
the Board in 2021 as we continually refresh its composition. In carrying
out such ongoing Board refreshment, which is beneficial in itself in
bringing new perspectives to the Board, we strive to maintain the right
balance of experience, skills, continuity and diversity required to be
successful. In 2021, we also announced our next chief executive, after
leading a rigorous succession planning and selection process.
I was pleased to welcome three new non-executive directors to
the Board – Elisabeth Brinton joined the Board on 1 March 2021,
Hilary Maxson joined the Board on 1 June 2021, and Ian Tyler was
appointed with effect from 1 January 2022. Elisabeth’s international
career and experience of developing clean energy strategies aligned
with climate change reduction, with a clear commercial focus on the
potential for digital technologies, bring additional and highly relevant
insights to our Board discussions. Hilary contributes a combination of
varied experience spanning finance, the capital markets, energy and
technology gained across her executive career in the United States,
Europe, Africa and Asia. Ian brings a wealth of boardroom experience
spanning a number of industrial sectors, including as chair of audit
and remuneration committees, and a distinguished executive career.
We look forward to the insights that he will bring to the Board.
At our upcoming Annual General Meeting (AGM) in April 2022,
Anne Stevens and our senior independent director Byron Grote will
be stepping down from the Board, having both served for nine years.
I would like to reiterate my thanks to Anne and Byron for their extensive
contributions to the Board and the committees they chair and on which
they serve. They have both carried out their service to the Board to the
highest standard and with utmost dedication.
At the conclusion of our AGM, Ian Tyler will succeed Anne Stevens as
chair of the Remuneration Committee, and Hilary Maxson, who joined
the Audit Committee on her appointment to the Board, will succeed
Byron Grote as chair of the Audit Committee. In February 2022, we
announced that Ian Tyler will succeed Byron Grote as our senior
independent director.
In November 2021, we announced that Duncan Wanblad will succeed
Mark Cutifani as chief executive in 2022. After nine years in role, Mark
will retire as chief executive and step down from the Board at our AGM
in April 2022. Following a rigorous global process, the Board concluded
that Duncan Wanblad is the stand-out successor to Mark, bringing his
30 years of international mining experience and deep understanding of
Anglo American, its culture and its context. Duncan will join the Board as
chief executive at the conclusion of the AGM on 19 April 2022.
Mark is a truly inspiring and authentic leader who has led the
transformation of the Group’s performance and prospects, serving
Anglo American and all its stakeholders well. On behalf of the Board,
management and employees, I would like to thank Mark for his enduring
commitment and dedication over almost a decade at the helm.
At the date of this report, 39% of the 13 Board directors are female, two
are directors of colour, and five different nationalities are represented,
bringing experience from all of our major markets. We anticipate that
future appointments will, as a whole, continue to support the Board’s
diversity aims.
Global Workforce Advisory Panel
The Board enthusiastically embraces the board-workforce engagement
recommendations contained in the UK Corporate Governance Code.
106
Anglo American plc Integrated Annual Report 2021Governance Anglo American’s Global Workforce Advisory Panel (the Panel) was
established in 2019, currently comprises 11 employees drawn from
across our business, and is chaired by our senior independent director,
Byron Grote. The Panel enables the Board to better understand
and take into account the views of the workforce, and how the
Group’s culture, Purpose and Values are embedded throughout the
organisation. Since its inception, the Panel has met on five occasions,
discussing a broad range of topics. In 2021, the Panel held two virtual
meetings to discuss a number of topics, including Anglo American’s
approach to building psychological safety in the workplace, and the
Group’s ongoing response to the Covid-19 pandemic, focusing on
health and wellness. The Board and I continue to be pleased with the
quality and the richness of the feedback we received from the Panel
and look forward to its continued insights.
From 19 April 2022, the Board has designated Marcelo Bastos
to succeed Byron Grote as Panel chair. On behalf of the Board,
management and employees, I would like to commend Byron for
his tireless commitment in chairing and engaging with the Panel.
→ For more information on the Panel and the ways in which we currently
engage with our workforce:
See pages 122-123
Board effectiveness
Every board and every individual can benefit and improve from the
receipt of constructive feedback, and this Board and its directors are
no exception. Annually, the Board undertakes a rigorous review of
its effectiveness and performance, and that of its committees and
individual directors. At least every three years, the review is facilitated
by an external third party that interviews the directors and senior
management to form an objective opinion on the performance of the
Board and its members. In 2021, an externally facilitated effectiveness
review of the Board, its committees and each of the directors was
undertaken. The process used and the results of the external review
are described in detail on pages 120-121. I am pleased to report
that the overall conclusion of the external review is that the Board and
committees continue to be effective and function well. Of course, there
is always room for improvement and each committee and the Board
itself are developing action plans to ensure that we address the points
raised by the evaluations.
The operation of the Board in 2021
The Board has continued to operate effectively throughout
2021, notwithstanding the ongoing challenges presented by the
pandemic. The Board had been conducting its meetings virtually
since March 2020, although I am pleased that we were able to
resume partial physical attendance for some directors in the second
half of 2021. We have also managed to ensure new directors’
onboarding programmes have continued as planned, albeit in a
virtual environment, and the virtual format of meetings has afforded
the Board greater opportunities to engage with each other, with
management and with employees.
During 2021, for the second year in a row, it was unfortunately not
possible for the Board to visit our operations as a group. We anticipate
that in-person Board site visits will resume in 2022 as global travel
restrictions are eased, and I look forward to those opportunities for the
Board to directly engage with management and employees at our
operations, and to meet with local stakeholders.
Committee governance
Starting on page 124, each of the Board committee chairs presents a
report on the activities of their committee during 2021. The effective
and efficient operation of the committees and their interaction with the
Board are vital to ensure that all matters receive the necessary attention
in a timely manner. I am grateful to the members and the chairs of those
committees in particular for their commitment and the work that they do
throughout the year in this regard.
Compliance with the UK Corporate Governance Code
The Board supports the principles and provisions of the UK
Corporate Governance Code (the Code) issued by the Financial
Reporting Council (FRC), which is available on the FRC’s website
(www.frc.org.uk). The principles and provisions of the Code have
applied throughout the financial year ended 31 December 2021.
It is the Board’s view that the Company has complied throughout
the year with the Code, with the exception of Provision 38 which
relates to pension contribution rates for executive directors. The
Group’s position in respect of this matter is detailed on page 144.
The ways in which the Code has been applied can be found on
the following pages:
Code section and where to find details:
Section 1: Board leadership and company purpose
Further detail on how the Board promotes the long term success
of the Group is provided in the Strategic Report on pages 2-104.
Relations with shareholders are described on page 123. For the
ways in which the Board engages with its key stakeholders, see
page 15 of our Strategic Report and our Section 172 statement
on page 20, and the Stakeholder engagement section on pages
122-123 of this report. Our whistleblowing programme is described
on page 134.
Section 2: Division of responsibilities
Pages 108-115 give details of the Board and executive
management and the Board governance structure.
Section 3: Composition, succession and evaluation
The processes we followed in relation to, and details of the findings
of, the external effectiveness review of the Board and committees
are described on pages 120-121. The work of the Nomination
Committee is illustrated on pages 126-127.
Section 4: Audit, risk and internal control
The report of the Audit Committee is found on pages 128-134, with
further detail on the Group’s principal risks to the business in the
Strategic Report on pages 60-67.
Section 5: Remuneration
The Group’s remuneration policy and the report of the
Remuneration Committee are found on pages 135-161.
2022 Annual General Meeting
I am pleased that our 2022 AGM will be held as a hybrid meeting
for the first time, which I hope will facilitate greater engagement with
shareholders at a time when physical attendance remains challenging
for some. Shareholders will be welcome to attend, vote, raise questions
and be heard both physically in the room and via the virtual platform.
The Board recognises the importance of the AGM as an opportunity
for shareholders to engage with the Board and provide feedback. This
year, we are putting our Climate Change Report to shareholders for an
advisory vote for the first time because we appreciate the significance
to our shareholders and broader stakeholders of our approach to
climate change, and the importance of providing a forum that allows
feedback and discussion on that. Whilst the vote is non-binding and
the Board retains ultimate responsibility for our strategy, shareholder
feedback is important to the development and implementation of our
climate change response.
I hope you find this report useful and informative. I look forward to
engaging with as many of you as possible at our 2022 AGM, in person
or virtually, and would encourage you to vote your shares even if you
cannot attend in person, so that we gain a better understanding of the
views of our shareholders as a whole.
Stuart Chambers
Chairman
107
Anglo American plc Integrated Annual Report 2021 Directors
Stuart Chambers (65)
Chairman
SN
Mark Cutifani (63)
Chief Executive
S
Stephen Pearce (57)
Finance Director
Tony O’Neill (64)
Technical Director
S
108
Group plc and Associated British Ports Holdings
plc. Stuart’s executive career included 13 years at
Pilkington plc and its subsequent parent company
Nippon Sheet Glass until 2010, in a number of
executive roles and ultimately as chief executive of
both companies. Prior to that, he gained 10 years of
sales and marketing experience at Mars Corporation,
following 10 years at Shell as a chemical engineer.
Current external appointments
Member of the UK Takeover Panel, and a Visiting
Fellow of Saïd Business School, Oxford University.
Nationality
British
Mark was previously CEO of AngloGold Ashanti
Limited, a position he held from 2007-2013. Before
joining AngloGold Ashanti, Mark was COO at Vale
Inco where he was responsible for Vale’s global
nickel business. Prior to this he held senior executive
positions with the Normandy Group, Sons of Gwalia,
Western Mining Corporation, Kalgoorlie Consolidated
Gold Mines, and CRA (Rio Tinto).
Current external appointments
Independent director of TotalEnergies SE and a
member of the board of trustees of The Power of
Nutrition, an independent charitable foundation.
Nationality
Australian
of managing director and CEO of Southern Cross
Electrical Engineering Ltd and was CFO of Alinta
Ltd. Stephen previously served as a non-executive
director of Cedar Woods Properties Ltd.
Current external appointments
Non-executive director of BAE Systems plc.
Nationality
Australian
Qualifications: BSc (Applied Physics),
PhD Business Administration, FIChemE
Appointed: 1 September 2017 and as Chairman
on 1 November 2017
Skills and experience
Stuart contributes to Anglo American significant
global executive and boardroom experience across
the industrial, logistics and consumer sectors.
Until 31 March 2021, Stuart served as chairman of
Travis Perkins plc, having joined the board as a non-
executive director in 2017. He previously served as
chairman of ARM Holdings plc and Rexam plc until
2016; and in his non-executive career on the boards
of Tesco PLC, Manchester Airport Group plc, Smiths
Qualifications: BE (Mining-Hons), FAusIMM, FREng,
CEngFIMMM, DBA (Hon), DoL (Hon)
Appointed: 3 April 2013 as Chief Executive
Skills and experience
Mark has contributed to Anglo American over
40 years’ experience of the mining industry across
a wide range of geographies and commodities.
He will step down from the Board at the Annual
General Meeting (AGM) on 19 April 2022 and will be
succeeded by Duncan Wanblad as chief executive.
Mark is chairman of the Group Management
Committee (GMC), is a non-executive director of
Anglo American Platinum and chairman of De Beers.
Qualifications: BBus (Acc), FCA, FGIA FCG, MAICD
Appointed: 24 April 2017 as Finance Director
Skills and experience
Stephen contributes to Anglo American over
20 years of public company director experience
and more than 30 years’ experience in the mining,
oil and gas, and utilities industries.
Stephen became a member of the GMC in
January 2017 and joined the Board in April 2017.
He is also a non-executive director of De Beers,
and until July 2021 was a non-executive director
of Anglo American Platinum. Before joining
Anglo American in 2017, Stephen served as CFO
and an executive director of Fortescue Metals Group
from 2010 to 2016. Prior to that, he held the positions
Qualifications: MBA, BASc (Eng), FREng, FIMMM
Appointed: 22 July 2015 as Technical Director
Skills and experience
Tony contributes to Anglo American over 40 years’
experience in the mining industry across numerous
geographies, and commodities spanning iron ore,
copper, nickel and gold.
Tony joined Anglo American in September 2013
and has responsibility for the Technical and
Sustainability function. He is a member of the GMC
and a non-executive director of De Beers. Until
July 2021, Tony was a non-executive director of
Anglo American Platinum.
Tony was previously Executive Vice President –
Business and Technical Development at AngloGold
Ashanti Limited from 2008, where he served as joint
acting CEO during 2013.
His extensive career in the mining industry includes
roles as Operations Executive at Newcrest Mining
and Head of the Gold Business at Western Mining
Corporation.
Current external appointments
None
Nationality
Australian
Anglo American plc Integrated Annual Report 2021Governance Committee member key
A Audit Committee
N Nomination Committee
R Remuneration Committee
S Sustainability Committee
Chair of Committee
Member of Committee
Byron Grote (73)
Senior Independent Director
A
N R
Qualifications: PhD Quantitative Analysis
Appointed: 19 April 2013 and as Senior
Independent Director on 1 January 2019
chief financial officer during much of that period.
He was previously a non-executive director of
Unilever NV and Unilever PLC.
Skills and experience
Byron has 35 years of experience across the natural
resources sector. He contributes to Anglo American
broad business, financial and board experience in
numerous geographies. Byron will step down from
the Board at the AGM on 19 April 2022.
Byron is designated by the Board to chair and
engage with Anglo American’s Global Workforce
Advisory Panel, established in 2019. Byron served on
the BP plc board from 2000 until 2013 and was BP’s
Current external appointments
Deputy chairman of the supervisory board of
AkzoNobel NV, senior independent director
of Tesco PLC, and a non-executive director
of Standard Chartered PLC. A member of the
European Audit Committee Leadership Network
and an emeritus member of the Cornell University
Johnson Advisory Council.
Nationality
American/British
Ian Ashby (64)
Independent Non-executive Director
Qualifications: B Eng (Mining)
Appointed: 25 July 2017
S
N R
Skills and experience
Ian contributes to Anglo American substantial
knowledge of the minerals industry across a
wide range of commodities, combined with
global operating, major projects and capital
development experience.
Ian served as President of Iron Ore for BHP Billiton
between 2006 and 2012, when he retired from the
company. During his 25-year tenure with BHP Billiton,
he held numerous roles in its iron ore, base metals
and gold businesses in Australia, the US and Chile,
as well as projects roles in the corporate office.
Marcelo Bastos (59)
Independent Non-executive Director
Qualifications: MBA, BSc (Hons) Mech Eng
Appointed: 1 April 2019
N S
Skills and experience
Marcelo contributes to Anglo American more than
30 years of operational and project experience in the
mining industry across numerous commodities and
geographies, particularly in South America. He will
succeed Byron Grote as chair of Anglo American’s
Global Workforce Advisory Panel on 19 April 2022.
Marcelo served as chief operating officer of MMG
between 2011 and 2017, responsible for the group’s
copper, zinc, silver, lead and gold operations, and
sales and marketing. In this role, he also led the
planning and development of the Las Bambas
copper mine in Peru. Prior to MMG, Marcelo served
Elisabeth Brinton (54)
Independent Non-executive Director
Qualifications: BA Hons
Appointed: 1 March 2021
S
Skills and experience
Elisabeth contributes to Anglo American experience
of developing clean energy strategies aligned with
climate change reduction, and a clear commercial
focus on the potential for digital technologies.
On 28 February 2022, Elisabeth joins Microsoft as
a group corporate vice president and member of
the CEO’s extended senior executive leadership
team, running their new global sustainability cloud
business. Until January 2022, she was EVP of Global
Renewables & Energy Solutions at Royal Dutch
Shell plc, joining in 2018 from AGL Energy, one of
Ian began his nearly 40-year mining career as an
underground miner at the Mount Isa Mines base
metals operations in Queensland, Australia.
Ian previously served as chairman of
Petropavlovsk plc, and a non-executive director of
Alderon Iron Ore Corp, Nevsun Resources Ltd, New
World Resources PLC and Genco Shipping & Trading,
and in an advisory capacity with Apollo Global
Management and Temasek.
Current external appointments
Independent director of IAMGOLD Corporation.
Nationality
Australian
as president of the BHP Mitsubishi Alliance joint
venture (metallurgical coal), president of BHP’s
Cerro Matoso nickel operation in Colombia, president
of nickel Americas, and president of Nickel West in
Australia. He had a 19-year career at Vale until 2004
in a range of senior positions in Brazil. Marcelo is a
former non-executive director of Golder Associates
and Oz Minerals Ltd.
Current external appointments
Non-executive director of Aurizon Holdings Ltd and
Iluka Resources Ltd.
Nationality
Brazilian/Australian
Australia’s largest energy companies, where she
led its commercial new energies business and built
Australia’s largest portfolio of renewables at the
time in partnership with the A$3 billion Powering
Australia Renewables Fund. Prior to that, Elisabeth
spent 15 years in a number of senior technology
roles in the US, leading the development of cloud-
based customer solutions and broader digital
transformations for the energy industry, having begun
her career as a successful entrepreneur.
Current external appointments
None
Nationality
American
109
Anglo American plc Integrated Annual Report 2021 Directors continued
Hilary Maxson (43)
Independent Non-executive Director
Qualifications: MBA, B.S. (Applied Economics &
Management)
Appointed: 1 June 2021
A
Skills and experience
Hilary contributes to the Board experience in
business, spanning finance, the capital markets,
energy and technology, gained across her executive
career in the US, Europe, Africa and Asia.
Hilary is CFO of Schneider Electric and a member
of its executive committee, based in Paris. She
previously served as CFO of its largest business unit,
Energy Management, having joined the company
in 2017 as CFO of the Building and IT business,
situated in Hong Kong. Prior to joining Schneider
Hixonia Nyasulu (67)
Independent Non-executive Director
Qualifications: BA Hons
Appointed: 1 November 2019
N R
Skills and experience
Hixonia contributes to Anglo American significant
global board experience drawn from the natural
resources, financial services and consumer
industries.
Hixonia has previously served as a non-executive
director on the boards of Sasol, including five years
as chairman, Nedbank, Unilever NV and Unilever
PLC. She has also served as a member of the
South Africa advisory board of J.P. Morgan and on
the board of the Development Bank of Southern
Africa. In 2004, Hixonia founded Ayavuna Women’s
Nonkululeko Nyembezi (61)
Independent Non-executive Director
Qualifications: MBA, MSc, BSc
Appointed: 1 January 2020
A S
Skills and experience
Nonkululeko contributes to Anglo American
great breadth of technical and strategic insights,
with a background in engineering and extensive
experience spanning mining, steel, financial
services and technology in South African and global
organisations.
Until June 2020, Nonkululeko was chief executive
of Ichor Coal N.V. She previously served as chair of
Alexander Forbes Group and as a non-executive
director on the boards of Old Mutual plc, Exxaro
Resources, Universal Coal plc and Denel, and as
CEO of ArcelorMittal South Africa. In her earlier
Anne Stevens (73)
Independent Non-executive Director
Qualifications: BSc, PhD
Appointed: 15 May 2012
Skills and experience
Anne contributes to Anglo American a wealth of
experience and wide-ranging commercial acumen
from a number of global industries in North, Central
and South America. She will step down from the
Board at the AGM on 19 April 2022.
Anne was chief executive of GKN plc from November
2017 to April 2018. She was formerly chairman and
CEO of SA IT Services from 2011 until her retirement
in December 2014. From 2006 to 2009, Anne
was chairman and CEO of Carpenter Technology
Corporation. Prior to this, she was COO for the
R
A N
110
Electric, Hilary spent 12 years with AES in a variety
of finance, M&A and business development roles,
based across the US, Cameroon and the Philippines,
ultimately as CFO for Asia. Hilary began her career at
Bank of America and Citigroup, in New York.
Current external appointments
Non-executive director of AVEVA Group plc
(Schneider Electric is the majority shareholder).
Nationality
American
Investments (Pty) Ltd, a female-controlled investment
holding company. Prior to that, she ran T.H. Nyasulu
& Associates, a strategy, marketing and research
company, after starting her career at Unilever in
South Africa. Hixonia was a founder member of
the Advisory Group formed by the World Economic
Forum to set up a community of global chairs.
Current external appointments
Senior independent director of Vivo Energy plc.
A member of the board of AGRA, and chairs the
Africa Economic Challenge Fund, both not-for-profit
organisations.
Nationality
South African
career, Nonkululeko was chief officer of M&A for
the Vodacom group and chief executive officer
of Alliance Capital, the then local subsidiary of a
New York-based global investment management
company.
Current external appointments
Chairman of JSE Limited (stepping down in May
2022) and Macsteel Service Centres SA, and a non-
executive director of Standard Bank of South Africa
Limited.
Nationality
South African
Americas at Ford Motor Company until 2006, the
culmination of her 16-year career with the company.
Her early career was spent at Exxon Corporation,
where she held roles in engineering, product
development, and sales and marketing. Anne is a
former non-executive director of Lockheed Martin
Corporation, GKN plc and XL Catlin.
Current external appointments
Non-executive director of Aston Martin Lagonda
Global Holdings plc and Harbour Energy plc.
Nationality
American
Anglo American plc Integrated Annual Report 2021Governance Joined the Board in January 2022:
Ian Tyler (61)
Independent Non-executive Director
Qualifications: BCom, ACA
Appointed: 1 January 2022
A R
Skills and experience
Ian contributes to Anglo American a wealth of
boardroom and financial experience spanning
a number of industrial sectors, including as chair
of remuneration and audit committees. He will
succeed Anne Stevens as chair of the Remuneration
Committee, and Byron Grote as the senior
independent director, on 19 April 2022.
executive career was at Balfour Beatty plc, a global
infrastructure business, joining as finance director
in 1996 and serving as chief executive from 2005
to 2013.
Current external appointments
Chairman of Vistry Group PLC (formerly Bovis
Homes Group), and a non-executive director of BAE
Systems plc (stepping down from both roles in May
2022). Chairman of Amey and Affinity Water, both
privately-held businesses.
Ian is the former chairman of Cairn Energy PLC, and
a former non-executive director of VT Group plc and
Cable & Wireless Communications Plc, amongst
other non-executive board roles. Ian’s senior
Nationality
British
Joining the Board as Chief Executive in April 2022:
Duncan Wanblad (55)
Group Director – Strategy and
Business Development and
Chief Executive designate
Qualifications: BSc (Eng) Mech, GDE
(Eng Management)
Member of the GMC since October 2009 and will
join the Board as Chief Executive on 19 April 2022
Skills and experience
Duncan will bring to the Board 30 years of
international mining experience and a deep
understanding of the Anglo American Group, its
culture and context.
Duncan was appointed Group Director – Strategy
and Business Development in 2016, also serving as
CEO of our Base Metals business from 2013 to 2019.
He is a non-executive director of Kumba Iron Ore
and De Beers, and chairs the Anglo American
Foundation.
Between 2009 and 2013, Duncan held the position
of Group Director – Other Mining and Industrial,
responsible for a global portfolio of mining and
industrial businesses for disposal or turnaround to
maximise shareholder value. He was appointed CEO
of our Copper operations in 2008, prior to which
he served as joint interim CEO of Anglo American
Platinum in 2007 (having served on the board
since 2004). From 2004 to 2007, Duncan was
Executive Director of Projects and Engineering at
Anglo American Platinum. Duncan began his career
at Johannesburg Consolidated Investment Company
Limited in 1990.
Nationality
South African
Board experience and diversity
Professional experience
Percentage of Board members
The broad range of skills and experience and the diversity of our Board
Mining
54%
as at the date of this report are illustrated below.
Engineering
54%
62%
100%
Percentage of Board members
54%
Professional experience
Large project management
Construction in extractive industries
Mining
Finance
Engineering
Marketing (downstream) or commodity trading
Large project management
Safety, health, environment
Construction in extractive industries
Digital technology
Finance
Climate change or clean energies
Marketing (downstream) or commodity trading
External quoted boardroom experience
Safety, health, environment
Previous chief executive
Digital technology
Climate change or clean energies
External quoted boardroom experience
Previous chief executive
Regional experience(1)
Percentage of Board members
North America
South America
Regional experience(1)
China
Percentage of Board members
Australia
North America
Southern Africa
South America
India
China
(1)
Australia
In the regions in which the Group operates or has major markets in.
Southern Africa
India
(1)
In the regions in which the Group operates or has major markets in.
92%
100%
54%
54%
69%
62%
69%
92%
85%
54%
46%
69%
31%
69%
77%
85%
62%
46%
31%
77%
62%
100%
92%
62%
62%
100%
46%
92%
46%
62%
15%
62%
46%
46%
15%
Gender diversity
39%
Board nationalities
1
1
2
2
3
61%
4
Male (8)
Female (5)
Australian
American
South African
British
American/
British
Brazilian/
Australian
111
Anglo American plc Integrated Annual Report 2021
Executive management
Group Management Committee members
Mark Cutifani
Chief Executive
Member since
April 2013
Stephen Pearce
Finance Director
Member since
January 2017
Tony O’Neill
Technical Director
Member since
September 2013
Duncan Wanblad
Group Director –
Strategy and Business
Development and
Chief Executive
designate
Member since
October 2009
→ For full biographical details of the executive
directors and our chief executive designate:
See pages 108-111
112
Didier Charreton (58)
Group Director – People and Organisation
Bruce Cleaver (56)
CEO of De Beers Group
Qualifications: MSc
Member since: December 2015
Qualifications: BSc, LLB, LLM
Member since: January 2016
Skills and experience
Didier joined Anglo American in December 2015.
He has held a number of senior HR roles across
his 30-year career. From 2007 until 2014, Didier
was chief human resources officer for Baker
Hughes, the US-based oilfield services company.
Prior to 2007, he was HR director at Coats plc
in the UK, and before that held a number of HR
roles at Schlumberger, based in the US, Argentina,
Venezuela and France.
Skills and experience
Bruce has served as CEO of De Beers Group
since July 2016. He has previously served
as Group Director, Strategy and Business
Development at Anglo American, as well as
Executive Head of Strategy and Corporate
Affairs for De Beers, having joined the Group in
2005. Before joining De Beers, he was a partner
at Webber Wentzel, Africa’s largest law firm,
specialising in commercial matters.
Nolitha Fakude (57)
Group Director – South Africa
Qualifications: BA (Hons)
Member since: September 2019
Skills and experience
Nolitha was appointed Group Director –
South Africa in September 2019, and chairs
Anglo American’s South African management
board. She is a non-executive director of
Anglo American Platinum. From April 2017
to August 2019, Nolitha was an independent
non-executive director on the Board of
Anglo American plc.
A former executive director and executive
vice president of strategy and sustainability at
Sasol Limited until 2016, Nolitha has held various
other senior executive positions in retail and
financial services. She has previously served on
boards as a non-executive director in the mining,
manufacturing and retail sectors.
Nolitha is a non-executive director of JSE Limited
and is the President of the Minerals Council of
South Africa.
Ruben Fernandes (56)
CEO of Base Metals
Qualifications: MBA, MSc (Metallurgical
Engineering)
Member since: March 2019
Skills and experience
Ruben has served as CEO of Base Metals since
March 2019 and in January 2022 took on
accountability for the Group’s Iron Ore and Nickel
operations in Brazil. He previously served as CEO
of Anglo American Brazil.
Prior to joining the Group in 2012, Ruben was
head of mining at Votorantim Metals in Brazil,
responsible for projects and exploration activities
around the world, as well as operations in Peru
and Colombia. Between 2009 and 2011, he
was COO at Vale Fertilizers, responsible for
the fertiliser operations, sales and marketing.
Ruben was also CEO of Kaolin Companies –
Pará Pigments and Cadam – two subsidiaries
of Vale, between 2007 and 2009, and held
various analysis, marketing and project roles in
Vale’s Base Metals business which he joined in
1999. Between 1988 and 1998, he held several
leadership roles in the special alloys industry.
Anglo American plc Integrated Annual Report 2021Governance Anik Michaud (54)
Group Director – Corporate Relations and
Sustainable Impact
Qualifications: LL.L (Law)
Member since: March 2015
Skills and experience
Anik is Group Director – Corporate Relations
and Sustainable Impact, having joined the
GMC in 2015. She is a non-executive director of
Anglo American Platinum.
Anik’s remit includes corporate communication
(including brand and employee engagement),
international and government relations, social
performance and engagement, sustainability
integration to drive positive impact from the
Group’s Sustainable Mining Plan, and the office of
the chief executive. Anik joined Anglo American
in 2008 as Group Head of Corporate
Communication. Prior to that, she was director
of public affairs for Rio Tinto Alcan, following 10
years with the Alcan group.
Themba Mkhwanazi (52)
CEO of Bulk Commodities
Richard Price (58)
Group General Counsel and Company Secretary
Qualifications: B Eng (Chemical) Hons
Member since: August 2019
Qualifications: LL.B, BA (Hons)
Member since: May 2017
Skills and experience
Richard joined Anglo American as Group General
Counsel in May 2017 and was appointed as
Company Secretary in March 2018. Prior to
joining Anglo American, he was a partner at
Shearman & Sterling, the international law firm
working across EMEA, Asia and North America.
In private practice, Richard acted for clients
across the metals, mining, energy and financial
services sectors, among others, assisting
them with complex financing, corporate and
compliance matters.
Skills and experience
Themba was appointed CEO of Bulk
Commodities in January 2022. Prior to that, he
was CEO of Kumba Iron Ore from 2016 to 2021,
and CEO for Anglo American’s Thermal Coal
business in South Africa, having joined the Group
in 2014.
Themba has extensive experience in the
resources industry, including 18 years in his native
South Africa, as well as in the US and Australia.
Before joining the Group, Themba was managing
director for Huntsman Tioxide in South Africa
until 2007 when he was appointed COO of
Richards Bay Minerals, a joint venture between
Rio Tinto and BHP. In 2011, he was seconded to
Rio Tinto’s Australian coal business, before taking
up the role of regional general manager for the
Americas in 2012.
Seamus French served as CEO of Bulk
Commodities and Other Minerals and
a member of the GMC during the year,
before stepping down on 31 December
2021 after a 14-year career with
Anglo American.
Natascha Viljoen (51)
CEO of Anglo American Platinum
Peter Whitcutt (56)
CEO of Marketing
Qualifications: MBA, B Eng (Extractive Metallurgy)
Member since: April 2020
Qualifications: MBA, Bcom (Hons), CA (SA)
Member since: October 2009
Skills and experience
Natascha was appointed CEO of
Anglo American Platinum in April 2020. Prior to
that, she was Anglo American’s Group Head of
Processing, having joined the Group in 2014.
Before joining Anglo American, Natascha spent
six years at Lonmin, where she served on the
executive committee as EVP of Processing, also
with responsibility for several wider corporate
functions including sustainability. Prior to that, she
worked for BHP’s coal and chrome businesses
in South Africa (including as general manager
of BHP’s Klipspruit Colliery), the Modikwa joint
operation between Anglo American Platinum
and African Rainbow Minerals, and AngloGold.
Natascha began her career in 1991 at Iscor as a
trainee engineer.
Skills and experience
Peter has served as CEO of Marketing since
January 2016. He is a non-executive director of
De Beers.
Peter joined the Group in 1990 within the
Corporate Finance division. He worked on
the merger of Minorco with Anglo American
Corporation of South Africa, the listing of
Anglo American plc in 1999 and the subsequent
unwinding of the cross-holding with De Beers.
Peter was appointed Group Head of Finance in
2003, CFO of Base Metals in August 2008 and
from 2013 to 2015, he served as Group Director –
Strategy, Business Development and Marketing.
113
Anglo American plc Integrated Annual Report 2021 Board roles and responsibilities
The Board, through its role in setting the tone
from the top, provides leadership to the Group
and is collectively responsible for promoting
and safeguarding the long term success of the
business. The Board is supported by a number
of committees, to which it has delegated
certain powers.
The role of these committees is summarised below, and their
membership, responsibilities and activities during the year are detailed
on pages 124-161.
Some decisions are sufficiently material that they can only be made
by the Board as a whole. The schedule of ‘Matters Reserved for the
Anglo American plc Board’, and the committees’ terms of reference,
explain which matters are delegated and which are retained for Board
approval; these documents can be found on the Group’s website.
Senior Independent Director (SID)
Byron Grote serves as the Board’s SID.
He acts as a sounding board for the
chairman and as an intermediary between
the other directors. The SID leads the
annual review of the performance of the
chairman and is available to shareholders
on matters where the usual channels of
communication are deemed inappropriate.
Ian Tyler will succeed Byron Grote as the
SID in April 2022.
The Board
Chairman
Stuart Chambers leads the Board, ensuring it works
constructively as a team. His main responsibilities
include: chairing the Board and the Nomination
Committee and setting their agendas; Board
composition and succession planning; providing
support and counsel to the chief executive and his
team; promoting the highest standards of integrity
and governance; facilitating effective
communication between directors; effective
dialogue with shareholders and other stakeholders;
and acting as ambassador for the Group.
Independent Non-executive
Directors (NEDs)
The role of the NEDs is to support,
constructively challenge, and provide
advice to executive management;
effectively contribute to the development
of the Group’s strategy; scrutinise the
performance of management in meeting
agreed goals; and monitor the delivery of
the Group’s strategy.
Finance Director
Stephen Pearce leads the finance
function and supports the chief
executive in formulating and
implementing strategy in relation
to the financial and operational
performance of the Group.
Chief Executive
Mark Cutifani manages the Group. His main
responsibilities include: executive leadership;
formulation and implementation of the Group’s
strategy as agreed by the Board; approval and
monitoring of business plans; organisational structure
and senior appointments; business development; and
stakeholder relations. Duncan Wanblad will succeed
Mark Cutifani as chief executive in April 2022.
Technical Director
Tony O’Neill leads the Technical and
Sustainability function and supports
the chief executive in developing and
implementing strategy in relation to
mining, technology and innovation,
business performance, safety, health
and environment
Audit Committee
Oversight of financial reporting,
audit, internal control and risk
management.
Nomination Committee
Responsible for Board composition,
appointment of directors and
ensuring effective succession
planning for the Board and senior
management.
Remuneration Committee
Determines the remuneration of
executive directors, the chairman
and senior management, and
oversees remuneration policy
for all employees.
Sustainability Committee
Oversees management of
sustainability issues, including
safety, health, environment, and
social performance.
→ For more information
See pages 128–134
→ For more information
See pages 126–127
→ For more information
See pages 135–161
→ For more information
See pages 124–125
Chief Executive
Corporate Committee
Reviews corporate and ethical policies and
processes, and financial performance and
budgets at business unit level.
Group Management Committee (GMC)
Principal executive committee. Responsible for
formulating strategy, setting targets/budgets
and managing the Group’s portfolio.
Operational Committee
Responsible for driving operational best
practices across the Group and the
setting of technical standards.
Investment Committee
Responsible for making recommendations on
capital investment proposals.
Marketing Risk Committee
Responsible for evaluating, monitoring, directing and
controlling the management of risk associated with
the sales and marketing activities of the Group.
Innovation Committee
Responsible for the governance of
technology innovation projects.
114
Anglo American plc Integrated Annual Report 2021Governance
Executive structure
Independence of the non-executive directors
The Board delegates executive responsibilities to the chief executive,
who is advised and supported by the GMC. The GMC comprises the
chief executive, business unit CEOs, Group directors of corporate
functions and the Group general counsel and company secretary.
The names of the GMC members, their roles and biographical details
appear on pages 112-113.
Board composition
At the date of this report, the Board comprises 13 directors: the
chairman, chief executive, two further executive directors (our finance
director and technical director) and nine independent non-executive
directors. The roles of our directors are summarised opposite.
In 2021, Elisabeth Brinton and Hilary Maxson joined the Board as
independent non-executive directors. Ian Tyler joined the Board as an
independent non-executive director in January 2022 and, in November
2021, we announced that Duncan Wanblad will succeed Mark Cutifani
as chief executive and will join the Board at our Annual General Meeting
(AGM) in April 2022. In 2021, we also announced that Anne Stevens
and Byron Grote will step down from the Board at the 2022 AGM,
having both served for nine years.
The broad range of skills and experience our Board members
contribute to the long term sustainable success of the Group are set
out on pages 108-111. The Board is supported by the Group general
counsel and company secretary.
There is a clear separation of responsibilities at the head of the
Company between the leadership of the Board (the responsibility of
the chairman) and the executive responsibility for leadership of the
Company’s business (the responsibility of the chief executive).
Board diversity: targets of the Hampton-Alexander and
Parker reports
The Board is committed to ensuring that it has the right balance
of skills, experience and diversity and supports the targets of the
Hampton-Alexander and Parker reports on gender and ethnic
diversity. In support of these aims, in leading search processes
to appoint new directors, the Nomination Committee retains the
services of executive search firms who are accredited under
the UK Government’s Voluntary Code of Conduct for Executive
Search Firms.
At the date of this report, five (39%) of the directors are
female and two (15%) are people of colour. Five different
nationalities are represented, bringing experience from all of
Anglo American’s major markets. 85% of the Board have a
nationality or place of origin outside the UK.
The Board therefore currently exceeds the gender and ethnic
diversity targets recommended by the Hampton-Alexander and
Parker reports. At the beginning of 2021, due to fluctuations in
the size and composition of the Board as tenures expired, 30% of
the Board were female and two were directors of colour. In March
2021, following the appointment of Elisabeth Brinton, female
representation rose to 36%, further increasing to 42% by June
2021 with the appointment of Hilary Maxson. At 31 December
2021, there were five female and seven male directors serving
on the Board; this increased to eight male directors with the
appointment of Ian Tyler on 1 January 2022.
Following the AGM in April 2022, with the retirements of two
longstanding non-executive directors, the Board will reduce in
size to 11, and female members will represent 36%.
The diversity of our Board as at the date of this report is illustrated
on page 111.
At the date of this report, over two-thirds of the Board are independent
non-executive directors. The Board determines all the non-executive
directors (other than the chairman) to be independent of management
and free from any business or other relationship which could materially
interfere with their ability to exercise independent judgement. The
UK Corporate Governance Code (the Code) does not consider a
chairman to be independent due to the unique position the role holds
in corporate governance. Stuart Chambers met the independence
criteria contained in the Code when he was appointed as the Group’s
chairman in 2017.
In May 2021, Anne Stevens had served on the Board for nine years.
As disclosed in our 2020 Integrated Annual Report, the assessment
of her independence has been subjected to heightened scrutiny.
Throughout the year, the Board remained satisfied that Ms Stevens has
displayed independence of thought, mindset and judgement in her
role as a non-executive director and has continued to demonstrate
excellent stewardship as chair of the Remuneration Committee. In
April 2022, Byron Grote will have served on the Board for nine years.
Ms Stevens and Dr Grote will not be standing for re-election at the
Company’s AGM in April 2022 and will step down from the Board at
that time.
To ensure the continued effectiveness of the Board, the chairman
and the non-executive directors meet without the executive directors
present after each scheduled Board meeting. The chairman also meets
with each of the non-executive directors, at least annually. The senior
independent director (SID) engages with the other non-executive
directors without the chairman present, at least annually, to appraise
the chairman’s performance. In 2021, Dr Grote, as the SID, met with the
non-executive directors on one such occasion.
Time commitment and external appointments
The Board, through the Nomination Committee, considers annually the
time commitment expected from each of the non-executive directors to
meet the expectations of their role.
The Board acknowledges that non-executive directors have business
interests other than those of the Company. Prior to their appointment
to the Board, non-executive directors are required to declare any
directorships, appointments and other business interests to the
Company in writing. Non-executive directors are required to seek the
approval of the chairman, chief executive and Group general counsel
and company secretary, on behalf of the Board, before accepting
additional significant commitments that might affect the time they are
able to devote to their role. New appointments are then reported to the
full Board.
Currently, several of the non-executive directors hold more than two
external appointments (although some of these are not-for-profit
organisations). The Board has considered these external commitments,
taking into account the time commitment required for each role, and
is satisfied they do not impact the individual Board members’ ability to
discharge their responsibilities fully and effectively. As evidenced in the
table on page 116, in 2021 all directors attended 100% of the Board
and committee meetings that they were eligible to do so.
Executive directors are required to seek approval from the Board,
following consideration by the Nomination Committee, before
accepting an external directorship. The Board would not approve
executive directors holding more than one non-executive directorship in
a FTSE 100 company (or other equivalent publicly quoted company),
nor the chairmanship of any such company.
115
Anglo American plc Integrated Annual Report 2021 Board operations
Board information and support
All directors have full and timely access to the information required
to discharge their responsibilities fully and effectively. They have
access to the advice and services of the Group general counsel and
company secretary and his team, other members of the Group’s
management and employees, and external advisers. Directors may
take independent professional advice in the furtherance of their duties,
at the Company’s expense.
Where a director is unable to attend a Board or committee meeting,
he or she is provided with all relevant papers and information relating
to that meeting and encouraged to discuss issues arising with the
respective chairs and other Board and committee members. In 2021,
all directors attended 100% of the meetings they were eligible to attend,
as evidenced in the table below.
All non-executive directors are provided with access to papers for
each of the Board’s committees, including those who do not serve
as members of those committees. Non-executive directors regularly
attend meetings of the Board’s committees they do not serve on, at
the invitation of the respective committee chair.
Board induction and development
Following appointment and as required, directors receive training and
development appropriate to their level of experience and knowledge.
This includes the provision of a comprehensive, tailored induction
programme and individual briefings with GMC members and their
teams to provide newly appointed directors with information about the
Group’s business, culture and values, and other relevant information
to assist them in effectively performing their duties and contributing to
Board discussions.
In addition to scheduled Board operational site visits, non-executive
directors are expected to spend time at the Group’s operations to
meet management and members of the workforce. In 2021, for the
second year in a row, the Covid-19 pandemic severely constrained
opportunities for Board members to visit operations.
Highlights
– Following their appointments as independent non-executive
directors in March and June 2021 respectively, Elisabeth Brinton
and Hilary Maxson undertook tailored and comprehensive
onboarding programmes.
– Despite global travel restrictions as a result of Covid-19, inductions
for Ms Brinton and Ms Maxson have been extensive and conducted
using videoconferencing.
– In June 2021, all Board members joined a Sustainability Committee
‘deep dive’ on Anglo American’s approach to social performance,
led by Mark Cutifani, Anik Michaud and members of the Corporate
Relations and Sustainable Impact team.
– In November 2021, as part of his induction programme ahead of his
appointment as a non-executive director in January 2022, Ian Tyler
attended the Board’s two-day strategy meeting.
– In November 2021, Ian Ashby visited our Crop Nutrients’ Woodsmith
project in the UK, and spent two days with management discussing
project development, as well as attending sessions to discuss the
strategy to make the Woodsmith project a ‘mine of the future’.
Board and committee meetings 2021 – frequency and attendance of members
The table below shows the attendance of directors at meetings of the Board and committees during the year. Attendance is expressed as the
number of meetings attended out of the number eligible to attend. As demonstrated below, all directors attended 100% of the meetings they were
eligible to do so. Due to ongoing travel restrictions as a result of the Covid-19 pandemic, all Board and committee meetings in 2021 were either
held remotely, or a hybrid with a number of attendees joining in person at the Group’s London corporate office, with other attendees joining by
videoconference.
Independent
Board
Board Strategy
Audit
Nomination(4)
Remuneration(5)
Sustainability
Stuart Chambers
Mark Cutifani
Stephen Pearce
Tony O’Neill
Ian Ashby
Marcelo Bastos
Elisabeth Brinton(1)
Byron Grote
Hilary Maxson(2)
Hixonia Nyasulu(3)
Nonkululeko Nyembezi
Anne Stevens
n/a
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
6/6
6/6
6/6
6/6
6/6
6/6
5/5
6/6
4/4
6/6
6/6
6/6
1/1
1/1
1/1
1/1
1/1
1/1
1/1
1/1
1/1
1/1
1/1
1/1
–
–
–
–
–
–
–
4/4
2/2
–
4/4
4/4
6/6
–
–
–
6/6
6/6
–
6/6
–
6/6
–
6/6
–
–
–
–
7/7
–
–
7/7
–
6/6
–
7/7
4/4
4/4
–
4/4
4/4
4/4
2/2
–
–
–
4/4
–
(1) Appointed to the Board 1 March 2021 and as a member of the Sustainability Committee on 1 September 2021.
(2) Appointed to the Board and as a member of the Audit Committee on 1 June 2021.
(3) Appointed as a member of the Remuneration Committee on 23 February 2021. Attended one meeting of the Committee prior to her appointment, at the invitation of the chair.
(4) The number of Nomination Committee meetings included three scheduled meetings, with additional special-purpose meetings to consider executive succession planning. All the independent
non-executive directors (NEDs) were invited to attend Nomination Committee meetings in March, June, July and October, at the invitation of the chairman, where the topic of discussion was the
chief executive succession process. An additional Nomination Committee update call was held in July, to which all NEDs were invited. Attendance by NEDs who are not Committee members is
not reflected in the table above.
(5) The number of Remuneration Committee meetings included three scheduled meetings, with additional special-purpose meetings to consider executive remuneration.
(6) Ian Tyler attended the 2021 Board Strategy meeting, and the Remuneration Committee meeting in December prior to his appointment on 1 January 2022, at the invitation of the
respective chairs.
116
Anglo American plc Integrated Annual Report 2021Governance Board activity
The Board is responsible for the overall
conduct of the Group’s business, its strategic
direction and its culture, ensuring these are
aligned to our Purpose and Values. The
chairman is responsible for setting the agenda.
The agenda of matters discussed by the Board
in 2021 is described and explained below.
The Board is scheduled to meet at least six times a year but meets
more often when circumstances warrant this. In addition, the Board
dedicates a full meeting, usually held over two days, to the discussion
of the Group’s strategy, addressing critical short, medium and long term
issues. This augments the discussion of strategic topics at every Board
meeting. Annually, each of the Group’s business unit heads presents to
the Board in some depth on key aspects of their business. In 2021, the
Board met on six occasions. In 2022, the Board has agreed to increase
the number of scheduled meetings to seven.
In between meetings, the Board receives regular updates from the chief
executive on operational and business performance.
Board and non-executive directors’ visits to Group
operations in 2021
Undertaking regular site visits allows the directors to gain a better
understanding of the Group’s operations and culture, and affords Board
members the opportunity to meet and engage with a diverse cross-
section of employees.
During 2021, for the second year in a row, the Covid-19 pandemic
severely constrained what the Board was able to do physically on
the ground. It was not possible for the non-executive directors, Board
or Sustainability Committee to visit our operations as a group. We
anticipate that in-person Board site visits will resume in 2022 as global
travel restrictions are eased, ensuring that the safety and well-being of
our Board and employees are always prioritised.
In November 2021, our Sustainability Committee chair Ian Ashby was
able to visit the Group’s Woodsmith crop nutrients project in north east
England, accompanied by our technical director, Tony O’Neill, and
Tom McCulley, now CEO of Crop Nutrients. The directors visited the mine
site, held discussions on the sinking methodologies being implemented
and discussed the transition to mine operations. All required safety
protocols were observed and adhered to, including any relevant
additional Covid-19 controls.
Principal activities during the year
Topic and link to pillars of value
Activities
Outcomes/decisions
Safety and health
Fatal incidents, Total Recordable Case
Frequency Rate, health and medical
incidents
→ Further reading
Pages 52-56
Environment
Environmental incidents, energy and
climate change, water availability and
rehabilitation
→ Further reading
Pages 43-48
Safety is the most critical area of focus for the Board.
The causes of fatal incidents and those causing injury
were examined in detail by the Sustainability Committee
and the findings discussed by the Board.
Management performance in reducing such incidents
through the Group’s Elimination of Fatalities programme
was monitored.
The Board was updated on the ongoing strategies to
minimise the impact of Covid-19 on the workforce,
operations and host communities, including the Group’s
vaccination support programme across Anglo American
operations.
The Board reviewed material environmental incidents and
steps taken by management to reduce energy and natural
resource consumption.
Climate-related activities, energy efficiency targets and
decarbonisation strategies were considered during the year
by the Board and the Sustainability Committee.
The Board considered the development and
implementation of Anglo American’s suite of technologies,
integral to its FutureSmart Mining™ programme, that are
driving step-change innovations and transforming the
nature of mining.
Endorsed the Group’s continued
Covid-19 WeCare response
programme.
The Board approved:
– The Group’s first dedicated
Climate Change Report and
ambition to deliver carbon
neutral operations by 2040
– The intention to hold a non-
binding resolution on climate
change at the 2022 AGM
– Reporting methodology for the
Group’s Scope 3 emissions
reduction ambition
– A contract for additional low
emission Capesize+ vessels
to join our global shipping
operations
– A new Group policy on mineral
residue facilities and water
management structures.
117
Anglo American plc Integrated Annual Report 2021
Board activity continued
Topic and link to pillars of value
Activities
Outcomes/decisions
Socio-political
Social incidents and performance,
government, media, investor and
stakeholder relations
→ Further reading
Pages 12-15
The Board receives updates on key geo-political
developments in the Group’s operating jurisdictions,
significant social incidents, and a briefing from the Group
head of investor relations, at each meeting. Feedback
from meetings held between executive management and
institutional investors is communicated to the Board.
Supported the donation of
$100 million to create a special
endowment to support the
sustainability work of the
Anglo American Foundation.
The chief executive and business unit leaders updated the
Board on engagement with the governments of the Group’s
host countries and on local community dialogue.
The Board was briefed by management on feedback
following the Group’s two Sustainability Performance
updates held in 2021, stakeholder feedback from the
first Climate Change Report, and results from the external
stakeholder reputation survey carried out in 2021.
People
Inclusion and diversity, talent and
performance management, employee
engagement
→ Further reading
Pages 50-57
People are a pillar of the Group’s strategy and the Board
is focused on creating an inclusive and diverse culture.
Succession plans for executive management were
reviewed.
Announced the appointment
of Duncan Wanblad as chief
executive, to succeed Mark
Cutifani, from 19 April 2022.
Succession plans for the Group Management Committee
were reviewed by the Nomination Committee, on behalf of
the Board.
The Board received feedback on discussions and outcomes
of two Global Workforce Advisory Panel meetings chaired
by the senior independent director. The Board also
considered the findings from a global colleague survey
undertaken in 2021, aligned to our Purpose and Values.
Approved senior leadership
changes, announced in
October 2021.
Provided input into the topics
of discussion for the Global
Workforce Advisory Panel.
Operations
Operational performance by each
business unit and progress of key
projects
→ Further reading
Pages 76-100
The Board received detailed updates on the operational
performance, strategy, safety and sustainability
performance, people, technological innovation, and
key risks of its business units. Progress of the Group’s
Quellaveco, Venetia Underground and Woodsmith projects
was discussed.
The Board and Sustainability Committee considered the
restart of operations at Metallurgical Coal’s Grosvenor mine,
based on industry-leading improvements to safely operate
the mine.
Approved capital investment
funding for key projects: upgrade
of desalination plant and power
projects at Copper’s Collahuasi
joint operation in Chile; and
concentrator expansion at the
Der Brochen project at our PGMs
Mototolo mine.
Approved the recommencement
of operations at Grosvenor mine.
Approved material supply
contracts throughout the year.
Financial
Key financial measures, liquidity
and balance sheet strength, cost
improvements, dividend
→ Further reading
Pages 72-75
The Board monitored and discussed progress against the
annual budget and five-year plan. Liquidity strategy and
balance sheet strength were reviewed.
Recommended the 2020 final
dividend (approved at the
2021 AGM).
The Board and Audit Committee considered the Group’s
dividend policy, and options for additional shareholder
returns.
Approved the 2021 interim
dividend, and $2 billion of
additional shareholder returns
in the form of a special dividend
and share buyback programme.
Approved the early redemption of
up to $1 billion of bonds in 2021.
118
Anglo American plc Integrated Annual Report 2021Governance
Topic and link to pillars of value
Activities
Outcomes/decisions
Economic outlook and
commodity price
Macro-economic environment and
commodity price outlook
→ Further reading
Pages 70-71
The Board received briefings from internal teams on trends
in relevant areas and likely scenarios for global economic
growth. The ongoing impact of Covid-19 on the supply
and demand for commodities was discussed. The Board
received regular updates on commodity markets, including
energy pricing, from Marketing leadership.
Strategy
Portfolio outlook, progress on critical
tasks and long term strategic pathways
→ Further reading
Pages 10-57
Board governance
Reports from committees, legislative
and regulatory compliance, succession
planning
→ Further reading
Pages 120-161
The Board considered strategic issues at every meeting in
2021 and, in addition, held a two-day dedicated strategy
meeting. The Board discussed progress towards delivery
of the Group’s strategic goals in the context of Portfolio,
Innovation and People, including: the ongoing impact of
Covid-19 on the Group’s strategy; long term trends and
disruptions; the Group’s resilience to 1.5°C pathways; the
circular economy; the hydrogen economy; technology and
innovation capability; and exploration activities.
The Board considered options for moving its portfolio away
from thermal coal and towards future-enabling products,
while supporting a ‘Just Transition’ that seeks to balance
the needs and expectations of all stakeholders, including
environmentally and socially sustainable jobs, consistent
with addressing the overriding issue of climate change.
Endorsed the Group’s critical
strategic objectives.
Recommended the demerger of
the Group’s South African thermal
coal operations (approved by
shareholders in 2021), through
the creation of a new stand-alone
company, Thungela Resources
Limited.
Approved the sale of the Group’s
minority shareholding in Cerrejón,
Colombia.
Each of the committee chairs reported on their respective
meetings. Reports were received on the Group’s
compliance with relevant legislation and regulation and any
actions needed to respond to recent developments. The
Board received updates on material litigation across the
Group. The Audit Committee chair provided an update on
material whistleblowing reports.
Approved Board and committee
appointments:
– Ian Tyler as a non-executive
director from 1 January 2022
– Duncan Wanblad as chief
executive from 19 April 2022
Chief executive succession planning was considered
throughout the year by the Nomination Committee and
the Board, culminating in the announcement of Duncan
Wanblad to succeed Mark Cutifani as chief executive.
The Board discussed the findings of the externally facilitated
review of the performance of the Board and its committees.
The Board and Nomination Committee reviewed the
Board’s composition, diversity and succession plans for
non-executive and executive directors.
– Successor chairs for the Audit
and Remuneration committees
from 19 April 2022
– Non-executive directors as
members of the Board’s
committees
– Successor designated
non-executive director to chair
Anglo American’s Global
Workforce Advisory Panel.
Approved Anglo American’s 2020
Modern Slavery Act statement.
Agreed Board effectiveness
priorities for 2022.
119
Anglo American plc Integrated Annual Report 2021
Board effectiveness
Each year, the Board undertakes a rigorous
review of its own effectiveness and
performance, and that of its committees
and individual directors. At least every three
years, the evaluation is externally facilitated.
In 2021, an external effectiveness review
was undertaken. The process for how the
review was conducted and its findings are
illustrated below and opposite.
The last externally facilitated Board effectiveness review was
undertaken in 2018, the results of which were reported in the 2018
Integrated Annual Report. In 2019 and 2020, the Board conducted
internal evaluations, the details of which were reported in the respective
Integrated Annual Reports. To allow the Board and its committees to
judge progress over the past three years, the reviews explored similar
areas on each occasion.
2021 Board effectiveness review process
The 2021 Board effectiveness was externally facilitated by Independent
Board Evaluation (IBE), a consultancy with no other connection to
the Company, and conducted in accordance with the UK Corporate
Governance Code.
1. Agenda setting
2. Interview process
3. Observation and completion
In June, the evaluation team conducted its
orientation, reviewing key documents and
finalising dates and a detailed agenda for
the Board interviews. The evaluation team
met with the chairman, chief executive and
Group general counsel and company
secretary to agree a comprehensive brief
and agenda for the review.
From July to September, detailed interviews
were held with each director, according to
the agreed agenda. The evaluation team
interviewed eight members of senior
management including the Group general
counsel and company secretary, GMC
members, and the committee secretaries,
as well as the lead external audit and
remuneration partners, to gain a broader
perspective of the Board’s work.
In September, the evaluation team
observed Board and committee meetings.
Following completion of the exercise, the
evaluation team collated the results, and
the draft conclusions were discussed with
the chairman and committee chairs.
4. Report back
IBE presented the findings of the effectiveness review at a
meeting of the full Board in November. A report on the chairman’s
performance was presented to the senior independent director
and the results discussed at a meeting of the non-executive
directors without the chairman present. The chairman received a
report with feedback on individual directors’ performance. The
chairman held one-to-one meetings with each of the directors
following the review.
5. Actions and 2022 priority areas
At its December meeting, considering the findings of the 2021
review, the Board considered and agreed Board effectiveness
priority areas for 2022. Action plans addressing the findings of
the review will be monitored throughout 2022.
The external reviews which took place in 2018 and 2015 were also
facilitated by IBE. The Board, through the Nomination Committee,
felt that retaining IBE for a third review cycle would allow progress
to be tracked on the priority areas of focus identified in the previous
effectiveness review. In addition, the Board is of the view that, as the first
IBE review was conducted under the Board’s predecessor chairman
and, given the substantial refreshment of the Board in the period from
2015 to 2021, IBE’s independence is not impaired by the length of its
relationship with the Board.
Key highlights from the review
The review confirmed that the Board is believed to be effective and
well functioning, with some very experienced and knowledgeable
independent non-executive directors bringing a variety of expertise
to the Group, all under the strong and positive leadership of Stuart
Chambers as chairman.
The most positive feedback from the Board was on the following
aspects:
– The quality of the Board’s strategy discussions
– Board composition, especially regarding value and impact of
independent non-executive directors
– Governance and compliance
– Feedback from the Group’s employee engagement mechanisms is
getting ever more valuable and effective, particularly with regard to
the Group’s culture and bringing the views of the wider workforce into
the boardroom.
There were some improvement recommendations identified in the
areas of re-establishing contact with the business and with senior
managers as Covid-19 travel restrictions ease, Board processes and
non-executive director inductions.
120
Anglo American plc Integrated Annual Report 2021Governance Committee effectiveness in 2021
Remuneration Committee
The committee reviews looked at ways in which they could improve
their overall effectiveness, their performance, and areas that they
needed to address in 2022. All committees were believed to be
performing well and were appropriately constituted.
The results confirmed that the chair is high performing and well
regarded by the Board and GMC. Focus areas for 2022 will be ensuring
an effective transition of the committee chair and reviewing the fair pay
agenda and pay structures below the GMC.
Audit Committee
Sustainability Committee
The results confirmed that the committee chair is high performing and
well regarded by the Board and senior management. Focus areas for
2022 will be a review of financial controls and ensuring an effective
transition of the committee chair.
The results confirmed that the committee chair has delivered positive
improvements to the structure and format of meetings. Focus areas
for 2022 will include continuing to take a broader view of critical
sustainability areas, and more external views of areas of best practice.
Nomination Committee
The results confirmed that the committee has been well led, organised
and thorough in its oversight of the chief executive succession process.
Focus areas for 2022 will be oversight of senior leadership succession
and transition.
Actions taken in 2021 to address the areas identified by the Board as effectiveness priority areas following the internal
2020 evaluation are summarised below.
Strategy
Long term trends
After significant progress
made over the last two
years on increasing the
Board’s time focusing on
strategic issues, direct the
Board’s time towards the
oversight of execution
and making strategic
choices rather than further
significant strategic
re-invention.
The Board should direct
its climate change focus
to the workstreams which
underpin our carbon
neutrality targets and
devote more time to
circular economy trends
and consequences for the
Group’s strategy.
Strategic matters were
discussed at every Board
meeting, in addition to the
dedicated annual Board
strategy meeting. The
Board discussed progress
towards delivery of the
Group’s strategic goals.
Climate change issues
were considered by the
Board and Sustainability
Committee throughout the
year. The Board approved
the Group’s first dedicated
Climate Change Report.
Technology
and innovation
Areas identified for action
Following the in-depth
briefing sessions on
resource development
plans for the Group’s key
assets, and the technology
roadmap underpinning
their pathways to value,
direct the Board’s focus
to the plans for the
deployment of these
technologies across the
Group’s global footprint.
Actions taken in 2021
The Board discussed
the development and
implementation of
Anglo American’s suite of
technologies, integral to
its FutureSmart Mining™
programme.
People
Director development
Build on the success of
the in-depth briefing
sessions scheduled in
2020 to the further ongoing
development of Board
directors.
All Board members
participated in ‘deep
dive’ briefing sessions on
climate change and social
performance during the year.
Maintain the Board’s
enhanced visibility and
oversight in the areas of
safety, talent and senior
management succession,
with a sustained focus on
the elimination of fatalities.
Re-invigorate the exposure
of the Board to future
leaders in the Group’s
talent pipeline, once
physical meetings resume.
The Board and Nomination
Committee focused their
energies throughout the
year on the chief executive
succession process, and
succession plans for senior
leadership. We anticipate
there will be greater
opportunities for in-person
engagement with future
leaders when physical
meetings resume in 2022.
Building on the priority areas identified and the actions taken during 2021, and taking account of the findings of the 2021 review,
the Board has identified the following effectiveness priorities for 2022:
Long term strategy
Continue to focus the
Board’s time on execution
of the Group’s long term
strategy, and further
shaping of strategic
choices over the 10-30 year
time horizon, particularly in
light of the trends in climate
change and the circular
economy.
Technology
deployment
The Board should direct
its focus by allocating
capital to this key source of
competitive advantage by
innovation and deployment
of new ways of mining,
aligned with the Group’s
Purpose.
People
Maintain focus on exposure of the Board to future leaders
in the Group’s talent pipeline. Facilitate increased contact
between the Board and the business, and between
the independent non-executive directors and senior
management. Use of video and/or virtual technology to
bring operations into the boardroom and facilitate (subject
to the easing of travel restrictions) additional location visits
in 2022.
Director development
and induction
Strengthen the ongoing
development of Board
directors, aligned with
the Group’s strategic
objectives, and enhance
the new director
onboarding programme to
ensure a more individually
tailored approach.
121
Anglo American plc Integrated Annual Report 2021 Stakeholder engagement
How the Board has engaged
The Board is committed to ensuring collaboration and partnering
with a broad range of stakeholders, both directly and indirectly
through reports from senior management. Stakeholder
considerations form part of discussions at Board meetings and
decision making takes into account potential impacts on our
stakeholders, as described in the Section 172 statement on
page 20 of the Strategic Report. How the Board interacts directly
with certain of its key stakeholders is illustrated below. For further
information on reflecting stakeholder views in the Board’s decision
making, please see pages 14-21.
Creating shared value
Investors
Employees and unions
Communities
Suppliers
and contractors
Civil society (NGOs, faith
groups and academia)
Customers
Governments
and multilateral institutions
Industry
associations
Global Workforce Advisory Panel
Anglo American’s Global Workforce Advisory Panel (the Panel)
was established in 2019. Its purpose is to give employees more of
a 'voice’ in the boardroom so their views can be better understood
and considered when decisions are being made about the future of
the business. The Panel affords valuable opportunities for the Board
to understand how the Group’s culture, Purpose and Values are
embedded into the organisation.
The Panel operates alongside Anglo American’s existing employee
engagement mechanisms, such as regular employee engagement
surveys and director interaction with employees.
Composition of the Panel
The Panel is made up of 11 employees, representing the countries
where the Group has a significant presence, and is chaired by our
Board’s senior independent director, Byron Grote. Panel members are
nominated using agreed criteria set out in its terms of reference and
selected to ensure representatives, throughout the organisation, are
appropriately balanced across the areas of gender, ethnicity, age and
seniority. New Panel members undertake an induction to ensure a
clear understanding of their role and to support them in being effective
employee representatives. The Panel is supported by the Group’s
company secretarial and employee engagement teams. Panel
members meet at least twice a year with Byron Grote.
Panel meetings and discussions in 2021
Despite the ongoing challenges presented by Covid-19, the Panel
met on two occasions in 2021, in March and September. As in 2020,
both meetings were held virtually over two sessions, to accommodate
members in different global time zones. In addition to the scheduled
meetings, a check-in session was held with Panel members and the
employee engagement team.
Topics for discussion in 2021 included Anglo American’s approach
to building psychological safety in the workplace, and the role of our
leaders in building a psychologically safe working environment, where
every voice is valued and employees feel safe to speak up. At the
second meeting of the year, the Panel was provided with an update
on how its feedback helped to shape this workstream. Internal guest
speakers were invited to join Panel meetings for the first time. The Panel
heard directly from the internal guest speakers on the Group’s WeCare
programme, focusing on mental and physical health, and domestic and
gender-based violence.
The Panel is scheduled to meet twice in 2022, and we anticipate one of
these meetings taking place physically.
122
Board and Panel feedback
Following each Panel meeting, Byron Grote discusses the key themes
with the Board chairman and chief executive. A session is scheduled
at Board meetings, at least twice a year, for Dr Grote to discuss the key
themes with the full Board. The key messages from each meeting are
then shared and discussed with the Group Management Committee.
Dr Grote shares feedback from the Board meeting discussions with the
Panel at the following meeting.
Topics for discussion at Panel meetings are suggested equally by
Panel members, the Panel chair, other members of the Board, and
management.
Panel chair successor
Byron Grote has successfully chaired the Panel since its inception in
2019 and, as a result of his retirement from the Board in April 2022, the
Nomination Committee and Board have considered the appointment
of a designated non-executive director to succeed him in chairing the
Panel. The Board has approved the appointment of Marcelo Bastos
as Panel chair, from 19 April 2022. Mr Bastos joined the Board as a
“I am incredibly proud to be a member of the
Panel and to have the opportunity to represent
the voice of my colleagues, so they are heard
in the boardroom. I am grateful to work for an
organisation that truly cares about its people
no matter where they are in the world.”
Evelyn Du
Evelyn is a senior physical trader, Marketing, and has been a Panel
member since 2020
Anglo American plc Integrated Annual Report 2021Governance “Board members feel that feedback
from the Panel is increasingly
valuable, particularly with regards
to the Group’s culture and bringing
the views of the wider workforce
into the boardroom. This was
demonstrated by the findings of
the recent Board effectiveness
review. There continues to be good
alignment between the Panel and
the Board on which topics are
important to the workforce and are
selected for discussion.”
Byron Grote
Byron is the Board’s senior independent director and
Panel chair
non-executive director in 2019, and the Board believes his experience
gained during a long executive and non-executive career, and his
personal characteristics, make him well suited to this role. Mr Bastos’s
more than 30 years’ global mining experience across the Americas,
Africa, Asia and Australia, along with his CEO, COO and C-suite director
roles, has given him substantial experience of facilitating engagement
and business understanding with a wide range of employees globally.
Global employee engagement survey
The Board was updated during the year on the findings and resulting
actions from a global colleague survey undertaken in 2021, that was
focused on the well-being of our colleagues.
→ For more information on our People and workforce culture:
See pages 50–57
Investor engagement
The Group always has an active engagement programme with its key
financial audiences, including investors and sell-side analysts, as well
as potential shareholders.
The Group’s investor relations department manages the interactions
with these audiences through roadshow meetings, presentations
including at the time of the interim and final results and twice yearly
sustainability performance updates, as well as regular attendance
at industry conferences organised mainly by investment banks for
their institutional investor base. Key topics covered include finance
and operating performance, sustainability and governance matters.
In particular over the course of 2021, there was an increased interest
and focus on sustainability and decarbonisation themes.
As a result of the Covid-19 pandemic, all investor engagements
continued to be conducted through virtual platforms throughout 2021,
allowing the Group to continue with its regular scheduled programme
of roadshow meetings and presentations, including at the time of the
interim and final results, as well as attendance at investor conferences.
Owing to the lack of travel in response to the pandemic and continued
from 2020, the investor relations department and the management
team were able to attend a higher than usual number of conferences,
as well as host ad hoc investor meetings, during 2021. Any significant
concerns raised by shareholders in relation to the Company and its
affairs are communicated to the Board.
The Board receives a briefing at each meeting from the Group head of
investor relations and analysts’ reports are circulated to the directors.
Feedback from meetings held between executive management, or
the investor relations department, and institutional shareholders, is also
communicated to the Board.
Annual General Meeting and General Meeting
Due to the measures imposed by the UK government in response to the
Covid-19 pandemic, the Company was unable to host the AGM in its
usual format in 2021, despite the Chairman’s preference to welcome
shareholders in person to the meeting. The Board values the AGM as an
opportunity for all shareholders, but in particular its retail shareholders,
to raise questions and comments to the Board. Shareholders were
invited to submit their questions in advance of the AGM and also offered
the opportunity to ask questions during the meeting.
A General Meeting was held immediately after the 2021 AGM
to approve the demerger of the Group’s South African thermal
coal operations.
Voting levels at the 2021 AGM were approximately 70%, with generally
less than 1% being votes withheld. All resolutions submitted to the
meeting in 2021 were passed with at least 88% of votes in favour.
Investor engagement in 2021
January
Closed period
Q4 2020 Production Report
March
Investor roadshows: London (virtual),
Edinburgh (virtual) and South Africa
(virtual)
Conferences: Exane Basic Materials
(virtual)
South African thermal coal roadshow
(virtual)
May
Investor roadshows: London (virtual)
and North America (virtual)
Conferences: Bank of America Metals
& Mining (virtual)
Climate Action 100+ investor meeting
Thungela Capital Markets Day
Chairman investor meeting
T&S Investor presentation
July
Closed period
Q2 Production Report
2021 interim results
Investor roadshows: London (virtual)
September
Investor roadshows: Europe (virtual),
London (virtual) and North America
(virtual)
November
Investor roadshow: London (virtual,
Europe (virtual), North America
(virtual) and South Africa (virtual)
Conferences: RBC ESG interview
series
February
2020 Full year results
Investor roadshows: London
(virtual) and North America (virtual)
Conferences: BMO Global Metals &
Mining (virtual)
Chairman investor meeting
April
Q1 2021 Production Report
Sustainability Performance update
Thungela demerger announcement
presentation
UBS London Mining Tour (virtual)
June
Conferences: J.P. Morgan Cazenove
European Materials Conference
(virtual)
Exane BNP 23rd European CEO
Conference (virtual)
BofA Smart Mine 2.0 (virtual)
Goldman Sachs sales desk briefing
August
Investor Roadshows: South Africa
(virtual) and London (virtual)
October
Q3 Production Report
Sustainability Performance update
December
2021 investor update call
Morgan Stanley fireside session
123
Anglo American plc Integrated Annual Report 2021
Sustainability Committee report
“Sustainability is embedded
in Anglo American’s strategy.
The Committee is instrumental in
overseeing how the Group manages
its most material sustainability issues.”
Committee members
Ian Ashby – Chairman
Marcelo Bastos
Elisabeth Brinton (appointed 1 September 2021)
Stuart Chambers
Mark Cutifani
Nonkululeko Nyembezi
Tony O’Neill
→ For further detail on biographies and Board experience:
See pages 108-111
Business unit heads, Group directors of corporate relations and sustainable
impact, and of people and organisation, the Group general counsel
and company secretary, and the Group heads of safety and sustainable
development also participate in meetings of the Committee. Other members
of senior management are invited to attend when necessary.
Role and responsibilities
safety; health and wellness; socio-political trends; human rights; climate
change; and environmental and social performance. Significant
social, safety, health and environmental incidents are reviewed at each
meeting, as are the results from operational risk reviews and operational
risk assurance audit observations.
The Committee seeks to address the fundamental root causes of all fatal
incidents occurring across Anglo American.
In 2021, one member of the workforce lost their life at the Group’s
managed operations. The preliminary observations from the incident
were reported to the Committee, noting the factors surrounding the
incident, mitigation steps being taken and the process for formal
investigation. The findings of the independent investigation were
presented to the Committee following its completion.
In addition to the Committee’s standing agenda items, the following
matters were discussed during 2021:
– Progress of the Group’s Elimination of Fatalities programme, designed
to achieve a zero fatality business
– The Group’s strategy and roadmap for energy and decarbonisation
– Tailings and water storage facilities stewardship
– Social performance, community engagement and resettlement
The Committee oversees, on behalf of the Board, material
management policies, processes, and strategies designed to manage
safety, health, environment, and socio-political risks, to achieve
compliance with sustainable development responsibilities and
commitments and strive to be a global leader in sustainable mining.
– Anglo American’s 2020 Sustainability Report
– Group Principal Risks relating to sustainability
– Mine closure liabilities
The Committee is responsible for reviewing the causes of any fatal or
significant sustainability incidents and ensuring learnings are shared
across the Group.
– The Elimination of Fatalities risk assurance and governance
workstream
– Fire and explosion risk management framework
The Committee’s terms of reference are available to view online.
– The Group’s carbon neutrality Scope 1 and 2 targets review, and the
→ For more information, visit:
www.angloamerican.com/about-us/governance
Committee discussions in 2021
The Committee met four times in 2021, with full attendance (either
virtually or in person), as described on page 116.
Group’s Scope 3 reduction ambition
– Anglo American’s first dedicated Climate Change Report
– Climate change litigation risk
– Stakeholder feedback from the Climate Change Report
– An update on the Group’s global lives and livelihoods support
programme (WeCare), and the status of the health and wellness and
vaccination programmes
At each meeting, the Committee reviews detailed reports covering the
Group’s performance across a range of sustainability areas, including:
– Delivery of the Group’s Sustainable Mining Plan and approval of
revised 2022 commitments
– Safety, Health and Environment Policy review
124
Anglo American plc Integrated Annual Report 2021Governance – Consideration of the findings and recommendations of the
Grosvenor Board of Inquiry
– Grosvenor mine restart readiness
– Governance of non-managed joint venture operations
– The definition of fresh water for external reporting and related
2030 goals
– Review of a new Group policy on processed mineral residue facilities
and water management structures
– The Committee’s effectiveness review.
In June 2021, the Committee held a ‘deep dive’ briefing session
to learn more about the Group’s approach to social performance.
The session was led by our chief executive, and the Group director
of corporate relations and sustainable impact, Anik Michaud, and
members of the corporate relations and sustainable impact team.
All Board members attended this briefing session, at the invitation of
the Committee chair.
Discussions related to climate change in 2021
Sustainability Committee
February – energy and decarbonisation strategy and roadmap;
carbon emissions: development of the Group’s Scope 3 reduction
strategy.
September – review of the 2021 Climate Change Report*; Scope 3
reduction strategy; update on operational carbon neutrality goals.
Board
February – carbon emissions: Scope 3 reduction strategy.
April – approval of the intention to hold a non-binding resolution on
climate change at the 2022 AGM.
May – discussion of Scope 3 reporting methodology.
July –update on carbon neutrality Scope 1 and Scope 2 emissions
strategy; discussion of Scope 3.
September and October – approval of the reporting methodology
for the Group’s Scope 3 emissions reduction ambition; approval of
the 2021 Climate Change Report.
November – climate change discussions at the Board’s strategy
meeting, including the Group’s resilience to 1.5°C pathways, circular
and hydrogen economies.
*All Board members participated in the September Sustainability Committee
discussions, as part of the comprehensive review of the Climate Change Report.
In addition, as part of our ongoing process of Board renewal,
Elisabeth Brinton, who has significant experience related to clean
energy and climate change mitigation strategies, and Hilary Maxson,
a senior executive at a company with a strong track record in climate
action, were appointed as non-executive directors during the year.
Engaging on a global level
Anglo American is also an active member or contributor to a growing
number of associations that are seeking to address climate change.
In 2021, we were the only company from the extractives industry invited
to join the recently launched Taskforce on Nature-related Financial
Disclosures (TNFD), which aims to provide organisations with a
complete picture of their environmental risks and opportunities. TNFD
membership was followed at COP26, when we joined the H2Zero
Initiative as one of 28 companies that have pledged to accelerate the
use of decarbonised, ‘green’ hydrogen.
Climate change resolution
We are putting our Climate Change Report to shareholders for approval
at the 2022 AGM for the first time because the Board appreciates
the significance to our shareholders and broader stakeholders of our
approach to climate change, and the importance of providing a forum
that allows feedback and discussion on our approach. The climate
resolution also confirms that the Company will report on its progress in
achieving the plans set out in the Climate Change Report on an annual
basis and issue an updated version of the report at least every three
years. Whilst the vote is non-binding and the Board retains ultimate
responsibility for our strategy, shareholder feedback is important to the
development and implementation of our climate change response.
125
▲ At our Las Tórtolas site, which forms part of Los Bronces mine, we are making
history by commissioning the first facility in Chile to generate ‘green’ hydrogen
for carbon-zero vehicles. The plant will produce hydrogen from re-used water
from the mining and treatment processes, and from photovoltaic (PV) energy
sources, and represents an important step in our business’s journey towards
achieving carbon neutrality by 2040.
Governance – Climate change
Embedding climate change thinking
Climate change is the defining issue of our time, and Anglo American
is determined to play its part in addressing it, across our value chain.
The Board is leading the way through endeavouring to ensure
that climate change thinking is embedded across the business,
through robust governance, and that we apply a principled and
consistent approach throughout our climate change governance
and management systems.
In 2021, Anglo American published its first dedicated Climate Change
Report, which provides our stakeholders with transparent disclosure
of the Group’s comprehensive approach to climate change. The
report was reviewed by the Sustainability Committee and approved
by the Board.
Our internal governance and management systems
The Board agreed to direct its climate change focus in 2021 to the
workstreams that underpin the transition to a low carbon future. These
include our goal of being carbon neutral across our operations, and our
ambition to reduce our Scope 3 emissions by 50%, by 2040. It is also
devoting more time to circular economy trends and the consequences
for the Group’s strategy.
The Sustainability Committee is responsible for considering climate-
change-related topics at Anglo American. The Committee oversees,
on behalf of the Board, material policies, processes and strategy
designed to manage climate-related risks and opportunities. The full
Board holds regular strategic discussions on material climate-related
activities and energy efficiency targets.
The Board, Sustainability Committee, and the Group Management
Committee are supported by a Climate Change Steering Committee,
which is chaired by our Group head of strategy. This committee draws
together all workstreams across the Group related to climate change
and identifies synergies, areas for improvement or gaps.
Anglo American plc Integrated Annual Report 2021 Nomination Committee report
“The Committee plays a vital role in
ensuring the composition of the Board
reflects an appropriate mix of skills,
experience, diversity and perspectives to
suit the evolving nature of the business
and the expectations of society.”
Committee members
Stuart Chambers – Chairman
Ian Ashby
Marcelo Bastos (appointed 23 February 2021)
Byron Grote
Hixonia Nyasulu
Anne Stevens
Ian Tyler (joining with effect from 19 April 2022)
→ For further detail on biographies and Board experience:
See pages 108-111
The chief executive, the Group director of people and organisation, and the
Group general counsel and company secretary also participate in meetings of
the Committee. Other non-executive directors may attend committee meetings
at the invitation of the chairman.
Role and responsibilities
The role of the Nomination Committee is to assist the Board in
regularly reviewing its composition and those of its committees,
to lead the process for Board appointments, and ensure effective
succession planning for the Board and senior management.
The Committee’s terms of reference are available to view online.
→ For more information, visit:
www.angloamerican.com/about-us/governance
Committee discussions in 2021
The Committee met six times in 2021, with full attendance (either
virtually or in person), as described on page 116. Discussions at the
meetings covered the responsibilities outlined above, with particular
focus on executive and non-executive succession planning.
126
The following matters were considered during 2021:
– The composition, structure and size of the Board and its committees,
and the leadership needs of the organisation
– Succession planning for the Group chief executive and
recommending to the Board the appointment of Duncan Wanblad to
succeed Mark Cutifani as chief executive in April 2022
– Endorsing the engagement of Independent Board Evaluation to
facilitate the Board’s 2021 external effectiveness review
– Non-executive director succession planning, approving the
appointment of Spencer Stuart as external search consultant to
facilitate recruitment, and formalising the search process for a
non-executive appointment
– Recommending to the Board the appointment of Ian Tyler as a
non-executive director and member of the Audit and Remuneration
committees, and as chair of the Remuneration Committee from
19 April 2022
– Group Management Committee and senior leadership succession
– Board committee membership changes and making
recommendations to the Board on the appointment of non-executive
directors to serve on Board committees:
– Hilary Maxson as chair of the Audit Committee from 19 April 2022
– Marcelo Bastos as a member of the Nomination Committee
– Hixonia Nyasulu as a member of the Remuneration Committee
– Elisabeth Brinton as a member of the Sustainability Committee
– Ian Tyler as a member of the Nomination Committee from
19 April 2022
– Recommending to the Board that Marcelo Bastos be appointed as
the designated non-executive director to chair Anglo American’s
Global Workforce Advisory Panel from 19 April 2022.
The results of the externally facilitated Board and committee
effectiveness reviews in 2021 are on pages 120-121.
Information on the Group’s policy on inclusion and diversity,
and details of the gender balance of Anglo American’s senior
management and their direct reports (defined as our Group
Management Committee and those reporting to the committee),
can be found in the People section on page 56.
Anglo American plc Integrated Annual Report 2021Governance Chief executive appointment process in 2021
Succession planning for all directors, including the executive directors,
is an ongoing cycle of work. The Nomination Committee has oversight
of the senior leadership development and succession plans, ensuring
they are aligned to the long term strategic ambitions and the diverse
leadership needs of the Group.
After nine years in role, Mark Cutifani will retire as chief executive and
step down from the Board at our AGM in April 2022. Mark joined Anglo
American and the Board in 2013 and has led the transformation of the
Group’s performance and prospects, serving Anglo American and all its
stakeholders well.
The Board, through its Nomination Committee, initiated a global process
in 2020 to identify the best person for the role of chief executive. For the
purposes of the chief executive selection process, the chairman asked
that all the independent non-executive directors would participate in
the Nomination Committee’s discussions.
The search process included a number of internal candidates on our
internal succession plan, and a diverse range of external candidates.
External candidates were considered from a number of the regions in
which the Group operates, or has major markets, and included gender
and ethnically diverse candidates.
Following the rigorous global process, the Board concluded that
Duncan Wanblad is the stand-out successor to Mark Cutifani,
bringing his 30 years of international mining experience, and deep
understanding of our Group, its culture and its context. Duncan has
been integral to the reshaping of the Company in recent years and is
uniquely qualified to take Anglo American forward. Duncan will join the
Board as chief executive at the conclusion of our AGM on 19 April 2022.
▲ During a visit to the Woodsmith site in north east England to mark our annual
Global Safety Day in October 2021, Mark Cutifani and Duncan Wanblad
are accompanied by (left) Crop Nutrients’ health and safety director
Nigel Chapman.
Set out below are the milestone steps that culminated in our
announcement on 3 November 2021 of our chief executive
appointment:
2018
Preliminary assessment of potential internal candidates and
their development plans.
2020
An updated role profile for the Group chief executive was
considered and agreed by the Nomination Committee,
including the leadership characteristics and capabilities
required for the role. The Board discussed the development of
candidates on our internal succession plan, and an externally
facilitated benchmarking exercise of the external talent
market was completed.
H1 2021
The Nomination Committee considered a targeted and
diverse longlist of external candidates, alongside the internal
succession candidates, and agreed that the chairman would
engage with a shortlist of such candidates. In June 2021,
shortlisted external candidates were invited to take part in a
formal assessment process.
Q3 2021
The Nomination Committee agreed which of the shortlisted
candidates would be invited to meet with a panel of non-
executive directors. Finalist internal and external candidates
then participated in formal panel interviews with the
chairman and the independent non-executive directors.
The Remuneration Committee considered remuneration
arrangements for the incoming and outgoing chief executive.
Q4 2021
Following unanimous recommendation from the
Nomination Committee, the Board resolved to approve the
appointment of Duncan Wanblad as Anglo American’s
next chief executive. The remuneration arrangements for
the appointment of Duncan Wanblad and the retirement
of Mark Cutifani were duly negotiated and approved by the
Remuneration Committee.
Process used in relation to non-executive Board appointments
As part of the Board’s ongoing cycle of refreshment, during
2021, the Nomination Committee led a search process to recruit
a new non-executive director, as part of an orderly succession
process to ensure that the capabilities and attributes lost as a
result of forthcoming retirements from the Board in 2022 were
replaced, and to ensure the composition of the Board reflected an
appropriate mix of skills, experience, diversity and perspectives.
Spencer Stuart was retained by the Committee to assist with
the search process. Spencer Stuart has previously worked for
the Group in recruiting for non-executive and senior leadership
appointments and accordingly has a good understanding of
the Board’s requirements. They are accredited under the UK
Government’s Voluntary Code of Conduct for Executive Search
Firms.
Prior to the search commencing, the Nomination Committee
agreed the skills and experience it considered necessary for
the role and provided this to Spencer Stuart. A longlist of diverse
candidates was then identified by Spencer Stuart and discussed
with the Committee members to agree a shortlist to be interviewed.
Shortlisted candidates were interviewed by members of the
Committee and other Board members, as relevant.
127
Anglo American plc Integrated Annual Report 2021 Audit Committee report
“The Committee is focused on ensuring
the integrity of the Company’s financial
statements and the robustness of the
Group’s systems of internal control
and financial and regulatory risk
management systems.”
Committee members
Byron Grote* – Chairman
Hilary Maxson* (appointed 1 June 2021 and will succeed
Byron Grote as chair with effect from 19 April 2022)
Nonkululeko Nyembezi
Anne Stevens
Ian Tyler* (appointed 1 January 2022)
– Overseeing completion of the viability statement.
– Reviewing the effectiveness of the Group’s Code of Conduct and the
arrangements to counter the risk of bribery and corruption.
The Committee’s terms of reference are available to view online.
→ For more information, visit:
www.angloamerican.com/about-us/governance
* Audit Committee members deemed to have recent and relevant financial
experience in accordance with the UK Corporate Governance Code.
Fair, balanced and understandable
The Committee as a whole has competence relevant to the sector.
→ For further detail on biographies and Board experience:
See pages 108-111
The chairman, the chief executive, the finance director, the Group financial
controller, head of financial reporting, Group financial reporting manager, the
Group head of risk management and business assurance, and the Group
general counsel and company secretary also participate in meetings of
the Committee.
Role and responsibilities
– Monitoring the integrity of the annual and interim financial
statements.
– Making recommendations to the Board concerning the adoption
of the annual and interim financial statements.
– Overseeing the Group’s relations with the external auditor.
– Reviewing the independence, effectiveness and objectivity of the
external auditor.
– Reviewing and monitoring the effectiveness of the Group’s risk
management and internal control mechanisms.
– Approving the terms of reference of the internal audit function and
assessing its effectiveness.
– Approving the internal audit plan and reviewing regular reports from
the Group head of risk management and business assurance on
effectiveness of the internal control system.
– Receiving reports from management on the principal risks of the
Group. Details of the principal risks are contained on pages 61-67.
128
A key requirement of our financial statements is for the report to be fair,
balanced, understandable and provide the information necessary for
shareholders to assess the Group’s and parent Company’s position and
performance, business model and strategy. The Audit Committee and
the Board are satisfied that the 2021 Integrated Annual Report meets
this requirement, as appropriate weight has been given to both positive
and negative developments in the year.
In justifying this statement, the Audit Committee has considered the
robust processes which operate in creating the 2021 Integrated Annual
Report, including:
– Review and approval of management’s assessment of the risk of
misstatement in financial reporting
– Clear guidance and instruction provided to all contributors
– Revisions to regulatory reporting requirements are provided to
contributors and monitored on an ongoing basis
– Early-warning meetings focused on accounting matters are
conducted between business unit management, Group functions,
the Group finance team and the external auditor in advance of the
year end reporting process
– A thorough process of review, evaluation and verification of the
inputs from business units is undertaken to ensure the accuracy
and consistency of information presented in the 2021 Integrated
Annual Report
– External advisers provide advice to management and the Audit
Committee on best practice with regard to the creation of the 2021
Integrated Annual Report
– A meeting of the Audit Committee was held in February 2022 to
review and approve the draft 2021 Integrated Annual Report, in
advance of the final approval by the Board. This review included
the significant accounting matters explained in the notes to the
consolidated financial statements
Anglo American plc Integrated Annual Report 2021Governance – The Audit Committee considered the conclusions of the external
auditor over the key audit matters that contributed to their audit
opinion, specifically impairment charges and impairment reversals,
accounting for the demerger of the Group’s South African thermal
coal operations, presentation of trading revenue, and environmental
restoration and decommissioning obligations.
Committee discussions in 2021
The Committee met four times in 2021, with full attendance (either
virtually or in person) as described on page 116. Throughout the course
of 2021, and consistent with prior years, the Audit Committee paid
particular attention to the valuation of assets, one-off transactions, tax
matters, financial controls and the Group’s liquidity position. In addition,
there were in-depth discussions on ad hoc topics as requested by the
Audit Committee; for example, covering the wider impact of Covid-19,
Quellaveco, marketing, mine closure liabilities, IT cyber risk, pensions
funding and exposures, and sustainability reporting governance and
assurance. The Committee reviewed the system of internal control and
risk management.
An external effectiveness review of the Committee was undertaken.
The key topics discussed by the Committee are set out on the
following pages.
Significant accounting issues considered
by the Audit Committee in relation to the
Group’s financial statements
→ Impairment and impairment reversals
of assets
The value of mining operations is sensitive
to a range of characteristics unique to
each asset. Management is required
to apply judgement in the estimation of
Ore Reserves, and price and production
forecasts which drive cash flow projections.
Response of the Audit Committee
The Committee exercises oversight over the impairment review process. The Committee assessed the
identification of impairment and impairment reversal indicators, the impact of Covid-19 and climate
change on commodity prices and exchange rate assumptions, the review of changes in the valuation
of cash generating units (CGUs) and associated sensitivity analysis, and the appropriateness of
disclosures made within the 2021 Integrated Annual Report on key sources of estimation uncertainty.
The Committee paid particular attention to the impact of climate change on the Group’s impairment
analysis. In addition to the linkage to commodity prices, the impact of carbon pricing through carbon
cost assumptions was considered for the operations where a valuation was prepared together with
the consistency of climate-related assumptions to the Group’s wider climate strategy. The Committee
reviewed and approved the associated climate-related impairment disclosure.
During 2021, the most significant assets considered were the following:
De Beers
The annual impairment assessment for goodwill relating to De Beers shows that the valuation
headroom has increased from $1.2 billion to $1.8 billion since 2020.
While sufficient headroom remains, the valuation continues to be sensitive to changes in foreign
exchange rates and consumer demand, impacting prices. The Committee concluded that no
impairment at 31 December 2021 should be recorded and carefully considered and approved the
proposed disclosure.
Minas-Rio, Iron Ore Brazil
During 2021, based on improved market conditions in the short and medium term, the valuation
of Minas-Rio was assessed and previous impairments have been partially reversed, resulting in an
impairment reversal of $1.4 billion ($0.9 billion after tax). In December 2021, further consideration was
given to the impact of changes in the production profile of the mine plan but there was no resultant
change necessary to the carrying value of the CGU as the recoverable amount was materially
consistent with the carrying value. The Committee considered market forecast and valuation scenarios
presented by management and approved the conclusions of the assessments.
Metallurgical Coal
An impairment assessment was undertaken for the Moranbah/Grosvenor, Dawson and Capcoal CGUs
(Metallurgical Coal) due to changes to forecast economic parameters, including commodity prices and
foreign exchange rates. The Committee considered the outcome of the assessment, taking into account
the medium and long term outlook for hard coking coal prices, exchange rates and the valuation
scenarios presented by management. It was concluded impairments of $0.4 billion, $0.2 billion and
$0.2 billion ($0.3 billion, $0.1 billion and $0.1 billion after tax), respectively, were appropriately recorded
at 30 June 2021. The Committee was comfortable that there were no triggers for further impairment or
reversal at 31 December 2021.
Cerrejón
On 28 June 2021, the Group announced it had entered into an agreement for the sale of its 33.3%
shareholding in the Cerrejón associate to Glencore plc. An impairment of $0.3 billion was recognised
in the year to adjust the carrying value to the estimated future proceeds less forecast costs to sell.
All conditions precedent, including approvals from authorities, were cleared on 23 December 2021,
and the Cerrejón associate therefore met the criteria to be classified as held for sale from that date.
The Committee considered judgements related to the transaction, including the recognition of the
impairment charge, classification as an asset held for sale and reclassification of post-agreement
income from associate to special items, and approved the related disclosure.
Other
In addition to the assets noted above, the Committee was updated on the valuation drivers of assets
that had previously been impaired and therefore are considered to have an inherent risk of either
further impairment or impairment reversal. The Committee considered an updated valuation model for
El Soldado and was comfortable that a full impairment reversal of $0.1 billion should be recognised.
Additionally, after careful consideration of the valuation drivers of Barro Alto and other previously
impaired assets, no impairments or impairment reversals were recorded for those assets.
129
Anglo American plc Integrated Annual Report 2021 Audit Committee report continued
Significant accounting issues considered
by the Audit Committee in relation to the
Group’s financial statements continued
→ Taxation
The Group’s tax affairs are governed
by complex domestic tax legislations,
international tax treaties between countries
and the interpretation of both by tax
authorities and courts. Given the many
uncertainties that could arise from these
factors, judgement is often required in
determining the tax that is due. Advice
is received from independent experts
where required.
→ Provision for restoration, rehabilitation
and environmental costs
The estimation of environmental restoration
and decommissioning liabilities is
inherently uncertain, given the long time
periods over which these expenditures will
be incurred, and the potential for changes
in regulatory frameworks and industry
practices over time.
→ Special items, remeasurements and
one-off transactions
The Group’s criteria for recognising a
special item or remeasurement involves
the application of judgement in determining
whether an item, owing to its size or nature,
should be separately disclosed in the
income statement.
→ Demerger of thermal coal operations
in South Africa
On 4 June 2021, the Group undertook
a demerger of its South African thermal
coal operations via an in specie return of
capital to shareholders. The transaction
involved judgement, particularly in respect
of assessing the fair value of the distribution
to be recognised.
Response of the Audit Committee continued
The Group head of tax provided the Committee with updates throughout the year on various tax matters,
including international and domestic tax policy updates, the implementation and operational outcomes
of the tax risk management framework, the impact of Covid-19 on the global tax environment, the status
of tax audits, tax reporting, and the status of uncertain tax positions. While all these matters are inherently
judgemental, no significant issues arose during 2021.
The Committee reviewed the update provided by management on estimates of environmental and
decommissioning liabilities, which are based on the work of external consultants and internal experts.
The Committee considered the changes in assumptions, including discount rates, and other drivers of
movements in the amounts provided on the balance sheet and concluded that the provisions recorded
as at 31 December 2021 appropriately reflected these updates.
The Committee reviewed each of the items classified as special items or remeasurements in the
financial statements, and the related disclosures, to ensure that the separate disclosure of these
items was appropriate.
The Committee reviewed the accounting entries recorded to effect the demerger including
consideration of the appropriateness of the valuation of the capital returned to shareholders that
was recognised at fair value. The Committee was satisfied the transaction was appropriately recorded
and disclosed.
→ Trading revenue
The Group changed its presentation policy
in respect of the recognition of physically
settled third-party trading contracts from a
gross to net basis.
The Committee reviewed the Group’s revised accounting policy for physically settled contracts relating
to third-party material which is bought and sold as part of the Group’s commodity trading activities.
The Committee considered the judgements made around which activities constituted trading together
with whether the revised presentation (on a net margin basis) would provide more relevant information
to the users of the financial statements and concluded that the change was appropriate.
The Committee reviewed the key areas of judgement in light of the year end inventory balances, and
considered the associated key controls in place. The revisions to the inventory valuation methodology for
PGMs were reviewed and considered appropriate.
The Committee reviewed the impact of Covid-19 on each of its significant accounting judgements
and estimates, concluding that the Group’s principal source of estimation uncertainty relates to
assumptions used for the assessment of impairment and impairment reversal of assets where indicators
of impairment or impairment reversal are identified. In addition to the impact on accounting judgements,
the Committee considered the impact of Covid-19 on financial reporting processes and the control
environment and was satisfied this had been appropriately addressed.
On 21 October 2020, an application was initiated against Anglo American South Africa (AASA).
The application seeks the certification of class action litigation to be brought on behalf of community
members residing in the Kabwe area in Zambia in relation to alleged lead-related health impacts. AASA
intends to vigorously defend the claim. During the year the Committee considered developments to
the case, including the Group’s responses to the class certification application filed during the year. The
litigation is still subject to significant uncertainty, and it was concluded that it is not currently possible to
make a reasonable estimate of the outcome, quantum or timing of any potential future determination.
Various other legal matters were reviewed and the Committee considered management’s assessment
that there were no material provisions required with respect to ongoing legal matters and that there
were no individually material contingent liabilities that required disclosure. The Committee endorsed
management’s proposal.
→ Inventory
Inventory valuation is an area of focus for
the Group due to the level of judgement
and complexity involved in assessing
the carrying value of inventory held on
the balance sheet. Areas of judgement
include valuation of ore stockpiles and
diamond stones.
→ Covid-19
Reviewing and monitoring the impact of
Covid-19.
→ Legal matters
A provision is recognised where, based
on the Group’s legal views and, in some
cases, independent advice, it is considered
probable that an outflow of resources will
be required to settle a present obligation
that can be measured reliably. This requires
the exercise of judgement. The Committee
was updated by the Group general counsel
and company secretary on the status of
legal matters over the course of the year.
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Anglo American plc Integrated Annual Report 2021Governance
→ Retirement benefits
The estimation of retirement benefits
requires judgement over the estimation
of scheme assets and liabilities. Areas
of judgement include assumptions for
discount and inflation rates, returns on
assets and life expectancy. Changes
in the assumptions used would
affect the amounts recognised in the
financial statements.
→ Accounting standards and best
practice guidance
The impact of new accounting standards,
and any elections made in their application,
involves judgement to ensure their adoption
is managed appropriately.
→ Going concern basis of accounting
in preparing the financial statements
The ability of the Group to continue as a
going concern depends upon continued
access to sufficient financing facilities.
Judgement is required in the estimation of
future cash flows and compliance with debt
covenants in future years.
The Committee reviewed the assumptions behind the calculations of the asset and liability positions of
the Group’s pension and medical plans and concluded that the amounts recorded as at 31 December
2021 appropriately reflected these updates.
In addition, the Committee reviewed the funding levels of the plans, any additional funding being
provided to the plans and the overall expense recognised for the year. The Committee assessed the
appropriateness of the Group’s overall risk management approach to retirement benefits.
The Committee considered the Group’s approach to sustainability KPI assurance in order to facilitate
best practice climate change disclosures. The Committee also received updates on government
consultations regarding UK corporate reform which are anticipated to bring wide-ranging changes
to the corporate regulatory landscape.
In addition, the Committee reviewed the amendment to the Group’s net debt alternative performance
measure proposed by management. The Committee considered industry practice and the economic
substance of the arrangements and concluded that it was appropriate to exclude vessel lease contracts
that are priced with reference to a freight index.
The Committee assessed the forecast levels of net debt, headroom on existing borrowing facilities and
compliance with debt covenants. This analysis covered a period of least 12 months from the date of
approval of the financial statements, and considered a range of downside sensitivities, including a
reduction in commodity prices and demand as a result of the Covid-19 pandemic. The Committee
concluded it was appropriate to adopt the going concern basis.
Liquidity management
Response of the Audit Committee
→ Liquidity and debt
Reviewing the application of the debt
strategy, funding and capital structure
and the Group’s forecast cash position.
Judgement is required in the estimation
of future cash flows and their impact on
financing plans and contingencies.
The Committee received regular updates on the profile of the Group’s debt maturities and liquidity
headroom, continued capital expenditure requirements, free cash flow generation and dividend
payments.
The Committee reviewed management’s debt capital markets and banking plans for 2022, in the
context of strategy-defined targets, to ensure the continued sufficiency of financing facilities.
→ Payment of the dividend
Reviewing management’s recommendation
to the Board regarding the level of dividend
to be paid for 2020, based on the payout-
ratio-driven dividend policy.
During 2021, the Committee reviewed the proposals for payments of dividends, in accordance with
the payout-ratio-driven dividend policy based on 40% of underlying earnings. Taking into account the
Group’s liquidity position, the Committee endorsed the proposal by management, and recommended
to the Board for approval, the payments of the 2020 final dividend, the 2021 interim dividend and
additional returns by way of special dividend and share buyback programme.
→ Viability statement
The viability statement, and the underlying
process to analyse various scenarios that
support the development of the viability
statement, are found on pages 60-61.
The Committee reviewed the time period over which the assessment is made, along with the scenarios
that are analysed, the potential financial consequences and assumptions made in the preparation of
the statement.
The Committee concluded that the scenarios analysed were sufficiently severe but plausible
(taking into account a prolonged impact of Covid-19) and the time period of the viability statement was
appropriate.
131
Anglo American plc Integrated Annual Report 2021
Audit Committee report continued
Risk assurance
Response of the Audit Committee
→ Risk management
The Group’s risk profile and the process by
which risks are identified and assessed.
The Committee assessed the Group’s risk profile, in particular the principal risks (see pages 61-67).
The Committee discussed the key risks, the mitigation plans in place and the appropriate executive
management responsibilities. The Committee also considered the process by which the risk profile
is generated, the changes in risk definitions and how the risks aligned with the Group’s risk appetite.
Following discussion and challenge, the risk profile was approved.
→ Various risk matters
The Committee oversees the
implementation of work to mitigate a
variety of key risks.
During the course of 2021, the Committee reviewed work to mitigate data protection risk, risks
associated with the Quellaveco project, marketing and trading risks and managing mine closure and
concurrent rehabilitation liabilities. The Committee evaluated the work being performed, progress made
and provided challenge to satisfy itself that these risks were being adequately managed.
→ Ethical business conduct
The Committee monitors the effectiveness
of, and compliance with, the Group’s Code
of Conduct. The Committee also reviews
the Group’s whistleblowing arrangements
and procedures.
→ Mineral Resources and Ore Reserves
statements
The year-on-year changes to Mineral
Resources and Ore Reserves for operations
and projects across the Group.
→ Internal audit work
Reviewing the results of internal audit work
and the 2021 plan.
The Committee reviewed the ongoing work to enhance ethical business conduct across the Group.
The Committee received reports on bullying and harassment investigations, anti-corruption initiatives
and the inaugural Action for Integrity campaign. The Committee considered the activities undertaken
to strengthen Code of Conduct and Group policy governance such as undertaking risk management
effectiveness reviews of 20 Group policies and implementation of a Compliance Management System.
The Committee reviewed the significant year-on-year changes, satisfying itself that appropriate
explanations existed. The Committee also reviewed the ongoing improvements in the process to
estimate and report Mineral Resources and Ore Reserves.
The Committee received reports on the results of internal audit work. The Committee assessed the
impact of the Covid-19 pandemic on the ability to carry out audits, satisfying itself that sufficient
coverage of the 2021 plan was achieved. The Committee discussed areas where control improvement
opportunities were identified and reviewed the progress in completion of agreed management actions.
The Committee reviewed the proposed 2022 internal audit plan, assessing whether the plan addressed
the key areas of risk for the business units and Group. The Committee approved the plan, having
discussed the scope of work and its relationship to the Group’s risks.
→ External audit
Reviewing the results of the external audit
work, evaluating the quality of the external
audit and consideration of management
letter recommendations.
The Committee reviewed the planning report from PwC in May 2021 and approved the final audit
plan and fee, having given due consideration to the audit approach, materiality level and audit risks.
The Committee received updates during the year on the audit process, including how the auditor had
challenged the Group’s assumptions on the issues noted in this report. In February 2022, the Committee
reviewed the output of the external audit work that contributed to the auditor’s opinion.
Ensuring the independence and effectiveness of the
external auditor
Non-audit fees represented 25% of the 2021 audit fee of $15.1 million.
A more detailed analysis is provided on page 244.
Anglo American’s Group policy on External Auditor Independence
incorporates the requirements of the FRC’s revised Ethical Standard
published in 2019.
A key factor that may impair an auditor’s independence is a lack of
control over non-audit services provided by the external auditor. The
external auditor’s independence is deemed to be impaired if the auditor
provides a service that:
Other safeguards:
– The external auditor is required to adhere to a rotation policy based
on best practice and professional standards in the UK. The standard
period for rotation of the audit engagement partner and any key
audit partners is five years. The audit engagement partner, Mark King,
was appointed in 2020 and will rotate off at the end of the 2024
audit in accordance with this requirement.
– Results in the auditor acting as a manager or employee of the Group
– Any PwC partner designated as a key audit partner of
– Puts the auditor in the role of advocate for the Group
– Creates a mutuality of interest between the auditor and the Group.
Anglo American addresses this issue through the following measures:
– Services performed by PwC are permitted non-audit services. The
permitted non-audit services mirrors the 'Whitelist’ included in the
FRC’s revised Ethical Standard
– Prior approval by the Audit Committee of non-audit services where
the cost of the proposed service exceeds or is expected to exceed
$100,000
– Disclosure of the extent and nature of non-audit services.
Anglo American’s approach to the provision of non-audit services is
contained within its policy on External Auditor Independence.
Non-audit work is only undertaken where there is commercial sense
in using the auditor without jeopardising auditor independence; for
example, where the service is related to the assurance provided by the
auditor or benefits from the knowledge the auditor has of the business.
Anglo American will rotate off the audit at the end of 2024 and
shall not be employed by Anglo American in a key management
position unless a period of at least two years has elapsed since the
conclusion of the last relevant audit.
– The external auditor is required to assess periodically whether, in their
professional judgement, they are independent of the Group.
– The Audit Committee ensures that the scope of the auditor’s work is
sufficient and that the auditor is fairly remunerated. The Committee
agreed an audit fee of $15.1 million (2020: $10.8 million) for
statutory audit services in the year.
– The Audit Committee has primary responsibility for making
recommendations to the Board on the appointment, reappointment
and removal of the external auditor.
– The Audit Committee has the authority to engage independent
counsel and other advisers as they determine necessary to resolve
issues on the auditor’s independence.
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Anglo American plc Integrated Annual Report 2021Governance – An annual assessment is undertaken of the auditor’s effectiveness
through a structured questionnaire and input from all business units
and Group functions covering all aspects of the audit process. The
Audit Committee members also participate in this assessment, which
evaluates audit planning, execution, communications and reporting.
The assessment identifies strengths and areas for improvement,
which are discussed with the auditor and action plans agreed. The
Committee reviewed the measures taken by PwC to support audit
quality, including their significant focus on robust challenge and
appropriate scepticism in respect of management’s assumptions.
The evaluation of the external audit concluded that the external
auditor was independent, objective and effective in the delivery of
the audit.
Anglo American confirms compliance during the year with the
provisions of the Competition and Markets Authority Order on
mandatory tendering and audit committee responsibilities.
The FRC Audit Quality Review team completed a review of PwC’s audit
of the Group and Company’s financial statements for the year ended
31 December 2020. No key findings were identified, and certain areas
of good practice were noted.
through assessment of global factors affecting the industry and the
Group specifically, as well as the risks arising from the business unit
assessments. Consideration is given to the views and interests of
Anglo American stakeholders. Materiality of risk is determined through
assessment of the various impacts that may arise and likelihood of
occurrence. An exception relates to those risks deemed catastrophic
in nature, where the focus of assessment is on impact and status of
internal controls, given the very low likelihood of occurrence. When
considering the impact of any risk, we assess safety, environmental,
financial, legal or regulatory, social and reputational consequences.
Regular reports on the status of risks and controls are presented to
executive management teams throughout the year. The Committee
reviewed reports on Anglo American’s overall risk profile on two
occasions during the year and conducted in-depth reviews of specific
risks during its meetings over the course of the year. Each principal
risk is assigned to either the Board or the relevant Board committee to
oversee executive management actions in response to that risk. The
Audit Committee reviews that oversight process on an annual basis.
Details of the principal risks are provided on pages 61-67.
Conclusions of the Audit Committee for 2021
The Audit Committee has satisfied itself that the external auditor’s
independence was not impaired.
The Audit Committee held meetings with the external auditor, without
the presence of management, on two occasions, and the chairman
of the Audit Committee held regular meetings with the lead audit
engagement partner during the year.
Consideration given to the appointment of the
external auditor
The Audit Committee’s assessment of the external auditor’s
performance and independence underpins its recommendation to
the Board to propose to shareholders the re-appointment of PwC as
auditor until the conclusion of the AGM in 2023. Resolutions to authorise
the Board to re-appoint and determine the remuneration of PwC will be
proposed at the AGM on 19 April 2022.
Risk management
Risk management is the responsibility of the Board and is integral to
the achievement of the Group’s objectives. The Board establishes the
system of risk management, setting risk appetite and maintaining the
system of internal control to manage risk within the Group. The robust
process of identifying and evaluating the principal and emerging risks
was in place during 2021 and up to the date of this report. The Group’s
system of risk management and internal control is monitored by the
Audit Committee under delegation from the Board. The Board confirms
that it has completed a robust assessment of the Company’s emerging
and principal risks.
The system of risk management is designed to ensure awareness of
risks that threaten the achievement of objectives. The controls that
mitigate those risks are identified so that assurance can be provided on
the effectiveness of those controls. A determination can then be made
as to whether the risk is operating within the Group’s risk appetite. We
seek to embed a culture of risk awareness into the development of our
strategic and operational objectives.
The process for identification and assessment of the principal risks
combines a top-down and bottom-up approach. At the operations
level, a process to identify all risks that prevent the achievement of
objectives is undertaken. Detailed analysis of the material risks at each
location is performed to ensure management understanding of the risk
and controls that reduce likelihood of occurrence and impact should
the risk materialise. These operational risk profiles contribute to the
assessment of risks at the business unit level. Executive management
at each business unit assesses risks that threaten achievement of
the business unit objectives and the status of controls, or actions,
that mitigate those risks. At the Group level, risks are identified
Risk appetite
We define risk appetite as ‘the nature and extent of risk that
Anglo American is willing to accept in relation to the pursuit of its
objectives’. Each principal risk is assessed as to whether it is operating
within the limit of appetite for the Group. This is based on review of the
external factors influencing that risk, the status of management actions
to mitigate or control the risk and the potential impact should the risk
materialise. For risks operating beyond the limit of appetite, a change
in strategy may be required. For risks operating within, but approaching
the limit of appetite, specific management actions may be required to
ensure the risk remains within the limit of appetite.
Risk management and the system of internal control
Controls either reduce the likelihood or impact of any risk, while the
identification of material controls – i.e. those controls that have the most
influence in mitigating a risk – is an important input for audit planning.
The system of internal control operates on a collaborative ‘three lines’
approach, with operating management owning and managing risks
and controls on a day-to-day basis, and business unit or functional
management fulfilling a second line role through frequent oversight of
implementation of controls, and providing complementary expertise,
support and challenge relating to the management of risk.
A centrally managed internal audit department provides the third line
role by reviewing the design and operating effectiveness of the internal
control framework, which includes the work performed by the first and
second lines management teams. External assurance providers sit
outside the three lines’ roles but provide additional assurance to satisfy
legislative and regulatory expectations, or requests from management
or the Board to complement internal sources of assurance.
The above is reflected in the Anglo American Risk and Assurance
Governance (RAG) Model, introduced in 2020, and work has continued
in 2021 together with the respective functions and operations to
embed this further.
Internal audit operated in all the Group’s managed businesses in 2021,
reporting its work to executive management and the Audit Committee
on a regular basis. The internal audit department’s mandate and
annual audit coverage plans were approved by the Audit Committee.
The scope of internal audit work covers the broad spectrum of risk
to which the Group is exposed. The audit of controls associated with
major operating/technical risks was undertaken in conjunction with
relevant experts from the technical and sustainability function, the
results of which were shared with the Sustainability Committee and
Audit Committee.
133
Anglo American plc Integrated Annual Report 2021 Audit Committee report continued
In determining its opinion that the internal financial controls and internal
control and risk management environment was effective during 2021,
the Audit Committee considered the following factors:
– The results of internal audit work, including the response of
management to completion of actions arising from audit work
– The key risk areas of judgement and estimation uncertainty within
financial reporting and mitigating actions taken by management
– The output of risk management work
– The output of external audit work and other assurance providers
– Issues identified by management or reported through whistleblowing
arrangements, and the results of investigations into allegations of
breaches of our values and business principles.
Reviewing the effectiveness of the system of risk
management and internal control
The Board, through the Audit Committee, fulfils its responsibility in
reviewing the effectiveness of the system of risk management and
internal control through review of reports submitted over the course
of the year covering the risk management process, adequacy of the
internal control environment, consideration of risk appetite, in-depth
reviews of specific risks and the results of external audit work. The
Sustainability Committee also reviews sustainable development risks
in detail and reports its findings to the Board.
Reviewing the effectiveness of internal audit
The Committee assesses the work of internal audit on a regular basis
through the receipt of reports on the progress of the internal audit plan
and issues arising and through its annual effectiveness review. The
resources of internal audit are also monitored to ensure appropriate
expertise and experience. The Committee met with the Group head
of risk management and business assurance, in the absence of
management on two occasions during 2021. Furthermore, the chair
of the Committee held regular one-to-one meetings with the Group
head of risk management and business assurance. This enables further
evaluation of the work performed.
Whistleblowing programme
The Group operates a multilingual whistleblowing facility which uses
a reporting platform provided by a third-party service provider. The
whistleblowing programme is called YourVoice and continues to
facilitate confidential and anonymous reporting of a wide range of
concerns about potentially unethical, unlawful or unsafe conduct or
practices that conflict with our Values and Code of Conduct.
YourVoice channel is available to our employees in our managed
operations as well as to all external stakeholders, such as suppliers,
community members, and members of the public affected by
our operation.
During 2021, we received 797 reports through the YourVoice channel,
a 30% increase from 2020.
812 allegations were closed during this reporting period, which include
intakes from prior years. 30% of the 2021 allegations closed were
substantiated or partially substantiated. All YourVoice reports are
assessed and investigated as appropriate by a dedicated investigation
team based across the Group using a standardised investigation
framework. Appropriate actions were taken against substantiated
allegations in accordance with Group policies.
The continued rise in reports is attributed to the increased awareness of
the channel, a growing culture of trust among our employees and other
stakeholders to raise their concerns with confidence. The promotion of
this channel through other relevant Groupwide initiatives, such as the
Action for Integrity month, policies, and programmes, also encouraged
a healthier ‘speak up’ culture.
The current process facilitates the opportunity to take early remedial
actions and enables management to address any systemic issues
identified. For this purpose, protocols have been agreed with the
Group’s senior management for early involvement and support in
sensitive investigation cases, such as fraud, bullying, harassment,
safety and others with significant reputational damage.
The Audit Committee is charged with the responsibility of monitoring
and advancing the programme on a continuous basis.
134
Anglo American plc Integrated Annual Report 2021Governance Directors’ remuneration report
“The Committee’s approach to pay is to ensure
strong alignment between remuneration and the
Purpose and strategic ambitions of the Company.
Our balanced framework incentivises strong
delivery over the short term and the achievement
of our transformational long term strategy.”
Committee members
Anne Stevens – Chair
Ian Ashby
Byron Grote
Hixonia Nyasulu (appointed 23 February 2021)
Ian Tyler* (appointed 1 January 2022 and will succeed
Anne Stevens as chair with effect from 19 April 2022)
*Ian Tyler has the requisite length of service as a member of a remuneration
committee on appointment as incoming chair, in accordance with the UK
Corporate Governance Code and the Committee’s terms of reference.
→ For further detail on biographies and Board experience:
See pages 108-111
The chairman, chief executive, Group director of people and organisation,
the Group head of reward and external advisers also attend meetings at the
invitation of the Committee.
Role and responsibilities
Changes to the Committee
Hixonia Nyasulu was appointed as a member of the Committee
on 23 February 2021.
Ian Tyler was appointed as a member of the Committee on
1 January 2022.
Committee discussions and focus areas in 2021
– Confirmation of incentive results for the 2020 annual bonus and
vesting levels of the 2018 LTIP
– Continued review of impact of Covid-19 on all stakeholders
– Setting of incentive targets for 2021, including the 2021 annual
bonus and 2021 LTIP
– Approval of remuneration arrangements and service agreement for
incoming Group chief executive
– Approval of remuneration arrangements for outgoing Group chief
executive on cessation of employment
– Approval of remuneration arrangements for change in role or
cessation of employment of GMC members
– Establishing and developing the Group’s general policy on executive
and senior management remuneration
– Discussions on the approach to the impact of fatalities on variable
remuneration outcomes for executive directors and GMC members
– Determining specific remuneration packages for the chairman,
executive directors, members of the Group Management Committee
(GMC) and other senior management for review and approval by
the Board
– Input and oversight on the reward policy for the broader workforce
– Consideration of the impact of the demerger of our thermal coal
operations in South Africa as Thungela Resources Limited on
our incentives
– Updates on broader employee pay.
– Engaging with the wider workforce, shareholders and other
Key areas of focus for 2022
stakeholders regarding executive remuneration.
– Development of the next directors’ remuneration policy, including
The Committee’s terms of reference are available to view online.
consultation with shareholders on key aspects
→ For more information, see
www.angloamerican.com/about-us/governance
– Assessment of incentive outcomes, including for the 2021 annual
bonus and 2019 LTIP award
– Setting of incentive targets for 2022, including the 2022 annual
bonus and 2022 LTIP award
– Design and implementation of global employee share plan with a
view to ensuring all employees are enabled to become shareholders
– Review of corporate governance and remuneration trends and any
implications for the Group.
135
Anglo American plc Integrated Annual Report 2021 Introductory letter
Dear Shareholders
Despite continued uncertainties created by the ongoing impacts of
Covid-19, during 2021, Anglo American delivered strong operational
and financial performance, remained focused on our commitment to
keep employees and communities safe, and continued to focus our
diversified portfolio on those metals and minerals that enable a lower
carbon global economy and that meet the fast growing consumer-
driven demands of developed and maturing economies.
The Committee’s approach to pay is to ensure that the strong alignment
between remuneration and the Purpose and strategic ambitions of
the Company is maintained at all times. Our balanced framework
incentivises strong delivery over the short term and the achievement of
our transformational long term strategy.
Environmental and social commitments
Health and safety
We are committed to ensuring our employees are healthy, happy and
fulfilled at work, leading to safer production and positive influences on
our communities. In parallel, we remain uncompromising in our focus
on achieving zero harm.
The prioritisation of the work of our Elimination of Fatalities Taskforce
has delivered a demonstrable reduction in fatalities since its inception.
In the period to August 2021, we had a continuous period of 11 months
without a fatality across our Group managed operations, but the tragic
fatality at our Quellaveco project in Peru is a reminder that, despite
our progress, the work is not done. All management level employees
across the global organisation, including executive directors, continue
to have an element of their annual bonus linked to the achievement of
deliverables in the Elimination of Fatalities workstream.
For the 2021 bonus, the Committee determined it is appropriate
that executive director bonus outcomes be reduced by 3.5% to
reflect the one fatality, recognising the collective responsibility of the
executive directors when failures in safety result in a fatality within
the organisation.
As highlighted in our 2020 report, during 2021 the Committee has
reviewed in detail the impact of fatalities on variable remuneration.
The Committee considered market practice as well as our internal
context, particularly the significant improvements in our safety
record, and determined that the current approach of discretionary
reductions to annual bonus outcomes remains the most appropriate
for Anglo American. The reduction will be determined taking into
consideration all relevant facts and circumstances, including the
number of fatalities, the cause of such fatalities, any repeat failures in
safety and the number of high potential incidents. In order to recognise
the progress we have made and the importance of a zero harm culture,
future reductions to variable pay are likely to be more significant in
terms of quantum than previously implemented.
WeCare and our continued response to Covid-19
Through our comprehensive WeCare programme we continue to help
protect our people and communities from the impacts of Covid-19,
in terms of both health and livelihoods as well as employee wellbeing
more generally. The programme, which operates with the tag line ‘We
are all in this together’, focuses on the physical and mental health of our
people and the provision of many essential services in the communities
local to our sites.
136
A portion of our 2019 LTIP award is measured on the success of our
global well-being strategy. Within that strategy, the three priorities of
disease response, physical health and mental health were adapted
with the onset of the pandemic to support the physical and mental
health resilience our people need to deal with the direct and indirect
impacts of the pandemic. As we pay more attention to mental
health, psychological safety continues to be an intrinsic aspect of our
safety delivery.
Sustainability
Climate change poses the greatest current threat to our way of life and
it is essential that we accelerate the transition to a decarbonised world.
Anglo American is committed to addressing this challenge across our
value chain. Our Sustainable Mining Plan (SMP) includes commitments
to be a leader in environmental stewardship. By 2030, our aims include
reducing GHG emissions (Scopes 1 and 2) by 30% against a 2016
baseline, improving energy efficiency by 30%, and achieving a 50%
net reduction in freshwater abstraction in water-scarce areas. As set
out in the Remuneration Report, our remuneration structures incentivise
delivery on these key initiatives.
Our current in-flight LTIP awards include metrics that incentivise the
delivery of the reduction of GHG emissions and increased energy
efficiency. The 2022 award will incentivise the reduction of GHG
emissions through increasing the use of renewable energy. For
the 2022 award we have also introduced a measure based on
the reduction in the abstraction of fresh water, aligned to our SMP
water goal.
A ‘Just Transition’ is one where the communities and people in the
regions where we operate are not left behind but thrive as we move
to a greener, less carbon dependent future. It involves creating
environmentally and socially sustainable jobs that are consistent
with addressing the climate change agenda. To reflect this, we have
retained the off-site jobs measure for the 2022 LTIP, linked to the
SMP goal of supporting or creating five jobs off site for every job on
site by 2030.
Chief executive succession
A key focus of the Committee’s agenda during 2021 was the
remuneration arrangements for our chief executive succession.
Duncan Wanblad was announced as the incoming chief executive
and will take up the role in April 2022, following the AGM. The terms of
the remuneration package for Duncan were announced in November
2021. This package complies fully with the directors’ remuneration
policy that was approved by shareholders at the 2020 AGM. Duncan’s
base salary will be £1.25 million per annum and he will receive a
pension contribution of 15% of base salary, giving a total fixed pay
on appointment of £1.47 million per annum. Further information in
respect of Duncan Wanblad’s remuneration upon taking up the role of
chief executive is provided in the implementation for 2022 section, on
pages 143-144.
Mark Cutifani will be retiring as chief executive and stepping down
from the Board on 19 April 2022 and will remain an Anglo American
employee until 30 June 2022. Between stepping down as chief
executive and leaving the Group, he will continue to provide services
to the Group in support of a smooth transition into the role for Duncan
Wanblad. His remuneration arrangements on retirement are in line
with the current directors’ remuneration policy, and treatment of his
incentives will be in line with his service agreement and the rules of our
incentive arrangements. He will receive a payment in lieu of unworked
notice, good leaver treatment in respect of outstanding share awards
and a pro-rated bonus in respect of time served to 30 June 2022. He
will receive his salary, pension and benefits up to his date of cessation
of employment. Further information in respect of his remuneration
arrangements on leaving the Group is provided on page 144.
Anglo American plc Integrated Annual Report 2021Directors’ remuneration report continuedGovernance Decision making
The Committee has taken into consideration: company performance,
which includes financial performance; progress in safety; personal
achievements in innovation and our People agenda; and transforming
our portfolio when making decisions on pay. We also continue to
consider shareholder opinion and experience, pay for the wider
workforce, and wider societal expectations. As a Committee, we
continue to strive to make decisions that strike a balance between
incentivising the management team, paying for good performance
and being equitable in the broader context. To avoid conflicts of
interest, no executive director is present when their pay is discussed;
likewise, the chairman is recused from the meeting when his
remuneration is discussed.
As in 2020, the Committee did not make adjustments to incentives as
a result of the impact from the Covid-19 pandemic.
2021 outcomes
Safety, health and environment
Regrettably, after years of continued improvement in our total injury
frequency rate, there was a slight uptick in 2021, due to the disruptions
caused to our working practices as a result of Covid-19. We are
reassured to know that the injury frequency rate decreased in the
second half of the year after we reinforced the importance of our
routines and practices. Overall, however we did not achieve the
required year-on-year improvement and the element of the annual
bonus linked to injury rates will not payout.
The work from the Elimination of Fatalities programme has already
made a significant difference to the safety of our operational
colleagues, as detailed above, and the achievements during 2021
resulted in an above target payout for this measure.
As noted above, the Committee determined it appropriate that
executive director bonus outcomes for 2021 be reduced by 3.5%,
recognising the collective responsibility of the executive directors when
failures in safety result in a fatality.
Financial performance
The strong demand for our products and knock-on effect on prices
from 2020 carried through to 2021, as economies continued to recover
from the disruptions caused by Covid-19.
Following a fall in underlying EBITDA in 2020, operational improvements
at PGMs, De Beers and Iron Ore, together with the improving market for
diamonds meant we delivered a record financial performance in 2021,
generating underlying EBITDA of $20.6 billion.
We achieved an attributable free cash flow result of $7.8 billion, due
largely to a strong price environment in the first half of the year. Return
on capital employed (ROCE) performance remained strong at 43%,
well above our target return through the cycle of 15%. We also saw
impressive relative share price performance, resulting in a TSR of 43%
for the year, versus 20% for the FTSE 100.(1)
The Committee considers the operation of the policy in 2021 and the
pay outcomes to be appropriate and reflective of performance.
Annual bonus outcomes
EPS performance measured using fixed prices and foreign exchange
(FX) rates was 242 cps and resulted in 65% vesting of the 17% of the
annual bonus determined by this metric. The 17% of the annual bonus
based on underlying EPS at actual prices and FX rates resulted in a
100% vesting, with a result of 722 cps. The result for the 16% based on
sustaining attributable free cash flow at fixed prices and FX rates was
£2.9 billion, resulting in 67.5% vesting.
Despite the uptick in injury rate, the Group continued to make good
progress towards our environmental and health goals, resulting in a
70% payment against SHE targets (this does not include the safety
deductor which is applied on the whole award).
Bonus outcomes for the executive directors after the safety deductor
were at 75.2% of maximum.
2019 LTIP outcomes
The shareholder experience over the three-year performance period
was a positive one; the TSR outcome of 101.3% is significantly higher
than the FTSE 100 median TSR of 19.7% and the Euromoney Global
Mining Index TSR of 65.8%. This resulted in full vesting of the 70% based
on the two TSR components.
The 10% of the award dependent on ROCE vested at 100%, based on
attributable ROCE of 43% for the year. Group Cumulative Attributable
Free Cash Flow was affected by below budget cost and volume
performance across the 3-year performance period impacted by
headwinds including Covid-19 and one off operational incidents. This
resulted in 0% vesting for the 10% of the LTIP for this measure.
The ESG measures were fully achieved, resulting in a 100% vesting for
the 10% of the LTIP based on these measures. This includes the full
implementation of Water Management Standards (WMS) by the end
of 2021 and the full roll-out of the priorities of our WeCare programme
that constituted part of our response to Covid-19.
The LTIP award will therefore vest at 90% of maximum. The vesting cap
applicable to the 2019 award will not come into force based on current
share prices.
The Committee considers that the operation of the policy and the
annual bonus and LTIP outcomes for 2021 are a fair reflection of the
performance of the business and the role played by management
in that performance, and the experience of shareholders and
stakeholders. Therefore no adjustments to the incentive outcomes
were made.
Fairness and wider workforce pay
As we set out in more detail in our Fairness section, the Company is
committed to ensuring fairness and equity in our remuneration and
benefits structures across our global operations.
We are excited to announce a global initiative that will strive to
increase employee share ownership, create greater equity in wealth
creation opportunities across the wider global workforce and enhance
employee engagement. Our new global employee share plan will
enable employees to share in the success of the Company and
encourage employees to act as owners. It will allow for awards of
Company shares to employees who do not currently enjoy supported
access to share ownership and will also incentivise personal investment
in the Company. This new plan will not include the grant of additional
share awards to executive directors or GMC members. The terms and
plan rules will be presented to a shareholder vote at the 2022 AGM,
and it is intended that implementation will take place later in the year
following approval.
During the year, the Global Workforce Advisory Panel chaired by our
senior independent director Byron Grote continued to operate with the
goal of facilitating how the Board communicates with and takes aboard
the views of the wider workforce. Two virtual meetings took place during
the year providing employees with the opportunity to raise and discuss
their views on a range of topics, including executive remuneration
and its alignment with wider Company pay policy. The Remuneration
Committee is considering opportunities to improve how the Group
engages with the workforce to explain how decisions on executive
remuneration reflect wider workforce pay policy.
The Company is a proud advocate of the living wage, having been
an accredited Living Wage employer in the UK since 2014 via the
Living Wage Foundation. In 2021, the Company strengthened this
position via our public commitments to ensure that every employee at
Anglo American earns a fair wage; to explore ways of applying Living
Wage principles to our contractors and supplier base in the future;
and to advocate Living Wage principles to organisations or individuals
beyond our control, but within reach of our influence.
(1) Based on 3 month average prices, in line with the TSR calculation methodology for
LTIP awards.
137
Anglo American plc Integrated Annual Report 2021 The Committee is kept updated with information relating to wider
workforce pay, which provides an overview of people management
practices and also provides context for decision making on executive
director remuneration.
CEO pay ratio
The CEO pay ratio compares the chief executive’s remuneration to
the pay for an employee at the median, lower quartile and upper
quartile of our UK employee population (including De Beers and Crop
Nutrients employees). The median CEO pay ratio for 2021 is 116:1,
down from 126:1 for 2020. The decrease mainly reflects a higher bonus
achievement for all of our bonus eligible employees in the UK pushing
up total remuneration levels.
Looking ahead
New remuneration policy
In 2022, we will consult with shareholders on the development of the
next remuneration policy, which will be put to a shareholder vote at the
AGM in 2023.
Salaries
The Committee approved a 3% increase to current executive directors’
salaries in 2022, in line with the 3% increase awarded to the Group’s
UK-based employees.
Implementation of incentives in 2022
There are no changes to the incentive levels in 2022, with the maximum
opportunities for the annual bonus and LTIP remaining at 210%
and 300% of salary, respectively. Performance measures attached
to the awards are in line with the terms of the 2020 policy. Details of
performance conditions attached to the 2022 incentives can be found
in the implementation report that begins on page 142.
Conclusion
This 2021 directors’ remuneration report will be the last from me as
chair of the Remuneration Committee. Having been a member of
this Committee since 2016 and chair since 2019, I am proud of the
work the Committee has done to strengthen the relationship between
pay outcomes and the key strategic ambitions of the Company.
The Committee is well placed to continue the work to ensuring the
strong ongoing linkage between incentives and the transition to
a decarbonised world; and to focus on equity in pay across the
workforce.
Following the AGM in April, I will be succeeded as Remuneration
Committee chair by Ian Tyler, who joined the Board and the Committee
on 1 January 2022.
Finally, I would like to thank all the members of the Committee that have
served with me for their support and counsel, the executive directors
for their engagement and other stakeholders who have provided their
input over the years.
Anne Stevens
Chair, Remuneration Committee
138
Anglo American plc Integrated Annual Report 2021Directors’ remuneration report continuedGovernance At a glance
This section provides a summary of the key
information presented across the remuneration
report. This includes an overview of the 2020 policy,
performance and remuneration outcomes, as well
as how our remuneration is linked to strategy.
Summary of our remuneration structure
Summary of 2020-2023 remuneration policy components
Link to strategy
Key features
Fixed pay
Salary
Recruitment and retention
of high-calibre executives
– Reviewed annually by Remuneration Committee
– Increases based on Group performance, individual performance,
levels of increase for the broader UK population and inflation
Benefits
– Include car-related benefits, medical insurance, personal-taxation
and financial advice, among others
– Capped at 10% of salary
Pension
Alignment with the wider
workforce
– Newly appointed directors: same contribution level as the wider workforce
– Incumbent directors: 18.33% of salary for 2022. Will be reduced to 15% of salary
from 1 January 2023 in line with the rate for the wider UK workforce
2
0
2
2
2
0
2
3
2
0
2
4
2
0
2
5
2
0
2
6
Annual bonus
Cash
Rewards delivery of
strategic priorities and
financial success
– Maximum bonus award of 210% of salary
– Outcome based on financial, SHE, strategic and individual objectives
subject to a safety deductor
– 50% of bonus is paid in cash
– Cash bonus subject to malus and clawback
Deferred shares
Encourages sustained
performance in line with
shareholder interests
– 50% of bonus is deferred into shares (Bonus Shares)
– One-third of Bonus Shares will vest after two years, with
the remaining Bonus Shares vesting after a further one year
– Bonus Shares are subject to malus and clawback
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LTIP
Encourages long term
shareholder return and
accomplishment of longer
term strategic objectives
– Shares granted with a face value of 300% of salary
– Shares vest after a three-year performance period and released
after a further two-year holding period
– Vesting based on measures linked to strategic priorities
– LTIP award is subject to malus and clawback
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Shareholding guidelines
In-post
To align with long term
shareholder interests
Post-employment
To align with long term
shareholder interests
– Chief executive: 400% of salary
– Other executive directors: 300% of salary
– Lower of the in-post requirement at the time of cessation
and the actual shareholding at cessation
– To be held for two years post-employment
l
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139
Anglo American plc Integrated Annual Report 2021
Incentive performance metrics – financial measures
Underlying EPS◊
Three-year shareholder return
Group attributable ROCE◊
$7.22/share
101.3%
43%
2021
2020
$2.53/share
$7.22/share
2021
2020
71%
101.3%
2021
2020
17%
43%
2022 Implementation table
Key remuneration element
Implementation
Performance metrics
Salary
Car allowance
Pension
Annual bonus
LTIP
Mark Cutifani
Stephen Pearce
Tony O’Neill
Duncan Wanblad £1,250,000 (on assuming role of chief executive)
£1,440,722 (3% increase)
£868,287 (3% increase)
£900,452 (3% increase)
Mark Cutifani
Stephen Pearce
Tony O’Neill
Duncan Wanblad £33,296 (on assuming role of chief executive)
£33,622
£32,423
£32,423
18.33% of base salary (decrease from 21.67% in 2021)
15% of base salary for Duncan Wanblad (on assuming role of chief executive)
Maximum of 210% of salary
50% paid out as cash
17% paid out as shares deferred for 2 years
33% paid out as shares deferred for 3 years
Maximum of 300% of salary
3 year performance period with 2 year post-vesting holding period
34% EPS
16% SAFCF
20% SHE
20% Strategic
10% Individual
50% TSR
15% ROCE
15% SAFCF
20% ESG
Key performance metrics for 2022
Metrics
Pillars of value
Rationale
Annual Bonus weighting LTIP weighting
Safety and zero harm
Safety and health – Employee safety is the Group’s first and most important value 15%
Underlying EPS◊
Sustaining attributable
free cash flow◊
Financial
Financial
– EPS links reward to delivery of in-year underlying equity
returns to shareholders
– Incentivises cash generation for use either as incremental
capital investment, for capital returns to shareholders, or
debt reduction
Water efficiency
Environment
– Achieve enhanced water efficiency
34%
16%
5%
TSR
Financial
Group attributable ROCE◊
Financial
Sustaining attributable
free cash flow
Financial
Renewable energy
Environment
Water reduction
Environment
Social responsibility
Socio-political
Total
– Creates a direct link between executive pay and
shareholder value
– Measure is split between comparison against sector index
(Euromoney Global Mining Index)and comparison against
local peers (constituents of FTSE 100 index)
– ROCE promotes disciplined capital allocation by linking
reward to investment return
– Incentivises cash generation for use either as incremental
capital investment, for capital returns to shareholders, or
debt reduction
– Commitment to address climate change by reducing
greenhouse gas emissions through the use of
renewable energy
– Reduction of freshwater abstraction in water-stressed
areas to reduce our environmental burden in the areas
where we operate
– Off-site jobs supported at our locations to reinforce our
commitment to the communities in which we operate
(1) 30% of annual bonus dependent on achievement of strategic and individual goals
50%
15%
15%
6%
8%
6%
70%(1)
100%
140
Anglo American plc Integrated Annual Report 2021Directors’ remuneration report continuedGovernance Executive directors’ shareholdings
Requirement
Shareholding as at 31 Dec 2021
Mark Cutifani
400%
Stephen Pearce
300%
Tony O’Neill
300%
2,535%
1,322%
2,256%
400%
300%
300%
2,535%
1,322%
2,256%
Shareholding requirement
Shareholding as 31 December 2021
Executive directors are expected to build up and hold a percentage of their salary in shares (400% for the chief executive, 300% for other executive directors).
As at 31 December 2021, all executive director shareholdings exceeded the required levels.
→ For more information
See page 154
2021 Pay outcomes £’000
Mark Cutifani
2021
2020
£1,837
£1,814
Stephen Pearce
2021
2020
£1,085
£1,074
Tony O’Neill
2021
2020
£1,148
£1,143
£1,330
£965
£1,380
£1,001
Fixed
Bonus paid
LTIP paid
£2,207
£1,574
£5,777
£5,938
£3,481
£3,579
£3,610
£3,711
2021 annual bonus outcome
2019 LTIP vesting outcome
100%
100%
EPS
34% of overall opportunity
Maximum vesting
actual price: $7.12
fixed price: $2.74
75.2%
SAFCF
16% of overall opportunity
Fixed price: $3.4 billion
SHE
20% of overall opportunity
Strategic
20% of overall opportunity
Individual objectives
10% of overall opportunity
Opportunity
Outcome
Safety deductor
3.5% deduction of outcome
EPS
28.1% of overall opportunity
actual price: $7.22
fixed price: $2.42
SAFCF
10.8% of overall opportunity
Fixed price: $2.9 billion
SHE
14% of overall opportunity
Strategic
16% of overall opportunity
Individual objectives
Mark Cutifani: 9%
Stephen Pearce: 9%
Tony O’Neill: 9%
of overall opportunity
90%
TSR
70% of overall opportunity
Euromoney Global Mining
TSR: index + 6% p.a.
FTSE 100 TSR:
upper quintile
ROCE
10% of overall opportunity
Maximum vesting
ROCE: 20%
AFCF
10% of overall opportunity
Maximum vesting
AFCF: $4 billion
ESG
10% of overall opportunity
Opportunity
Outcome
TSR
70% of overall opportunity
Group TSR: 101.3%
ROCE
10% of overall opportunity
Group ROCE: 43%
AFCF
0% of overall opportunity
AFCF: Threshold not met
ESG
10% of overall opportunity
achieved
141
Anglo American plc Integrated Annual Report 2021
Directors’ remuneration policy
2020 executive directors’ remuneration policy
The 2020 remuneration policy was set out in the 2019 annual report
and was presented for shareholder approval at the AGM held on 5 May
2020. This Policy was approved with 95.61% support. It is intended that
this policy will apply until the Company’s 2023 AGM.
→ The full remuneration policy can be found in the 2019 annual report
available on our Group website
www.angloamerican.com/annual-report-2019
How our remuneration policy addresses UK Corporate Governance
Code provision 40 principles
The 2020 remuneration policy was designed taking into consideration
the principles of provision 40 of the UK Corporate Governance Code.
The table below outlines how the policy addresses each of those
principles:
Principle
Clarity
Simplicity
Risk
Predictability
Proportionality
How this is addressed in the 2020 remuneration policy
Our remuneration structure is clearly defined.
Performance-based elements, metrics and vesting
schedules are clearly disclosed on payment.
Our remuneration elements comprise of well-understood
UK market standard elements.
Our policy limits the risk of unfair or excessive
remuneration through the following measures:
– Clearly defined limits on the maximum opportunities
of incentive awards
– Operation of deferral on annual bonus share
awards on significant portion of the award
– Operation of post-vesting holding period for
LTIP awards
– Strong powers of discretion for Remuneration
Committee to adjust formulaic outcomes of
incentive awards to ensure payouts are aligned
to Group performance
– Robust malus and clawback provisions on all
incentives
– Reduction in LTIP award mechanism to ensure
reduction in grant size of awards, should there be
a significant fall in share price between grants.
The policy has defined limits which can be used to
determine potential values. Scenario charts were
presented before approval of the policy to illustrate
potential payout scenarios under the new policy.
Payouts under incentive awards are linked to the
fulfilment of performance conditions that support the
Group’s long term strategy. Deferral and annual grant of
awards ensure performance measures will continue to
be aligned.
The Committee’s powers of discretion ensure that
there will be no rewards under incentives for poor
performance.
Alignment to
culture
Focus on share ownership and long term sustainable
performance is reflected in the policy. LTIP measures
support a long term focus for executives, including on
environmental issues.
Payouts for a significant portion of both the annual bonus
and LTIP are dependent on the achievement of ESG and
SHE measures, which underlines the importance of safety
and sustainability to the Group strategy.
142
Summary of policy and statement of implementation
of policy in 2022
The following pages provide a summary of the key elements of our
directors' remuneration policy. The last column of the table below
states how the remuneration policy will be applied in 2022. For 2022,
there are no significant changes in the structure of the remuneration
packages for directors compared to previous years.
Annual bonus safety deductor
As promised in our 2020 report, during 2021, the Committee
reviewed in detail the impact of fatalities on variable remuneration.
The Committee considered market practice, as well as our internal
context, particularly the significant improvements in our safety record,
and determined that the current approach of discretionary reductions
to annual bonus outcomes remains the most appropriate approach
for Anglo American. The reduction will be determined taking into
consideration all relevant facts and circumstances, including the
number of fatalities, the cause of such fatalities, any repeat failures in
safety and the number of high potential incidents. In order to recognise
the progress we have made and the importance of a zero harm culture,
future reductions to variable pay will be more significant in terms of
quantum than previously implemented.
Performance measures
The annual bonus targets for 2022 are considered by the Board to
be commercially sensitive; they will be disclosed in the 2022 annual
report on remuneration. Specific details of individual and strategic
performance targets for 2022 will also be included in the 2022 report.
In line with the policy, 50% of the annual bonus will be linked to financial
performance. For 2022, EPS will account for 34% of the annual bonus.
Half of this will be based on performance at actual prices and FX rates,
and half on performance at fixed prices and FX. Sustaining attributable
free cash flow (SAFCF), measured at fixed prices and FX and
accounting for 16% of the bonus, was introduced to the annual bonus
in 2021 and will be retained for 2022.
In 2022, the structure of the LTIP will continue to include a 50%
weighting on relative TSR. Financial measures based on ROCE
and SAFCF are also unchanged and continue to account for 15%
each, with the remainder of the measures focused on strategic ESG
objectives. SAFCF for the LTIP will be measured at out-turn prices and
FX as for the 2021 award.
Reducing greenhouse gas (GHG) emissions has been a measure in
the LTIP for the past two grants, in line with the Group’s SMP target of
a 30% reduction in GHG emissions by 2030. For the 2022 Award, a
related measure focusing on the production of renewable energy will
be introduced, to highlight the importance of this organic area of the
GHG reduction programme.
While the implementation of the tailings facilities standard remains a
critical environmental priority, it is felt that the inclusion of the metric as
part of the past two LTIP grants means that work on our tailings facilities
is sufficiently supported at this point, and the focus for 2022 can move
to other important aspects of our ESG agenda.
For 2022, the tailings facilities measure is replaced by a water
reduction measure. Given the importance of water in our operations
and the SMP goal of reducing abstraction of fresh water in water-
scarce regions by 50% by 2030, a measure to reduce the abstraction
of fresh water in water-stressed areas will be included in the 2022 LTIP
grant. The reduction will be based on a baseline of the prior three-year
rolling average, to smooth out any volatility in annual usage.
The social responsibility measure is retained for a further year, with
a stretching target of supporting 2.5 off-site jobs in the communities
that we operate in for each job on site, by the end of 2024. This
measure supports the external livelihoods commitment outlined in our
Anglo American plc Integrated Annual Report 2021Directors’ remuneration report continuedGovernance SMP and our ambition for a ‘Just Transition’, including the creation of
environmentally friendly and socially sustainable jobs.
The three-year SAFCF measure in the LTIP will be at actual prices
and FX and is considered by the Board to be commercially sensitive;
disclosing it would enable competitors to derive information as to our
detailed business plan. The actual targets, along with the outcomes,
will be disclosed in the 2024 remuneration report. The definition of
SAFCF can be found on page 272.
Key aspects of the remuneration policy for executive directors
Operation
Opportunity/performance measures
Implementation for 2022
Basic salary
To recruit and retain high
calibre executives
People
Annual bonus
To encourage and reward
delivery of the Group’s
strategic priorities for the
relevant year.
To ensure, through the
deferral of a portion into
shares, that longer term focus
is encouraged and in line with
shareholder interests.
Safety and health
Environment
Socio-political
People
Financial
Cost
Long Term Incentive Plan
(LTIP)
To encourage and reward
the achievement of long
term sustainable shareholder
returns and the delivery of
financial/strategic priorities.
To align executive director
interests to shareholder
interests.
Safety and health
Financial
Environment
Socio-political
Basic salary levels are
reviewed annually by the
Committee, taking account of
factors including the Group’s
performance, individual
performance, levels of increase
for the wider workforce and
inflation.
The Committee also considers
the impact of any basic
salary increase on the total
remuneration package.
Any increases awarded will
be set out in the applicable
statement of implementation
of policy.
The annual bonus is awarded
based on a combination of
measures, determined by
the Committee each year to
ensure continued alignment
with the Group’s financial goals,
strategic priorities and business
needs.
50% of the annual bonus
earned will be deferred into
shares under the Bonus Share
Plan (BSP), vesting 17% after
two years and 33% after three
years.
Dividends are paid on Bonus
Shares.
Malus and clawback provisions
apply as described below.
Conditional awards of shares
or nil-cost options are granted
annually, with a performance
period and vesting period of at
least three years.
Any awards that vest are
subject to a holding period so
that the overall LTIP time horizon
is at least five years.
Vested awards may not
generally be sold during the
holding period, other than to
cover tax liabilities arising on
vesting.
Dividend equivalents accrue
over the vesting period and are
payable in respect of awards
that vest.
Malus and clawback provisions
apply as described below.
Maximum increase of 5% of salary
per annum, in normal circumstances.
There may be occasions when the
Committee may award a higher
annual increase, the rationale
for which will be explained to
shareholders in the applicable
statement of implementation of
policy.
Executive directors will receive a 3% increase in salary
for 2022. This increase is in line with the increase for the
Company’s UK employees.
With effect from 1 January 2022, the salaries for the
executive directors will be:
– Mark Cutifani – £1,440,722
– Stephen Pearce – £868,287
– Tony O’Neill – £900,452
Duncan Wanblad will succeed Mark Cutifani as chief
executive on 19 April 2022. His annual salary as chief
executive will be £1,250,000.
The maximum annual bonus
opportunity is 210% of salary.
The maximum annual bonus opportunity for each of the
executive directors remains at 210% of salary.
The bonus earned at threshold
performance is up to 25% of the
maximum. Performance below
threshold results in zero bonus.
Performance measures for the
annual bonus for each year must
meet the following criteria:
– Minimum 50% financial measures
– Minimum 15% SHE measures
– Maximum 20% personal
measures
– Remainder of award to be linked
to strategic measures
The performance measures for the 2022 award will be as
follows:
– EPS (34% weighting) – Half on performance at actual
prices and FX, and half on performance at fixed prices
and FX
– SAFCF (16%) – Sustaining attributable free cash flow at
fixed prices and FX
– Strategic measures (20%) – Strategic objectives
supporting the Group’s delivery on portfolio, innovation
and people
– SHE measures (20%) – Safety objectives focused on
elimination of fatalities, environment, health and injuries
– Personal measures (10%) – Individually tailored
objectives to motivate the execution of the Group
strategy.
As disclosed on page 142, recognising the progress we
have made and the importance of continuously striving for
a zero harm culture, it is the Committee's intention that any
reduction to variable remuneration in the event of fatalities
will be more significant compared to previous years.
The maximum annual LTIP
opportunity is 300% of salary.
The maximum LTIP opportunity for each of the executive
directors remains at 300% of salary.
The Committee reviews the executive
directors’ LTIP award sizes annually,
prior to grant, to ensure they are
appropriate. The Committee intends
to apply a reduction to award
opportunities if the Group’s share
price declines by more than 25%
between consecutive award dates;
the reduction will typically be no less
than 50% of the degree of share
price decline.
For each performance element,
threshold performance warrants
25% vesting of the element, rising
on a straight-line basis to 100% for
achieving stretch targets.
Performance below threshold results
in zero vesting.
Performance measures attached
to each award should be linked to
the Group’s strategic priorities and
may include, but are not limited to,
TSR, ROCE, FCF and other strategic
objectives.
The performance measures for the 2022 LTIP will be as
follows:
– TSR vs Euromoney Global Mining Index (33% weighting)
– 25% vesting for TSR equal to index; 100% for Index
performance +6% per annum
– TSR vs FTSE 100 (17%) – 25% vesting for TSR equal to
median performance; 100% vesting for TSR equal to 80th
percentile performance
– ROCE (15%) – 25% vesting for 12% return; 100% vesting
for 20% return
– SAFCF (15%) – Sustaining attributable free cash flow at
actual prices and FX
– Water reduction (8%) – 25% vesting for 8.5% reduction
in abstraction of fresh water in water-stressed regions
from rolling 3-year average over 2019-2021. 100%
vesting for 11.5% reduction. This measure does not
include Los Bronces where an approved long-term water
strategy must be developed, and tracking to the relevant
milestones, within the performance period.
– Renewable energy (6%) – 25% vesting for renewable
energy production capacity of 150MW per annum,
100% vesting for 250MW renewable energy production
capacity. In addition for the awards to vest, two additional
sites above target to have execution stage approval
and Latin America and Australia to have an approved
Renewable Energy Ecosystem in place.
– Social responsibility (6%) – number of off-site jobs
supported for each on-site job. 25% vesting for 2 off-
site jobs supported, 100% vesting for 2.5 off-site jobs
supported.
143
Anglo American plc Integrated Annual Report 2021 Operation
Opportunity/performance measures
Implementation for 2022
In line with the award limits
applicable to the share plan,
on the same basis that apply to
other eligible employees.
SIP free, partnership and matching schemes continue to
be operated for 2022.
The SAYE scheme also continues to be operated for 2022.
The pension contribution for executive directors for 2022
will be 18.34% of base salary.
Duncan Wanblad’s pension level on assumption of the
role of chief executive will be 15% of base salary.
No changes to benefits operated for 2022.
New executive director
appointments will receive the
same Company contribution as
the wider UK workforce.
Incumbent executive directors
will receive a rate of Company
contributions of 18.34% of base
salary in 2022 (reduced from
21.67% in 2021, 25% in 2020
and 30% in 2019) effective from
1 January 2022.
This will be further reduced to
15% of salary from 1 January
2023, when it will be aligned
with the rate for the wider UK
workforce.
Capped at 10% of salary.
The Committee reserves the
discretion to exceed the ongoing
maximum level for certain
situation-specific benefits, such
as relocation. Full details of the
exercise of any such discretion
will be set out in the applicable
statement of implementation of
policy.
All-employee share plans
To encourage eligible
employees to build up a
shareholding in the Company.
People
Pension
To provide a market
competitive level of pension
provision, taking account of
the provisions for the wider
workforce, to attract and retain
high performing executive
directors.
People
Other benefits
To provide market competitive
benefits.
People
Executive directors are eligible
to participate in applicable
all-employee share plans
on the same basis as other
eligible employees. In the UK,
these currently comprise the
Company’s Save As You Earn
(SAYE) scheme and Share
Incentive Plan (SIP) on identical
terms to other UK employees.
Executive directors participate
in defined contribution pension
arrangements.
Executive directors have the option
for contributions which may not be
paid to a UK-registered pension
scheme as a result of applicable
limits (either annual allowance or
lifetime allowance) to be treated as
if paid to an unregistered unfunded
retirement benefit scheme
(UURBS).
Executive directors may request
a pension allowance to be paid
in place of defined contribution
arrangements.
The Company currently provides
the following ongoing benefits:
28 days’ leave, with encashment of
any accumulated leave in excess
of 20 days
– Car-related benefits
– Medical insurance (family)
– Death and disability insurance
– Directors’ liability insurance
– Limited personal taxation and
financial advice
– Club membership
– Other ancillary benefits,
including attendance at relevant
public events.
The Company reimburses all
necessary and reasonable
business expenses.
Remuneration arrangements for the retirement of
Mark Cutifani
It was announced in November 2021 that Mark Cutifani will be retiring
as chief executive and stepping down from the Board on 19 April
2022 and will remain an Anglo American employee until 30 June
2022. Between stepping down as chief executive and leaving the
Group, he will continue to provide services to the Group in support of a
smooth transition into the role for Duncan Wanblad. The remuneration
arrangements for Mark as outlined in the table above will apply until
his departure from the Group on 30 June 2022. The remuneration
arrangements for his retirement will consist of:
– Payment in lieu of unworked notice consisting of base salary, car
allowance and pension from 1 July 2022 to 31 October 2022
– Pro-rated bonus for time served in 2022 up to 30 June 2022 and
subject to performance, to be paid out fully in cash at the normal
time (following year end) to the extent a bonus is earned
Following his retirement, he will be expected to maintain a holding
of Anglo American shares of four times his salary on cessation, for a
period of two years.
Malus and clawback
Awards under the annual bonus (including both cash and deferred
bonus awards under the BSP) and LTIP are subject to malus provisions
and clawback provisions, which may be applied during the period
of two years after the date of vesting. Malus refers to the reduction,
including to nil, of unvested or unpaid awards or the requirement for
additional performance measures to be met for vesting of the award.
Clawback refers to the recovery of paid or vested amounts. Clawback
may be applied in the circumstances below, Malus may be applied in
the circumstances below, as well as in other exceptional circumstances,
at the Committee’s discretion.
– Material misstatement in results
– Good leaver treatment in respect of outstanding share awards,
– Misconduct
awards will vest at their original vesting dates, and any LTIP awards
which vest will be subject to a further two year holding period
– No LTIP for 2022 will be granted
– LTIP awards to be pro-rated for service up to 30 June 2022 and
vesting remains subject to performance.
– Material failing in risk management
– Error in calculation.
144
Anglo American plc Integrated Annual Report 2021Directors’ remuneration report continuedGovernance
Determining the fees paid to NEDs is a matter for the Board, with the
NEDs abstaining; therefore, increases were approved by the chairman
and the executive directors. The chairman’s increase was approved by
the Remuneration Committee, in consultation with the chief executive.
No directors were involved in any decision as to their own fees. From
2023, the chairman and NED fees will be reviewed annually, in line
with the approach taken for the executive directors and the wider UK
employee population.
Role
Chairman fee
NED base fee
2021 Fee (£’000)
2022 Fee (£’000)
714(1)
90
773(1)
97.5
Senior independent director
30 (additional to
base fee)
32.5 (additional
to base fee)
Chair of Audit, Remuneration or
Sustainability committees
30 (additional to
base fee)
40 (additional to
base fee)
Audit, Remuneration or Sustainability
committee membership
15 (each
committee
membership)
20 (each
committee
membership)
Nomination committee membership
10
12.5
(1) Includes service on any Board committees.
Shareholding guidelines
Within five years of appointment, executive directors are expected to
hold shares in the Company with a value of four times basic salary in
respect of the chief executive and three times basic salary in respect
of other executive directors. The Committee takes into consideration
achievement against these in-post guidelines when making grants
under the Company’s various incentive plans.
In order to provide further long term alignment with shareholders, and
in line with the UK Corporate Governance Code, executive directors
will normally be expected to maintain a holding of Company shares
for a period after their employment. Executive directors will normally
be required to continue to hold the lower of the in-post requirement
at the time of cessation and the actual shareholding at cessation.
The requirement applies for a two-year period post-termination,
and applies to all share awards granted under the BSP or LTIP from
2020 onwards.
Non-executive director fee policy
The full remuneration policy for our non-executive directors (NEDs)
is outlined in the 2019 Integrated Annual Report. The policy does
not set limits for individual fees, but provides that maximum annual
aggregate basic fees for all NEDs (excluding the chairman) should
not exceed £1.25 million.
Chairman and non-executive director (NED) fees:
implementation for 2022
Fee levels for the Chairman and NEDs were reviewed in 2022 to ensure
that they are set at an appropriate market level and remain competitive.
Increases to the NEDs’ annual base fees were last approved in
2017, phased in over a two-year period, rising to their current level of
£90,000 in 2019. Committee membership fees were introduced as
part of the 2017 review and have also not increased since 2019. Fees
for the committee chairs and the senior independent director were last
increased in 2014.
In deciding to set fees for 2022 at the levels set out below, the following
considerations were taken into account:
– NED fees have not risen for a considerable period of time and, with
inflation, have declined in real terms and not kept up with increases in
remuneration for the wider workforce
– Fee levels should be competitive with the Group’s closest industry
and FTSE 30 peers
– Parity in the fees paid to the chairs of our Audit, Remuneration and
Sustainability committees should be maintained given the demands
of these roles in the context of our Company
– With the addition of another Board meeting in 2022 and the
expectation of more out of cycle briefings and meetings with
management, the workload and time commitment of our NEDs
are increasing.
For 2022, NED base fees and the fee for the senior independent
director have increased by 8.3%. Fees for chairing or serving as a
member of the Audit, Remuneration or Sustainability committees
have increased by 33.3%; and fees for serving as a member of the
Nomination Committee have increased by 25%.
The chairman’s fee has also increased by 8.3% in 2022. The fee paid
to the chairman and his predecessor has not increased since 2014
apart from a 2% increase in 2021. The chairman’s fee for 2022 was
set following a review process taking into account all relevant factors
including external market levels and the decline of the chairman's fee in
real terms over multiple years.
145
Anglo American plc Integrated Annual Report 2021 Annual report on directors’ remuneration
Audited Information
Under schedule 8 of the Large and Medium-sized Companies and
Groups (accounting and reports) Regulations 2008, elements of this
section of the report have been audited. The areas of the report subject
to audit are indicated in the headings.
Single total figure of remuneration for executive directors
Executive director remuneration in 2021 (audited)
The table below sets out the remuneration paid to the executive
directors for 2021.
Executive directors
Mark Cutifani
Mark Cutifani (2020)
Stephen Pearce
Stephen Pearce (2020)
Tony O'Neill
Tony O'Neill (2020)
Total basic
salary
£’000(1)
Benefits in
kind
£’000
Annual bonus
– cash and
Bonus Shares
£’000
LTIP(2)(3)
award vesting
£’000
Pension(4)
£’000
Other(5)
£’000
Total
£’000
Total
fixed
remuneration
£’000
Total
variable
remuneration
£’000
1,399
1,371
843
826
874
857
57
41
40
37
39
38
2,207
1,574
1,330
965
1,380
1,001
5,777
5,938
3,481
3,579
3,610
3,711
382
402
202
210
235
248
5
5
5
5
5
5
9,827
9,331
5,902
5,623
6,144
5,860
1,837
1,814
1,085
1,074
1,148
1,143
7,990
7,517
4,817
4,549
4,996
4,717
(1) In 2020, all executive directors voluntarily donated 30% of their salary for three months to Covid-19 related charities and funds. The donated values are included in the disclosed salary
figures above.
(2) The LTIP vesting level was confirmed by the Remuneration Committee at its meeting on 21 February 2022. As the awards are due to vest after publication of this report, an average share price
between 1 October 2021 and 31 December 2021, of £28.26, was used to calculate the value and will be trued up in the 2022 report. The LTIP values shown include dividend equivalent
amounts of £688,500 for Mark Cutifani, £414,940 for Stephen Pearce and £430,311 for Tony O’Neill. This includes an equivalent payment for the special dividend paid in September 2021.
The values of LTIP awards that vested in 2021 have been restated using the share price at vesting of £29.62, see page 151 for further details.
(3) For the 2019 LTIP vesting in 2022, between grant and valuation of the award for single figure purposes, the share price increased from £20.25 to £28.26, which equated to an increase in value
of each vesting share of £8.01. The proportion of the value disclosed in the single figure attributable to share price growth is 28.3%. The Remuneration Committee did not exercise discretion in
respect of the share price appreciation. For the 2018 LTIP vesting in 2021 the share price increased from £17.79 to £29.62 at vesting, equating to an increase in value of each vesting share of
£11.83. The proportion of the value disclosed in the single figure attributable to share price growth is 39.9%.
(4) Pension figures no longer include employer NIC values where pension is received as a cash allowance. Pension figures now include the notional return on UURBS balances. See page 152 for
further details.
(5) Other comprises the value of free and matching shares awarded under the SIP.
Basic salaries for 2021
Benefits in kind for 2021 (audited)
Benefits for executive directors with a value over £5,000 are set out
below. Executive directors also receive tax advice, club membership,
death and disability insurance, directors’ liability insurance, medical
insurance and other ancillary benefits.
Mark Cutifani
Stephen Pearce
Tony O’Neill
Car-related benefits £
32,643
31,479
31,479
Mark Cutifani received tax advice to the value of £19,680 during the
year. The increase in value in the tax advisory costs is related to the
additional advice received ahead of his retirement in 2022.
The basic salaries for 2021 were as follows (in £’000s):
Mark Cutifani
£1,399
(2020: £1,371)
Stephen Pearce
£843
(2020: £826)
Tony O’Neill
£874
(2020: £857)
146
Anglo American plc Integrated Annual Report 2021Governance
Annual bonus outcomes for 2021 (audited)
50% of the total 2021 annual bonus is payable in cash, with 50%
deferred into shares. One-third of the deferred shares will vest after two
years subject to continued employment; the remaining two-thirds will
vest after three years.
50% of each executive director’s bonus outcome was assessed against
financial targets. 20% each was assessed against strategic measures
and a further 20% was assessed on Safety, Health and Environment
(SHE) measures, with the remaining 10% being assessed against the
achievement of individual objectives.
Strategic and SHE objectives are shared by the executive directors,
with individual objectives being tailored for their specific roles. The key
individual performance measures are assessed against the overall
operational and financial performance of the business.
After a period of sustained year-on-year improvements on safety,
there was a dip in the Group’s injury rate during 2021; this was largely
Summary of 2021 annual bonus outcome
due to the changes to operating configurations caused by Covid-19
related disruptions. Tragically, one colleague lost his life during the year
in a work-related incident in a Group managed operation. Although
significant progress towards eliminating fatalities has been made in
recent years, the Committee and the executive directors strongly believe
that any loss of life is unacceptable. A 3.5% reduction in executive
directors’ annual bonuses will therefore be implemented.
Discretion
Incentives are designed to ensure they drive appropriate short and long
term behaviours, and it is the Committee’s general preference to avoid
making any adjustments. Aside from the utilisation of discretion to apply
the safety deductor, the Committee did not make any discretionary
adjustments to the 2021 bonus outcomes.
Financial metrics
(50%)
SHE metrics
(20%)
Strategic metrics
(20%)
Personal metrics
(10%)
Total pay-out pre-
safety deductor
(%)
Pay-out after 3.5%
safety deductor
(%)(1)
Annual bonus
value
(£’000)
Mark Cutifani
Stephen Pearce
Tony O’Neill
38.9%
38.9%
38.9%
14%
14%
14%
16%
16%
16%
9%
9%
9%
77.9%
77.9%
77.9%
75.2%
75.2%
75.2%
£2,207,458
£1,330,380
£1,379,663
(1) Safety deductor applied on a multiplicative basis against overall annual bonus outcomes.
Annual bonus performance assessment for 2021 (audited)
The financial element of the 2021 annual bonus is measured against
underlying EPS and sustaining attributable free cash flow (SAFCF)
measures. SAFCF, measured at fixed prices and FX rates, was
introduced to the annual bonus in 2021.
The EPS elements of the award accounted for 34% of the total annual
bonus, split equally between EPS measured at fixed prices and FX rates
and EPS measured at actual prices and FX rates. The fixed price and FX
rate EPS portion is designed to reflect Group operational performance,
excluding the impact of the variations in price and currency fluctuations.
Both target ranges are illustrated in the financial performance table,
with 25% vesting for performance at threshold. SAFCF, measured at
fixed prices and FX rates, accounted for 16% of the total annual bonus.
Underlying EPS assessed at actual prices and FX rates for the year
was 722 cps (2020: 253 cps) corresponding to a 100% (2020: 75%)
vesting performance. EPS assessed at fixed prices and FX rates was
242 cps (2020: 103 cps), corresponding to a 65% (2020: 0%) vesting
performance. Full achievement of EPS at actual prices was due to
the strong price environment and demand for some of our products,
especially copper, PGMs and iron ore, as well as an improving market
for diamonds. Earnings and cash flow were broadly in line with targets
due to robust operational performance in the year, as operations
recovered from the impact of Covid-19, and the PGMs ACP incident in
2020. Full vesting for the EPS at fixed prices was not achieved due to
operational issues, unplanned maintenance and logistics constraints.
Vesting of the combined EPS element was 82.5% (2020: 37.3%). The
EPS element corresponds to 34% of the annual bonus award, with
the 82.5% outcome equivalent to 28% (2020: 18.6%) of the overall
opportunity. It should be noted that in 2020 the EPS element accounted
for 50% of the annual bonus award.
SAFCF assessed at fixed prices and FX rates was $2.9 billion,
corresponding to a 67.5% payout on this measure. The strong cash flow
performance was driven largely by the strong operating performance.
The shared strategic objectives account for 20% of the total award.
These objectives reflect the Group’s strategic priorities for the year,
incorporating a combination of quantitative and qualitative metrics.
Following the end of the year, the Committee made a detailed
assessment of performance, leading to the evaluations shown in the
tables that follow.
The executive directors have 10% of the annual bonus weighted to
individual performance measures, focusing on the critical deliverables
for each executive director in the areas of Portfolio, Innovation and
People. The tables that follow detail the achievement against these
objectives for each executive director.
Financial performance
Metric
EPS at actual prices and FX rates(1)
EPS at fixed prices and FX rates(1)
SAFCF at fixed prices and FX rates
Total
Threshold (25%)
Maximum (100%)
Outcome
Weighting
$4.75/share
$7.12/share
$7.22/share
$2.06/share
$2.74/share
$2.42/share
$2.3bn
$3.4bn
$2.9bn
17%
17%
16%
50%
Payout
100%
65.2%
67.5%
77.8%
(1) The two EPS targets have been restated from the previously approved ranges to exclude the demerger of Coal SA from June onwards and the disposal of Cerrejón from July onwards. EPS at
fixed prices and FX rates was restated from previously approved ranges of threshold $2.19 per share and stretch $2.93 per share to the targets stated above. The EPS at actual prices and FX
was restated from previously approved ranges of threshold $4.85 per share and stretch $7.35 per share to the targets stated above. The restatement was made so that it did not change the
difficulty /stretch within the metric or the bonus outcome.
147
Anglo American plc Integrated Annual Report 2021 Annual report on directors’ remuneration continued
SHE performance
Metric
Metric type
Achievement
Total recordable case frequency rate
(TRCFR) – improvement of 15% on prior
three-year Group average
Safety
Despite several business units recording double-digit performance
improvements during the year, the Group recorded a slight increase in TRCFR
during 2021. The rate improved during the second half as the importance of
work routines was reinforced.
Weighting Outcome
5%
0%
Environment
30 instances of digital programmes were deployed during 2021,
representing a strong uptake across all business units and a range of
different sites and locations.
Progress the deployment of key digital
programmes:
– Environmental DNA
– Spatial Inventory Modelling (SIM)
– Predictive Monitoring
– Integrated GHG modelling.
Target at least one deployment of each of these
programmes at least one site in each BU.
Deploy noise-related digital critical control
monitoring processes at 80% of relevant
sites and target 50% of employees who are
exposed to hazards to have a single integrated
electronic health record by end-2021
Health
systems
This result represents an over-achievement of the goal, primarily driven
by more sites and projects participating in the eDNA programme and
Predictive Monitoring.
5%
100%
This outcome resulted in full payout for the portion of the annual bonus
dependent on this measure.
Noise critical controls were deployed at 100% of the relevant sites.
Integrated health records were implemented in-line with targets at Bulk
Commodities and Copper. Three of the four tasks were implemented at PGMs
and De Beers; however, the final step in relation to system interfaces was
scheduled for December and did not complete as planned, with completion
scheduled for the first quarter of 2022.
5%
80%
Each operation to complete their 2021 EoF
deliverables per the approved plan. This
results in 75% completion of the overall EoF
programme at a Group level
Total
This measure will payout at 80%.
Safety
The Elimination of Fatalities (EoF) programme achieved its 2021 objectives,
with all business units achieving more than 95% of their site deliverables.
The EoF programme is over 75% complete, and focus is transitioning to a
business-as-usual phase.
5%
100%
Performance against the annual bonus measure exceeded the target and
results in a 100% payout of this measure.
20%
70%
Weighting Outcome
7%
100%
3%
33%
Shared strategic performance
Metric
Metric type
Achievement
Quellaveco – delivery of project milestones
Portfolio
The Quellaveco project remains on track to deliver line 1 completion in
mid-2022.
Woodsmith – align project execution strategy
and delivery of project milestones
Portfolio
Deliver $400 million of net cost and volume
growth via deployment of P101; FutureSmart
Mining™; Digitalisation; Technology
Development; and marketing initiatives
Innovation
Technical review largely completed in 2021, which concluded that a number
of elements of the project’s design would benefit from modification to bring it
up to the Group’s safety and operating integrity standards, and to optimise the
value of the asset for the long term.
Gross cost and volume gains arose from higher production rates and
availability, combined with throughput and recovery, and working capital
gains. This was offset by operational issues at Moranbah North; water
availability and recovery issues, as well as port closures due to bad weather, at
Copper; unplanned maintenance at Iron Ore Brazil; and logistics constraints at
Kumba, resulting in the net cost and volume target being missed.
Sustainability
Innovation
11 out of the 12 SMP objectives are on track, with water not tracking on target.
– achieve 2021 SMP objectives:
– develop roadmap and execution plan for next
evolution of FutureSmart MiningTM and initiate
first pilot project
– develop 2030 carbon neutrality execution
roadmap and commence feasibility studies
on the priority initiatives
The next evolution of FutureSmart MiningTM (FSM) consists of multiple sub-
projects in relation to leaching chemistry, biotechnology, nature-based solutions
and circularity,which as they develop will enhance FSM and create a broader
holistic programme that will enable a further step-change in innovation.
A number of pilot projects have commenced during the year and are in
implementation or operational phase.
A Scope 1and 2 emissions reduction roadmap has been developed and
implementation has commenced. A Scope 3 emissions methodology and
ambition was concluded and detailed in the Climate Change Report in
October 2021.
5%
60%
Embed the Organisation Model into
employee onboarding and leadership
development programmes
Each business unit to sign off
Organisational Leadership Excellence
blueprints with implementation of
blueprints progressing to plan
People
The Organisation Model was embedded into senior manager onboarding
and leadership development programmes.
Organisation Leadership Excellence blueprints were signed off by each
business unit. Implementation is progressing to plan, and dashboards have
been developed to track progress.
3%
100%
Diversity – 28% women in manager-once-
removed roles by end-2021
People
At year end, female representation in the chief executive’s manager-once-
removed population was 29%, a 2% increase on 2020 and above target.
Total
148
2%
100%
20%
80%
Anglo American plc Integrated Annual Report 2021Governance
38.9%
14%
16%
9%
77.9%
3.5%
75.2%
Outcome
38.9%
14%
16%
9%
77.9%
3.5%
75.2%
Outcome
100%
2021 annual bonus personal performance
Mark Cutifani
Financial
SHE
Strategic
Personal
Total
Safety deductor
Overall result
Percentage weighting
2021 outcome
50%
20%
20%
10%
100%
A percentage reduction from overall bonus outcome on a multiplicative basis
—
Details of personal objectives
Achievement
Portfolio (5%)
– Complete demerger of thermal coal
operations in South Africa, define pathway
for Cerrejón exit
– Progress delivery of the De Beers strategy
– Alignment on optimal configuration of the
Group’s portfolio
Successful demerger of thermal coal operations in South Africa as Thungela Resources
Ltd, in line with accelerated timetable. Disposal of the Group's shareholding in Cerrejón to
Glencore was announced in June 2021 and completed in January 2022.
The execution of the De Beers strategy is progressing to plan, notably via a restructured
organisation delivering improved business performance.
80%
Detailed board discussions took place to align the Group’s long-term strategic approach,
although full alignment still progressing.
People (5%)
– Alignment of succession options with
Group chief executive succession planning process concluded successfully. Broader GMC
succession options aligned with the Board and incoming chief executive.
the Board
Overall individual performance
100%
90%
Stephen Pearce
Financial
SHE
Strategic
Personal
Total
Safety deductor
Overall result
Details of personal objectives
Percentage weighting
2021 outcome
50%
20%
20%
10%
100%
A percentage reduction from overall bonus outcome on a multiplicative basis
—
Achievement
Portfolio (4%)
– Complete demerger of thermal coal
Successful demerger of thermal coal operations in South Africa as Thungela Resources Ltd,
in line with accelerated timetable.
operations in South Africa, define pathway
for Cerrejón exit
Innovation (3%)
– Drive capital effectiveness and efficiency
through integrated capital allocation
decision making and improved internal
capital structure
Disposal of the Group's shareholding in Cerrejón to Glencore was announced in June 2021
and completed in January 2022.
Delivery of a step-change in integrated business planning (between Technical, Finance and
Sustainability disciplines), with significant progress ongoing in optimising capital structures
across the Group.
67%
People (3%)
– Cost model roll-out to major assets
Cost model pilots concluded at Iron Ore Brazil and Los Bronces, with deployment further
integrated with Anglo American’s Operating Model schedule.
– Anticipate and respond to Johannesburg
Stock Exchange and UK regulatory
requirements impacting financial controls
Continued improvement in controls supporting our JSE listing requirements.
Significant development in the design of internal control activities in response to anticipated
UK legislation.
Overall individual performance
100%
90%
149
Anglo American plc Integrated Annual Report 2021
38.9%
14%
16%
9%
77.9%
3.5%
75.2%
Outcome
100%
67%
100%
90%
Tony O’Neill
Financial
SHE
Strategic
Personal
Total
Safety deductor
Overall result
Annual report on directors’ remuneration continued
Percentage weighting
2021 outcome
50%
20%
20%
10%
100%
A percentage reduction from overall bonus outcome on a multiplicative basis
—
Details of personal objectives
Achievement
Portfolio (4%)
– Complete Capital Engineering across
the whole organisation review
Technical, Capital and Sustainability reviews were undertaken twice during 2021.
Reviews of major capital engineering projects at Woodsmith and Venetia resulted in
significant managerial changes that have resulted in improved performance.
A change in CEO for Crop Nutrients was implemented, effective from 1 January 2022.
Innovation (3%)
– Deliver significant progress in nuGen,
Carbon Neutrality and the next evolution
of FutureSmart MiningTM, with associated
pull-through of innovation
Significant progress continues to be made in developing and operationalising innovation
programmes. Significant progress has been made on the nuGen programme with
successful proof of concept testing of the Hydrogen Power Plant module, and mechanical
truck installation in South Africa.
Carbon Neutrality workstreams have progressed with the South African Renewable Energy
strategy designed and approved, and permit applications submitted for the first mover sites.
A number of projects are in concept or pre-feasibility stage.
The next evolution of FutureSmart MiningTM consists of multiple sub-projects in relation
to leaching chemistry, biotechnology, nature-based solutions and circularity, which as
they develop will create a broader holistic programme that will enable a further step-
change in innovation. Projects that were under way in various stages of implementation,
commissioning and operation during 2021 include drystack tailings, coarse particle
recovery, bulk ore sorting, rock cutting, real-time sensing, eDNA and Circulab, supported by
the broader innovation in Data Analytics.
People (3%)
– Reduction in repeat HPI events by 20%
The percentage of repeat high potential incidents was 61% in 2020. In 2021 this improved
to 48%. This is a 21% improvement in the percentage of repeat high potential incidents.
Overall individual performance
150
Anglo American plc Integrated Annual Report 2021Governance
2019 LTIP award vesting (audited)
In 2019, Mark Cutifani, Stephen Pearce and Tony O’Neill received
LTIP grants of 199,196, 120,050 and 124,497 conditional shares
respectively; in addition to this, they received 849, 512 and 531
additional conditional shares respectively as a result of the demerger
of our South African thermal coal operations into Thungela Resources
Ltd in June 2021. More details on this adjustment to the awards can be
found on pages 153-154. Vesting of these conditional share awards
was subject to:
– The Group’s TSR performance relative to:
(i) Euromoney Global Mining Index
(ii) FTSE 100 constituents over the three-year period to
31 December 2021
– Group attributable ROCE in year to 31 December 2021
– Group cumulative attributable FCF at fixed price and FX rates
over the three-year period to 31 December 2021
–
Implementation of the Water Management Standard
–
Implementation of an employee well-being strategy.
TSR performance over the three-year period was strong, with
shareholders seeing a TSR of 101.3%, well above the FTSE 100 median
TSR of 19.7% and the Euromoney Global Mining Index TSR of 65.8%.
ROCE performance for the period was 43%, resulting in full vesting
of this portion of the award. The performance was due to strong
commodity prices, with the Group basket price being well above
budget. Cash flow was impacted by headwinds including Covid-19
and one-off operational incidents and therefore resulted in no vesting
for the cumulative attributable free cash flow at fixed price and FX rates
portion of the award.
The Water Management Standard (WMS) measure required all sites
to have implemented the WMS by the end of 2021. The WMS included
the three components of a competent water manager, a site water
balance being in place and a site-specific water management plan.
At 31 December 2021, all aspects were met at operational sites,
leading to full vesting for this portion of the award.
The employee well-being measure required the implementation of
well-being strategies at all sites. During the performance period, the
Group was already in the process of developing a well-being strategy
focused on the overall health of employees, but with the onset of
Covid-19 in early 2020, focus on this area shifted to our response to
the pandemic, culminating in the development of our WeCare lives
and livelihoods programme. By the end of 2021, all sites had fully
implemented the priorities of WeCare, leading to full vesting for this
portion of the award.
Performance against the 2019 LTIP performance measures resulted
in an overall achievement of 90%. At a 90% vest and based on current
share price, the cap on vesting value does not come into effect and
there will be no reduction in vesting. At a 90% vesting level, the share
price required for the cap to come into effect is £44.81.
Discretion
No discretionary adjustments were made to the LTIP targets
or outcome.
Performance assessment for 2019 LTIP awards
Measure
Euromoney Global Mining Index TSR
Weighting
47%
Threshold
performance
(25% vesting)
Index performance
(65.8%)
Stretch
performance
(100% vesting)
Index +6% p.a.
(92.4%)
Actual
performance
101.3%
Vesting
outcome
100%
FTSE 100 constituents TSR
Group attributable ROCE
Group cumulative free cash flow(1)
Implementation of water management standard
23% Median TSR performance
(19.7%)
80th percentile TSR
performance (75.6%)
101.3%
100%
10%
10%
7%
12%
$2.6 bn
20%
$4 bn
More than 90% of sites
implemented all three
components
100% of sites implemented
all three components
43%
< 2.6 bn
100%
100%
0%
100%
Implementation of employee well-being strategy
3%
90% of sites fully
implemented
100% of sites fully
implemented
100%
100%
(1) 2019-2021 cumulative attributable free cash flow (AFCF) at fixed price and FX rates.
Total outcome of the 2019 LTIP
Numbers
shares
granted(1)
Numbers
shares vesting
at 90%
Dividend
equivalents on
vested value
Value based
on vesting at
90%(2)
Total value
Mark Cutifani (maximum opportunity 300% of salary)
200,045
180,041
£688,500 £5,088,168 £5,776,667
Stephen Pearce (maximum opportunity 300% of salary)
120,562
108,506
£414,940 £3,066,509 £3,481,449
Tony O’Neill (maximum opportunity 300% of salary)
125,028
112,525
£430,311 £3,180,102 £3,610,413
(1) Number of shares includes additional Anglo American shares resulting from adjustment following the demerger of Thungela Resources Ltd. The number of additional shares in respect of the
2019 LTIP is shown on page 153. Dividend equivalents for additional adjusted shares accrue from the date of demerger.
(2) 2019 LTIP vesting does not exceed the cap and therefore there will be no reduction in vesting. Values based on the average share price for 1 October to 31 December 2021 of £28.26; value
excludes dividend equivalents.
Restatement of value of 2018 LTIP
Mark Cutifani
Stephen Pearce
Tony O’Neill
Number of
shares vesting
Dividend
equivalents
value
2020
estimated
value(1)
(ex dividends)
2020
estimated
total value
Actual value
of award at
vesting(2)
Restated 2018
LTIP value
186,256
£421,231 £4,004,693 £4,425,924 £5,516,903 £5,938,134
112,252
£253,866 £2,413,522 £2,667,388 £3,324,904 £3,578,770
116,410
£263,269 £2,502,926 £2,766,195 £3,448,064 £3,711,334
(1) 2020 estimated value uses three-month average share price up to 31 December 2020 of £21.50 as stated in the 2020 Annual Report.
(2) The share price on vesting was £29.62.
151
Anglo American plc Integrated Annual Report 2021 Annual report on directors’ remuneration continued
Outstanding LTIP awards
External directorships
As explained in the 2016 Annual Report on Remuneration, the value
that can be received from LTIP awards granted in 2017, 2018 and
2019 is limited to twice the face value at grant. The cap has not been
applicable for the 2017, 2018 or 2019 awards.
Pension (audited)
The pension contribution amounts in the table below should be read
in conjunction with the following information:
– The total amounts of pension contributions treated as having
been paid into the UURBS for Mark Cutifani, Stephen Pearce and
Tony O’Neill are £299,811, £182,676 and £186,147 respectively
– Contributions treated as being paid into the UURBS earn a fixed
return of 5.125%. The total return earned in 2021 was £78,437
for Mark Cutifani, £19,526 for Stephen Pearce, and £45,635 for
Tony O’Neill
– As at 31 December 2021, the total balance due to executive
directors in relation to the UURBS was £3,296,633. Retirement
benefits can only be drawn from the UURBS if a member has
attained age 55 and has left Group service.
Total pension for 2021
DC contribution
(£’000)
Mark Cutifani
Stephen Pearce
Tony O’Neill
£3.3
£3.3
UURBS
contribution
(£’000)
£299.8
£182.7
£186.1
UURBS
Notional
Increase
(£’000)
£78.4
£19.5
£45.6
Total
(£’000)
£381.5
£202.2
£235.1
Executive directors are not permitted to hold external directorships or
offices without the prior approval of the Board. If approved, they may
each retain the fees payable from only one such appointment.
In the year, Mark Cutifani retained fees for one external non-executive
directorship, at TotalEnergies SE, amounting to €110,000 for 2021.
Stephen Pearce retained fees for one external non-executive
directorship, at BAE Systems plc, amounting to £112,026 for 2021.
Payments for past directors (audited)
In addition to retirement benefits, the Company continues to provide
five former executive directors with private medical insurance
arrangements. The total annual cost to the Company is £55,283.
The Committee continues to meet these longstanding commitments,
but no new commitments have been made during the year or will be
made in future.
Payments for loss of office (audited)
The Company did not make any payments for loss of office to directors
during 2021.
Other director remuneration in 2021 (audited)
Non-executive director remuneration
The table below sets out the remuneration paid to the Company’s NEDs
in 2021. Fees shown include any additional fees paid in respect of
chairing or being a member of one of the Board’s committees or acting
as the senior independent director.
Role
Chairman fee
NED base fee
Fee (£’000)
714(1)
90
Senior independent director
30 (additional to base fee)
Chair of Audit, Remuneration or Sustainability
committees
30 (additional to base fee)
Audit, Remuneration or Sustainability
committee membership
15 (each committee
membership)
Nomination committee membership
10
(1) Includes service on any Board committees.
Single total figure of remuneration for non-executive directors
Non-executive directors
Stuart Chambers
Ian Ashby
Marcelo Bastos(1)
Elisabeth Brinton(2)
Byron Grote
Hilary Maxson(3)
Hixonia Nyasulu(1)
Nonkululeko Nyembezi(4)
Anne Stevens
Total fees
2021
£’000
Benefits in
kind 2021
£’000(5)
Total
2021
£’000(7)
Total fees
2020
£’000(6)
Benefits in
kind 2020
£’000(5)
Total
2020
£’000(7)
714
145
113
80
175
61
113
120
145
9
723
700
145
105
175
100
115
145
7
707
145
105
175
100
115
145
(1) The increases to fees for Marcelo Bastos and Hixonia Nyasulu reflect additional committee memberships in 2021.
(2) Elisabeth Brinton joined the Board on 1 March 2021; her 2021 fees are a part-year figure.
(3) Hilary Maxson joined the Board on 1 June 2021; her 2021 fees are a part-year figure.
(4) Nonkululeko Nyembezi did not receive a fee increase in 2021; the increase shown is due to her taking on additional committee membership part way through the year in 2021.
(5) Stuart Chambers’ benefits in kind figure relates to the reimbursement of travel expenses during the year and the settlement of tax in relation to the reimbursement.
(6) In 2020, all NEDs in office voluntarily donated 30% of their fees for three months to Covid-related charities and funds. The donated values are included in the disclosed fee figures above.
(7) Total is comprised only of fixed remuneration.
152
Anglo American plc Integrated Annual Report 2021Governance Scheme interests granted during 2021 (audited)
The table below summarises the BSP and LTIP share awards granted to
executive directors during 2021.
The BSP award granted in 2021 was granted in the form of forfeitable
shares and is included in the applicable total annual bonus values as
set out in the applicable single-figure table.
The LTIP is granted in the form of conditional shares and vesting is
dependent on the Group’s performance over 2021-2023 based on the
performance metrics detailed.
Summary of conditional share awards and options granted in 2021
Type of award
Bonus
Share Plan
LTIP share
awards
Performance
measure
—
Vesting schedule
Performance
period end
Director
Basis of award
Number of
shares awarded
Face value
at grant(1)
—
—
Mark Cutifani
50% of bonus
26,869
£786,724
Stephen Pearce
50% of bonus
16,479
£482,505
Tony O’Neill
50% of bonus
17,090
£500,395
31/12/2023
Mark Cutifani
300% of salary
143,305
£4,195,970
Stephen Pearce
300% of salary
86,366
£2,528,796
Tony O’Neill
300% of salary
89,566
£2,622,492
TSR vs.
Euromoney
Global Mining
Index (33%)
TSR vs.
FTSE 100
constituents
(17%)
Balanced
Scorecard
50%
25% for TSR
equal to the Index;
100% for the Index
+6% p.a. or above
25% for TSR
equal to median;
100% for 80th percentile
or above
ROCE (15%)
25% for 12%;
100% for 20%
Cumulative SAFCF at actual
prices and FX rates (15%)
GHG intensity (8%)
25% for 5% improvement in
GHG intensity by 2023
100% for 15% improvement
Tailings facilities (6%)
100% for implementation of
the updated Anglo American
standard incorporating all
GISTM requirements across
Group managed operations
Social responsibility (8%)
25% for 1.5 jobs supported
off site for each job on site
globally, 100% for 2 jobs
supported
(1) The face values of the BSP and LTIP awards have been calculated using a grant share price of £29.28. This share price has been calculated based on the five-day average closing share prices
between 1 March 2021 and 5 March 2021. As receipt of the LTIP awards is conditional on performance, the actual value of these awards may be nil. Vesting outcomes will be disclosed in the
remuneration report for 2023.
Additional grants and payments due to demerger of
thermal coal operations
The number of additional Anglo American conditional shares resulting
to the executive directors from the adjustment are as follows:
The demerger of the Group’s thermal coal operations in South Africa as
Thungela Resources Ltd was completed in June 2021. The transaction
resulted in shareholders receiving one Thungela share for every 10
Anglo American shares owned. The following treatments were applied
for our share awards:
Role
Mark Cutifani
Stephen Pearce
Tony O’Neill
2019 LTIP
2020 LTIP
2021 LTIP
849
512
531
968
583
605
611
368
382
LTIP awards
LTIP awards in the form of conditional awards over Anglo American
shares, were adjusted to increase the number of Anglo American
conditional shares under award by the value of the Thungela shares
recipients would have received had they been Anglo American
shareholders at the date of the demerger. These additional shares are
subject to the same performance conditions and vest at the same time
as the underlying award.
153
Anglo American plc Integrated Annual Report 2021 Deferred annual bonus awards under the Bonus Share Plan (BSP)
Deferrals into shares from annual bonus awards are granted
as forfeitable shares under the Bonus Share Plan in the UK. As
shareholders, participants received Thungela shares subject to the
same restrictions as the underlying awards over Anglo American
shares. Due to the receipt of the awards over Thungela shares resulting
in a capital gain, an accelerated vesting of a portion of the award to
cover any potential capital gains tax may take place in March 2022.
Share Incentive Plan (SIP)
As Anglo American shareholders, employees participating in the
SIP received one Thungela share for every 10 Anglo American
shares held. These were sold by the SIP Trustees on the employees'
behalf immediately after the demerger and the Group compensated
employees for an additional tax charge arising. The value of the
additional payment for the executive directors was £467 for Mark
Cutifani, £342 for Stephen Pearce and £322 for Tony O'Neill. The
treatment of Thungela shares received by the executive directors
was the same as the approach for wider workforce participants.
Save as You Earn (SAYE)
SAYE option holders do not hold Anglo American shares until the
options are exercised. Option holders will be eligible to receive a
cash payment on exercise, to the value of the Thungela shares they
would have received had they been Anglo American shareholders.
No cash payments on exercise were made to the executive directors
during 2021, but all held unexercised options as at 31 December
2021. The approach for executive directors was the same as for wider
workforce participants. The maximum values of the cash payments
that will be made to the executive directors relating to the SAYE are
£162.22 for Mark Cutifani, £387.49 for Stephen Pearce and £195.28
for Tony O’Neill.
Annual report on directors’ remuneration continued
Total interests in shares (audited)
The table below summarises the total interests of the directors
(including any share interests held by connected persons) in shares of
Anglo American plc as at 31 December 2021. These include beneficial
and conditional interests.
Executive director shareholding requirements
As per the 2020 remuneration policy, the executive director
shareholding guidelines were strengthened, with Mark Cutifani being
expected to hold interests in shares to a value of four times basic
salary, and Stephen Pearce and Tony O’Neill being expected to hold
shares to a value of three times salary. For the purposes of calculating
progress against the shareholding requirement, the following shares
are included:
– Beneficially owned shares
– Vested incentive shares in a holding period
– In-flight BSP shares on a net of tax basis
– SIP shares.
LTIP share awards with performance conditions are not included.
At the date of preparation of this report, all executive directors
have met their shareholding requirements, Mark Cutifani has net
shareholdings (including Bonus Shares) equal to 2,535% of basic
salary, 1,322% for Stephen Pearce and 2,256% for Tony O’Neill,
calculated using the average share price between 1 October and
31 December 2021 of £28.26.
Differences from 31 December 2021 to 23 February 2022
The interests of Mark Cutifani, Stephen Pearce and Tony O’Neill
increased by 18 shares each during the period between 31 December
2021 to 23 February 2022, as a result of the acquisition of shares
under the SIP. Their total holdings therefore increased to 1,918,185,
786,927, and 1,113,866, respectively. There have been no
other changes in the interests of the directors in shares between
31 December 2021 and 23 February 2022.
Shares in Anglo American plc at 31 December 2021
Directors
Mark Cutifani
Stephen Pearce
Tony O'Neill
Stuart Chambers
Ian Ashby(1)
Marcelo Bastos
Elisabeth Brinton
Byron Grote(1)
Hilary Maxson
Hixonia Nyasulu
Nonkululeko Nyembezi
Anne Stevens
Conditional
(no performance conditions)
Conditional (with
performance conditions)
Total
Beneficial
Within a
holding period
BSP Bonus Shares
SAYE
(options over shares)
SIP
870,695
278,385
174,225
167,775
456,527
173,990
191,708
95,681
121,783
4,359
1,720
2,709
1,212
2,895
1,459
LTIP
Total
571,808
1,918,167
344,613
786,909
357,380
1,113,848
14,523
2,365
1,601
—
40,896
—
1,555
1,924
2,122
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
14,523
2,365
1,601
—
40,896
—
1,555
1,924
2,122
(1) Included in the beneficial interests of Ian Ashby and Byron Grote are shares held via unsponsored ADRs.
154
Anglo American plc Integrated Annual Report 2021Governance Fairness
Introduction
In 2020 we introduced this dedicated fairness section to the
remuneration report incorporating disclosures that demonstrate
the Committee’s belief that our remuneration structures are fair
and appropriate.
The Committee takes into account a wide range of internal and external
considerations when making decisions on executive remuneration,
including engaging with relevant stakeholders. During the year, the
Global Workforce Advisory Panel chaired by our senior independent
director Byron Grote continued to operate with the goal of facilitating
how the Board communicates with and takes aboard the views of
the wider workforce. Two virtual meetings took place during the year
providing employees with the opportunity to raise and discuss their
views on a range of topics, including executive remuneration and
its alignment with wider Company pay policy. The Remuneration
Committee is considering opportunities to improve how the Group
engages with the workforce to explain how decisions on executive
remuneration reflect wider workforce pay policy.
Global employee share plan
We are implementing a global employee share plan that will increase
employee share ownership, create greater equity in wealth creation
opportunities across the wider global workforce and enhance
employee engagement. The plan will enable employees to share in the
success of the Company and encourage employees to act as owners.
It will allow for awards of Company shares to employees who do not
currently enjoy supported access to share ownership and will also
incentivise personal investment in the Company.
This new plan will not include the grant of additional share awards to
executive directors or GMC members. The terms and plan rules will be
presented to a shareholder vote at the 2022 AGM, and it is intended
that implementation will take place later in the year following approval.
Living wage
Anglo American has been an accredited Living Wage employer in the
UK since 2014 via the Living Wage Foundation. In 2021, as a result
of the maturity and availability of Living Wage reference values for all
the countries in which Anglo has a presence, we were able to conduct
an in-depth assessment to understand our overall position regarding
the Living Wage and our global employee workforce. Following this
study, the following commitments were agreed and published on our
corporate website:
1. We are committed to ensuring that every employee at
Anglo American earns a fair wage, and we are confident that this
principle is applied to all of our employees in each of our locations
2. We are committed to formalising our approach to fair pay by:
a. partnering with an independent third party (the Fair Wage
Network), with an aim to become an accredited Living
Wage employer globally in 2022 (we are already accredited
by the Living Wage Foundation in the UK)
b. incorporating a Living Wage analysis into our annual pay
review processes to ensure we adhere to fluctuating Living
Wage benchmarks
3. We are committed to exploring ways of applying Living Wage
principles to our contractors and supplier base in the future
4. We are committed to advocating Living Wage principles to
organisations or individuals beyond our control, but within reach
of our influence.
Anglo American has been in partnership with the Fair Wage Network
since March 2021. The Fair Wage Network is a trusted organisation that
has developed an online database that covers Living Wage reference
values for every country in the world and is considered an expert in
this field. In January 2022, we commenced the accreditation process
with the Fair Wage Network, with a view to formalising our status as
a committed Living Wage employer. Presently, our focus is on direct
employees, with the intention to focus on contractors and suppliers in
the future.
Cascade of pay elements through employee population
The following table represents the cascade of our remuneration
elements across our UK employee population. Work on aligning our
newly acquired Crop Nutrients business to this remuneration structure
was completed in 2021.
Population
All UK
employees
Remuneration
element
Details
Salary
Salaries are determined based on the role
and market rates; regular benchmarking
exercises are taken to ensure salaries remain
competitive against the market.
Pension
Benefits
SAYE
SIP
We are an accredited Living Wage employer
and all employees are paid at least the Real
Living Wage.
All employees are able to participate in the
Company’s Defined Contribution scheme.
All employees are eligible to participate in
our range of benefits ranging from private
medical coverage, occupational health
services (including Covid-19 testing), and
life assurance to a range of well-being and
shopping benefits.
All employees are eligible to participate
in the company’s SAYE scheme, which
encourages employee share ownership and
the opportunity to share in the value created
in the Company.
All employees who have been in employment
for three months or more are eligible to
participate in the company’s SIP scheme
of partnership and matching shares.
The Company matches the number of
partnership shares bought on a 1:1 basis.
All employees are also eligible to receive
discretionary annual awards of free shares.
Annual Bonus Our UK permanent employees are eligible
to participate in our annual bonus scheme.
Performance for the bonus is determined on a
team basis, ensuring that everyone is working
towards the company’s collective goals.
LTIP
Management
and senior
management
Shareholding
requirements
Executive
directors
and GMC
members
LTIP performance measures for the
management population are the same as
those for the executive directors, providing
appropriate alignment. The LTIP ensures the
focus of the decision-making population is on
long term value creation.
The executive director shareholding
requirements were further strengthened in our
2020 remuneration policy, ensuring greater
alignment with interests of shareholders.
GMC members are also now subject to a
shareholding requirement.
155
Anglo American plc Integrated Annual Report 2021
Annual report on directors’ remuneration continued
Our key SHE and ESG commitments flow through to the incentives
for all eligible employees. The annual bonus scheme outcomes for all
eligible employees are determined by team based goals that include
SHE measures, financial metrics and critical strategic measures.
All eligible employees are incentivised to work collectively on key
priorities in these areas, and are subject to the safety deductor. The LTIP
awards granted to management and senior management include the
performance measures applicable to our executive directors, which
for 2022 include ESG measures relating to renewable energy, water
abstraction reduction and supporting off-site jobs in the regions that
we operate.
Hourly pay gap ratios
The table below ranks Anglo American Services (UK) Limited
334 UK employees’ hourly pay from lowest to highest and then
splits the number of employees into equally sized groups.
Reflecting the hourly pay gap described above, this chart shows
that there has been little change year-on-year in the upper quartile,
where the percentage of women remained static at 30%, however,
the percentage of women in the upper middle quartile continued to
increase year on year from 47% to 54%. Proportionally there remains
more male employees than female employees in the higher pay
quartiles.
Gender pay gap
Introduction
Through intentional efforts, creating a more psychologically safe
workplace and recognising the impact of intersectionality, we continue
to improve our female representation. As at April 2021, women make
up 56% of our UK HQ employees compared with 54% a year earlier,
and female representation continues to increase across our total
management population. We continue to focus on areas such as
talent acquisition, development so individuals not only get in but get
on, mentoring and opportunities for those from under-represented
groups. Our actions are supporting our goal of having 33% female
representation across our Executive Committee and those that report
to it, improving to 29% by the end of 2021, from 27% in 2020.
We remain confident that our pay policies result in equal pay for equal
work, regardless of gender or other characteristics. We have also
made significant progress in improving both female representation
and creating a more inclusive workplace in the last few years and
acknowledge the need for this to continue.
Summary
Anglo American Services (UK) Limited is the UK company that has
historically employed the majority of Anglo American’s UK workforce
and is predominantly engaged in the provision of head office corporate
services to Anglo American’s global operations. The following sets
out the information required by the UK regulation for Anglo American
Services (UK) Limited, as at 5 April 2021.
Our mean UK hourly pay gap of 44% is primarily a function of the
representation of men in the most senior management roles in our UK
head office, as shown most clearly in the quartile analysis. On a global
basis(1), our gender pay gap of 15.2 % reflects the far greater balance
across the full breadth of our business activities.
(1) Weighted average gender pay gap of the guaranteed pay of those employees in Australia,
Brazil, Chile, Singapore, South Africa and the UK who are subject to the Anglo American
Groupwide reward structures
Hourly pay quartiles
Hourly pay quartiles
Lower
Lower Middle
Upper Middle
Upper
2021
Percentage
males
in Quartile
2021
Percentage
females
in Quartile
2020
Percentage
males in
Quartile
2020
Percentage
females in
Quartile
20
39
46
70
80
61
54
30
19
41
53
70
81
59
47
30
Proportion of employees awarded a bonus for 2021
Anglo American’s UK performance pay schemes operate irrespective
of gender, with the majority of UK employees eligible to receive variable
bonus pay during the year. 2021 saw 84% of male and 80% of female
employees receive a bonus.
% awarded a bonus
Male
Female
2021
84%
80%
2020
84%
81%
The population for which bonus pay refers was 336 reflecting
the different rules for the statutory reporting of hourly rate and
bonus figures.
Bonus pay gap
The factors driving the bonus pay gap are the same as for the hourly
pay gap, being the imbalanced gender composition across the
more senior roles in our UK headquarters. Variable performance pay
structures for the most senior employees differ from those of the wider
workforce, thereby further widening the gap. The decrease in the mean
bonus pay gap for 2021reflects the increasing proportion of female
employees in more senior roles recognising there will be a lag given the
vesting period for bonuses.
Hourly pay
Anglo American is a global mining business, headquartered in the UK,
and the majority of the senior leadership team is UK-based. The gaps
shown are largely attributable to the fact that more men than women
are working in more highly paid, senior roles.
Bonus pay gap
Male
Female
2021
79%
75%
2020
82%
75%
At the snapshot date of 5 April 2021, Anglo American Services (UK) Ltd
comprised of:
– A UK workforce of 334 employees of which 44% were men and
56% were women
– Although there has been a significant improvement year-on-year,
the senior management population was made up of a substantially
higher proportion of men (71%) than women (29%)
– Leading to a 44% mean and 36% median UK hourly pay gap
(2020: 47% mean and 36% median).
The UK Gender Pay Gap Requirement
The UK Gender Pay Gap reporting requirement is a regulation under
The Equality Act 2010 (Gender Pay Gap Information) Regulations
2017 that is designed to provide public transparency in relation to the
difference between men’s and women’s earnings, on average, within
a company.
This regulation came into effect on 6 April 2017 and all UK registered
companies that employ, in the UK, 250 or more people are required to
disclose the specifically defined information by 4 April 2022. The source
data for the required information is at the ‘snapshot date’ of 5 April
2021. The Company is confident that it complies with the UK’s Equal
Pay legislation, which governs the right to equal pay between men and
women for equal work.
156
Anglo American plc Integrated Annual Report 2021Governance Remuneration disclosures
Ten-year TSR performance
Ten-year remuneration and returns
The TSR chart shows the Group’s TSR performance against the
performance of the FTSE 100 index from 1 January 2012 to 31
December 2021. The FTSE 100 index was chosen as this is a widely
recognised broad index of which Anglo American has been a long
term constituent.
The TSR performance since 2013, when the current chief executive
took office, versus the FTSE 100 index, is positive.
TSR is calculated in US dollars, and assumes all dividends are
reinvested. The TSR level shown as at 31 December each year is the
average of the closing daily TSR levels for the five-day period up to
and including that date.
The table below shows the total remuneration earned by the incumbent
chief executive over the same 10-year period, along with the proportion
of maximum opportunity earned in relation to each type of incentive.
The total amounts are based on the same methodology as for the
single figure table for executive directors on page 133 of this report.
200
150
100
50
0
t
n
e
m
t
s
e
v
n
i
0
0
1
$
l
a
c
i
t
e
h
t
o
p
y
h
a
f
o
e
u
a
V
l
2011
2012 2013 2014 2015
2016
2017
2018
2019
2020
2021
Source: Datastream
Ten-year CEO remuneration
Financial year ending
Cynthia Carroll
Total remuneration
(single figure, £’000)
Annual bonus
(% of maximum)
LTIP
(% of maximum)
BSP Enhancement
Shares
(% of maximum)
Mark Cutifani
Total remuneration
(single figure, £’000)
Annual bonus
(% of maximum)
LTIP
(% of maximum)
31 December,
2012
31 December,
2013
31 December,
2014
31 December,
2015
31 December,
2016
31 December,
2017
31 December,
2018
31 December,
2019
31 December,
2020
31 December,
2021
3,203
1,462
35%
67%
50%
28%
0%
0%
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5,305
3,725
3,462
3,996
6,693
15,636
10,745
9,331
9,827
65%
60%
36.5%
87.5%
76.9%
63.4%
58%
54.6%
75.2%
—
—
50%
0%
50%
100%
92.5%
83.8%
90%
157
Anglo American plc Integrated Annual Report 2021
Annual report on directors’ remuneration continued
CEO pay ratio
The table shows our CEO pay ratio for 2021 based on our total UK
population, and the methodology used to for the calculation. At 116:1,
the CEO pay ratio at the median has decreased from the median ratio
of 126:1 (restated) in 2020 and 133:1 in 2019. This is as a result of
the following:
– The chief executive’s total remuneration has increased from
£9.32 million in 2020 to £9.83 million in 2021. This is largely due to
the higher payout of the 2021 annual bonus of 75.2% compared
to 54.6% in 2020. The increase in bonus is offset in part by the
higher value of the LTIP vesting in 2020 and the continued planned
decrease in pension level.
– The total remuneration of the median employee has increased from
£74,193 to £84,452. This is due to the increased bonus pay-outs for
2021 across the bonus eligible population.
As for previous years and in line with our executive director
remuneration strategy, our chief executive pay comprises a higher
proportion of incentive pay compared to the wider employee
population. This will likely remain the key driver of fluctuations in the
ratio from year to year.
Option A has been used to calculate the ratio, being the most
comprehensive methodology of the three prescribed methods. This
methodology uses the full-time equivalent pay and benefits data for all
UK employees during the year and compares the single figure number
for employees at the 25th, 50th and 75th percentiles against the chief
executive at the snapshot date of 31 December 2021, the last day of
the financial year.
The salary, benefits and share plan data has been taken on a full-time
equivalent basis; however, the annual bonus amounts have been taken
on an estimated basis. All other elements were calculated in line with
the methodology used for the chief executive.
The employee at the 50th percentile does not participate in a long term
incentive plan and does not receive all benefits applicable to the chief
executive. Therefore, the ratio is not a direct comparison with the total
remuneration of the chief executive. Having reviewed the reasons for
the change in the median pay ratio, the company is satisfied that the
ratio is appropriate.
Financial year ending
2021
2020 (1)
2019
CEO pay ratio
25th percentile employee
Median percentile employee
75th percentile employee
Method
used
25th
percentile
Median
percentile
75th
percentile
Option A
Option A
Option A
Salary
185:1
188:1
205:1
116:1
126:1
133:1
65:1
74:1
60:1
Total remuneration
2021
2020
2019
2021
2020
2019
£44,761
£60,029
£45,039
£64,080
£41,706
£53,027
£54,810
£84,452
£49,805
£74,193
£52,301
£80,811
£99,176
£91,350
£108,200
£150,876
£126,812
£178,416
(1) 2020 numbers have been restated in line with the changes made to the single figure number as outlined in note 2 for the single figure table on page 146.
158
Anglo American plc Integrated Annual Report 2021Governance Change in directors’ remuneration compared to
UK employees
The following table sets out the directors’ basic salary, benefits
and annual bonus amounts for 2021, 2020 and the year-on-year
changes. We show the average change in each element for UK-based
Anglo American Services (UK) Limited employees below GMC level
(this excludes the De Beers and Crop Nutrients businesses’ employees).
This population is being used, as Anglo American plc does not have
any direct employees. The chosen population is considered to be the
most relevant employee comparator group given the Groupwide nature
of roles performed at the corporate head office.
The results show that the although the average UK employee salary
has fallen due to an increase in headcount of lower paid employees,
the comparable salaries for employees who have been employed for
both years shows a 6% rise from 2020. This is due to a combination of
promotions and a 2% salary increase being applied for all employees.
Benefits have increased by 28% on a like-for-like basis, largely due to
an increase in pension level.
2021
Salaries/fees(1)
2021
Benefits(2)
2021
Bonus
2020
Salaries/fees(1)
2020
Benefits(2)
2020
Bonus
Executive directors
Mark Cutifani
Stephen Pearce
Tony O’Neill
Non-executive directors
Stuart Chambers(3)
Ian Ashby
Marcelo Bastos(4)
Elisabeth Brinton(5)
Byron Grote
Hilary Maxson(5)
Hixonia Nyasulu(4)
Nonkululeko Nyembezi(6)
Anne Stevens
UK employees
£’000
% change
£’000
% change
£’000
% change
£’000
% change
£’000
% change
£’000
% change
£’000
% change
£’000
% change
£’000
% change
£’000
% change
£’000
% change
£’000
% change
£’000
% change(7)
1,399
2%
843
2%
874
2%
714
2%
145
—%
113
8%
96
—%
175
—%
105
—%
113
13%
120
—%
145
—%
105
6%
57
38%
40
7%
39
2%
9
18%
0
—%
0
—%
0
—%
0
—%
0
—%
0
—%
0
—%
0
—%
21
2,207
40%
1,330
38%
1,380
38%
0
—%
0
—%
0
—%
0
—%
0
—%
0
—%
0
—%
0
—%
0
—%
98
28%
42%
1,371
2%
826
2%
857
2%
700
—%
145
10%
105
2%
0
—%
175
4%
0
—%
100
11%
115
—%
145
4%
106
5%
41
7%
37
(5%)
38
12%
7
46%
0
—%
0
—%
0
—%
0
—%
0
—%
0
—%
0
—%
0
—%
19
11%
(1) There was no increase in NED base or committee fees in 2020 or 2021; any increase is due to individuals taking on additional committee memberships.
(2) Benefits for UK employees comprise of pension and car allowances (where applicable), these being the most material.
(3) Stuart Chambers’ benefits in kind figure relates to the reimbursement of travel expenses during the year and the settlement of tax in relation to the reimbursement.
(4) Marcelo Bastos and Hixonia Nyasulu joined the Board part way through 2019; their 2019 full year equivalent fees have been included for comparability.
(5) Elisabeth Brinton and Hilary Maxson joined the Board part way through 2021; their full year equivalent fees have been included for comparability in future years.
(6) Nonkululeko Nyembezi joined the Board on 1 January 2020; no change is calculable for 2020.
(7) Annual salary increase was 2% for UK employees in 2020 and 2021; increases includes pay uplifts from promotions.
1,574
(4%)
965
(4%)
1,001
(4%)
0
—%
0
—%
0
—%
0
—%
0
—%
0
—%
0
—%
0
—%
0
—%
92
7%
159
Anglo American plc Integrated Annual Report 2021 Annual report on directors’ remuneration continued
$m
% change
$m
% change
$m
% change
$m
% change
$m
% change
’000
% change
2021
8,925
184
4,047
348
2,837
250
3,796
13
1,000
348
62
(3)
2020
3,135
(10)
904
(36)
810
7
3,365
(3)
223
(71)
64
2
Number of votes
For
Against
Abstain
898,958,341
50,836,179
13,118,414
(94.65%)
(5.35%)
911,402,369
41,886,673
8,482,628
(95.61%)
(4.39%)
Distribution statement for 2021
The table below sets out the total expenditure on employee reward
over 2021, compared to profit generated by the Company and the
dividends received by investors. Underlying earnings are shown, as this
is one of the Group’s key measures of performance, while employee
numbers help put the payroll costs of employees into context.
Distribution statement
Underlying earnings(1)
Dividends payable for year to company shareholders(2)
Dividends payable for year to non-controlling interests (2)
Payroll costs for all employees
Share buybacks
Employee numbers
(1) See page 179 for details on how underlying earnings are calculated.
(2)
Includes value of special dividend paid in September 2021.
2021 AGM shareholder voting
Vote
2020 Annual Report on Remuneration
2020 Annual Remuneration Policy
Remuneration Committee in 2021
Membership
The Committee comprised the independent NEDs listed on page 135
as at 31 December 2021.
External advisers to the Committee
The table below details the external advisers to the Committee
and the fees paid for services provided during 2021. The fees for
external advisers are charged on a time and expenses basis and are
in accordance with the terms and conditions set out in the relevant
engagement letter. Deloitte is one of the founding members of the
Remuneration Consulting Group.
The Committee is satisfied that the Deloitte engagement team, which
provides remuneration advice to the Committee, does not have
connections with Anglo American plc or its directors that may impair
its independence. The Committee reviewed the potential for conflicts
of interest and judged that there were appropriate safeguards against
such conflicts.
External advisers and fees
Appointed by the Committee as external advisers from November 2020 following a competitive tender process. Support
during 2021 included attendance and advice at Remuneration Committee meetings and advice on the remuneration
elements relating to the announcement of the change of chief executive.
Other services provided to the Company
Corporate tax advisory services, risk advisory services, financial transformation advisory services, financial advisory
services in relation to mergers and acquisitions and capital restructuring, legal managed services.
Fees for committee
assistance
£140,450
Advisers
Deloitte LLP
160
Anglo American plc Integrated Annual Report 2021Governance Directors’ service agreements
The executive directors are employed under service agreements which
are rolling contracts with no fixed term. The chief executive and finance
director have service agreements that may be terminated by either
side by giving not less than 12 months’ notice. The technical director
is employed under a service agreement that may be terminated by
either side by giving not less than six months’ notice. The dates of the
executive directors’ service agreements are set out below.
Mark Cutifani
Stephen Pearce
Tony O’Neill
Date of appointment
3 April 2013
24 April 2017
22 July 2015
It was announced in November 2021 that Mark Cutifani will be stepping
down as chief executive and from the Board on 19 April 2022 and will
remain an Anglo American employee until 30 June 2022.
The chairman and NEDs are appointed by the Company under letters
of appointment and do not have service contracts or contracts for
service. All NEDs are expected to serve for an initial period of three
years, subject to annual re-election by shareholders at the AGM.
NEDs are typically expected to serve two three-year terms, although
the Board may invite them to serve for an additional period. The
appointment of the chairman may be terminated by either side by
giving not less than six months’ notice. All other NEDs have a notice
period of not less than one month from either side. The dates of each
NED’s original appointment are set out below.
Stuart Chambers
Ian Ashby
Marcelo Bastos
Elisabeth Brinton
Byron Grote
Hilary Maxson
Hixonia Nyasulu
Nonkululeko Nyembezi
Anne Stevens
Approval
Date of appointment
1 September 2017
25 July 2017
1 April 2019
1 March 2021
19 April 2013
1 June 2021
1 November 2019
1 January 2020
15 May 2012
This directors’ remuneration report has been approved by the Board of
directors of Anglo American plc.
Signed on behalf of the Board of directors.
Anne Stevens
Chair, Remuneration Committee
23 February 2022
161
Anglo American plc Integrated Annual Report 2021 Governance
Statement of directors’ responsibilities
– Make judgements and accounting estimates that are reasonable
and prudent
– Prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Group and Parent Company
will continue in business.
The directors are responsible for safeguarding the assets of the
Group and Parent Company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The directors are also responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s and Parent
Company’s transactions and disclose with reasonable accuracy at
any time the financial position of the Group and Parent Company and
enable them to ensure that the financial statements and the Directors’
Remuneration Report comply with the Companies Act 2006.
The directors are responsible for the maintenance and integrity of
the Parent Company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
– the Strategic Report includes a fair review of the development and
performance of the business and the position of the Group and
Parent Company, together with a description of the principal risks
and uncertainties that it faces.
By order of the Board
Mark Cutifani
Chief Executive
23 February 2022
Stephen Pearce
Finance Director
The directors are responsible for preparing the Integrated
Annual Report and the financial statements in accordance
with applicable law and regulation.
Company law requires the directors to prepare financial statements
for each financial year. Under that law the directors have prepared
the Group financial statements in accordance with UK-adopted
International Accounting Standards and the Parent Company
financial statements in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting
Standards, comprising FRS 101 “Reduced Disclosure Framework”,
and applicable law).
Under company law, directors must not approve the financial
statements unless they are satisfied that they give a true and fair view
of the state of affairs of the Group and Parent Company and of the
profit or loss of the Group for that period. In preparing the financial
statements, the directors are required to:
– Select suitable accounting policies and then apply them consistently
– State whether applicable UK-adopted International Accounting
Standards have been followed for the Group financial statements
and United Kingdom Accounting Standards, comprising FRS 101
have been followed for the Parent Company financial statements,
subject to any material departures disclosed and explained in the
financial statements
Directors’ confirmations
for the year ended 31 December 2021
The directors consider that the Integrated Annual Report and
accounts, taken as a whole, is fair, balanced and understandable and
provides the information necessary for shareholders to assess the
Group’s and Parent Company’s position and performance, business
model and strategy.
We confirm that, to the best of our knowledge:
– the Group financial statements, which have been prepared in
accordance with UK-adopted international accounting standards,
give a true and fair view of the assets, liabilities, financial position
and profit of the Group;
– the Parent Company financial statements, which have been
prepared in accordance with United Kingdom Accounting
Standards, comprising FRS 101, give a true and fair view of the
assets, liabilities and financial position of the Parent Company; and
162
Anglo American plc Integrated Annual Report 2021
Financial statements and
other financial information
Contents
Independent auditors’ report to the members of Anglo American plc
Primary statements
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement of changes in equity
Notes to the financial statements
Financial performance
1.
2.
3.
4.
5.
6.
Operating profit from subsidiaries and joint operations
Financial performance by segment
Earnings per share
Net finance costs
Income tax expense
Dividends
Significant items
7.
8.
Significant accounting matters
Special items and remeasurements
Capital by segment
Intangible assets
Capital base
9.
10.
11. Property, plant and equipment
12. Capital expenditure
13.
14. Financial asset investments
15. Provisions for liabilities and charges
16. Deferred tax
Investments in associates and joint ventures
Working capital
17.
Inventories
18. Trade and other receivables
19. Trade and other payables
Net debt and financial risk management
20. Net debt
21. Borrowings
22. Financial instruments and derivatives
23. Financial risk management
Equity
24. Called-up share capital and consolidated equity analysis
25. Non-controlling interests
Employees
26. Employee numbers and costs
27. Retirement benefits
28. Share-based payments
Unrecognised items and uncertain events
29. Events occurring after end of year
30. Commitments
31. Contingent assets and liabilities
Group structure
32. Assets and liabilities held for sale
33. Acquisitions and disposals
34. Basis of consolidation
35. Related undertakings of the Group
Other items
36. Related party transactions
37. Auditors’ remuneration
38. Leases
39. Accounting policies
Financial statements of the Parent Company
Summary by operation
Key financial data
Exchange rates and commodity prices
214
215
217
218
223
224
224
224
226
226
228
230
244
244
245
247
256
259
261
262
164
173
173
174
175
176
177
178
181
182
182
184
185
188
190
191
192
193
194
196
196
197
200
201
201
202
204
205
210
Anglo American plc Integrated Annual Report 2021
163
Financial statements and other financial information
Independent auditors’ report to the
members of Anglo American plc
Report on the audit of the financial statements
Opinion
In our opinion:
– Anglo American plc’s Group financial statements and Parent
Company financial statements (the “financial statements”) give
a true and fair view of the state of the Group’s and of the Parent
Company’s affairs as at 31 December 2021 and of the Group’s
profit and the Group’s cash flows for the year then ended;
– the Group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
– the Parent Company financial statements have been properly
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards,
comprising FRS 101 “Reduced Disclosure Framework”, and
applicable law); and
– the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
We have audited the financial statements, included within the
Integrated Annual Report 2021 (the “Annual Report”), which comprise:
the Consolidated and Parent Company balance sheets as at
31 December 2021; the Consolidated income statement, the
Consolidated statement of comprehensive income, the Consolidated
cash flow statement and the Consolidated statement of changes in
equity for the year then ended; and the notes to the financial
statements, which include a description of the significant accounting
policies.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities
for the audit of the financial statements section of our report. We
believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical
requirements that are relevant to our audit of the financial statements
in the UK, which includes the FRC’s Ethical Standard, as applicable to
listed public interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit
services prohibited by the FRC’s Ethical Standard were not provided.
Other than those disclosed in note 37, we have provided no non-audit
services to the Parent Company or its controlled undertakings in the
period under audit.
Our audit approach
Context
The financial year ended 31 December 2021 saw the Group benefit
from a stronger pricing environment across several key commodities
in its portfolio, the overall financial performance of the Group was
considerably improved when compared to the prior year.
Our audit for the current year continued to be impacted by the
Covid-19 pandemic. Many of the territories in which the Group
operates remain impacted by continued restrictions imposed by
governments, which in turn impacted the way in which we conducted
our audit. A majority of audit procedures were performed remotely,
164 Anglo American plc Integrated Annual Report 2021
including the Group team’s direction and oversight of our component
teams. Consistent with the prior year, the impact from the pandemic,
both from a financial reporting risk perspective and as it related to
delivering the audit, was continuously re-evaluated throughout
the year.
As part of our audit, we made enquiries of management to understand
its process to assess the extent of the potential impact of climate
change risks on the Group and its financial statements. During the
year, the Group continued to develop its strategy in response to the
potential risks associated with climate change by re-aligning its
portfolio towards future-enabling products. Notably, it demerged its
South African thermal coal operations and, subsequent to the year
end, divested its interest in the Cerrejón thermal coal operation in
Colombia. Management has also updated its climate ambitions,
including an ambition introduced this year to halve scope 3
greenhouse gas emissions by 2040 as discussed on page 43. This
ambition does not directly impact financial reporting, as management
has not yet developed a pathway to deliver this objective and will only
model the impact when such a pathway has been developed.
Management has explained how it has considered the impact of
climate change on the financial statements, and specifically in respect
of cash flow projections for impairment testing, in note 7 to the financial
statements. This includes its consideration of risks and opportunities
that could impact the financial statements together with assumptions
in respect of carbon pricing.
We used our knowledge of the Group to consider the risk assessment
performed by management, including its assessment of the strategic
and financial resilience of the Group’s portfolio under various scenarios
including a 1.5°C scenario, aligned to the goals of the Paris
Agreement. Following this we considered management’s financial
reporting risk assessment in respect of climate change, focusing on
those areas considered to be most heavily impacted such as
management's impairment assessment over non-current assets.
Whilst the impact is uncertain, we particularly considered the impact of
both physical and transition risks arising due to climate change, as well
as related opportunities and climate targets made by the Group, on
the recoverable value of the Group’s assets. The useful lives of the
Group’s mines are reassessed annually and changes could impact
depreciation charges and timing of mine restoration activity. Based on
the current life of mine plans there were no indications that useful lives
had been materially impacted by climate change. Our work on
impairment is further described in the relevant Key Audit Matter.
We also read the disclosures made in relation to climate change, in the
other information within the Annual Report, and considered their
consistency with the financial statements and our knowledge from
our audit.
Overview
Audit scope
– Our audit included full scope audits, audit of specific account
balances or specified procedures at each of the Group’s thirteen in-
scope businesses, joint ventures and associates (“components”),
– Taken together, the components at which audit work was performed
accounted for 97% of consolidated revenue, 95% of consolidated
profit before tax and 95% of consolidated profit before tax, special
items and remeasurements.
Key audit matters
– Assessment of impairment and impairment reversals for intangible
assets, property, plant and equipment and investments in
associates and joint ventures (Group) and investments in
subsidiaries (Parent Company)
Financial statements and other financial information
Independent auditors’ report to the members of Anglo American plc
– Provisions for environmental restoration and decommissioning
(Group)
– Demerger of the Group’s South African thermal coal operations
(Group and Parent Company)
– Changes in the presentation of certain revenue streams from
a gross to a net basis (Group)
Materiality
– Overall Group materiality: $300 million (2020: $200 million) based
on approximately 3.0% of the Group’s three year-average
consolidated profit before tax, special items and remeasurements
– Overall Parent Company materiality: $300 million (2020:
$80 million) based on approximately 1% of the Parent Company’s
total assets
– Performance materiality:$225 million (2020: $150 million) (Group)
and $225 million (2020: $60 million) (Parent Company)
The scope of our audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional
judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect
on: the overall audit strategy; the allocation of resources in the audit;
and directing the efforts of the engagement team. These matters, and
any comments we make on the results of our procedures thereon,
were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. This is not a complete list of all
risks identified by our audit.
The demerger of the Group’s South African thermal coal operations
(Group and Parent Company) and changes in the presentation of
certain revenue streams from a gross to a net basis (Group) are new
key audit matters this year. The fair value allocation of the purchase
price in respect of the acquisition of Sirius Minerals Plc (‘Sirius’), the
recoverability of deferred tax assets in Brazil and evaluating the impact
of the Covid-19 pandemic, which were key audit matters last year, are
no longer included because the Sirius acquisition took place in the
prior year, Minas-Rio in Brazil is no longer in a net deferred tax asset
position, and the Covid-19 key audit matter was to address the
response to the initial year impacted by Covid-19. Otherwise, the key
audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Assessment of impairment and impairment reversals for intangible
assets, property, plant and equipment and investments in associates
and joint ventures (Group) and investments in subsidiaries (Parent
Company)
As at 31 December 2021, the Group has intangible assets of
$3,002 million (2020: $3,103 million), property, plant and equipment of
$39,501 million (2020: $36,419 million) and investments in associates
and joint ventures of $1,021 million (2020: $1,258 million). All of these
asset categories require review for indicators of impairment, and where
relevant, impairment reversal.
The determination of whether an impairment or impairment reversal
trigger exists can be judgemental. Management must determine the
recoverable amount when impairment indicators or indicators of
impairment reversal are identified.
The Group has goodwill of $1,877 million as at 31 December 2021
(2020: $1,963 million), predominantly associated with the De Beers
business. Goodwill is required to be tested for impairment at
least annually.
The determination of recoverable amount, being the higher of value-in-
use (“VIU”) and fair value less costs of disposal (“FVLCD”), requires
judgement and estimation on the part of management in identifying
and then determining the recoverable amounts for the relevant cash-
generating units (“CGUs”). Recoverable amounts are based on
management’s view of key value driver inputs and external market
conditions such as future commodity prices, budgeted operating
expenditure, the timing and approval of future capital expenditure, and
the most appropriate discount rate. As these assumptions were derived
from observable data available to a market participant as required
under IFRS, they are not necessarily aligned with a 1.5°C Paris
Agreement scenario. Estimation uncertainty is considered to be
significant due to the long lives of the majority of assets and uncertainty
in the quantum and timing of cash flows, including the uncertain impact
of climate change on the Group’s operations, as described in note 7 to
the financial statements.
For all material finite-lived intangible assets, property, plant and
equipment and investments in associates and joint ventures, we
undertook the following to test management’s assessment for
indicators of impairment/impairment reversal:
– understood and evaluated management’s processes and controls
in respect of the impairment trigger assessment process;
– assessed the appropriateness of management’s identification of
the Group’s CGUs; and
– evaluated and challenged management’s assessment and
judgements in respect of impairment/impairment reversal
indicators, including ensuring that the impact of climate change,
and recent commodity price and foreign exchange volatility, were
appropriately considered in management’s impairment trigger
assessment and conclusions.
Specifically, for each CGU where triggers for impairment or
impairment reversals were identified, and in respect of the De Beers
and other CGUs where an annual goodwill impairment test was
required, management prepared a detailed cash flow model on a
FVLCD basis to estimate the recoverable amount, or compared the
carrying value to the fair value indicated by the share price of listed
subsidiaries, where relevant. Our procedures in respect of each
model included:
– verifying the integrity of formulae and the mathematical accuracy
of management’s valuation models;
– consideration of the impact of the latest life of mine plan
assumptions and ensuring that the valuation model reflected the
latest plans. This included assessing the competence and
objectivity of management’s internal technical experts in preparing
the plan as well as reviewing the supporting information
underpinning the internal expert’s report, where appropriate;
Anglo American plc Integrated Annual Report 2021 165
Financial statements and other financial information
Independent auditors’ report to the members of Anglo American plc
Key audit matter
How our audit addressed the key audit matter
The CGUs where impairment or impairment reversal triggers were
identified in the year include Moranbah-Grosvenor (Metallurgical Coal),
Dawson (Metallurgical Coal), Capcoal (Metallurgical Coal), Minas-Rio
(Iron Ore Brazil), El Soldado (Copper) and Cerrejón (Thermal Coal). As
triggers for impairment/impairment reversal were identified in respect
of these CGUs, management prepared a detailed cash flow model on
a FVLCD basis to estimate the recoverable amount. Management’s
analysis determined that pre-tax impairment losses had occurred at
Moranbah-Grosvenor (Metallurgical Coal) of $0.4 billion, Dawson
(Metallurgical Coal) of $0.2 billion, and Capcoal (Metallurgical Coal) of
$0.2 billion, and that pre-tax impairment reversals should be recognised
at Minas-Rio (Iron Ore Brazil) of $1.4 billion and El Soldado (Copper) of
$0.1 billion.
Management also recorded an impairment charge of $0.3 billion in
respect of its investment in Cerrejón, based on estimated consideration
for the sale of its interest to Glencore. Management recorded an
additional charge in relation to the write-off of redundant assets at
Copper Chile (Copper).
Refer to notes 7 and 8 for management conclusions and the Audit
Committee’s views on page 129.
At 31 December 2021, the Parent Company holds investments in
subsidiaries amounting to $31,796 million (2020: $31,651 million).
Investments in subsidiaries are accounted for at historical cost less
accumulated impairment.
Judgement is required to assess if impairment triggers exist and where
triggers are identified, if the investment carrying value is supported by
the recoverable amount. In assessing for impairment triggers,
management considers if the underlying net assets of the investment
support the carrying amount and whether other facts and
circumstances, including impairments recorded in the Group financial
statements, would be indicative of a trigger.
Based on management’s assessment, no impairment triggers in respect
of the carrying value of investments in subsidiaries were identified at the
balance sheet date.
Refer to note 1 of the Parent Company’s financial statements.
– assessing the reliability of management’s forecast capital and
operating expenses with reference to comparing budgeted results
with actual performance in prior periods;
– with the support of our valuations experts, assessing the discount
rate used in each model and whether it fell within a reasonable
range taking account of external market data. Our assessment of
discount rates also included consideration of country and asset
specific risks and challenging management to ensure that these
had been appropriately captured in either the discount rate or
underlying cash flow forecasts;
– benchmarking management's forecast commodity price and
foreign exchange assumptions against our own collated
consensus data to assess whether they fell within an external
analyst range. Specifically in respect of De Beers, we engaged our
economics experts to challenge and assess the appropriateness of
the methodology and assumptions used in deriving forecast
diamond prices;
– challenging and verifying that the cash flow forecasts
appropriately captured and considered the impact of carbon
emissions on price, mine plan costs and cost of capital, where
material;
– verifying that costs and benefits of achieving the Group’s emissions
reduction ambitions and targets and the implementation of
projects to mitigate physical climate risk were appropriately
included in cash flow forecasts, where such costs and benefits
have been incorporated into the approved life of mine plan; and
– assessing whether the assumptions had been determined and
applied on a consistent basis, where relevant, across the Group.
As a result of our work, we determined that the impairment charges
recorded are appropriate and that adequate disclosures have been
made in the financial statements.
In respect of investments in subsidiaries in the Parent Company, we
undertook the following to test management’s assessment for
indicators of impairment:
– evaluated and challenged management’s assessment and
judgements, including ensuring that consideration had been given
to the results of the Group’s impairment assessment in respect of
intangible assets and property, plant and equipment;
– verified the mathematical accuracy of management's assessment
and that the net assets of the subsidiaries being assessed agreed
to the respective subsidiary balance sheet at 31 December 2021;
and
– independently performed an assessment of other internal and
external impairment triggers, including considering the market
capitalisation of the Group with reference to the carrying value of
investments in subsidiaries in the Parent Company to identify other
possible impairment indicators.
As a result of our work, we are satisfied that management’s
impairment assessment of intangible assets and property, plant and
equipment is appropriate and that there are no indicators of
impairment in respect of the carrying value of the Parent Company’s
investments in subsidiaries as at 31 December 2021.
166 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Independent auditors’ report to the members of Anglo American plc
Key audit matter
How our audit addressed the key audit matter
Provisions for environmental restoration and
decommissioning (Group)
The Group has provisions for environmental restoration and
decommissioning of $2,556 million as at 31 December 2021 (2020:
$2,953 million).
We assessed management’s process for the review of environmental
restoration and decommissioning provisions and performed detailed
testing in respect of the cost estimates.
The calculation of these provisions requires management to estimate
the quantum and timing of future costs, taking into account the unique
nature of each site, the long timescales involved and the potential
associated obligations. These calculations also require management to
determine an appropriate rate to discount future costs to their net
present value.
Management reviews the environmental restoration and
decommissioning obligations at each reporting period, using experts to
provide support in its assessment where appropriate. This review
incorporates the effects of any changes in local regulations,
rehabilitation activities that have taken place during the year and
management’s anticipated approach to restoration and rehabilitation.
Refer to note 15 for management’s conclusions and the Audit
Committee’s views on page 130.
As part of our detailed testing, we validated the existence of legal
and/or constructive obligations with respect to the provision and
considered whether the intended method of restoration and
rehabilitation was appropriate. We evaluated the competence and
objectivity of management’s experts who produced the cost
estimates. We read correspondence between management and
management’s experts, as well as with the mining regulatory body
where applicable, and also held meetings with the experts to
understand their methodology and inputs.
For certain of the Group’s environmental restoration and
decommissioning provisions, particularly those where there had been
a significant change in the provision compared to the prior year, we
engaged our own internal experts to assess the work performed by
management’s expert, including review of any contingent liabilities,
which are not provided for, and detection of any other excluded costs
requiring recognition or disclosure that could be material.
In assessing the appropriateness of cost estimates, we focused on
validating that costs underpinning the accounting provision represent
management’s and the experts’ best estimate of expenditure, based
on the current extent of mine disturbance as well as any risk
adjustments included in the estimate. In respect of claims that have
been made by regulatory authorities or government bodies regarding
closure estimates, we met with legal counsel, where relevant, to
assess the probable outcomes in relation to ongoing claims and
exposure and areas where legal requirements are open to
interpretation. We assessed the timing of the cash flows and discount
rates applied to calculate the present value of estimated costs by
comparing the rates applied by management to the yields on
government bonds with maturities approximating the timing of cash
flows for each territory and currency.
We validated the formulae and mathematical accuracy of
management’s calculations.
Based on the procedures performed, we consider that the provisions
related to environmental restoration and decommissioning
obligations are consistent with the obligations associated with the
operations and the related remediation plans to satisfy those
obligations. Further, we consider the related disclosures in the
financial statements to be appropriate.
Anglo American plc Integrated Annual Report 2021 167
Financial statements and other financial information
Independent auditors’ report to the members of Anglo American plc
Key audit matter
How our audit addressed the key audit matter
Demerger of the Group’s South African thermal coal operations
(Group and Parent Company)
The Group completed the demerger of its South African thermal coal
operations on 4 June 2021. The demerger took place after a
restructuring of the legal entities in South Africa such that a single legal
entity, incorporated as Thungela Resources Limited (‘Thungela’), held
the assets and liabilities to be demerged with a fair value at $719 million
as of the demerger date.
As a distribution of non-cash assets to owners, the transaction required
the Group to recognise the distribution at the fair value of the assets
being distributed to shareholders at the date of demerger. Management
determined the fair value of the return of capital based on a discounted
cash flow model based on the underlying life of mine of the assets being
demerged, as well as analyst consensus pricing assumptions.
Refer to note 33 for management’s conclusions and the Audit
Committee’s views on page 130.
The transaction was executed by means of a simultaneous share
premium reduction and in specie return of capital by the Parent
Company.
Changes in the presentation of certain revenue streams from a gross
to a net basis (Group)
The Group has amended its accounting policy to present physically
settled third party sales and purchase contracts on a net basis in the
income statement when these contracts are accounted for as a
derivative prior to settlement and the purpose of the transaction is to
earn a trading margin in accordance with the Group’s strategy.
Judgement was applied to determine that the revised policy would
provide more relevant information given the demerger of the Group’s
South African thermal coal business and associated increase in third
party purchases and sales, and the continued growth of the Group’s
trading activities. Refer to note 7 for management’s conclusions and the
Audit Committee’s views on page 130.
We performed the following procedures in respect of the demerger:
– Read the Thungela prospectus and associated legal
documentation to understand the legal form and commercial
substance of the transaction;
– Confirmed that the transaction should be accounted for as a
distribution of non-cash assets to owners, requiring that the fair
value of Thungela at the date of demerger be estimated;
– Assessed the fair value of Thungela by reference to the market
capitalisation of the demerged entity both on initial listing
subsequent to the demerger and during the period immediately
following listing, and comparing it with the discounted cash flow
model underpinning the valuation used by management;
– Tested the carrying amount of material assets and liabilities
divested by the Group immediately prior to demerger;
– Assessed the tax implications of the transaction;
– Recalculated the accounting entries, including the recycling of the
translation reserve associated with the divested entity, and the loss
on demerger; and
– Assessed the related disclosures.
In respect of the Parent Company, we also considered the
appropriateness of the entries recorded to investment in subsidiaries
and equity shareholders’ funds.
Based on the procedures performed, we consider that the accounting
for the demerger of the Group’s South African thermal coal
operations is appropriate and the estimated fair value determined by
management to be materially acceptable. We also consider the
related disclosures in the financial statements to be appropriate.
We evaluated and challenged the basis on which management
introduced the change to their accounting policy and considered the
appropriateness of their methodology. As a part of our detailed
testing, we engaged internal technical experts to assist us with
understanding whether the accounting treatment to present third
party sales and purchase contracts net is appropriate. We also
performed the following procedures:
– Considered alternative views and benchmarked against industry
peers, taking into account the maturity of the trading functions of
the Group’s immediate peers;
– Understood the controls that management had implemented to
ensure that the treatment was being applied to the correct
transactions according to the purpose for that transaction;
– Substantively tested the underlying transactions to verify that they
had been classified appropriately; and
– Assessed the disclosure of the accounting policy change, including
the restatement of comparatives and whether it was appropriately
disclosed in the current year.
As a result of our work, we are satisfied that the presentation of
physically settled third party sales and purchase contracts on a net
basis in accordance with the Group’s strategy is appropriate and the
relevant disclosures including the restatement for the prior year
recorded by management are appropriate.
168 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Independent auditors’ report to the members of Anglo American plc
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial statements
as a whole, taking into account the structure of the Group and the
Parent Company, the accounting processes and controls, and the
industry in which they operate.
The Group is organised into eight reportable segments – De Beers,
Copper, Platinum Group Metals, Iron Ore, Metallurgical Coal, Nickel,
Manganese and Crop Nutrients, as well as a Corporate function. Each
segment is further divided into Businesses which align to discrete
country or joint venture operations. We have identified each Business
as a component, with each component representing a consolidation
of a number of discrete country operations or underlying businesses.
The Group’s accounting processes for managed operations are
structured around a local finance function at each component, which
are supported by the Group’s central functions including: i) one of the
Group’s three shared service centres in either South Africa, Brazil or
Australia dependent on the geographical location of the component;
and ii) with the exception of De Beers and Metallurgical Coal, through
the Group’s Marketing function in Singapore where the majority of the
Group’s commodity sales are transacted and processed. Each
component reports to the Group through an integrated consolidation
system.
Based on our risk and materiality assessments, we determined which
components required an audit of their complete financial information
having consideration to the relative significance of each component to
the Group, locations with significant inherent risks and the overall
coverage obtained over each material line item in the consolidated
financial statements.
We scoped in eleven components requiring an audit of their complete
financial information, of which five were considered to be financially
significant components. The additional six components subject to a
complete audit were selected due to specific risk characteristics and in
order to achieve the required coverage in respect of each material line
item in the financial statements, including the Group’s Corporate
function. In addition one component was scoped in for audit of specific
account balances and one component was scoped in for specified
procedures over significant balances and transactions to obtain
appropriate coverage of all material balances.
Recognising that not every operation or business in a component is
included in our Group audit scope, we considered as part of our Group
audit oversight responsibility what audit coverage had been obtained
in aggregate by our component teams by reference to operations or
businesses at which audit work had been undertaken.
Where the work was performed by component audit teams or at a
central function, we determined the level of involvement we needed to
have in the audit work at those components to be able to conclude
whether sufficient appropriate audit evidence had been obtained as a
basis for our opinion on the Group financial statements as a whole. As
a result of the global pandemic, certain countries continue to be
placed under restrictive government lockdowns for the duration of
both our pre year-end and year end audit procedures, which impacted
the way we conducted our work, with more procedures being
performed remotely. In practice, this meant some component teams
were able to attend client sites once rules permitted, or were able to
obtain sufficient, appropriate evidence remotely given more than one
piece of audit evidence could be obtained to support the same
transaction.
As a result of Covid-19, we were unable to visit any component teams
for the 2021 audit. As such, our oversight procedures included the
issuance of formal, written instructions to component auditors setting
out the work to be performed at each location and regular
communication throughout the audit cycle including regular
component calls, review of component auditor workpapers and
participation in audit clearance meetings. In most cases
communication was performed through video conferencing.
Taken together, the components where we performed our audit work
accounted for 97% of consolidated revenue, 95% of consolidated
profit before tax and 95% of consolidated profit before tax, special
items and remeasurements. This was before considering the
contribution to our audit evidence from performing audit work at the
Group level, including disaggregated analytical review procedures
and our evaluation of entity level controls, which covers a significant
portion of the Group’s smaller and lower risk components that were not
directly included in our Group audit scope.
The financial statements of the Parent Company are prepared using
the same accounting processes as the Group’s central functions and
were audited by the Group audit team.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the
individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the
financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall materiality
How we determined it
Rationale for benchmark applied
Financial statements – Group
Financial statements – Parent Company
$300 million (2020: $200 million).
$300 million (2020: $80 million).
Approximately 3.0% of Group’s three-year average
consolidated profit before tax, special items and
remeasurements
Profit before tax, special items and remeasurements is
used as the materiality benchmark. The directors use
this measure as they believe that it reflects the
underlying performance of the Group. We consider that
it is most appropriate to calculate materiality based on
a three-year average of profit before tax, special items
and remeasurements to respond to longer-term trends
in commodity markets and to dampen the impact of
short-term price volatility. We used judgement to cap
our materiality at $300 million.
Approximately 1% of Parent Company’s total assets
We considered total assets to be an appropriate
benchmark for the Parent Company, given that it is the
ultimate holding company and holds material
investments in subsidiary undertakings. In the prior year,
materiality was capped based on an allocation of
Group materiality to the Corporate component.
Anglo American plc Integrated Annual Report 2021 169
Financial statements and other financial information
Independent auditors’ report to the members of Anglo American plc
For each component in the scope of our group audit, we allocated
a materiality that is less than our overall group materiality. The range
of materiality allocated across components was $60 million to
$90 million.
statements about whether the directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect
to going concern are described in the relevant sections of this report.
We use performance materiality to reduce to an appropriately low
level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we
use performance materiality in determining the scope of our audit and
the nature and extent of our testing of account balances, classes of
transactions and disclosures, for example in determining sample sizes.
Our performance materiality was 75% (2020: 75%) of overall
materiality, amounting to $225 million (2020: $150 million) for the
Group financial statements and $225 million (2020: $60 million) for the
Parent Company financial statements.
In determining the performance materiality, we considered a number
of factors – the history of misstatements, risk assessment and
aggregation risk and the effectiveness of controls – and concluded
that an amount at the upper end of our normal range was appropriate.
We agreed with the Audit Committee that we would report to them
misstatements identified during our audit above $15 million (Group
audit) (2020: $10 million) and $15 million (Parent Company audit)
(2020: $10 million) as well as misstatements below those amounts
that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the Group’s and the
Parent Company’s ability to continue to adopt the going concern basis
of accounting included:
– Obtaining and examining management’s base case forecast and
downside scenarios, including those that incorporate the
unpredictability of the global pandemic on the Group’s operations
and the macroeconomic environment, checking that the forecasts
have been subject to board review and approval;
– Considering the historical reliability of management forecasting for
cash flow and net debt by comparing budgeted results to actual
performance;
– Reviewing the key inputs into the models, such as commodity prices
and production forecasts, to ensure that these were consistent with
our understanding and the inputs used in other key accounting
judgements in the financial statements;
– Performing our own independent sensitivity analysis to understand
the impact of changes in cash flow and net debt on the resources
available to the Group;
– Reviewing the covenants applicable to the Group’s borrowings and
reviewing whether management’s assessment supports ongoing
compliance with those covenants; and
– Reading management’s paper to the Audit Committee in respect of
going concern, and agreeing the forecasts set out in this paper to
the underlying base case cash flow model.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group’s and the
Parent Company’s ability to continue as a going concern for a period
of at least twelve months from when the financial statements are
authorised for issue.
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted,
this conclusion is not a guarantee as to the Group’s and the Parent
Company’s ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK
Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the directors’ statement in the financial
170 Anglo American plc Integrated Annual Report 2021
Reporting on other information
The other information comprises all of the information in the Annual
Report other than the financial statements and our auditors’ report
thereon. The directors are responsible for the other information, which
includes reporting based on the Task Force on Climate-related
Financial Disclosures (TCFD) recommendations. Our opinion on the
financial statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except to the extent
otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify an
apparent material inconsistency or material misstatement, we are
required to perform procedures to conclude whether there is a
material misstatement of the financial statements or a material
misstatement of the other information. If, based on the work we have
performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing
to report based on these responsibilities.
With respect to the Strategic Report and Directors’ report, we also
considered whether the disclosures required by the UK Companies Act
2006 have been included.
Based on our work undertaken in the course of the audit, the
Companies Act 2006 requires us also to report certain opinions and
matters as described below.
Strategic Report and Directors’ report
In our opinion, based on the work undertaken in the course of the audit,
the information given in the Strategic Report and Directors’ report for
the year ended 31 December 2021 is consistent with the financial
statements and has been prepared in accordance with applicable
legal requirements.
In light of the knowledge and understanding of the Group and Parent
Company and their environment obtained in the course of the audit,
we did not identify any material misstatements in the Strategic Report
and Directors’ report.
Directors’ Remuneration
In our opinion, the part of the Directors’ remuneration report to be
audited has been properly prepared in accordance with the
Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in
relation to going concern, longer-term viability and that part of the
corporate governance statement relating to the Parent Company’s
compliance with the provisions of the UK Corporate Governance Code
specified for our review. Our additional responsibilities with respect to
the corporate governance statement as other information are
described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded
that each of the following elements of the corporate governance
statement is materially consistent with the financial statements and our
knowledge obtained during the audit, and we have nothing material to
add or draw attention to in relation to:
– The directors’ confirmation that they have carried out a robust
assessment of the emerging and principal risks;
– The disclosures in the Annual Report that describe those principal
risks, what procedures are in place to identify emerging risks and an
explanation of how these are being managed or mitigated;
Financial statements and other financial information
Independent auditors’ report to the members of Anglo American plc
– The directors’ statement in the financial statements about whether
they considered it appropriate to adopt the going concern basis of
accounting in preparing them, and their identification of any material
uncertainties to the Group’s and Parent Company’s ability to
continue to do so over a period of at least twelve months from the
date of approval of the financial statements;
– The directors’ explanation as to their assessment of the Group’s and
Parent Company’s prospects, the period this assessment covers
and why the period is appropriate; and
– The directors’ statement as to whether they have a reasonable
expectation that the Parent Company will be able to continue in
operation and meet its liabilities as they fall due over the period of its
assessment, including any related disclosures drawing attention to
any necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term
viability of the Group was substantially less in scope than an audit and
only consisted of making inquiries and considering the directors’
process supporting their statement; checking that the statement is in
alignment with the relevant provisions of the UK Corporate
Governance Code; and considering whether the statement is
consistent with the financial statements and our knowledge and
understanding of the Group and Parent Company and their
environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
– The directors’ statement that they consider the Annual Report, taken
as a whole, is fair, balanced and understandable, and provides the
information necessary for the members to assess the Group’s and
Parent Company’s position, performance, business model and
strategy;
– The section of the Annual Report that describes the review of
effectiveness of risk management and internal control systems; and
– The section of the Annual Report describing the work of the Audit
Committee.
We have nothing to report in respect of our responsibility to report
when the directors’ statement relating to the Parent Company’s
compliance with the Code does not properly disclose a departure from
a relevant provision of the Code specified under the Listing Rules for
review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of directors’ responsibilities,
the directors are responsible for the preparation of the financial
statements in accordance with the applicable framework and for
being satisfied that they give a true and fair view. The directors are also
responsible for such internal control as they determine is necessary to
enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the Group’s and the Parent Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or the Parent Company or
to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that
includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with
laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in
respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud, is
detailed below.
Based on our understanding of the Group and industry, we identified
that the principal risks of non-compliance with laws and regulations
related to the failure to comply with environmental regulations, health
and safety regulations, and anti-bribery and corruption laws, and we
considered the extent to which non-compliance might have a material
effect on the financial statements. We also considered those laws and
regulations that have a direct impact on the financial statements such
as the Companies Act 2006 and applicable tax legislation in the
jurisdictions in which the Group has material operations. We evaluated
management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of override
of controls), and determined that the principal risks were related to
posting inappropriate journal entries and management bias in
accounting estimates. The Group engagement team shared this risk
assessment with the component auditors so that they could include
appropriate audit procedures in response to such risks in their work.
Audit procedures performed by the Group engagement team and/or
component auditors included:
– Understanding and evaluating the design and implementation of
controls designed to prevent and detect irregularities and fraud;
– Inquiry of management, Internal Audit and the Group’s legal
advisors regarding their consideration of known or suspected
instances of non-compliance with laws and regulations and fraud;
– Identifying and testing journal entries, in particular any journal entries
posted with unusual account combinations; and
– Challenging assumptions and judgements made by management in
respect of critical accounting judgements and significant
accounting estimates, and assessing these judgements and
estimates for management bias.
There are inherent limitations in the audit procedures described above.
We are less likely to become aware of instances of non-compliance
with laws and regulations that are not closely related to events and
transactions reflected in the financial statements. Also, the risk of not
detecting a material misstatement due to fraud is higher than the risk
of not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain
transactions and balances, possibly using data auditing techniques.
However, it typically involves selecting a limited number of items for
testing, rather than testing complete populations. We will often seek to
target particular items for testing based on their size or risk
characteristics. In other cases, we will use audit sampling to enable us
to draw a conclusion about the population from which the sample is
selected.
A further description of our responsibilities for the audit of the financial
statements is located on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditors’
report.
Anglo American plc Integrated Annual Report 2021 171
Financial statements and other financial information
Independent auditors’ report to the members of Anglo American plc
Use of this report
This report, including the opinions, has been prepared for and only for
the Parent Company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no other
purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to whom this
report is shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if,
in our opinion:
– we have not obtained all the information and explanations we
require for our audit; or
– adequate accounting records have not been kept by the Parent
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
– certain disclosures of directors’ remuneration specified by law are
not made; or
– the Parent Company financial statements and the part of the
Directors’ remuneration report to be audited are not in agreement
with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were
appointed by the members on 5 May 2020 to audit the financial
statements for the year ended 31 December 2020 and subsequent
financial periods. The period of total uninterrupted engagement is two
years, covering the years ended 31 December 2020 to 31 December
2021.
Other matter
In due course, as required by the Financial Conduct Authority
Disclosure Guidance and Transparency Rule 4.1.14R, these financial
statements will form part of the ESEF-prepared annual financial report
filed on the National Storage Mechanism of the Financial Conduct
Authority in accordance with the ESEF Regulatory Technical Standard
(‘ESEF RTS’). This auditors’ report provides no assurance over whether
the annual financial report will be prepared using the single electronic
format specified in the ESEF RTS.
Mark King (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
23 February 2022
172 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Primary statements
Consolidated income statement
for the year ended 31 December 2021
Before special
items and
remeasurements
Special items and
remeasurements
(note 8)
Note
2
41,547
(24,454)
17,093
—
460
17,553
139
(434)
18
(277)
17,276
(5,271)
12,005
1, 2
8
2, 13
4
5
25
2021
Total
41,554
(23,962)
17,592
(207)
634
18,019
139
(550)
21
7
492
499
(207)
174
466
—
(116)
3
(113)
(390)
353
17,629
(659)
(5,930)
(306)
11,699
2020 (restated)(1)
Before special
items and
remeasurements
Special items and
remeasurements
(note 8)
Total
25,447
(18,760)
6,687
—
180
6,867
115
(556)
(334)
(775)
6,092
(1,790)
4,302
1,167
3,135
—
25,447
(1,056)
(19,816)
(1,056)
5,631
513
(77)
(620)
—
(31)
23
(8)
(628)
(346)
(974)
513
103
6,247
115
(587)
(311)
(783)
5,464
(2,136)
3,328
72
(1,046)
1,239
2,089
3,080
8,925
57
(363)
3,137
8,562
US$ million
Revenue
Operating costs
Operating profit
Non-operating special items
Net income from associates and joint ventures
Profit before net finance costs and tax
Investment income
Interest expense
Other net financing gains/(losses)
Net finance costs
Profit before tax
Income tax expense
Profit for the financial year
Attributable to:
Non-controlling interests
Equity shareholders of the Company
Earnings per share (US$)
Basic
Diluted
3
3
7.22
7.13
(0.29)
(0.29)
6.93
6.84
2.53
2.50
(0.84)
(0.83)
1.69
1.67
(1) The Group has changed its accounting policy to amend the presentation of third-party purchases and related commodity sales which are made by the Group’s marketing business to earn
a trading margin. These sales and purchases were previously shown on a gross basis and are now shown net within revenue from other sources. Revenue and operating costs have been
restated accordingly but there was no impact on operating profit from this change in accounting policy for which the comparatives have been restated. See note 7 for further details.
Consolidated statement of comprehensive income
for the year ended 31 December 2021
US$ million
Profit for the financial year
Items that will not be reclassified to the income statement (net of tax)(1)
Remeasurement of net retirement benefit obligation
Net revaluation (loss)/gain on equity investments
Items that have been or may subsequently be reclassified to the income statement (net of tax)(1)
Net exchange differences:
Net loss (including associates and joint ventures)
Cumulative loss transferred to the income statement on disposal of foreign operations
Other comprehensive loss for the financial year (net of tax)
Total comprehensive income for the financial year (net of tax)
Attributable to:
Non-controlling interests
Equity shareholders of the Company
(1) Tax amounts are shown in note 5C.
2021
11,699
2020
3,328
91
(10)
(1,330)
363
(886)
1
62
(92)
4
(25)
10,813
3,303
2,870
7,943
1,204
2,099
Anglo American plc Integrated Annual Report 2021 173
Financial statements and other financial information
Primary statements
Consolidated balance sheet
as at 31 December 2021
US$ million
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Environmental rehabilitation trusts
Investments in associates and joint ventures
Financial asset investments
Inventories
Trade and other receivables
Deferred tax assets
Derivative financial assets
Pension asset surplus and other non-current assets
Total non-current assets
Current assets
Inventories
Trade and other receivables
Current tax assets
Derivative financial assets
Current financial asset investments
Cash and cash equivalents
Total current assets
Assets classified as held for sale
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Short term borrowings
Provisions for liabilities and charges
Current tax liabilities
Derivative financial liabilities
Total current liabilities
Non-current liabilities
Trade and other payables
Medium and long term borrowings
Royalty liability
Retirement benefit obligations
Deferred tax liabilities
Derivative financial liabilities
Provisions for liabilities and charges
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Called-up share capital
Share premium account
Own shares
Other reserves
Retained earnings
Equity attributable to equity shareholders of the Company
Non-controlling interests
Total equity
Note
2021
2020
10
11
15, 22
13
14
17
18
16
22
17
18
22
14
20
3,002
39,501
113
1,021
340
583
870
532
256
794
47,012
5,228
4,309
104
187
29
9,066
18,923
32
50
3,103
36,419
301
1,258
371
599
987
639
637
725
45,039
5,970
3,886
13
105
—
7,521
17,495
—
19
20, 21
15
22
19
20, 21
22
27
16
22
15
65,985
62,534
(7,930)
(1,235)
(579)
(627)
(212)
(10,583)
(318)
(11,621)
(382)
(502)
(4,865)
(317)
(2,627)
(20,632)
(6,692)
(1,194)
(595)
(383)
(214)
(9,078)
(321)
(12,317)
(340)
(643)
(3,804)
(192)
(3,073)
(20,690)
(31,215)
(29,768)
34,770
32,766
24
33
24
25
737
2,558
(6,141)
(11,045)
41,716
27,825
6,945
34,770
749
4,358
(6,107)
(10,368)
37,192
25,824
6,942
32,766
The financial statements of Anglo American plc, registered number 03564138, were approved by the Board of directors on 23 February 2022
and signed on its behalf by:
Mark Cutifani
Chief Executive
Stephen Pearce
Finance Director
174 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Primary statements
Consolidated cash flow statement
for the year ended 31 December 2021
US$ million
Cash flows from operating activities
Profit before tax
Net finance costs including financing special items and remeasurements
Net income from associates and joint ventures
Non-operating special items
Operating profit
Revenue and operating special items and remeasurements
Cash element of special items
Depreciation and amortisation
Share-based payment charges
(Decrease)/increase in provisions and net retirement benefit obligations
Decrease/(increase) in inventories
Increase in operating receivables
Increase in operating payables
Other adjustments
Cash flows from operations
Dividends from associates and joint ventures
Dividends from financial asset investments
Income tax paid
Net cash inflows from operating activities
Cash flows from investing activities
Expenditure on property, plant and equipment
Cash flows used in derivatives related to capital expenditure
Proceeds from disposal of property, plant and equipment
Investments in associates and joint ventures
Expenditure on intangible assets
Net redemption of financial asset investments held at amortised cost
Interest received and other investment income
Net cash outflow on acquisitions
Net cash inflow on disposals
Other investing activities
Net cash used in investing activities
Cash flows from financing activities
Interest paid
Cash flows from/(used in) derivatives related to financing activities
Dividends paid to Company shareholders
Dividends paid to non-controlling interests
Proceeds from issuance of bonds
Proceeds from other borrowings
Capital repayment of lease obligations
Repayments of bonds and borrowings
Purchase of shares by Group companies
Other financing activities
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at start of year
Cash movements in the year
Effects of changes in foreign exchange rates
Cash and cash equivalents at end of year
Note
2021
2020
17,629
5,464
4
13
8
1
8
390
(634)
207
17,592
(499)
(18)
1
2,715
189
(303)
328
(637)
1,368
(147)
20,588
475
1
783
(103)
(513)
5,631
1,056
(107)
2,597
166
126
(1,560)
(1,035)
1,061
63
7,998
226
—
13
12
12
12
14
33
33
20
6
25
(4,341)
(1,606)
16,723
6,618
(5,732)
(4,647)
(8)
17
(35)
(68)
29
87
—
63
89
(11)
7
(14)
(63)
67
84
(520)
384
(27)
(5,558)
(4,740)
(433)
95
(4,047)
(2,838)
996
972
(471)
(20)
(904)
(668)
2,966
2,121
(336)
(195)
(2,554)
(3,160)
(1,084)
(385)
(127)
—
(9,356)
(716)
1,809
1,162
20
7,508
1,809
(260)
20
9,057
6,335
1,162
11
7,508
Anglo American plc Integrated Annual Report 2021 175
Financial statements and other financial information
Primary statements
Consolidated statement of changes in equity
for the year ended 31 December 2021
US$ million
At 1 January 2020
Profit for the year
Other comprehensive income/(loss)
Dividends
Equity settled share-based payment schemes
Shares cancelled during the year
Share buyback
Change in ownership
Other
At 31 December 2020
Profit for the year
Other comprehensive income/(loss)
Dividends
Equity settled share-based payment schemes
Shares cancelled during the year
Share buyback
Change in ownership
In specie return of capital relating to Thungela
demerger (note 33)
Other
At 31 December 2021
Total share
capital(1)
Own
shares(2)
Retained
earnings
Cumulative
translation
adjustment
reserve
Other
reserves
(note 24)
5,111
(6,195)
36,274
(10,965)
570
—
—
—
—
(4)
—
—
—
—
—
—
89
—
—
—
(1)
2,089
—
(904)
(95)
—
(223)
44
7
—
(39)
—
—
—
—
—
—
5,107
(6,107)
37,192
(11,004)
—
—
—
—
(12)
—
—
(1,800)
—
—
—
—
(71)
—
—
—
—
37
8,562
81
(4,047)
(10)
—
(1,000)
(73)
1,081
(70)
—
(692)
—
—
—
—
—
—
—
Total equity
attributable
to equity
shareholders
of the
Company
24,795
2,089
10
(904)
15
—
(223)
44
(2)
Non-
controlling
interests
Total equity
6,590
31,385
1,239
3,328
(35)
(810)
(25)
(1,714)
1
—
—
(58)
15
16
—
(223)
(14)
13
25,824
8,562
6,942
32,766
3,137
11,699
(619)
(267)
(886)
(4,047)
(2,837)
(6,884)
(66)
—
(1,000)
(73)
3
—
—
89
(63)
—
(1,000)
16
—
49
—
21
4
—
—
(8)
636
—
(8)
—
15
12
—
—
—
(4)
(719)
(37)
(106)
(16)
(825)
(53)
3,295
(6,141)
41,716
(11,696)
651
27,825
6,945
34,770
(1)
Includes share capital and share premium.
(2) Own shares comprise shares of Anglo American plc held by the Company, its subsidiaries and employee benefit trusts (note 24).
176 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Financial performance
Profit attributable to equity shareholders
increased by 310% to $8,562 million and
underlying earnings increased by 185%
to $8,925 million.
The following disclosures provide further information about the
drivers of the Group’s financial performance in the year. This
includes analysis of the respective contribution of the Group’s
reportable segments along with information about its operating cost
base, net finance costs and tax. In addition, disclosure on earnings
per share and the dividend is provided.
1. Operating profit from subsidiaries and joint operations
Overview
US$ million
Revenue before special items and remeasurements(1)
Operating costs:
Employee costs
Depreciation of property, plant and equipment
Amortisation of intangible assets
Third-party commodity purchases(1)
Consumables, maintenance and production input costs
Logistics, marketing and selling costs
Royalties
Exploration and evaluation
Net foreign exchange (losses)/gains
Other operating income
Other operating expenses(1)
Operating profit before special items and remeasurements
Revenue special items and remeasurements
Operating special items and remeasurements
Operating profit
Profit attributable to equity shareholders
$8.6 bn
(2020: $2.1 bn)
Note
2021
41,547
26
(3,603)
(2,672)
(43)
(5,994)
(6,011)
(2,945)
(1,173)
(257)
(138)
292
2020
restated(1)
25,447
(3,180)
(2,553)
(44)
(4,738)
(4,023)
(2,475)
(607)
(195)
37
363
(1,910)
(1,345)
8
8
17,093
7
492
17,592
6,687
—
(1,056)
5,631
(1) Third-party trading amounts have been restated from a gross to a net presentation. See note 7 for further details.
Royalties exclude items which meet the definition of income tax on profit and accordingly have been accounted for as taxes. Exploration and
evaluation excludes associated employee costs. The full exploration and evaluation expenditure (including associated employee costs) is
presented in the table below.
Operating profit before special items and remeasurements is stated after (charging)/crediting:
US$ million
Exploration expenditure
Evaluation expenditure
Research and development expenditure
Provisional pricing adjustment(1)
2021
(128)
(172)
(144)
815
2020
(101)
(142)
(123)
829
(1) Third-party trading amounts restated from a gross to a net presentation. See note 7 for further details. In addition the presentation of certain iron ore provisional pricing adjustments has been
corrected.
Accounting policy
See note 39C for the Group’s accounting policy on revenue and exploration and evaluation expenditure.
Anglo American plc Integrated Annual Report 2021 177
Financial statements and other financial information
Notes to the financial statements
Financial performance
2. Financial performance by segment
Overview
The Group’s operating segments are aligned to those business units that are evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance. Operating segments with similar economic characteristics are aggregated
into reportable segments.
The Group has reassessed its reportable segments following the demerger of Thungela (see note 33). The Thermal Coal (South Africa and
Cerrejón) operating segment, which was previously aggregated with Metallurgical Coal within the ‘Coal’ reportable segment, has been
presented within the ‘Corporate and other’ reportable segment as it is no longer part of the Group’s core business due to the commitment to exit
from the production of thermal coal. The results of the Group’s metallurgical coal businesses are now disclosed separately as the ‘Metallurgical
Coal’ reportable segment. Additionally, the ‘Nickel and Manganese’ reportable segment has been amended to disaggregate the Nickel and
Manganese businesses. Comparative information has been restated to reflect the changes.
Shipping revenue related to shipments of the Group’s products is shown within the relevant operating segment. Revenue from other shipping
arrangements, primarily relating to third-party carriage services, is presented within the ‘Corporate and other’ segment, which also includes
unallocated corporate costs, exploration costs and the results of the Group’s Thermal Coal (South Africa and Cerrejón) operations. Revenue
disclosed in relation to Cerrejón arose in advance of the sale agreement for the disposal on 28 June 2021 (see note 13).
The disclosures in this note include certain Alternative Performance Measures (APMs). For more information on the APMs used by the Group,
including definitions, please refer to page 270.
Depreciation
and
amortisation
Underlying
EBITDA
1,100
(480)
(583)
(59)
(346)
(512)
(512)
(65)
(1)
4,011
320
7,099
6,871
962
315
(41)
(3)
Group
revenue
5,602
6,433
710
14,502
11,104
2,899
768
114
(1)
1,126
43,258
(1,711)
2021
Net finance
costs and
income tax
expense
(214)
Underlying
EBIT
620
Non-
controlling
interests
(61)
Underlying
earnings
345
3,428
(1,337)
(572)
1,519
261
6,753
6,359
450
250
(42)
18
(1,919)
(1,717)
(150)
(116)
3
—
279
(1,045)
3,789
(1,411)
3,231
—
(2)
—
9
300
132
(39)
(631)
(3,082)
8,925
2
(460)
(286)
(289)
20,634
(2,844) 17,790
(826)
129
(697)
(351)
(5,783) (2)
235
41,547
19,808
(2,715) 17,093
(5,548)
(3,080)
8,465
7
41,554
634
292
18,019
634
(537)
8,562
Segment results
US$ million
De Beers
Copper
Nickel
Platinum Group Metals
Iron Ore
Metallurgical Coal
Manganese
Crop Nutrients
Corporate and other
Less: associates and joint ventures(3)
Subsidiaries and joint operations
Reconciliation:
Net income from associates and joint ventures
Special items and remeasurements
Revenue
Profit before net finance costs and tax
Profit attributable to equity shareholders of the Company
178 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Financial performance
2. Financial performance by segment continued
US$ million
De Beers
Copper
Nickel
Platinum Group Metals
Iron Ore
Metallurgical Coal
Manganese
Crop Nutrients
Corporate and other
Less: associates and joint ventures
Subsidiaries and joint operations
Reconciliation:
Net income from associates and joint ventures
Special items and remeasurements
Revenue
Profit before net finance costs and tax
Profit attributable to equity shareholders of the Company
Group
revenue
3,378
4,199
534
6,604
7,905
1,909
697
107
1,550
26,883
(1,436)
25,447
—
25,447
(1)
Underlying
EBITDA
417
1,864
206
2,555
4,565
50
304
1
(160)
Depreciation
and
amortisation
Underlying
EBIT
—
1,227
79
2,270
4,091
(468)
245
1
(395)
(417)
(637)
(127)
(285)
(474)
(518)
(59)
—
(235)
9,802
(2,752)
7,050
(518)
155
(363)
2020 (restated)(4)
Net finance
costs and
income tax
expense
(127)
(548)
(2)
(914)
(774)
106
(120)
(12)
(354)
(2,745) (2)
180
Non-
controlling
interests
25
(72)
—
(288)
(843)
—
(3)
—
11
Underlying
earnings
(102)
607
77
1,068
2,474
(362)
122
(11)
(738)
(1,170)
3,135
3
(180)
9,284
(2,597)
6,687
(2,565)
(1,167)
2,955
103
(543)
6,247
103
(969)
2,089
(1) Group revenue in respect of Crop Nutrients relates to revenue from its associate, The Cibra Group, a fertiliser distributor based in Brazil.
(2) Comprises net finance costs of $290 million (2020: $797 million) and income tax expense of $5,493 million (2020: $1,948 million).
(3) Income from the Cerrejón associate arising after the agreement of the disposal transaction in June 2021 has been classified as a special item and is therefore excluded from Corporate and
other Group revenue, underlying EBITDA, underlying EBIT and underlying earnings. See notes 8 and 13 for further detail.
(4) Third-party trading amounts restated from a gross to a net presentation. See note 7 for further details.
The segment results are stated after elimination of inter-segment interest and dividends and include an allocation of corporate costs.
Further information
Group revenue by product
Segments predominantly derive revenue as follows – De Beers: rough and polished diamonds; Copper: copper; Platinum Group Metals: platinum
group metals and nickel; Iron Ore: iron ore; Metallurgical Coal: metallurgical coal; Nickel: nickel; Manganese: manganese ore. Revenue reported
within Corporate and other revenue includes thermal coal revenue from the South African thermal coal operations prior to the demerger, the
Group’s share of thermal coal revenue from its associate Cerrejón up to 1 July 2021, after which, revenue is reported within special items, the
margin from the Group’s thermal coal marketing and trading activity and shipping revenue relating to carriage services provided to third parties.
Other revenue principally relates to gold, iridium, ruthenium and molybdenum. See note 39C for the Group’s accounting policy on revenue
recognition. The revenue analysis below includes the Group’s share of revenue in equity accounted associates and joint ventures excluding
special items and remeasurements. See note 13.
US$ million
Diamonds
Copper
Platinum
Palladium
Rhodium
Iron ore
Metallurgical coal
Thermal coal(2)
Nickel
Manganese ore and alloys
Shipping
Other
Reconciliation:
Revenue from
contracts with
customers
5,590
Revenue from
other sources
12
5,751
2,511
3,854
6,328
9,838
2,114
707
1,187
—
1,378
1,507
365
1
6
49
215
561
294
3
768
—
219
2021
Group
revenue
5,602
6,116
2,512
3,860
6,377
10,053
2,675
1,001
1,190
768
1,378
1,726
2020 (restated)(1)
Revenue from
contracts with
customers
3,371
Revenue from
other sources
7
Group
revenue
3,378
3,738
1,066
2,150
2,548
6,378
1,496
1,204
769
—
847
824
240
2
5
19
763
280
278
6
697
—
195
3,978
1,068
2,155
2,567
7,141
1,776
1,482
775
697
847
1,019
26,883
40,765
2,493
43,258
24,391
2,492
Less: Revenue from associates and joint ventures
Special items and remeasurements
Revenue
—
—
40,765
(1,711)
(1,711)
7
7
789
—
—
(1,436)
(1,436)
—
—
41,554
24,391
1,056
25,447
(1) Third-party trading amounts restated from a gross to a net presentation, reducing revenue from contracts with customers by $5,497 million and increasing revenue from other sources by
$42 million. See note 7 for further details. In addition, the presentation of certain iron ore provisional pricing adjustments has been corrected via the reclassification of $418 million from
revenue from contracts with customers to revenue from other sources.
(2) Group revenue and income from the Cerrejón associate, arising after 28 June 2021, when the Group agreed the sale of its 33.3% shareholding, have been classified as a special item and are
therefore excluded from Group revenue, underlying EBITDA, underlying EBIT and underlying earnings. See notes 8 and 13 for further details.
Anglo American plc Integrated Annual Report 2021 179
Financial statements and other financial information
Notes to the financial statements
Financial performance
2. Financial performance by segment continued
Revenue from other sources for subsidiaries and joint operations of $789 million (2020 restated: $1,056 million) includes net fair value losses
relating to derivatives of $64 million, net fair value gains relating to provisionally priced contracts of $846 million and revenue remeasurements
of $7 million (2020 (restated see note 7): net fair value gains of $242 million, $814 million and nil respectively). Derivative net gains include both
financial derivatives and the net margin arising on contracts for the physical sale and purchase of third-party material (third-party sales) where
these contracts are accounted for as derivatives prior to settlement and are entered into to generate a trading margin.
Group revenue by destination
The Group’s geographical analysis of segment revenue is allocated based on the customer’s port of destination. Where the port of destination is
not known, revenue is allocated based on the customer’s country of domicile.
China
India
Japan
Other Asia
South Africa
Other Africa
Brazil
Chile
Other South America
North America
Australia
United Kingdom(2)
Other Europe
(1) Third-party trading amounts restated from a gross to a net presentation. See note 7 for further details.
(2) United Kingdom is Anglo American plc's country of domicile.
US$ million
11,248
2,274
6,169
7,539
1,428
1,664
728
712
65
1,872
44
3,144
6,371
43,258
2021
%
26%
5%
14%
17%
3%
4%
2%
2%
—
4%
—
7%
16%
100%
US$ million
9,191
1,805
3,937
4,354
539
890
432
502
21
790
12
1,229
3,181
26,883
2020 (restated)(1)
%
34%
7%
15%
16%
2%
3%
2%
2%
—
3%
—
5%
11%
100%
180 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Financial performance
3. Earnings per share
Overview
The disclosures in this note include certain Alternative Performance Measures (APMs). For more information on the APMs used by the Group,
including definitions, please refer to page 270.
US$
Earnings per share
Basic
Diluted
Underlying earnings per share
Basic
Diluted
Headline earnings per share
Basic
Diluted
2021
2020
6.93
6.84
7.22
7.13
7.00
6.92
1.69
1.67
2.53
2.50
2.47
2.44
Further information
The calculation of basic and diluted earnings per share is based on the following data:
Earnings (US$ million)
Basic and diluted earnings
Weighted average number of shares (million)
Basic number of ordinary shares outstanding
Effect of dilutive potential ordinary shares
Diluted number of ordinary shares outstanding
Profit attributable to equity
shareholders of the Company
Underlying earnings
Headline earnings
2021
2020
2021
2020
2021
2020
8,562
2,089
8,925
3,135
8,654
3,056
1,236
15
1,251
1,239
14
1,253
1,236
15
1,251
1,239
14
1,253
1,236
15
1,251
1,239
14
1,253
The weighted average number of ordinary shares in issue is the weighted number of shares in issue throughout the year, and excludes shares
held by employee benefit trusts and Anglo American plc shares held by Group companies. The weighted average number of shares has
decreased since 2020, principally due to the share buyback announced in July 2021. The diluted number of ordinary shares outstanding,
including share options and awards, is calculated on the assumption of conversion of all potentially dilutive ordinary shares. In the year ended
31 December 2021 there were 19,953 (2020: 198,161) share options that were potentially dilutive but not included in the calculation of diluted
earnings because they were anti-dilutive.
Headline earnings, a Johannesburg Stock Exchange defined performance measure, is reconciled from profit attributable to equity shareholders
of the Company as follows:
US$ million
Profit attributable to equity shareholders of the Company
Special items and remeasurements
Underlying earnings for the financial year
Revenue remeasurements
Operating special items – restructuring
Operating remeasurements
Non-operating special items – remeasurement of deferred consideration
Non-operating special items – disposals
Financing special items and remeasurements
Tax special items and remeasurements
Associates’ and joint ventures’ special items and remeasurements
Other reconciling items
Headline earnings for the financial year
Gross
7
—
(106)
453
(16)
(113)
—
—
10
2021
Net
8,562
363
8,925
14
—
(111)
306
(32)
(113)
(317)
(10)
(8)
8,654
Gross
—
(50)
(56)
509
—
(8)
—
—
72
2020
Net
2,089
1,046
3,135
—
(40)
(71)
348
—
(8)
(344)
—
36
3,056
The reconciling items above are shown gross and net of tax and non-controlling interests.
Other reconciling items principally relate to adjustments to former operations and disposals of property, plant and equipment (2020: relate to
adjustments to former operations and disposals of property, plant and equipment and investments).
Anglo American plc Integrated Annual Report 2021 181
Financial statements and other financial information
Notes to the financial statements
Financial performance
4. Net finance costs
Overview
US$ million
Investment income
Interest income from cash and cash equivalents
Interest income from associates and joint ventures
Other interest income
Net interest income on defined benefit arrangements
Dividend income from financial asset investments
Investment income
Interest expense
Interest and other finance expense
Lease liability interest expense
Net interest cost on defined benefit arrangements
Unwinding of discount relating to provisions and other liabilities
Less: Interest expense capitalised
Interest expense before special items and remeasurements
Financing special items
Interest expense
Other net financing gains/(losses)
Net foreign exchange gains/(losses)
Other net fair value losses
Other net financing gains/(losses) before special items and remeasurements
Financing remeasurements
Other net financing gains/(losses)
Net finance costs
2021
2020
79
7
42
10
1
56
10
34
15
—
139
115
(497)
(561)
(40)
(40)
(64)
(641)
207
(434)
(116)
(550)
167
(149)
18
3
21
(32)
(40)
(93)
(726)
170
(556)
(31)
(587)
(75)
(259)
(334)
23
(311)
(390)
(783)
Further information
Interest income recognised on financial assets at amortised cost is $83 million (2020: $58 million) and interest expense recognised on financial
liabilities at amortised cost is $275 million (2020: $383 million).
Included in other net fair value losses is $142 million (2020: $257 million) in respect of fair value losses on the revaluation of deferred
consideration balances relating to the Mototolo acquisition (see note 22 for further details). Revaluation of deferred consideration balances
are classified as special items and remeasurements only when the original gain or loss on disposal or acquisition has been classified as a
special item.
5.
Income tax expense
Overview
Calculation of effective tax rate (statutory basis)
Adjusted for:
Special items and remeasurements
Associates’ and joint ventures’ tax and non-controlling interests
Calculation of underlying effective tax rate
2021
Profit
before tax
US$ million
Tax charge
US$ million
Effective
tax rate
17,629
(5,930)
33.6%
(353)
224
659
(222)
17,500
(5,493)
31.4%
The underlying effective tax rate was 31.4% for the year ended 31 December 2021. This is higher than the underlying effective tax rate of 31.2%
for the year ended 31 December 2020. The underlying effective tax rate in 2021 was mainly impacted by the relative level of profits arising in the
Group’s operating jurisdictions.
182 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Financial performance
5. Income tax expense continued
Uncertainty and changes to tax regimes can materialise in any country in which we operate and the Group has no control over political acts,
actions of regulators, or changes in local tax regimes. Global and local economic and social conditions can have a significant influence on
governments’ policy decisions and these have the potential to change tax and other political risks faced by the Group.
In line with our published Tax Strategy, the Group actively monitors tax developments at a national level, as well as global themes and
international policy trends, on a continuous basis, and has active engagement strategies with governments, regulators and other stakeholders
within the countries in which we operate, or plan to operate, as well as at an international level. This includes the OECD’s implementation of its
Digitalisation of the Economy Project which seeks to reallocate taxing rights for large profitable groups (‘Pillar 1’) and implement a minimum
effective tax rate of 15% on profits of large multinational groups in each country in which they operate (‘Pillar 2’). We are engaging with
policymakers in efforts to ensure that the stated policy objectives are met and that the Group is well placed to comply when the rules are in force.
We assess portfolio capital investments against political risks and avoid or minimise exposure to jurisdictions with unacceptable risk levels.
The disclosures in this note include certain Alternative Performance Measures (APMs). For more information on the APMs used by the Group,
including definitions, please refer to page 270.
A. Analysis of charge for the year
US$ million
United Kingdom corporation tax
South Africa tax
Other overseas tax
Prior year adjustments
Current tax
Deferred tax
Income tax expense before special items and remeasurements
Special items and remeasurements tax
Income tax expense
2021
126
2,795
1,605
22
4,548
723
5,271
659
5,930
2020
61
1,249
572
(28)
1,854
(64)
1,790
346
2,136
Current tax includes royalties which meet the definition of income tax and are in addition to royalties recorded in operating costs.
B. Factors affecting tax charge for the year
The reconciling items between the statutory corporation tax rate and the income tax expense are:
US$ million
Profit before tax
Less: Net income from associates and joint ventures
Profit before tax (excluding associates and joint ventures)
Tax calculated at United Kingdom corporation tax rate of 19.0% (2020: 19.0%)
Tax effects of:
Items non-deductible/taxable for tax purposes
Temporary difference adjustments
Current year losses not recognised
Recognition of losses and temporary differences not previously recognised
Utilisation of losses and temporary differences not previously recognised
Write-off of losses and temporary differences previously recognised
Other temporary differences
Functional currency remeasurements (note 8)
Special items and other remeasurements
Special items and remeasurements
Other adjustments
Dividend withholding taxes
Effect of differences between local and United Kingdom tax rates
Prior year adjustments to current tax
Other adjustments
Income tax expense
2021
17,629
2020
5,464
(634)
(103)
16,995
3,229
5,361
1,019
49
35
229
(22)
(102)
—
(7)
349
276
625
300
1,582
22
25
214
(4)
(238)
7
22
418
33
451
187
458
(28)
13
5,930
2,136
Anglo American plc Integrated Annual Report 2021 183
Financial statements and other financial information
Notes to the financial statements
Financial performance
5. Income tax expense continued
The special items and remeasurements reconciling charge of $625 million (2020: charge of $451 million) relates to the net tax impact of total
special items and remeasurements before tax calculated at the United Kingdom corporation tax rate less the associated tax recorded against
these items and tax special items and remeasurements.
Included within dividend withholding taxes for the year ended 31 December 2021 is a credit of $31million (2020: charge of $45 million) due to
a reassessment of future dividend distributions.
Associates’ and joint ventures’ tax included within Net income from associates and joint ventures for the year ended 31 December 2021 is
a charge of $232 million (2020: $156 million). Excluding special items and remeasurements, this becomes a charge of $222 million
(2020: $158 million).
C. Tax amounts included in other comprehensive income
The Consolidated statement of comprehensive income includes a tax charge on the remeasurement of net retirement benefit obligations
recognised directly in equity that will not be reclassified to the income statement of $66 million (2020: $26 million). In addition, there is a tax credit
on the net revaluation credit on equity investments recognised directly in equity that will not subsequently be reclassified to the income statement
of $6 million (2020: charge of $11 million).
D. Tax amounts recognised directly in equity
In 2021, deferred tax of $5 million (2020: $11 million) was credited directly to equity mainly in relation to movements in share-based payments
and severance indemnity updates.
Accounting judgement
The Group’s tax affairs are governed by complex domestic tax legislations, international tax treaties between countries and the interpretation of
these by tax authorities and courts. Given the many uncertainties that could arise from these factors, judgement is often required in determining
the tax that is due. Where management is aware of potential uncertainties, and where it is judged not probable that the taxation authorities would
accept the uncertain tax treatment, a provision is made following the appropriate requirements set out in IFRIC 23 Uncertainty over income tax
treatments, and determined with reference to similar transactions and, in some cases, reports from independent experts.
Accounting policy
See note 39G for the Group’s accounting policy on tax.
6. Dividends
Proposed final ordinary dividend per share (US cents)
Proposed final ordinary dividend (US$ million)
Proposed final special dividend per share (US cents)
Proposed final special dividend (US$ million)
2021
118
1,444
50
612
2020
72
899
—
—
These financial statements do not reflect the proposed final ordinary dividend or final special dividend as it is still subject to shareholder approval.
Dividends paid during the year are as follows:
US$ million
Final ordinary dividend for 2020 – 72 US cents per ordinary share (2019: 47 US cents per ordinary share)
Interim ordinary dividend for 2021 – 171 US cents per ordinary share (2020: 28 US cents per ordinary share)
Interim special dividend for 2021 – 80 US cents per ordinary share (2020: nil)
2021
907
2,140
1,000
4,047
2020
557
347
—
904
As at the dividend record date, there are forecasted to be 1,223,693,614 (2020: 1,248,370,165) dividend bearing shares in issue.
184 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Significant items
Special items and remeasurements are a net loss of $0.4 billion
and include a $1.4 billion impairment reversal of Minas-Rio,
offset with a $0.8 billion impairment of Metallurgical Coal
assets, a loss on the South African coal operations demerger
of $0.4 billion and tax remeasurements charge of $0.3 billion.
During 2021, the significant accounting matters addressed by
management included:
– the assessment of impairment and impairment reversal indicators
– the estimation of cash flow projections for impairment testing
Special items and remeasurements loss
$0.4 bn
– accounting policy change for certain commodity trading
(2020: $1.0 bn)
transactions from a gross revenue presentation to a net basis
– change in accounting estimate of PGM inventories
– demerger of the Group’s South African thermal coal assets.
7. Significant accounting matters
In the course of preparing financial statements, management
necessarily makes judgements and estimates that can have a
significant impact on the financial statements. The critical judgements
and key sources of estimation uncertainty that affect the results for the
year ended 31 December 2021 are set out below. In addition to these
items, further detail on other significant judgements and estimates
determined by management is provided, where applicable, in the
relevant note to the financial statements.
Impairment and impairment reversals of assets
i) Critical accounting judgements
The Group assesses at each reporting date whether there are any
indicators that its assets and cash generating units (CGUs) may be
impaired. Operating and economic assumptions which could affect
the valuation of assets using discounted cash flows, including those
that could be impacted by the Group’s current and emerging principal
risks such as climate change, are updated regularly as part of the
Group’s planning and forecasting processes. Judgement is therefore
required to determine whether the updates represent significant
changes in the service potential of an asset or CGU, and are therefore
indicators of impairment or impairment reversal. The judgement also
takes into account the Group’s long term economic forecasts, market
consensus and sensitivity analysis of the discounted cash flow models
used to value the Group’s assets.
Assets (other than goodwill) that have been previously impaired must
be assessed for indicators of both impairment and impairment
reversal. Such assets are generally carried on the balance sheet at
a value close to their recoverable amount at the last assessment.
Therefore in principle any change to operational plans or assumptions
or economic parameters could result in further impairment or
impairment reversal if an indicator is identified. Significant operating
assets that the Group has previously impaired include Minas-Rio (Iron
Ore); Dawson, Capcoal, Moranbah-Grosvenor (Metallurgical Coal)
and Barro Alto (Nickel). These assets have a combined carrying value
of $10.3 billion within property, plant and equipment as at
31 December 2021, of which the most significant individual asset is
Minas-Rio, which has a carrying value of $6.8 billion.
ii) Cash flow projections for impairment testing
Expected future cash flows used in discounted cash flow models are
inherently uncertain and could materially change over time. They are
significantly affected by a number of factors including Ore Reserves
and Mineral Resources, together with economic factors such as
commodity prices, exchange rates, discount rates and estimates of
production costs and future capital expenditure. Where discounted
cash flow models based on management’s assumptions are used, the
resulting fair value measurements are considered to be at level 3 in the
fair value hierarchy, as defined in IFRS 13 Fair Value Measurement, as
they depend to a significant extent on unobservable valuation inputs.
Cash flow projections are based on financial budgets and Life of Mine
Plans or, for non-mine assets, an equivalent appropriate long term
forecast, incorporating key assumptions as detailed below:
– Ore Reserves and Mineral Resources
Ore Reserves and, where considered appropriate, Mineral
Resources are incorporated in projected cash flows, based on Ore
Reserves and Mineral Resources statements and exploration and
evaluation work undertaken by appropriately qualified persons.
Mineral Resources are included where management has a high
degree of confidence in their economic extraction, despite
additional evaluation still being required prior to meeting the
required confidence to convert to Ore Reserves.
– Commodity and product prices
Commodity and product prices are based on latest internal
forecasts, benchmarked with external sources of information such
as the range of available analyst forecasts and for the short term,
spot prices. In estimating the forecast cash flows, management also
takes into account the expected realised price from existing
contractual arrangements.
– Foreign exchange rates
Foreign exchange rates are based on latest internal forecasts,
benchmarked with external sources of information for relevant
countries of operation or directly from external forecasts. Long term
foreign exchange rates are kept constant on a real basis.
– Discount rates
Cash flow projections used in fair value less costs of disposal
impairment models are discounted based on real post-tax discount
rates, assessed annually. Adjustments to the rates are made for any
risks that are not reflected in the underlying cash flows, including the
risk profile of the individual asset and country risk.
Anglo American plc Integrated Annual Report 2021 185
Financial statements and other financial information
Notes to the financial statements
Significant items
7. Significant accounting matters continued
– Operating costs, capital expenditure and other operating factors
Operating costs and capital expenditure are based on financial
budgets covering a five-year period. Cash flow projections beyond
five years are based on Life of Mine Plans, as applicable, and
internal management forecasts. Cost assumptions incorporate
management experience and expectations, as well as the nature
and location of the operation and the risks associated therewith (for
example, the grade of Ore Reserves varying significantly over time
and unforeseen operational issues). Underlying input cost
assumptions are consistent with related output price assumptions.
Other operating factors, such as the timelines of granting licences
and permits, are based on management’s best estimate of the
outcome of uncertain future events at the balance sheet date. For
further information refer to the unaudited Ore Reserves and Mineral
Resources Report 2021.
Where an asset has potential for future development through
capital investment, to which a market participant would attribute
value, and the costs and economic benefits can be estimated
reliably, this development is included in the recoverable amount
(with appropriate risk adjustments).
– Climate change
Climate change may have various impacts for the Group. These
include the risks and opportunities relating to the demand for the
Group’s commodities as a result of the transition to a low carbon
economy, and physical risks caused by climate change such as the
inability to obtain or sustain the level of water security needed to
support operations (see principal risk 12 in respect of water, page
67). The Group has incorporated carbon pricing when preparing
discounted cash flow valuations. Short term carbon prices are
incorporated based on currently enacted legislation, and longer
term carbon prices are based on the latest internal views, formed
with reference to external forecasts. Separate carbon prices are
used for developed and developing economies. These carbon
prices are used both as an input into our commodity price forecasts
and in our forecast carbon cost for each operation. Carbon costs
are based on the forecast carbon price per tonne/CO2e, multiplied
by estimated Scope 1 and 2 emissions for the relevant operation.
The cost and benefits of achieving the Group’s emissions reduction
ambitions and targets and the implementation of projects to
mitigate physical climate risk are included when the Group has a
high degree of confidence that a project is technically feasible and
it is included in the Life of Mine Plan, which typically aligns with the
related capital project being internally approved. This is consistent
with the approach taken for other key assumptions such as the
inclusion of Ore Reserves and Mineral Resources and forecasted
operating costs and capital expenditures as outlined above.
The Group has assessed the strategic and financial resilience of its
portfolio under 1.5°C, 2°C and 3°C scenarios. Further disclosure
about these scenarios, aligned to the Task Force on Climate-
Related Financial Disclosures (TCFD) requirements, is provided in
the Group’s 2021 Climate Change Report. These specific scenarios
are not used as an input to asset valuations for financial reporting
purposes as no single scenario is representative of management’s
best estimate of the likely assumptions that would be used by a
market participant when valuing the Group’s assets. When
constructing a scenario that assumes global temperature increases
are contained to a certain level, many judgements and assumptions
are needed, including in relation to the nature and speed of
technological deployment and the evolution of public policy.
Depending on the judgements and assumptions made there is
therefore a wide range of possible transition impacts for each level
of warming and scenarios may therefore not be comparable
between companies.
186 Anglo American plc Integrated Annual Report 2021
The Group has not yet performed a full assessment of the
implications of any resilience scenario on asset valuations used for
financial reporting purposes, although we would anticipate that
prices for the majority of the Group’s commodities would be higher
than existing forecasts in the short and medium term under a 1.5°C
or 2°C scenario, driven by growing investment in infrastructure
associated with the transition to a low-carbon economy while
carbon prices are also likely to be higher than existing forecasts. In
the longer term the more rapid decarbonisation of the steel value
chain under a 1.5°C or 2°C scenario through higher steel recycling
rates and technological change would be expected to lead to lower
benchmark prices for both iron ore and metallurgical coal, although
we anticipate that for iron ore this may largely be offset by higher
product premiums for the Group’s high quality lump and pellet-feed
products given these are particularly well-suited to less carbon
intensive steelmaking technologies. The valuation of the Group’s
metallurgical coal assets is less sensitive to changes in the long-term
price than other operations given the remaining asset lives.
iii) Key sources of estimation uncertainty
For assets where indicators of impairment or impairment reversal are
identified, the Group performs impairment reviews to assess the
recoverable amount of its operating assets principally with reference
to fair value less costs of disposal, assessed using discounted cash
flow models. Mining operations are large, complex assets requiring
significant technical and financial resources to operate. Their value
may be sensitive to a range of characteristics unique to each asset.
Management applies judgement in determining the assumptions that
are considered to be reasonable and consistent with those that would
be applied by market participants as outlined in note 39D. All
assumptions are made from the perspective of a hypothetical
informed market participant (as required by IFRS 13 Fair Value
Measurement). As a result, these assumptions may differ from the
Group’s own internal forecasts.
Minas-Rio (Iron Ore)
At 30 June 2021, based on improved market conditions in the short
and medium term, the valuation of Minas-Rio was assessed and the
previous impairments have been partially reversed to a recoverable
amount of $7.1 billion, resulting in an impairment reversal of $1.4 billion
($0.9 billion after tax) when applying a discount rate of 7.3%. Another
assessment was undertaken at 31 December 2021 as a result of
changes in the production profile in the latest Life of Mine Plan but
there was no resultant change necessary to the carrying value of the
cash generating unit as the recoverable amount was materially
consistent with the carrying value.
The latest valuation is inherently sensitive to changes in economic and
operational assumptions. The model uses forecast iron ore prices that
fall within the analyst range throughout the model. The long term price
in the model from 2032 onwards falls within the second quartile of the
analyst price range of $62/tonne to $70/tonne (Platts 62% CFR
reference basis, 2021 real basis). In addition to the base case
valuation, alternative scenarios have been considered to assess the
impact of changes in key assumptions, including decreases in the long
term iron ore price. If the long term price assumptions used in the
model were changed by $5/tonne in each year, with all other
assumptions remaining the same, this would change the valuation by
$0.6 billion.
De Beers goodwill
The valuation of De Beers has been assessed as at 31 December
2021 and the recoverable amount was considered to exceed the
carrying value by $1.8 billion. The valuation, based on discounted cash
flows using a discount rate of 7.0%, is sensitive to input assumptions
particularly in relation to the foreign exchange assumption for
producer currencies against the USD (affecting the cost of production
in USD terms) and the future price growth for diamonds. In addition, the
valuation assumes that material contractual arrangements, including
our relationship with the Government of the Republic of Botswana,
continue without material amendment.
Financial statements and other financial information
Notes to the financial statements
Significant items
7. Significant accounting matters continued
The foreign exchange assumption in respect of the producer currency
rates against the USD are sourced from an external provider. In the
short term to medium term we assume the southern African producer
currencies exchange rates depreciate by between 2% and 3% per
annum against the USD compared to the FY21 actual rates. Thereafter
the rates are assumed to depreciate by the inflation differential
between producer economies and the US.
The two primary factors impacting price growth are expected
consumer demand growth and changes in global supply. Expected
consumer demand growth (in USD terms) is driven predominantly by:
local currency GDP growth expectations in the primary markets in
which diamonds are sold; foreign exchange movements against the
USD in the end consumer markets; and the desirability of diamonds.
Desirability includes all aspects of buying behaviour such as
competition for share of wallet from other luxury products including
experiential holidays, hardline and softline goods, new technology and
jewellery products such as those containing other precious stones or
laboratory-grown diamonds. The Group has experienced a strong
economic recovery from the Covid-19 pandemic in diamond jewellery
consuming countries in 2021. External forecasts assume a return to
pre-pandemic levels of growth from 2022 onwards with consumer
demand recovering to the level seen in 2018 by the beginning of 2023.
The real GDP growth assumption in USD terms is 3.0% over the next
five years including 3.4% over the first three years which is sourced
from an external provider and is weighted by the key markets in which
we operate including the US, China, India, Japan, Gulf Region and
Eurozone. Over the long-term consumer demand is expected to grow
at least in line with inflation.
The external foreign exchange forecast is of annual USD appreciation
against the Indian Rupee of 0.3% and USD depreciation against the
Chinese Renminbi, Japanese Yen and Euro of 0.3%, 1.7% and 1.1%
respectively for the medium term compared to FY21 actual average
rates. The consumer demand forecast has assumed that the
laboratory-grown diamond jewellery sector will continue to grow as it
builds from a relatively small base. However, the forecast is for the
laboratory-grown diamond jewellery market size to stabilise by 2026.
Changes in total global supply are driven primarily by the output
anticipated from new projects and assumes a continued supply
contraction over the long term.
The valuation remains sensitive to consumer demand growth which
could result in both upside and downside risk. For example, a reduction
in the weighted GDP growth rates, a strengthening of the USD against
other consumer country currencies or an increase in substitution by
laboratory-grown diamonds in certain categories would suppress
consumer demand growth. These factors have a range of possible
impacts that may not occur independently of each other. A range of
alternative scenarios have been considered in determining whether
there is a reasonably possible change in the forecast for foreign
exchange rates in producer countries in conjunction with a reasonably
possible change in consumer demand growth, which would result in
the recoverable amount equating to the carrying amount.
A 5% strengthening of the producer currencies against our assumed
USD in conjunction with a 0.4 percentage point underperformance in
our mid to long term consumer demand growth expectation would
result in the recoverable amount equating to the carrying amount. This
reduction in the consumer demand growth might be brought about
through either a 23% one-off appreciation of the USD against
consumer countries’ currencies or a reduction in long term real GDP
growth assumptions by 0.4 percentage points, with other valuation
assumptions remaining the same. Our assessment is that with other
assumptions remaining the same, no reasonably possible change in
global supply would result in the recoverable amount equating to the
carrying amount.
Accounting policy change from a gross revenue presentation to
a net basis
During the year the Group amended its accounting policy in respect
of certain physically-settled contracts relating to the purchase and
sale of material produced by third parties (third-party sales) and now
presents the margin on these transactions on a net basis within
revenue from other sources where the contracts form part of the
Group’s commodity trading activities. Judgement was applied to
determine that the revised policy would provide more relevant
information given the demerger of the Group’s South African
thermal coal business and the continued growth of the Group’s
trading activities.
Revenue and operating costs for the year ended 31 December 2021
are both $8.0 billion lower than would have been reported under the
Group’s previous accounting policy ($4.1 billion of which relates to
copper, $1.8 billion relates to platinum group metals and $1.8 billion
relates to thermal coal), with no impact on operating profit or reported
cash flows. The prior period comparative has been restated for this
change in accounting policy. Revenue and operating costs for the year
ended 31 December 2020 have both reduced by $5.5 billion
compared to the previously reported values, with no impact on
operating profit or reported cash flows.
Change in accounting estimate for PGM inventories
Following the normalisation of the metal refining process at the
Platinum Group Metals (PGM) business unit (after the temporary Anglo
Converter Plant (ACP) shutdown in 2020) and a review of recent price
trends, the PGM inventory valuation model has been reassessed and
amended. The most significant amendment relates to the valuation of
concentrate purchased from third parties. This material is now valued
using a six-month rolling average cost, which is more closely aligned to
the number of months stock on hand, including stock within the
production process, than the twelve-month rolling average used in
previous periods. The change in estimate had the effect of decreasing
the value of inventory as disclosed in the financial statements at
31 December 2021 by $381 million with a corresponding increase
in operating costs.
Thungela Disposal
On 4 June 2021, the Group completed the demerger of its South
African thermal coal assets into a newly incorporated company,
Thungela Resources Limited (Thungela), that on 7 June 2021 was
admitted to trading on both the Johannesburg and London Stock
Exchanges (JSE and LSE). As a level 3 fair value measurement at the
date of the demerger, a discounted cash flow model was used to
determine the fair value of the in specie return of capital and retained
financial asset investment. The Group applied judgement to select
appropriate inputs to this model, in particular with respect to the
discount rate and forecast thermal coal prices. See note 33 for further
details.
Recognition of deferred tax assets
As a result of both the partial utilisation of the asset, as well as the
increase in the deferred tax liability relating to functional currency
remeasurements, the net deferred tax asset recognised in Brazil in
relation to the Minas-Rio iron ore mine at 31 December 2020, has
become a net deferred tax liability at 31 December 2021. Accordingly,
it is no longer considered to be a significant accounting matter for
the Group.
Anglo American plc Integrated Annual Report 2021 187
Financial statements and other financial information
Notes to the financial statements
Significant items
8. Special items and remeasurements
Overview
US$ million
Revenue remeasurements
Impairment reversals
Impairments
Restructuring costs
Other operating special items
Operating remeasurements
Operating special items and remeasurements
Disposals of businesses and investments
Adjustments relating to business combinations
Adjustments relating to former operations
Other non-operating special items
Non-operating special items
Financing special items and remeasurements
Tax special items and remeasurements
Total
Associates’ and joint ventures’ special items and remeasurements
Total special items and remeasurements
Special items
Special items are those items of financial performance that, due to
their size and nature, the Group believes should be separately
disclosed on the face of the income statement. The Group classifies
subsequent adjustments to items classified as special items on initial
recognition in subsequent periods as special items. These items, along
with related tax and non-controlling interests, are excluded from
underlying earnings, which is an Alternative Performance Measure
(APM). For more information on the APMs used by the Group, including
definitions, please refer to page 270.
– Operating special items are those that relate to the operating
performance of the Group and principally include impairment
charges and reversals and restructuring costs.
– Non-operating special items are those that relate to changes in the
Group’s asset portfolio. This category principally includes profits and
losses on disposals of businesses and investments or closure of
operations, adjustments relating to business combinations, and
adjustments relating to former operations of the Group, such as
changes in the measurement of deferred consideration receivable
or provisions recognised on disposal or closure of operations in prior
periods. This category also includes charges relating to Black
Economic Empowerment (BEE) transactions.
– Financing special items are those that relate to financing activities
and include realised gains and losses on early repayment of
borrowings, and the unwinding of the discount on material
provisions previously recognised as special items.
– Tax special items are those that relate to tax charges or credits
where the associated cash outflow or inflow is anticipated to be
significant due to its size and nature, principally including resolution
of tax enquiries.
188 Anglo American plc Integrated Annual Report 2021
Before tax
7
Non-
controlling
interests
7
Tax
—
1,482
(502)
(21)
(795)
238
—
(89)
(106)
492
(393)
(45)
507
(276)
(207)
(113)
—
179
—
26
(9)
(247)
(16)
—
—
—
30
4
13
—
—
(76)
(80)
—
—
(92)
(80)
—
(320)
(659)
—
3
(57)
2021
2020
Net
14
959
(557)
—
(33)
(111)
258
(409)
(45)
351
(276)
(379)
(113)
(317)
(537)
174
(363)
Net
—
—
(770)
(40)
(112)
(71)
(993)
(15)
6
391
(6)
376
(8)
(344)
(969)
(77)
(1,046)
Remeasurements
Remeasurements are items that are excluded from underlying
earnings in order to reverse timing differences in the recognition of
gains and losses in the income statement in relation to transactions
that, while economically linked, are subject to different accounting
measurement or recognition criteria. Remeasurements include mark-
to-market movements on derivatives that are economic hedges of
transactions not yet recorded in the financial statements, in order to
ensure that the overall economic impact of such transactions is
reflected within the Group’s underlying earnings in the period in which
they occur. When the underlying transaction is recorded in the income
statement, the realised gains or losses are recorded in underlying
earnings within either revenue, operating costs or net finance costs as
appropriate. If the underlying transaction is recorded in the balance
sheet, for example capital expenditure, the realised amount remains in
remeasurements on settlement of the derivative.
– Revenue remeasurements, presented within revenue from other
sources, include unrealised gains and losses on derivatives relating
to revenue.
– Operating remeasurements include unrealised gains and losses on
derivatives relating to operating costs or capital expenditure
transactions. They also include the reversal through depreciation
and amortisation of a fair value gain or loss, arising on revaluation of
a previously held equity interest in a business combination.
– Financing remeasurements include unrealised gains and losses on
financial assets and liabilities that represent economic hedges,
including accounting hedges, related to financing arrangements.
– Tax remeasurements include foreign exchange impacts arising in
US dollar functional currency entities where tax calculations are
generated based on local currency financial information and hence
tax is susceptible to currency fluctuations.
Financial statements and other financial information
Notes to the financial statements
Significant items
8. Special items and remeasurements continued
Revenue remeasurements
The gain of $7 million ($14 million after tax and non-controlling
interests) relates to remeasurements on derivatives presented in
revenue from other sources.
Operating special items
Impairment reversals
Impairment reversals of $1,482 million ($959 million after tax and non-
controlling interests) for the year ended 31 December 2021 comprise
the reversals at Minas-Rio (Iron Ore) of $1,421million ($938 million
after tax) and El Soldado (Copper) of $61 million ($21 million after tax
and non-controlling interests).
Further information on significant accounting matters relating to
impairments and impairment reversals is provided in note 7.
2020
There were no impairment reversals for the year ended 31 December
2020.
Impairments
Impairments of $795 million ($557 million after tax) for the year ended
31 December 2021 principally comprise impairments within
Metallurgical Coal.
2020
Impairments of $770 million for the year ended 31 December 2020
principally comprise the impairment charges to operations at Barro
Alto (Nickel) of $589 million and South African thermal coal (Corporate
and other) of $119 million.
Restructuring costs
No restructuring costs were recognised within special items for the
year ended 31 December 2021.
2020
Restructuring costs of $40 million for the year ended
31 December 2020 principally consisted of restructuring programmes
in De Beers.
Other operating special items
The loss of $89 million ($33 million after tax and non‑controlling
interest) principally relates to the write-off of redundant waste dump
infrastructure assets at Copper Chile (Copper).
2020
The net loss of $112 million after tax write-off related to lost equipment
and longwall assets, which were assessed to have no future economic
benefit following the incident at Grosvenor (Metallurgical Coal) and the
write-off of other redundant assets.
Operating remeasurements
Operating remeasurements reflect a loss of $106 million
($111 million after tax and non-controlling interests) which principally
relates to a $93 million depreciation and amortisation charge arising
due to the fair value uplift on the Group’s pre-existing 45%
shareholding in De Beers, which was required on acquisition of
a controlling stake in 2012.
2020
Operating remeasurements reflected a net loss of $71 million which
principally related to depreciation and amortisation charge arising due
to the fair value uplift on the Group’s pre-existing 45% shareholding in
De Beers, which was required on acquisition of a controlling stake.
Non-operating special items
Disposals of businesses and investments
The $393 million loss ($409 million after tax and non-controlling
interests) relates to the demerger of the South African thermal coal
operations, for further information please see note 33.
2020
The net loss principally relates to the equalisation of ownership across
its integrated metallurgical coal operations at Moranbah and
Grosvenor in Australia (Metallurgical Coal).
Adjustments relating to business combinations
The $45 million loss during the year ended 31 December 2021 relates
to adjustments in respect of business combinations in prior years.
2020
The net $6 million gain during the year ended 31 December 2020
related to adjustments in respect of business combinations in prior
years.
Adjustments relating to former operations
The net gain of $507 million ($351 million after tax and non-controlling
interests) principally relates to contingent consideration adjustments in
respect of disposals of the Group's interests in Rustenburg and Union
(Platinum Group Metals) completed in 2016 and 2018 respectively,
and contingent consideration received in respect of disposal of
Anglo American Norte (Copper) completed in 2015. For further detail
with respect to contingent consideration balances, see note 22.
2020
The net gain of $391 million after tax and non-controlling interests
related to adjustments in respect of disposals completed in prior years.
Other non-operating special items
On 28 June 2021, the Group announced that it had agreed the sale of
its 33.3% shareholding in the Cerrejón associate to Glencore. As the
associate’s carrying value was higher than the estimated $294 million
consideration due on completion, an impairment of $283 million has
been recognised. This includes $184 million of the Group’s share of net
income that is immediately impaired (see below), and has been
recorded to bring the associate’s carrying value into line with its fair
value less costs of disposal. The sale was completed on 11 January
2022. See note 32.
2020
There were no significant other non-operating special items during the
year ended 31 December 2020.
Financing special items and remeasurements
Financing special items and remeasurements principally comprise a
net fair value loss of $113 million (2020: $31 million) in respect of bond
buybacks completed in the year.
Tax associated with special items and remeasurements
Tax associated with special items and remeasurements includes a tax
remeasurement charge of $349 million principally arising on Brazilian
deferred tax, a tax on special items charge of $339 million and tax
special items credit of $29 million (2020: tax remeasurements of
$418 million principally arising on Brazilian deferred tax and tax on
special items credit of $72 million).
Of the total tax charge of $659 million (2020: $346 million), there is
a net current tax charge of $24 million (2020: credit of $32 million) and
a net deferred tax charge of $635 million (2020: $378 million).
Associates’ and joint ventures’ special items and remeasurements
Associates’ and joint ventures’ special items and remeasurements of
$174 million in the year ended 31 December 2021 principally relates
to $184 million income from the Cerrejón associate arising after the
agreement of the transaction in June 2021 and immediately impaired
to bring the carrying value of the investment in line with the expected
disposal proceeds. See note 13.
2020
Associates’ and joint ventures’ special items and remeasurements of
$77 million in the year ended 31 December 2020 principally related to
impairment charges and restructuring costs in Manganese.
Anglo American plc Integrated Annual Report 2021 189
Financial statements and other financial information
Notes to the financial statements
Capital base
We have a value-focused approach to capital
allocation with clear prioritisation: maintain
asset integrity; pay dividends to our
shareholders while ensuring a strong balance
sheet. Discretionary capital is then allocated
based on a balanced approach.
Value-disciplined capital allocation throughout the cycle is critical to
protecting and enhancing our shareholders’ capital, given the long
term and capital intensive nature of our business.
The Group uses attributable return on capital employed (ROCE)
to monitor how efficiently assets are generating profit on invested
capital for the equity shareholders of the Company. Attributable ROCE
is an Alternative Performance Measure (APM). For more information on
the APMs used by the Group, including definitions, please refer to
page 270.
9. Capital by segment
Attributable ROCE increased to 43% in the year ended
31 December 2021 (2020: 17%). Average attributable capital
employed has increased to $31.4 billion (2020: $30.5 billion),
primarily due to increased growth capital expenditure, largely at
Quellaveco and Crop Nutrients and increased stay-in-business
expenditure, largely at Platinum Group Metals and Copper.
De Beers
Copper
Nickel
Platinum Group Metals
Iron Ore
Metallurgical Coal
Manganese
Crop Nutrients
Corporate and other
Attributable ROCE %
2021
7
39
21
140
62
15
104
n/a
n/a
43
2020
(restated)(1)
—
19
5
48
41
(15)
78
n/a
n/a
17
(1) Comparative totals remain unchanged from what was reported in 2020. Figures have been
restated in line with the Group reassessment of its reportable segments, see note 2 for
further details.
The disclosures in this note include certain Alternative Performance Measures (APMs). For more information on the APMs used by the Group,
including definitions, please refer to page 270.
Capital employed by segment
Capital employed is the principal measure of segment assets and liabilities reported to the Group Management Committee. Capital employed is
defined as net assets excluding net debt, vessel lease contracts that are priced with reference to a freight index, the debit valuation adjustment
attributable to derivatives hedging net debt and financial asset investments.
US$ million
De Beers
Copper
Nickel
Platinum Group Metals
Iron Ore
Metallurgical Coal
Manganese
Crop Nutrients
Corporate and other
Capital employed
Reconciliation to Consolidated balance sheet:
Net debt(2)
Variable vessel leases excluded from net debt (see note 20)
Debit valuation adjustment attributable to derivatives hedging net debt
Financial asset investments
Net assets
Capital employed
2021
8,415
11,232
1,285
4,082
8,379
2,712
238
1,563
406
2020
(restated)(1)
8,967
9,128
1,157
4,967
8,472
3,196
238
988
857
38,312
37,970
(3,842)
(5,530)
(74)
5
369
(45)
—
371
34,770
32,766
(1) Comparative totals for capital employed remain unchanged from what was reported in 2020. Figures have been restated in line with the Group reassessment of its reportable segments, see
note 2 for further details.
(2) The Group has amended the definition of net debt during the year to exclude variable vessel leases.
190 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Capital base
9. Capital by segment continued
Non-current assets by location
US$ million
South Africa
Botswana
Other Africa
Brazil
Chile
Peru
Other South America
North America
Australia and Asia
United Kingdom(1)
Other Europe
Non-current assets by location
Unallocated assets
Total non-current assets
(1) United Kingdom is Anglo American plc’s country of domicile.
Intangible assets,
Property, plant and equipment
Total non-current assets
2021
9,711
3,386
1,138
7,502
6,745
6,691
1
621
3,048
3,561
99
42,503
2020
10,271
3,829
1,071
6,018
6,402
4,712
1
649
3,807
2,656
106
39,522
2021
10,185
3,388
1,146
8,059
6,821
6,931
2
621
3,547
3,729
101
44,530
2,482
47,012
2020
10,744
3,829
1,078
6,516
6,552
4,997
367
649
4,171
2,799
110
41,812
3,227
45,039
Total non-current assets by location primarily comprise Intangible assets, Property, plant and equipment and Investments in associates and
joint ventures.
10.
Intangible assets
Overview
Intangible assets comprise goodwill acquired through business combinations, brands, contracts and other non-mining assets.
2021
2020
Contracts
and other
intangibles
Goodwill
Total
Brands
Contracts
and other
intangibles
1,963
3,103
517
US$ million
Net book value
At 1 January
Acquired through business combinations
Additions
Amortisation charge for the year
Impairments
Disposals
Currency movements
At 31 December
Cost
Accumulated amortisation and impairment
Brands
517
—
—
—
—
—
—
517
517
—
623
—
77
(59)
(2)
(11)
(20)
608
1,077
—
—
—
—
(3)
(83)
1,877
1,948
—
77
(59)
(2)
(14)
(103)
3,002
3,542
(469)
(71)
(540)
Goodwill
Total
1,981
3,086
2
—
—
(2)
—
(18)
23
87
(60)
(10)
—
(23)
588
21
87
(60)
(8)
—
(5)
623
1,143
1,963
2,034
3,103
3,694
(520)
(71)
(591)
—
—
—
—
—
—
517
517
—
Brands, contracts and other intangibles includes $924 million (2020: $979 million) relating to De Beers, principally comprising assets
that were recognised at fair value on acquisition of a controlling interest in De Beers in August 2012. At 31 December 2021, $517 million
(2020: $517 million) of brands were held by the Group that have been assessed to have indefinite useful lives.
Further information
Goodwill relates to the following cash generating units (CGUs) or groups of CGUs:
US$ million
De Beers
Copper Chile
Platinum Group Metals
Other
2021
1,535
124
209
9
2020
1,619
124
209
11
1,877
1,963
Accounting judgement
Goodwill is tested at least annually for impairment by assessing the recoverable amount of the related CGU or group of CGUs. The recoverable
amounts have been determined based on fair value less costs of disposal using discounted cash flow projections. Other than in relation to
De Beers as set out in note 7, management believes that any reasonably possible change in a key assumption on which the recoverable
amounts are based would not cause the carrying values to exceed their recoverable amounts. The key assumptions used in determining the
recoverable amounts are set out in note 7.
Accounting policy
See note 39D for the Group’s accounting policies on intangible assets.
Anglo American plc Integrated Annual Report 2021 191
Financial statements and other financial information
Notes to the financial statements
Capital base
11. Property, plant and equipment
Overview
Property, plant and equipment comprises the physical assets that make up the Group’s operations. These include acquired mineral rights,
capitalised waste stripping and mine development costs, processing plants and infrastructure, vehicles and other equipment.
US$ million
Net book value
At 1 January
Additions
Depreciation charge for the year
Impairments
Impairments reversed
Disposals
Reclassifications
Currency movements
At 31 December
Cost
Mining
properties
– Owned
Land and
buildings
– Owned
Land and
buildings
– Right-of-
use assets
Plant and
equipment
– Owned
Plant and
equipment
– Right-of-
use assets
Capital
works in
progress
– Owned
Total
2021
Owned and leased assets
10,970
1,755
180
13,332
6
344
124
229
354
9,953
36,419
6,059
7,377
490
(1,019)
(293)
37
(152)
739
(653)
(83)
(29)
20
(37)
208
(64)
(48)
(1,440)
(255)
—
(2,845)
(6)
(312)
(1)
(168)
(809)
—
1,425
—
—
1,482
(11)
(488)
(11)
(207)
(906)
—
1,192
—
(2,139)
—
(5)
(243)
(4)
(248)
(1,217)
10,119
26,017
1,776
2,702
454
13,590
312
13,250
39,501
593
31,214
937
13,458
74,921
Accumulated depreciation and impairment
(15,898)
(926)
(139) (17,624)
(625)
(208) (35,420)
US$ million
Net book value
At 1 January
Acquired through business combinations
Additions
Depreciation charge for the year
Impairments
Disposals
Reclassifications
Currency movements
At 31 December
Cost
Mining
properties
– Owned
Land and
buildings
– Owned
Land and
buildings
– Right-of-
use assets
Plant and
equipment
– Owned
Plant and
equipment
– Right-of-
use assets
Capital
works in
progress
– Owned
Total
2020
Owned and leased assets
11,078
1,845
159
14,237
7
398
(968)
(39)
(43)
694
(157)
40
2
(82)
(32)
(31)
43
(30)
12
95
(42)
(36)
(11)
—
3
2
148
289
—
123
6,593
34,201
949
4,411
1,010
5,177
(1,446)
(135)
—
(2,673)
(719)
(64)
1,160
14
(47)
—
—
(13)
(156)
(1,897)
(886)
(305)
—
(1)
66
(105)
10,970
26,599
1,755
2,868
180
13,332
229
9,953
36,419
300
32,944
625
10,251
73,587
Accumulated depreciation and impairment
(15,629)
(1,113)
(120)
(19,612)
(396)
(298)
(37,168)
Additions include $207 million (2020: $170 million) of net interest expense incurred on borrowings which fund the construction of qualifying
assets that have been capitalised during the year, principally for the Quellaveco copper project in Peru and the Woodsmith project in the UK.
Depreciation includes $2,672 million (2020: $2,553 million) of depreciation within operating profit, $77 million (2020: $56 million) of depreciation
arising due to the fair value uplift on the pre-existing 45% shareholding in De Beers which has been included within operating remeasurements
(see note 8), and $96 million (2020: $64 million) of pre-commercial production depreciation on assets used in capital projects which has been
capitalised.
Disposals includes disposals of assets and businesses.
192 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Capital base
11. Property, plant and equipment continued
Accounting judgements
Impairment testing
For the purposes of impairment testing, the recoverable amount of each of the cash generating units (CGUs) or group of CGUs has been
determined based on a fair value less costs of disposal basis. The key assumptions used in determining fair value less costs of disposal are set
out in note 7.
Deferred stripping
In certain mining operations, rock or soil overlying a mineral deposit, known as overburden, and other waste materials must be removed to access
the orebody. The process of removing overburden and other mine waste materials is referred to as stripping.
The Group defers stripping costs onto the balance sheet where they are considered to improve access to ore in future periods. Where the
amount to be capitalised cannot be specifically identified it is determined based on the volume of waste extracted compared with expected
volume for the identified component of the orebody. This determination is dependent on an individual mine’s design and Life of Mine Plan and
therefore changes to the design or Life of Mine Plan will result in changes to these estimates. Identification of the components of a mine’s orebody
is made by reference to the Life of Mine Plan. The assessment depends on a range of factors including each mine’s specific operational features.
Accounting policy
See note 39D for the Group’s accounting policies on property, plant and equipment.
12. Capital expenditure
The disclosures in this note include certain Alternative Performance Measures (APMs). For more information on the APMs used by the Group,
including definitions, please refer to page 270.
Capital expenditure by segment
US$ million
De Beers
Copper
Nickel
Platinum Group Metals
Iron Ore
Metallurgical Coal
Crop Nutrients
Corporate and other
Capital expenditure
Reconciliation to Consolidated cash flow statement:
Cash flows used in derivatives related to capital expenditure
Proceeds from disposal of property, plant and equipment
Direct funding for capital expenditure received from non-controlling interests
Expenditure on property, plant and equipment
2021
565
1,773
29
894
628
649
530
125
2020
(restated)(1)
381
1,443
33
571
517
683
292
205
5,193
4,125
(8)
17
530
5,732
(11)
7
526
4,647
(1) Comparative totals remain unchanged from what was reported in 2020. Figures have been restated in line with the Group reassessment of its reportable segments, see note 2 for further
details.
Direct funding for capital expenditure received from non-controlling interests represents capital expenditure relating to the Quellaveco project
funded by Mitsubishi. Mitsubishi has continued to provide direct funding for its 40% share of capital expenditure via draw-downs against a
committed shareholder facility which are recorded as borrowings on the Group’s Consolidated balance sheet.
Capital expenditure by category
US$ million
Growth projects
Life-extension projects
Stay-in-business
Development and stripping
Proceeds from disposal of property, plant and equipment
Capitalised operating cash flows
2021
1,752
474
2,068
904
(17)
12
2020
1,438
296
1,566
769
(7)
63
5,193
4,125
Growth projects and life-extension projects capital expenditure includes the cash flows from derivatives related to capital expenditure and is net
of direct funding for capital expenditure received from non-controlling interests.
Anglo American plc Integrated Annual Report 2021 193
Financial statements and other financial information
Notes to the financial statements
Capital base
13.
Investments in associates and joint ventures
Overview
Investments in associates and joint ventures represent businesses the Group does not control, but instead exercises significant influence or joint
control. These include (within the respective business units) the associates Cerrejón (thermal coal production in the Corporate and other
segment, disposed in January 2022) and Jellinbah (metallurgical coal production in the Metallurgical Coal segment) and the joint ventures
Ferroport (port operations in the Iron Ore segment) and Samancor (manganese mining in the Manganese segment). The Group’s other
investments in associates and joint ventures arise primarily in the Platinum Group Metals segment and Crop Nutrients segment.
The disclosures in this note include certain Alternative Performance Measures (APMs). For more information on the APMs used by the Group,
including definitions, please refer to page 270.
On 28 June 2021, the Group agreed the sale of its 33.3% shareholding in the Cerrejón associate to Glencore. The sale agreement had an
economic effective date from 31 December 2020 and any dividends received after this date are deducted from the consideration due on
completion. Economic benefits from 1 January 2021 onwards therefore did not accrue to the Group. Income from the associate arising after the
agreement of the transaction in June 2021 has been classified as a special item and is therefore excluded from the Group revenue, underlying
EBITDA and underlying EBIT APMs disclosed in the tables below. An impairment charge has been recognised within non-operating special items
to bring the carrying value of the investment in line with the expected disposal proceeds and the Group’s post-disposal share of earnings. The
Cerrejón associate met the criteria to be classified as held for sale on 23 December 2021, and the investment value of $50 million was
transferred to assets held for sale, see note 32 for further details.
On 20 December 2021, Anglo American Platinum announced the sale of its 49% interest in Bokoni. The transaction is subject to the fulfilment or
waiver of notable conditions precedent and therefore does not meet the criteria to be classified as held for sale at 31 December 2021.
US$ million
At 1 January
Acquired through business combinations
Net income from associates and joint ventures
Dividends received
Investments in equity and capitalised loans
Impairments
Disposals
Transfer to assets held for sale
Other movements
Currency movements
At 31 December
Associates
733
—
389
(342)
11
(283)
(4)
(50)
(48)
(18)
Joint ventures
525
—
245
(133)
24
—
(12)
—
(16)
—
388
633
2021
Total
1,258
—
634
(475)
35
(283)
(16)
(50)
(64)
(18)
1,021
Associates
766
20
(17)
(64)
8
(4)
—
—
—
24
Joint ventures
567
—
120
(162)
6
—
(13)
—
42
(35)
733
525
2020
Total
1,333
20
103
(226)
14
(4)
(13)
—
42
(11)
1,258
Further information
The Group’s total investments in associates and joint ventures include long term loans of $145 million (2020: $202 million), which in substance
form part of the Group’s net investment. These loans are not repayable in the foreseeable future.
The Group’s share of the results of the associates and joint ventures is as follows:
Income statement
US$ million
Group revenue
Operating costs (before special items and remeasurements)
Associates’ and joint ventures’ underlying EBIT
Net finance costs
Income tax expense
Non-controlling interests
Net income from associates and joint ventures (before special items and remeasurements)
Special items and remeasurements
Special items and remeasurements tax
Net income from associates and joint ventures
2021
1,711
(1,014)
2020
1,436
(1,073)
697
(13)
(222)
(2)
460
184
(10)
634
363
(22)
(158)
(3)
180
(79)
2
103
Group revenue and net income from the Cerrejón associate, arising after 28 June 2021, when the Group agreed the sale of its 33.3%
shareholding, have been classified as special items and are therefore excluded from Group revenue, underlying EBITDA, underlying EBIT and
underlying earnings. See note 8 for further detail.
Balance sheet
US$ million
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets as at 31 December 2021
Net assets as at 31 December 2020
194 Anglo American plc Integrated Annual Report 2021
Associates
304
380
(143)
(153)
Joint ventures
977
334
(212)
(466)
388
733
633
525
Total
1,281
714
(355)
(619)
1,021
1,258
Financial statements and other financial information
Notes to the financial statements
Capital base
13. Investments in associates and joint ventures continued
Further information
The Group’s share of the results of the associates and joint ventures is as follows:
US$ million
Samancor
Cerrejón(1)
Jellinbah
Ferroport
Other
US$ million
Samancor
Cerrejón
Jellinbah
Ferroport
Other
US$ million
Samancor
Cerrejón (1)
Jellinbah
Ferroport
Other
Group
revenue
768
Underlying
EBITDA
315
Underlying
EBIT
250
Share of net
income
132
219
514
85
125
1,711
87
279
69
76
826
43
265
62
77
697
203
183
41
75
634
Group
revenue
697
Underlying
EBITDA
304
Underlying
EBIT
245
Share of net
income
39
209
303
114
113
—
93
95
26
1,436
518
(83)
(75)
80
94
27
363
56
64
19
103
2021
Dividends
received
125
240
97
—
13
475
2020
Dividends
received
163
11
49
—
3
226
Aggregate investment
2021
233
—
340
265
183
2020
230
400
271
229
128
1,021
1,258
(1) As at 31 December 2021 Cerrejón investment in associate assets of $50 million was classified as held for sale. Income from the Cerrejón associate arising after the sale agreement dated
in June 2021 has been classified as a special item and is therefore excluded from Group revenue, underlying EBITDA, underlying EBIT and underlying earnings. See notes 8 and 32 for
further detail.
Accounting judgements
Impairment
No indicators of impairment were identified for the Group’s investments in associates and joint ventures with the exception of the Cerrejón
associate, which was impaired during the year (see note 8).
Accounting policy
See note 39I for the Group’s accounting policy on associates and joint arrangements, which includes joint ventures.
Anglo American plc Integrated Annual Report 2021 195
Financial statements and other financial information
Notes to the financial statements
Capital base
14. Financial asset investments
Overview
Financial asset investments include three categories. Financial assets at amortised cost principally comprise loans to and deposits with third
parties including the Group’s associates and joint ventures. Assets classified at fair value through other comprehensive income principally
comprise investments in equities of other companies. Financial assets held at fair value through profit and loss comprise financial assets that
do not meet the criteria to be classified under either of the other two categories.
US$ million
At 1 January
Additions
Interest receivable
Net loans (repaid)/advanced
Disposals
Impairments
Fair value and other movements
Currency movements
At 31 December
Current
Non-current
Financial
assets at
amortised cost
207
At fair value
through
profit and loss
33
At fair value
through other
comprehensive
income
131
—
3
(56)
(10)
(12)
—
(5)
127
—
127
13
—
27
(14)
—
3
(2)
60
29
31
25
—
—
(2)
—
35
(7)
182
—
182
2021
Total
371
38
3
(29)
(26)
(12)
38
(14)
369
29
340
Financial
assets at
amortised cost
373
At fair value
through
profit and loss
3
At fair value
through other
comprehensive
income
58
—
7
(67)
—
(20)
(23)
(63)
207
—
207
—
—
—
—
—
28
2
33
—
33
3
—
—
(9)
—
77
2
131
—
131
2020
Total
434
3
7
(67)
(9)
(20)
82
(59)
371
—
371
Accounting policy
See note 39D for the Group’s accounting policies on financial asset investments.
15. Provisions for liabilities and charges
Overview
US$ million
At 1 January
Credited/(charged) to the income
statement
Capitalised
Unwinding of discount
Amounts applied
Unused amounts reversed
Disposals
Currency movements
At 31 December
Current
Non-current
Environmental
restoration Decommissioning
Employee
benefits
Onerous
contracts
(1,990)
(963)
(170)
(19)
29
(238)
(43)
76
16
399
106
(1,645)
(106)
(1,539)
3
(83)
(20)
21
41
62
28
(911)
(61)
(850)
(50)
—
(1)
44
3
—
11
(163)
(148)
(15)
Legal
(266)
(52)
(6)
—
44
10
—
15
Restructuring
(37)
(6)
—
—
23
1
4
1
Other
(223)
Total
(3,668)
(35)
(59)
—
55
24
23
8
(111)
(386)
(65)
267
99
488
170
—
—
(1)
4
4
—
1
(11)
(255)
(4)
(7)
(57)
(198)
(14)
(14)
—
(207)
(189)
(3,206)
(579)
(18)
(2,627)
Further information
Environmental restoration
The Group has an obligation to undertake restoration, rehabilitation and environmental work when environmental disturbance is caused by the
development or ongoing production of a mining property. A provision is recognised for the present value of such costs, based on management’s
best estimate of the legal and constructive obligations incurred. Changes in legislation could result in changes in provisions recognised. It is
anticipated that the majority of these costs will be incurred over a period in excess of 20 years.
Decommissioning
Provision is made for the present value of costs relating to the decommissioning of plant or other site restoration work. It is anticipated that the
majority of these costs will be incurred over a period in excess of 20 years.
The pre-tax, real discount rates that have been used in calculating the environmental restoration and decommissioning liabilities as at
31 December 2021, in the principal currencies in which these liabilities are denominated and with matching maturities to the timelines are as
follows: US dollar: 0.0%-0.1% (2020: 0.0%-0.1%); South African rand: 3.7%-4.3% (2020: 4.3%-4.9%); Australian dollar: 0.0%-0.2%
(2020: 0.0%-0.3%); Chilean peso: 2.1%-3.0% (2020: 0.0%-1.4%); and Brazilian real: 5.0%-5.5% (2020: 3.4%-4.4%).
Decommissioning amounts capitalised and Environmental Restoration charged to the income statement in the year are principally driven by
changes in the discount rates and other changes in underlying estimates.
Employee benefits
Provision is made for statutory or contractual employee entitlements where there is significant uncertainty over the timing or amount of
settlement. It is anticipated that these costs will be incurred when employees choose to take their benefits.
196 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Capital base
15. Provisions for liabilities and charges continued
Onerous contracts
Provision is made for the present value of certain long term contracts where the unavoidable cost of meeting the Group’s obligations is expected
to exceed the benefits to be received. It is anticipated that the majority of these costs will be incurred over a period of up to four years.
Other
Other provisions primarily relate to social commitments in Quellaveco and other claims and liabilities.
Environmental rehabilitation trusts
The Group makes contributions to controlled funds that were established to meet the cost of some of its restoration and environmental
rehabilitation liabilities in South Africa. The funds comprise the following investments, which with the exception of some cash balances, are held in
unit trusts:
US$ million
Equity
Bonds
Cash and cash equivalents
2021
66
12
35
113
2020
92
152
57
301
These assets are primarily denominated in South African rand. Where not held in a unit trust, cash and cash equivalents are held in short term
fixed deposits or earn interest at floating inter-bank rates. Bonds held in unit trusts earn interest at a weighted average fixed rate of 10.0%
(2020: 8.0%) for an average period of seven years (2020: five years).
These funds are not available for the general purposes of the Group (see note 22). All income from these assets is reinvested to meet specific
environmental obligations. These obligations are included in provisions as stated above.
Accounting judgements
Environmental restoration and decommissioning provisions
The recognition and measurement of environmental restoration and decommissioning provisions requires judgement and is based on
assumptions and estimates, including the required closure and rehabilitation costs, the timing of future cash flows, and the discount rates applied.
The Group considers that no reasonably possible change to a single assumption would have a material impact on the provisions, however a
combination of changes in multiple assumptions may.
The Group considers the impact of climate change on environmental restoration and decommissioning provisions, specifically the timing of future
cash flows, and has concluded that it does not currently represent a key source of estimation uncertainty. Changes to legislation, including in
relation to climate change, are factored into the provisions when the legislation becomes enacted.
Accounting policy
See note 39D for the Group’s accounting policy on environmental restoration and decommissioning obligations.
16. Deferred tax
Overview
The movement in net deferred tax liabilities during the year is as follows:
US$ million
At 1 January
Acquired through business combinations
Charged to the income statement
Charged to equity
Disposal of business
Currency movements
At 31 December
2021
(3,165)
2020
(2,865)
—
(1,358)
(55)
80
165
(8)
(314)
(26)
—
48
(4,333)
(3,165)
Anglo American plc Integrated Annual Report 2021 197
Capital base
16. Deferred tax continued
Accounting judgements
Recognition of deferred tax asset
Accounting policy
See note 39G for the Group’s accounting policy on tax.
Financial statements and other financial information
Notes to the financial statements
Financial statements and other financial information
Notes to the financial statements
Capital base
16. Deferred tax continued
Further information
Where there is a right of offset of deferred tax balances within the same tax jurisdiction, IAS 12 Income Taxes requires these to be presented after
such offset in the Consolidated balance sheet. The closing deferred tax balances before this offset are as follows:
In accordance with the requirements of IAS 12 Income Taxes, the Group reassesses the recognition and recoverability of deferred tax assets at
US$ million
Deferred tax assets before offset
Tax losses
Post employment benefits
Share-based payments
Enhanced tax depreciation
Depreciation in excess of capital allowances
Other temporary differences
Deferred tax liabilities before offset
Capital allowances in excess of depreciation
Fair value adjustments
Withholding tax
Other temporary differences
The closing deferred tax balances after offset are as follows:
US$ million
Deferred tax assets
Deferred tax liabilities
2021
2020
the end of each reporting period.
789
—
13
—
166
744
903
25
17
288
715
985
1,712
2,933
(3,625)
(3,710)
(682)
(92)
(1,646)
(6,045)
(724)
(131)
(1,533)
(6,098)
2021
532
(4,865)
(4,333)
2020
639
(3,804)
(3,165)
Other temporary differences primarily arise in relation to deferred stripping costs, functional currency differences and post employment benefits.
The amount of deferred tax charged to the Consolidated income statement is as follows:
US$ million
Capital allowances in excess of depreciation
Fair value adjustments
Tax losses
Provisions
Other temporary differences
2021
(144)
(25)
(267)
(179)
(743)
(1,358)
2020
(292)
(14)
303
68
(379)
(314)
Deferred tax charged to the income statement includes a charge of $349 million (2020: $418 million) relating to deferred tax remeasurements
and a charge of $286 million (2020: credit $40 million) relating to deferred tax on special items.
Deferred tax assets are recognised to the extent that the business has forecast taxable profits against which the assets can be recovered.
A net deferred tax liability of $701 million (2020: net deferred tax asset of $380 million) is recognised in Brazil in relation to the Minas-Rio iron ore
and Barro Alto nickel mines. This relates primarily to functional currency taxable temporary differences, and is partially offset by tax losses,
deductible goodwill and fixed asset temporary differences.
The Group has the following temporary differences for which no deferred tax assets have been recognised:
US$ million
Expiry date
Less than five years
Greater than five years
No expiry date
Tax losses
– revenue
Tax losses
– capital
Other
temporary
differences
Tax losses
– revenue
Tax losses
– capital
Other
temporary
differences
14
200
5,599
5,813
—
—
155
—
2,304
2,304
3,869
11,772
4,024
12,141
2
103
5,423
5,528
—
—
2,124
2,124
113
—
4,145
11,692
4,258
11,910
2021
Total
169
200
2020
Total
115
103
No deferred tax has been recognised in respect of temporary differences associated with investments in subsidiaries, branches, associates and
interests in joint ventures and joint operations where the Group is in a position to control the timing of the reversal of the temporary differences
and it is probable that such differences will not reverse in the foreseeable future. The Group uses the Board approved forecasts as the basis for
the profits expected to arise in the foreseeable future. The aggregate amount of temporary differences associated with such investments in
subsidiaries, branches, associates and interests in joint ventures and joint operations is represented by the contribution of those investments to
the Group’s retained earnings and amounted to $20,030 million (2020: $18,605 million).
198 Anglo American plc Integrated Annual Report 2021
Anglo American plc Integrated Annual Report 2021 199
Financial statements and other financial information
Notes to the financial statements
Capital base
16. Deferred tax continued
Accounting judgements
Recognition of deferred tax asset
In accordance with the requirements of IAS 12 Income Taxes, the Group reassesses the recognition and recoverability of deferred tax assets at
the end of each reporting period.
Accounting policy
See note 39G for the Group’s accounting policy on tax.
Anglo American plc Integrated Annual Report 2021 199
Financial statements and other financial information
Notes to the financial statements
Working capital
This section includes analysis of inventories,
receivables and payables. These balances
principally relate to current assets and
liabilities held to support operating activities.
US$ million
Inventories
Trade and other receivables
Trade and other payables
2021
5,811
5,179
(8,248)
2,742
2020
6,569
4,873
(7,013)
4,429
Net working capital decreased in 2021 led by an increase in accruals,
and operating payables due to higher metals prices which increased
the value of deferred income relating to future deliveries. This was
offset by higher operating receivables as a result of higher base
metals prices. The decrease in inventory was principally as a result of
a change in accounting estimate which decreased the value of work
in progress.
17.
Inventories
Overview
Inventories represent goods held for sale in the ordinary course of business (finished products), ore being processed into a saleable condition
(work in progress) and spares, raw materials and consumables to be used in the production process (raw materials and consumables).
US$ million
Raw materials and consumables
Work in progress
Finished products
Expected to
be used
within one
year
729
Expected to
be used
after more
than one year
—
2,209
2,290
5,228
571
12
583
2021
Total
729
2,780
2,302
5,811
Expected to
be used
within one
year
810
Expected to
be used
after more
than one year
—
2,948
2,212
5,970
599
—
599
2020
Total
810
3,547
2,212
6,569
Further information
The cost of inventories recognised as an expense and included in operating costs amounted to $16,937 million (2020 (restated as a result
of the accounting policy change from a gross revenue presentation to a net basis (see note 7)): $12,673 million). The write-down of
inventories to net realisable value (net of revaluation of provisionally priced purchases) amounted to $54 million (2020: $360 million).
Accounting judgements
Accounting for inventory involves the use of judgements and estimates, particularly related to the measurement and valuation of work in progress
inventory within the production process. Certain estimates, including expected metal recoveries and work in progress volumes, are calculated by
engineers using available industry, engineering and scientific data. Estimates used are periodically reassessed by the Group taking into account
technical analysis and historical performance. During the year the Group has amended the classification of iridium and ruthenium from waste
products to by-products and reassessed the PGM inventory valuation model (see note 39A and note 7 for further information).
Accounting policy
See note 39E for the Group’s accounting policy on inventories.
200 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Working capital
18. Trade and other receivables
Overview
Trade receivables are amounts due from the Group’s customers for commodities and services the Group has provided. Many of the Group’s sales
are provisionally priced, which means that the price is finalised at a date after the sale takes place. When there is uncertainty about the final
amount that will be received, the receivable is marked to market based on the forward price.
Trade and other receivables also includes amounts receivable for VAT and other indirect taxes, prepaid expenses and amounts receivable from
others for non-sale transactions.
US$ million
Trade receivables
Tax receivables
Accrued income
Prepayments
Contract assets
Other receivables
Due within
one year
2,322
524
252
430
58
723
4,309
Due after
one year
49
363
—
52
—
406
870
2021
Total
2,371
887
252
482
58
1,129
5,179
Due within
one year
1,984
609
133
438
126
596
3,886
Due after
one year
42
351
—
70
—
524
987
2020
Total
2,026
960
133
508
126
1,120
4,873
Further information
The Group applies the simplified expected credit loss model for its trade receivables measured at amortised cost, as permitted by IFRS 9
Financial Instruments. The expected credit losses on trade receivables are estimated using a provision matrix by reference to past default
experience, credit profiles and financial metrics, adjusted as appropriate for current observable data.
As part of its approach to working capital management the Group uses debtor discounting arrangements. These arrangements are on a non-
recourse basis and hence the related receivables are derecognised from the Consolidated balance sheet.
Of the year end trade receivables balance, $33 million (2020: $54 million) were past due, stated after an associated impairment provision of
$23 million (2020: $18 million). Given the use of payment security instruments (including letters of credit from acceptable financial institutions),
and the nature of the related counterparties, these amounts are considered recoverable. The historical level of customer default is minimal and
there is no current observable data to indicate a material future default. As a result the credit quality of year end trade receivables is considered
to be high.
Trade receivables do not incur any interest, are principally short term in nature and are measured at their nominal value (with the exception of
receivables relating to provisionally priced sales, as set out in the revenue recognition accounting policy, see note 39C), net of appropriate
provision for estimated irrecoverable amounts.
19. Trade and other payables
Overview
Trade and other payables include amounts owed to suppliers, tax authorities and other parties that are typically due to be settled within 12
months. The total also includes contract liabilities, which represents monies received from customers but for which we have not yet delivered the
associated service. These amounts are recognised as revenue when the service is provided. All revenue relating to performance obligations
which was incomplete as at 31 December 2020 was recognised during the year. Other payables include deferred consideration in respect of
business combinations and dividends payable to non-controlling interests. The share buyback liability represents amounts not yet utilised from
the $1 billion share buyback programme announced on 29 July 2021.
US$ million
Trade payables
Accruals
Contract liabilities and deferred income
Tax and social security
Other payables
Share buyback liability
2021
2,914
2,331
1,753
120
944
186
2020
2,974
1,714
1,400
116
809
—
8,248
7,013
Further information
Trade payables are non-interest bearing and are measured at their nominal value (with the exception of payables relating to provisionally priced
commodity purchases which are marked to market using the appropriate forward price) until settled. $318 million (2020: $321 million) of trade
and other payables are included within non-current liabilities.
Contract liabilities and deferred income include $1,645 million (2020: $1,263 million) for payments received in advance for metal which is
expected to be delivered within six months and $86 million (2020: $115 million) in respect of freight and performance obligations which are
expected to be completed within 30 to 45 days.
Anglo American plc Integrated Annual Report 2021 201
Financial statements and other financial information
Notes to the financial statements
Net debt and financial risk management
Net debt decreased from $5.5 billion to
$3.8 billion during the year, driven by strong
operating cash flows of $20.6 billion.
Gearing has decreased from 14% at
31 December 2020 to 10%
at 31 December 2021.
US$ million
Net assets
Net debt including related derivatives
(note 20)(1)
Variable vessel leases
Total capital
Gearing
2021
34,770
3,842
74
38,686
10%
2020
(restated)
32,766
5,530
45
38,341
14%
Net debt is calculated as total borrowings excluding variable vessel
lease contracts that are priced with reference to a freight index, less
cash and cash equivalents (including derivatives that provide an
economic hedge of net debt but excluding the impact of the debit
valuation adjustment on these derivatives). Total capital is calculated
as ‘Net assets’ (as shown in the Consolidated balance sheet)
excluding net debt and variable vessel leases.
20. Net debt
Overview
The disclosures in this note include certain Alternative Performance Measures (APMs). For more information on the APMs used by the Group,
including definitions, please refer to page 270.
The Group has amended its definition of net debt to exclude all variable vessel lease contracts that are priced with reference to a freight index.
These liabilities have been excluded as they are required to be remeasured at each reporting date to the latest spot freight rate, which generates
significant short term volatility in reported values and means that the carrying value of the lease liability is not necessarily consistent with the
average lease payments which are expected to be made over the lease term.
Movement in net debt
US$ million
At 1 January 2020
Short term
borrowings
Medium and
long term
borrowings
(978)
(9,744)
Total
financing
activity
liabilities
(10,722)
Removal of
variable
vessel leases
91
Cash
and cash
equivalents
6,335
Derivatives
hedging
net debt
(239)
Net debt
including
derivatives
(restated)(1)
(4,535)
Acquired through business combinations
(5)
(253)
(258)
—
—
Cash flow
1,487
(2,748)
(1,261)
(51)
1,162
Interest accrued on borrowings
(493)
(58)
(551)
—
20
—
—
634
—
—
(258)
(130)
(551)
—
440
(102)
(394)
(1,055)
1,055
3
(66)
(74)
(197)
(41)
(331)
—
(194)
(107)
(405)
—
—
—
5
—
—
—
—
—
11
(1,181)
(12,317)
(13,498)
1,585
(230)
1,355
45
(168)
7,508
1,809
415
(5,530)
(95)
2,901
(419)
(963)
(4)
(75)
(494)
963
355
—
351
(274)
(536)
(810)
30
219
249
(1,226)
(11,621)
(12,847)
—
—
—
197
—
74
—
—
—
—
(260)
9,057
—
—
(466)
20
—
(494)
—
(115)
(593)
(11)
(126)
(3,842)
Reclassifications
Movement in fair value
Other movements
Currency movements
At 31 December 2020
Cash flow
Interest accrued on borrowings
Reclassifications
Movement in fair value
Other movements
Currency movements
At 31 December 2021
(1)
The Group has amended the definition of net debt during the year to exclude variable vessel leases.
Other movements include $705 million relating to leases entered into in the year ended 31 December 2021 (2020: $227 million).
202 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Net debt and financial risk management
20. Net debt continued
Further information
Reconciliation to the Consolidated balance sheet
US$ million
Balance sheet
Bank overdrafts
Net cash/(debt) classifications
Cash and cash equivalents
Short term borrowings
Medium and
long term borrowings
2021
9,066
(9)
9,057
2020
7,521
(13)
7,508
2021
(1,235)
9
2020
(1,194)
13
2021
(11,621)
2020
(12,317)
—
—
(1,226)
(1,181)
(11,621)
(12,317)
Other
The debit valuation adjustments of $5 million (2020: nil) reduce the valuation of derivative liabilities hedging net debt reflecting the impact of the
Group’s own credit risk. These adjustments are excluded from the Group’s definition of net debt.
Cash and cash equivalents includes $713 million (2020: $357 million) which is restricted. This primarily relates to cash which is required to cover
initial margin on trading exchanges and cash which is held in joint operations where the timing of dividends is jointly controlled by the joint
operators.
Accounting policy
See note 39F for the Group’s accounting policy on cash and debt.
Anglo American plc Integrated Annual Report 2021 203
Financial statements and other financial information
Notes to the financial statements
Net debt and financial risk management
21. Borrowings
Overview
The Group borrows mostly in the capital markets through bonds issued in the US markets and under the Euro Medium Term Note (EMTN)
programme. The Group uses interest rate and cross currency swaps to ensure that the majority of the Group’s borrowings are exposed to floating
rate US dollar interest rates.
In March 2021, the Group issued $500 million 2.250% Senior Notes due 2028 and $500 million 2.875% Senior Notes due 2031 as part of its
routine financing activities.
In April 2021, following the maturity of the last outstanding notes, the Group discontinued its South African Domestic Medium Term Note (DMTN)
programme.
In June 2021, the Group bought back US dollar denominated bonds with maturities in 2025. The Group used $1.0 billion of cash to retire
$0.9 billion of contractual repayment obligations (including derivatives hedging the bonds) maturing in 2025 as part of the funding objective
to reduce near term debt maturities and increase the average maturity of the Group’s bond portfolio.
At 31 December 2021 and 31 December 2020, the following bonds were retained as fixed rate exposures; $193 million 5.375% due April 2025,
$99 million 5% due May 2027, $750 million 5.625% due April 2030, and $500 million 3.95% due September 2050. All other bonds at
31 December 2021 and 31 December 2020 were swapped to floating rate exposures.
Further information
US$ million
Secured
Bank loans and overdrafts
Leases
Other loans
Unsecured
Short term
borrowings
Medium and
long term
borrowings
Total
borrowings
Contractual
repayment at
hedge rates
Short term
borrowings
Medium and
long term
borrowings
Total
borrowings
2021
2020
Contractual
repayment at
hedge rates
22
207
2
231
89
668
—
757
111
875
2
988
111
875
2
988
25
179
—
204
33
364
—
397
58
543
—
601
58
543
—
601
Bank loans and overdrafts
—
180
180
180
252
553
805
805
Bonds issued under EMTN programme
2.5% €241m bond due April 2021
3.5% €433m bond due March 2022
3.25% €750m bond due April 2023
1.625% €600m bond due September 2025
1.625% €500m bond due March 2026
3.375% £300m bond due March 2029
US bonds
4.125% $193m bond due April 2021
4.125% $360m bond due September 2022
3.625% $650m bond due September 2024
5.375% $193m bond due April 2025(1)
4.875% $339m bond due May 2025(1)
4.75% $700m bond due April 2027
5% $99m bond due May 2027(2)
4% $650m bond due September 2027
2.25% $500m bond due March 2028
4.5% $650m bond due March 2028
5.625% $750m bond due April 2030
2.625% $1bn bond due September 2030
2.875% $500m bond due March 2031
3.95% $500m bond due September 2050
Bonds issued under DMTN programme
9.49% R650m bond due April 2021
JIBAR+1.47% R400m bond due April 2021
Mitsubishi facility
Interest payable and other loans
—
495
—
—
—
—
—
363
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
146
—
—
871
695
573
407
—
—
664
192
348
732
113
673
491
702
744
919
499
490
—
495
871
695
573
407
—
363
664
192
348
732
113
673
491
702
744
919
499
490
—
—
1,571
—
—
—
1,571
146
Total borrowings
1,004
10,864
11,868
1,235
11,621
12,856
—
572
1,033
714
566
395
—
360
650
193
339
700
159
650
500
650
750
1,000
500
500
—
—
1,571
146
12,128
13,116
298
—
—
—
—
—
193
—
—
—
—
—
—
—
—
—
—
—
—
—
45
27
—
175
990
1,194
—
553
964
771
635
438
—
369
687
748
698
774
107
712
—
746
743
957
—
498
—
—
967
—
298
553
964
771
635
438
193
369
687
748
698
774
107
712
—
746
743
957
—
498
45
27
967
175
313
572
1,033
714
566
395
193
360
650
750
650
700
159
650
—
650
750
1,000
—
500
44
27
967
175
11,920
12,317
12,910
13,511
12,623
13,224
(1) Outstanding value of bond shown subsequent to bond buyback transactions completed in June 2021.
(2) Bond acquired as part of the acquisition of Sirius Minerals Plc (Crop Nutrients). At maturity the bond will be redeemed at 160% of par value.
Accounting policy
See note 39F for the Group’s accounting policies on bank borrowings and lease liabilities.
204 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Net debt and financial risk management
22. Financial instruments and derivatives
Financial instruments overview
For financial assets and liabilities which are traded on an active market, such as listed investments or listed debt instruments, fair value is
determined by reference to market value. For non-traded financial assets and liabilities, fair value is calculated using discounted cash flows,
considered to be reasonable and consistent with those that would be used by a market participant, and based on observable market data
where available (for example forward exchange rate, interest rate or commodity price curve), unless carrying value is considered to approximate
fair value.
Where discounted cash flow models based on management’s assumptions are used, the resulting fair value measurements are considered to be
at level 3 in the fair value hierarchy, as defined in IFRS 13 Fair Value Measurement, as they depend to a significant extent on unobservable
valuation inputs.
All derivatives that have been designated into hedge relationships have been separately disclosed.
US$ million
Financial assets
Trade and other receivables
Derivative financial assets
Cash and cash equivalents
Financial asset investments
Environmental rehabilitation trusts(1)
Financial liabilities
Trade and other payables
Derivative financial liabilities
Royalty liability
Borrowings
Net financial assets/(liabilities)
US$ million
Financial assets
Trade and other receivables
Derivative financial assets
Cash and cash equivalents
Financial asset investments
Environmental rehabilitation trusts(1)
Financial liabilities
Trade and other payables
Derivative financial liabilities
Royalty liability
Borrowings
Net financial assets/(liabilities)
At fair value
through profit
and loss
Financial
assets at
amortised cost
At fair value
through other
comprehensive
income
Designated
into hedges
Financial
liabilities at
amortised cost
2,565
176
6,805
60
110
9,716
(1,104)
(452)
—
—
(1,556)
8,160
1,200
—
2,261
127
3
3,591
—
—
—
—
—
—
—
—
182
—
182
—
—
—
—
—
3,591
182
—
267
—
—
—
267
—
(77)
—
(8,542)
(8,619)
(8,352)
At fair value
through profit
and loss
Financial
assets at
amortised cost
At fair value
through other
comprehensive
income
Designated
into hedges
Financial
liabilities at
amortised cost
2,173
175
6,336
33
284
9,001
(723)
(380)
—
—
(1,103)
7,898
1,121
—
1,185
207
17
2,530
—
—
—
—
—
—
—
—
131
—
131
—
—
—
—
—
2,530
131
—
567
—
—
—
567
—
(26)
—
(8,953)
(8,979)
(8,412)
(5,271)
—
(382)
(4,314)
(9,967)
(9,967)
(6,375)
(529)
(382)
(12,856)
(20,142)
(6,386)
2021
Total
3,765
443
9,066
369
113
13,756
2020
Total
3,294
742
7,521
371
301
12,229
—
—
—
—
—
—
—
—
—
—
—
—
(4,774)
(5,497)
—
(340)
(4,558)
(9,672)
(9,672)
(406)
(340)
(13,511)
(19,754)
(7,525)
(1) These funds are not available for the general purposes of the Group. All income from these assets is reinvested to meet specific environmental obligations. These obligations are included in
provisions as per note 15.
The Group’s cash and cash equivalents at 31 December 2021 include $6,805 million (2020: $6,336 million) held in high grade money market
funds. These funds are selected to ensure compliance with the minimum credit rating requirements and counterparty exposure limits set out in
the Group’s Treasury policy.
Anglo American plc Integrated Annual Report 2021 205
Financial statements and other financial information
Notes to the financial statements
Net debt and financial risk management
22. Financial instruments and derivatives continued
Fair value hierarchy
An analysis of financial assets and liabilities carried at fair value is set out below:
US$ million
Financial assets
At fair value through profit and loss
Provisionally priced trade receivables
Other receivables
Derivatives hedging net debt
Other derivatives
Cash and cash equivalents
Financial asset investments
Environmental rehabilitation trusts(1)
Designated into hedges
Derivatives hedging net debt
At fair value through other comprehensive income
Financial asset investments
Financial liabilities
At fair value through profit and loss
Provisionally priced trade payables
Other payables
Derivatives hedging net debt
Other derivatives
Debit valuation adjustment to derivative liabilities
Designated into hedges
Derivatives hedging net debt
Level 1
Level 2
Level 3
—
—
—
—
6,805
—
—
—
1,786
—
12
164
—
56
110
267
—
779
—
—
—
4
—
—
2021
Total
1,786
779
12
164
60
110
267
Level 1
Level 2
Level 3
—
—
—
8
—
198
1,547
—
79
88
—
31
86
—
567
—
626
—
—
—
2
—
—
2020
Total
1,547
626
79
96
6,336
33
284
567
6,805
6,336
135
6,940
—
47
182
2,395
830
10,165
108
6,650
—
2,398
23
651
131
9,699
—
—
—
—
—
—
—
(640)
—
—
(464)
(328)
(129)
5
(77)
—
—
—
—
(640)
(464)
(328)
(129)
5
(77)
(1,169)
(464)
(1,633)
—
—
—
(1)
—
—
(1)
(288)
—
—
(435)
(205)
(174)
—
(26)
—
—
—
—
(288)
(435)
(205)
(175)
—
(26)
(693)
(435)
(1,129)
Net assets carried at fair value
6,940
1,226
366
8,532
6,649
1,705
216
8,570
(1) These funds are not available for the general purposes of the Group. All income from these assets is reinvested to meet specific environmental obligations. These obligations are included in
provisions as per note 15.
Fair value hierarchy Valuation technique
Level 1
Level 2
Level 3
Valued using unadjusted quoted prices in active markets for identical financial instruments. This category includes cash and cash
equivalents held in money market funds, listed equity shares and quoted futures.
Instruments in this category are valued using valuation techniques where all of the inputs that have a significant effect on the
valuation are directly or indirectly based on observable market data. This category includes provisionally priced trade receivables
and payables and over-the-counter derivatives.
Instruments in this category have been valued using a valuation technique where at least one input (which could have a significant
effect on the instrument’s valuation) is not based on observable market data. Where inputs can be observed from market data
without undue cost and effort, the observed input is used. Otherwise, management determines a reasonable estimate for the
input. This category includes contingent consideration, receivables relating to disposals, unlisted equity investments and the
embedded derivative relating to the Royalty liability.
The movements in the fair value of the level 3 financial assets and liabilities are shown as follows:
US$ million
At 1 January
Net profit/(loss) recorded in the income statement
Net profit recorded in the statement of comprehensive income
Reclassification to/(from) level 3 financial assets
Settlements and disposals
Currency movements
At 31 December
2021
651
439
1
44
(239)
(66)
830
Assets
2020
369
492
5
(26)
(207)
18
651
2021
(435)
(174)
—
—
116
29
(464)
Liabilities
2020
(178)
(271)
—
—
36
(22)
(435)
206 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Net debt and financial risk management
22. Financial instruments and derivatives continued
For the level 3 financial assets and liabilities, changing certain estimated inputs to reasonably possible alternative assumptions would impact the
fair value as follows:
Level 3 fair value sensitivities
Rustenburg Mine (Platinum Group Metals)
Deferred consideration of $510 million (2020: $474 million) is calculated as 35% of the distributable free cash flows generated by Sibanye-
Stillwater’s Rustenburg Mine over a six year period from inception in November 2016, subject to a minimum receipt of $0.2 billion. The discount
rate used in the calculation is 9.54% (2020: 8.49%). The movement for the current period relates to changes in the forecast cash flows driven by
fluctuations in PGM prices and in the ZAR:USD exchange rate.
Union Mine (Platinum Group Metals)
Deferred consideration of $214 million (2020: $120 million) is calculated as 35% of the positive distributable free cash flows generated by
Union Mine over an eleven year period from inception in February 2018. If the cumulative deferred consideration is negative at the end of the
eleven year period, Anglo American Platinum will be obligated to repay Siyanda Resources Proprietary Limited the cumulative deferred
consideration received. Based on forecasts the cumulative deferred consideration is positive. The discount rate used in the calculation is 15.88%
(2020: 15.16%). The movement for the period relates to increases in PGM prices and fluctuations in the ZAR:USD exchange rate.
Mototolo Mine (Platinum Group Metals)
Deferred consideration of $342 million (2020: $357 million) is payable monthly over a period of 72 months from the effective date of acquisition
in November 2018 in monthly instalments, as well as annual top-up payments where applicable. The deferred consideration is remeasured
based on the actual PGM 4E prices realised over the deferred consideration period. The maximum amount payable is limited to $1.4 billion. The
discount rate used in the calculation is 7.98% (2020: 6.70%). The movement for the period relates to increases in PGM prices and fluctuations in
the ZAR:USD exchange rate and has been recognised within finance costs due to the linkage to price rather than operational performance of the
mine. Movements in the consideration payable have not been recognised as a special item as the income statement impact of the initial
transaction was below the Group threshold for special item classification.
US$ million
Deferred consideration/financial assets
Rustenburg deferred consideration
10% change in exchange rates
Reduction in profit or loss
Increase to profit or loss
10% change in PGM prices
Reduction in profit or loss
Increase to profit or loss
Union Mine deferred consideration
10% change in exchange rates
Reduction in profit or loss
Increase to profit or loss
10% change in PGM prices
Reduction in profit or loss
Increase to profit or loss
Deferred consideration/financial liabilities
Mototolo deferred consideration
10% change in PGM prices
Reduction in profit or loss
Increase to profit or loss
10% change in exchange rates
Reduction in profit or loss
Increase to profit or loss
2021
2020
38
38
36
36
4
4
4
4
34
34
34
34
71
71
71
71
46
51
46
51
45
45
45
45
Further information on financial instruments
Borrowings designated in fair value hedges represent listed debt which is held at amortised cost, adjusted for the fair value of the hedged interest
rate risk. The fair value of these borrowings is $8,820 million (2020: $9,340 million), which is measured using quoted indicative broker prices and
consequently categorised as level 2 in the fair value hierarchy. The carrying value of the remaining borrowings at amortised cost includes bonds
which are not designated into hedge relationships, bank borrowings and lease liabilities. The carrying value of these bonds is $1,571 million
(2020: $2,150 million) and the fair value is $1,812 million (2020: $2,606 million). The carrying value of the remaining borrowings at amortised
cost are considered to approximate the fair value.
Offsetting of financial assets and liabilities
The Group offsets financial assets and liabilities and presents them on a net basis in the Consolidated balance sheet only where there is a legally
enforceable right to offset the recognised amounts, and the Group intends to either settle the recognised amounts on a net basis or to realise the
asset and settle the liability simultaneously.
Anglo American plc Integrated Annual Report 2021 207
Financial statements and other financial information
Notes to the financial statements
Net debt and financial risk management
22. Financial instruments and derivatives continued
At 31 December 2021, certain over-the-counter derivatives entered into by the Group and recognised at fair value through profit and loss are
both subject to enforceable ISDA master netting arrangements and intended to be settled on a net basis. In accordance with the requirements
of IAS 32 Financial Instruments: Presentation, the positions of these derivatives have been offset; those in a liability position totalling $10 million
(2020: $16 million) were offset against those in an asset position totalling $321 million (2020: $665 million). The net asset position of $311 million
(2020: $649 million) is presented within derivative assets (2020: within derivative assets) in the Consolidated balance sheet.
If certain credit events (such as default) were to occur, additional derivative instruments would be settled on a net basis under ISDA agreements.
Interest rate and cross currency interest rate swaps in an asset position totalling $234 million (2020: $210 million liability position) would be
offset against those in a liability position totalling $410 million (2020: $645 million asset position). These instruments are presented on a gross
basis in the Consolidated balance sheet as the Group does not have a legally enforceable right to offset the amounts in the absence of a credit
event occurring.
Royalty liability
The Hancock royalty liability and related embedded derivative were recognised when the Group acquired the Woodsmith project in 2020. Future
royalty payments will vary based on the actual revenues achieved by the Woodsmith project. This uncertainty over future cash flows represents
an embedded derivative. This derivative is measured at fair value and calculated as the value of all differences in expected royalty payments at
the period end date compared to expected royalty payments on initial recognition of the liability, discounted using the effective interest rate of the
host liability. At 31 December 2021, the embedded derivative has a negligible value. The embedded derivative has been designated in a
cashflow hedge with the future revenue transactions. In subsequent periods any fair value gains or losses on the derivative will be presented
within other comprehensive income and accumulate in the cashflow hedge reserve before being recycled to the income statement as revenue is
recognised.
The royalty liability does not form part of borrowings on the basis that obligations to make cash payments against this liability only arise when the
Woodsmith project generates revenues, and that otherwise the Group is not currently contractually liable to make any payments under this
arrangement (other than in the event of Anglo American Woodsmith Limited’s insolvency).
Derivatives overview
The Group utilises derivative instruments to manage certain market risk exposures; however, it may choose not to designate certain derivatives as
hedges for accounting purposes. Such derivatives are classified as ‘Held for trading’ and fair value movements are recorded in the Consolidated
income statement.
The use of derivative instruments is subject to limits and the positions are regularly monitored and reported to senior management.
Fair value hedges
In accordance with the Group’s policy, interest rate swaps are taken out to swap the Group’s fixed rate borrowings to floating rate. These have
been designated as fair value hedges. The carrying value of the hedged debt is adjusted at each balance sheet date to reflect the impact on
its fair value of changes in market interest rates. At 31 December 2021, this adjustment was to increase the carrying value of borrowings by
$106 million (2020: $458 million increase). Changes in the fair value of the hedged debt are offset against fair value changes in the interest rate
swap and recognised in the Consolidated income statement as financing remeasurements. Recognised in the Consolidated income statement
is a gain on fair value hedged items of $351 million (2020: $194 million loss), offset by a loss on fair value hedging instruments of $357 million
(2020: $188 million gain).
Held for trading
The Group may choose not to designate certain derivatives as hedges. This may occur where the Group is economically hedged but IFRS 9
Financial Instruments hedge accounting cannot be achieved or where gains and losses on both the derivative and hedged item naturally offset
in the Consolidated income statement, as is the case for certain cross currency swaps of non-US dollar debt. A fair value loss of $196 million in
respect of these cross currency swaps has been recognised in the Consolidated income statement (2020: gain of $462 million) and is presented
within financing remeasurements net of foreign exchange gains on the related borrowings of $202 million (2020: $435 million loss). Fair value
changes on held for trading derivatives are recognised in the Consolidated income statement as remeasurements or within underlying earnings
in accordance with the policy set out in note 8.
208 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Net debt and financial risk management
22. Financial instruments and derivatives continued
Further information on derivatives
Fair value of derivative positions
The fair value of the Group’s open derivative positions at 31 December (excluding normal purchase and sale contracts held off balance sheet)
recorded within ‘Derivative financial assets’ and ‘Derivative financial liabilities’, is as follows:
US$ million
Derivatives hedging net debt
Fair value hedge
Interest rate swaps
Held for trading
Forward foreign currency contracts
Cross currency swaps
Debit valuation adjustment to derivative liabilities
Other derivatives
Total derivatives
2021
Current
2020
2021
Non-current
2020
Asset
Liability
Asset
Liability
Asset
Liability
Asset
Liability
23
—
—
—
23
164
187
—
—
(88)
5
(83)
(129)
(212)
9
—
—
—
9
96
105
—
244
(77)
558
(26)
(20)
(19)
—
(39)
(175)
(214)
—
12
—
256
—
256
—
(240)
—
(317)
—
(317)
—
79
—
637
—
637
—
(166)
—
(192)
—
(192)
Other derivatives primarily relate to forward foreign currency contracts hedging capital expenditure, forward commodity contracts and other
commodity contracts that are accounted for as ‘Held for trading’. These marked to market valuations are not predictive of the future value of
the hedged position, nor of the future impact on the profit of the Group. The valuations represent the cost of closing all hedge contracts at
31 December, at market prices and rates available at the time.
Interest Benchmark Reform
Benchmark transition progress
The Group has continued its transition to alternative interest risk-free rates in the year as a result of interest rate benchmark reform. Further details
of the Group’s transition is included in note 39F. At 31 December 2021, the Group held the below financial instruments which have not been
transitioned to alternative risk-free benchmarks:
US$ million
Financial assets
Derivative financial assets
Financial liabilities
Derivative financial liabilities
Borrowings
Total assets and liabilities exposed to USD LIBOR
2021
USD LIBOR
Not presently
transitioned
to alternative
risk-free rate
Carrying
value
176
176
(400)
(1,723)
(1,947)
(400)
(1,723)
(1,947)
At 31 December 2021, the Group held undrawn committed borrowing facilities totalling $4.7 billion with reference to USD LIBOR. The notional
amount of derivatives in hedging relationships yet to be transitioned to alternative risk-free rates at 31 December 2021 was $5.3 billion
(2020: $5.3 billion). During the year, the Group completed the transition of GBP LIBOR financial instruments to SONIA in advance of its cessation
on 31 December 2021 with no impact to Derivative financial liabilities and Borrowings, for details of the instruments affected please see note 21.
Accounting judgements
Fair value of financial instruments
Certain of the Group’s financial instruments, principally derivatives, are required to be measured on the balance sheet at fair value. Where a
quoted market price for an identical instrument is not available, a valuation model is used to estimate the fair value based on the net present
value of the expected cash flows under the contract. Valuation assumptions are usually based on observable market data (for example forward
foreign exchange rate, interest rate or commodity price curves) where available.
Accounting policies
See notes 39D and 39F for the Group’s accounting policies on financial asset investments, impairment of financial assets, derivative financial
instruments and hedge accounting.
Anglo American plc Integrated Annual Report 2021 209
Financial statements and other financial information
Notes to the financial statements
Net debt and financial risk management
23. Financial risk management
Overview
The Board approves and monitors the risk management processes, including documented treasury policies, counterparty limits and controlling
and reporting structures. The risk management processes of the Group’s independently listed subsidiaries are in line with the Group’s own policy.
The types of risk exposure, the way in which such exposure is managed and quantification of the level of exposure in the Consolidated balance
sheet at 31 December is as follows:
– liquidity risk
– credit risk
– commodity price risk
– foreign exchange risk
– interest rate risk.
A. Liquidity risk
The Group ensures that there are sufficient committed loan facilities (including refinancing, where necessary) in order to meet short term business
requirements, after taking into account cash flows from operations and its holding of cash and cash equivalents, as well as any Group distribution
restrictions that exist. In addition, certain projects may be financed by means of limited recourse project finance, if appropriate.
Certain borrowing facilities within the Group are the subject of financial covenants that vary from facility to facility, but which would be considered
normal for such facilities, such as the ratio of debt to tangible net worth. The respective borrowers remain in compliance with these financial
covenants at 31 December 2021.
The expected undiscounted cash flows of the Group’s financial liabilities, by remaining contractual maturity, based on conditions existing at the
balance sheet date, are as follows:
US$ million
Net financial liabilities
Borrowings
Expected future interest payments
Derivatives hedging debt – net settled
Derivatives hedging debt – gross settled:
– gross inflows
– gross outflows
Other financial liabilities
Total
US$ million
Net financial liabilities
Borrowings
Expected future interest payments
Derivatives hedging debt – net settled
Derivatives hedging debt – gross settled:
– gross inflows
– gross outflows
Other financial liabilities
Total
Amount due for
repayment
within one year
Greater than
one year, less
than two
years
Greater than
two years, less
than three
years
Greater than
three years,
less than four
years
Greater than
four years, less
than five years
Greater than
five years
2021
Total
(1,076)
(393)
14
1,295
(1,418)
(6,145)
(7,723)
(968)
(357)
15
865
(1,070)
(107)
(728)
(325)
15
9
(26)
(110)
(1,318)
(285)
15
689
(736)
(17)
(750)
(258)
15
569
(569)
(11)
(7,817)
(12,657)
(1,156)
(2,774)
60
—
—
(303)
134
3,427
(3,819)
(6,693)
(1,622)
(1,165)
(1,652)
(1,004)
(9,216)
(22,382)
Amount due for
repayment
within one year
Greater than
one year, less
than two
years
Greater than
two years, less
than three years
Greater than
three years, less
than four years
Greater than
four years, less
than five years
Greater than
five years
(1,028)
(1,078)
(1,307)
(442)
(420)
(376)
(777)
(326)
(2,166)
(265)
(6,468)
(1,192)
2
3
3
545
(599)
(120)
928
(1,045)
(91)
(74)
3
—
—
3
—
—
—
22
—
—
(200)
993
(1,050)
(5,335)
(6,860)
(1,669)
(1,888)
(1,174)
(2,428)
(7,838)
(21,857)
2020
Total
(12,824)
(3,021)
36
2,466
(2,694)
(5,820)
The table above does not include cash flows in relation to the Woodsmith royalty financing on the basis that cash flows under this arrangement
are not contractually defined, but instead are wholly dependent upon Woodsmith revenue in future years. However, should the Woodsmith
primary subsidiary, Anglo American Woodsmith Limited, enter insolvency, then it would be required to repay Hancock the principal value of
$250 million upon its request.
210 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Net debt and financial risk management
23. Financial risk management continued
The Group had the following undrawn committed borrowing facilities at 31 December:
US$ million
Expiry date
Within one year
Greater than one year, less than two years
Greater than two years, less than three years
Greater than three years, less than four years
Greater than four years, less than five years
Greater than five years
2021
2020
209
1,092
1,520
4,885
326
9
8,041
2,228
615
1,453
916
4,718
47
9,977
The Group has an undrawn $4.7 billion revolving credit facility due to mature in March 2025.
In April 2020, the Group signed a new $2.0 billion revolving credit facility with an initial maturity date of April 2021. After the Group’s $1.0 billion
bond issuance in March 2021 the Group issued a notice of cancellation for the facility which became effective in March 2021 and accordingly
this facility is no longer available.
On 14 December 2021, the Group cancelled its $0.2 billion bilateral facility. At the same date, it increased a $4.5 billion revolving credit facility
maturing March 2025 by $0.2 billion to $4.7 billion.
B. Credit risk
Credit risk is the risk that a counterparty to a financial instrument will cause a loss to the Group by failing to pay its obligation.
The Group’s principal financial assets are cash, trade and other receivables, investments and derivative financial instruments. The Group’s
maximum exposure to credit risk primarily arises from these financial assets and is as follows:
US$ million
Cash and cash equivalents
Trade and other receivables
Financial asset investments
Derivative financial assets
Environmental rehabilitation trust
2021
9,066
3,765
187
443
113
2020
7,521
3,294
240
742
209
13,574
12,006
The Group limits credit risk on liquid funds and derivative financial instruments through diversification of exposures with a range of financial
institutions. Counterparty limits are set for each financial institution with reference to credit ratings assigned by Standard & Poor’s, Moody’s and
Fitch Ratings, shareholder equity (in case of relationship banks) and fund size (in case of asset managers).
Given the diverse nature of the Group’s operations (both in relation to commodity markets and geographically), and the use of payment security
instruments (including letters of credit from financial institutions), it does not have significant concentration of credit risk in respect of trade
receivables, with exposure spread over a large number of customers.
The classification of trade and other receivables excludes prepayments and tax receivables, the classification of financial asset investments
excludes equity investments held at fair value through other comprehensive income.
C. Commodity price risk
The Group’s earnings are exposed to movements in the prices of the commodities it produces.
The Group’s policy is to sell its products at prevailing market prices and is generally not to hedge commodity price risk, although some hedging
may be undertaken for strategic reasons. In such cases, the Group generally uses forward contracts and other derivative instruments to
economically hedge the price risk.
Certain of the Group’s sales and purchases are provisionally priced, meaning that the selling price is determined normally 30 to 180 days after
delivery to the customer, based on quoted market prices stipulated in the contract, and as a result are susceptible to future price movements.
The exposure of the Group’s financial assets and liabilities to commodity price risk is as follows:
US$ million
Total net financial instruments
(excluding derivatives)
Derivatives
Commodity price linked
Subject to
price
movements
Fixed price
Not linked to
commodity
price
2021
Total
2020(restated)(1)
Commodity price linked
Subject to
price
movements
Fixed price
Not linked to
commodity
price
Total
1,360
40
1,400
452
—
452
(8,112)
(6,300)
1,321
398
(9,580)
(7,861)
(126)
(86)
(80)
(5)
421
336
(8,238)
(6,386)
1,241
393
(9,159)
(7,525)
(1) The table has been restated to include environmental rehabilitation trusts of $301 million in the financial instruments not linked to commodity price category, and the presentation of financial
instruments subject to price movements has been corrected via the reclassification of $211 million from fixed price of $80 million and not linked to commodity prices of $131 million.
Commodity price linked financial instruments subject to price movements include provisionally priced trade receivables and trade payables.
Commodity price linked financial instruments at fixed price include receivables and payables for commodity sales and purchases no longer
subject to price adjustment at the balance sheet date.
Anglo American plc Integrated Annual Report 2021 211
Financial statements and other financial information
Notes to the financial statements
Net debt and financial risk management
23. Financial risk management continued
D. Foreign exchange risk
As a global business, the Group is exposed to many currencies principally as a result of non-US dollar operating costs and, to a lesser extent, from
non-US dollar revenue.
The South African rand, Chilean peso, Brazilian real and Australian dollar are the most significant non-US dollar currencies influencing costs.
A strengthening of the US dollar against the currencies to which the Group is exposed has a positive effect on the Group’s earnings. The Group’s
policy is generally not to hedge such exposures given the correlation, over the longer term, with commodity prices and the diversified nature of the
Group, although exceptions can be approved by a committee with delegated authority from the Group Management Committee.
In addition, currency exposures exist in respect of non-US dollar capital expenditure projects and non-US dollar borrowings in US dollar functional
currency entities. The Group’s policy is to evaluate whether or not to hedge its non-US dollar capital expenditure on a case-by-case basis, taking
into account the estimated foreign exchange exposure, liquidity of foreign exchange markets and the cost of executing a hedging strategy.
Further detail with respect to the Group’s non-US dollar borrowings approach is included in note 21.
Net other financial liabilities (excluding net debt related balances, variable vessel leases and cash in disposal groups, but including the debit
valuation adjustment attributable to derivatives hedging net debt) are $2,470 million. This includes net liabilities of $108 million denominated in
US dollars, $298 million denominated in Brazilian real, $362 million denominated in Australian dollars, $491 million denominated in Chilean pesos
and $751 million denominated in South African rand.
E. Interest rate risk
Interest rate risk arises due to fluctuations in interest rates which impact the value of short term investments and financing activities. The Group
is principally exposed to US and South African interest rates.
USD LIBOR is expected to be replaced by an alternative risk-free rate by June 2023. The Group is managing the transition to alternative risk-free
rates with respect to its hedging arrangements and any future transactions in the financial market. Please see note 39F for further details.
The Group’s policy is to borrow funds at fixed rates of interest. The Group uses interest rate contracts to convert the majority of borrowings to
floating rates of interest and manage its exposure to interest rate movements on its debt.
In respect of financial assets, the Group’s policy is to invest cash at floating rates of interest and to maintain cash reserves in short term
investments (less than one year) in order to maintain liquidity.
Analysis of interest rate risk associated with net debt balances and the impact of derivatives to hedge against this risk is included within the
table below. Net other financial liabilities (excluding net debt related balances, variable vessel leases and cash in disposal groups, but including
the debit valuation adjustment attributable to derivatives hedging net debt) of $2,470 million (2020 (restated (see note 22)):
$1,950 million) are primarily non-interest bearing.
The table below reflects the exposure of the Group’s net debt to currency and interest rate risk:
US$ million
US dollar
Euro
South African rand
Brazilian real
Australian dollar
Sterling
Other
Impact of interest rate derivatives
Total
Reconciliation:
Variable vessel leases
Net debt
US$ million
US dollar
Euro
South African rand
Brazilian real
Australian dollar
Sterling
Other
Impact of interest rate derivatives
Total
Reconciliation:
Variable vessel leases
Net debt
212 Anglo American plc Integrated Annual Report 2021
Cash
and cash
equivalents
7,636
32
695
244
108
19
323
—
Floating rate
borrowings
Fixed rate
borrowings
Derivatives
hedging
net debt
Impact of
currency
derivatives
(1,847)
—
(7)
—
—
(7)
—
(7,265)
(2,681)
(133)
(24)
(77)
(753)
(53)
(8,542)
8,542
(126)
—
—
—
—
—
—
—
(126)
(3,097)
2,679
—
—
—
418
—
—
—
9,057
(10,403)
(2,444)
Cash
and cash
equivalents
6,801
16
206
78
151
49
207
—
Floating rate
borrowings
Fixed rate
borrowings
(1,102)
—
(542)
—
—
(7)
—
(8,953)
(7,732)
(3,276)
(169)
(29)
(48)
(549)
(44)
8,953
Derivatives
hedging
net debt
414
—
1
—
—
—
—
—
7,508
(10,604)
(2,894)
415
Impact of
currency
derivatives
(3,722)
3,273
—
—
—
449
—
—
—
2021
Total
(4,699)
30
555
220
31
(323)
270
—
(3,916)
74
(3,842)
2020
Total
(5,341)
13
(504)
49
103
(58)
163
—
(5,575)
45
(5,530)
Financial statements and other financial information
Notes to the financial statements
Net debt and financial risk management
23. Financial risk management continued
Based on the net foreign currency and interest rate risk exposures detailed above, and taking into account the effects of the hedging
arrangements in place, management considers that earnings and equity are not materially sensitive to reasonable foreign exchange or interest
rate movements in respect of the financial instruments held as at 31 December 2021 or 2020.
Anglo American plc Integrated Annual Report 2021 213
Financial statements and other financial information
Notes to the financial statements
Equity
Equity represents the capital of the Group
attributable to Company shareholders and
non-controlling interests, and includes share
capital, share premium and reserves.
Total equity has increased from $32.8 billion to $34.8 billion in the
year, principally reflecting the profit for the year, partially offset by
cancellation of shares and dividends to Company shareholders and
non-controlling interests of $6.9 billion.
Total equity
$34.8 bn
(2020: $32.8 bn)
24. Called-up share capital and consolidated equity analysis
Called-up share capital
Ordinary shares of 5486/91 US cents each:
At 1 January
Shares cancelled(1)
At 31 December
Number of shares
US$ million
Number of shares
US$ million
2021
2020
1,363,118,080
749
1,371,602,399
(21,466,105)
(12)
(8,484,319)
1,341,651,975
737
1,363,118,080
753
(4)
749
(1) During the year, 21,466,105 shares were cancelled under the buyback programme. In 2020, 8,484,319 shares were purchased and cancelled under the 2019 buyback programme approved
at the 2019 annual general meeting.
The number and carrying value of called-up, allotted and fully paid ordinary shares as at 31 December 2021 (including the shares held by the
Group in other structures, as outlined below) was 1,341,651,975 and $737 million (2020: 1,363,118,080 and $749 million).
At general meetings, every member who is present in person has one vote on a show of hands and, on a poll, every member who is present in
person or by proxy has one vote for every ordinary share held.
Own shares
Own shares
Number of shares
US$ million
Number of shares
US$ million
2021
2020
Own shares held by subsidiaries and employee benefit trusts
Total
123,430,969
123,430,969
6,141
124,361,049
6,141
124,361,049
6,107
6,107
Included in Own shares are 112,300,129 (2020: 112,300,129) Anglo American plc shares held by Epoch Investment Holdings (RF) Proprietary
Limited, Epoch Two Investment Holdings (RF) Proprietary Limited and Tarl Investment Holdings (RF) Proprietary Limited, which are consolidated
by the Group by virtue of their contractual arrangements with Tenon Investment Holdings Proprietary Limited, a wholly owned subsidiary of
Anglo American South Africa Proprietary Limited. Further details of these arrangements are provided in note 39B.
Included in the calculation of the dividend payable are 5,916,158 ($241 million) shares held in the Employee Benefit Trust in respect of forfeitable
share awards granted to certain employees. Under the terms of these awards, the shares are beneficially owned by the respective employees,
who are entitled to receive dividends in respect of the shares. The shares are released to the employees on vesting of the awards, and any shares
that do not vest are returned to the Company or the Employee Benefit Trust. These shares are recognised on the Consolidated balance sheet
within Own shares and are excluded from the calculation of basic earnings per share. They are included in the calculation of diluted earnings per
share to the extent that the related share awards are dilutive (see note 3).
214 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Equity
24. Called-up share capital and consolidated equity analysis continued
Consolidated equity analysis
Fair value and other reserves comprise:
US$ million
At 1 January 2020
Other comprehensive income
Equity settled share-based payment schemes
Cancellation of treasury shares
Other
At 31 December 2020
Other comprehensive loss
Equity settled share-based payment schemes
Cancellation of treasury shares
Other
At 31 December 2021
Share-based
payment
reserve
431
—
21
—
(1)
451
—
15
—
(6)
460
Financial
asset
revaluation
reserve
(3)
49
—
—
(5)
41
(8)
—
—
(2)
31
Other
reserves
142
Total
fair value
and other
reserves
570
—
—
4
(2)
144
—
—
12
4
49
21
4
(8)
636
(8)
15
12
(4)
160
651
Other reserves comprise a capital redemption reserve of $150 million (2020: $138 million) and other reserves.
25. Non-controlling interests
Overview
Non-controlling interests that are material to the Group relate to the following subsidiaries:
– De Beers Plc (De Beers) is a company incorporated in Jersey. It is one of the world’s leading diamond companies with operations across all key
parts of the diamond value chain. Non-controlling interests hold a 15% (2020: 15%) interest in De Beers, which represents the whole of the
Diamonds reportable segment.
– Anglo American Sur S.A. (Anglo American Sur) is a company incorporated in Chile. Its principal operations are the Los Bronces and El Soldado
copper mines and the Chagres smelter, which are located in Chile. Non-controlling interests hold a 49.9% (2020: 49.9%) interest in
Anglo American Sur.
– Anglo American Platinum Limited (Anglo American Platinum) is a company incorporated in South Africa and listed on the JSE. Its principal
mining operations are the Mogalakwena and Amandelbult platinum group metals mines, which are located in South Africa. Non-controlling
interests hold an effective 20.8% (2020: 19.2%) interest in the operations of Anglo American Platinum, which represents the whole of the
Platinum Group Metals reportable segment.
– Kumba Iron Ore Limited (Kumba Iron Ore) is a company incorporated in South Africa and listed on the JSE. Its principal mining operations are
the Sishen and Kolomela iron ore mines, which are located in South Africa. Non-controlling interests hold an effective 46.6% (2020: 46.6%)
interest in the operations of Kumba Iron Ore, comprising the 30.0% (2020: 30.0%) interest held by other shareholders in Kumba Iron Ore and
the 23.7% (2020: 23.7%) of Kumba Iron Ore’s principal operating subsidiary, Sishen Iron Ore Company Proprietary Limited, that is held by
shareholders outside the Group.
US$ million
Underlying earnings attributable to
De Beers
Anglo
American
Sur
Anglo
American
Platinum
Kumba
Iron Ore
Other
Total
De Beers
Anglo
American
Sur
Anglo
American
Platinum
Kumba
Iron Ore
Other
Total
2021
2020
non-controlling interests
58
582
1,045
1,394
1
3,080
(28)
82
288
834
(9) 1,167
Profit/(loss) attributable to
non-controlling interests
Dividends paid to non-controlling
53
574
1,125
1,388
(3) 3,137
(37)
82
372
849
(27) 1,239
interests
(9)
(458)
(808) (1,535)
(28) (2,838)
(8)
(38)
(181)
(429)
(12)
(668)
Balance sheet information:
Equity attributable to
non-controlling interests
1,365
1,618
1,338
1,665
959
6,945
1,364
1,525
1,035
1,937
1,081
6,942
Anglo American plc Integrated Annual Report 2021 215
Financial statements and other financial information
Notes to the financial statements
Equity
25. Non-controlling interests continued
Further information
Summarised financial information on a 100% basis and before inter-company eliminations for De Beers, Anglo American Sur, Anglo American
Platinum and Kumba Iron Ore is as follows:
US$ million
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
Revenue(1)
Profit/(loss) for the financial year(2)
Total comprehensive income/(expense)
Net cash inflow from operating activities
2021
2020
Anglo
American
Sur
4,316
Anglo
American
Platinum
6,000
Kumba
Iron Ore
3,133
Anglo
American
Sur
4,186
Anglo
American
Platinum
5,903
Kumba
Iron Ore
3,155
De Beers
8,853
De Beers
8,430
4,475
1,596
6,460
2,061
4,236
1,414
5,198
2,541
(806) (1,121) (3,587)
(631)
(643)
(865) (3,218)
(533)
(2,429) (1,545) (1,596)
(856)
(2,712) (1,676) (1,592)
(874)
9,670
3,246
7,277
3,707
9,734
3,059
6,291
4,289
5,591
3,724
14,502
6,944
3,371
2,382
6,604
4,880
317
1,149
5,398
2,983
(86) 1,173
4,736
2,688
(235)
(294)
164
1,891
1,816
152
1,881
1,784
1,163
1,682
6,698
3,366
35
524
1,358
1,804
(1) Third-party trading amounts restated from a gross to a net presentation in 2020. See note 7 for further details.
(2) Stated after special items and remeasurements.
216 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Employees
This section contains information about the
Group’s current and former employees as
well as the associated cost of employment
and post employment benefits incurred by
the Group.
26. Employee numbers and costs
The Group had on average 62,000 employees during 2021,
down 2,000 since the prior year.
Employees
62,000
(2020: 64,000)
Employee numbers
The average number of employees, excluding contractors and associates’ and joint ventures’ employees and including a proportionate
share of employees within joint operations, by segment was:
Thousand
De Beers
Copper
Nickel
Platinum Group Metals
Iron Ore
Metallurgical Coal
Crop Nutrients
Corporate and other
2021
8
2020
(restated)(1)
9
5
1
31
9
2
1
5
62
4
1
32
9
2
—
7
64
(1) Comparative totals remain unchanged from what was reported in 2020. Figures have been restated in line with the Group reassessment of its reportable segments, see note 2 for further
details.
The average number of employees, excluding contractors and associates’ and joint ventures’ employees and including a proportionate share of
employees within joint operations, by principal location of employment was:
Thousand
South Africa
Other Africa
South America
North America
Australia and Asia
Europe
Employee costs
Payroll costs in respect of the employees included in the tables above were:
US$ million
Wages and salaries
Social security costs
Post employment benefits
Share-based payments
Total payroll costs
Reconciliation:
Less: Employee costs capitalised
Less: Employee costs included within special items
Employee costs included in operating costs
2021
41
2020
45
5
9
1
3
3
5
8
1
3
2
62
64
2021
3,142
197
268
189
2020
2,799
145
254
167
3,796
3,365
(193)
—
3,603
(159)
(26)
3,180
Post employment benefits include contributions to defined contribution pension and medical plans, current and past service costs related to
defined benefit pension and medical plans and other benefits provided to certain employees during retirement.
Anglo American plc Integrated Annual Report 2021 217
Financial statements and other financial information
Notes to the financial statements
Employees
26. Employee numbers and costs continued
Key management
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the
Group, directly or indirectly, including any director (executive and non-executive) of the Group. Key management comprises members of the
Board and the Group Management Committee.
Compensation for key management was as follows:
US$ million
Salaries and short term employee benefits
Social security costs
Post employment benefits
Share-based payments
2021
28
11
3
21
63
2020
30
11
3
23
67
Disclosure of directors’ emoluments, pension entitlements, share options and long term incentive plan awards required by the Companies Act
2006 and those specified for audit by Part 3 and Schedule 8 of the Large and Medium-Sized Companies and Groups (Accounts and Reports)
(Amendment) Regulations 2013 are included in the Remuneration report.
27. Retirement benefits
Overview
The Group operates a number of defined contribution and defined benefit pension plans with the most significant plans being in South Africa and
the United Kingdom. It also operates post employment medical plans, the majority of which are unfunded, principally in South Africa. The post
employment medical plans provide health benefits to retired employees and certain dependants.
Defined contribution plans
The charge for the year for defined contribution pension plans (net of amounts capitalised) was $143 million (2020: $131 million) and for defined
contribution medical plans (net of amounts capitalised) was $68 million (2020: $63 million).
Defined benefit pension plans and post employment medical plans
Characteristics of plans
The majority of the defined benefit pension plans are funded. The assets of these plans are held separately from those of the Group, in
independently administered funds, in accordance with statutory requirements or local practice in the relevant jurisdiction. The responsibility for
the governance of the funded retirement benefit plans, including investment and funding decisions, lies with the Trustees of each scheme. The
unfunded liabilities are principally in relation to termination indemnity plans in Chile.
South Africa
The pension plans in South Africa are in surplus. All pension plans in South Africa are closed to new members and the majority of plans are closed
to future benefit accrual. As the plans are in surplus no employer contributions are currently being made. The Group’s provision of anti-retroviral
therapy to HIV positive staff does not significantly impact the post employment medical plan liability.
United Kingdom
The Group operates funded pension plans in the United Kingdom. These plans are closed to new members and to the future accrual of benefits.
The Group is committed to make payments to certain United Kingdom pension plans under deficit funding plans agreed with the respective
Trustees.
Other
Other pension and post employment medical plans primarily comprise obligations in Chile where legislation requires employers to provide for
a termination indemnity, entitling employees to a cash payment made on the termination of an employment contract.
Contributions
Employer contributions are made in accordance with the terms of each plan and may vary from year to year. Employer contributions made to
funded pension plans in the year ended 31 December 2021 were $3 million (2020: $42 million). In addition, $13 million (2020: $21 million) of
benefits were paid to unfunded pension plans and $25 million (2020: $23 million) of benefits were paid in relation to post employment medical
plans. The Group expects to contribute $23 million to its pension plans and $23 million to its post employment medical plans in 2022.
Income statement
The amounts recognised in the Consolidated income statement are as follows:
US$ million
Charged to operating costs
Net (credit)/charge to net finance costs
Total net charge to the income statement
Pension
plans
14
Post
employment
medical plans
2
(2)
12
32
34
2021
Total
16
30
46
Pension
plans
17
Post
employment
medical plans
2
(7)
10
32
34
2020
Total
19
25
44
Net (credit)/charge to net finance costs includes interest expense on surplus restriction of $12 million (2020: $10 million).
218 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Employees
27. Retirement benefits continued
Comprehensive income
The pre-tax amounts recognised in the Consolidated statement of comprehensive income are as follows:
US$ million
Return on plan assets, excluding interest income
Actuarial gains/(losses) on plan liabilities
Movement in surplus restriction
Remeasurement of net defined benefit obligation
Pension
plans
(146)
Post
employment
medical plans
1
321
(17)
158
(2)
—
(1)
2021
Total
(145)
319
(17)
157
Pension
plans
470
Post
employment
medical plans
—
(479)
2
(7)
34
—
34
2020
Total
470
(445)
2
27
Actuarial losses on plan liabilities comprise net losses from changes in financial and demographic assumptions as well as experience on plan
liabilities. The tax amounts arising on remeasurement of the net defined benefit obligations are disclosed in note 5.
Balance sheet
A summary of the movements in the net pension plan assets and retirement benefit obligations on the Consolidated balance sheet is as follows:
US$ million
Net asset/(liability) recognised at 1 January
Net income statement charge before special items
Remeasurement of net defined benefit obligation
Employer contributions to funded pension plans
Benefits paid to unfunded plans
Effects of curtailments/settlements
Other
Currency movements
Net asset recognised at 31 December
Amounts recognised as:
Defined benefit pension plans in surplus
Retirement benefit obligation – pension plans
Retirement benefit obligation – medical plans
Retirement benefit surplus – medical plans
2021
72
(46)
157
3
38
(1)
8
53
284
695
(198)
(304)
91
284
2020
(20)
(44)
27
42
44
—
1
22
72
715
(295)
(348)
—
72
The Group, in consultation with scheme and legal advisers, has determined that once all beneficiaries of the schemes have been settled the full
economic benefit of the surplus of each of the schemes would become payable to the relevant Group company. Therefore, defined benefit
pension plans and post retirement medical plans in surplus are included in Pension asset surplus and other non-current assets on the
Consolidated balance sheet.
Further information
Movement analysis
The changes in the fair value of plan assets are as follows:
US$ million
At 1 January
Interest income
Pension
plans
5,836
131
Return on plan assets, excluding interest income
Contributions paid by employer to funded pension plans
(146)
3
Post
employment
medical plans
12
1
1
—
2021
Total
5,848
132
(145)
3
Pension
plans
5,258
Post
employment
medical plans
12
145
470
42
1
—
—
2020
Total
5,270
146
470
42
Benefits paid
Effects of curtailments/settlements
Other
Currency movements
As at 31 December
(225)
(1)
(226)
(241)
(1)
(242)
(1)
(86)
(62)
—
97
(8)
(1)
11
(70)
5,450
102
5,552
—
11
151
5,836
—
—
—
12
—
11
151
5,848
Anglo American plc Integrated Annual Report 2021 219
Financial statements and other financial information
Notes to the financial statements
Employees
27. Retirement benefits continued
The changes in the present value of defined benefit obligations are as follows:
US$ million
At 1 January
Current service costs
Interest costs
Actuarial gains/(losses)
Benefits paid
Other
Currency movements
As at 31 December
Post
employment
medical plans
Post
employment
medical plans
Pension
plans
(5,292)
(14)
(117)
321
238
(34)
87
(360)
(2)
(33)
(2)
26
31
25
2021
Total
(5,652)
(16)
(150)
319
264
(3)
112
Pension
plans
(4,773)
(17)
(128)
(479)
262
(10)
(147)
(399)
(2)
(33)
34
24
—
16
2020
Total
(5,172)
(19)
(161)
(445)
286
(10)
(131)
(4,811)
(315)
(5,126)
(5,292)
(360)
(5,652)
The most significant actuarial gain arose from changing financial assumptions on pension plans totalling $277 million (2020: loss arose from
changing financial assumptions on pension plans totalling $466 million).
Pension plan assets and liabilities by geography
The split of the present value of funded and unfunded obligations in defined benefit pension plans and the fair value of pension assets at
31 December is as follows:
US$ million
Corporate bonds
Government bonds
Debt (Repurchase Agreements)
Equity
Cash
Other
South
Africa
140
411
United
Kingdom
2,871
2,723
(69)
(1,062)
95
48
2
34
121
66
Other
3
59
—
8
—
—
Fair value of pension plan assets
627
4,753
Active members
Deferred members
Pensioners
Present value of funded obligations
Present value of unfunded obligations
Net surplus/(deficit) in pension plans
Surplus restriction
Recognised retirement benefit assets/(liabilities)
Non-current assets – pension asset surplus
Retirement benefit obligation – pension plans
(4)
(2)
—
(445)
(2,910)
(451)
(4,111)
—
176
(142)
34
34
—
(22)
620
—
620
658
2021
Total
3,014
3,193
South
Africa
139
408
United
Kingdom
2,929
3,288
(1,131)
(55)
(1,463)
137
169
68
70
(16)
5,450
(20)
(55)
(75)
(152)
(157)
—
(157)
3
(3,410)
(4,637)
(174)
639
(142)
497
695
86
142
2
722
(4)
(2)
(455)
(461)
—
261
(124)
137
137
—
35
159
87
5,035
—
(1,756)
(2,761)
(4,517)
(1)
517
—
517
577
2020
Total
3,070
3,764
(1,518)
129
301
90
5,836
(12)
(1,763)
(3,283)
(5,058)
(234)
544
(124)
420
715
Other
2
68
—
8
—
1
79
(8)
(5)
(67)
(80)
(233)
(234)
—
(234)
1
(38)
(160)
(198)
(60)
(235)
(295)
(1,201)
(4)
(1,207)
Other assets principally comprise debt backed securities, annuities and interest rate swaps.
The fair value of assets is used to determine the funding level of the plans. The fair value of the assets of the funded plans was sufficient to cover
118% (2020: 115%) of the benefits that had accrued to members after allowing for expected increases in future earnings and pensions. The
present value of unfunded obligations includes $159 million (2020: $231 million) relating to active members. All material investments are quoted.
In South Africa, the asset recognised is restricted to the amount in the Employer Surplus Account. The Employer Surplus Account is the amount
that the Group is entitled to by way of a refund, taking into consideration any contingency reserves as recommended by the funds’ actuaries.
220 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Employees
27. Retirement benefits continued
Actuarial assumptions
The principal assumptions used to determine the actuarial present value of benefit obligations and pension charges and credits are detailed
below (shown as weighted averages):
Defined benefit pension plans
Average discount rate for plan liabilities
Average rate of inflation
Average rate of increase of pensions in payment
Post employment medical plans
Average discount rate for plan liabilities
Average rate of inflation
Expected average increase in healthcare costs
South
Africa
United
Kingdom
10.4%
6.2%
6.2%
10.4%
6.2%
7.8%
1.9%
3.3%
3.5%
n/a
n/a
n/a
2021
Other
5.8%
3.0%
2.8%
9.9%
6.5%
8.7%
South
Africa
United
Kingdom
9.8%
5.2%
5.2%
9.8%
5.2%
7.6%
1.4%
3.0%
3.0%
n/a
n/a
n/a
2020
Other
3.4%
2.8%
2.6%
10.6%
6.6%
9.1%
The weighted average duration of the South African plans is 9 years (2020: 9 years), United Kingdom plans is 17 years (2020: 18 years) and
plans in other regions is 14 years (2020: 14 years). This represents the average period over which future benefit payments are expected to
be made.
Mortality assumptions are determined based on standard mortality tables with adjustments, as appropriate, to reflect experience of conditions
locally. In South Africa the PA90 tables are used. The main plans in the United Kingdom use CMI tables or Club Vita models with plan specific
adjustments based on mortality investigations. The mortality tables used imply that a male or female aged 60 at the balance sheet date has the
following future life expectancy (shown as weighted averages):
Years
South Africa
United Kingdom
Other
2021
18.8
27.9
24.2
Male
2020
18.8
27.9
24.3
2021
23.4
29.6
28.2
Female
2020
23.4
29.7
28.5
The table below summarises the expected life expectancy from the age of 60 for a male or female aged 45 at the balance sheet date. When
viewed together with the respective life expectancy at age 60 in the table above, this indicates the anticipated improvement in life expectancy
(shown as weighted averages):
Years
South Africa
United Kingdom
Other
2021
18.8
28.6
25.3
Male
2020
18.8
28.7
25.5
2021
23.4
30.9
29.2
Female
2020
23.4
30.8
29.5
Risk of plans
The Group has identified the main risk to its defined benefit pension schemes as being interest rate risk due to the impact on the UK discount rate
assumption:
Risk
Description
Mitigation
Interest rate risk
A fall in longer term real and nominal
interest rates expectations causes gilt
yields and corporate bond yields to
decrease, which results in a lower
discount rate being applied to the UK
pension liabilities and so, with all else
being held equal, the value of the
pension scheme liabilities increases.
If the pension scheme assets do not
increase by the same amount as the
increase in the pension scheme
liabilities (caused by the fall in interest
rates) then, all else being equal, this
will result in a worsening of the
pension scheme funding position.
The Trustees’ investment strategies vary by plan for the UK and include investing, with the
intention of counter-balancing the movements in the liabilities, in fully owned (fully funded)
physical credit and gilts, and by gaining unfunded exposure to gilts (via gilt repurchase
agreements) and other fixed income based derivatives to match the real and nominal
interest rate sensitivity of the pension scheme liabilities.
Approximately 75-100% (depending on the scheme) of the pension scheme liabilities are
currently hedged against movements in real and nominal interest rates.
The Trustees’ hedging strategies are typically designed to protect the respective schemes’
funding plans against volatility in market yields. The discount rate used to calculate any
funding requirement for the schemes is linked to gilt yields rather than to corporate bond
yields as required under IAS 19. Consequently the valuation of the net retirement benefit
obligation for accounting purposes remains susceptible to movements in value due to the
difference between corporate bond and gilt yields. In addition, since corporate bond yields
are typically higher than gilt yields, this can result in the recognition of accounting surpluses
in respect of schemes where cash contributions continue to be made to meet funding
shortfalls.
Anglo American plc Integrated Annual Report 2021 221
Financial statements and other financial information
Notes to the financial statements
Employees
27. Retirement benefits continued
Sensitivity analysis
Significant actuarial assumptions for the determination of pension and medical plan liabilities are the discount rate, inflation rate and mortality.
The sensitivity analysis below has been provided by local actuaries on an approximate basis based on changes in the assumptions occurring
at the end of the year, assuming that all other assumptions are held constant and the effect of interrelationships is excluded. The effect on plan
liabilities is as follows:
US$ million
Discount rate – 0.5% decrease
Inflation rate – pension plans – 0.5% increase
Inflation rate – medical plans – 0.5% increase
Life expectancy – increase by 1 year
South
Africa
United
Kingdom
(30)
(17)
(12)
(25)
(364)
(162)
—
(221)
Other
(12)
(6)
(3)
(3)
2021
Total
(406)
(185)
(15)
(249)
Independent qualified actuaries carry out full valuations at least every three years using the projected unit credit method. The actuaries have
updated the valuations to 31 December 2021. Assumptions are set after consultation with the qualified actuaries. While management believes
the assumptions used are appropriate, a change in the assumptions used would impact the Group’s other comprehensive income.
Accounting policy
See note 39H for the Group’s accounting policy on retirement benefits.
222 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Employees
28. Share-based payments
Overview
During the year ended 31 December 2021 the Group had share-based payment arrangements with employees relating to shares of the
Company. All of these Company schemes, as well as any non-cyclical awards, are equity settled either by award of ordinary shares (BSP,
LTIP, SIP and Non-cyclical) or award of options to acquire ordinary shares (SAYE). The awards are conditional on employment. LTIPs vest in
accordance with the achievement of relative TSR targets and a balanced scorecard of measures including a Group ROCE target, a
Sustaining attributable free cash flow target and environmental, social and governance targets. Other schemes in the Group include
performance conditions based on Group financial performance.
The total share-based payment charge relating to Anglo American plc shares for the year is split as follows:
US$ million
BSP
LTIP
Other schemes
Share-based payment charge relating to Anglo American plc shares
2021
81
73
6
160
2020
82
59
5
146
In addition there are equity settled share-based payment charges of $13 million (2020: $10 million) relating to Kumba Iron Ore Limited shares
and $12 million (2020: $11 million) relating to Anglo American Platinum Limited shares. Certain entities also operate cash settled employee
share-based payment schemes.
Further information
The movements in the number of shares for the more significant share-based payment arrangements are as follows:
Bonus Share Plan
Ordinary shares of 5486/91 US cents may be awarded under the terms of this scheme for no consideration.
Number of awards
Outstanding at 1 January
Conditionally awarded in year
Vested in year
Forfeited or expired in year
Outstanding at 31 December
Further information in respect of the BSP, including performance conditions, is shown in the Remuneration report.
Long Term Incentive Plan
Ordinary shares of 5486/91 US cents may be awarded under the terms of this scheme for no consideration.
Number of awards
Outstanding at 1 January
Conditionally awarded in year
Vested in year
Forfeited or expired in year
Outstanding at 31 December
2021
10,862,488
2020
11,824,806
2,343,404
4,383,844
(4,128,121)
(5,096,505)
(186,282)
(249,657)
8,891,489
10,862,488
2021
12,163,678
2020
12,010,241
3,538,541
5,296,437
(2,824,370)
(4,579,836)
(875,430)
(563,164)
12,002,419
12,163,678
The early vesting of share awards is permitted at the discretion of the Company upon, inter alia, termination of employment, ill health or death.
The LTIP awards are contingent on pre-established performance criteria being met. Further information in respect of this scheme is shown in the
Remuneration report.
Accounting policy
See note 39H for the Group’s accounting policy on share-based payments.
Anglo American plc Integrated Annual Report 2021 223
Financial statements and other financial information
Notes to the financial statements
Unrecognised items and uncertain events
This section includes disclosure of items and transactions that are
not reflected in the Group’s results because they are uncertain or
have been incurred after the end of the year. These disclosures are
considered relevant to an understanding of the Group’s financial
position and the effect of expected or possible future events.
29. Events occurring after end of year
On 21 February 2022, Anglo American announced the safe restart of its Grosvenor (Metallurgical Coal) mining operation in Queensland,
Australia. With the exception of the Grosvenor restart, the disposal of Cerrejón completed on 11 January 2022 (see note 32) and the proposed
final and special dividend for 2021 (see note 6) there have been no further reportable events since 31 December 2021.
30. Commitments
Overview
A commitment is a contractual obligation to make a payment in the future which is not provided for in the Consolidated balance sheet. The Group
also has purchase obligations relating to take or pay agreements which are legally binding and enforceable.
Capital commitments (including cancellable and non-cancellable contracts) for subsidiaries and joint operations relating to the acquisition of
property, plant and equipment are $3,647 million (2020: $4,327 million), of which 56% (2020: 50%) relates to expenditure to be incurred within
the next year.
The Group’s outstanding commitments relating to take or pay agreements are $13,092 million (2020: $13,790 million), of which 10%
(2020: 11%) relate to expenditure to be incurred within the next year.
31. Contingent assets and liabilities
Overview
The Group is subject to various claims which arise in the ordinary course of business. Additionally, the Group has provided indemnities against
certain liabilities as part of agreements for the sale or other disposal of business operations. Having taken appropriate legal advice, the Group
believes that a material liability arising from the indemnities provided is remote.
The Group is required to provide guarantees in several jurisdictions in respect of environmental restoration and decommissioning obligations. The
Group has provided for the estimated cost of these activities.
Contingent assets
Metallurgical Coal
In 2014, the Metallurgical Coal business was granted an arbitration award of $107 million against MMTC Limited in respect of a contractual
dispute. The award has since been challenged in the Indian courts, during which time interest has continued to accrue. On 17 December 2020,
the Indian Supreme Court found in favour of the Metallurgical Coal business. The award, inclusive of interest, is currently valued at approximately
$140 million. The precise timing and value of receipt remains uncertain and hence no receivable has been recognised on the Consolidated
balance sheet as at 31 December 2021.
Contingent liabilities
Anglo American South Africa Proprietary Limited (AASA)
In October 2020, an application was initiated against Anglo American South Africa Proprietary Limited (AASA). The application seeks the
certification of class action litigation to be brought on behalf of community members residing in the Kabwe area in Zambia in relation to alleged
lead-related health impacts.
AASA has noted its intention to oppose the class certification application, and will defend itself against the allegations made. It filed its response
to the application on 31 August 2021 and a supplementary response on 11 November 2021. The class certification hearing is likely to take place
in the second half of 2022, with a ruling likely to follow several months later.
This litigation is still subject to significant uncertainty, and it is not currently possible to make a reasonable estimate of the outcome, quantum or
timing of any potential future determination and therefore no provision is recognised.
224 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Unrecognised items and uncertain events
31. Contingent assets and liabilities continued
De Beers
Guarantees provided in respect of environmental restoration and decommissioning obligations involve judgements in terms of the outcome
of future events. In one of the territories in which De Beers operates, conditions exist, or are proposed, with respect to backfilling pits on closure.
A formal appeal has been lodged to remove the existing backfilling condition and no provision has been raised on the basis that it is not probable
that this condition will be enforced. Should the appeal not be successful the estimated cost of backfilling is $254 million.
Accounting judgement
Where the existence of an asset is contingent on uncertain future events which are outside the Group’s control, the asset is only recognised once
it becomes virtually certain that the Group will receive future economic benefits.
A provision is recognised where, based on the Group’s legal views and, in some cases, independent advice, it is considered probable that an
outflow of resources will be required to settle a present obligation that can be measured reliably.
Anglo American plc Integrated Annual Report 2021 225
Financial statements and other financial information
Notes to the financial statements
Group structure
This section includes details about the composition of the Group
and how this is reflected in the Consolidated financial statements.
It also includes disclosures of significant corporate transactions
such as acquisitions and disposals.
32. Assets and liabilities held for sale
On 28 June 2021, the Group announced it had entered into an agreement for the sale of its 33.3% interest in the Cerrejón associate to Glencore.
All conditions precedent, including approvals from authorities, were cleared on 23 December 2021, and the Cerrejón associate therefore met the
criteria to be classified as held for sale from that date. At 31 December 2021, assets of $50 million were classified as held for sale and an
impairment of $283 million recognised within non-operating special items to bring the carrying amount in line with the expected disposal
proceeds (see notes 8 and 13). On 11 January 2022, the Group completed the disposal and received the outstanding consideration receivable
of $50 million. In line with the agreement, the initial cash consideration of $294 million was reduced by $240 million cash dividends, repayment of
shareholders loan of $41 million received from Cerrejón and adjusted for the cash sweeping arrangement paid to Cerrejón of $37 million.
2020
There were no assets classified as held for sale as at 31 December 2020.
33. Acquisitions and disposals
Acquisitions
There were no acquisitions in the year ended 31 December 2021.
2020
On 17 March 2020, the Group acquired a 100% interest in Sirius Minerals Plc (Crop Nutrients) for cash consideration of $496 million
(£405 million). As a result of the acquisition the Group acquired control of the Woodsmith project, which once developed will mine the world’s
largest known source of high grade polyhalite (a premium multi-nutrient fertiliser).
Disposals
On 4 June 2021, the Group completed the demerger of its South African thermal coal assets into a newly incorporated company, Thungela
Resources Limited (Thungela), that on 7 June 2021 was admitted to trading on both the Johannesburg and London Stock Exchanges (JSE and
LSE). The demerger comprised the Goedehoop, Greenside, Khwezela, Zibulo, Isibonelo and Butsanani coal mining operations, a 23.2%
shareholding in Richards Bay Coal Terminal and the 50:50 Mafube Colliery joint operation. The demerger was executed by means of an in specie
return of capital valued at an amount equal to the fair value of the disposed operations. Share premium decreased by $1,800 million and the
difference between this and the fair value demerged was credited to retained earnings.
The fair value of the in specie return of capital at the date of the demerger and retained financial asset investment was a level 3 fair value
measurement based on a discounted cash flow model with a real post-tax discount rate of 9.5%. The model used forecast thermal coal prices
that fall within the analyst range throughout the forecast period. The forecast long-term price from 2027 onwards fell within the interquartile
range of analyst prices of $65/tonne to $72/tonne (API4 FOB Richards Bay real 2021 basis).
Details of the net loss on demerger of Thungela are shown below:
US$ million
Property, plant and equipment
Environmental rehabilitation trust
Other non-current assets
Current assets
Current liabilities
Provisions
Non-current liabilities
Thungela net assets and liabilities
Non-controlling interest
Less: Retained financial asset investments (see Further information below)
Net assets demerged
Net cash and cash equivalents demerged
Net cash outflow from demerger of Thungela
226 Anglo American plc Integrated Annual Report 2021
4 June 2021
770
223
87
547
(210)
(485)
(121)
811
(106)
(64)
641
(200)
(200)
Financial statements and other financial information
Notes to the financial statements
Group structure
33. Acquisitions and disposals continued
US$ million
Share premium reduction
Capital reduction returned to distributable reserves
In specie return of capital relating to Thungela demerger
Net assets demerged
Retained financial asset investments (see Further information below)
Revaluation gain on retained financial asset investments (see Further information below)
Gain on demerger of Thungela
Transaction costs
Withholding taxes
Related taxes released
Reclassification of foreign currency translation reserve
Loss on demerger of Thungela net of tax and transaction costs (see note 8)
4 June 2021
1,800
(1,081)
719
(641)
(64)
(1)
13
(42)
(35)
18
(363)
(409)
Further information
On completion of the demerger, the Group retained an 8.9% interest in Thungela through the Tenon/Epoch investment companies, together with
Thungela shares allocated in respect of Anglo American own shares held by subsidiaries and employee benefit trusts. A financial asset at fair
value through other comprehensive income of $64 million was recognised on the Group’s Consolidated balance sheet in respect of this interest,
with a revaluation gain, representing the difference between the previous carrying value of the 8.9% interest in the net assets and their fair value,
also recognised within special items in the Consolidated income statement. Subsequently, 0.3% of the retained interest was used to settle share
schemes relating to Thungela executives. Following the listing of Thungela on the JSE and LSE, the retained investment in Thungela is accounted
for as a level 1 financial instrument.
Anglo American’s marketing business will continue to support Thungela in the sale and marketing of its products for a three-year period with an
additional six-month transitional period thereafter from the date of demerger. Sales and purchases under the offtake agreement will be reported
on a net basis within revenue from other sources together with the Group’s other third-party trading activities.
Contingent capital support is also provided until the end of 2022 in the event of thermal coal prices in South African rand (ZAR) falling below a
certain threshold, the financial impact of which is not significant.
Other
Other cash received in respect of disposals principally relates to $235 million on the settlement of deferred consideration balances relating to the
sale of the Rustenburg operations (Platinum Group Metals) completed in November 2016 and $50 million contingent consideration in respect of
the disposal of the Group’s interest in Anglo American Norte (Copper) completed in 2015.
2020
Disposals in 2020 principally related to the settlement of deferred consideration balances at Platinum Group Metals and the sale of 12% of the
Group’s interest in the Grosvenor mine (Metallurgical Coal) as part of the equalisation of ownership across its integrated Australian metallurgical
coal operations at Moranbah North and Grosvenor.
Anglo American plc Integrated Annual Report 2021 227
Financial statements and other financial information
Notes to the financial statements
Financial statements and other financial information
Notes to the financial statements
Group structure
34. Basis of consolidation
Overview
The principal subsidiaries, joint operations, joint ventures and associates of the Group and the Group percentage of equity capital are set out
below. All these interests are held indirectly by the Parent Company and are consolidated within these financial statements.
The Group aggregates the following operating segments into reportable segments:
– Kumba Iron Ore and Iron Ore Brazil are aggregated into Iron Ore
– Copper Chile and Copper Peru are aggregated into Copper
– Thermal Coal – South Africa, until the date of demerger and Thermal Coal – Colombia, until the date of the sale agreement (see notes 32 and
33) are aggregated into Corporate and other.
A complete list of the Group’s related undertakings can be found in note 35.
Metallurgical Coal
Coal Australia and Canada, comprising:
Segment and asset
De Beers(1)
Debswana(2), comprising:
Jwaneng
Orapa regime
Namdeb Holdings(3), comprising:
Namdeb Diamond Corporation
Debmarine Namibia
Location
Accounting treatment
Botswana
Joint operation
Percentage of equity owned
2021
85%
19.2%
2020
85%
19.2%
Namibia
Joint operation
50%
50%
De Beers Consolidated Mines(4), comprising:
South Africa
Full consolidation
100%
100%
Venetia
De Beers Canada, comprising:
Snap Lake
Victor
Gahcho Kué
Sales, comprising:
De Beers Global Sightholder Sales
De Beers Sightholder Sales South Africa
Auction Sales
DTC Botswana
Namibia DTC
Element Six, comprising:
Element Six Technologies
Element Six Abrasives
Brands, comprising:
Forevermark
De Beers Jewellers
Copper
Copper Chile
Los Bronces
El Soldado
Chagres
Collahuasi
Copper Peru
Quellaveco
Nickel
Barro Alto
Platinum Group Metals(5)
Mogalakwena Mine
Amandelbult complex(6)
Twickenham Mine
Unki Mine
Platinum Refining
Modikwa Platinum Joint Operation
Mototolo
Kroondal Pooling and Sharing Agreement
Bokoni
See page 229 for footnotes.
Canada
Canada
Canada
Botswana
South Africa
Singapore
Botswana
Namibia
Global
Global
Global
Global
Chile
Chile
Chile
Chile
Peru
Brazil
South Africa
South Africa
South Africa
Zimbabwe
South Africa
South Africa
South Africa
South Africa
South Africa
Full consolidation
Full consolidation
Joint operation
Full consolidation
Full consolidation
Full consolidation
Joint operation
Joint operation
Full consolidation
Full consolidation
Full consolidation
Full consolidation
Full consolidation
Full consolidation
Full consolidation
Joint operation
100%
100%
51%
100%
100%
100%
50%
50%
100%
60%
100%
100%
100%
100%
51%
100%
100%
100%
50%
50%
100%
60%
100%
100%
50.1%
50.1%
50.1%
44%
50.1%
50.1%
50.1%
44%
Full consolidation
60%
60%
Full consolidation
Full consolidation
Full consolidation
Full consolidation
Full consolidation
Full consolidation
Joint operation
Full consolidation
Joint operation
Equity accounted associate
100%
79%
100%
100%
100%
100%
100%
50%
100%
50%
49%
100%
79%
100%
100%
100%
100%
100%
50%
100%
50%
49%
Segment and asset
Location
Accounting treatment
Percentage of equity owned
2021
2020
Group structure
34. Basis of consolidation continued
Dalrymple Bay Coal Terminal Pty Ltd
Iron Ore
Kumba Iron Ore
Sishen(7)
Kolomela(7)
Minas-Rio
Ferroport(8)
Moranbah North(9)
Grosvenor(9)(10)
Capcoal(9)
Dawson(9)
Jellinbah(11)(12)
Peace River Coal
Manganese
Samancor(11)(13)
Crop Nutrients
Woodsmith(14)
Goedehoop
Greenside
Khwezela
Mafube
Zibulo(16)
Isibonelo
Corporate and other
Coal South Africa, comprising:(15)
South Africa
South Africa
South Africa
Brazil
Brazil
Australia
Australia
Australia
Australia
Australia
Australia
Canada
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
Colombia
Full consolidation
Full consolidation
Full consolidation
Full consolidation
Equity accounted joint venture
Joint operation
Joint operation
Joint operation
Joint operation
Equity accounted associate
Equity accounted associate
Full consolidation
Full consolidation
Full consolidation
Full consolidation
Joint operation
Full consolidation
Full consolidation
69.7%
76.3%
76.3%
100%
50%
88%
88%
70%
51%
33.3%
25.3%
100%
—
—
—
—
—
—
—
—
69.7%
76.3%
76.3%
100%
50%
88%
88%
70%
51%
33.3%
25.3%
100%
100%
100%
100%
50%
73%
100%
23.2%
66.7%
33.3%
South Africa and Australia
Equity accounted joint venture
40%
40%
United Kingdom
Full consolidation
100%
100%
Richards Bay Coal Terminal
Butsanani
Carbones del Cerrejón(17)
Equity accounted associate
Full consolidation
Equity accounted associate
33.3%
(1) 85% should be applied to all holdings within De Beers to determine the Group’s
(9) The wholly owned subsidiary Anglo American Metallurgical Coal Holdings Limited holds
attributable share of the asset.
the proportionately consolidated joint operations. These operations are unincorporated
(2) De Beers owns 50% of equity in Debswana, but consolidates 19.2% of Debswana on a
and jointly controlled.
proportionate basis, reflecting the economic interest. The Group’s effective interest in
Debswana is 16.3% (taking into account the Group’s 85% interest in De Beers Group).
(3) The 50% interest in Namdeb Holdings is held indirectly through De Beers. The Group’s
effective interest in Namdeb Holdings is 42.5%.
(10) The Group sold 12% of its interest in Grosvenor on 18 December 2020. Prior to that, the
Group's ownership was 100% and it was fully consolidated.
(11) These entities have a 30 June year end.
(12) The Group’s effective interest in the Jellinbah operation is 23.3%.
(4) De Beers’ legal ownership of De Beers Consolidated Mines (DBCM) and its subsidiaries is
(13) Samancor is comprised of investments in Groote Eylandt Mining Company Proprietary
74%. For accounting purposes De Beers consolidates 100% of DBCM as it is deemed to
Limited, Samancor Marketing Pte. Limited and Samancor Holdings Proprietary Limited.
control the BEE entity, Ponahalo, which holds the remaining 26%. The Group’s effective
Samancor Holdings Proprietary Limited is the parent company of Hotazel Manganese
interest in DBCM is 85%.
(5) The Group’s effective interest in Anglo American Platinum is 79.2% (2020: 80.8%), which
excludes shares issued as part of a community empowerment deal.
(6) Amandelbult complex comprises Tumela mine and Dishaba mine.
(7) Sishen and Kolomela are fully owned by the Sishen Iron Ore Company (SIOC). Kumba Iron
Mines (HMM) and the Metalloys Smelter. BEE shareholders hold a 26% interest in HMM and
therefore the Group’s effective ownership interest in HMM is 29.6%.
(14) The Group acquired 100% of the Woodsmith project on 17 March 2020.
(15) On 4 June 2021, the Group completed the demerger of its South African thermal coal
assets (see note 33). Prior to the demerger the percentage of equity ownership was
Ore Limited has a 76.3% interest in SIOC (2020: 76.3%). Including shares held by Kumba
consistent with prior year.
Iron Ore in relation to its own employee share schemes, the Group’s effective interest in
(16) Zibulo forms part of the Anglo American Inyosi Coal BEE company of which the Group
Kumba Iron Ore is 69.97% (2020: 70.04%). Consequently, the Group’s effective interest in
owns 73%.
SIOC is 53.4% (2020: 53.4%).
(8) Ferroport owns and operates the iron ore handling and shipping facilities at the port of Açu.
(17) On 28 June 2021, the Group announced it had entered into an agreement for the sale of its
33.3% interest in the Cerrejón associate to Glencore plc. All conditions precedent,
including approvals from authorities, were cleared on 23 December 2021, and the
Cerrejón associate therefore met the criteria to be classified as held for sale from that date.
Accounting judgements
Joint arrangements
Joint arrangements are classified as joint operations or joint ventures according to the rights and obligations of the parties, as described in note
39I. Judgement is required in determining this classification through an evaluation of the facts and circumstances arising from each individual
arrangement. When a joint arrangement has been structured through a separate vehicle, consideration has been given to the legal form of the
separate vehicle, the terms of the contractual arrangement and, when relevant, other facts and circumstances. When the activities of an
arrangement are primarily designed for the provision of output to the parties and, the parties are substantially the only source of cash flows
contributing to the continuity of the operations of the arrangement, this indicates that the parties to the arrangement have rights to the assets and
obligations for the liabilities. Certain joint arrangements that are structured through separate vehicles including Collahuasi, Debswana and
Namdeb Holdings are accounted for as joint operations. These arrangements are primarily designed for the provision of output to the parties
sharing joint control, indicating that the parties have rights to substantially all the economic benefits of the assets. The liabilities of the
arrangements are in substance satisfied by cash flows received from the parties; this dependence indicates that the parties effectively have
obligations for the liabilities. It is primarily these facts and circumstances that give rise to the classification as joint operations.
228 Anglo American plc Integrated Annual Report 2021
Anglo American plc Integrated Annual Report 2021 229
Financial statements and other financial information
Notes to the financial statements
Group structure
34. Basis of consolidation continued
Segment and asset
Iron Ore
Kumba Iron Ore
Sishen(7)
Kolomela(7)
Minas-Rio
Ferroport(8)
Metallurgical Coal
Coal Australia and Canada, comprising:
Moranbah North(9)
Grosvenor(9)(10)
Capcoal(9)
Dawson(9)
Jellinbah(11)(12)
Dalrymple Bay Coal Terminal Pty Ltd
Peace River Coal
Manganese
Samancor(11)(13)
Crop Nutrients
Woodsmith(14)
Corporate and other
Coal South Africa, comprising:(15)
Goedehoop
Greenside
Khwezela
Mafube
Zibulo(16)
Isibonelo
Richards Bay Coal Terminal
Butsanani
Carbones del Cerrejón(17)
Location
Accounting treatment
Percentage of equity owned
2021
2020
South Africa
South Africa
South Africa
Brazil
Brazil
Australia
Australia
Australia
Australia
Australia
Australia
Canada
Full consolidation
Full consolidation
Full consolidation
Full consolidation
Equity accounted joint venture
Joint operation
Joint operation
Joint operation
Joint operation
Equity accounted associate
Equity accounted associate
Full consolidation
69.7%
76.3%
76.3%
100%
50%
88%
88%
70%
51%
33.3%
25.3%
100%
69.7%
76.3%
76.3%
100%
50%
88%
88%
70%
51%
33.3%
25.3%
100%
South Africa and Australia
Equity accounted joint venture
40%
40%
United Kingdom
Full consolidation
100%
100%
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
Colombia
Full consolidation
Full consolidation
Full consolidation
Joint operation
Full consolidation
Full consolidation
Equity accounted associate
Full consolidation
—
—
—
—
—
—
—
—
Equity accounted associate
33.3%
100%
100%
100%
50%
73%
100%
23.2%
66.7%
33.3%
(9) The wholly owned subsidiary Anglo American Metallurgical Coal Holdings Limited holds
the proportionately consolidated joint operations. These operations are unincorporated
and jointly controlled.
(10) The Group sold 12% of its interest in Grosvenor on 18 December 2020. Prior to that, the
Group's ownership was 100% and it was fully consolidated.
(11) These entities have a 30 June year end.
(12) The Group’s effective interest in the Jellinbah operation is 23.3%.
(13) Samancor is comprised of investments in Groote Eylandt Mining Company Proprietary
Limited, Samancor Marketing Pte. Limited and Samancor Holdings Proprietary Limited.
Samancor Holdings Proprietary Limited is the parent company of Hotazel Manganese
Mines (HMM) and the Metalloys Smelter. BEE shareholders hold a 26% interest in HMM and
therefore the Group’s effective ownership interest in HMM is 29.6%.
(14) The Group acquired 100% of the Woodsmith project on 17 March 2020.
(15) On 4 June 2021, the Group completed the demerger of its South African thermal coal
assets (see note 33). Prior to the demerger the percentage of equity ownership was
consistent with prior year.
(16) Zibulo forms part of the Anglo American Inyosi Coal BEE company of which the Group
owns 73%.
(17) On 28 June 2021, the Group announced it had entered into an agreement for the sale of its
33.3% interest in the Cerrejón associate to Glencore plc. All conditions precedent,
including approvals from authorities, were cleared on 23 December 2021, and the
Cerrejón associate therefore met the criteria to be classified as held for sale from that date.
(1) 85% should be applied to all holdings within De Beers to determine the Group’s
attributable share of the asset.
(2) De Beers owns 50% of equity in Debswana, but consolidates 19.2% of Debswana on a
proportionate basis, reflecting the economic interest. The Group’s effective interest in
Debswana is 16.3% (taking into account the Group’s 85% interest in De Beers Group).
(3) The 50% interest in Namdeb Holdings is held indirectly through De Beers. The Group’s
effective interest in Namdeb Holdings is 42.5%.
(4) De Beers’ legal ownership of De Beers Consolidated Mines (DBCM) and its subsidiaries is
74%. For accounting purposes De Beers consolidates 100% of DBCM as it is deemed to
control the BEE entity, Ponahalo, which holds the remaining 26%. The Group’s effective
interest in DBCM is 85%.
(5) The Group’s effective interest in Anglo American Platinum is 79.2% (2020: 80.8%), which
excludes shares issued as part of a community empowerment deal.
(6) Amandelbult complex comprises Tumela mine and Dishaba mine.
(7) Sishen and Kolomela are fully owned by the Sishen Iron Ore Company (SIOC). Kumba Iron
Ore Limited has a 76.3% interest in SIOC (2020: 76.3%). Including shares held by Kumba
Iron Ore in relation to its own employee share schemes, the Group’s effective interest in
Kumba Iron Ore is 69.97% (2020: 70.04%). Consequently, the Group’s effective interest in
SIOC is 53.4% (2020: 53.4%).
(8) Ferroport owns and operates the iron ore handling and shipping facilities at the port of Açu.
Accounting judgements
Joint arrangements
Joint arrangements are classified as joint operations or joint ventures according to the rights and obligations of the parties, as described in note
39I. Judgement is required in determining this classification through an evaluation of the facts and circumstances arising from each individual
arrangement. When a joint arrangement has been structured through a separate vehicle, consideration has been given to the legal form of the
separate vehicle, the terms of the contractual arrangement and, when relevant, other facts and circumstances. When the activities of an
arrangement are primarily designed for the provision of output to the parties and, the parties are substantially the only source of cash flows
contributing to the continuity of the operations of the arrangement, this indicates that the parties to the arrangement have rights to the assets and
obligations for the liabilities. Certain joint arrangements that are structured through separate vehicles including Collahuasi, Debswana and
Namdeb Holdings are accounted for as joint operations. These arrangements are primarily designed for the provision of output to the parties
sharing joint control, indicating that the parties have rights to substantially all the economic benefits of the assets. The liabilities of the
arrangements are in substance satisfied by cash flows received from the parties; this dependence indicates that the parties effectively have
obligations for the liabilities. It is primarily these facts and circumstances that give rise to the classification as joint operations.
Anglo American plc Integrated Annual Report 2021 229
Financial statements and other financial information
Notes to the financial statements
Group structure
35. Related undertakings of the Group
The Group consists of the Parent Company, Anglo American plc, incorporated in the United Kingdom and its subsidiaries, joint operations, joint
ventures and associates. In accordance with Section 409 of the Companies Act 2006 a full list of related undertakings, the country of
incorporation and the effective percentage of equity owned as at 31 December 2021 is disclosed below. Unless otherwise disclosed all entities
with an indirect equity holding of greater than 51% are considered subsidiary undertakings. See note 34 for the Group’s principal subsidiaries,
joint operations, joint ventures and associates.
As disclosed in the Group’s published tax strategy, the Group does not use tax haven jurisdictions to manage taxes. There remain a small
number of undertakings in the Group which are registered in tax haven jurisdictions and have remained so for other business purposes. The
Group is well advanced in our strategy to remove legacy undertakings from tax haven jurisdictions, and, where possible, these entities are
resident for tax purposes in the United Kingdom regardless of where they are registered. Where the tax residency of a related undertaking is
different from its country of incorporation, this is referenced in the notes to the list below.
Country of
incorporation(1)(2)
Name of undertaking
See page 243 for footnotes.
Percentage
of equity
owned(3)
Share class
Registered address
Angola
Anglo American Discovery (Moxico) –
100%
Quota
Edifício Kilamba, 20.º Andar, Avenida 4 de Fevereiro,
Prospeccao E Exploracao Mineira (SU),
LDA
Marginal de Luanda, Luanda
Angola
Anglo American Discovery (Cunene) –
100%
Quota
Edifício Kilamba, 20.º Andar, Avenida 4 de Fevereiro,
Prospeccao E Exploracao Mineira (SU),
LDA
Marginal de Luanda, Luanda
Angola
De Beers Angola Holdings SARL
85%
Quota
Rua Rainha Ginga 87 9º andar, Luanda,República de
Anguilla
Argentina
Carbones del Cerrejon Limited(4)
Minera Anglo American Argentina S.A.U
33%
100%
Ordinary
Babrow's Commercial Complex, Box 1341, The Valley
Angola, Caixa Postal 4031
Ordinary
Nominative
Non-Endorsable
Esteban Echeverría 1776, Piso 2, Godoy Cruz, Mendoza
Australia
Australia
Anglo American Australia Finance Limited
Anglo American Australia Holdings Pty
100%
100%
Ordinary
Ordinary
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Limted
Australia
Anglo American Australia Limited
100%
Ordinary
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Australia
Anglo American Exploration (Australia) Pty
100%
Ordinary
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Limited
Australia
Anglo American Metallurgical Coal Assets
100%
Ordinary
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Eastern Australia Limited
Australia
Anglo American Metallurgical Coal Assets
100%
Ordinary
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Pty Ltd
Australia
Anglo American Metallurgical Coal Finance
100%
Ordinary
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Limited
Australia
Anglo American Metallurgical Coal Holdings
100%
Ordinary
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Limited
Australia
Australia
Anglo American Metallurgical Coal Pty Ltd
Anglo American Thermal Coal (Australia) Pty
100%
100%
Ordinary
Ordinary
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Ltd
Australia
Anglo Coal (Archveyor Management) Pty
100%
Ordinary
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Ltd
Australia
Anglo Coal (Capcoal Management) Pty
100%
Limited
Australia
Australia
Australia
Australia
Australia
Australia
Anglo Coal (Dawson Management) Pty Ltd
Anglo Coal (Dawson Services) Pty Ltd
Anglo Coal (Dawson South Management)
Pty Ltd
Anglo Coal (Dawson South) Pty Ltd
Anglo Coal (Dawson) Holdings Pty Ltd
Anglo Coal (Dawson) Limited
100%
100%
100%
100%
100%
100%
230 Anglo American plc Integrated Annual Report 2021
A Class Ordinary
B Class Ordinary
C Class Ordinary
D Class Ordinary
E Class Ordinary
F Class Ordinary
G Class Ordinary
H Class Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Limited by
guarantee
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Financial statements and other financial information
Notes to the financial statements
Group structure
35. Related undertakings of the Group continued
Country of
incorporation(1)(2)
Name of undertaking
See page 243 for footnotes.
Percentage
of equity
owned(3)
Share class
Registered address
Australia
Australia
Anglo Coal (German Creek) Pty Ltd
Anglo Coal (Grasstree Management) Pty
100%
100%
Ordinary
Ordinary
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Limited
Australia
Anglo Coal (Grosvenor Management) Pty
100%
Ordinary
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ltd
Anglo Coal (Grosvenor) Pty Ltd
Anglo Coal (Jellinbah) Holdings Pty Ltd
100%
100%
Anglo Coal (Moranbah North Management)
100%
Pty Limited
Anglo Coal (Roper Creek) Pty Ltd
Anglo Coal (Theodore South) Pty Ltd
Anglo Operations (Australia) Pty Ltd
Bowen Basin Coal Pty Ltd
Capricorn Coal Developments JV
Dalrymple Bay Coal Terminal Pty Ltd
Dawson Coal Processing Pty Ltd
Dawson Highwall Mining Pty Ltd
Dawson JV
Dawson Sales Pty Ltd
Dawson South Exploration JV
Dawson South JV
Dawson South Sales Pty Ltd
De Beers Australia Exploration Limited
Australia
German Creek Coal Pty Limited
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 7, 12 Creek Street, Brisbane QLD 4000
N/A
Martin Armstrong Drive, Hay Point QLD 4740
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
N/A
Level 11, 201 Charlotte Street, Brisbane QLD 4000
N/A
N/A
Level 11, 201 Charlotte Street, Brisbane QLD 4000
23 North Street, Mount Lawley, WA 6050
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
N/A
Ordinary
Ordinary
Ordinary
N/A
Ordinary
N/A
N/A
Ordinary
Ordinary
Preference
B Class Ordinary
C Class Ordinary
D Class Ordinary
E Class Ordinary
100%
100%
100%
23%
70%
25%
100%
100%
51%
51%
51%
51%
51%
85%
70%
Australia
Groote Eylandt Mining Company Proprietary
40%
Ordinary
Level 35, 108 St Georges Terrace, Perth WA 6000
Australia
Jellinbah Group Pty Ltd
33%
Limited
Level 7, 12 Creek Street, Brisbane QLD 4000
Ordinary
A Class Ordinary
E Class Ordinary
F Class Ordinary
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Belgium
Belgium
Jellinbah JV
Jellinbah Mining Pty Ltd
Jellinbah Resources Pty Ltd
Jena Pty. Limited
Jena Unit Trust
JG Land Company Pty Ltd
Lake Vermont JV
Lake Vermont Marketing Pty Ltd
Lake Vermont Resources Pty Ltd
Monash Energy Coal Limited
Moranbah North Coal (No2) Pty Ltd
Moranbah North Coal (Sales) Pty Ltd
Moranbah North Coal JV
23%
33%
33%
100%
100%
23%
23%
33%
33%
100%
100%
88%
88%
N/A
Ordinary
Ordinary
Ordinary
N/A
Ordinary
N/A
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
N/A
N/A
Level 7, 12 Creek Street, Brisbane QLD 4000
Level 7, 12 Creek Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 7, 12 Creek Street, Brisbane QLD 4000
N/A
Level 7, 12 Creek Street, Brisbane QLD 4000
Level 7, 12 Creek Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Level 11, 201 Charlotte Street, Brisbane QLD 4000
N/A
Moranbah North Coal Pty Ltd
100%
Ordinary
Level 11, 201 Charlotte Street, Brisbane QLD 4000
Moranbah South JV
QCMM (Lake Vermont Holdings) Pty Ltd
QCMM Finance Pty Ltd
Roper Creek JV
Theodore South JV
Tremell Pty Ltd
De Beers Auction Sales Belgium NV
International Institute of Diamond Grading
and Research (Belgium) NV
50%
33%
33%
86%
51%
33%
85%
85%
N/A
Ordinary
Ordinary
N/A
N/A
Ordinary
Ordinary
Ordinary
N/A
Level 7, 12 Creek Street, Brisbane QLD 4000
Level 7, 12 Creek Street, Brisbane QLD 4000
N/A
N/A
Level 7, 12 Creek Street, Brisbane QLD 4000
21 Schupstraat, 2018 Antwerp
21 Schupstraat, 2018 Antwerp
Bermuda
Coromin Insurance Limited
100%
Common
Clarendon House, 2 Church Street, Hamilton
Anglo American plc Integrated Annual Report 2021 231
Financial statements and other financial information
Notes to the financial statements
Financial statements and other financial information
Notes to the financial statements
Group structure
35. Related undertakings of the Group continued
35. Related undertakings of the Group continued
Country of
incorporation(1)(2)
Name of undertaking
See page 243 for footnotes.
Percentage
of equity
owned(3)
Share class
Registered address
Percentage
of equity
owned(3)
Share class
Registered address
Bermuda
Botswana
Holdac Insurance Limited
Ambase Prospecting (Botswana) (Pty) Ltd
100%
100%
Common
Ordinary
Clarendon House, 2 Church Street, Hamilton
Plot 32, Unit G3 Victoria House, Independence Avenue,
Brazil
Ventos de Santa Sara Holding S/A
98%
Ordinary
Rodovia Doutor Mendel Steinbruch, nº 10.800, sala
246, Distrito Industrial, Maracanaú/CE, CEP
Botswana
Anglo American Corporation Botswana
100%
Ordinary
Plot 67977, Fairground Office Park, Gaborone
(Services) Limited
Botswana
Broadhurst Primary School (Pty) Ltd
45%
Ordinary
First Floor Debswana Corporate Centre, Plot 64288
Gaborone, Ad54 Acj
Airport Road, Block 8, Gaborone
British Virgin
De Beers Centenary Angola Properties Ltd
85%
Ordinary
Craigmuir Chambers, Road Town, Tortola, VG1110
Group structure
Country of
incorporation(1)(2)
Name of undertaking
See page 243 for footnotes.
Botswana
De Beers Global Sightholder Sales (Pty) Ltd
85%
Ordinary
3rd Floor, DTCB Building,Plot 63016, Block 8, Airport
Road, Gaborone
Botswana
Botswana
De Beers Holdings Botswana (Pty) Ltd
Debswana Diamond Company (Pty) Ltd(5)
85%
43%
Ordinary
Ordinary
5th Floor, Debswana House, Main Mall, Gaborone
First Floor Debswana Corporate Centre, Plot 64288
Airport Road, Block 8, Gaborone
Botswana
Debswana Wellness Fund
43%
N/A
First Floor Debswana Corporate Centre, Plot 64288
Airport Road, Block 8, Gaborone
Botswana
Diamond Trading Company Botswana (Pty)
43%
Ordinary
Plot 63016, Airport Road, Block 8, Gaborone
Ltd
Botswana
Sesiro Insurance Company (Pty) Ltd
43%
Ordinary
First Floor Debswana Corporate Centre, Plot 64288
Botswana
Botswana
The Diamond Trust
Tokafala (Proprietary) Limited
21%
57%
N/A
Ordinary
Brazil
Anglo American Investimentos – Minério de
100%
Ferro Ltda.
Membership
interest
Brazil
Anglo American Minério de Ferro Brasil S.A.
100%
Ordinary
Brazil
Anglo American Niquel Brasil Ltda.
100%
Membership
interest
Airport Road, Block 8, Gaborone
Debswana House, The Mall, Gaborone
3rd Floor, DTCB Building, Plot 63016, Block 8, Airport
Road, Gaborone
Rua Maria Luiza Santiago, nº 200, 16º andar, sala 1603,
bairro Santa Lúcia, CEP 30360-740, Belo Horizonte,
Minas Gerais
Rua Maria Luiza Santiago, nº 200, 16º andar, sala 1601,
bairro Santa Lucia, CEP 30360-740, Belo Horizonte,
Minas Gerais
Rua Maria Luiza Santiago, nº. 200, 8º andar (parte),
Santa Lúcia, CEP 30360-740, Belo Horizonte, Minas
Gerais
Brazil
Anglo Ferrous Brazil Participações S.A.
100%
Ordinary
Rua Maria Luiza Santiago, nº 200, 16º andar (parte),
Câmara de Comércio Brasil República Sul
100%
N/A
Av. Paulista, nº. 2.300, 10º andar, Cerqueira César, São
Africana
Element Six Limitada
51%
Ordinary
Rua da Consolação, 368, 15º andar Consolação, São
Paulo/SP
bairro Santa Lúcia, CEP 30360-740, Belo Horizonte,
Minas Gerais
Canada
Peregrine Diamonds Ltd
85%
2400-333 Bay St, Toronto ON, M5H2T6
Brazil
Ventos de Santa Sara Energias Renovaveis
98%
Ordinary
Rodovia Doutor Mendel Steinbruch, nº 10.800, sala
S/A
226, Distrito Industrial, Maracanaú/CE, CEP
61939-910
61939-911
British Virgin
Delibes Holdings Limited(6)
Craigmuir Chambers, Road Town, Tortola, VG1110
British Virgin
Loma de Niquel Holdings Limited(6)
Craigmuir Chambers, Road Town, Tortola, VG1110
Islands
Islands
Islands
Canada
0912055 B.C. Ltd.
100%
Common
c/o McCarthy Tetrault, Suite 2400, 745 Thurlow Street,
Vancouver BC V6E 0C5
Canada
Anglo American Exploration (Canada) Ltd.
100%
Common
c/o Anglo American Exploration (Canada) Ltd., Suite
Canada
Canada
Auspotash Corporation
Central Ecuador Holdings Ltd.
Class B Preference
620 – 650 West Georgia Street, Vancouver, BC, V6B
Class C Preference
4N8
N/A
333 Bay Street, Suite 2400, Toronto, Ontario, M5H 2T6
Class A Common
c/o Borden Ladner Gervais, 1200 Waterfront Centre,
Class B Common
200 Burrard Street, Vancouver, British Columbia, V6C
3L6
Canada
De Beers Canada Holdings Inc.
2400-333 Bay St, Toronto ON, M5H2T6
Canada
Canada
De Beers Canada Inc.
Lion Battery Technologies Inc.
Class A Preferred
Suite 2600, Three Bentall Centre, 595 Burrard Street,
2400-333 Bay St, Toronto ON, M5H2T6
Canada
Peace River Coal Inc.
P.O. BOX 49314, Vancouver BC V7X 1L3
c/o McCarthy Tetrault, Suite 2400, 745 Thurlow Street,
Vancouver BC V6E 0C5
85%
94%
A Ordinary
B Ordinary
Class A1
Class A2
Class B
Class C
100%
70%
85%
85%
46%
100%
A Ordinary
B Ordinary
Preference
Common
Preference
Class A Non-
Voting
Common
Preference
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
China
China
China
China
Anglo American Chile Ltda
100%
Ordinary
Isidora Goyenechea 2800, piso 46, Las Condes,
Anglo American Copper Finance SpA
100%
Ordinary
Isidora Goyenechea 2800, piso 46, Las Condes,
Anglo American Marketing Chile SpA
100%
Ordinary
Torre Titanium, 2800 Isidora Goyenechea, piso 46, Las
Condes, Santiago 7550647, Chile
Anglo American Sur S.A.
50%
Ordinary
Isidora Goyenechea 2800, piso 46, Las Condes,
Compañía Minera Dona Ines De Collahuasi
44%
Ordinary
Avda Andres Bello 2687, P 11 Edif. el Pacifico, Las
SCM
Condes, Santiago, Región Metropolitana
Compañía Minera Westwall S.C.M
50%
Ordinary
Isidora Goyenechea 2800, piso 46, Las Condes,
Inversiones Anglo American Norte SpA
100%
Ordinary
Isidora Goyenechea 2800, piso 46, Las Condes,
Inversiones Anglo American Sur SpA
100%
Ordinary
Isidora Goyenechea 2800, piso 46, Las Condes,
Santiago
Santiago
Santiago
Santiago
Santiago
Santiago
Santiago
Anglo American Resources Trading (China)
100%
Equity interest
Units 01, 02A, 07A, 08, Floor 32, No. 1198 Century
De Beers Jewellers Commercial (Shanghai)
85%
Equity interest
Suite 4607, The Park Place, No.1601 Nan Jing West
Avenue, Pudong New Area, Shanghai
Road, Shanghai
Huangpu District, Shanghai
Nan Jing West Road, Shanghai
Co. Ltd.
Co., Ltd
Company Limited
Brazil
Ventos de São Felipe Holding S/A
98%
Ordinary
Rodovia Doutor Mendel Steinbruch, nº 10.800, sala
244, Distrito Industrial, Maracanaú/CE, CEP
61939-906
Brazil
Ventos de São Felipe Energias Renovaveis
98%
Ordinary
Rodovia Doutor Mendel Steinbruch, nº 10.800, sala
Inversiones Minorco Chile SpA
100%
Ordinary
Isidora Goyenechea 2800, piso 46, Las Condes,
S/A
290, Distrito Industrial, Maracanaú/CE, CEP
61939-907
Brazil
Ventos de Santa Alice Holding S/A
98%
Ordinary
Rodovia Doutor Mendel Steinbruch, nº 10.800, sala
241, Distrito Industrial, Maracanaú/CE, CEP
61939-908
Brazil
Ventos de Santa Alice Energias Renovaveis
98%
Ordinary
Rodovia Doutor Mendel Steinbruch, nº 10.800, sala
Element Six Trading (Shanghai) Co., Ltd
51%
Equity interest
Room 807, Floor 8, No 390-408 East Beijing Road,
S/A
236, Distrito Industrial, Maracanaú/CE, CEP
61939-909
Forevermark Marketing (Shanghai)
85%
Equity interest
Suite 4601, 4602 and 4608, The Park Place, No.1601
232 Anglo American plc Integrated Annual Report 2021
Anglo American plc Integrated Annual Report 2021 233
49%
49%
Ordinary
Preference
Membership
interest
Membership
interest
Paulo
Rua da Passagem, nº 123, 11º andar, sala 1101,
Botafogo, CEP 22290-030, Rio de Janeiro/RJ
Rua Visconde de Ouro Preto, nº 5, 11º andar (parte),
Botafogo, Rio de Janeiro/RJ
Rua Maria Luiza Santiago, nº 200, 16º andar (parte),
bairro Santa Lúcia, CEP 30360-740, Belo Horizonte,
Minas Gerais
Rua Maria Luiza Santiago, nº. 200, 20º andar (parte),
bairro Santa Lúcia, CEP 30.360-740, Belo Horizonte,
Minas Gerais
Ferroport Logística Comercial Exportadora
50%
Ordinary
S.A.
GD Empreendimentos Imobiliários S.A.
33%
Guaporé Mineração Ltda.
Brazil
Mineração Tanagra Ltda.
Brazil
Brazil
Brazil
Brazil
Brazil
Financial statements and other financial information
Notes to the financial statements
Group structure
35. Related undertakings of the Group continued
Country of
incorporation(1)(2)
Name of undertaking
See page 243 for footnotes.
Percentage
of equity
owned(3)
Share class
Registered address
Brazil
Ventos de Santa Sara Holding S/A
98%
Ordinary
Rodovia Doutor Mendel Steinbruch, nº 10.800, sala
246, Distrito Industrial, Maracanaú/CE, CEP
61939-910
Brazil
Ventos de Santa Sara Energias Renovaveis
98%
Ordinary
Rodovia Doutor Mendel Steinbruch, nº 10.800, sala
British Virgin
Islands
British Virgin
Islands
British Virgin
Islands
S/A
226, Distrito Industrial, Maracanaú/CE, CEP
61939-911
De Beers Centenary Angola Properties Ltd
85%
Ordinary
Craigmuir Chambers, Road Town, Tortola, VG1110
Delibes Holdings Limited(6)
Loma de Niquel Holdings Limited(6)
85%
94%
A Ordinary
B Ordinary
Class A1
Class A2
Class B
Class C
Craigmuir Chambers, Road Town, Tortola, VG1110
Craigmuir Chambers, Road Town, Tortola, VG1110
Canada
0912055 B.C. Ltd.
100%
Common
c/o McCarthy Tetrault, Suite 2400, 745 Thurlow Street,
Canada
Anglo American Exploration (Canada) Ltd.
100%
Canada
Canada
Auspotash Corporation
Central Ecuador Holdings Ltd.
Canada
De Beers Canada Holdings Inc.
Canada
Canada
De Beers Canada Inc.
Lion Battery Technologies Inc.
Canada
Peace River Coal Inc.
100%
70%
85%
85%
46%
100%
Canada
Peregrine Diamonds Ltd
85%
Vancouver BC V6E 0C5
Common
Class B Preference
Class C Preference
c/o Anglo American Exploration (Canada) Ltd., Suite
620 – 650 West Georgia Street, Vancouver, BC, V6B
4N8
N/A
333 Bay Street, Suite 2400, Toronto, Ontario, M5H 2T6
Class A Common
Class B Common
c/o Borden Ladner Gervais, 1200 Waterfront Centre,
200 Burrard Street, Vancouver, British Columbia, V6C
3L6
A Ordinary
B Ordinary
Preference
2400-333 Bay St, Toronto ON, M5H2T6
2400-333 Bay St, Toronto ON, M5H2T6
Class A Preferred
Suite 2600, Three Bentall Centre, 595 Burrard Street,
Common
Preference
Class A Non-
Voting
Common
Preference
P.O. BOX 49314, Vancouver BC V7X 1L3
c/o McCarthy Tetrault, Suite 2400, 745 Thurlow Street,
Vancouver BC V6E 0C5
2400-333 Bay St, Toronto ON, M5H2T6
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
China
China
China
China
Anglo American Chile Ltda
100%
Ordinary
Isidora Goyenechea 2800, piso 46, Las Condes,
Santiago
Anglo American Copper Finance SpA
100%
Ordinary
Isidora Goyenechea 2800, piso 46, Las Condes,
Santiago
Anglo American Marketing Chile SpA
100%
Ordinary
Torre Titanium, 2800 Isidora Goyenechea, piso 46, Las
Condes, Santiago 7550647, Chile
Anglo American Sur S.A.
50%
Ordinary
Isidora Goyenechea 2800, piso 46, Las Condes,
Santiago
Compañía Minera Dona Ines De Collahuasi
44%
Ordinary
Avda Andres Bello 2687, P 11 Edif. el Pacifico, Las
SCM
Condes, Santiago, Región Metropolitana
Compañía Minera Westwall S.C.M
50%
Ordinary
Isidora Goyenechea 2800, piso 46, Las Condes,
Santiago
Inversiones Anglo American Norte SpA
100%
Ordinary
Isidora Goyenechea 2800, piso 46, Las Condes,
Santiago
Inversiones Anglo American Sur SpA
100%
Ordinary
Isidora Goyenechea 2800, piso 46, Las Condes,
Santiago
Inversiones Minorco Chile SpA
100%
Ordinary
Isidora Goyenechea 2800, piso 46, Las Condes,
Santiago
Anglo American Resources Trading (China)
100%
Equity interest
Units 01, 02A, 07A, 08, Floor 32, No. 1198 Century
Co. Ltd.
Avenue, Pudong New Area, Shanghai
De Beers Jewellers Commercial (Shanghai)
85%
Equity interest
Suite 4607, The Park Place, No.1601 Nan Jing West
Co., Ltd
Road, Shanghai
Element Six Trading (Shanghai) Co., Ltd
51%
Equity interest
Room 807, Floor 8, No 390-408 East Beijing Road,
Huangpu District, Shanghai
Forevermark Marketing (Shanghai)
85%
Equity interest
Suite 4601, 4602 and 4608, The Park Place, No.1601
Company Limited
Nan Jing West Road, Shanghai
Anglo American plc Integrated Annual Report 2021 233
Financial statements and other financial information
Notes to the financial statements
Group structure
35. Related undertakings of the Group continued
Country of
incorporation(1)(2)
Name of undertaking
See page 243 for footnotes.
Percentage
of equity
owned(3)
Share class
Registered address
China
Platinum Guild International (Shanghai) Co.,
78%
Ordinary
Room 601, L'avenue,99 XianXia Road, Shanghai
Limited
200051
Colombia
Colombia
Anglo American Colombia Exploration S.A.
100%
Cerrejon Zona Norte S.A.
33%
100%
Ordinary
Ordinary
Ordinary
Carrera 7 No. 71-52 Torre B, Piso 9, Bogotá
Calle 100 No. 19-54, Piso 11, Bogotá
c/o KPMG, 500b. Av. Mpala/Quartier Golf, Lubumbashi
Democratic
Ambase Exploration Africa (DRC) SPRL
Republic of
Congo
Ecuador
Ecuador
Anglo American Ecuador S.A.
Central Ecuador EC-CT S.A.
100%
70%
Ordinary
Ordinary
Av. Patria E4-69 y Av. Amazonas, Cofiec,16th Floor
Av. Patria E4-69 y Av. Amazonas, Edif.COFIEC, piso 17,
Quito
Finland
AA Sakatti Mining Oy
100%
Ordinary
AA Sakatti Mining Oy, Tuohiaavantie 2, 99600,
Sodankylä
Gabon
Samancor Gabon SA
40%
Ordinary
C/- Fiduge SARLBattery IV, Soraya Building, PO Box
Germany
Germany
Element Six GmbH
Kupfer Copper Germany GmbH
51%
80%
Ordinary
Ordinary
15.950, Liberville
Staedeweg 18, 36151, Burghaun
Simmons & Simmons LLP, Koenigsalle 2a, 40212,
Dusseldorf
Hong Kong
De Beers Auction Sales Holdings Limited
85%
Ordinary
Unit 1001,10/F Unicorn Trade Centre, 127-131 Des
Voeux Road, Central
Hong Kong
De Beers Jewellers (Hong Kong) Limited
85%
Ordinary
RM 02B&03-06 26/F, Kinwick Centre, 32 Holly Wood
Road Central
Hong Kong
Forevermark Limited
85%
Ordinary
RM 02B&03-06 26/F, Kinwick Centre, 32 Holly Wood
Road Central
Hong Kong
Platinum Guild International (Hong Kong)
78%
Ordinary
Suites 2901-2, Global Trade Square, No.21 Wong Chuk
India
India
India
India
India
Limited
Hang Road
Anglo American Services (India) Private
100%
Equity
A- 1/292, Janakpuri, New Delhi - 110058
Limited
De Beers India Private Ltd
85%
Ordinary Equity
Preference Equity
601, 6th floor, TCG Financial Centre, C -53, G Block,
Bandra Kurla Complex, Bandrar (East), Mumbai 400
058
Hindustan Diamond Company Private
43%
Ordinary equity
Office No. 12, 14th Floor, Navjivan Society Building,
Limited
No.3, Lamington Road, Mumbai 400 008
Platinum Guild India Private Limited
78%
Ordinary
Notan Classic, 3rd Floor, 114 Turner Road, Bandra
West, Mumbai 400 050
Sirius Minerals India Private Limited
100%
Ordinary
Regus Elegance, 2F, Elegance, Jasola Districe Centre
Old Mathura Road, New Delhi, 110025
Indonesia
PT Anglo American Indonesia
100%
Ordinary
Pondok Indah Office Tower 3, 17th Floor, Jl. Sultan
Iskandar Muda, Kav. 5-TA RT.004/RW.003 Pondok
Indah, Jakarta Selatan 12310
Indonesia
PT Minorco Services Indonesia
100%
Ordinary
Pondok Indah Office Tower 3, 17th Floor, Jl. Sultan
Iskandar Muda, Kav. 5-TA RT.004/RW.003 Pondok
Indah, Jakarta Selatan 12310
Ireland
CMC-Coal Marketing Designated Activity
33%
Ordinary
Fumbally Square, New Street, Dublin 8, D08 XYA5
Company
Coromin Insurance (Ireland) DAC
100%
Ordinary
Fourth Floor, 25/28 Adelaide Road, Dublin
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
Element Six (Holdings) Limited
Element Six (Trade Marks) Limited
Element Six Abrasives Treasury Limited
Element Six Limited
Element Six Treasury Limited
Isle of Man
Element Six (Legacy Pensions) Limited
51%
51%
51%
51%
85%
85%
Ordinary
Ordinary
A Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
A Ordinary
Shannon Airport, Shannon, Co.Clare
Shannon Airport, Shannon, Co.Clare
Shannon Airport, Shannon, Co.Clare
Shannon Airport, Shannon, Co.Clare
Shannon Airport, Shannon, Co.Clare
1st Floor, 18-20 North Quay, Douglas, IM1 4LE
Israel
Italy
De Beers Auction Sales Israel Ltd
85%
Ordinary
11th Floor, Yahalom (Diamond) Building, 21 Tuval
Street Ramat Gan 5252236
Forevermark Italy S.R.L.
85%
Ordinary
Via Burlamacchi Francesco 14, 20135, Milan
234 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Group structure
35. Related undertakings of the Group continued
Country of
incorporation(1)(2)
Name of undertaking
See page 243 for footnotes.
Percentage
of equity
owned(3)
Share class
Registered address
Japan
De Beers Jewellers Japan K.K.
85%
Common stock
New Otani Garden Court 7th Floor, 4-1 Kioi-cho,
Chiyoda-ku, Tokyo
Japan
Element Six Limited
51%
Ordinary
9F PMO Hatchobori, 3-22-13 Hatchobori, Chuo-ku,
Tokyo, 104
Japan
Forevermark KK
85%
Common stock
New Otani Garden Court, 7th Floor, 4-1 Kioi-cho,
Chiyoda-ku, Tokyo
Japan
Furuya Eco-Front Technology Co., Ltd
31%
Common
MSB-21 Minami Otsuka Building, 2-37-5 Minami
Otsuka, Toshima-ku, Tokyo
Japan
PGI KK
78%
Ordinary
Imperial Hotel Tower 17F, 1-1-1 Uchisaiwai-cho,
Jersey
Jersey
A.R.H. Investments Limited(6)
A.R.H. Limited(6)
Jersey
Ambras Holdings Limited(6)(7)
Chiyoda-ku, Tokyo, 100-8575
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
100%
100%
100%
Ordinary
Class A
Class B
Class C
Repurchaseable
Class A Ordinary
Repurchaseable
Class B Ordinary
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Ammin Coal Holdings Limited(6)
100%
Anglo African Exploration Holdings Limited(6) 100%
Anglo American Amcoll UK Ltd(6)
100%
Ordinary
Ordinary
Ordinary
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
Anglo American Buttercup Company
100%
Ordinary
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
Limited(6)
Anglo American Chile Investments UK Ltd(6)
Anglo American Clarent UK Ltd(6)
Anglo American Corporation de Chile
100%
100%
100%
Ordinary
Ordinary
Ordinary
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
Holdings Limited(6)
Jersey
Anglo American Exploration Colombia
100%
Ordinary
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
Limited(6)
Jersey
Anglo American Exploration Overseas
100%
Ordinary
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
Holdings Limited(6)
Jersey
Anglo American Finland Holdings 2
100%
Ordinary
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
Limited(6)
Jersey
Anglo American Midway Investment
100%
Limited(6)
Jersey
Anglo American Overseas Limited(6)(8)
100%
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
A Shares
B Shares
Repurchaseable
Class A Ordinary
Repurchaseable
Class B Ordinary
Repurchaseable
Class C Ordinary
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Anglo Australia Investments Limited(6)
Anglo Diamond Investments Limited(6)
Anglo Iron Ore Investments Limited(6)
Anglo Operations (International) Limited(6)
Anglo Peru Investments Limited(6)
Anglo Quellaveco Limited(6)
Anglo South American Investments
Limited(6)
Anglo Venezuela Investments Limited(6)
Aval Holdings Limited(6)
Cheviot Holdings Limited(6)
De Beers Centenary Limited(6)
De Beers Exploration Holdings Limited(6)
De Beers Holdings Investments Limited(6)
De Beers Investments plc(6)
100%
100%
100%
100%
100%
100%
100%
100%
100%
85%
85%
85%
85%
85%
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Class A
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
Anglo American plc Integrated Annual Report 2021 235
Financial statements and other financial information
Notes to the financial statements
Group structure
35. Related undertakings of the Group continued
Country of
incorporation(1)(2)
Name of undertaking
See page 243 for footnotes.
Percentage
of equity
owned(3)
Share class
Registered address
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
De Beers plc(6)
Highbirch Limited(6)
Kumba International Trading Limited(6)
Minorco Overseas Holdings Limited(6)
Minorco Peru Holdings Limited(6)
Minpress Investments Limited(6)
Sirius Minerals Finance Limited(6)
85%
100%
53%
100%
100%
100%
100%
Sirius Minerals Finance No.2 Limited(6)
100%
Luxembourg
Kumba Iron Ore Holdings Sarl
Macau
De Beers Jewellers (Macau) Company
53%
85%
Limited
A Ordinary
B Ordinary
Class A
Class B
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Preference
Ordinary
Preference
Ordinary
Ordinary
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
3rd Floor, 44 Esplanade, St Helier, JE4 9WG
47 Esplanade, St Helier, JE1 0BD
47 Esplanade, St Helier, JE1 0BD
58 rue Charles Martel, L-2134, Luxembourg
Avenida da Praia Grande No. 409, China Law Building
16/F – B79
Madagascar
Societe Civille De Prospection De Nickel A
32%
N/A
N/A
Madagascar
Mauritius
Anglo American International Limited(6)
100%
c/o AXIS Fiduciary Ltd, 2nd Floor, The AXIS, 26 Bank
Street, Cybercity Ebene, 72201
Normal Class A
Ordinary
Ordinary-B
Repurchaseable
Class A Ordinary
Mexico
Anglo American Mexico S.A. de C.V.
100%
Common
Mexico
Servicios Anglo American Mexico S.A. de
100%
Common
C.V.
c/o Sanchez Mejorada, Velasco y Ribe, S.C., Paseo de
la Reforma No. 450, Col. Lomas de Chapultepec,
11000
c/o Sanchez Mejorada, Velasco y Ribe, S.C., Paseo de
la Reforma No. 450, Col. Lomas de Chapultepec,
11000
Mozambique
Anglo American Corporation Mocambique
100%
Quota
PricewaterhouseCoopers, Ltda. Avenida Vladimir
Servicos Limitada
Lenine, No 174, 4o andar. Edifício Millennium Park
Maputo
Namibia
Namibia
Ambase Prospecting (Namibia) (Pty) Ltd
De Beers Marine Namibia (Pty) Ltd
100%
43%
Ordinary
Ordinary
c/o SGA, 24 Orban Street, Klein Windhoek, Windhoek
4th Floor, Namdeb Centre, 10 Dr Frans, Indongo Street,
Windhoek
Namibia
De Beers Namibia Holdings (Pty) Ltd
85%
Ordinary
6th floor, Namdeb Centre, 10 Dr Frans, Indongo Street,
Windhoek
Namibia
Debmarine Namdeb Foundation
43%
N/A
10th Floor, Namdeb Centre, 10 Dr Frans Indongo Street,
Windhoek
Namibia
DTC Valuations Namibia (Pty) Ltd
85%
Ordinary
4th Floor, Namdeb Centre, 10 Dr Frans, Indongo Street,
Windhoek
Namibia
Exclusive Properties (Pty) Ltd
43%
Ordinary
10th Floor, Namdeb Centre, 10 Dr Frans Indongo Street,
Windhoek
Namibia
Namibia
Longboat Trading (Pty) Ltd
Mamora Mines & Estates Limited
100%
28%
Ordinary
Ordinary
24 Orban Street, Klein Windhoek, Windhoek
10th Floor, Namdeb Centre, 10 Dr Frans Indongo Street,
Windhoek
Namibia
Namdeb Diamond Corporation (Pty) Ltd
43%
Ordinary
10th Floor, Namdeb Centre, 10 Dr Frans Indongo Street,
Windhoek
Namibia
Namdeb Holdings (Pty) Ltd
43%
Ordinary
10th Floor, Namdeb Centre, 10 Dr Frans Indongo Street,
Windhoek
Namibia
Namdeb Properties (Pty) Ltd
43%
Ordinary
10th Floor, Namdeb Centre, 10 Dr Frans Indongo Street,
Windhoek
Namibia
Namibia Diamond Trading Company (Pty)
43%
Ordinary
9th Floor, Namdeb Centre, 10 Dr Frans Indongo Street,
Ltd
Windhoek
Namibia
Namibia
OMDis Town Transformation Agency
Oranjemund Private Hospital (Proprietary)
43%
43%
N/A
Ordinary
Unit 6, Gold Street, Business Park, Prosperita, Windhoek
10th Floor, Namdeb Centre, 10 Dr Frans Indongo Street,
Limited
Windhoek
236 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Group structure
35. Related undertakings of the Group continued
Country of
incorporation(1)(2)
Name of undertaking
See page 243 for footnotes.
Percentage
of equity
owned(3)
Share class
Registered address
Namibia
Oranjemund Town Management Company
43%
Ordinary
10th Floor, Namdeb Centre, 10 Dr Frans Indongo Street,
(Pty) Ltd
Windhoek
Namibia
Namdeb Hospital Pharmacy (Pty) Ltd
43%
Ordinary
10th Floor, Namdeb Centre, 10 Dr Frans Indongo Street,
Windhoek
Netherlands
Anglo American (TIH) B.V.(6)
100%
Ordinary
17 Charterhouse Street, London, EC1N 6RA, United
Kingdom
Netherlands
Anglo American Exploration B.V.(6)
100%
Ordinary
17 Charterhouse Street, London, EC1N 6RA, United
Kingdom
Netherlands
Anglo American Exploration (Philippines)
100%
Ordinary
17 Charterhouse Street, London, EC1N 6RA, United
B.V.(6)
Kingdom
Netherlands
Anglo American International B.V.(6)
100%
Ordinary
17 Charterhouse Street, London, EC1N 6RA, United
Kingdom
Netherlands
Anglo American Netherlands B.V.(6)
100%
Ordinary
17 Charterhouse Street, London, EC1N 6RA, United
Kingdom
Netherlands
Anglo Operations (Netherlands) B.V.(6)
100%
Ordinary
17 Charterhouse Street, London, EC1N 6RA, United
Netherlands
Netherlands
Element Six N.V.
Erabas B.V(6)
85%
79%
Ordinary
Ordinary
Kingdom
De Nieuwe Erven 2, 5431 NT, Cuijk
17 Charterhouse Street, London, EC1N 6RA, United
Kingdom
Netherlands
Loma de Niquel Holdings B.V.(6)
100%
Ordinary
17 Charterhouse Street, London, EC1N 6RA, United
Netherlands
Minorco Exploration (Indonesia) B.V.(6)
100%
Ordinary
17 Charterhouse Street, London, EC1N 6RA, United
Kingdom
Kingdom
North
Anglo American Exploration West Tetyan
100%
Ordinary
Str. Risto Ravanovski no. 13A, 1000, Skopje, Municipality
Macedonia
Skopje
of Karpos
Panama
Cibra Trading Inc
30%
Ordinary
Street 53, East Marbella, MMG Tower 2nd Floor,
Republic of Panama
Papua New
Guinea
Papua New
Guinea
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Anglo American (Star Mountain) Limited
100%
Ordinary
c/o Pacific Legal Group Lawyers, Ground Floor,
Iaraguma Haus, Lot 30 Section 38 Off Cameron
Road, Gordons, National Capital District
Anglo American Exploration (PNG) Limited
100%
Ordinary
c/o Pacific Legal Group Lawyers, Ground Floor,
Anglo American Marketing Peru S.A.
Anglo American Peru S.A.
Anglo American Quellaveco S.A.
100%
100%
60%
Ordinary
Ordinary
Class A Ordinary
Class B Non-
Voting
Iaraguma Haus, Lot 30 Section 38 Off Cameron
Road, Gordons, National Capital District
Calle Esquilache 371, Piso 10, San Isidro, Lima 27
Calle Esquilache 371, Piso 10, San Isidro, Lima 27
Calle Esquilache 371, Piso 10, San Isidro, Lima 27
Anglo American Servicios Perú S.A. en
100%
Ordinary
Calle Esquilache 371, Piso 10, San Isidro, Lima 27
Liquidación
Asociación Michiquillay en Liquidación
Asociación Quellaveco
Cobre del Norte S.A.
Philippines
Anglo American Exploration (Philippines)
Inc.
Sierra Leone
Gemfair (SL) Limited
Singapore
Anglo American STF Pte. Ltd.
100%
100%
100%
100%
85%
100%
N/A
N/A
Ordinary
Ordinary
Ordinary
Ordinary
Calle Esquilache 371, Piso 10, San Isidro, Lima 27
Calle Esquilache 371, Piso 10, San Isidro, Lima 27
Calle Esquilache 371, Piso 10, San Isidro, Lima 27
c/o SyCipLaw Center, 105 Paseo de Roxas, Makati City
1226, Metro Manila
31 Lightfoot Boston Street, Freetown, Sierra Leone
10 Collyer Quey, #38-00 Ocean Financial Centre,
049315
Singapore
Anglo American Shipping Pte. Limited
100%
Ordinary
10 Collyer Quay, Level 38 Ocean Financial Centre,
049315
Singapore
De Beers Auction Sales Singapore Pte. Ltd.
85%
Ordinary
10 Collyer Quay, #03-04 Ocean Financial Centre,
049315
Singapore
Kumba Singapore Pte. Ltd.
53%
Ordinary
10 Collyer Quey, #38-00 Ocean Financial Centre,
049315
Singapore
MR Iron Ore Marketing Services Pte. Ltd.
50%
Ordinary
10 Collyer Quey, #38-00 Ocean Financial Centre,
049315
Anglo American plc Integrated Annual Report 2021 237
Financial statements and other financial information
Notes to the financial statements
Group structure
35. Related undertakings of the Group continued
Country of
incorporation(1)(2)
Name of undertaking
See page 243 for footnotes.
Percentage
of equity
owned(3)
Share class
Registered address
Singapore
Singapore
Samancor Marketing Pte. Ltd.
Sirius Minerals (Singapore) Pte. Ltd
South Africa
AEF Mining Services (Pty) Ltd
40%
100%
25%
Ordinary
Ordinary
Ordinary
16 Collyer Quay #18-00 Income at Raffles, 049318
80 Robinson Road, #02-00, 068898
Zommerlust Building, Rietbok Road, Kathu, Northern
Cape, 8446
South Africa
Africa Pipe Industries North (Pty) Ltd
40%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Amaprop Townships Ltd
100%
Ordinary
61 Katherine Street, Sandton, 2196
South Africa
Ambase Investment Africa (Botswana) (Pty)
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
Ltd
2196
South Africa
Ambase Investment Africa (DRC) (Pty) Ltd
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Ambase Investment Africa (Namibia) (Pty)
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
Ltd
2196
South Africa
Ambase Investment Africa (Tanzania) (Pty)
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
Ltd
2196
South Africa
Ambase Investment Africa (Zambia) (Pty)
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
Ltd
2196
South Africa
Anglo American Corporation of South Africa
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
(Pty) Ltd
2196
South Africa
Anglo American EMEA Shared Services (Pty)
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
Ltd
2196
South Africa
Anglo American Farms (Pty) Ltd
100%
Ordinary
Vergelegen Wine Farm, Lourensford Road, Somerset
West, 7130
South Africa
Anglo American Farms Investment Holdings
100%
Ordinary
Vergelegen Wine Farm, Lourensford Road, Somerset
(Pty) Ltd
West, 7130
South Africa
Anglo American Group Employee
Shareholder Nominees (Pty) Ltd
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Anglo American Marketing South Africa
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
Proprietary Limited
2196
South Africa
Anglo American Platinum Limited
79%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Anglo American Properties Ltd
100%
South Africa
Anglo American Prospecting Services (Pty)
100%
Ordinary
Ordinary
61 Katherine Street, Sandton, 2196
55 Marshall Street, Johannesburg, 2001
Ltd
South Africa
Anglo American SA Finance Proprietary
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
Limited
2196
South Africa
Anglo American Sebenza Fund (Pty) Ltd
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Anglo American SEFA Mining Fund (Pty) Ltd 50%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Anglo American South Africa Investments
100%
Proprietary Limited
Ordinary
Preference
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Anglo American South Africa Proprietary
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
Limited
2196
South Africa
Anglo American Zimele (Pty) Ltd
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Anglo American Zimele Community Fund
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
(Pty) Ltd
2196
South Africa
Anglo American Zimele Loan Fund (Pty) Ltd
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Anglo Coal Investment Africa (Botswana)
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
(Pty) Ltd
2196
South Africa
Anglo Corporate Enterprises (Pty) Ltd
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Anglo Corporate Services South Africa
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
Proprietary Limited
2196
238 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Group structure
35. Related undertakings of the Group continued
Country of
incorporation(1)(2)
Name of undertaking
See page 243 for footnotes.
Percentage
of equity
owned(3)
Share class
Registered address
South Africa
Anglo Platinum Management Services (Pty)
79%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
Ltd
2196
South Africa
Anglo South Africa (Pty) Ltd
100%
South Africa
Anglo South Africa Capital (Pty) Ltd
100%
Ordinary
Redeemable
Preference
Ordinary
Redeemable
Preference
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Anseld Holdings Proprietary Limited
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Atomatic Trading (Pty) Limited
58%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Balgo Nominees (Pty) Ltd
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Blinkwater Farms 244KR (Pty) Ltd
78%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
South Africa
Boikgantsho Platinum Mine (Pty) Ltd
South Africa
Bokoni Platinum Holdings (Pty) Ltd
South Africa
Bokoni Platinum Mines (Pty) Ltd
South Africa
Damelin Emalahleni (Pty) Ltd
South Africa
South Africa
South Africa
DBCM Holdings (Pty) Ltd
De Beers Consolidated Mines (Pty) Ltd(9)
De Beers Group Services (Pty) Ltd
38%
38%
38%
20%
63%
63%
85%
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Redeemable
Preference
2196
5 Jellicoe Avenue, Rosebank, Johannesburg, 2913
82 Grayston Drive, Sandton, Johannesburg, 2196
4th Floor Atholl, Johannesburg, Gauteng, 2196
Cnr O R Tambo & Beatrix Avenue, Witbank, 1035
36 Stockdale Street, Kimberley, 8301
36 Stockdale Street, Kimberley, 8301
Cornerstone, Corner Diamond Drive and Crownwood
Road, Theta, Johannesburg, 2013
South Africa
De Beers Marine (Pty) Ltd
85%
Ordinary
Cornerstone, Corner Diamond Drive and Crownwood
Road, Theta, Johannesburg, 2013
South Africa
De Beers Matlafalang Business
63%
Ordinary
Cornerstone, Corner Diamond Drive and Crownwood
Development (Pty) Ltd
Road, Theta, Johannesburg, 2013
South Africa
De Beers Sightholder Sales South Africa
63%
Ordinary
Cornerstone, Corner Diamond Drive and Crownwood
(Pty) Ltd
Road, Theta, Johannesburg, 2013
South Africa
Dido Nominees (Pty) Ltd
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Element Six (Production) Proprietary Limited 51%
South Africa
Element Six South Africa Proprietary Limited 51%
South Africa
Element Six Technologies Proprietary
85%
Ordinary
Ordinary
Ordinary
Debid Road, Nuffield, Springs, 1559
Debid Road, Nuffield, Springs, 1559
Debid Road, Nuffield, Springs, 1559
Limited
South Africa
Ga-Phasha Platinum Mine (Pty) Limited
38%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Hotazel Manganese Mines Proprietary
30%
Limited
Ordinary
Preference
39 Melrose Boulevard, Melrose Arch, Johannesburg,
2076
South Africa
Khongoni Haaskraal Coal (Pty) Ltd
20%
Ordinary
Unit 3, Bauhinia Street, Highveld Technopark, Centurion,
0157
South Africa
KIO Investments Holdings (Pty) Ltd
70%
Ordinary
Centurion Gate Building 2B, 124 Akkerboom Road,
Centurion, 0157
South Africa
Kumba BSP Trust
53%
N/A
Centurion Gate Building 2B, 124 Akkerboom Road,
Centurion, 0157
South Africa
Kumba Iron Ore Limited
70%
Ordinary
Centurion Gate Building 2B, 124 Akkerboom Road,
Centurion, 0157
South Africa
Kwanda Platinum Mine (Pty) Ltd
South Africa
Lebowa Platinum Mines Limited
South Africa
Lexshell 49 General Trading (Pty) Ltd
38%
38%
35%
Ordinary
Ordinary
Ordinary
124 Akkerboom Street, Building 2B, Centurion, 0157
124 Akkerboom Street, Building 2B, Centurion, 0157
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Longboat (Pty) Ltd
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
Anglo American plc Integrated Annual Report 2021 239
Financial statements and other financial information
Notes to the financial statements
Group structure
35. Related undertakings of the Group continued
Country of
incorporation(1)(2)
Name of undertaking
See page 243 for footnotes.
Percentage
of equity
owned(3)
Share class
Registered address
South Africa
Main Place Holdings Limited
39%
Ordinary
Suite 801, 76 Regent Road, Sea Point, Western Cape
8005
South Africa
Manganore Iron Mining Proprietary Limited
47%
Ordinary
39 Melrose Boulevard, Melrose Arch, Johannesburg,
South Africa
Marikana Ferrochrome Limited
South Africa
Marikana Minerals (Pty) Ltd
South Africa
Matthey Rustenburg Refiners (Pty) Ltd
100%
100%
79%
2076
Ordinary
Ordinary
55 Marshall Street, Johannesburg, 2001
55 Marshall Street, Johannesburg, 2001
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
A' Redeemable
cumulative
Preference shares
B' Redeemable
cumulative
Preference shares
A' Ordinary shares
B' Ordinary shares
South Africa
Metalloys Manganese Smelter Proprietary
40%
Ordinary NPV
39 Melrose Boulevard, Melrose Arch, Johannesburg,
Limited
2076
South Africa
Micawber 146 (Pty) Ltd
79%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Modikwa Mining Personnel Services (Pty) Ltd 39%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Modikwa Platinum Mine (Pty) Ltd
South Africa
Mogalakwena Platinum Limited
39%
78%
Ordinary
Ordinary
16 North Road, Dunkeld Court, Dunkeld West, 2196
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Mogalakwena Mine Solar Power (Pty) Ltd
78%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Newshelf 480 (Pty) Ltd
55%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
South Africa
Norsand Holdings (Pty) Ltd
79%
2196
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
Ordinary
B' Ordinary
Non-Cumulative
Redeemable
Preference
South Africa
Peruke (Pty) Ltd
51%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Platmed (Pty) Ltd
78%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Platmed Properties (Pty) Ltd
78%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Polokwane Iron Ore Company (Pty) Ltd
27%
Ordinary
Centurion Gate Building 2B, 124 Akkerboom Road,
Centurion, 0157
South Africa
Precious Metals Refiners Proprietary Limited 78%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Pro Enviro (Pty) Ltd
South Africa
Resident Nominees (Pty) Ltd
20%
100%
Ordinary
Ordinary
Greenside Colliery, PTN 0ff 331, Blackhills, 1032
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Rustenburg Base Metals Refiners Proprietary
78%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
Limited
2196
South Africa
Rustenburg Platinum Mines Limited
78%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Samancor Holdings Proprietary Limited
40%
Ordinary
39 Melrose Boulevard, Melrose Arch, Johannesburg,
2076
South Africa
Samancor Manganese Proprietary Limited
40%
Ordinary NPV
39 Melrose Boulevard, Melrose Arch, Johannesburg,
2076
South Africa
Sheba's Ridge Platinum (Pty) Ltd
27%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Sibelo Resource Development (Pty) Ltd
53%
Ordinary
Centurion Gate Building 2B, 124 Akkerboom Road,
Centurion, 0157
South Africa
Sishen Iron Ore Company (Pty) Ltd
53%
Ordinary
Centurion Gate Building 2B, 124 Akkerboom Road,
Centurion, 0157
240 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Group structure
35. Related undertakings of the Group continued
Country of
incorporation(1)(2)
Name of undertaking
See page 243 for footnotes.
Percentage
of equity
owned(3)
Share class
Registered address
South Africa
Spectrem Air Pty Ltd
93%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Tenon Investment Holdings (Pty) Ltd
100%
Ordinary
144 Oxford Road, Rosebank, Melrose, Johannesburg,
2196
South Africa
Terra Nominees Proprietary Limited
40%
Ordinary
39 Melrose Boulevard, Melrose Arch, Johannesburg,
South Africa
The Village of Cullinan (Pty) Ltd
South Africa
The Work Expert (Pty) Ltd
South Africa
UHPU Manufacturing Proprietary Limited
South Africa
Vergelegen Wine Estate (Pty) Ltd
63%
47%
51%
100%
Ordinary
Ordinary
N/A
Ordinary
2076
36 Stockdale Street, Kimberley, 8301
17 Du Plooy Street, FH Building, Potchefstroom, North
West, 2530
Debid Road, Nuffield Springs, 1559
Vergelegen Wine Farm, Lourensford Road, Somerset
West, 7130
South Africa
Vergelegen Wines (Pty) Ltd
100%
Ordinary
Vergelegen Wine Farm, Lourensford Road, Somerset
West, 7130
South Africa
Whiskey Creek Management Services (Pty)
78%
Ordinary
144 Oxford Road, Rosebank, Melrose, 2196
South Africa
Kroondal UJV
50%
N/A
Ltd
South Africa
Marikana UJV
50%
N/A
Constantia Office Park, Cnr 14th Avenue & Hendrik
Potgieter Road, Bridgeview House, Ground Floor
(Lakeview Avenue), Weltevreden Park, 1709
Constantia Office Park, Cnr 14th Avenue & Hendrik
Potgieter Road, Bridgeview House, Ground Floor
(Lakeview Avenue), Weltevreden Park, 1709
South Africa
Modikwa Platinum Mine UJV
50%
N/A
ARM House, 29 Impala Road, Chislehurston, Sandton,
2196
South Africa
Mototolo UJV
100%
N/A
55 Marshall Street, Johannesburg, 2001
South Africa
WPIC Holdings Pty Ltd
South Africa
Peglerae Hospital (Pty) Ltd
43%
31%
Ordinary
Ordinary
5 Hollard Street, Johannesburg, 1627
21 Oxford Manor, Rudd & Chaplin Roads, Illovo,
Johannesburg, 2196
South Africa
Venetia Solar Project Pty Ltd
63%
Ordinary
Cornerstone, Corner Crownwood Road and Diamond
South Africa
Kumba Iron One Rehabilitation Trust
South Africa
SIOC Employee Benefit Trust
South Africa
Dingleton Home Owners Resettlemen Trust
70%
53%
53%
N/A
N/A
N/A
Drive, Theta, Johannesburg, 2013
124 Akkerboom Street, Building 2B, Centurion, 0157
124 Akkerboom Street, Building 2B, Centurion, 0157
124 Akkerboom Street, Building 2B, Centurion, 0157
South Africa
Main Street 1252 (Pty) Ltd (RF)
62.9%
Ordinary
Cornerstone, Corner of Diamond Drive and Crownwood
Road, Theta, Johannesburg, 2013
Sweden
Switzerland
Element Six AB
De Beers Centenary AG(6)
51%
85%
Ordinary
Ordinary
c/o Advokatbyrån Kaiding, Box 385, 931 24 Skellefteå
c/o Telemarketing, Plus AG, Sonnenplatz 6, 6020,
Emmenbrücke
Switzerland
PGI SA
78%
Ordinary
Avenue Mon-Repos 24, Case postale 656, CH-1001
Switzerland
Synova S.A.
28%
Tanzania
Ambase Prospecting (Tanzania) (Pty) Ltd
100%
Ordinary
Ordinary
Lausanne
13 Route de Genolier, 1266 Duillier
c/o Mawalla Advocates, Mawalla Road, Mawalla
Heritage Park, Plot No. 175/20, Arusha
United Arab
Emirates
De Beers DMCC
85%
Ordinary
Office 4D, Almas Tower, Jumeirah Lakes Towers, Dubai
United Kingdom Anglo American Australia Investments
100%
Ordinary
17 Charterhouse Street, London, EC1N 6RA
Limited(10)
United Kingdom Anglo American Capital Australia Limited
United Kingdom Anglo American Capital plc(10)
100%
100%
Ordinary
17 Charterhouse Street, London, EC1N 6RA
Ordinary
3% Cumulative
Preference
17 Charterhouse Street, London, EC1N 6RA
United Kingdom Anglo American CMC Holdings Limited
United Kingdom Anglo American Corporate Secretary
100%
100%
Ordinary
Ordinary
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
Limited
United Kingdom Anglo American Diamond Holdings Limited
100%
United Kingdom Anglo American Finance (UK) Limited
United Kingdom Anglo American Foundation
100%
100%
Ordinary
Ordinary
Limited by
guarantee
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
Anglo American plc Integrated Annual Report 2021 241
Financial statements and other financial information
Notes to the financial statements
Group structure
35. Related undertakings of the Group continued
Country of
incorporation(1)(2)
Name of undertaking
See page 243 for footnotes.
Percentage
of equity
owned(3)
Share class
Registered address
United Kingdom Anglo American Holdings Limited
100%
17 Charterhouse Street, London, EC1N 6RA
Ordinary
8% Preference
8.3% Preference
B shares
United Kingdom Anglo American International Holdings
100%
Ordinary
17 Charterhouse Street, London, EC1N 6RA
Limited
United Kingdom Anglo American Investments (UK) Limited
United Kingdom Anglo American Marketing Limited
United Kingdom Anglo American Medical Plan Limited
United Kingdom Anglo American Medical Plan Trust
United Kingdom Anglo American Prefco Limited(10)
United Kingdom Anglo American Projects UK Limited(10)
United Kingdom Anglo American REACH Limited
United Kingdom Anglo American Services (UK) Ltd.(10)
United Kingdom Anglo American Technical & Sustainability
Limited
100%
100%
100%
100%
100%
100%
100%
100%
100%
Ordinary
Ordinary
Ordinary
N/A
Ordinary
Capital Preference
Preference
Ordinary
Ordinary
Ordinary
Ordinary
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
United Kingdom Anglo American Technical & Sustainability
100%
Ordinary
17 Charterhouse Street, London, EC1N 6RA
Services Ltd
United Kingdom Anglo American Woodsmith Limited
United Kingdom Anglo Base Metals Marketing Limited
United Kingdom Anglo Platinum Marketing Limited
United Kingdom Anglo UK Pension Trustee Limited
United Kingdom Anmercosa Finance Limited
United Kingdom AP Ventures Fund I LP
United Kingdom AP Ventures Fund II LP
United Kingdom Birchall Gardens LLP
United Kingdom Charterhouse CAP Limited
United Kingdom Curtis Fitch Limited
United Kingdom De Beers Intangibles Limited
United Kingdom De Beers Jewellers Limited
United Kingdom De Beers Jewellers Trade Mark Limited
United Kingdom De Beers Jewellers UK Limited
United Kingdom De Beers UK Limited
United Kingdom Ebbsfleet Property Limited
United Kingdom Element Six (UK) Limited
100%
100%
78%
100%
100%
38%
19%
50%
85%
21%
85%
85%
85%
85%
85%
50%
51%
United Kingdom Element Six Abrasives Holdings Limited
51%
United Kingdom Element Six Holdings Limited
United Kingdom Element Six Limited
85%
85%
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
N/A
N/A
N/A
Ordinary
Ordinary B
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
1 More London Place, London, SE1 2AF
16 Littleworth Lane, Esher, Surrey, KT10 9PF
16 Littleworth Lane, Esher, Surrey, KT10 9PF
Bardon Hall, Copt Oak Road, Markfield, LE67 9PJ
17 Charterhouse Street, London, EC1N 6RA
Formal House, 60 St George’s Place, Cheltenham,
Gloucestershire, GL50 3PN
Ordinary
17 Charterhouse Street, London, EC1N 6RA
A Ordinary
B Ordinary
Deferred Share
Special Dividend
Share
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary A
Preference
Ordinary
Ordinary
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
Bardon Hall, Copt Oak Road, Markfield, LE67 9PJ
Global Innovation Centre, Fermi Avenue, Harwell,
Oxford, Didcot, Oxfordshire, OX11 0QR
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
Global Innovation Centre, Fermi Avenue, Harwell,
Oxford, Didcot, Oxfordshire, OX11 0QR
United Kingdom Element Six Technologies Limited
85%
Ordinary
Global Innovation Centre, Fermi Avenue, Harwell,
United Kingdom Ferro Nickel Marketing Limited
United Kingdom Forevermark Limited
United Kingdom Gemfair Limited
United Kingdom IIDGR (UK) Limited
United Kingdom Lightbox Jewelry Ltd.
United Kingdom Mission Zero Technologies Ltd
United Kingdom Rhoanglo Trustees Limited
United Kingdom Sach 1 Limited
100%
85%
85%
85%
85%
25%
100%
100%
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Oxford, Didcot, Oxfordshire, OX11 0QR
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
46-54 High Street, Ingatestone, Essex, CM4 9DW
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
242 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Group structure
35. Related undertakings of the Group continued
Country of
incorporation(1)(2)
Name of undertaking
See page 243 for footnotes.
United Kingdom Sach 2 Limited
United Kingdom Security Nominees Limited
United Kingdom Sirius Minerals Foundation
United Kingdom Sirius Minerals Holdings Limited
United Kingdom Supercritical Solutions Ltd
United Kingdom Swanscombe Development LLP
United Kingdom The Diamond Trading Company Limited
United Kingdom TRACR Limited
United Kingdom York Potash Holdings Limited
United Kingdom York Potash Intermediate Holdings Limited
United Kingdom York Potash Ltd
United Kingdom York Potash Processing & Ports Limited
100%
United Kingdom YPF Ltd
Anglo American US Holdings Inc.
Dakota Salts LLC
Percentage
of equity
owned(3)
Share class
Registered address
100%
100%
100%
100%
25%
50%
85%
85%
100%
100%
100%
100%
100%
100%
Ordinary
Redeemable
Preference
Ordinary
Limited by
guarantee
Ordinary
Ordinary
N/A
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
B preference
Non-voting
Ordinary
Non-voting
Ordinary
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
Resolution House, Lake View, Eastfield, Scarborough,
YO11 3ZB
17 Charterhouse Street, London, EC1N 6RA
Orchard House School Lane, Cookham, Maidenhead,
SL6 9QJ
Bardon Hall, Copt Oak Road, Markfield, LE67 9PJ
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
17 Charterhouse Street, London, EC1N 6RA
Common shares
c/o Corporation Service Company, 251 Little Falls Drive,
Membership
interest
Wilmington Delaware, 19808
120 W Sweet Ave, Bismarck, ND 58504-5566
De Beers Jewellers US, Inc.
85%
Common
300 First Stamford place, Stamford, CT 06902
Element Six Technologies (OR) Corp.
85%
Ordinary
23055 SE Stark Street, Gresham, Oregon, 97030
Element Six Technologies US Corporation
85%
Ordinary
3901 Burton Drive, Santa Clara CA 95054
Element Six US Corporation
51%
Common stock
24900 Pitkin Road, Suite 250, Spring TX 77386
Forevermark US Inc.
85%
Common
300 First Stamford Place, Stamford, CT, 06902
Lightbox Jewelry Inc.
85%
Ordinary
3500 South Dupont Highway, Dover, County of Kent DE
19901
Platinum Guild International (U.S.A.) Jewelry
79%
Ordinary
125 Park Avenue, 25th Floor, New York, New York
Inc.
10017
Venezuela
Minera Loma de Niquel C.A.
100%
Class A
Torre Humboldt, floor 9, office 09-07, Rio Caura Street,
Zambia
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Zimbabwe
Anglo Exploration (Zambia) (Pty) Ltd
Amzim Holdings Limited
Anglo American Corporation Zimbabwe
Limited
Broadlands Park Limited
Southridge Limited
Unki Mines (Private) Limited
100%
79%
79%
79%
79%
79%
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Prados del Este., Caracas 1080
11 Katemo Road, Rhodes Park, Lusaka
28 Broadlands Road, Emerald Hill, Harare
28 Broadlands Road, Emerald Hill, Harare
28 Broadlands Road, Emerald Hill, Harare
28 Broadlands Road, Emerald Hill, Harare
28 Broadlands Road, Emerald Hill, Harare
(1) All the companies with an incorporation in the United Kingdom are registered in England and Wales.
(2) The country of tax residence is disclosed where different from the country of incorporation.
(3) All percentages have been rounded.
(4) Tax resident in Colombia.
(5) The interest in Debswana Diamond Company (Pty) Ltd is held indirectly through De Beers and is consolidated on a 19.2% proportionate basis, reflecting economic interest. The Group’s
effective interest in Debswana Diamond Company (Pty) Ltd is 16.3%.
(6) Tax resident in the United Kingdom.
(7) 2% direct holding by Anglo American plc.
(8) 0.03% direct holding by Anglo American plc.
(9) A 74% interest in De Beers Consolidated Mines (Pty) Ltd (DBCM) and its subsidiaries is held indirectly through De Beers. The 74% interest represents De Beers’ legal ownership share in
DBCM. For accounting purposes De Beers consolidates 100% of DBCM as it is deemed to control the BEE entity, Ponahalo, which holds the remaining 26%. The Group’s effective interest
in DBCM is 85%.
(10) 100% direct holding by Anglo American plc.
Anglo American plc Integrated Annual Report 2021 243
United States
of America
United States
of America
United States
of America
United States
of America
United States
of America
United States
of America
United States
of America
United States
of America
United States
of America
Financial statements and other financial information
Notes to the financial statements
Other items
This section includes disclosures about related party transactions,
auditors’ remuneration, leases and accounting policies.
36. Related party transactions
The Group has related party relationships with its subsidiaries, joint operations, associates and joint ventures (see notes 34 and 35). Members of
the Board and the Group Management Committee are considered to be related parties.
The Company and its subsidiaries, in the ordinary course of business, enter into various sale, purchase and service transactions with joint
operations, associates, joint ventures and others in which the Group has a material interest. These transactions are under terms that are no less
favourable to the Group than those arranged with third parties.
US$ million
Transactions with related parties
Sale of goods and services
Purchase of goods and services
Balances with related parties
Trade and other receivables from related parties
Trade and other payables to related parties
Loans receivable from related parties
Associates
Joint ventures
Joint operations
2021
2020
2021
2020
2021
2020
—
—
—
—
2
—
(28)
—
(38)
—
—
—
158
87
(169)
(197)
(3,466)
(1,985)
1
(16)
76
1
(31)
154
18
21
(273)
(157)
—
—
Balances and transactions with joint operations or joint operation partners represent the portion that the Group does not have the right to offset
against the corresponding amount recorded by the respective joint operations. These amounts primarily relate to purchases by De Beers and
Platinum Group Metals from their joint operations in excess of the Group’s attributable share of their production.
Loans receivable from related parties are included in Financial asset investments on the Consolidated balance sheet.
Remuneration and benefits received by directors are disclosed in the Remuneration report. Remuneration and benefits of key management
personnel, including directors, are disclosed in note 26. Information relating to pension fund arrangements is disclosed in note 27.
37. Auditors’ remuneration
US$ million
Paid to the Company’s auditor for audit
of the Anglo American plc Annual Report(1)
Paid to the Company’s auditor for other
services to the Group
Audit of the Company’s subsidiaries
Total audit fees
Audit related assurance services
Other assurance services
Total non-audit fees
Paid/payable to PwC
United
Kingdom
Overseas
Total
2021
Paid/payable
to auditor (if
not PwC)
United
Kingdom and
overseas
Paid/payable to PwC
United
Kingdom
Overseas
Total
2020
Paid/payable
to auditor (if
not PwC)
United
Kingdom and
overseas
5.9
1.4
7.3
—
1.6
3.9
5.5
—
1.0
6.9
0.9
1.1
2.0
6.8
8.2
0.8
1.0
1.8
7.8
15.1
1.7
2.1
3.8
0.4
0.4
—
—
—
2.4
4.0
1.0
0.2
1.2
2.9
6.8
0.9
0.9
1.8
5.3
10.8
1.9
1.1
3.0
1.2
1.2
—
0.6
0.6
(1) $0.6 million of audit fees paid in 2021 related to the audit for the year ended 31 December 2020.
Audit related assurance services includes $1.7 million (2020: $1.9 million) for the interim review.
244 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Notes to the financial statements
Other items
38. Leases
Overview
Lease agreements give rise to the recognition of a right-of-use asset (see note 11) and a related liability for future lease payments (see note 21).
Further information
Amounts recognised in the balance sheet
The balance sheet shows the following amounts relating to leases:
Right-of-use assets are detailed in note 11. Per requirements of IFRS 16 Leases, lease agreements give rise to the recognition of a right-of-use
asset and a related liability for future lease payments. The cost of leases other than short term leases less than 12 months, variable leasing costs
and leases of low value assets are allocated between the depreciation of right-of-use assets and a finance charge representing the unwind of
the discount on lease liabilities.
Leases relate principally to corporate offices, diamond jewellery retail outlets and shipping vessels. The Group leases land and buildings for its
office space, for employee accommodation and retail stores for De Beers Jewellers. The leases for office space typically run for 5 to 25 years,
employee accommodation up to 25 years and leases of retail stores 5 to 25 years. Some longer leases incorporate fixed increases in rentals or
provide for annual uplifts based upon an index, typically a measure of inflation. Leases for shipping vessels typically run for 1 to 2 years and the
majority are priced with reference to a freight index.
Lease liabilities balance and maturity analysis:
US$ million
Amount due for repayment within one year
Greater than one year, less than two years
Greater than two years, less than three years
Greater than three years, less than four years
Greater than four years, less than five years
Greater than five years
Total due for repayment after more than one year
Total
Effect of discounting
Lease liability
Amounts recognised in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to leases:
US$ million
Depreciation (see note 11)
Interest expense (included in finance costs, see note 4)
Expense relating to short term leases less than 12 months, variable leasing costs and leases of low value
2021
230
125
90
66
58
636
975
1,205
(330)
875
2021
303
40
102
2020
198
103
58
42
35
240
478
676
(133)
543
2020
177
32
123
Amounts recognised in the cash flow statement
In the Consolidated cash flow statement for the year ended 31 December 2021, the total amount of cash paid in respect of leases recognised
on the Consolidated balance sheet are split between repayments of principal of $336 million (2020: $195 million) and repayments of interest of
$31 million (2020: $26 million), both presented within cash flows from financing activities. The repayment of both principal and interest forms part
of both the Attributable free cash flow and Sustaining attributable free cash flow Alternative Performance Measures.
Further disclosures
In addition to the lease commitments above, the Group has lease commitments in relation to leases not yet commenced of $369 million.
Further disclosures required by IFRS 16 Leases are presented in notes 4, 11 and 21.
Accounting judgements
At the date of inception of a new contract or significant modification of an existing contract, the Group assesses whether the contract is, or
contains, a lease. A contract is, or contains a lease if the contract conveys the right to control the asset for a period of time in exchange for
consideration. To identify lease arrangements, the Group assesses whether:
– The contract specifies the use of an identified asset or collection of assets.
– The Group has the right to obtain substantially all of the economic benefits from the use of the identified asset(s).
– The Group has the right to direct the use of the asset(s).
The Group has paid particular attention to the judgement over whether the lessor has a substantive right to substitute the specified assets for
alternatives.
– Many assets used by the Group are highly specialised in nature and are purpose-built or modified to meet the Group’s specification.
Judgement is required to assess whether the assets can be substituted and used for other purposes without significant additional modification.
– The remote location of some of the Group’s operations presents practical difficulties to the substitution of assets. Judgement is required to
determine whether assets in remote locations can be relocated to other locations within a reasonable timeframe and cost.
Anglo American plc Integrated Annual Report 2021 245
Financial statements and other financial information
Notes to the financial statements
Financial statements and other financial information
Notes to the financial statements
Other items
38. Leases continued
– At some locations, high levels of security restrict the movement of assets to alternative locations, limiting the ability to substitute assets.
– The Group’s health and safety standards exceed statutory requirements in some jurisdictions. This places limitations on the ability to substitute
certain assets, such as vehicles. Judgement is required to assess whether equivalent assets meeting the Group’s requirements can be sourced
within required operational timeframes.
The Group recognises a lease liability and a corresponding right-of-use asset at the commencement date of the lease.
Accounting policy
Accounting policies applied to lease liabilities and corresponding right-of-use assets are set out respectively in notes 39F and 39D.
Other items
39. Accounting policies
A. Basis of preparation
Basis of preparation
On 31 December 2020, IFRS as adopted by the European Union at
that date was brought into UK law and became UK-adopted
International Accounting Standards, with future changes being subject
to endorsement by the UK Endorsement Board. The Group
transitioned to UK-adopted international accounting standards on
1 January 2021 and accordingly the Group’s annual Consolidated
financial statements for the year ending 31 December 2021 have
been prepared under UK-adopted international accounting
standards. This change constitutes a change in accounting
framework. However, there is no impact on recognition, measurement
or disclosure in the year reported as a result of the change in
framework.
prospective change in estimate has increased the carrying value of
inventory at 31 December 2021 by $138 million.
Following the normalisation of the metal refining process at the
Platinum Group Metals (PGM) business unit (after the temporary Anglo
Converter Plant (ACP) shutdown in 2020) and a review of recent price
trends, the PGM inventory valuation model has been reassessed and
amended. Further detail with respect to the change is included in
note 7.
Going concern
The financial position of the Group, its cash flows, liquidity position and
borrowing facilities are set out in the Group financial review on pages
72-75. Further details of our policy on financial risk management are
set out in note 23 to the financial statements on pages 210-213. The
The financial statements have been prepared in accordance with the
Group’s net debt (including related hedges) at 31 December 2021
requirements of the Companies Act 2006, UK-adopted International
was $3.8 billion (2020 (restated): $5.5 billion), representing a gearing
Accounting Standards and those parts of the Companies Act 2006
level of 10% (2020: 14%). The Group’s liquidity position (defined as
applicable to companies reporting under those standards and the
cash and undrawn committed facilities) of $17.1 billion at
requirements of the Disclosure and Transparency rules of the Financial
31 December 2021 remains strong. Details of borrowings and facilities
Conduct Authority in the United Kingdom as applicable to periodic
financial reporting. The financial statements have been prepared
under the historical cost convention as modified by the revaluation of
pension assets and liabilities and certain financial instruments. A
summary of the principal Group accounting policies is set out below.
are set out in note 21 and note 23 on pages 204 and 210 respectively,
and net debt is set out in note 20 on pages 202-203.
The directors have considered the Group’s cash flow forecasts for the
period to the end of December 2023 under base and downside
scenarios with reference to the Group’s principal risks as set out within
The preparation of financial statements in conformity with generally
the Group Viability Statement on pages 60 and 61. Further
accepted accounting principles requires the use of estimates and
consideration was given to the uncertainty of the impact of the
assumptions that affect the reported amounts of assets and liabilities
Covid-19 pandemic on both the wider macroeconomic environment,
at the date of the financial statements and the reported amounts of
including demand for the Group’s products and realised prices, and
revenues and expenses during the reporting period. Although these
the Group’s operations, including production levels. In each of the
estimates are based on management’s best knowledge of the
amount, event or actions, actual results ultimately may differ from
those estimates.
The Group’s results are presented in US dollars, the currency in which
its business is primarily conducted.
Changes in accounting policies, estimates and disclosures
The accounting policies applied are consistent with those adopted
and disclosed in the Group financial statements for the year ended
31 December 2020, except for the changes set out below:
Adoption of new accounting pronouncement
The following new accounting pronouncement became effective in
the current reporting period:
downside scenarios modelled (including price reductions of up to 20%
against budget, operational incidents and climate change impacts),
the Group maintains sufficient liquidity throughout the period of
assessment without the use of mitigating actions.
The Board is satisfied that the Group’s forecasts and projections,
taking account of reasonably possible changes in trading
performance, show that the Group will be able to operate within the
level of its current facilities for the period of at least 12 months from the
date of approval of the financial statements. For this reason the
Group continues to adopt the going concern basis in preparing its
financial statements.
not yet adopted
New IFRS accounting standards, amendments and interpretations
– Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest
The Group has not early adopted any other amendment, standard or
Rate Benchmark Reform — Phase 2.
The adoption of this new accounting pronouncement has not had a
significant impact on the accounting policies, methods of computation
or presentation applied by the Group.
interpretation that has been issued but is not yet effective. It is
expected that where applicable, these standards and amendments
will be adopted on each respective effective date. The following new
or amended IFRS accounting standards, amendments and
interpretations not yet adopted are not expected to have a significant
Change in accounting policy for trading of physically settled
impact on the Group:
contracts
The Group has amended its accounting policy in respect of certain
physically-settled contracts relating to the purchase and sale of
– Amendments to IAS 1 Presentation of financial statements:
classification of liabilities as current or non-current
material produced by third parties (third-party sales). These contracts
– Amendments to IAS 1 Presentation of financial statements:
are entered into and managed collectively to generate a trading
disclosure of accounting policies
margin as part of the Group’s Marketing business and are accounted
for as derivatives prior to settlement as they meet the definition of net
settlement as defined in IFRS 9 Financial Instruments. Further detail
with respect to the change is included in note 7.
Change in accounting estimate
Due to changes in PGM prices, demand and trading conditions, the
classification of iridium and ruthenium has been amended from waste
products to by-products with effect from 1 January 2021. This
– Amendments to IAS 8 Accounting policies, changes in accounting
estimates and errors: definition of accounting estimates
– Amendments to IAS 12 Income Taxes: deferred tax related to Assets
and Liabilities arising from a Single Transaction
– Amendments to IAS 37 Provisions, contingent liabilities and
contingent assets: onerous contracts
246 Anglo American plc Integrated Annual Report 2021
Anglo American plc Integrated Annual Report 2021 247
Financial statements and other financial information
Notes to the financial statements
Other items
39. Accounting policies
A. Basis of preparation
Basis of preparation
On 31 December 2020, IFRS as adopted by the European Union at
that date was brought into UK law and became UK-adopted
International Accounting Standards, with future changes being subject
to endorsement by the UK Endorsement Board. The Group
transitioned to UK-adopted international accounting standards on
1 January 2021 and accordingly the Group’s annual Consolidated
financial statements for the year ending 31 December 2021 have
been prepared under UK-adopted international accounting
standards. This change constitutes a change in accounting
framework. However, there is no impact on recognition, measurement
or disclosure in the year reported as a result of the change in
framework.
The financial statements have been prepared in accordance with the
requirements of the Companies Act 2006, UK-adopted International
Accounting Standards and those parts of the Companies Act 2006
applicable to companies reporting under those standards and the
requirements of the Disclosure and Transparency rules of the Financial
Conduct Authority in the United Kingdom as applicable to periodic
financial reporting. The financial statements have been prepared
under the historical cost convention as modified by the revaluation of
pension assets and liabilities and certain financial instruments. A
summary of the principal Group accounting policies is set out below.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Although these
estimates are based on management’s best knowledge of the
amount, event or actions, actual results ultimately may differ from
those estimates.
The Group’s results are presented in US dollars, the currency in which
its business is primarily conducted.
Changes in accounting policies, estimates and disclosures
The accounting policies applied are consistent with those adopted
and disclosed in the Group financial statements for the year ended
31 December 2020, except for the changes set out below:
Adoption of new accounting pronouncement
The following new accounting pronouncement became effective in
the current reporting period:
– Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest
Rate Benchmark Reform — Phase 2.
The adoption of this new accounting pronouncement has not had a
significant impact on the accounting policies, methods of computation
or presentation applied by the Group.
Change in accounting policy for trading of physically settled
contracts
The Group has amended its accounting policy in respect of certain
physically-settled contracts relating to the purchase and sale of
material produced by third parties (third-party sales). These contracts
are entered into and managed collectively to generate a trading
margin as part of the Group’s Marketing business and are accounted
for as derivatives prior to settlement as they meet the definition of net
settlement as defined in IFRS 9 Financial Instruments. Further detail
with respect to the change is included in note 7.
Change in accounting estimate
Due to changes in PGM prices, demand and trading conditions, the
classification of iridium and ruthenium has been amended from waste
products to by-products with effect from 1 January 2021. This
prospective change in estimate has increased the carrying value of
inventory at 31 December 2021 by $138 million.
Following the normalisation of the metal refining process at the
Platinum Group Metals (PGM) business unit (after the temporary Anglo
Converter Plant (ACP) shutdown in 2020) and a review of recent price
trends, the PGM inventory valuation model has been reassessed and
amended. Further detail with respect to the change is included in
note 7.
Going concern
The financial position of the Group, its cash flows, liquidity position and
borrowing facilities are set out in the Group financial review on pages
72-75. Further details of our policy on financial risk management are
set out in note 23 to the financial statements on pages 210-213. The
Group’s net debt (including related hedges) at 31 December 2021
was $3.8 billion (2020 (restated): $5.5 billion), representing a gearing
level of 10% (2020: 14%). The Group’s liquidity position (defined as
cash and undrawn committed facilities) of $17.1 billion at
31 December 2021 remains strong. Details of borrowings and facilities
are set out in note 21 and note 23 on pages 204 and 210 respectively,
and net debt is set out in note 20 on pages 202-203.
The directors have considered the Group’s cash flow forecasts for the
period to the end of December 2023 under base and downside
scenarios with reference to the Group’s principal risks as set out within
the Group Viability Statement on pages 60 and 61. Further
consideration was given to the uncertainty of the impact of the
Covid-19 pandemic on both the wider macroeconomic environment,
including demand for the Group’s products and realised prices, and
the Group’s operations, including production levels. In each of the
downside scenarios modelled (including price reductions of up to 20%
against budget, operational incidents and climate change impacts),
the Group maintains sufficient liquidity throughout the period of
assessment without the use of mitigating actions.
The Board is satisfied that the Group’s forecasts and projections,
taking account of reasonably possible changes in trading
performance, show that the Group will be able to operate within the
level of its current facilities for the period of at least 12 months from the
date of approval of the financial statements. For this reason the
Group continues to adopt the going concern basis in preparing its
financial statements.
New IFRS accounting standards, amendments and interpretations
not yet adopted
The Group has not early adopted any other amendment, standard or
interpretation that has been issued but is not yet effective. It is
expected that where applicable, these standards and amendments
will be adopted on each respective effective date. The following new
or amended IFRS accounting standards, amendments and
interpretations not yet adopted are not expected to have a significant
impact on the Group:
– Amendments to IAS 1 Presentation of financial statements:
classification of liabilities as current or non-current
– Amendments to IAS 1 Presentation of financial statements:
disclosure of accounting policies
– Amendments to IAS 8 Accounting policies, changes in accounting
estimates and errors: definition of accounting estimates
– Amendments to IAS 12 Income Taxes: deferred tax related to Assets
and Liabilities arising from a Single Transaction
– Amendments to IAS 37 Provisions, contingent liabilities and
contingent assets: onerous contracts
Anglo American plc Integrated Annual Report 2021 247
Financial statements and other financial information
Notes to the financial statements
Other items
39. Accounting policies continued
– Amendments to IFRS 3 Business combinations: updating
a reference to the conceptual framework
– Annual Improvements to IFRS Standards 2018–2020.
IAS 16 Property, Plant and Equipment: Proceeds before
intended use
An amendment to IAS 16 – Proceeds before intended use was
published in May 2020 and will become effective for the Group from
1 January 2022.
The amendment prohibits an entity from deducting from the cost of
an item of property, plant and equipment any proceeds received from
selling items produced while the entity is preparing the asset for its
intended use. The proceeds from selling these items, and the
associated costs will be recognised in the income statement. IAS 2
Inventories should be applied in identifying and measuring the cost
of these items. The Group considers that assets for significant new
projects reach their intended use when the project achieves
commercial production. A number of factors are considered in this
assessment.
Significant judgement is required in allocating costs between those
associated with production of output before the item of property, plant
and equipment is available for its intended use, and costs associated
with bringing the asset to the location and condition necessary for it to
be capable of operating in the manner intended by management.
Particular judgement has been identified in the allocation of the costs
for employees and contractors working on both activities related to
production and activities related to the development of the project.
The Group has substantially concluded its impact assessment of the
amendment. The impact of applying the amendment during the year
ended 31 December 2021 would have been to increase revenue by
$103 million with a similar impact on operating costs and an
insignificant impact on property, plant and equipment.
The Group’s Quellaveco copper project is the most significant project
impacted by the amendment to IAS 16 during 2022. All production
and sales from Quellaveco in 2022 are expected to arise before
commercial production is achieved, and as a result revenue and
associated costs that would previously have been capitalised against
project assets will now be recognised in the Consolidated income
statement.
B. Basis of consolidation
Basis of consolidation
The financial statements incorporate a consolidation of the financial
statements of the Company and entities controlled by the Company
(its subsidiaries). Control is achieved where the Company is exposed,
or has rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over the
investee.
The results of subsidiaries acquired or disposed of during the year are
included in the income statement from the effective date of acquisition
or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the results of subsidiaries,
joint arrangements and associates to bring their accounting policies
into line with those used by the Group. Intra-group transactions,
balances, income and expenses are eliminated on consolidation,
where appropriate.
For non-wholly owned subsidiaries, non-controlling interests are
presented in equity separately from the equity attributable to
shareholders of the Company. Profit or loss and other comprehensive
income are attributed to the shareholders of the Company and to non-
248 Anglo American plc Integrated Annual Report 2021
controlling interests even if this results in the non-controlling interests
having a deficit balance.
Changes in ownership interest in subsidiaries that do not result in a
change in control are accounted for in equity. The carrying amounts of
the controlling and non-controlling interests are adjusted to reflect the
changes in their relative interests in the subsidiary. Any difference
between the amount by which the non-controlling interest is adjusted
and the fair value of the consideration paid or received is recorded
directly in equity and attributed to the shareholders of the Company.
Foreign currency transactions and translation
Foreign currency transactions by Group companies are recognised in
the functional currencies of the companies at the exchange rate ruling
on the date of the transaction. At each reporting date, monetary assets
and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the reporting date. Gains and
losses arising on retranslation are included in the income statement for
the period and are classified in the income statement according to the
nature of the monetary item giving rise to them.
Non-monetary assets and liabilities that are measured in terms of
historical cost in a foreign currency are translated using the exchange
rate at the date of the transaction.
On consolidation, the assets and liabilities of the Group’s foreign
operations are translated into the presentation currency of the Group
at exchange rates prevailing on the reporting date. Income and
expense items are translated at the average exchange rates for the
period where these approximate the rates at the dates of the
transactions. Any exchange differences arising are classified within the
statement of comprehensive income and transferred to the Group’s
cumulative translation adjustment reserve. Exchange differences on
foreign currency balances with foreign operations for which settlement
is neither planned nor likely to occur in the foreseeable future, and
therefore form part of the Group’s net investment in these foreign
operations, are offset in the cumulative translation adjustment reserve.
Cumulative translation differences are recycled from equity and
recognised as income or expense on disposal of the operation to
which they relate.
Goodwill and fair value adjustments arising on the acquisition of
foreign entities are treated as assets of the foreign entity and
translated at the closing rate.
Tenon
Tenon Investment Holdings Proprietary Limited (Tenon), a wholly
owned subsidiary of Anglo American South Africa Proprietary Limited
(AASA), has entered into agreements with Epoch Investment Holdings
(RF) Proprietary Limited (Epoch), Epoch Two Investment Holdings (RF)
Proprietary Limited (Epoch Two) and Tarl Investment Holdings (RF)
Proprietary Limited (Tarl) (collectively the Investment Companies),
each owned by independent charitable trusts whose trustees are
independent of the Group. Under the terms of these agreements, the
Investment Companies have purchased Anglo American plc shares on
the market and have granted to Tenon the right to nominate a third
party (which may include Anglo American plc but not any of its
subsidiaries) to take transfer of the Anglo American plc shares each
has purchased on the market. Tenon paid the Investment Companies
80% of the cost of the Anglo American plc shares including associated
costs for this right to nominate, which together with subscriptions by
Tenon for non-voting participating redeemable preference shares in
the Investment Companies, provided all the funding required to
acquire the Anglo American plc shares through the market. These
payments by Tenon were sourced from the cash resources of AASA.
Tenon is able to exercise its right of nomination at any time up to
31 December 2025 against payment of an average amount of $3.41
per share to Epoch, $5.30 per share to Epoch Two and $4.40 per
share to Tarl which will be equal to 20% of the total costs respectively
incurred by Epoch, Epoch Two and Tarl in purchasing shares
nominated for transfer to the third party. These funds will then become
Financial statements and other financial information
Notes to the financial statements
Other items
39. Accounting policies continued
available for redemption of the preference shares issued by the
Investment Companies. The amount payable by the third party on
receipt of the Anglo American plc shares will accrue to Tenon and, as
these are own shares of the Company, any resulting gain or loss
recorded by Tenon will not be recognised in the Consolidated income
statement of Anglo American plc.
Under the agreements, the Investment Companies will receive
dividends on the shares they hold and have agreed to waive the right
to vote on those shares. The preference shares issued to the charitable
trusts are entitled to a participating right of up to 10% of the profit after
tax of Epoch and 5% of the profit after tax of Epoch Two and Tarl. The
preference shares issued to Tenon will carry a fixed coupon of 3% plus
a participating right of up to 80% of the profit after tax of Epoch and
85% of the profit after tax of Epoch Two and Tarl. Any remaining
distributable earnings in the Investment Companies, after the above
dividends, are then available for distribution as ordinary dividends to
the charitable trusts.
The structure effectively provides Tenon with a beneficial interest in the
price risk on these shares together with participation in future dividend
receipts. The Investment Companies will retain legal title to the shares
until Tenon exercises its right to nominate a transferee.
At 31 December 2021 the Investment Companies together held
112,300,129 (2020: 112,300,129) Anglo American plc shares, which
represented 8.4% (2020: 8.2%) of the ordinary shares in issue
(excluding treasury shares) with a market value of $4,574 million
(2020: $3,720 million). The Investment Companies are not permitted
to hold more than an aggregate of 10% of the issued share capital of
Anglo American plc at any one time.
The Investment Companies are considered to be structured entities.
Although the Group has no voting rights in the Investment Companies
and cannot appoint or remove trustees of the charitable trusts, the
Group considers that the agreement outlined above, including Tenon’s
right to nominate the transferee of the Anglo American plc shares held
by the Investment Companies, results in the Group having control over
the Investment Companies as defined under IFRS 10 Consolidated
Financial Statements. Accordingly, the Investment Companies are
required to be consolidated by the Group.
C. Financial performance
Revenue recognition
Revenue from contracts with customers is recognised in a manner that
depicts the pattern of the transfer of goods and services to customers.
The amount recognised reflects the amount to which the Group
expects to be entitled in exchange for those goods and services. Sales
contracts are evaluated to determine the performance obligations, the
transaction price and the point at which there is transfer of control. The
transactional price is the amount of consideration due in exchange for
transferring the promised goods or services to the customer, and is
allocated against the performance obligations and recognised in
accordance with whether control is recognised over a defined period
or at a specific point in time.
Revenue is derived principally from commodity sales. A sale is
recognised when control has been transferred. This is usually when
title and insurance risk have passed to the customer and the goods
have been delivered to a contractually agreed location. Revenue from
contracts with customers is measured at the fair value of consideration
received or receivable as at the date control is transferred, after
deducting discounts, volume rebates, value added tax and other sales
taxes. Sales of metal concentrate are stated at their invoiced amount
which is net of treatment and refining charges.
Sales of certain commodities are provisionally priced such that the
price is not settled until a predetermined future date and is based on
the market price at that time or a specified period to that date. These
sales are marked to market at each reporting date using the forward
price for the period equivalent to that outlined in the contract. Revenue
on provisionally priced sales is recognised with reference to the
forward market price when control passes to the customer and is
classified as revenue from contracts with customers. Subsequent
mark-to-market adjustments are recognised in revenue from other
sources.
Revenues from the sale of material by-products are recognised within
revenue from contracts with customers at the point control passes.
Where a by-product is not regarded as significant, revenue may be
credited against the cost of sales.
Physically-settled contracts relating to the purchase and sale of
material produced by third parties (third-party sales) are presented on
a net basis within revenue from other sources where these contracts
are entered into and managed collectively to generate a trading
margin as part of the Group’s Marketing business and are accounted
for as derivatives prior to settlement. This includes third-party material
purchased for blending activities conducted to benefit from short-term
pricing differentials (usually of less than twelve months). The sale and
purchase of third-party material to mitigate shortfalls in the Group’s
own production are shown on a gross basis with sales reported within
revenue from contracts with customers as such contracts are used to
maintain customer relationships and fulfil physical sale commitments
rather than to generate a trading margin.
Where the Group enters into commodity sale or purchase agreements
in the course of its commodity trading activities in which the seller has
a right to repurchase, consideration is given to whether the risks and
rewards of ownership have been transferred as a result of the sale.
This assessment is made with reference to the criteria in IFRS 9
Financial Instruments. Key considerations in this assessment include
whether the purchaser has a practical ability to use the commodity
and whether price risk has been transferred.
Where risks and rewards have been transferred, the sale or purchase
contract is accounted for separately from the repurchase obligation
(which is recorded as a derivative financial instrument). Where risks
and rewards have not been transferred or the arrangements do not
relate to the Group’s commodity trading activities, any consideration
received or paid is recorded as a liability or asset as appropriate and
no adjustment is made to revenue or inventory.
Revenue from services is recognised over time in line with the policy
above. For contracts which contain separate performance obligations
for the sale of commodities and the provision of freight services, the
portion of the revenue representing the obligation to perform the
freight service is deferred and recognised over time as the obligation is
fulfilled, along with the associated costs. In situations where the Group
is acting as an agent, amounts billed to customers are offset against
the relevant costs.
Interest income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate applicable.
Dividend income from investments is recognised when the
shareholders’ rights to receive payment have been established.
Exploration and evaluation expenditure
Exploration and evaluation expenditure is expensed in the year in
which it is incurred.
Exploration expenditure is the cost of exploring for Mineral Resources
other than that occurring at existing operations and projects and
comprises geological and geophysical studies, exploratory drilling and
sampling and Mineral Resource development.
Evaluation expenditure includes the cost of conceptual and pre-
feasibility studies and evaluation of Mineral Resources at existing
operations.
Anglo American plc Integrated Annual Report 2021 249
Financial statements and other financial information
Notes to the financial statements
Other items
39. Accounting policies continued
When a decision is taken that a mining project is technically feasible
and commercially viable, usually after a pre-feasibility study has been
completed, subsequent directly attributable expenditure, including
feasibility study costs, are considered development expenditure and
are capitalised within property, plant and equipment.
Exploration properties acquired are recognised on the balance sheet
when management considers that their value is recoverable. These
properties are measured at cost less any accumulated impairment
losses.
Short term and low value leases
Leases with a term of less than 12 months or those with committed
payments of less than $5,000 are not recognised in the balance sheet.
The Group recognises payments for these leases as an expense on a
straight-line basis over the lease term within operating costs in
underlying EBITDA.
Borrowing costs
Interest on borrowings directly relating to the financing of qualifying
assets in the course of construction is added to the capitalised cost of
those projects under ‘Capital works in progress’, until such time as the
assets are substantially ready for their intended use or sale.
Where funds have been borrowed specifically to finance a project, the
amount capitalised represents the actual borrowing costs incurred.
Where the funds used to finance a project form part of general
borrowings, the amount capitalised is calculated using a weighted
average of rates applicable to relevant general borrowings of the
Group during the period. All other borrowing costs are recognised in
the income statement in the period in which they are incurred.
All cash flows relating to interest on borrowings are presented within
interest paid in the cash flow statement.
D. Capital base
Business combinations and goodwill arising thereon
The identifiable assets, liabilities and contingent liabilities of a
subsidiary, a joint arrangement or an associate, which can be
measured reliably, are recorded at their provisional fair values at the
date of acquisition. The estimation of the fair value of identifiable
assets and liabilities is subjective and the use of different valuation
assumptions could have a significant impact on financial results.
Goodwill is the fair value of the consideration transferred (including
contingent consideration and previously held non-controlling interests)
less the fair value of the Group’s share of identifiable net assets on
acquisition.
Where a business combination is achieved in stages, the Group’s
previously held interests in the acquiree are remeasured to fair value at
the acquisition date and the resulting gain or loss is recognised in the
income statement.
Amounts arising from interests in the acquiree prior to the acquisition
date that have previously been recognised in other comprehensive
income are reclassified to the income statement, where such
treatment would be appropriate if that interest were disposed of.
Transaction costs incurred in connection with the business
combination are expensed. Provisional fair values are finalised within
12 months of the acquisition date.
Goodwill in respect of subsidiaries and joint operations is included
within intangible assets. Goodwill relating to associates and joint
ventures is included within the carrying value of the investment.
Where the fair value of the identifiable net assets acquired exceeds
the cost of the acquisition, the surplus, which represents the discount
on the acquisition, is recognised directly in the income statement in the
period of acquisition.
250 Anglo American plc Integrated Annual Report 2021
For non-wholly owned subsidiaries, non-controlling interests are
initially recorded at the non-controlling interests’ proportion of the fair
values of net assets recognised at acquisition.
Impairment of goodwill, intangible assets and property, plant and
equipment
Goodwill arising on business combinations is allocated to the group of
cash generating units (CGUs) that is expected to benefit from
synergies of the combination, and represents the lowest level at which
goodwill is monitored by the Group’s Board of directors for internal
management purposes. The recoverable amount of the CGU, or group
of CGUs, to which goodwill has been allocated is tested for impairment
annually, or when events or changes in circumstances indicate that it
may be impaired.
Any impairment loss is recognised immediately in the income
statement. Impairment of goodwill is not subsequently reversed.
At each reporting date, the Group reviews the carrying amounts of its
property, plant and equipment and intangible assets to determine
whether there is any indication that those assets are impaired. If such
an indication exists, the recoverable amount of the asset is estimated
in order to determine the extent of any impairment. Where the asset
does not generate cash flows that are independent from other assets,
the Group estimates the recoverable amount of the CGU to which the
asset belongs. An intangible asset with an indefinite useful life is tested
for impairment annually and whenever there is an indication that the
asset may be impaired.
Recoverable amount is the higher of fair value less costs of disposal
and value in use (VIU) assessed using discounted cash flow models,
as explained in note 7. In assessing VIU, the estimated future cash
flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of
money and the risks specific to the asset for which estimates of future
cash flows have not been adjusted.
If the recoverable amount of an asset or CGU is estimated to be less
than its carrying amount, the carrying amount of the asset or CGU is
reduced to its recoverable amount. An impairment loss is recognised in
the income statement.
Where an impairment loss subsequently reverses, the carrying amount
of the asset or CGU is increased to the revised estimate of its
recoverable amount, to the extent that the increased carrying amount
does not exceed the carrying amount that would have been
determined had no impairment been recognised for the asset or CGU.
A reversal of an impairment loss is recognised in the income
statement.
In addition, in making assessments for impairment, management
necessarily applies its judgement in allocating assets, including
goodwill, that do not generate independent cash inflows to
appropriate CGUs.
Subsequent changes to the CGU allocation, to the timing of cash flows
or to the assumptions used to determine the cash flows could impact
the carrying value of the respective assets.
Non-mining licences and other intangible assets
Non-mining licences and other intangible assets are measured at cost
less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired as part of an acquisition of a business are
capitalised separately from goodwill if the asset is separable or arises
from contractual or legal rights and the fair value can be measured
reliably on initial recognition. Intangible assets are amortised over their
estimated useful lives, usually between 3 and 20 years, except
goodwill and those intangible assets that are considered to have
indefinite lives. For intangible assets with a finite life, the amortisation
period is determined as the period over which the Group expects to
obtain benefits from the asset, taking account of all relevant facts and
circumstances including contractual lives and expectations about the
renewal of contractual arrangements without significant incremental
Financial statements and other financial information
Notes to the financial statements
Other items
39. Accounting policies continued
costs. An intangible asset is deemed to have an indefinite life when,
based on an analysis of all of the relevant factors, there is no
foreseeable limit to the period over which the asset is expected to
generate cash flows for the Group. Indefinite lived intangible assets
are principally brands for which there is global recognition with
no foreseeable timeframe of expected contribution that the Group
is continuing to invest and actively market. Amortisation methods,
residual values and estimated useful lives are reviewed at
least annually.
Deferred stripping
The removal of rock or soil overlying a mineral deposit, overburden,
and other waste materials is often necessary during the initial
development of an open pit mine site, in order to access the orebody.
The process of removing overburden and other mine waste materials
is referred to as stripping. The directly attributable cost of this activity is
capitalised in full within ‘Mining properties – owned’, until the point at
which the mine is considered to be capable of operating in the manner
intended by management. This is classified as growth or life-extension
capital expenditure, within investing cash flows.
The removal of waste material after the point at which depreciation
commences is referred to as production stripping. When the waste
removal activity improves access to ore extracted in the current period,
the costs of production stripping are charged to the income statement
as operating costs in accordance with the principles of IAS 2
Inventories.
Where production stripping activity both produces inventory and
improves access to ore in future periods the associated costs of waste
removal are allocated between the two elements. The portion that
benefits future ore extraction is capitalised within ‘Mining properties –
owned’. This is classified as stripping and development capital
expenditure, within investing cash flows. If the amount to be
capitalised cannot be specifically identified it is determined based on
the volume of waste extracted compared with expected volume for
the identified component of the orebody. This determination is
dependent on an individual mine’s design and Life of Mine Plan and
therefore changes to the design or Life of Mine Plan will result in
changes to these estimates. Identification of the components of a
mine’s orebody is made by reference to the Life of Mine Plan. The
assessment depends on a range of factors including each mine’s
specific operational features and materiality.
In certain instances significant levels of waste removal may occur
during the production phase with little or no associated production.
This may occur at both open pit and underground mines, for example
longwall development.
The cost of this waste removal is capitalised in full to ‘Mining properties
– owned’.
All amounts capitalised in respect of waste removal are depreciated
using the unit of production method for the component of the orebody
to which they relate, consistent with depreciation of property, plant and
equipment.
The effects of changes to the Life of Mine Plan on the expected cost of
waste removal or remaining Ore Reserves for a component are
accounted for prospectively as a change in estimate.
Property, plant and equipment
Property, plant and equipment is stated at cost, less accumulated
depreciation and accumulated impairment losses. Cost is the fair
value of consideration required to acquire and develop the asset and
includes the purchase price, acquisition of mineral rights, costs directly
attributable to bringing the asset to the location and condition
necessary for it to be capable of operating in the manner intended by
management, the initial estimate of any decommissioning obligation
and, for assets that take a substantial period of time to get ready for
their intended use, borrowing costs.
Gains or losses on disposal of property, plant and equipment are
determined by comparing the net proceeds from disposal with the
carrying amount. The gain or loss is recognised in the income
statement.
Depreciation of property, plant and equipment
Mining properties are depreciated to their residual values using the unit
of production method based on Proved and Probable Ore Reserves
and, in certain limited circumstances, other Mineral Resources included
in the Life of Mine Plan. These other Mineral Resources are included in
depreciation calculations where, taking into account historical rates of
conversion to Ore Reserves, there is a high degree of confidence that
they will be extracted in an economic manner. This is the case
principally for diamond operations, where depreciation calculations
are based on Diamond Reserves and Diamond Resources included in
the Life of Mine Plan. This reflects the unique nature of diamond
deposits where, due to the difficulty in estimating grade, Life of Mine
Plans frequently include significant amounts of Inferred Resources.
Buildings and items of plant and equipment for which the consumption
of economic benefit is linked primarily to utilisation or to throughput
rather than production, are depreciated to their residual values at
varying rates on a straight-line basis over their estimated useful lives,
or the Reserve Life, whichever is shorter. Estimated useful lives
normally vary from up to 20 years for items of plant and equipment to
a maximum of 50 years for buildings. Under limited circumstances,
items of plant and equipment may be depreciated over a period that
exceeds the Reserve Life by taking into account additional Mineral
Resources other than Proved and Probable Reserves included in the
Life of Mine Plan, after making allowance for expected production
losses based on historical rates of Mineral Resource to Ore Reserve
conversion.
‘Capital works in progress’ are measured at cost less any recognised
impairment. Depreciation commences when the assets are capable of
operating in the manner intended by management, at which point they
are transferred to the appropriate asset class.
Land is not depreciated.
When parts of an item of property, plant and equipment have different
useful lives, they are accounted for as separate items (major
components).
Depreciation methods, residual values and estimated useful lives are
reviewed at least annually.
Leased right-of-use assets
Leased right-of-use assets are included within property, plant and
equipment, and on inception of the lease are recognised at the
amount of the corresponding lease liability, adjusted for any lease
payments made at or before the lease commencement date, plus any
direct costs incurred and an estimate of costs for dismantling,
removing, or restoring the underlying asset and less any lease
incentives received.
The right-of-use asset is depreciated on a straight-line basis over the
term of the lease, or, if shorter, the useful life of the asset. The useful
lives of right-of-use assets are estimated on the same basis as those
of owned property, plant and equipment.
Financial assets
Investments, other than investments in subsidiaries, joint arrangements
and associates, are financial asset investments and are initially
recognised at fair value. The Group’s financial assets are classified into
the following measurement categories: debt instruments at amortised
cost, equity instruments and debt instruments designated at fair value
through other comprehensive income (OCI), and debt instruments,
derivatives and equity instruments at fair value through profit and loss.
Financial assets are classified as at amortised cost only if the asset is
held within a business model whose objective is to collect the
Anglo American plc Integrated Annual Report 2021 251
Financial statements and other financial information
Notes to the financial statements
Other items
39. Accounting policies continued
contractual cash flows and the contractual terms of the asset give rise
to cash flows that are solely payments of principal and interest.
At subsequent reporting dates, financial assets at amortised cost are
measured at amortised cost less any impairment losses. Other
investments are classified as either at fair value through profit or loss
(which includes investments held for trading) or at fair value through
OCI. Both categories are subsequently measured at fair value. Where
investments are held for trading purposes, unrealised gains and losses
for the period are included in the income statement within other gains
and losses.
The Group has elected to measure equity instruments, which are
neither held for trading nor are contingent consideration in a business
combination, at fair value through OCI as this better reflects the
strategic nature of the Group’s equity investments. For equity
instruments at fair value through OCI, changes in fair value, including
those related to foreign exchange, are recognised in other
comprehensive income and there is no subsequent reclassification of
fair value gains and losses to profit or loss.
Impairment of financial assets
A financial asset not measured at fair value through profit or loss is
assessed at each reporting date to determine whether there is any
objective evidence that it is impaired. The Group assesses on a
forward-looking basis the expected credit losses, defined as the
difference between the contractual cash flows and the cash flows that
are expected to be received, associated with its assets carried at
amortised cost and fair value through OCI. The impairment
methodology applied depends on whether there has been a
significant increase in credit risk. For trade receivables only, the
simplified approach permitted by IFRS 9 is applied, which requires
expected lifetime losses to be recognised from initial recognition of the
receivables.
Losses are recognised in the income statement. When a subsequent
event causes the amount of impairment loss to decrease, the
decrease in impairment loss is reversed through the income statement.
Impairment losses relating to equity instruments at fair value through
OCI are not reported separately from other changes in fair value.
Derecognition of financial assets and financial liabilities
Financial assets are derecognised when the right to receive cash flows
from the asset has expired, the right to receive cash flows has been
retained but an obligation to on-pay them in full without material delay
has been assumed or the right to receive cash flows has been
transferred together with substantially all the risks and rewards of
ownership.
Financial liabilities are derecognised when the associated obligation
has been discharged, cancelled or has expired.
Environmental restoration and decommissioning obligations
An obligation to incur environmental restoration, rehabilitation and
decommissioning costs arises when disturbance is caused by the
development or ongoing production of a mining asset. Costs for
restoration of site damage, rehabilitation and environmental costs are
estimated using either the work of external consultants or internal
experts. Such costs arising from the decommissioning of plant and
other site preparation work, discounted to their net present value, are
provided for and capitalised at the start of each project, as soon as the
obligation to incur such costs arises.
These costs are recognised in the income statement over the life of the
operation, through the depreciation of the asset and the unwinding of
the discount on the provision. Costs for restoration of subsequent site
damage which is created on an ongoing basis during production are
252 Anglo American plc Integrated Annual Report 2021
provided for at their net present values and recognised in the income
statement as extraction progresses.
The amount recognised as a provision represents management’s best
estimate of the consideration required to complete the restoration and
rehabilitation activity, the application of the relevant regulatory
framework and timing of expenditure. These estimates are inherently
uncertain and could materially change over time. Changes in the
measurement of a liability relating to the decommissioning of plant or
other site preparation work (that result from changes in the estimated
timing or amount of the cash flow or a change in the discount rate), are
added to or deducted from the cost of the related asset in the current
period. If a decrease in the liability exceeds the carrying amount of the
asset, the excess is recognised immediately in the income statement.
If the asset value is increased and there is an indication that the
revised carrying value is not recoverable, an impairment test is
performed in accordance with the accounting policy set out above.
For some South African operations annual contributions are made to
dedicated environmental rehabilitation trusts to fund the estimated
cost of rehabilitation during and at the end of the life of the relevant
mine. The Group exercises full control of these trusts and therefore the
trusts are consolidated. The trusts’ assets are disclosed separately on
the balance sheet as non-current assets.
The trusts’ assets are measured based on the nature of the underlying
assets in accordance with accounting policies for similar assets.
E. Working capital
Inventories
Inventory and work in progress are measured at the lower of cost and
net realisable value, except for inventory held by commodity broker-
traders which is measured at fair value less costs to sell and are
disclosed separately to the extent that they are material. The
production cost of inventory includes an appropriate proportion of
depreciation and production overheads. Cost is determined on the
following basis:
– Raw materials and consumables are measured at cost on a first in,
first out (FIFO) basis or a weighted average cost basis
– Work in progress and finished products are measured at raw
material cost, labour cost and a proportion of production overhead
expenses
– Metal and coal stocks are included within finished products and are
measured at average cost.
At precious metals operations that produce ‘joint products’, cost is
allocated among products according to the ratio of contribution of
these metals to gross sales revenues.
Inventory is recognised as a current asset where it is expected to be
consumed in the next 12 months. Stockpiles are classified as non-
current where stockpiles are not expected to be processed in the next
12 months and there is no market to sell the product in its current state.
F. Net debt and financial risk management
Cash and debt
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and on demand
deposits, together with short term, highly liquid investments that are
readily convertible to a known amount of cash and that are subject to
an insignificant risk of changes in value. Bank overdrafts are shown
within short term borrowings in current liabilities on the balance sheet.
Cash and cash equivalents in the cash flow statement are shown net
of overdrafts. Cash and cash equivalents are measured at amortised
cost except for money market fund investments which are held at fair
value as they are redeemed through the sale of units in the funds and
not solely through the recovery of principal and interest.
Financial statements and other financial information
Notes to the financial statements
Other items
39. Accounting policies continued
Financial liabilities and equity instruments
Financial liabilities and equity instruments are classified and
accounted for as debt or equity according to the substance of the
contractual arrangements entered into.
Borrowings
Interest bearing borrowings and overdrafts are initially recognised at
fair value, net of directly attributable transaction costs. Finance
charges, including premiums payable on settlement or redemption
and direct issue costs, are recognised in the income statement using
the effective interest method. They are added to the carrying amount
of the instrument to the extent that they are not settled in the period in
which they arise.
Lease liabilities
Lease liabilities recognised on balance sheet are recognised within
borrowings as part of net debt. On inception, the lease liability is
recognised as the present value of the expected future lease
payments, calculated using the Group’s incremental borrowing rate,
adjusted to reflect the length of the lease and country of location. For
a minority of leases where it is possible to determine the interest rate
implicit in the lease, it is used in place of the Group’s incremental
borrowing rate.
Lease payments included in the lease liability consist of each of the
following:
– Fixed payments, including in-substance fixed payments
– Payments whose variability is dependent only upon an index or a
rate, measured initially using the index or rate at the lease
commencement date. The lease liability is revalued when there is a
change in future lease payments arising from a change in an index
or rate
– Any amounts expected to be payable under a guarantee of residual
value
– The exercise price of a purchase option that the Group is reasonably
certain to exercise, the lease payments after the date of a renewal
option if the Group is reasonably certain to exercise its option to
renew the lease, and penalties for exiting a lease agreement unless
the Group is reasonably certain not to exit the lease early.
Variable leasing costs (other than those referred to above) and the
costs of non-lease components are not included in the lease liability
and are charged to operating costs in underlying EBITDA as they are
incurred.
The lease liability is measured at amortised cost using the effective
interest method. It is remeasured when there is a change to the
forecast lease payments. When the lease liability is remeasured, an
adjustment is made to the corresponding right-of-use asset.
Derivative financial instruments and hedge accounting
In order to hedge its exposure to foreign exchange, interest rate and
commodity price risk, the Group enters into forward, option and swap
contracts. Commodity based (own use) contracts that meet the scope
exemption in IFRS 9 are recognised in earnings when they are settled
by physical delivery. Commodity contracts which do not meet the own
use criteria are accounted for as derivatives.
All derivatives are held at fair value in the balance sheet within
‘Derivative financial assets’ or ‘Derivative financial liabilities’ except if
they are linked to settlement and delivery of an unquoted equity
instrument and the fair value cannot be measured reliably, in which
case they are carried at cost. A derivative cannot be measured reliably
where the range of reasonable fair value estimates is significant and
the probabilities of various estimates cannot be reasonably assessed.
Derivatives are classified as current or non-current depending on the
contractual maturity of the derivative.
Changes in the fair value of derivative financial instruments that are
designated and effective as hedges of future cash flows (cash flow
hedges) are recognised directly in equity. The gain or loss relating to
the ineffective portion is recognised immediately in the income
statement. If the cash flow hedge of a firm commitment or forecast
transaction results in the recognition of a non-financial asset or liability,
then, at the time the asset or liability is recognised, the associated
gains or losses on the derivative that had previously been recognised
in equity are included in the initial measurement of the asset or liability.
For hedges that do not result in the recognition of a non-financial asset
or liability, amounts deferred in equity are recognised in the income
statement in the same period in which the hedged item affects profit
or loss.
For an effective hedge of an exposure to changes in fair value, the
hedged item is adjusted for changes in fair value attributable to the risk
being hedged. The corresponding entry and gains or losses arising
from remeasuring the associated derivative are recognised in the
income statement within financing remeasurements.
Hedge effectiveness is determined at the inception of the hedge
relationship, and through periodic prospective effectiveness
assessments to ensure that an economic relationship exists between
the hedged item and hedging instrument. The Group’s material
hedging instruments are interest rate swaps that have similar critical
terms to the related debt instruments, such as payment dates,
maturities and notional amount. As all critical terms matched during
the year, there was no material hedge ineffectiveness. The Group also
uses cross currency swaps to manage foreign exchange risk
associated with borrowings denominated in foreign currencies. These
are not designated in an accounting hedge as there is a natural offset
against foreign exchange movements on associated borrowings.
The Group has designated the embedded derivative component of
the royalty liability (see note 22) as a cash flow hedge of future
revenue cash flows from the Woodsmith project. At 31 December
2021 the derivative has a negligible value and hence no accounting
entries have been made. In future periods, assuming the hedge
remains effective, fair value derivative gains and losses as a result of
changing forecast price and production forecasts will be recorded
within other comprehensive income and recycled to revenue as the
related revenue is recognised.
Hedge accounting is discontinued when the hedging instrument
expires or is sold, terminated, exercised, revoked, or no longer qualifies
for hedge accounting. At that time, any cumulative gain or loss on the
hedging instrument recognised in equity is retained until the forecast
transaction occurs. If a hedge transaction is no longer expected to
occur, the net cumulative gain or loss previously recognised in equity is
recycled to the income statement for the period.
Changes in the fair value of any derivative instruments that are not
designated in a hedge relationship are recognised immediately in the
income statement.
Derivatives embedded in other financial instruments or non-financial
host contracts (other than financial assets in the scope of IFRS 9) are
treated as separate derivatives when their risks and characteristics are
not closely related to those of their host contracts and the host
contracts themselves are not carried at fair value with unrealised gains
or losses reported in the income statement.
Derivatives embedded in contracts which are financial assets in the
scope of IFRS 9 are not separated and the whole contract is
accounted for at either amortised cost or fair value.
Interest Rate Benchmark Reform: IFRS 9 Financial Instruments and
IFRS 7 Financial Instruments: Disclosures
The Group uses interest rate derivatives to swap the majority of its
Euro, Sterling and US dollar bonds from fixed interest rates to EURIBOR,
SONIA and USD LIBOR respectively. Any non-USD interest rate
derivatives are swapped to USD LIBOR using cross currency interest
rate swaps which are not designated into hedges. The interest rate
derivatives are designated into fair value hedges.
Anglo American plc Integrated Annual Report 2021 253
Financial statements and other financial information
Notes to the financial statements
Other items
39. Accounting policies continued
USD LIBOR is expected to be replaced by alternative risk-free rates as
part of inter-bank offer rate (IBOR) reform. Phase 2 IBOR amendments
to IFRS 9 Financial Instruments, IAS 39 Hedge Accounting, IFRS 7
Financial Instruments: Disclosures, IFRS 4 Insurance Contracts and
IFRS 16 Leases were adopted in the year with no material impact to
the Group.
The Group is continuing its transition to incorporate alternative risk-free
rates and the principal benchmarks used are EURIBOR, SONIA and
USD LIBOR. The Group is continuing to monitor the market and
discussing the potential changes with its counterparties in order to
effectively transition to alternative risk-free rates. During the year, the
Group has adhered to International Swaps and Derivative Association
(ISDA) fallback protocol to ensure appropriate rates may be applied
to relevant derivative instruments on cessation in the event transition
to alternative risk-free rates is not completed in advance of cessation.
The Group does not hold any material lease agreements that contain
references to existing benchmarks and as a result there is no
material impact on the lease liabilities or right-of-use assets at
31 December 2021.
See note 22 for a summary of the Group’s current transition of financial
instruments to alternative risk-free rates.
See note 21 for a list of the Group’s Euro, Sterling and US dollar bonds
which in turn reflects the nominal amount of the hedging instruments
for those bonds which have been hedged.
G. Taxation
Tax
The tax expense includes the current tax and deferred tax charge
recognised in the income statement.
Current tax payable is based on taxable profit for the year. Taxable
profit differs from profit before tax as reported in the income statement
because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are not
taxable or deductible. The Group’s liability for current tax is calculated
using tax rates that have been enacted or substantively enacted by
the reporting date.
Deferred tax is recognised in respect of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes.
Deferred tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised. Probable
taxable profits are based on evidence of historical profitability and
taxable profit forecasts limited by reference to the criteria set out in
IAS 12 Income Taxes. Such assets and liabilities are not recognised if
the temporary differences arise from the initial recognition of goodwill
or of an asset or liability in a transaction (other than in a business
combination) that affects neither taxable profit nor accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries, joint arrangements
and associates except where the Group is able to control the reversal
of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each
reporting date and is adjusted to the extent that it is no longer probable
that sufficient taxable profit will be available to allow all or part of the
asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in
the period when the liability is settled or the asset is realised, based on
the laws that have been enacted or substantively enacted by the
254 Anglo American plc Integrated Annual Report 2021
reporting date. Deferred tax is charged or credited to the income
statement, except when it relates to items charged or credited directly
to equity, in which case the deferred tax is also taken directly to equity.
Deferred tax assets and liabilities are offset when they relate to income
taxes levied by the same taxation authority and the Group intends to
settle its current tax assets and liabilities on a net basis with that
taxation authority.
H. Employees
Retirement benefits
The Group’s accounting policy involves the use of ‘best estimate’
assumptions in calculating the schemes’ valuations in accordance
with the accounting standard. This valuation methodology differs from
that applied in calculating the funding valuations, which require the
use of ‘prudent’ assumptions, such as lower discount rates, higher
assumed rates of future inflation expectations and greater
improvements in life expectancy, leading to a higher value placed on
the liabilities. The funding valuations are carried out every three years,
using the projected unit credit method, by independent qualified
actuaries and are used to determine the money that must be put into
the funded schemes. The Group operates both defined benefit and
defined contribution pension plans for its employees as well as post
employment medical plans. For defined contribution plans the amount
recognised in the income statement is the contributions paid or
payable during the year.
For defined benefit pension and post employment medical plans, full
actuarial valuations are carried out at least every three years using the
projected unit credit method and updates are performed for each
financial year end. The average discount rate for the plans’ liabilities is
based on AA rated corporate bonds of a suitable duration and
currency or, where there is no deep market for such bonds, is based on
government bonds. Pension plan assets are measured using year end
market values.
Remeasurements comprising actuarial gains and losses, movements
in asset surplus restrictions and the return on scheme assets
(excluding interest income) are recognised immediately in the
statement of comprehensive income and are not recycled to the
income statement. Any increase in the present value of plan liabilities
expected to arise from employee service during the year is charged to
operating profit. The net interest income or cost on the net defined
benefit asset or liability is included in investment income or interest
expense respectively.
The retirement benefit obligation recognised on the balance sheet
represents the present value of the deficit or surplus of the defined
benefit plans. Any recognised surplus is limited to the present value of
available refunds or reductions in future contributions to the plan.
Share-based payments
The Group makes equity settled share-based payments to certain
employees, which are measured at fair value at the date of grant and
expensed on a straight-line basis over the vesting period, based on the
Group’s estimate of shares that will eventually vest. For those share
schemes with market related vesting conditions, the fair value is
determined using the Monte Carlo model at the grant date. The fair
value of share options issued with non-market vesting conditions has
been calculated using the Black Scholes model.
For all other share awards, the fair value is determined by reference to
the market value of the shares at the grant date. For all share schemes
with non‑market vesting conditions, the likelihood of vesting has been
taken into account when determining the relevant charge. Vesting
assumptions are reviewed during each reporting period to ensure they
reflect current expectations.
Financial statements and other financial information
Notes to the financial statements
been previously impaired are regularly reviewed for indicators of
impairment reversal.
The Group’s share of an associate’s or joint venture’s losses in excess
of its interest in that associate or joint venture is not recognised unless
the Group has an obligation to fund such losses. Unrealised gains
arising from transactions with associates and joint ventures are
eliminated against the investment to the extent of the Group’s interest
in the investee. Unrealised losses are eliminated in the same way, but
only to the extent that there is no evidence of impairment.
Non-current assets and disposal groups held for sale
Non-current assets and disposal groups are classified as held for sale
if their carrying amount will be recovered through a sale transaction
rather than through continuing use. This condition is met only when a
sale is highly probable within one year from the date of classification,
management is committed to the sale and the asset or disposal group
is available for immediate sale in its present condition.
Non-current assets and disposal groups are classified as held for sale
from the date these conditions are met and are measured at the lower
of carrying amount and fair value less costs to sell. Any resulting
impairment loss is recognised in the income statement.
On classification as held for sale the assets are no longer depreciated.
Comparative amounts are not adjusted.
Black Economic Empowerment (BEE) transactions
Where the Group disposes of a portion of a South African based
subsidiary or operation to a BEE company at a discount to fair value,
the transaction is considered to be a share-based payment (in line
with the principle contained in South Africa interpretation AC 503
Accounting for Black Economic Empowerment (BEE) Transactions).
The discount provided or value given is calculated in accordance with
IFRS 2 Share-based Payments and the cost, representing the fair value
of the BEE credentials obtained by the subsidiary, is recorded in the
income statement.
Other items
39. Accounting policies continued
I. Group structure
Associates and joint arrangements
Associates are investments over which the Group has significant
influence, which is the power to participate in the financial and
operating policy decisions of the investee, but without the ability to
exercise control or joint control. Typically the Group owns between
20% and 50% of the voting equity of its associates.
Joint arrangements are arrangements in which the Group shares joint
control with one or more parties. Joint control is the contractually
agreed sharing of control of an arrangement, and exists only when
decisions about the activities that significantly affect the
arrangement’s returns require the unanimous consent of the parties
sharing control.
Judgement is required in determining this classification through an
evaluation of the facts and circumstances arising from each individual
arrangement. Joint arrangements are classified as either joint
operations or joint ventures based on the rights and obligations of the
parties to the arrangement. In joint operations, the parties have rights
to the assets and obligations for the liabilities relating to the
arrangement, whereas in joint ventures, the parties have rights to the
net assets of the arrangement.
Joint arrangements that are not structured through a separate vehicle
are always joint operations. Joint arrangements that are structured
through a separate vehicle may be either joint operations or joint
ventures depending on the substance of the arrangement. In these
cases, consideration is given to the legal form of the separate vehicle,
the terms of the contractual arrangement and, when relevant, other
facts and circumstances. When the activities of an arrangement are
primarily designed for the provision of output to the parties, and the
parties are substantially the only source of cash flows contributing
to the continuity of the operations of the arrangement, this indicates
that the parties to the arrangements have rights to the assets and
obligations for the liabilities.
Certain joint arrangements that are structured through separate
vehicles including Collahuasi, Debswana and Namdeb are accounted
for as joint operations. These arrangements are primarily designed for
the provision of output to the parties sharing joint control, indicating
that the parties have rights to substantially all the economic benefits of
the assets. The liabilities of the arrangements are in substance
satisfied by cash flows received from the parties; this dependence
indicates that the parties effectively have obligations for the liabilities.
It is primarily these facts and circumstances that give rise to the
classification as joint operations.
The Group accounts for joint operations by recognising the assets,
liabilities, revenue and expenses for which it has rights or obligations,
including its share of such items held or incurred jointly.
Investments in associates and joint ventures are accounted for using
the equity method of accounting except when classified as held for
sale. The Group’s share of associates’ and joint ventures’ net income is
based on their most recent audited financial statements or unaudited
interim statements drawn up to the Group’s balance sheet date.
The total carrying values of investments in associates and joint
ventures represent the cost of each investment including the carrying
value of goodwill, the share of post-acquisition retained earnings, any
other movements in reserves and any long term debt interests which in
substance form part of the Group’s net investment, less any cumulative
impairments. The carrying values of associates and joint ventures are
reviewed on a regular basis and if there is objective evidence that an
impairment in value has occurred as a result of one or more events
during the period, the investment is impaired. Investments which have
Anglo American plc Integrated Annual Report 2021 255
Financial statements and other financial information
Financial statements of the Parent Company
Balance sheet of the Parent Company, Anglo American plc, as at 31 December 2021
US$ million
Fixed assets
Investment in subsidiaries
Financial asset investments
Current assets
Amounts due from Group undertakings
Cash at bank and in hand
Creditors due within one year
Amounts owed to Group undertakings
Other payables
Net current assets
Total assets less current liabilities
Net assets
Capital and reserves
Called-up share capital
Share premium account
Capital redemption reserve
Other reserves
Retained earnings
Total shareholders’ funds
Note
2021
2020
1
31,796
31,651
3
—
31,799
31,651
574
—
574
(224)
(186)
(410)
164
301
6
307
(217)
—
(217)
90
31,963
31,963
31,741
31,741
2
2
2
2
2
737
2,558
150
1,955
26,563
31,963
749
4,358
138
1,955
24,541
31,741
The profit after tax for the year of the Parent Company amounted to $4,989 million (2020: $535 million).
The financial statements of Anglo American plc, registered number 03564138, were approved by the Board of directors on 23 February 2022
and signed on its behalf by:
Mark Cutifani
Chief Executive
Stephen Pearce
Finance Director
256 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Financial statements of the Parent Company
1.
Investment in subsidiaries
US$ million
Cost
At 1 January
Capital contributions(1)
Additions
Disposals
At 31 December
Provisions for impairment
At 1 January
Impairment on disposals
At 31 December
Net book value
2021
2020
31,659
145
719
(719)
31,804
(8)
—
(8)
30,893
130
645
(9)
31,659
(17)
9
(8)
31,796
31,651
(1) This amount represents the Group share-based payment charge and is net of $16 million (2020: $15 million) of intra-group recharges.
Further information about subsidiaries is provided in note 35 to the Consolidated financial statements.
2. Reconciliation of movements in equity shareholders’ funds
US$ million
At 1 January 2020
Profit for the financial year
Dividends(1)
Share buyback
Net purchase of treasury shares under employee share schemes
Shares cancelled during the year
Capital contribution to Group undertakings
At 31 December 2020
Profit for the financial year
Dividends(1)
Share buyback
Net purchase of treasury shares under employee share schemes
Shares cancelled during the year
Capital contribution to Group undertakings
In specie return of capital relating to Thungela demerger
Other
At 31 December 2021
Called-up
share capital
753
Share
premium
account
4,358
Capital
redemption
reserve
134
Other
reserves
1,955
Retained
earnings
24,860
Total
32,060
—
—
—
—
(4)
—
—
—
—
—
—
—
—
—
—
—
4
—
—
—
—
—
—
—
749
4,358
138
1,955
—
—
—
—
(12)
—
—
—
—
—
—
—
—
—
(1,800)
—
—
—
—
—
12
—
—
—
—
—
—
—
—
—
—
—
535
(673)
(223)
(103)
—
145
24,541
4,989
(2,983)
(1,000)
(227)
—
161
1,085
(3)
535
(673)
(223)
(103)
—
145
31,741
4,989
(2,983)
(1,000)
(227)
—
161
(715)
(3)
737
2,558
150
1,955
26,563
31,963
(1) Dividends relate only to shareholders on the United Kingdom principal register excluding dividends waived by Wealth Nominees Limited as nominees for Estera Trust (Jersey) Limited, the
trustee for the Anglo American employee share scheme. Dividends paid to shareholders on the Johannesburg branch register are distributed by a South African subsidiary in accordance with
the terms of the Dividend Access Share Provisions of Anglo American plc’s Articles of Association. The directors are proposing a final dividend in respect of the year ended 31 December 2021
of 118 US cents per share (see note 6 to the Consolidated financial statements).
Fees payable to PwC for non-audit services to the Parent Company are not required to be disclosed because they are included within the
consolidated disclosure in note 37 to the Consolidated financial statements.
Anglo American plc Integrated Annual Report 2021 257
Financial statements and other financial information
Financial statements of the Parent Company
3. Accounting policies: Anglo American plc (the Company)
The Parent Company balance sheet and related notes have been prepared under the historical cost convention and in accordance with
Financial Reporting Standard 100 Application of Financial Reporting Requirements (FRS 100) and Financial Reporting Standard 101 Reduced
Disclosure Framework (FRS 101).
The Parent Company financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and The Large
and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008/410).
A summary of the principal accounting policies is set out below.
The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires
management to exercise judgement in applying the Parent Company’s accounting policies.
As permitted by section 408 of the Companies Act 2006, the statement of comprehensive income of the Parent Company is not presented as
part of these financial statements.
The Parent Company has taken advantage of the following disclosure exemptions under FRS 101:
– the requirements of paragraphs 45(b) and 46-52 of IFRS 2 Share-based Payments
– the requirements of IFRS 7 Financial Instruments: Disclosures
– the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement
– the requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in respect of paragraph
79(a)(iv) of IAS 1
– the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134-136 of IAS 1 Presentation of Financial
Statements
– the requirements of IAS 7 Statement of Cash Flows
– the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
– the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures
– the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of
a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.
Significant accounting policies
Investments
Investments represent equity holdings in subsidiaries and are measured at cost less accumulated impairment.
Financial instruments
The Company recognises financial instruments when it becomes a party to the contractual arrangements of the instrument. Financial instruments
are derecognised when they are discharged or when the contractual terms expire.
Dividends
Interim equity dividends are recognised when declared. Final equity dividends are recognised when approved by the shareholders at an annual
general meeting.
Share-based payments
The Parent Company has applied the requirements of IFRS 2 Share-based Payments.
The Parent Company makes equity settled share-based payments to the directors, which are measured at fair value at the date of grant and
expensed on a straight-line basis over the vesting period, based on the Parent Company’s estimate of shares that will eventually vest. For those
share schemes with market related vesting conditions, the fair value is determined using the Monte Carlo model at the grant date. The fair value
of share options issued with non-market vesting conditions has been calculated using the Black Scholes model. For all other share awards, the
fair value is determined by reference to the market value of the shares at the grant date. For all share schemes with non-market vesting
conditions, the likelihood of vesting has been taken into account when determining the relevant charge. Vesting assumptions are reviewed
during each reporting period to ensure they reflect current expectations.
The Parent Company also makes equity settled share-based payments to certain employees of certain subsidiary undertakings. Equity settled
share-based payments that are made to employees of the Parent Company’s subsidiaries are treated as increases in equity over the vesting
period of the award, with a corresponding increase in the Parent Company’s investments in subsidiaries, based on an estimate of the number of
shares that will eventually vest.
Any payments received from subsidiaries are applied to reduce the related increases in Investments in subsidiaries.
Taxation
Current and deferred tax is recognised in the statement of comprehensive income of the Parent Company, except that a charge attributable to
an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other
comprehensive income or directly in equity respectively.
The only income of the Parent Company is dividend income from subsidiaries. This income is non-taxable and there is no tax charge for the year.
258 Anglo American plc Integrated Annual Report 2021
Financial statements and other financial information
Summary by operation
This section includes certain Alternative Performance Measures (APMs). For more information on the APMs used by the Group, including
definitions, please refer to page 270.
Marketing activities are allocated to the underlying operation to which they relate.
US$ million (unless otherwise stated)
Sales
volume
Realised
price
Unit cost
Group
revenue(1)
Underlying
EBITDA
Underlying
EBIT
Underlying
earnings
Capital
expenditure
2021
(4)
5,602
(5)
1,100
De Beers
Mining
Botswana
Namibia
South Africa
Canada
Trading
Other(6)
Base Metals
Copper
Los Bronces(10)
Collahuasi(11)
Quellaveco(12)
Other Copper(13)
Nickel
Platinum Group Metals
Mogalakwena
Amandelbult
Processing and trading(18)
Other(19)
Bulk Commodities
Iron Ore
Kumba Iron Ore(23)
Iron Ore Brazil (Minas-Rio)
Metallurgical Coal
Manganese (Samancor)(27)
Crop Nutrients
Woodsmith
Other(28)
Corporate and other
Exploration
Corporate activities and
unallocated costs
Thermal Coal – South Africa(29)
Thermal Coal – Colombia(33)
See page 260 for footnotes.
377
(14)
$/PGM oz
868
694
1,127
(17)
(17)
(17)
(16)
(16)
(16)
’000 cts
33,357 (2)
n/a
n/a
n/a
n/a
n/a
n/a
kt
n/a
(3)
(3)
(3)
(3)
(3)
$/ct
146
152
565
113
62
n/a
n/a
c/lb
n/a
641 (7)
453
(8)
325
273
n/a
43
42
koz
5,214 (15)
1,479 (15)
n/a
n/a
n/a
n/a
773
$/PGM oz
2,761
2,563
907 (15)
3,122
1,772
(15)
n/a
1,056
2,935
Mt
n/a
63.3
(20)
40.3 (20)
23.0
(20)
14.1 (24)
3.7
n/a
n/a
n/a
n/a
n/a
n/a
5.3 (30)
3.4
n/a
$/t
n/a
157
161
150
200
n/a
n/a
n/a
n/a
n/a
n/a
n/a
77
65
n/a
(21)
(21)
(21)
(25)
(31)
$/ct
58
32
359
45
44
n/a
n/a
c/lb
n/a
120
158
61
n/a
n/a
(4)
(4)
(4)
(4)
(9)
(9)
(9)
(22)
(22)
(22)
(26)
n/a
899
$/t
n/a
33
39
24
105
n/a
n/a
n/a
n/a
n/a
n/a
n/a
46
34
n/a
n/a
n/a
n/a
n/a
n/a
n/a
7,143
6,433
3,047
2,641
n/a
745
710
14,502
3,787
2,817
4,817
3,081
14,771
11,104
6,958
4,146
2,899
768
114
n/a
114
1,126
n/a
354
553
219
(32)
620
407
68
82
4
505
(446)
3,689
3,428
1,588
1,970
n/a
(130)
261
6,753
2,471
1,571
1,110
1,601
7,059
6,359
3,960
2,399
450
250
(42)
n/a
(42)
(289)
(132)
(270)
70
43
345
n/a
n/a
n/a
n/a
n/a
n/a
1,798
1,519
n/a
1,307
n/a
n/a
279
3,789
n/a
n/a
n/a
n/a
3,663
3,231
1,442
1,789
300
132
(39)
n/a
(39)
(631)
(120)
(600)
61
28
565
72
91
309
42
4
47
1,802
1,773
493
365
777
138
29
894
435
81
n/a
378
1,277
628
417
211
649
—
530
530
—
125
—
44
81
—
464
101
241
68
515
(289)
4,331
4,011
1,871
2,188
n/a
(48)
320
7,099
2,611
1,633
1,138
1,717
8,148
6,871
4,311
2,560
962
315
(41)
n/a
(41)
(3)
(128)
(63)
101
87
43,258
20,634
17,790
8,925
5,193
Anglo American plc Integrated Annual Report 2021 259
Financial statements and other financial information
Summary by operation
US$ million (unless otherwise stated)
De Beers
Mining
Botswana
Namibia
South Africa
Canada
Trading
Other(6)
Base Metals
Copper
Los Bronces(10)
Collahuasi(11)
Quellaveco(12)
Other Copper(13)
Nickel
Platinum Group Metals
Mogalakwena
Amandelbult
Processing and trading(18)
Other(19)
Bulk Commodities
Iron Ore
Kumba Iron Ore(23)
Iron Ore Brazil (Minas-Rio)
Metallurgical Coal
Manganese (Samancor)(27)
Crop Nutrients
Woodsmith
Other(28)
Corporate and other
Exploration
Corporate activities and
unallocated costs
Thermal Coal – South Africa
Thermal Coal – Colombia(33)
Sales
volume
Realised
price
’000 cts
21,380 (2)
$/ct
133 (3)
Unit
cost
$/ct
57
Group
revenue(1)
(restated)
Underlying
EBITDA
Underlying
EBIT
Underlying
earnings
Capital
expenditure
2020 (restated)
(4)
3,378
(5)
417
—
(102)
n/a
n/a
n/a
n/a
n/a
n/a
kt
n/a
648 (7)
325
278
n/a
45
43
koz
2,869 (15)
839 (15)
501 (15)
953 (15)
576
Mt
n/a
64.2
40.4 (20)
23.8 (20)
16.9 (24)
(20)
3.6
n/a
n/a
n/a
n/a
n/a
n/a
124 (3)
492 (3)
99 (3)
58 (3)
n/a
n/a
c/lb
n/a
299 (8)
n/a
n/a
n/a
n/a
563
$/PGM oz
2,035 (16)
2,065 (16)
2,228 (16)
n/a
2,083
$/t
n/a
111
113 (21)
107 (21)
109 (25)
n/a
(21)
n/a
n/a
n/a
n/a
n/a
n/a
(4)
(4)
(4)
(4)
35
272
53
36
n/a
n/a
c/lb
n/a
113
149
62
n/a
n/a
334 (14)
(9)
(9)
(9)
$/PGM oz
713 (17)
530 (17)
1,031 (17)
n/a
757
$/t
n/a
27
31 (22)
21 (22)
86 (26)
n/a
(22)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
4,733
4,199
2,013
1,767
n/a
419
534
6,604
1,720
1,108
2,481
1,295
10,511
7,905
4,880
3,025
1,909
697
107
n/a
107
1,550
n/a
191
16.6 (30)
57 (31)
38 (32)
1,150
4.5
n/a
46
n/a
39
n/a
209
225
113
165
92
80
(258)
2,070
1,864
639
1,308
n/a
(83)
206
2,555
1,059
474
460
562
4,919
4,565
2,702
1,863
50
304
1
n/a
1
(160)
(101)
(44)
(15)
—
178
82
16
40
74
(390)
1,306
1,227
294
1,083
n/a
(150)
79
2,270
944
429
436
461
3,868
4,091
2,386
1,705
(468)
245
1
n/a
1
(395)
(102)
(129)
(81)
(83)
n/a
n/a
n/a
n/a
n/a
n/a
684
607
n/a
735
n/a
n/a
77
1,068
n/a
n/a
n/a
n/a
2,234
2,474
850
1,624
(362)
122
(11)
n/a
(11)
(738)
(89)
(457)
(112)
(80)
381
66
77
147
31
3
57
1,476
1,443
272
313
788
70
33
571
273
56
n/a
242
1,200
517
354
163
683
—
292
292
—
205
—
21
184
—
(1) Group revenue is shown after deduction of treatment and refining charges (TC/RCs).
Third-party trading amounts restated from a gross to a net presentation. See note 7 for
further details.
(2) Total sales volumes on a 100% basis were 36.3 million carats (2020: 22.7 million carats).
Total sales volumes (100%) include De Beers Group’s joint arrangement partners’ 50%
proportionate share of sales to entities outside De Beers Group from Diamond Trading
Company Botswana and Namibia Diamond Trading Company.
(3) Pricing for the mining business units is based on 100% selling value post-aggregation of
goods. Realised price includes the price impact of the sale of non-equity product and, as a
result, is not directly comparable to the unit cost.
(4) Unit cost is based on consolidated production and operating costs, excluding depreciation
and operating special items, divided by carats recovered.
Includes rough diamond sales of $4.9 billion (2020: $2.8 billion).
(5)
(6) Other includes Element Six, Brands and consumer markets, acquisition accounting
adjustments and corporate.
(7) Excludes 432 kt third-party sales (2020: 453 kt).
(8) Represents realised price and excludes impact of third-party sales.
(9) C1 unit cost includes by-product credits.
(10) Figures on a 100% basis (Group’s share: 50.1%).
(11) 44% share of Collahuasi sales and financials.
(12) Figures on a 100% basis (Group’s share: 60%), except capex which represents the Group’s
share after deducting direct funding from non‑controlling interests. 2021 capex on a 100%
basis is $1,295 million, of which the Group’s share is $777 million. 2020 capex on a 100%
basis was $1,314 million, of which the Group’s share was $788 million.
(13) Other operations includes El Soldado and Chagres (figures on a 100% basis, Group’s
share: 50.1%). Financials include third-party sales and purchases, projects and corporate
costs.
(14) C1 unit cost.
(15) Sales volumes exclude the sale of refined metal purchased from third parties and toll
material. PGM volumes is 5E metals and gold.
(16) Average US$ realised basket price, based on sold ounces (own mined and purchased
concentrate). Excludes the impact of the sale of refined metal purchased from third parties.
(17) Total cash operating costs (includes on-mine, smelting and refining costs only) per own
mined PGM ounce of production.
(18) Purchase of concentrate from joint operations, associates and third parties for processing
into refined metals, tolling and trading activities.
(19) Includes Unki, Mototolo and PGMs’ share of joint operations (Kroondal and Modikwa).
260 Anglo American plc Integrated Annual Report 2021
26,883
9,802
7,050
3,135
4,125
(20) Sales volumes are reported as wet metric tonnes. The comparative has been restated as
Kumba previously reported on a dry basis. Product is shipped with c.9% moisture from
Minas‑Rio and c.1.6% moisture from Kumba. Total iron ore is the sum of Kumba and
Minas‑Rio.
(21) Prices for Kumba Iron Ore are the average realised export basket price (FOB Saldanha)
(wet basis) and the comparative has been restated as Kumba previously reported on a dry
basis. Prices for Minas-Rio are the average realised export basket price (FOB Brazil) (wet
basis). Prices for total iron ore are a blended average.
(22) Unit costs are reported on an FOB wet basis. The comparative has been restated as
Kumba previously reported on a dry basis. Unit costs for total iron ore are a blended
average.
(23) Sales volumes and realised price differ to Kumba’s stand-alone reported results due to
sales to other Group companies.
(24) Sales volumes exclude thermal coal sales of 2.1 Mt (2020: 2.3 Mt).
(25) Realised price is the weighted average hard coking coal and PCI sales price achieved at
managed operations.
(26) FOB cost per saleable tonne, excluding royalties and study costs.
(27) Sales and financials include ore and alloy.
(28) Other comprises projects and corporate costs as well as the share in associate results from
The Cibra Group, a fertiliser distributor based in Brazil.
(29) Thermal Coal – South Africa mining activity included until the demerger on 4 June 2021,
with prior year comparison up to 31 December 2020.
(30) South African sales volumes include export primary production, secondary production sold
into export markets and production sold domestically at export parity pricing and exclude
domestic sales of 5.3 Mt (2020: 12.4 Mt) and third-party sales of 6.4 Mt (2020: 9.4 Mt).
(31) Thermal Coal – South Africa realised price is the weighted average export thermal coal
price achieved. Excludes third-party sales from locations other than Richards Bay.
(32) FOB cost per saleable tonne from the trade operations, excluding royalties and study costs.
(33) Represents the Group’s attributable share from its 33.3% shareholding in Cerrejón. The
sale of Anglo American’s interest in Cerrejón was completed on 11 January 2022 following
receipt of the relevant regulatory approvals. The agreement is effective 31 December
2020 and, therefore, economic benefits from 1 January 2021 have not accrued to Anglo
American. Metrics reflect earnings and volumes from the first half of the year only, before
the agreement was entered into.
Financial statements and other financial information
Key financial data
This section includes certain Alternative Performance Measures (APMs). For more information on the APMs used by the Group, including
definitions, please refer to page 270.
2021
2020
(restated)
2019
2018
2017
2016
2015
2014
2013
2012
(restated)(1)
43,258
26,883
31,825
30,196
28,650
23,142
23,003
30,988
33,063
32,785
17,790
7,050
7,010
6,377
6,247
3,766
2,223
4,933
6,620
6,253
20,634
9,802
10,006
9,161
8,823
6,075
4,854
7,832
9,520
8,860
41,554
25,447
29,870
27,610
26,243
21,378
20,455
27,073
29,342
28,680
Profit/(loss) for the financial year
11,699
3,328
4,582
4,373
4,059
1,926
(5,842)
(1,524)
426
(3,137)
(1,239)
(1,035)
(824)
(893)
(332)
218
(989)
(1,387)
(277)
(775)
(420)
(380)
(473)
(209)
(458)
(256)
(276)
17,629
5,464
6,146
6,189
5,505
2,624
(5,454)
(259)
1,700
(299)
(171)
(564)
(906)
8,562
2,089
3,547
3,549
3,166
1,594
(5,624)
(2,513)
(961)
(1,470)
8,925
3,135
3,468
3,237
3,272
2,210
827
2,217
2,673
2,860
38,312
37,970
35,576
32,269
32,813
31,904
32,842
43,782
46,551
49,757
34,770
32,766
31,385
29,832
28,882
24,325
21,342
32,177
37,364
43,738
(6,945)
(6,942)
(6,590)
(6,234)
(5,910)
(5,309)
(4,773)
(5,760)
(5,693)
(6,127)
27,825
25,824
24,795
23,598
22,972
19,016
16,569
26,417
31,671
37,611
US$ million (unless otherwise stated)
Income statement measures
Group revenue(2)
Underlying EBIT
Underlying EBITDA
Revenue(2)
Net finance costs (before special items
and remeasurements)
Profit/(loss) before tax
Non-controlling interests
Profit/(loss) attributable to equity
shareholders of the Company
Underlying earnings
Balance sheet measures
Capital employed
Net assets
Non-controlling interests
Equity attributable to equity shareholders
of the Company
Cash flow measures
Cash flows from operations
20,588
7,998
9,260
7,782
8,375
5,838
4,240
6,949
7,729
7,370
Capital expenditure
Net debt(3)
Metrics and ratios
Underlying earnings per share (US$)
Earnings per share (US$)
Ordinary dividend per share (US cents)
Ordinary dividend cover (based on
underlying earnings per share)
Underlying EBIT margin
Underlying EBIT interest cover(4)
Underlying effective tax rate
Gearing (net debt to total capital)(5)
(5,193)
(4,125)
(3,840)
(2,818)
(2,150)
(2,387)
(4,177)
(6,018)
(6,075)
(5,947)
(3,842)
(5,530)
(4,535)
(2,848)
(4,501)
(8,487)
(12,901)
(12,871)
(10,652)
(8,510)
7.22
6.93
289
2.53
1.69
100
2.75
2.55
2.57
1.72
0.64
1.73
2.09
2.81
2.80
2.48
1.24
(4.36)
(1.96)
(0.75)
109
100
102
—
—
32
2.0
85
2.0
85
2.5
2.5
2.5
2.5
2.6
2.5
41.1%
26.2%
22.0%
21.1%
21.8%
16.3%
9.7%
15.9%
20.0%
19.1%
45.2
11.2
18.0
19.9
16.5
16.7
10.1
30.1
35.8
36.8
31.4%
31.2%
30.8%
31.3%
29.7%
24.6%
31.0%
29.8%
32.0%
29.0%
10%
14%
13%
9%
13%
26%
38%
29%
22%
16%
2.28
(1.17)
85
2.7
(1) Certain balances relating to 2012 were restated to reflect the adoption of new accounting pronouncements. See note 2 of the 2013 Consolidated financial statements for details.
(2) Third-party trading amounts restated from a gross to a net presentation in 2020. See note 7 for further details. Amounts prior to 2020 have not been restated.
(3) The Group has amended the definition of net debt during the year to exclude variable vessel leases. The amounts for 2020 and 2019 have therefore been restated from $5,575 million
(2019: $4,626 million) to $5,530 million (2019: $4,535 million).
(4) Underlying EBIT interest cover is underlying EBIT divided by net finance costs, excluding net foreign exchange gains and losses, unwinding of discount relating to provisions and other liabilities,
financing special items and remeasurements, and including the Group’s attributable share of associates’ and joint ventures’ net finance costs.
(5) Net debt to total capital is calculated as net debt divided by total capital (being ‘Net assets’ as shown in the Consolidated balance sheet excluding net debt and variable vessel leases).
Anglo American plc Integrated Annual Report 2021 261
Financial statements and other financial information
Exchange rates and commodity prices
US$ exchange rates
Year end spot rates
South African rand
Brazilian real
Sterling
Australian dollar
Euro
Chilean peso
Botswana pula
Peruvian sol
Average rates for the year
South African rand
Brazilian real
Sterling
Australian dollar
Euro
Chilean peso
Botswana pula
Peruvian sol
Commodity prices
Year end spot prices
Copper(1)
Platinum(2)
Palladium(2)
Rhodium(3)
Iron ore (62% Fe CFR)(4)
Iron ore (66% Fe Concentrate CFR)(5)
Hard coking coal (FOB Australia)(4)
PCI (FOB Australia)(4)
Nickel(1)
Manganese ore (44% CIF China)(5)
Average market prices for the year
Copper(1)
Platinum(2)
Palladium(2)
Rhodium(3)
Iron ore (62% Fe CFR)(4)
Iron ore (66% Fe Concentrate CFR)(5)
Hard coking coal (FOB Australia)(4)
PCI (FOB Australia)(4)
Nickel(1)
Manganese ore (44% CIF China)(5)
(1) Source: London Metal Exchange (LME).
(2) Source: London Platinum and Palladium Market (LPPM).
(3) Source: Johnson Matthey/Comdaq.
(4) Source: Platts.
(5) Source: Metal Bulletin.
262 Anglo American plc Integrated Annual Report 2021
2021
2020
15.96
14.69
5.57
0.74
1.38
0.88
852
11.75
3.99
5.19
0.73
1.30
0.81
712
10.80
3.62
14.79
16.46
5.40
0.73
1.33
0.85
761
11.08
3.88
5.16
0.78
1.45
0.88
792
11.42
3.50
2021
2020
440
962
1,928
14,150
119
147
357
244
949
5.60
423
1,086
2,388
20,109
160
185
226
164
839
5.21
351
1,075
2,370
17,000
159
177
103
92
750
4.27
280
885
2,197
11,220
109
120
124
78
625
4.67
US cents/lb
US$/oz
US$/oz
US$/oz
US$/tonne
US$/tonne
US$/tonne
US$/tonne
US cents/lb
US$/dmtu
US cents/lb
US$/oz
US$/oz
US$/oz
US$/tonne
US$/tonne
US$/tonne
US$/tonne
US cents/lb
US$/dmtu
Ore Reserves and Mineral Resources
Ore Reserves and Mineral Resources
as at 31 December 2021
The Ore Reserve and Mineral Resource estimates presented in this
report were prepared in accordance with the Anglo American plc
Group Ore Reserves and Mineral Resources Reporting Policy. This
policy stipulates that the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves 2012
edition (the JORC Code) be used as a minimum standard. Some
Anglo American plc subsidiaries have a primary listing in South Africa
where public reporting is carried out in accordance with the South
African Code for Reporting of Exploration Results, Mineral Resources
and Mineral Reserves (the SAMREC Code). The SAMREC Code is
similar to the JORC Code and the Ore Reserve and Mineral Resource
terminology appearing in this section follows the definitions in both
the JORC (2012) and SAMREC (2016) Codes. Ore Reserves in the
context of this report have the same meaning as ‘Mineral Reserves’
as defined by the SAMREC Code and the CIM (Canadian Institute of
Mining Metallurgy and Petroleum) Definition Standards on Mineral
Resources and Mineral Reserves.
The information on Ore Reserves and Mineral Resources was prepared
by or under the supervision of Competent Persons (CPs) as defined in
the JORC or SAMREC Codes. All CPs have sufficient experience
relevant to the style of mineralisation and type of deposit under
consideration and to the activity which they are undertaking. All the
CPs consent to the inclusion in this report of the information in the form
and context in which it appears. The names of the CPs along with
their Recognised Professional Organisation (RPO) affiliation and years
of relevant experience are listed in the Ore Reserves and Mineral
Resources Report 2021.
The Anglo American Group of companies are subject to reviews aimed
at providing assurance in respect of Ore Reserve and Mineral
Resource estimates. The reviews are conducted by suitably qualified
CPs from within the Anglo American Group or independent
consultants. The frequency and depth of review is a function of the
perceived risks and/or uncertainties associated with a particular Ore
Reserve and Mineral Resource. The overall value of the entity and time
that has elapsed since an independent third-party review are also
considered. Those operations/projects subjected to independent
third-party reviews during the year are indicated in footnotes to the
tables in the Ore Reserves and Mineral Resources Report 2021.
Both the JORC and SAMREC Codes require due consideration of
reasonable prospects for eventual economic extraction for Mineral
Resource definition. These include long-range commodity price
forecasts which are prepared by in-house specialists using estimates
of future supply and demand and long term economic outlooks. The
calculation of Ore Reserve and Mineral Resource estimates are based
on long term prices determined at the beginning of the second quarter
of each year. Ore Reserves are dynamic and likely to be affected by
fluctuations in the prices of commodities, uncertainties in production
costs, processing costs and other mining, infrastructure, legal,
environmental, social and governmental factors which may impact the
financial condition and prospects of the Group. Mineral Resource
estimates also change in time and tend to be mostly influenced by new
information pertaining to the understanding of the deposit and
secondly by the conversion to Ore Reserves.
Mineral Resource classification defines the confidence associated with
different parts of the Mineral Resource. The confidence that is assigned
refers collectively to the reliability of estimates of grade and tonnage.
This includes considering the quality of the underlying sample data,
the demonstrated continuity of the geology, the likely precision of
grade estimates and density estimates that collectively affect
confidence in the Mineral Resource. Most business units have
developed commodity-specific approaches to the classification of
their Mineral Resources.
The appropriate Mineral Resource classification is determined by the
appointed Competent (or Qualified) Persons. The choice of
appropriate category of Mineral Resource depends upon the quantity,
distribution and quality of geoscientific information available and the
level of confidence in these data.
Anglo American makes use of a web-based group reporting database
called the Anglo Reserve and Resource Reporting system (ARR) for the
compilation, review and approval of Ore Reserve and Mineral
Resource reporting. The system allows the CPs to capture the
estimates, year-on-year reconciliations and other supplementary
information thus supporting this Ore Reserves and Mineral Resources
publication.
The estimates of Ore Reserves and Mineral Resources are stated as
at 31 December 2021. The figures in the tables are rounded, and if
used to derive totals and averages, minor differences may result.
Unless stated otherwise, Mineral Resources are additional to (i.e.
exclusive of) those resources converted to Ore Reserves and are
reported on a dry tonnes basis. Mineral Resources should not be
added to Ore Reserves as Modifying Factors have been applied to
Ore Reserves.
The Ore Reserves and Mineral Resources Report 2021 should be
considered the only valid source of Ore Reserve and Mineral Resource
information for the Anglo American Group exclusive of Kumba Iron Ore
and Anglo American Platinum Limited, which publish their own
independent annual reports.
It is accepted that mine planning may include some Inferred Mineral
Resources. Inferred Mineral Resources in the Life of Mine Plan (LOM
Plan) are described as ‘Inferred (in LOM Plan)’ separately from the
remaining Inferred Mineral Resources described as ‘Inferred (ex. LOM
Plan)’, as required. These resources are declared without application
of Modifying Factors. Reserve Life reflects the scheduled extraction
period in years for the total Ore Reserves in the approved LOM Plan.
The Ownership (Attributable) Percentage that Anglo American holds
in each operation and project is presented beside the name of each
entity and reflects the Group’s share of equity owned. The reported
estimates represent 100% of the Ore Reserves and Mineral Resources.
Operations and projects which fall below the internal threshold for
reporting (25% attributable interest) are not reported.
On 4 June 2021, Anglo American demerged its thermal coal
operations in South Africa into a newly incorporated company,
Thungela Resources Limited. Operations or projects from the Coal
South Africa business are not reported.
Ore Reserves and Mineral Resources are reported for properties over
which mineral tenure has been granted and are valid, or where
applications have been submitted or will be submitted at the
appropriate time and there is a reasonable expectation that the rights
will be granted in due course (any associated comments appear in
the footnotes in the Ore Reserves and Mineral Resources Report 2021).
Risk registers related to Ore Reserves and Mineral Resources are
maintained for each operation, covering key risks pertaining to, but not
limited to, technical, environmental, social, health, safety, economic
and political aspects. Mitigation measures are put in place to address
the material risks at each operation.
→ The detailed Ore Reserve and Mineral Resource estimates, Ore Reserve and Mineral
Resource reconciliation overview, Definitions and Glossary are contained in the separate
Ore Reserves and Mineral Resources Report 2021 which is available in the Annual Reporting
Centre on the Anglo American website.
Anglo American plc Integrated Annual Report 2021 263
Ore Reserves and Mineral Resources
Estimated Ore Reserves(1)
as at 31 December 2021
Detailed Proved and Probable estimates appear on the referenced pages in the Ore Reserves and Mineral Resources Report 2021.
DIAMOND(3) OPERATIONS – DBCi
(See page 14 in R&R Report for details)
Gahcho Kué
Kimberlite
DIAMOND(3) OPERATIONS – DBCM
(See page 15 in R&R Report for details)
Venetia (OP)
Kimberlite
Venetia (UG)
Kimberlite
DIAMOND(3) OPERATIONS – Debswana
(See pages 16 & 17 in R&R Report for details)
Jwaneng
Letlhakane
Orapa
Kimberlite
TMR
Kimberlite
DIAMOND(3) OPERATIONS – Namdeb
(See page 18 in R&R Report for details)
Mining Area 1
Orange River
Beaches
Fluvial Placers
Ownership
%
43.4
Mining
Method
OP
Ownership
%
62.9
Ownership
%
42.5
42.5
42.5
Ownership
%
42.5
42.5
Mining
Method
OP
UG
Mining
Method
OP
n/a
OP
Mining
Method
OC
OC
Total Proved and Probable
LOM(2)
(years)
9
LOM(2)
(years)
26
Saleable Carats
(Mct)
41.0
Treated Tonnes
(Mt)
27.5
Saleable Carats
(Mct)
2.5
Treated Tonnes
(Mt)
3.3
62.9
91.1
LOM(2)
(years)
15
Saleable Carats
(Mct)
138.9
Treated Tonnes
(Mt)
111.9
22
16
LOM(2)
(years)
21
3
5.2
151.2
26.8
102.8
Saleable Carats
(kct)
96
Treated Tonnes
(kt)
1,450
76
7,691
Saleable Carats
(kct)
7,791
Area
k (m2)
132,146
Atlantic 1
Marine Placers
42.5
MM
34
COPPER OPERATIONS
(See pages 20 & 22 in R&R Report for details)
Collahuasi
Sulphide (direct feed)
El Soldado
Los Bronces
Low Grade Sulphide (incl. stockpile)
Sulphide
Sulphide – Flotation
Sulphide – Dump Leach
Ownership
%
44.0
50.1
50.1
Mining
Method
OP
OP
OP
Quellaveco
Sulphide – Flotation
60.0
OP
Reserve Life(2)
(years)
86
Contained
Copper (kt)
25,990
ROM Tonnes
(Mt)
2,673.7
6
36
36
7,245
340
6,975
1,325
8,888
1,493.4
43.3
1,274.7
481.0
1,667.3
NICKEL OPERATIONS
(See page 24 in R&R Report for details)
Barro Alto
Niquelândia
Saprolite
Saprolite
PLATINUM(4) OPERATIONS
(See pages 26 & 27 in R&R Report for details)
Amandelbult Complex MR & UG2 Reefs
Mogalakwena
Platreef (incl. stockpiles)
Mototolo Complex
UG2 Reef
Unki
Main Sulphide Zone
Non-Managed
UG2 Reef
Ownership
%
Mining
Method
Reserve Life(2)
(years)
Contained Nickel
(kt)
ROM Tonnes
(Mt)
100
100
OP
OP
20
13
626
77
Ownership
%
78.8
Mining
Method
UG
78.8
78.8
78.8
44.8
OP
UG
UG
UG
Reserve Life(2)
(years)
>19
>19
>19
21
n/a
Contained Metal
(4E Moz)
13.6
116.7
13.5
5.6
7.4
48.2
6.2
ROM Tonnes
(Mt)
93.9
1,228.3
121.7
53.1
61.9
Operations = Mines in steady-state or projects in ramp-up phase.
TMR = Tailings Mineral Resource. Mining method: OP = Open Pit, UG = Underground, OC = Open Cast/Cut, MM = Marine Mining.
Mct = Million carats. Mt = Million tonnes. kct = thousand carats. kt = thousand tonnes. k (m²) = thousand square metres.
Diamond Recovered Grade is quoted as carats per hundred metric tonnes (cpht) or as carats per square metre (cpm²).
Values reported as 0.0 represent estimates less than 0.05.
TCu = Total Copper. 4E is the sum of Platinum, Palladium, Rhodium and Gold.
Moz = Million troy ounces. g/t = grams per tonne.
ROM = Run of Mine.
MR = Merensky Reef.
Non-Managed = Kroondal, Modikwa mines and Siphumelele 3 shaft.
264 Anglo American plc Integrated Annual Report 2021
Recovered
Grade
(cpht)
149.2
Recovered
Grade
(cpht)
78.0
69.0
Recovered
Grade
(cpht)
124.2
19.4
147.1
Recovered
Grade
(cpht)
6.62
0.99
Recovered
Grade
(cpm2)
0.06
Grade
(%TCu)
0.97
0.49
0.78
0.55
0.28
0.53
Grade
(%Ni)
1.30
1.24
Grade
(4E g/t)
4.52
2.96
3.45
3.29
3.70
Ore Reserves and Mineral Resources
Estimated Ore Reserves continued
KUMBA IRON ORE OPERATIONS
(See page 31 in R&R Report for details)
Kolomela
Sishen
Hematite (incl. stockpile)
Hematite (incl. stockpile)
IRON ORE BRAZIL OPERATIONS
(See page 33 in R&R Report for details)
Serra do Sapo
Friable Itabirite and Hematite
Itabirite
COAL OPERATIONS – Australia
(See pages 34 &35 in R&R Report for details)
Capcoal (OC)*
Metallurgical – Coking
Metallurgical – Other
Thermal – Export
Capcoal (UG)*
Metallurgical – Coking
Capcoal (UG) – Aquila*
Metallurgical – Coking
Dawson
Grosvenor
Moranbah North
Metallurgical – Coking
Thermal – Export
Metallurgical – Coking
Metallurgical – Coking
COAL OPERATIONS – Colombia
(See page 34 in R&R Report for details)
Cerrejón
Thermal – Export
SAMANCOR MANGANESE OPERATIONS
(See page 38 in R&R Report for details)
GEMCO(7)
ROM
Sands
Mamatwan
Wessels
Ownership
%
53.2
53.2
Ownership
%
100
Mining
Method
OP
OP
Reserve Life(2)
(years)
13
18
Mining
Method
OP
Reserve Life(2)
(years)
52
Ownership
%
79.2
Mining
Method
OC
Reserve Life(2)
(years)
18
70.0
70.0
51.0
88.0
88.0
UG
UG
OC
UG
UG
1
6
16
15
23
Ownership
%
33.3
Ownership
%
40.0
Mining
Method
OC
Reserve Life(2)
(years)
12
Mining
Method
OP
Reserve Life(2)
(years)
5
29.6
29.6
OP
UG
15
43
Total Proved and Probable
Saleable Product
(Mt)
141
425
Saleable Product(5)
(Mt)
682
1,033
Saleable Tonnes(6)
Grade
(%Fe)
64.7
63.2
Grade(5)
(%Fe)
67.1
67.1
(Mt)
34.6
47.1
11.4
0.8
31.0
68.9
60.9
70.7
159.8
Saleable Quality
5.0 CSN
6,750 kcal/kg
5,970 kcal/kg
8.5 CSN
9.0 CSN
7.0 CSN
6,670 kcal/kg
8.0 CSN
7.5 CSN
Saleable Tonnes(6)
(Mt)
317.4
Saleable Quality
6,240 kcal/kg
Tonnes
(Mt)
40
6.3
47
60
Grade
(%Mn)
43.0
40.0
36.4
41.4
Operations = Mines in steady-state or projects in ramp-up phase. Mining method: OP = Open Pit, UG = Underground, OC = Open Cast/Cut.
* Capcoal comprises open cast operations at Lake Lindsay and Oak Park, with an underground longwall operation at Grasstree which is replaced by Aquila.
(1) Estimated Ore Reserves are the sum of Proved and Probable Ore Reserves (on an exclusive basis, i.e. Mineral Resources are reported as additional to Ore Reserves unless stated otherwise).
Please refer to the detailed Ore Reserve estimates tables in the Anglo American plc Ore Reserves and Mineral Resources Report for the individual Proved and Probable Reserve estimates. The
Ore Reserve estimates are reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2012) as a
minimum standard. Ore Reserve estimates for operations in South Africa are reported in accordance with The South African Code for the Reporting of Exploration Results, Mineral Resources
and Mineral Reserves (The SAMREC Code, 2016), unless stated otherwise. The figures reported represent 100% of the Ore Reserves. Anglo American plc ownership is stated separately.
Rounding of figures may cause computational discrepancies.
(2) Reserve Life = The scheduled extraction period in years for the total Ore Reserves in the approved Life of Mine (LOM) Plan. LOM = Life of Mine (years) is based on scheduled Probable Reserves
including some Inferred Resources considered for LOM planning.
(3) DBCi = De Beers Canada, DBCM = De Beers Consolidated Mines, Debswana = Debswana Diamond Company, Namdeb = Namdeb Holdings. Reported Diamond Reserves are based on a
Bottom Cut-Off (BCO), which refers to the bottom screen size aperture and varies between 1.00 mm and 3.00 mm (nominal square mesh). Specific BCOs applied to derive estimates are
included in the detailed Diamond Reserve tables in the Anglo American plc Ore Reserves and Mineral Resources Report.
(4) Details of the individual Anglo American Platinum Limited Managed and Non-Managed operations appear in the Anglo American plc Ore Reserves and Mineral Resources Report. Ownership
percentage for Non-Managed operations is weighted by Contained Metal (4E Moz) contributions from each operation.
(5) Iron Ore Brazil Saleable Product tonnes are reported on a wet basis (average moisture content is 9.5 wt% of the wet mass) with grade stated on a dry basis.
(6) Total Saleable Tonnes represents the product tonnes quoted as metric tonnes on a product moisture basis. The coal quality for Coal Reserves is quoted as either kilocalories per kilogram
(kcal/kg) or Crucible Swell Number (CSN). Kilocalories per kilogram represent Calorific Value (CV) on a Gross As Received (GAR) basis. CV is rounded to the nearest 10 kcal/kg and CSN to
the nearest 0.5 index. Metallurgical – Coking: high-, medium- or low-volatile semi-soft, soft or hard coking coal primarily for blending and use in the steel industry. Metallurgical – Other: semi-
soft, soft, hard, semi-hard or anthracite coal, other than Coking Coal, such as pulverised coal injection (PCI) or other general metallurgical coal for the export or domestic market with a wider
range of properties than Coking Coal. Thermal – Export: low- to high-volatile thermal coal primarily for export in the use of power generation; quality measured by Calorific Value (CV).
(7) GEMCO Ore Reserve manganese grades are reported as expected product and should be read together with their respective mass yields, ROM: 60%, Sands: 20%.
Anglo American plc Integrated Annual Report 2021 265
Ore Reserves and Mineral Resources
Estimated Mineral Resources(1)
as at 31 December 2021
Detailed Measured, Indicated and Inferred estimates appear on the referenced pages in the Ore Reserves and Mineral Resources Report 2021.
Total Measured and Indicated
Total Inferred(2)
DIAMOND(3) OPERATIONS – Debswana
(See pages 16 & 17 in R&R Report for details)
Ownership
%
Mining
Method
DIAMOND(3) OPERATIONS – DBCi
(See page 14 in R&R Report for details)
Gahcho Kué
Kimberlite
DIAMOND(3) OPERATIONS – DBCM
(See page 15 in R&R Report for details)
Venetia (OP)
Venetia (UG)
Kimberlite
Kimberlite
Damtshaa
Jwaneng
Letlhakane
Orapa
Kimberlite
Kimberlite
TMR & ORT
TMR & ORT
Kimberlite
DIAMOND(3) OPERATIONS – Namdeb
(See page 18 in R&R Report for details)
Mining Area 1
Orange River
Beaches
Fluvial Placers
Atlantic 1
Midwater
Marine Placers
Marine
Ownership
%
Mining
Method
43.4
OP
Carats
(Mct)
3.0
Tonnes
(Mt)
Grade
(cpht)
2.4
124.7
Ownership
%
Mining
Method
Carats
(Mct)
Tonnes
(Mt)
Grade
(cpht)
62.9
OP
UG
42.5
42.5
42.5
42.5
OP
OP
n/a
n/a
OP
—
—
Carats
(Mct)
5.5
51.8
—
0.7
—
—
—
—
Tonnes
(Mt)
Grade
(cpht)
25.2
65.2
—
21.9
79.5
—
0.0 6,554.6
271.7
280.4
96.9
Carats
(Mct)
20.3
Carats
(Mct)
1.0
57.2
Carats
(Mct)
4.7
69.2
20.5
14.0
66.4
Tonnes
(Mt)
Grade
(cpht)
11.8
172.3
Tonnes
(Mt)
Grade
(cpht)
4.1
24.7
68.9
83.1
Tonnes
(Mt)
Grade
(cpht)
19.0
24.5
83.2
83.2
25.4
80.9
52.7
26.7
78.0
85.2
Ownership
%
Mining
Method
Carats
(kct)
Tonnes
(kt)
Grade
(cpht)
Carats
(kct)
Tonnes
(kt)
Grade
(cpht)
42.5
42.5
42.5
42.5
OC
OC
MM
MM
270
38,824
0.70
3,167
194,233
1.63
87
22,847
0.38
201
62,484
0.32
Carats
(kct)
Area
k (m2)
Grade
(cpm2)
Carats
(kct)
Area
k (m2)
Grade
(cpm2)
12,282
177,404
0.07
65,140
921,670
0.07
1,018
6,353
0.16
710
6,149
0.12
COPPER OPERATIONS
(See pages 21 & 22 in R&R Report for details)
Ownership
%
Mining
Method
Contained
Copper (kt)
Tonnes
(Mt)
Grade
(%TCu)
Contained
Copper (kt)
Tonnes
(Mt)
Grade
(%TCu)
Collahuasi
Oxide and Mixed
44.0
OP
489
69.1
0.71
281
48.4
0.58
Sulphide (direct feed)
8,877
976.1
0.91
26,488
2,962.6
0.89
Low Grade Sulphide (in situ & stockpile)
1,799
383.0
0.47
8,296
1,800.4
0.46
El Soldado
Los Bronces
Sulphide
Sulphide – Flotation
Sulphide – Dump Leach
50.1
50.1
OP
OP
782
139.3
0.56
51
11.7
0.44
11,130
2,494.7
0.45
4,795
1,074.6
0.45
—
—
—
9
3.7
0.24
Quellaveco
Sulphide – Flotation
60.0
OP
2,658
680.4
0.39
3,470
905.9
0.38
NICKEL OPERATIONS
(See page 24 in R&R Report for details)
Ownership
%
Mining
Method
Contained
Nickel (kt)
Tonnes
(Mt)
Grade
(%Ni)
Contained
Nickel (kt)
Tonnes
(Mt)
Grade
(%Ni)
Barro Alto
Saprolite
100
OP
137
12.5
1.09
111
9.3
1.20
Niquelândia
Saprolite
100
OP
Ferruginous Laterite
Ferruginous Laterite
87
32
—
6.9
1.26
2.5
1.25
—
—
48
—
36
4.2
1.15
—
—
3.2
1.13
Operations = Mines in steady-state or projects in ramp-up phase. TMR = Tailings Mineral Resource. ORT = Old Recovery Tailings.
Mining method: OP = Open Pit, UG = Underground, OC = Open Cast/Cut, MM = Marine Mining.
Mct = Million carats. Mt = Million tonnes. kct = thousand carats. kt = thousand tonnes. k (m²) = thousand square metres.
Diamond Grade is quoted as carats per hundred metric tonnes (cpht) or as carats per square metre (cpm²).
Values reported as 0.0 represent estimates less than 0.05.
TCu = Total Copper. 4E is the sum of Platinum, Palladium, Rhodium and Gold.
Moz = Million troy ounces. g/t = grams per tonne.
MR = Merensky Reef.
Non-Managed = Bokoni, Kroondal, Marikana, Modikwa mines and Siphumelele 3 shaft.
266 Anglo American plc Integrated Annual Report 2021
Ore Reserves and Mineral Resources
Estimated Mineral Resources continued
Total Measured and Indicated
Total Inferred(2)
Ownership
%
Mining
Method
Contained Metal
(4E Moz)
Tonnes
(Mt)
Grade
(4E g/t)
Contained Metal
(4E Moz)
Tonnes
(Mt)
Grade
(4E g/t)
UG
54.4
286.4
PLATINUM(4) OPERATIONS
(See pages 28 & 30 in R&R Report for details)
Amandelbult Complex MR & UG2 Reefs
Mogalakwena
Platreef (incl. stockpiles)
Mototolo Complex
MR & UG2 Reefs
Twickenham
MR & UG2 Reefs
Unki
Main Sulphide Zone
Non-Managed
MR & UG2 Reefs
78.8
78.8
78.8
78.8
78.8
38.9
OP
UG
UG
UG
UG
KUMBA IRON ORE OPERATIONS
(See page 31 in R&R Report for details)
Ownership
%
Mining
Method
Kolomela
Sishen
Hematite (in situ & stockpile)
Hematite (in situ & stockpile)
53.2
53.2
OP
OP
IRON ORE BRAZIL OPERATIONS
(See page 33 in R&R Report for details)
Ownership
%
Mining
Method
Serra do Sapo
Friable Itabirite and Hematite
100
OP
Itabirite
COAL OPERATIONS – Australia
(See pages 35 & 36 in R&R Report for details)
Ownership
%
Mining
Method
Capcoal (OC)*
Capcoal (UG)*
Capcoal (UG) – Aquila*
Dawson
Grosvenor(6)
Moranbah North(6)
79.2
70.0
70.0
51.0
88.0
88.0
OC
UG
UG
OC
UG
UG
COAL OPERATIONS – Colombia
(See page 35 in R&R Report for details)
Ownership
%
Mining
Method
126.7 1,728.0
28.5
60.7
16.8
120.0
207.8
335.7
121.2
683.6
Tonnes
(Mt)
99.1
399.2
5.91
2.28
4.26
5.62
4.32
5.46
Grade
(%Fe)
63.0
57.2
23.0
114.0
6.26
23.9
26.7
56.0
4.1
425.3
197.7
313.9
31.7
99.7
602.8
Tonnes
(Mt)
30.4
37.2
1.75
4.20
5.55
4.04
5.14
Grade
(%Fe)
63.5
54.7
Tonnes(5)
(Mt)
258.6
1,441.4
Grade(5)
(%Fe)
32.6
31.0
MTIS(6)
(Mt)
Coal
Quality
(kcal/kg)
140.5
81.1
38.0
757.1
294.5
178.3
6,900
6,810
6,660
6,710
6,460
6,670
MTIS(6)
(Mt)
Coal
Quality
(kcal/kg)
Tonnes(5)
(Mt)
Grade(5)
(%Fe)
55.8
442.6
36.6
30.9
MTIS(6)
(Mt)
Coal
Quality
(kcal/kg)
137.0
6,840
5.6
6,550
3.8
6,630
455.8
6,760
95.9
6,390
25.4
6,530
MTIS(6)
(Mt)
Coal
Quality
(kcal/kg)
Cerrejón
33.3
OC
4,165.1
6,560
601.7
6,360
SAMANCOR MANGANESE OPERATIONS
(See page 38 in R&R Report for details)
GEMCO(7)(8)
ROM
Sands
Mamatwan(7)
Wessels(7)
Ownership
%
Mining
Method
40.0
OP
29.6
29.6
OP
UG
Tonnes
(Mt)
114
9.2
76
120
Grade
(%Mn)
43.5
19.4
35.0
41.7
Tonnes
(Mt)
28
—
0.4
22
Grade
(%Mn)
44.2
—
36.0
40.8
Operations = Mines in steady-state or projects in ramp-up phase. Mining method: OP = Open Pit, UG = Underground, OC = Open Cast/Cut.
* Capcoal comprises open cast operations at Lake Lindsay and Oak Park, with an underground longwall operation at Grasstree which is replaced by Aquila.
(1) Estimated Mineral Resources are presented on an exclusive basis, i.e. Mineral Resources are reported as additional to Ore Reserves unless stated otherwise. Please refer to the detailed
Mineral Resource estimates tables in the Anglo American plc Ore Reserves and Mineral Resources Report for the individual Measured, Indicated and Inferred Resource estimates. The
Mineral Resource estimates are reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2012) as
a minimum standard. The Mineral Resource estimates for operations in South Africa are reported in accordance with The South African Code for the Reporting of Exploration Results,
Mineral Resources and Mineral Reserves (The SAMREC Code, 2016), unless stated otherwise. The figures reported represent 100% of the Mineral Resources. Anglo American plc
ownership is stated separately. Rounding of figures may cause computational discrepancies.
(2) Total Inferred is the sum of ‘Inferred (in LOM Plan)’, the Inferred Resources within the scheduled Life of Mine Plan (LOM Plan) and ‘Inferred (ex. LOM Plan)’, the portion of Inferred Resources
with reasonable prospects for eventual economic extraction not considered in the LOM Plan as relevant. Due to the uncertainty attached to Inferred Mineral Resources, it cannot be
assumed that all or part of an Inferred Mineral Resource will necessarily be upgraded to an Indicated or Measured Mineral Resource after continued exploration.
(3) DBCi = De Beers Canada, DBCM = De Beers Consolidated Mines, Debswana = Debswana Diamond Company, Namdeb = Namdeb Holdings. Estimated Diamond Resources are presented
on an exclusive basis, i.e. Diamond Resources are quoted as additional to Diamond Reserves. Reported Diamond Resources are based on a Bottom Cut-Off (BCO), which refers to the bottom
screen size aperture and varies between 1.00 mm and 3.00 mm (nominal square mesh). Specific BCOs applied to derive estimates are included in the detailed Diamond Resource tables in
the Anglo American plc Ore Reserves and Mineral Resources Report.
(4) Details of the individual Anglo American Platinum Limited Managed and Non-Managed operations appear in the Anglo American plc Ore Reserves and Mineral Resources Report. Ownership
percentage for Non-Managed is weighted by Contained Metal (4E Moz) contributions from each operation. Merensky Reef, UG2 Reef and Main Sulphide Zone Mineral Resources are
estimated over a ‘Resource Cut’ which takes cognisance of the mining method, potential economic viability and geotechnical aspects in the hangingwall or footwall of the reef.
(5) Iron Ore Brazil Mineral Resource tonnes and grade are reported on a dry basis.
(6) Coal Resources are quoted on a Mineable Tonnes In Situ (MTIS) basis in million tonnes, which are in addition to those Coal Resources that have been modified to produce the reported Coal
Reserves. Grosvenor and Moranbah North operations have been reported on a Gross Tonnes In Situ (GTIS) basis in million tonnes. Coal Resources are reported on an in situ moisture basis.
The coal quality for Coal Resources is quoted on an in situ heat content as kilocalories per kilogram (kcal/kg), representing Calorific Value (CV) on a Gross As Received (GAR) basis. CV is
rounded to the nearest 10 kcal/kg.
(7) Manganese Mineral Resources are quoted on an inclusive basis and must not be added to the Ore Reserves.
(8) GEMCO ROM Mineral Resource tonnes are stated as in situ, manganese grades are given as per washed ore samples and should be read together with their respective mass recovery
expressed as yield, ROM: 48%. GEMCO Sands Mineral Resource tonnes and manganese grades are as in situ.
Anglo American plc Integrated Annual Report 2021 267
Other information
Glossary of terms
Ore Reserves
An ‘Ore Reserve’ is the economically mineable part of a Measured
and/or Indicated Mineral Resource. It includes diluting materials and
allowances for losses, which may occur when the material is mined or
extracted and is defined by studies at Pre-Feasibility or Feasibility level
as appropriate that include application of Modifying Factors. Such
studies demonstrate that, at the time of reporting, extraction could
reasonably be justified. ‘Modifying Factors’ are (realistically assumed)
considerations used to convert Mineral Resources to Ore Reserves.
These include, but are not restricted to, mining, processing,
metallurgical, infrastructure, economic, marketing, legal,
environmental, social and governmental factors. Ore Reserves are
sub-divided in order of increasing confidence into Probable Ore
Reserves and Proved Ore Reserves.
A ‘Proved Ore Reserve’ is the economically mineable part of a
Measured Mineral Resource. A Proved Ore Reserve implies a high
degree of confidence in the Modifying Factors.
A ‘Probable Ore Reserve’ is the economically mineable part of an
Indicated, and in some circumstances, a Measured Mineral Resource.
The confidence in the Modifying Factors applying to a Probable Ore
Reserve is lower than that applying to a Proved Ore Reserve. A
Probable Ore Reserve has a lower level of confidence than a Proved
Ore Reserve but is of sufficient quality to serve as the basis for a
decision on the development of the deposit.
Mineral Resources
A ‘Mineral Resource’ is a concentration or occurrence of solid material
of economic interest in or on the Earth’s crust in such form, grade (or
quality), and quantity that there are reasonable prospects for eventual
economic extraction. The location, quantity, grade (or quality),
continuity and other geological characteristics of a Mineral Resource
are known, estimated or interpreted from specific geological evidence
and knowledge, including sampling. Mineral Resources are sub-
divided, in order of increasing geological confidence, into Inferred,
Indicated and Measured categories.
A ‘Measured Mineral Resource’ is that part of a Mineral Resource for
which quantity, grade (or quality), densities, shape, and physical
characteristics are estimated with confidence sufficient to allow the
application of Modifying Factors to support detailed mine planning
and final evaluation of the economic viability of the deposit. Geological
evidence is derived from detailed and reliable exploration, sampling
and testing gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes, and is
sufficient to confirm geological and grade (or quality) continuity
between points of observation where data and samples are gathered.
A Measured Mineral Resource has a higher level of confidence than
that applying to either an Indicated Mineral Resource or an Inferred
Mineral Resource. It may be converted to a Proved Ore Reserve or
under certain circumstances to a Probable Ore Reserve.
An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for
which quantity, grade (or quality), densities, shape and physical
characteristics are estimated with sufficient confidence to allow the
application of Modifying Factors in sufficient detail to support mine
planning and evaluation of the economic viability of the deposit.
Geological evidence is derived from adequately detailed and reliable
exploration, sampling and testing gathered through appropriate
techniques from locations such as outcrops, trenches, pits, workings
and drill holes, and is sufficient to assume geological and grade (or
quality) continuity between points of observation where data and
samples are gathered.
An Indicated Mineral Resource has a lower level of confidence than
that applying to a Measured Mineral Resource and may only be
converted to a Probable Ore Reserve.
268 Anglo American plc Integrated Annual Report 2021
An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for
which quantity and grade (or quality) are estimated on the basis of
limited geological evidence and sampling. Geological evidence is
sufficient to imply but not verify geological and grade (or quality)
continuity. It is based on exploration, sampling and testing information
gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes.
An Inferred Mineral Resource has a lower level of confidence than that
applying to an Indicated Mineral Resource and must not be converted
to an Ore Reserve. It is reasonably expected that the majority of
Inferred Mineral Resources could be upgraded to Indicated Mineral
Resources with continued exploration.
Life of Mine Plan (LOM Plan)
A design and costing study of an existing operation in which
appropriate assessments have been made of realistically assumed
geological, mining, processing, metallurgical, infrastructure, economic,
marketing, legal, environmental, social, governmental, engineering,
operational and all other Modifying Factors, which are considered in
sufficient detail to demonstrate at the time of reporting that extraction
is reasonably justified.
Reserve Life
The scheduled extraction period in years for the total Ore Reserves in
the approved LOM Plan.
Inferred (in LOM Plan)
Inferred Resources within the scheduled LOM Plan.
Inferred (ex. LOM Plan)
The portion of Inferred Resources with reasonable prospects for
eventual economic extraction not considered in the LOM Plan.
Fatal-injury frequency rate (FIFR)(1)
FIFR is the number of employee or contractor fatal injuries due to all
causes per 1,000,000 hours worked.
Lost time injury frequency rate (LTIFR)(1)
LTIFR is the number of lost time injuries (LTIs) for both employees and
contractors per 1,000,000 hours worked. An LTI is a work related injury
resulting in the person being unable to attend work or perform the
routine functions of his/her job, on the next calendar day after the day
of the injury, whether a scheduled workday or not. Restricted work
cases are therefore counted as LTIs.
Total recordable case frequency rate (TRCFR)(1)
TRCFR is the number of fatal injuries, lost time injuries and medical
treatment cases for both employees and contractors per 1,000,000
hours worked.
New cases of occupational disease (NCOD)(1)
NCOD is the sum of occupational diseases due to asbestosis, noise-
induced hearing loss, silicosis, coal-workers’ pneumoconiosis, chronic
obstructive air ways disease, occupational tuberculosis, occupational
asthma, hand/arm vibration syndrome, musculoskeletal disorders,
occupational dermatitis, occupational cancers, sensitisation to
platinum or rhodium salts, malaria, venus thromboembolism, work-
related mental disorders and other occupational diseases.
Total energy consumed(1)
Total amount of energy consumed is the sum of total energy from
electricity purchased, total energy from fossil fuels and total energy
from renewable fuels and is measured in million gigajoules (GJ).
Other information
Glossary of terms
Jobs supported through enterprise development initiatives
Anglo American supports jobs through training, mentoring and
capacity development. The number of jobs supported includes existing
jobs (in activities supported by the intervention) and newly created
jobs through the programmes. Jobs supported are measured as full
time equivalent jobs.
Businesses supported through enterprise development initiatives
Anglo American supports a range of entrepreneurs, micro, small and
medium enterprises, including farm households for agricultural
development programmes, participating in the programme in our
countries of operations through mentoring, technical assistance and
funding, depending on the specific programme. The programmes are
implemented by our strategic partner TechnoServe, in collaboration
with other local partners. The programmes are engaged in ongoing
monitoring and data is reported at the end of the reporting period.
Local procurement measurement
Launched in 2010, our Local Procurement Policy provides a
framework for supporting development outcomes through targeted
procurement initiatives. This policy is further strengthened by region
specific policies, especially as it relates to Host Community
Procurement. Local and Host Community procurement strategies
articulate the value to Anglo American and local Host communities.
The measurement of local host community procurement varies
between operations, and is informed by a combination of
development outcomes and legal requirements. Local procurement
(which is defined as in-county procurement) occurs on multiple levels,
and often as a combination of factors, including procurement from
host, indigenous and previously disadvantaged communities.
– Host communities: includes suppliers who have their main place of
business in the direct vicinity of the operation, as defined per region.
– Indigenous communities: includes First Nation-owned companies
(De Beers Canada), Aboriginal owned supplier businesses
(Australia).
– Previously disadvantaged and marginalised groups: includes
targeted preferential procurement expenditure from identified
beneficiary groups e.g. Black owned businesses (South Africa).
In most instances, our local procurement initiatives also take into
account communities that may be affected by our operations –
specifically referred to as Host Community Procurement, and aimed at
ensuring maximum impact on host communities in the direct vicinity of
our operations. To improve accuracy and provide a clear and focused
approach to our reporting, and to ensure maximum positive impact on
our host community and local suppliers, we started to redefine how we
measure our support for local and host community suppliers during
2019. In 2020 it was further rolled out and we will continue to expand
its reach until all regions have been included. We will also continue to
harmonise our data across the regions.
(1) Data relates to subsidiaries and joint operations over which Anglo American has
management control. In 2022, 2021, 2020, 2019 and 2018, data excludes results from
De Beers’ joint operations in Namibia and Botswana. 2017 data includes results from
De Beers’ joint operations in Namibia and Botswana. See Anglo American plc Sustainability
Report 2021 for the full list of entities within the reporting scope.
Total water withdrawals(1)
Total water withdrawals by source, reported in line with International
Council on Metals and Mining (ICMM) guidance, includes: surface
water; groundwater; seawater, and third-party water, and is measured
in million m3.
Greenhouse gases (GHGs)(1)
The Intergovernmental Panel on Climate Change 2006 report (as
updated in 2011) factors are applied as defaults for all carbon
dioxide-equivalent (CO2e) and energy calculations. Where emission
factors are available for specific countries or sub-regions from
government and regulatory authorities, these are applied. Australian
operations apply conversion factors required by the government for
regulatory reporting and operations in Brazil apply local factors for
biomass and biofuel. Factors for CO2e from electricity are based on
local grid factors.
Based on a self-assessment, Anglo American believes it reports in
accordance with the WRI/WBCSD GHG Protocol, as issued prior to the
2015 revision on Scope 2 emissions reporting. In line with the GHG
Protocol’s ‘management control’ boundary, 100% of the direct and
indirect emissions for managed operations are accounted for while
zero emissions for joint ventures and other investments are included in
the reporting scope.
Level 3, 4 and 5 environmental incidents(1)
Environmental incidents are unplanned or unwanted events resulting
from our operations that adversely impact the environment or
contravene local regulations/permit conditions. They are classified
from minor (Level 1) to significant (Level 5) depending on the duration
and extent of impact, as well as the sensitivity and/or biodiversity value
of the receiving environment. Level 3-5 incidents are those which we
consider to have prolonged impacts on the local environments, lasting
in excess of one month and affecting areas greater than several
hundred metres on site, or extending beyond the boundaries of our
immediate operations.
Total amount spent on corporate social investment (CSI)
Categories for corporate social investment expenditure include
charitable donations, community investment and commercial
initiatives. CSI contributions can take the form of cash donations,
contributions in kind and employees’ working hours spent on charity
and volunteering projects during work hours. Not included is
expenditure that is necessary for the development of an operation
(e.g. resettlement of families) or receiving a licence. Training
expenditure for individuals who will be employed by the Company
following completion of training is not included. CSI is reported in US
dollars and converted from the currency of the operations at the
average foreign exchange rate applied by Anglo American for
financial reporting purposes.
Charitable donations include charitable and philanthropic gifts and
contributions that tend to be ad hoc and one-offs.
Community investment includes the funding of community
partnerships which address social issues, the costs of providing public
facilities to community members who are not employees or
dependents, the marginal value of land or other assets transferred to
community ownership, and income creation schemes or mentoring/
volunteering initiatives that do not have a principally commercial
justification.
Commercial initiatives include enterprise development and other
community initiatives/partnerships that can also directly support the
success of the Company (such as supplier development). There must,
however be a clear and primary element of public benefit.
We prohibit the making of donations for political purposes to any
politician, political party or related organisation, an official of a political
party or candidate for political office in any circumstances either
directly or through third parties.
Anglo American plc Integrated Annual Report 2021 269
Other information
Alternative performance measures
Introduction
When assessing and discussing the Group’s reported financial
performance, financial position and cash flows, management makes
reference to Alternative Performance Measures (APMs) of historical or
future financial performance, financial position or cash flows that are
not defined or specified under International Financial Reporting
Standards (IFRS).
The APMs used by the Group fall into two categories:
– Financial APMs: These financial measures are usually derived from
the financial statements, prepared in accordance with IFRS. Certain
financial measures cannot be directly derived from the financial
statements as they contain additional information, such as financial
information from earlier periods or profit estimates or projections.
The accounting policies applied when calculating APMs are, where
relevant and unless otherwise stated, substantially the same as
those disclosed in the Group’s Consolidated financial statements for
the year ended 31 December 2020 with the exception of the new
accounting pronouncements disclosed in note 39.
– Non-financial APMs: These measures incorporate certain non-
financial information that management believes is useful when
assessing the performance of the Group.
APMs are not uniformly defined by all companies, including those in the
Group’s industry. Accordingly, the APMs used by the Group may not be
comparable with similarly titled measures and disclosures made by
other companies.
APMs should be considered in addition to, and not as a substitute for or
as superior to, measures of financial performance, financial position or
cash flows reported in accordance with IFRS. Measures used by the
Group exclude the impact of certain items, which impact the financial
performance and cash flows, in order to aid comparability of financial
information reported. The adjustments performed to defined IFRS
measures and rationale for adjustment are detailed on pages 270
to 272.
Purpose
The Group uses APMs to improve the comparability of information
between reporting periods and business units, either by adjusting for
uncontrollable factors or special items which impact upon IFRS
measures or, by aggregating measures, to aid the user of the Annual
Report in understanding the activity taking place across the Group’s
portfolio.
Their use is driven by characteristics particularly visible in the mining
sector:
1. Earnings volatility: The Group mines and markets commodities and
precious metals and minerals. The sector is characterised by
significant volatility in earnings driven by movements in macro-
economic factors, primarily price and foreign exchange. This
volatility is outside the control of management and can mask
underlying changes in performance. As such, when comparing year-
on-year performance, management excludes certain items (such as
those classed as ‘special items’) to aid comparability and then
quantifies and isolates uncontrollable factors in order to improve
understanding of the controllable portion of variances.
2. Nature of investment: Investments in the sector typically occur over
several years and are large, requiring significant funding before
generating cash. These investments are often made with partners
and the nature of the Group’s ownership interest affects how the
financial results of these operations are reflected in the Group’s
results e.g. whether full consolidation (subsidiaries), consolidation of
the Group’s attributable assets and liabilities (joint operations) or
equity accounted (associates and joint ventures). Attributable
metrics are therefore presented to help demonstrate the financial
performance and returns available to the Group, for investment and
financing activities, excluding the effect of different accounting
treatments for different ownership interests.
3. Portfolio complexity: The Group operates in a number of different,
but complementary commodities, precious metals and minerals.
The cost, value of and return from each saleable unit (e.g. tonne,
pound, carat, ounce) can differ materially between each business.
This makes understanding both the overall portfolio performance,
and the relative performance of its constituent parts on a like-for-like
basis, more challenging. The Group therefore uses composite APMs
to provide a consistent metric to assess performance at the portfolio
level.
Consequently, APMs are used by the Board and management for
planning and reporting. A subset is also used by management in
setting director and management remuneration, such as attributable
free cash flow prior to growth capital expenditure. The measures are
also used in discussions with the investment analyst community and
credit rating agencies.
Financial APMs
Group APM
Closest equivalent
IFRS measure
Income statement
Adjustments to reconcile to primary statements
Rationale for adjustments
Group revenue Revenue
– Revenue from associates and joint ventures
– Revenue special items and remeasurements
Underlying EBIT Profit/(loss) before
net finance income/
(costs) and tax
– Revenue, operating and non-operating special items
and remeasurements
– Underlying EBIT from associates and joint ventures
Underlying
EBITDA
Profit/(loss) before
net finance income/
(costs) and tax
– Revenue, operating and non-operating special items
and remeasurements
– Depreciation and amortisation
– Underlying EBITDA from associates and joint ventures
– Exclude the effect of different basis of
consolidation to aid comparability
– Exclude the impact of certain items due to
their size and nature to aid comparability
– Exclude the impact of certain items due to
their size and nature to aid comparability
– Exclude the effect of different basis of
consolidation to aid comparability
– Exclude the impact of certain items due to
their size and nature to aid comparability
– Exclude the effect of different basis of
consolidation to aid comparability
270 Anglo American plc Integrated Annual Report 2021
Other information
Alternative performance measures
Closest equivalent
IFRS measure
Profit/(loss) for the
financial year
attributable to equity
shareholders of the
Company
Adjustments to reconcile to primary statements
Rationale for adjustments
– Special items and remeasurements
– Exclude the impact of certain items due to
their size and nature to aid comparability
Income tax expense
– Tax related to special items and remeasurements
– The Group’s share of associates’ and joint ventures’
profit before tax, before special items and
remeasurements, and tax expense, before special
items and remeasurements
Earnings per share
– Special items and remeasurements
Group APM
Underlying
earnings
Underlying
effective tax
rate
Basic
underlying
earnings
per share
– Exclude the impact of certain items due to
their size and nature to aid comparability
– Exclude the effect of different basis of
consolidation to aid comparability
– Exclude the impact of certain items due to
their size and nature to aid comparability
– Exclude non-mining revenue and EBITDA
to show a margin for mining operations
only which provides a relevant
comparison to peers
– Exclude the impact of accounting
adjustments from the net debt obligation
of the Group
– Exclude the volatility arising from vessel
lease contracts that are priced with
reference to a freight index. These
liabilities are required to be remeasured at
each reporting date to the latest spot
freight rate, which means that the carrying
value of the lease liability is not necessarily
consistent with the average lease
payments which are expected to be made
over the lease term
– Exclude the effect of different basis of
consolidation to aid comparability
Mining EBITDA
margin
Operating profit
margin, defined by
IFRS
Balance sheet
Net debt
Borrowings less cash
and related hedges
– Revenue from associates and joint ventures
– Revenue, operating and non-operating special items
and remeasurements
– Underlying EBIT from associates and joint ventures
– Adjustment to Debswana to reflect as a 50/50
joint operation
– Exclusion of third-party sales, purchases and
trading activity
– Debit valuation adjustment
– Borrowings are adjusted to exclude vessel lease
contracts that are priced with reference to a freight
index
– Borrowings do not include the royalty liability (note 22)
on the basis that obligations to make cash payments
against this liability only arise when the Woodsmith
project generates revenues, and that otherwise the
Group is not currently contractually liable to make any
payments under this arrangement (other than in the
event of the Woodsmith project’s insolvency)
Attributable
ROCE
No direct equivalent
– Non-controlling interests’ share of capital employed
and underlying EBIT
– Average of opening and closing attributable
capital employed
Anglo American plc Integrated Annual Report 2021 271
Other information
Alternative performance measures
Group APM
Cash flow
Capital
expenditure
(capex)
Closest equivalent
IFRS measure
Expenditure on
property, plant and
equipment
Adjustments to reconcile to primary statements
Rationale for adjustments
– Cash flows from derivatives related to capital
– To reflect the net attributable cost of
expenditure
– Proceeds from disposal of property, plant and
equipment
– Direct funding for capital expenditure from
capital expenditure taking into account
economic hedges
Attributable
free cash flow
Cash flows from
operations
non‑controlling interests
– Capital expenditure
– Cash tax paid
Sustaining
attributable free
cash flow
Cash flows from
operations
– Dividends from associates, joint ventures and financial
asset investments
– Net interest paid
– Dividends to non-controlling interests
– Capital repayment of lease obligations
– Expenditure on non-current intangible assets
(excluding goodwill)
– Cash tax paid
– Dividends from associates, joint ventures and financial
asset investments
– Net interest paid
– Dividends to non-controlling interests
– Capital repayment of lease obligations
– Sustaining capital expenditure
– Capitalised operating cash flows relating to life
extension projects
– To measure the amount of cash available
to finance returns to shareholders or
growth after servicing debt, providing a
return to minority shareholders and
meeting existing capex commitments
– To measure the amount of cash available
to finance returns to shareholders or
growth after servicing debt, providing a
return to minority shareholders and
meeting the capex commitments needed
to sustain the current production base of
existing assets. It is calculated as
attributable free cash flow prior to growth
capex and expenditure on non-current
intangible assets (excluding goodwill)
Group revenue
Group revenue includes the Group’s attributable share of associates’
and joint ventures’ revenue and excludes revenue special items and
remeasurements. Following the agreement for the disposal of the
Group’s Cerrejón associate, revenue has been classified as a special
item. A reconciliation to ‘Revenue’, the closest equivalent IFRS measure
to Group revenue, is provided within note 2 to the Consolidated
financial statements.
Underlying EBIT
Underlying EBIT is ‘Operating profit/(loss)’ presented before special
items and remeasurements(1) and includes the Group’s attributable
share of associates’ and joint ventures’ underlying EBIT. Underlying
EBIT of associates and joint ventures is the Group’s attributable share
of associates’ and joint ventures’ revenue less operating costs before
special items and remeasurements(1) of associates and joint ventures.
A reconciliation to ‘Profit/(loss) before net finance income/(costs) and
tax’, the closest equivalent IFRS measure to underlying EBIT, is
provided within note 2 to the Consolidated financial statements.
Underlying EBITDA
Underlying EBITDA is underlying EBIT before depreciation and
amortisation and includes the Group’s attributable share of associates’
and joint ventures’ underlying EBIT before depreciation and
amortisation.
A reconciliation to ‘Profit/(loss) before net finance income/(costs) and
tax’, the closest equivalent IFRS measure to underlying EBITDA, is
provided within note 2 to the Consolidated financial statements.
Underlying earnings
Underlying earnings is ‘Profit/(loss) for the financial year attributable to
equity shareholders of the Company’ before special items and
remeasurements(1) and is therefore presented after net finance costs,
income tax expense and non-controlling interests.
272 Anglo American plc Integrated Annual Report 2021
A reconciliation to ‘Profit/(loss) for the financial year attributable to
equity shareholders of the Company’, the closest equivalent IFRS
measure to underlying earnings, is provided within note 2 to the
Consolidated financial statements.
Underlying effective tax rate
The underlying effective tax rate equates to the income tax expense,
before special items and remeasurements(1) and including the Group’s
share of associates’ and joint ventures’ tax before special items and
remeasurements(1), divided by profit before tax before special items
and remeasurements(1) and including the Group’s share of associates’
and joint ventures’ profit before tax before special items and
remeasurements(1).
A reconciliation to ‘Income tax expense’, the closest equivalent IFRS
measure to underlying effective tax rate, is provided within note 5 to
the Consolidated financial statements.
(1) Special items and remeasurements are defined in note 8 to the Consolidated
financial statements.
Underlying earnings per share
Basic and diluted underlying earnings per share are calculated as
underlying earnings divided by the basic or diluted shares in issue. The
calculation of underlying earnings per share is disclosed within note 3
to the Consolidated financial statements.
Mining EBITDA margin
The mining EBITDA margin is derived from the Group’s underlying
EBITDA as a percentage of Group revenue, adjusted to exclude certain
items to better reflect the performance of the Group’s mining business.
The mining EBITDA margin reflects Debswana accounting treatment
as a 50/50 joint operation, excludes third-party sales, purchases and
trading and excludes Platinum Group Metals’ purchase of concentrate.
Other information
Alternative performance measures
US$ million (unless otherwise stated)
Underlying EBITDA
Group revenue(1)
Margin
Adjustments for:
Debswana adjustment to reflect as a 50/50
joint operation
Exclude third-party purchases, trading
activity and processing(2)
Mining EBITDA margin
2021
20,634
43,258
48%
2020
(restated)
9,802
26,883
36%
2%
6%
56%
2%
5%
43%
(1) Third-party trading amounts restated from a gross to a net presentation. See note 7 for
further details.
(2) Third-party purchases, trading activity and processing consists of Platinum Group Metals’
purchase of concentrate, third-party sales and purchases and the impact of third-party
trading activity.
Net debt
Net debt is calculated as total borrowings less variable vessel lease
contracts that are priced with reference to a freight index, and cash
and cash equivalents (including derivatives that provide an economic
hedge of net debt, see note 22, but excluding the impact of the debit
valuation adjustment on these derivatives, explained in note 20). A
reconciliation to the Consolidated balance sheet is provided within
note 20 to the Consolidated financial statements.
Capital expenditure (capex)
Capital expenditure is defined as cash expenditure on property, plant
and equipment, including related derivatives, and is presented net of
proceeds from disposal of property, plant and equipment and includes
direct funding for capital expenditure from non-controlling interests in
order to match more closely the way in which it is managed.
A reconciliation to ‘Expenditure on property, plant and equipment’, the
closest equivalent IFRS measure to capital expenditure, is provided
within note 12 to the Consolidated financial statements.
Operating cash flows generated by operations that have not yet
reached commercial production are also included in capital
expenditure. However, capital expenditure is also periodically shown
on an underlying basis i.e. before inclusion of capitalised operating
cash flows. Where this occurs, the measure is footnoted as such.
Sustaining capital
Sustaining capital is calculated as capital expenditure excluding
capitalised operating cash flows and growth projects. Expenditure on
growth projects in 2021 principally related to Quellaveco and the
Woodsmith project (2020: Quellaveco, Woodsmith and construction
of another diamond recovery vessel (De Beers)). The Group uses
sustaining capital as a measure to provide additional information to
understand the capital needed to sustain the current production base
of existing assets.
Attributable return on capital employed (ROCE)
ROCE is a ratio that measures the efficiency and profitability of a
company’s capital investments. Attributable ROCE displays how
effectively assets are generating profit on invested capital for the
equity shareholders of the Company. It is calculated as attributable
underlying EBIT divided by average attributable capital employed.
Attributable underlying EBIT excludes the underlying EBIT of
non‑controlling interests.
Capital employed is defined as net assets excluding net debt, vessel
lease contracts that are priced with reference to a freight index, the
debit valuation adjustment attributable to derivatives hedging net debt
and financial asset investments. Attributable capital employed
excludes capital employed of non-controlling interests. Average
attributable capital employed is calculated by adding the opening and
closing attributable capital employed for the relevant period and
dividing by two.
Attributable ROCE is also used as an incentive measure in executives’
remuneration and is predicated upon the achievement of ROCE
targets in the final year of a three year performance period.
A reconciliation to ‘Profit/(loss) before net finance income/(costs) and
tax’, the closest equivalent IFRS measure to underlying EBIT, is
provided within note 2 to the Consolidated financial statements. A
reconciliation to ‘Net assets’, the closest equivalent IFRS measure to
capital employed, is provided within note 9 to the Consolidated
financial statements. The table below reconciles underlying EBIT and
capital employed to attributable underlying EBIT and average
attributable capital employed by segment.
De Beers
Copper
Nickel
Platinum Group Metals
Iron Ore
Metallurgical Coal
Manganese
Crop Nutrients
Corporate and other
Attributable ROCE %
2021
7
39
21
140
62
15
104
n/a
n/a
43
2020
(restated)(1)
—
19
5
48
41
(15)
78
n/a
n/a
17
(1) Comparative totals remain unchanged from what was reported in 2020. Figures have been restated in line with the Group reassessment of its reportable segments, see note 2 for
further details.
Anglo American plc Integrated Annual Report 2021 273
Other information
Alternative performance measures
US$ million
De Beers
Copper
Nickel
Platinum Group Metals
Iron Ore
Metallurgical Coal
Manganese
Crop Nutrients
Corporate and other
US$ million
De Beers
Copper
Nickel
Platinum Group Metals
Iron Ore
Metallurgical Coal
Manganese
Crop Nutrients
Corporate and other
Less:
Non-
controlling
interests’
share of
underlying
EBIT
(112)
Attributable
underlying
EBIT
508
Opening
attributable
capital
employed
7,712
(848)
2,580
—
(1,448)
(1,902)
—
(2)
—
8
261
5,305
4,457
450
248
(42)
(281)
5,897
1,157
4,191
7,197
3,196
238
988
893
Underlying
EBIT
620
3,428
261
6,753
6,359
450
250
(42)
(289)
Closing
capital
employed
8,415
11,232
1,285
4,082
8,379
2,712
238
1,563
406
2021
Less:
Non-
controlling
interests’
share of
closing
capital
employed
(1,159)
(3,854)
—
(671)
(1,210)
—
—
—
—
Closing
attributable
capital
employed
7,256
Average
attributable
capital
employed
7,484
7,378
1,285
3,411
7,169
2,712
238
1,563
406
6,638
1,221
3,801
7,183
2,954
238
1,276
649
17,790
(4,304)
13,486
31,469
38,312
(6,894)
31,418
31,444
2020 restated(1)
Less:
Non-
controlling
interests’
share of
underlying
EBIT
12
Attributable
underlying
EBIT
12
Opening
attributable
capital
employed
7,566
(148)
1,079
—
(454)
(1,158)
—
(3)
—
8
79
1,816
2,933
(468)
242
1
(387)
5,400
1,925
3,405
7,161
2,895
380
—
864
Less:
Non-
controlling
interests’
share of
closing capital
employed
(1,255)
(3,231)
—
(776)
(1,275)
—
—
—
36
Closing
capital
employed
8,967
9,128
1,157
4,967
8,472
3,196
238
988
857
Closing
attributable
capital
employed
7,712
Average
attributable
capital
employed
7,639
5,897
1,157
4,191
7,197
3,196
238
988
893
5,649
1,541
3,798
7,179
3,045
309
494
879
Underlying
EBIT
—
1,227
79
2,270
4,091
(468)
245
1
(395)
7,050
(1,743)
5,307
29,596
37,970
(6,501)
31,469
30,533
(1) Comparative totals for capital employed remain unchanged from what was reported in 2020. Figures have been restated in line with the Group reassessment of its reportable segments, see
note 2 for further details.
Attributable free cash flow
Attributable free cash flow is calculated as ‘Cash flows from
operations’ plus dividends received from associates, joint ventures and
financial asset investments, less capital expenditure, less expenditure
on non-current intangible assets (excluding goodwill), less tax cash
payments excluding tax payments relating to disposals, less net
interest paid including interest on derivatives hedging net debt, less
dividends paid to non-controlling interests.
A reconciliation of ‘Cash flows from operations’, the closest equivalent
IFRS measure, is provided on page 74 of the Group financial review.
Sustaining attributable free cashflow
Sustaining attributable free cash flow is used to measure the amount
of cash available to finance returns to shareholders or growth after
servicing debt, providing a return to minority shareholders and meeting
the capex commitments needed to sustain the current production
base of existing assets. Sustaining attributable free cash flow is also
used as an incentive measure in executives’ remuneration. It is
calculated as attributable free cash flow prior to growth capex and
expenditure on non-current intangible assets (excluding goodwill). A
reconciliation of ‘Cash flows from operations’, the closest equivalent
IFRS measure, is provided on page 74 of the Group financial review.
Growth capital expenditure in 2021 principally related to Quellaveco
and Woodsmith (2020: Quellaveco, Woodsmith and construction of
another diamond recovery vessel (De Beers)).
274 Anglo American plc Integrated Annual Report 2021
Other information
Alternative performance measures
Non-financial APMs
Some of our measures are not reconciled to IFRS either because they include non-financial information, because there is no meaningful IFRS
comparison or the purpose of the measure is not typically covered by IFRS.
Group APM
Category
Purpose
Copper equivalent production
Portfolio
complexity
Communicate production/revenue generation movements in a single comparable
measure removing the impact of price
Unit cost
Earnings volatility
Express cost of producing one unit of saleable product
Copper equivalent unit cost
Productivity
Volume and cash cost
improvements
Portfolio
complexity
Portfolio
complexity
Communicate the cost of production per unit in a single comparable measure for the
portfolio
Highlight efficiency in generating revenue per employee
Earnings volatility Quantify year-on-year underlying EBITDA improvement removing the impact of major
uncontrollable factors
Productivity
The Group’s productivity measure calculates the copper equivalent
production generated per employee. It is a measure that represents
how well headcount is driving revenue. It is calculated by dividing
copper equivalent production by the average direct headcount from
consolidated mining operations in a given year.
Volume and cash cost improvements
The Group uses an underlying EBITDA waterfall to understand its year-
on-year underlying EBITDA performance. The waterfall isolates the
impact of uncontrollable factors in order that the real year-on-year
improvement in performance can be seen by the user.
Three variables are normalised, in the results of subsidiaries and joint
operations, for:
– Price: The movement in price between comparative periods is
removed by multiplying current year sales volume by the movement
in realised price for each product group.
– Foreign exchange: The year-on-year movement in exchange is
removed from the current year non-US dollar cost base i.e. costs are
restated at prior year foreign exchange rates. The non-US dollar
cash cost base excludes costs which are price linked (e.g. purchase
of concentrate from third party PGMs providers, third party diamond
purchases).
– Inflation: CPI is removed from cash costs, restating these costs at the
pricing level of the base year.
The remaining variances in the underlying EBITDA waterfall are in real
US dollar terms for the base year i.e. for a waterfall comparing 2021
with 2020, the sales volume and cash cost variances exclude the
impact of price, foreign exchange and CPI and are hence in real 2020
terms. This allows the user of the waterfall to understand the underlying
real movement in sales volumes and cash costs on a consistent basis.
Copper equivalent production
Copper equivalent production, expressed as copper equivalent
tonnes, shows changes in underlying production volume. It is
calculated by expressing each commodity’s volume as revenue,
subsequently converting the revenue into copper equivalent units by
dividing by the copper price (per tonne). Long term forecast prices
(and foreign exchange rates where appropriate) are used, in order that
period-on-period comparisons exclude any impact for movements
in price.
When calculating copper equivalent production, sales from non-
mining activities are excluded. Volume from projects in pre-
commercial production are included.
Unit cost
Unit cost is the direct cash cost including direct cash support costs
incurred in producing one unit of saleable production. Unit cost relates
to equity production only.
For bulk products (iron ore, coal), unit costs shown are FOB i.e. cost on
board at port. For base metals (copper, nickel), they are shown at C1
i.e. after inclusion of by-product credits and logistics costs. For PGMs
and diamonds, unit costs include all direct expensed cash costs
incurred i.e. excluding, among other things, market development
activity, corporate overhead etc. Platinum Group Metals unit costs
exclude by-product credits. Royalties are excluded from all unit cost
calculations.
Copper equivalent unit cost
Copper equivalent unit cost is the cost incurred to produce one tonne
of copper equivalent. Only the cost incurred in mined output from
subsidiaries and joint operations is included, representing direct costs
in the Consolidated income statement controllable by the Group.
Costs and volumes from associates and joint ventures are excluded, as
are those from operations that are not yet in commercial production,
that deliver domestic production, and those associated with third party
volume purchases of diamonds and PGMs concentrate.
When calculating copper equivalent unit cost, unit costs for each
commodity are multiplied by relevant production, combined and then
divided by the total copper equivalent production, to get a copper
equivalent unit cost i.e. the cost of mining one tonne of copper
equivalent. The metric is in US dollars and, where appropriate, long
term foreign exchange rates are used to convert from local currency to
US dollars.
Anglo American plc Integrated Annual Report 2021 275
Other information
Production statistics
The figures below include the entire output of consolidated entities and the Group’s attributable share of joint operations, associates and joint
ventures where applicable, except for De Beers’ joint operations which are quoted on a 100% basis.(1)
2021
2020
12,893
9,433
22,326
1,137
330
1,467
5,306
5,306
3,177
3,177
7,538
9,021
16,559
1,125
323
1,448
3,771
3,771
3,324
3,324
32,276
25,102
36.3
33.4
10
22.7
21.4
9
43,784,900
39,211,300
50,697,500
42,034,800
0.70
39,900
287,800
327,700
0.81
39,300
285,400
324,700
102,431,100
71,959,200
55,681,300
55,831,600
1.25
630,000
277,200
1.24
629,100
276,900
6,178,500
7,160,500
7,451,300
6,921,700
0.73
42,300
0.84
45,800
108,000
104,800
647,200
621,100
641,100
612,500
431,500
111,600
108,700
647,400
622,400
648,500
623,000
453,100
De Beers
Carats recovered (’000 carats) 100% basis (unless otherwise stated)
Jwaneng
Orapa(2)
Botswana
Debmarine Namibia
Namdeb (land operations)
Namibia
Venetia
South Africa
Gahcho Kué (51% basis)
Canada
Total carats recovered
Sales volumes
Total sales volume (100%) (Mct)(3)
Consolidated sales volume (Mct)(3)
Number of Sights (sales cycles)(3)
Copper(4)
Los Bronces mine(5)
Ore mined
Ore processed – Sulphide
Ore grade processed – Sulphide (% TCu)(6)
Production – Copper cathode
Production – Copper in concentrate
Total production
Collahuasi 100% basis (Anglo American share 44%)
Ore mined
Ore processed – Sulphide
Ore grade processed – Sulphide (% TCu)(6)
Production – Copper in concentrate
Anglo American’s 44% share of copper production for Collahuasi
El Soldado mine(5)
Ore mined
Ore processed – Sulphide
Ore grade processed – Sulphide (% TCu)(6)
Production – Copper in concentrate
Chagres Smelter(5)
Ore smelted(7)
Production
Total copper production(8)
Total payable copper production
Total sales volumes
Total payable sales volumes
Third party sales(9)
See page 278 for footnotes.
276 Anglo American plc Integrated Annual Report 2021
Other information
Production statistics
Nickel (tonnes)(10)
Barro Alto
Ore mined
Ore processed
Ore grade processed – %Ni
Production
Codemin
Ore mined
Ore processed
Ore grade processed – %Ni
Production
Total nickel production
Nickel sales volumes
Platinum Group Metals
Produced PGMs (’000 troy oz)(11)
Own-mined
Mogalakwena
Amandelbult
Unki
Mototolo
Joint operations(12)
Purchase of concentrate
Joint operations(12)
Third parties
Refined production(11)(13)
Platinum (’000 troy oz)
Palladium (’000 troy oz)
Rhodium (’000 troy oz)
Other PGMs and Gold (’000 troy oz)
Nickel (tonnes)
Tolled material (‘000 troy oz)(14)
4E Head grade (g/tonne milled)(15)
PGMs sales – own-mined and purchase of concentrate(11)(16)
PGMs sales – third party trading(11)(17)
Iron Ore
Iron Ore production(18)
Iron Ore sales(18)
Kumba production(18)
Lump
Fines
Kumba production by mine (tonnes)
Sishen
Kolomela
Kumba sales(18)(19)
Export iron ore(19)
Domestic iron ore
Minas-Rio production
Pellet feed (wet basis)(18)
Minas-Rio sales
Export – pellet feed (wet basis)(18)
Metallurgical Coal (tonnes)
Metallurgical Coal production(20)
Hard coking coal
PCI/SSCC
Export thermal coal
Metallurgical Coal sales by product (tonnes)
Hard coking coal
PCI/SSCC
Export thermal coal
Metallurgical Coal production by operation (tonnes)(20)
Moranbah North
Grosvenor
Capcoal (including Grasstree)
Dawson
Jellinbah
Other
See page 278 for footnotes.
2021
2020
3,514,900
2,477,000
1.55
33,900
4,197,900
2,400,600
1.65
34,900
—
561,500
1.55
7,800
41,700
42,100
4,298.7
2,858.3
1,214.6
773.2
204.6
244.4
421.5
1,440.4
421.5
1,018.9
2,399.9
1,627.5
347.2
763.8
22,300
673.7
3.50
5,214.4
770.6
3,200
581,300
1.66
8,600
43,500
43,000
3,808.9
2,549.0
1,181.6
608.1
196.1
223.6
339.6
1,259.9
339.5
920.4
1,201.1
905.4
173.9
432.6
13,800
503.5
3.56
2,868.5
1,170.9
63,807,600
63,284,500
61,702,100
64,241,100
40,862,200
27,552,500
13,309,700
37,620,600
25,478,300
12,142,300
28,014,500
12,847,700
25,764,000
11,856,600
40,185,100
107,100
40,091,500
357,700
22,945,400
24,081,500
22,992,300
23,791,900
14,907,700
11,320,500
3,587,200
1,677,000
14,136,800
10,795,400
3,341,400
2,108,200
14,907,700
3,050,700
71,600
5,992,900
2,483,700
3,118,100
190,700
16,821,900
13,424,000
3,397,900
2,020,500
16,887,900
13,839,300
3,048,600
2,284,800
16,821,900
4,430,300
1,106,300
5,614,900
2,429,100
3,241,300
—
Anglo American plc Integrated Annual Report 2021 277
Other information
Production statistics
Manganese (tonnes) unless stated otherwise
Samancor production
Manganese ore(21)
Manganese alloys(21)(22)
Sales volumes
Manganese ore
Manganese alloys
Thermal Coal (tonnes)
Thermal Coal production (tonnes)(20)
Export – South Africa(23)
Export – Colombia(24)
Domestic – South Africa
Thermal Coal sales
Export – South Africa(23)
Export – Colombia(24)
Domestic – South Africa
Third party sales(25)
Thermal Coal South Africa production by operation (tonnes)(20)
Goedehoop
Greenside
Zibulo
Khwezela
Mafube
Other(26)
2021
2020
3,683,200
3,520,000
—
80,500
3,745,800
3,529,100
670
103,400
5,682,100
16,463,100
3,578,900
4,130,000
5,562,100
14,015,200
5,335,300
16,573,100
3,365,000
4,534,100
5,349,100
12,369,200
6,396,000
9,355,200
11,244,200
30,478,300
3,024,500
6,124,000
1,400,900
4,494,000
2,045,800
5,152,600
1,163,400
6,182,400
729,000
1,818,200
2,880,600
6,707,100
(1) De Beers Group production is on a 100% basis, except for the Gahcho Kué joint operation
(14) Tolled volume measured as the combined content of platinum, palladium, rhodium and
which is on an attributable 51% basis.
gold, reflecting the tolling agreements in place.
(2) Orapa constitutes the Orapa Regime which includes Orapa, Letlhakane and Damtshaa.
(3) Consolidated sales volumes exclude De Beers Group’s joint arrangement partners’ 50%
proportionate share of sales to entities outside De Beers Group from Diamond Trading
Company Botswana and the Namibia Diamond Trading Company, which are included in
total sales volume (100% basis). Sight 3 in Q2 2020 was cancelled due to Covid-19-
related restrictions on the movement of people and product.
(4) Excludes copper production from the Platinum Group Metals business unit. Units shown are
tonnes unless stated otherwise.
(5) Anglo American ownership interest of Los Bronces, El Soldado and the Chagres Smelter is
50.1%. Production is stated at 100% as Anglo American consolidates these operations.
(6) TCu = total copper.
(7) Copper contained basis.
(8) Total copper production includes Anglo American’s 44% interest in Collahuasi.
(9) Relates to sales of copper not produced by Anglo American operations.
(10) Excludes nickel production from the Platinum Group Metals business unit.
(11) PGMs is 5E+Au (platinum, palladium, rhodium, ruthenium and iridium plus gold).
(12) The joint operations are Modikwa and Kroondal. Platinum owns 50% of these operations,
which is presented under ‘Own-mined’ production, and purchases the remaining 50% of
production, which is presented under ‘Purchase of concentrate’.
(13) Refined production excludes toll material but includes in comparative periods material now
transitioned to tolling.
(15) 4E: the grade measured as the combined content of: platinum, palladium, rhodium and
gold, excludes tolled material. Minor metals are excluded due to variability.
(16) Sales from own mined and purchased concentrate, excludes refined metal purchased
from third parties. PGMs sales volumes from production are generally ~65% own mined
and ~35% purchases of concentrate though this may vary from quarter to quarter.
(17) Relates to sales of metal not produced by Anglo American operations.
(18) Production and sales volumes are reported as wet metric tonnes. The comparative has
been restated as Kumba previously on a dry basis. Product is shipped with c.9% moisture
from Minas-Rio and c.1.6% moisture from Kumba. Total iron ore is the sum of Kumba and
Minas-Rio.
(19) Sales volumes differ to Kumba’s standalone results due to sales to other Group companies.
(20) Anglo American’s attributable share of production.
(21) Saleable production.
(22) Production includes medium carbon ferro-manganese.
(23) Thermal Coal – South Africa mining activity included until the demerger on 4 June 2021,
with prior year comparison up to 31 December 2020. Includes export primary production,
secondary production sold into export markets and production sold domestically at export
parity pricing.
(24) Anglo American’s attributable share of Cerrejón production is 33.3%. Metrics reflect
volumes from the first half of the year only, before the sales agreement was entered into,
with prior year comparison up to up to 31 December 2020. Please see Note 32 for more
information.
(25) H1 only.
(26) Other includes Isibonelo and Rietvlei.
278 Anglo American plc Integrated Annual Report 2021
31 December
2021
30 September
2021
30 June
2021
31 March
2021
31 December
2020
31 December 2021 v
30 September 2021
31 December 2021 v
31 December 2020
Quarter ended
% Change (Quarter ended)
7,691
9,176
8,240
7,169
6,663
(16%)
15%
Other information
Quarterly production statistics
De Beers
Carats recovered (’000 carats)
100% basis(1)
Diamonds
Copper (tonnes)(2)(3)
Nickel (tonnes)(4)
PGMs M&C (’000 troy oz)(5)
PGMs refined (’000 troy oz)(5)(6)
Platinum (’000 troy oz)
Palladium (’000 troy oz)
Rhodium (’000 troy oz)
Other PGMs and gold (’000 troy oz)(5)
Nickel (tonnes)
160,700
156,500
169,700
160,300
167,800
10,600
10,400
10,600
10,100
11,700
1,103.4
1,391.3
1,116.2
1,420.4
1,057.9
1,353.7
653.5
423.2
97.7
216.9
5,700
662.9
459.8
92.2
205.5
6,000
625.7
427.5
94.3
206.2
5,800
1,021.2
1,076.1
973.0
457.8
317.0
63.0
135.2
4,800
673.1
296.4
206.8
47.1
122.8
3,700
Iron Ore (tonnes)(7)
Iron ore – Kumba
Iron ore – Minas-Rio
15,050,800
16,888,100
15,695,300
16,173,400
16,183,200
9,701,300
10,788,600
9,817,600
10,554,700
9,717,600
5,349,500
6,099,500
5,877,700
5,618,700
6,465,600
Metallurgical Coal (tonnes)(8)
4,372,100
4,288,500
2,968,600
3,278,500
4,182,400
Hard Coking Coal
PCI/SSCC
Export thermal Coal
Manganese (tonnes)
Manganese ore(9)
Manganese alloys(9)(10)
Thermal Coal (tonnes)(8)
Export – South Africa(11)
Export – Colombia(12)
Domestic – South Africa
2,922,400
3,567,400
2,319,500
2,511,200
3,221,200
1,449,700
721,100
649,100
767,300
341,800
443,800
519,000
372,400
961,200
562,300
834,600
1,003,600
940,500
904,500
942,400
—
—
—
—
—
—
—
—
—
—
14,600
2,533,600
3,148,500
4,085,000
1,784,000
1,794,900
347,000
2,425,100
3,137,000
3,627,500
(1) De Beers Group production is on a 100% basis, except for the Gahcho Kué joint
operation which is on an attributable 51% basis.
(2) Excludes copper production from the Platinum Group Metals business unit.
(3) Copper segment attributable production. Total copper production includes
Anglo American’s 44% interest in Collahuasi.
(4) Excludes nickel production from the Platinum Group Metals business unit.
(5) PGMs is 5E+Au (platinum, palladium, rhodium, ruthenium and iridium plus gold).
(6) Refined production excludes toll material but includes in comparative periods material
now transitioned to tolling.
(7) Production volumes are reported as wet metric tonnes. The comparative has been
restated as Kumba previously on a dry basis. Product is shipped with c.9% moisture
from Minas-Rio and c.1.6% moisture from Kumba. Total iron ore is the sum of Kumba
and Minas-Rio.
(8) Anglo American’s attributable share of production.
(9) Saleable production
(10) Production includes medium carbon ferro-manganese.
(11) Thermal Coal – South Africa mining activity included until the demerger on 4 June
2021. Includes export primary production, secondary production sold into export
markets and production sold domestically at export parity pricing.
(12) Anglo American’s attributable share of Cerrejón production is 33.3%. Metrics reflect
volumes from the first half of the year only, before the sales agreement was entered
into. Please see Note 32 for more information.
3%
2%
(1%)
(2%)
(1%)
(8%)
6%
6%
(5%)
(11%)
(10%)
(12%)
2%
(18%)
101%
(23%)
(17%)
n/a
n/a
n/a
n/a
(4%)
(9%)
3%
107%
120%
105%
107%
77%
54%
(7%)
0%
(17%)
5%
(9%)
51%
(39%)
(11%)
n/a
n/a
n/a
n/a
Anglo American plc Integrated Annual Report 2021 279
Other information
Other information
Non-financial data
Non-financial data
Anglo American plc data
Safety(1)
Work-related fatalities
Fatal-injury frequency rate (FIFR)(2)
Total recordable case frequency rate (TRCFR)(2)
Lost-time injury frequency rate (LTIFR)(2)
Occupational health(1)
New cases of occupational disease (NCOD)(2)
Environment(1)
Total greenhouse gas (GHG) emissions (Mt CO2e)
Total energy consumed (million GJ)(2)
Total water withdrawals (million m3)(3)
People
Number of employees (’000)(4)
Women in senior management (%)(5)
Historically Disadvantaged South Africans in management (%)(6)
Voluntary turnover (%)(7)
Social
CSI spend (total in US$ million)(8)
CSI spend (% of underlying EBIT)(8)
Businesses supported through enterprise development initiatives(9)
Jobs created/maintained through enterprise development programmes(9)
Select Business Unit data
Safety(1)
Work-related fatalities – De Beers
Work-related fatalities – Copper Chile
Work-related fatalities – Copper Peru(9)
Work-related fatalities – PGMs
Work-related fatalities – Iron Ore – Kumba
Work-related fatalities – Iron Ore – IOB
Work-related fatalities – Coal – Metallurgical Coal
Work-related fatalities – Coal – Thermal Coal South Africa
Work-related fatalities – Nickel
Work-related fatalities – Crop Nutrients(9)
Work-related fatalities – Corporate and Other
TRCFR – De Beers
TRCFR – Copper Chile
TRCFR – Copper Peru(9)
TRCFR – PGMs
TRCFR – Iron Ore – Kumba
TRCFR – Iron Ore – IOB
TRCFR – Coal – Metallurgical Coal
TRCFR – Coal – Thermal Coal South Africa
TRCFR – Nickel
TRCFR – Crop Nutrients(9)
TRCFR – Corporate and Other
See next page for footnotes.
2021
2020
2019
2018
2017
1
0.004
2.24
1.52
2
0.010
2.14
1.34
4
0.017
2.21
1.36
5
0.024
2.66
1.63
9
0.035
3.17
1.68
16
30
39
101
96
14.8
85
177
64
29
73
3.5
138
1
16.1
81
197
65
27
68
2.8
125
2
17.7
87
181
63
24
65
2.9
114
2
16.2
84
187
63
21
65
2.9
82
2
18.0
97
186
69
18
66
2.7
88
2
67,909
66,625
65,548
64,830
64,291
147,374
137,777
132,082
125,095
120,812
—
—
1
—
—
—
—
—
—
—
—
2.03
1.55
2.93
2.60
0.80
2.24
4.12
1.57
1.26
2.59
0.97
—
—
—
1
—
—
—
1
—
—
—
2.18
1.58
2.20
2.40
1.74
1.87
4.72
1.55
1.51
0.81
0.63
—
1
1
—
—
—
1
1
—
n/a
—
3.07
1.15
0.91
2.50
2.06
1.48
6.20
1.56
2.75
n/a
0.17
1
—
n/a
2
—
—
—
2
—
n/a
—
2.48
1.03
n/a
3.00
1.80
2.14
9.04
1.87
3.03
n/a
1.85
—
—
n/a
6
—
—
—
3
—
n/a
—
1.90
1.22
n/a
4.52
3.23
1.30
12.19
1.77
1.67
n/a
2.53
Environment(1)
GHG emissions – Mt CO2e – De Beers
GHG emissions – Mt CO2e – Copper Chile
GHG emissions – Mt CO2e – Copper Peru(9)
GHG emissions – Mt CO2e – PGMs
GHG emissions – Mt CO2e – Iron Ore – Kumba
GHG emissions – Mt CO2e – Iron Ore – IOB
GHG emissions – Mt CO2e – Coal – Metallurgical Coal
GHG emissions – Mt CO2e – Coal – Thermal Coal South Africa
GHG emissions – Mt CO2e – Nickel
GHG emissions – Mt CO2e – Crop Nutrients(9)
GHG emissions – Mt CO2e – Corporate and Other
Energy consumption – million GJ – De Beers
Energy consumption – million GJ – Copper Chile
Energy consumption – million GJ – Copper Peru(9)
Energy consumption – million GJ – PGMs
Energy consumption – million GJ – Iron Ore – Kumba
Energy consumption – million GJ – Iron Ore – IOB
Energy consumption – million GJ – Coal – Metallurgical Coal
Energy consumption – million GJ – Coal – Thermal Coal South Africa
Energy consumption – million GJ – Nickel
Energy consumption – million GJ – Crop Nutrients(9)
Energy consumption – million GJ – Corporate and Other
Total water withdrawals – million m3 – De Beers(3)
Total water withdrawals – million m3 – Copper Chile(3)
Total water withdrawals – million m3 – Copper Peru(10)
Total water withdrawals – million m3 – PGMs(3)
Total water withdrawals – million m3 – Iron Ore – Kumba(3)
Total water withdrawals – million m3 – Iron Ore – IOB(3)
Total water withdrawals – million m3 – Coal – Metallurgical Coal(3)
Total water withdrawals – million m3 – Coal – Thermal Coal South Africa(3)
Total water withdrawals – million m3 – Nickel(3)
Total water withdrawals – million m3 – Crop Nutrients(10)
Total water withdrawals – million m3 – Corporate and Other(3)
People(3)
Number of employees – De Beers
Number of employees – Copper Chile
Number of employees – Copper Peru(10)
Number of employees – PGMs
Number of employees – Iron Ore – Kumba
Number of employees – Iron Ore – IOB
Number of employees – Coal – Metallurgical Coal
Number of employees – Coal – Thermal Coal South Africa
Number of employees – Nickel
Number of employees – Crop Nutrients(10)
Number of employees – Corporate and Other
(1) Data relates to subsidiaries and joint operations over which Anglo American has
management control. In 2021- 2018, data excludes De Beers’ joint operations in
Namibia and Botswana. 2017 data includes De Beers’ joint operations in Namibia
and Botswana. See page 74 of the Anglo American plc Sustainability Report 2021
for the full list of entities within the reporting scope. Divested businesses are included
up until the point of divestment.
(2) See pages 268-269 for definitions and basis of calculation.
(3) The 2017-2019 withdrawal data was restated using the site-specific water balances
the data for 2020 and 2021.
(4) Average number of employees for 2021 and 2020 excludes contractors and
associates and joint ventures employees, and includes a share of employees within
joint operations, based on shareholding. Data for 2019-2017 is presented on the
same basis, with the exception of Debswana (De Beers), where employee numbers
are included at 19.2%, reflecting Anglo American’s economic interest.
(5) Female representation within the Group Management Committee and those reporting
to the committee.
2021
2020
2019
2018
2017
21.3
20.0
19.8
0.56
1.32
n/a
4.12
0.96
0.09
6.85
1.00
1.21
n/a
0.01
5.8
13.4
n/a
20.0
8.9
1.8
9.0
4.1
n/a
0.9
11.5
32.2
n/a
43.9
9.7
28.3
23.1
29.2
8.0
n/a
n/a
1.85
1.23
n/a
4.61
1.00
0.19
6.37
1.45
1.22
n/a
0.04
15.7
13.1
n/a
21.5
8.9
4.5
7.6
6.0
n/a
0.4
8.3
36.2
n/a
46.2
11.1
28.7
14.1
34.3
7.5
n/a
n/a
0.43
0.37
0.12
4.52
0.99
0.26
6.37
0.77
1.38
0.01
0.01
4.1
12.8
1.6
20.8
8.7
5.1
9.3
3.1
20.8
0.2
0.1
11.6
33.5
0.7
42.6
11.2
32.2
20.9
14.9
7.0
0.1
1.8
0.42
1.07
0.05
3.94
0.91
0.20
7.40
0.84
1.24
0.01
—
3.8
11.3
0.6
18.1
8.1
5.2
8.5
3.5
0.1
0.1
10.1
35.8
1.5
43.9
10.6
35.3
21.0
31.0
8.0
0.2
0.0
0.48
1.17
0.15
4.44
1.00
0.20
8.17
0.90
1.23
n/a
0.01
4.5
12.3
2.0
20.1
8.8
5.1
10.1
3.5
20.2
n/a
0.1
9.9
24.7
n/a
47.4
10.6
28.8
17.9
34.2
6.3
n/a
n/a
9,000
4,000
300
6,000
3,000
2,000
5,000
1,000
n/a
2,000
31,400
31,500
31,000
33,000
36,000
10,000
10,700
4,300
750
6,100
2,600
1,900
n/a
1,400
600
4,700
3,800
400
6,200
2,500
2,000
4,600
1,400
300
6,900
10,000
4,000
n/a
10,000
4,000
n/a
6,000
2,000
2,000
5,000
1,000
n/a
1,000
6,000
2,000
1,000
8,000
1,000
n/a
1,000
(6) Historically Disadvantaged South African employees within bands seven and above
divided by the total number of South African employees in bands seven and above.
(7) The number of people who resigned as a percentage of the total work force, excluding
contractors.
(8) CSI spend is the sum of donations for charitable purposes and community investment
(which includes cash and in-kind donations and staff time) as well as investments in
commercial initiatives with public benefit (such as enterprise development). Included
within the CSI expenditure figure for 2021 is expenditure relating to Zimele of
(9) Figures are presented on a cumulative basis since 2008.
(10) Data for Quellaveco prior to 2019 is not presented as the project only reached a full
year of development in 2019. Comparative data for Crop Nutrients prior to 2020 is not
presented as the acquisition of Sirius Minerals Plc was completed in 2020.
and is now aligned with the ICMM definitions. It is therefore directly comparable with
$8.6 million (2020: $4.9 million).
280 Anglo American plc Integrated Annual Report 2021
Anglo American plc Integrated Annual Report 2021 281
Other information
Non-financial data
Environment(1)
GHG emissions – Mt CO2e – De Beers
GHG emissions – Mt CO2e – Copper Chile
GHG emissions – Mt CO2e – Copper Peru(9)
GHG emissions – Mt CO2e – PGMs
GHG emissions – Mt CO2e – Iron Ore – Kumba
GHG emissions – Mt CO2e – Iron Ore – IOB
GHG emissions – Mt CO2e – Coal – Metallurgical Coal
GHG emissions – Mt CO2e – Coal – Thermal Coal South Africa
GHG emissions – Mt CO2e – Nickel
GHG emissions – Mt CO2e – Crop Nutrients(9)
GHG emissions – Mt CO2e – Corporate and Other
Energy consumption – million GJ – De Beers
Energy consumption – million GJ – Copper Chile
Energy consumption – million GJ – Copper Peru(9)
Energy consumption – million GJ – PGMs
Energy consumption – million GJ – Iron Ore – Kumba
Energy consumption – million GJ – Iron Ore – IOB
Energy consumption – million GJ – Coal – Metallurgical Coal
Energy consumption – million GJ – Coal – Thermal Coal South Africa
Energy consumption – million GJ – Nickel
Energy consumption – million GJ – Crop Nutrients(9)
Energy consumption – million GJ – Corporate and Other
Total water withdrawals – million m3 – De Beers(3)
Total water withdrawals – million m3 – Copper Chile(3)
Total water withdrawals – million m3 – Copper Peru(10)
Total water withdrawals – million m3 – PGMs(3)
Total water withdrawals – million m3 – Iron Ore – Kumba(3)
Total water withdrawals – million m3 – Iron Ore – IOB(3)
Total water withdrawals – million m3 – Coal – Metallurgical Coal(3)
Total water withdrawals – million m3 – Coal – Thermal Coal South Africa(3)
Total water withdrawals – million m3 – Nickel(3)
Total water withdrawals – million m3 – Crop Nutrients(10)
Total water withdrawals – million m3 – Corporate and Other(3)
People(3)
Number of employees – De Beers
Number of employees – Copper Chile
Number of employees – Copper Peru(10)
Number of employees – PGMs
Number of employees – Iron Ore – Kumba
Number of employees – Iron Ore – IOB
Number of employees – Coal – Metallurgical Coal
Number of employees – Coal – Thermal Coal South Africa
Number of employees – Nickel
Number of employees – Crop Nutrients(10)
Number of employees – Corporate and Other
(1) Data relates to subsidiaries and joint operations over which Anglo American has
management control. In 2021- 2018, data excludes De Beers’ joint operations in
Namibia and Botswana. 2017 data includes De Beers’ joint operations in Namibia
and Botswana. See page 74 of the Anglo American plc Sustainability Report 2021
for the full list of entities within the reporting scope. Divested businesses are included
up until the point of divestment.
(2) See pages 268-269 for definitions and basis of calculation.
(3) The 2017-2019 withdrawal data was restated using the site-specific water balances
and is now aligned with the ICMM definitions. It is therefore directly comparable with
the data for 2020 and 2021.
(4) Average number of employees for 2021 and 2020 excludes contractors and
associates and joint ventures employees, and includes a share of employees within
joint operations, based on shareholding. Data for 2019-2017 is presented on the
same basis, with the exception of Debswana (De Beers), where employee numbers
are included at 19.2%, reflecting Anglo American’s economic interest.
(5) Female representation within the Group Management Committee and those reporting
to the committee.
2021
2020
2019
2018
2017
0.43
0.37
0.12
4.52
0.99
0.26
6.37
0.77
1.38
0.01
0.01
4.1
12.8
1.6
20.8
8.7
5.1
9.3
3.1
20.8
0.2
0.1
11.6
33.5
0.7
42.6
11.2
32.2
20.9
14.9
7.0
0.1
1.8
0.42
1.07
0.05
3.94
0.91
0.20
7.40
0.84
1.24
0.01
—
3.8
11.3
0.6
18.1
8.1
5.2
8.5
3.5
21.3
0.1
0.1
10.1
35.8
1.5
43.9
10.6
35.3
21.0
31.0
8.0
0.2
0.0
0.48
1.17
0.15
4.44
1.00
0.20
8.17
0.90
1.23
n/a
0.01
4.5
12.3
2.0
20.1
8.8
5.1
10.1
3.5
20.2
n/a
0.1
9.9
24.7
n/a
47.4
10.6
28.8
17.9
34.2
6.3
n/a
n/a
0.56
1.32
n/a
4.12
0.96
0.09
6.85
1.00
1.21
n/a
0.01
5.8
13.4
n/a
20.0
8.9
1.8
9.0
4.1
1.85
1.23
n/a
4.61
1.00
0.19
6.37
1.45
1.22
n/a
0.04
15.7
13.1
n/a
21.5
8.9
4.5
7.6
6.0
20.0
19.8
n/a
0.9
11.5
32.2
n/a
43.9
9.7
28.3
23.1
29.2
8.0
n/a
n/a
n/a
0.4
8.3
36.2
n/a
46.2
11.1
28.7
14.1
34.3
7.5
n/a
n/a
10,000
10,700
4,300
750
3,800
400
9,000
4,000
300
10,000
4,000
n/a
10,000
4,000
n/a
31,400
31,500
31,000
33,000
36,000
6,100
2,600
1,900
n/a
1,400
600
4,700
6,200
2,500
2,000
4,600
1,400
300
6,900
6,000
3,000
2,000
5,000
1,000
n/a
2,000
6,000
2,000
2,000
5,000
1,000
n/a
1,000
6,000
2,000
1,000
8,000
1,000
n/a
1,000
(6) Historically Disadvantaged South African employees within bands seven and above
divided by the total number of South African employees in bands seven and above.
(7) The number of people who resigned as a percentage of the total work force, excluding
contractors.
(8) CSI spend is the sum of donations for charitable purposes and community investment
(which includes cash and in-kind donations and staff time) as well as investments in
commercial initiatives with public benefit (such as enterprise development). Included
within the CSI expenditure figure for 2021 is expenditure relating to Zimele of
$8.6 million (2020: $4.9 million).
(9) Figures are presented on a cumulative basis since 2008.
(10) Data for Quellaveco prior to 2019 is not presented as the project only reached a full
year of development in 2019. Comparative data for Crop Nutrients prior to 2020 is not
presented as the acquisition of Sirius Minerals Plc was completed in 2020.
Anglo American plc Integrated Annual Report 2021 281
Other information
Directors’ report
This section includes certain disclosures which are required by law to
be included in the Directors’ report.
In accordance with the Companies Act 2006 (Companies Act), the
following items have been reported in other sections of the Integrated
Annual Report and are included in this Directors’ report by reference:
– Details of the directors of the Company can be found on pages
108-111
– Directors’ interests in shares at 31 December 2021 and any
changes thereafter, can be found on page 154 of the directors’
remuneration report
– Events occurring after the end of the year are set out in note 29 to
the financial statements on page 224
– The Strategic Report on pages 2-104 gives a fair review of the
business and an indication of likely future developments and fulfils
the requirements set out in section 414C of the Companies Act
– Details of the Group’s governance arrangements and its
compliance with the UK Corporate Governance Code (the Code)
can be found on pages 106-162
– Comprehensive details of the Group’s approach to financial risk
management are given in note 23 to the financial statements on
pages 210-213
– The Group’s disclosure of its greenhouse gas emissions can be
found on page 43. The Group’s Streamlined Energy and Carbon
Reporting (SECR) disclosures can be found on page 104
– The Group’s disclosures related to the recommendations of the
Taskforce on Climate-Related Financial Disclosures (TCFD) can be
found on pages 102-103
– Details of employee engagement can be found on pages 50-57
and 122-123
– Details of stakeholder engagement can be found on pages 15, 20
and 122-123.
Going concern
The financial position of the Group, its cash flows, liquidity position and
borrowing facilities are set out in the Group financial review on pages
72-75. Further details of our policy on financial risk management are
set out in note 23 to the financial statements on pages 210-213. The
Group’s net debt (including related hedges) at 31 December 2021
was $3.8 billion (2020 (restated): $5.5 billion), representing a gearing
level of 10% (2020: 14%). The Group’s liquidity position (defined as
cash and undrawn committed facilities) of $17.1 billion at
31 December 2021 remains strong. Details of borrowings and facilities
are set out in note 21 and note 23 on pages 204 and 210 respectively,
and net debt is set out in note 20 on pages 202-203.
The directors have considered the Group’s cash flow forecasts for the
period to the end of December 2023 under base and downside
scenarios with reference to the Group’s principal risks as set out within
the Group Viability Statement on pages 60 and 61. Further
consideration was given to the uncertainty of the impact of the
Covid-19 pandemic on both the wider macroeconomic environment,
including demand for the Group’s products and realised prices, and
the Group’s operations, including production levels. In each of the
downside scenarios modelled (including price reductions of up to 20%
against budget, operational incidents and climate change impacts),
the Group maintains sufficient liquidity throughout the period of
assessment without the use of mitigating actions.
The Board is satisfied that the Group’s forecasts and projections,
taking account of reasonably possible changes in trading
performance, show that the Group will be able to operate within the
level of its current facilities for the period of at least 12 months from the
282 Anglo American plc Integrated Annual Report 2021
date of approval of the financial statements. For this reason the
Group continues to adopt the going concern basis in preparing its
financial statements.
Dividends
An interim dividend of 171 US cents per ordinary share and a special
dividend of 80 US cents per ordinary share was paid on
24 September 2021. The directors are recommending that a final
dividend of 118 US cents per ordinary share and a special dividend of
50 US cents per ordinary share be paid on 26 April 2022 to ordinary
shareholders on the register at the close of business on 18 March
2022, subject to shareholder approval at the AGM to be held on
19 April 2022. This would bring the total dividend in respect of 2021
to US$4.19 per ordinary share. In accordance with the UK-adopted
International Accounting Standards, the final dividend will be
accounted for in the financial statements for the year ended
31 December 2022.
The Anglo American Employee Benefit Trust (EBT) holds shares to
facilitate the operation of certain of the Group’s share option and
share incentive schemes (share plans). The EBT has waived the right
to receive dividends on shares held on behalf of share plans
participants employed by the Group in countries other than the UK
and South Africa.
Share capital
The Company’s issued share capital as at 31 December 2021 is set
out in note 24 on page 214.
Significant shareholdings
The Company has been notified of the following significant
shareholdings, as at the date of this report:
Company
Public Investment Corporation
BlackRock Inc
Tarl Investment Holdings (RF) Proprietary
Limited(1)
Epoch Two Investment Holdings (RF)
Proprietary Limited(1)
Number of
shares
Percentage of
voting rights
93,551,783
84,968,927
6.86
6.05
47,275,613
3.37
42,166,686
3.01
(1) Epoch Two Investment Holdings (RF) Proprietary Limited (Epoch 2) and Tarl Investment
Holdings (RF) Proprietary Limited (Tarl) are two of the independent companies that
have purchased shares as part of Anglo American’s 2006 share buyback programme.
Epoch 2 and Tarl have waived their right to vote all the shares they hold, or will hold,
in Anglo American plc.
Sustainable development
The Sustainability Report 2021 is published on the Group’s website on
7 March 2022.
This report focuses on the safety, health, sustainable development and
environmental performance of the Group’s managed operations, its
performance with regard to the Group’s Code of Conduct, and the
operational dimensions of its social programmes.
Audit information
The directors confirm that, so far as they are aware, there is no relevant
audit information of which the auditor is unaware, that all directors
have taken all reasonable steps to make themselves aware of any
relevant audit information and to establish that the auditor is aware of
that information.
Other information
Directors’ Report
Disclosure table pursuant to Listing Rule 9.8.4C
Listing Rule
Information to be included
Disclosure
9.8.4(1)
Interest capitalised by the
Group
See note 4, page 182
9.8.4(2) Unaudited financial
None
information (LR 9.2.18)
9.8.4(4)
Long term incentive scheme
only involving a director
(LR 9.4.3)
None
9.8.4(5) Directors’ waivers of
None
emoluments
9.8.4(6) Directors’ waivers of future
None
emoluments
9.8.4(7) Non pro rata allotments for
None
cash (issuer)
9.8.4(8) Non pro rata allotments for
None
cash (major subsidiaries)
9.8.4(9)
Listed company is a
subsidiary of another
company
Not applicable
9.8.4(10) Contracts of significance
None
involving a director
9.8.4(11) Contracts of significance
Not applicable
involving a controlling
shareholder
9.8.4(12) Waivers of dividends
9.8.4(13) Waivers of future dividends
9.8.4(14) Agreement with a controlling
shareholding LR
9.2.2AR(2)(a)
See ‘Dividends’ paragraph on
page 282
See ‘Dividends’ paragraph on
page 282
Not applicable
Employment and other policies
The Group’s key operating businesses are empowered to manage
within the context of the different legislative and social demands of the
diverse countries in which those businesses operate, subject to the
standards embodied in Anglo American’s Code of Conduct. Within all
the Group’s businesses, the safe and effective performance of
employees and the maintenance of positive employee relations are of
fundamental importance. Managers are charged with ensuring that
the following key principles are upheld:
– Adherence to national legal standards on employment and
workplace rights at all times
– Adherence to the International Labour Organization’s core labour
rights, including: prohibition of child labour; prohibition of inhumane
treatment of employees and any form of forced labour, physical
punishment or other abuse; recognition of the right of our employees
to freedom of association and the promotion of workplace equality;
and the elimination of all forms of unfair discrimination
– Continual promotion of safe and healthy working practices
– Provision of opportunities for employees to enhance their work
related skills and capabilities
– Adoption of fair and appropriate procedures for determining terms
and conditions of employment.
It is the Group’s policy that everybody should have full and fair
consideration for all vacancies. Employment is considered on merit
and with regard only to the ability of any applicant to carry out the role.
We endeavour to retain the employment of, and arrange suitable
retraining, for any employees in the workforce who become disabled
during their employment. Where possible we will adjust a person’s
working environment to enable them to stay in our employment.
The Group promotes an inclusive and diverse environment where
every colleague is valued and respected for who they are, and has
the opportunity to fulfil their potential. The Group is focused on
providing a workplace where everyone can thrive and has
introduced a number of Groupwide policies to encourage this. The
Group’s inclusion and diversity policy reflects its commitment as a
signatory to the United Nations Global Compact and is aligned
both to the labour rights principles set out in the International
Labour Organization core conventions and with the United Nations
Sustainable Development Goals. The Group has also
introduced bullying, harassment and victimisation and recognising
and responding to domestic violence policies which clearly states
its zero tolerance to such behaviours along with a Groupwide
flexible working policy.
Further, the Group is committed to treating employees at all levels
with respect and consideration, to investing in their development
and to ensuring that their careers are not constrained by
discrimination or arbitrary barriers.
The Anglo American Code of Conduct is supported by a number of
policies and procedures which provide specific guidance to
employees on the behaviour required to reinforce the Group’s
values and uphold the Group’s commitments to prioritise safety,
health and the environment; treat people with care and respect,
conduct business with integrity and protect its physical assets and
information. The Code of Conduct can be accessed via the
Group’s website.
In addition to meeting legal requirements, suppliers to Anglo American
must adhere to the requirements of the Responsible Sourcing
Standard for Suppliers, which is available on the Group’s website and
referenced in contracts.
The Business Integrity Policy sets out the Group’s anti-bribery and
corruption commitment by clearly stating that the Group will
neither give nor accept bribes, nor permit others to do so in its
name. The Policy sets out the standards of conduct required
across Anglo American, (including subsidiaries and managed joint
operations), by those with which the Group does business and by
those who work on the Group’s behalf, in combating corrupt behaviour
of all types. The Policy is supported by 11 Prevention of Corruption
Procedures, which have been translated into the main languages that
are used across the Group’s operations.
A dedicated team, operating within a broader risk management and
business assurance team oversees the implementation of the Code of
Conduct and Business Integrity Policy. Working closely with other
corporate functions, and senior managers in the business units, the
team provides guidance and support on the implementation and
monitoring of the Business Integrity Policy. The team also assists on
bribery and corruption risk identification and management, and
providing online and face-to-face training for relevant employees,
including those in high-risk roles. The internal audit team regularly
provide risk based assurance on the implementation of the anti-
bribery and corruption controls framework.
The Group’s whistleblowing facility, YourVoice, is available to
employees and external stakeholders to confidentially and, if they
choose, anonymously report concerns about behaviour which might
be unethical, unlawful or unsafe, or contrary to the Group’s Values and
Code of Conduct.
Political donations
No political donations were made during 2021. Anglo American has
an established policy of not making donations to, or incurring
expenses for the benefit of, any political party in any part of the
world, including any political party or political organisation as
defined in the Political Parties, Elections and Referendums Act 2000.
Additional information for shareholders
Set out below is a summary of certain provisions of the Company’s
current Articles of Association (Articles) and applicable English law
Anglo American plc Integrated Annual Report 2021 283
Other information
Directors’ Report
concerning companies (the Companies Act) required as a result of the
implementation of the Takeover Directive in English law. This is a
summary only and the relevant provisions of the Articles or the
Companies Act should be consulted if further information is required.
Dividends and distributions
Subject to the provisions of the Companies Act, the Company may, by
ordinary resolution, from time to time declare final dividends not
exceeding the amount recommended by the Board. The Board may
pay interim dividends whenever the financial position of the Company,
in the opinion of the Board, justifies such payment.
The Board may withhold payment of all, or any part of any dividends or
other monies payable in respect of the Company’s shares, from a
person with a 0.25% interest or more (as defined in the Articles) if such
a person has been served with a notice after failing to provide the
Company with information concerning interests in those shares
required to be provided under the Companies Act.
Rights and obligations attaching to shares
The rights and obligations attaching to the shares are set out in the
Articles.
The Articles may only be changed by a special resolution passed by
the shareholders.
Voting
Subject to the Articles generally and to any special rights or restrictions
as to voting attached by or in accordance with the Articles to any class
of shares, on a show of hands every member who is present in person
at a general meeting shall have one vote and, on a poll, every member
who is present in person or by proxy shall have one vote for every share
of which he/she is the holder. It is, and has been for some years, the
Company’s practice to hold a poll on every resolution at shareholder
meetings.
Where shares are held by trustees/nominees in respect of the Group’s
employee share plans and the voting rights attached to such shares
are not directly exercisable by the employees, it is the Company’s
practice that such rights are not exercised by the relevant trustee/
nominee.
Under the Companies Act, members are entitled to appoint a proxy,
who need not be a member of the Company, to exercise all or any of
their rights to attend and to speak and vote on their behalf at a general
meeting or class meeting.
A member may appoint more than one proxy in relation to a general
meeting or class meeting provided that each proxy is appointed to
exercise the rights attached to a different share or shares held by that
member. A member that is a corporation may appoint one or more
individuals to act on its behalf at a general meeting or class meeting as
a corporate representative. Where a shareholder appoints more than
one corporate representative in respect of its shareholding, but in
respect of different shares, those corporate representatives can act
independently of each other, and validly vote in different ways.
Restrictions on voting
No member shall, unless the directors otherwise determine, be entitled
in respect of any share held by him/her to vote either personally or by
proxy at a shareholders’ meeting, or to exercise any other right
conferred by membership in relation to shareholders’ meetings, if any
call or other sum presently payable by him/her to the Company in
respect of that share remains unpaid. In addition, no member shall be
entitled to vote if he/she has been served with a notice after failing to
provide the Company with information concerning interests in those
shares required to be provided under the Companies Act.
Issue of shares
Subject to the provisions of the Companies Act relating to authority
and pre-emption rights and of any resolution of the Company in a UK
general meeting, all unissued shares of the Company shall be at the
disposal of the directors and they may allot, grant options over, or
otherwise dispose of them to such persons at such times, and on such
terms, as they think proper.
284 Anglo American plc Integrated Annual Report 2021
Shares in uncertificated form
Any share or class of shares of the Company may be issued or held
(including any shares or class of shares held on the South African
Branch Register or any other overseas branch register of the members
of the Company) on such terms, or in such a way, that: title to it or them
is not, or must not be, evidenced by a certificate; or it or they may or
must be transferred wholly or partly without a certificate. The directors
have power to take such steps as they think fit in relation to: the
evidencing of and transfer of title to uncertificated shares (including in
connection with the issue of such shares); any records relating to the
holding of uncertificated shares; the conversion of certificated shares
into uncertificated shares; or the conversion of uncertificated shares
into certificated shares. The Company may by notice to the holder of
a share require that share: if it is uncertificated, to be converted into
certificated form; and if it is certificated, to be converted
into uncertificated form, to enable it to be dealt with in accordance with
the Articles.
If: the Articles give the directors power to take action, or require other
persons to take action, in order to sell, transfer or otherwise dispose of
shares; and uncertificated shares are subject to that power, but the
power is expressed in terms which assume the use of a certificate or
other written instrument, the directors may take such action as is
necessary or expedient to achieve the same results when exercising
that power in relation to uncertificated shares. The directors may take
such action as they consider appropriate to achieve the sale, transfer,
disposal, forfeiture, re-allotment or surrender of an uncertificated
share or otherwise to enforce a lien in respect of it. This may include
converting such share to certificated form. Unless the directors
resolve otherwise, shares which a member holds in uncertificated
form must be treated as separate holdings from any shares which
that member holds in certificated form. A class of shares must not be
treated as two classes simply because some shares of that class are
held in certificated form and others are held in uncertificated form.
Deadlines for exercising voting rights
Votes are exercisable at a general meeting of the Company in respect
of which the business being voted upon is being heard. Votes may be
exercised in person, by proxy, or in relation to corporate members, by
corporate representative. The Articles provide a deadline for
submission of proxy forms of not less than 48 hours before the time
appointed for the holding of the meeting or adjourned meeting.
Variation of rights
Subject to statute, the Articles specify that rights attached to any class
of shares may be varied with the written consent of the holders of not
less than three-quarters in nominal value of the issued shares of that
class, or with the sanction of an extraordinary resolution passed at a
separate general meeting of the holders of those shares. At every
such separate general meeting the quorum shall be two persons
holding, or representing by proxy, at least one-third in nominal value
of the issued shares of the class (calculated excluding any shares held
as treasury shares). The rights conferred upon the holders of any
shares shall not, unless otherwise expressly provided in the rights
attaching to those shares, be deemed to be varied by the creation or
issue of further shares ranking pari passu with them.
Transfer of shares
All transfers of shares that are in certificated form may be effected by
transfer in writing in any usual or common form or in any other form
acceptable to the directors and may be under hand only. The
instrument of transfer shall be signed by, or on behalf of, the transferor
and (except in the case of fully paid shares) by or on behalf of the
transferee. The transferor shall remain the holder of the shares
concerned until the name of the transferee is entered in the register of
shareholders. All transfers of shares registered on the main register of
members that are in uncertificated form may be effected by means of
the CREST system. All transfers of uncertified shares registered on the
branch register of members in South Africa may be effected via the
Transfer Secretary.
Other information
Directors’ Report
The directors may decline to recognise any instrument of transfer
relating to shares in certificated form unless it:
retire from office and stand for re-election. However, in accordance
with the Code, all directors will be subject to annual re-election.
(a) is in respect of only one class of share
(b) is lodged at the transfer office (duly stamped if required)
accompanied by the relevant share certificate(s) and such other
evidence as the directors may reasonably require to show the right
of the transferor to make the transfer (and, if the instrument of
transfer is executed by some other person on his/her behalf, the
authority of that person so to do).
The directors may decline to register any transfer of shares in
certificated form unless: the instrument of transfer is in respect of only
one class of share; the instrument of transfer is lodged (duly stamped
if required) at the Transfer Office accompanied by the relevant share
certificate(s) or such other evidence as the directors may reasonably
require to show the right of the transferor to make the transfer or, if the
instrument of transfer is executed by some other person on the
transferor’s behalf, the authority of that person to do so; and it is fully
paid. The directors may also refuse to register an allotment or transfer
of shares (whether fully paid or not) in favour of more than four
persons jointly.
If the directors refuse to register an allotment or transfer, they shall
send the refusal to the allottee or the transferee within two months
after the date on which the letter of allotment or transfer was lodged
with the Company.
A shareholder does not need to obtain the approval of the Company,
or of other shareholders of shares in the Company, for a transfer of
shares to take place.
Directors
Directors shall not be fewer than 5 nor more than 18 in number. A
director is not required to hold any shares of the Company by way of
qualification. The Company may by ordinary resolution increase or
reduce the maximum or minimum number of directors.
Powers of directors
Subject to the Articles, the Companies Act and any directions given by
special resolution, the business of the Company will be managed by
the Board who may exercise all the powers of the Company.
The Board may exercise all the powers of the Company to borrow
money and to mortgage or charge any of its undertaking, property and
uncalled capital and to issue debentures and other securities, whether
outright or as collateral security, for any debt, liability or obligation of
the Company or of any third party.
The Company may by ordinary resolution declare dividends, but no
dividend shall be payable in excess of the amount recommended by
the directors.
Subject to the provisions of the Articles and to the rights attaching to
any shares, any dividends or other monies payable on or in respect of
a share may be paid in such currency as the directors may determine.
The directors may deduct from any dividend payable to any member
all sums of money (if any) presently payable by him/her to the
Company on account of calls or otherwise in relation to shares of the
Company. The directors may retain any dividends payable on shares
on which the Company has a lien, and may apply the same in or
towards satisfaction of the debts, liabilities or engagements in respect
of which the lien exists.
Appointment and replacement of directors
The directors may from time to time appoint one or more directors.
The Board may appoint any person to be a director (so long as the
total number of directors does not exceed the limit prescribed in the
Articles). Any such director shall hold office only until the next AGM
and shall then be eligible for election.
The Articles provide that at each AGM all those directors who have
been in office for three years or more since their election, or last re-
election, shall retire from office. In addition, a director may at any AGM
Stock Exchange Listings
The Company’s ordinary shares are listed on the London Stock
Exchange (the primary listing), the JSE Limited, the SIX Swiss
Exchange, the Botswana Stock Exchange and the Namibian
Stock Exchange.
Significant agreements: change of control
At 31 December 2021, Anglo American had committed bilateral and
syndicated borrowing facilities totalling $5.7 billion with a number of
relationship banks which contain change of control clauses.
$8.5 billion of the Group’s bond issues also contain change of control
provisions. In aggregate, this financing is considered significant to the
Group and in the event of a takeover (change of control) of the
Company, these contracts may be cancelled, become immediately
payable or be subject to acceleration.
In the ordinary course of its business the Group’s subsidiaries enter into
a number of other commercial agreements, some of which would alter
or terminate upon a change of control of the Company. None of these
are considered by the Group to be significant to the Group as a whole.
Purchases of own shares
At the AGM held on 5 May 2021, authority was given for the Company
to purchase, in the market, up to 204.3 million ordinary shares of
5486/91 US cents each. This authority will expire at the 2022 AGM and,
in accordance with usual practice, a resolution to renew it for another
year will be proposed.
On 29 July 2021, the Company announced its intention to return up to
$1 billion to shareholders through an on-market irrevocable and non-
discretionary share buyback programme (the ‘Programme’). The
Programme started in July 2021 and ended in February 2022. This
additional return recognises the resilience of the Company’s balance
sheet, and the Board’s confidence in funding the Company’s portfolio
of highly attractive near and medium term growth opportunities. The
Programme returned to shareholders a total of $0.8 billion to
shareholders by 31 December 2021.
Details of the shares repurchased and subsequently cancelled under
the Programme during the financial period are set out below. Further
details can be found on the Group’s website at:
www.angloamerican.com/investors/shareholder-information/
share-purchase-transactions
Number of ordinary
shares of 5486/91
US cents
repurchased
21,473,605
Aggregate
consideration paid
$814,361,429
Average price paid
per share
$37.92
% of share capital the
repurchased shares
represented at
31 December 2021
1.60%
Indemnities
To the extent permitted by law and the Articles, the Company has
made qualifying third-party indemnity provisions for the benefit of its
directors during the year, which remain in force at the date of this
report. Copies of these indemnities are open for inspection at the
Company’s registered office.
By order of the Board
Richard Price
Group General Counsel and Company Secretary
23 February 2022
Anglo American plc Integrated Annual Report 2021 285
Other information
Shareholder information
Annual General Meeting (AGM)
This will be held at 14:30 on Tuesday, 19 April 2022, at The Queen
Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London
SW1P 3EE.
Shareholding enquiries
Enquiries relating to shareholdings should be made to the Company’s
UK Registrars, Equiniti, or the South African Transfer Secretaries,
Computershare Investor Services (Pty) Limited, at the relevant
address below:
UK Registrars
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
England
Telephone:
In the UK: 0371 384 2026
From overseas: +44 (0) 121 415 7558
Transfer Secretaries in South Africa
Computershare Investor Services (Pty) Limited
Rosebank Towers, 15 Biermann Avenue
Rosebank, Johannesburg, 2196, South Africa
Private Bag X9000, Saxonwold, 2132, South
Africa
Telephone: +27 (0) 11 370 5000
Fax: +27 (0) 11 688 5238
Enquiries on other matters should be addressed to the company
secretary at the following address:
Registered and Head Office
Anglo American plc
17 Charterhouse Street
London EC1N 6RA
England
Telephone: +44 (0) 20 7968 8888
Fax: +44 (0) 20 7968 8500
Registered number: 03564138
www.angloamerican.com
CoSec.Admin@angloamerican.com
On the Investors section of the Group website a whole range of
useful information for shareholders can be found, including:
– Investor calendar
– Share price and tools
– Dividend information
– AGM information
– FAQs.
286 Anglo American plc Integrated Annual Report 2021
Electronic communication
Shareholders may elect to receive, electronically, notification of the
availability on the Group’s website of future shareholder
correspondence, e.g. Integrated Annual Reports and Notices of
AGMs.
By registering for this service, UK shareholders can also vote online
in respect of future AGMs and access information on their
shareholding including, for example, dividend payment history, sales
and purchases and indicative share prices. In order to register for
these services, UK shareholders should contact the UK Registrars or
log on to www.shareview.co.uk and follow the on-screen
instructions. It will be necessary to have a shareholder reference
number when registering, which is shown on share certificates,
dividend tax vouchers and proxy cards.
Dividends
Dividends are declared and paid in US dollars to shareholders with
registered addresses in all countries except the UK, eurozone
countries and South Africa where they are paid in sterling, euros and
South African rand respectively. Shareholders outside South Africa
may elect to receive their dividends in US dollars.
Shareholders with bank accounts in the UK or South Africa can have
their cash dividends credited directly to their own accounts.
Shareholders should contact the relevant Registrar or Transfer
Secretary to make use of this facility. South African branch register
shareholders would need South African exchange control approval to
mandate their dividends to an account outside South Africa.
The Company operates a dividend reinvestment plan (DRIP), which
enables shareholders to reinvest their cash dividends into purchasing
Anglo American shares. Details of the DRIP and how to join are
available from Anglo American’s UK Registrars and South African
Transfer Secretaries and on the Group’s website.
ShareGift
The Company supports ShareGift, the charity share donation scheme
administered by The Orr Mackintosh Foundation (registered charity
number 1052686). Through ShareGift, shareholders with very small
numbers of shares which might be considered uneconomic to sell are
able to donate them to charity. Donated shares are aggregated and
sold by ShareGift, the proceeds being passed on to a wide range of
charities. For those shareholders who wish to use ShareGift, transfer
forms are available from the Registrars and further details of the
scheme can be found on the website www.sharegift.org.
Share dealing service
Telephone, internet and postal share dealing services have been
arranged through Equiniti, providing a simple way for European
residents to buy or sell Anglo American shares. For telephone
transactions call 0345 603 7037 (or +44 (0) 121 415 0138 from
overseas) during normal office hours and for internet dealing log on
to www.shareview.co.uk/dealing. You will need your shareholder
reference number, found on share certificates, dividend tax vouchers
and proxy cards. For further details on the postal dealing service call
0371 384 2248 (or +44 (0) 121 415 7172 from overseas).
Unsolicited mail
Under the Companies Act, the Company is obliged to make the share
register available upon request on payment of the appropriate fee.
Because of this, some shareholders may receive unsolicited mail. If you
wish to limit the receipt of addressed marketing mail you can register
with the Mailing Preference Service (MPS). The quickest way to register
with the MPS is via the website: www.mpsonline.org.uk. Alternatively
you can register by telephone on: 020 7291 3310, or by email to:
mps@dma.org.uk, or by writing to MPS Freepost LON20771,
London W1E 0ZT.
Other information
Other Anglo American publications
– Sustainability Report
– Ore Reserves and Mineral Resources Report
– Tax and Economic Contribution Report
– Transformation Report
– Climate Change Report
– Our Code of Conduct
– The Safety, Health and Environment (SHE) Way
– The Social Way
– The Socio-Economic Assessment Toolbox (SEAT)
– Notice of 2022 AGM
– www.facebook.com/angloamerican
– www.twitter.com/angloamerican
– www.linkedin.com/company/anglo-american
– www.youtube.com/angloamerican
– www.flickr.com/angloamerican
– www.slideshare.com/angloamerican
Financial and other reports may be found at:
www.angloamerican.com/reporting
A printed copy of the Anglo American Integrated Annual Report can be ordered online at:
www.angloamerican.com/site-services/contact-us
©Anglo American plc 2022. All rights reserved.
Strategic partners
Anglo American works in partnership with a wide range of organisations; these important relationships form part of the Group’s
commitments to a wide range of key sustainability and other societal objectives. A selection of the organisations we work with can be
found on our website: www.angloamerican.com/approach-and-policies.
Group terminology
In this document, references to “Anglo American”, the “Anglo American Group”, the “Group”, “we”, “us”, and “our” are to refer to either
Anglo American plc and its subsidiaries and/or those who work for them generally, or where it is not necessary to refer to a particular entity,
entities or persons. The use of those generic terms herein is for convenience only, and is in no way indicative of how the Anglo American
Group or any entity within it is structured, managed or controlled. Anglo American subsidiaries, and their management, are responsible
for their own day-to-day operations, including but not limited to securing and maintaining all relevant licences and permits, operational
adaptation and implementation of Group policies, management, training and any applicable local grievance mechanisms.
Anglo American produces Groupwide policies and procedures to ensure best uniform practices and standardisation across the
Anglo American Group but is not responsible for the day to day implementation of such policies. Such policies and procedures constitute
prescribed minimum standards only. Group operating subsidiaries are responsible for adapting those policies and procedures to reflect
local conditions where appropriate, and for implementation, oversight and monitoring within their specific businesses.
Forward-looking statements and third party information
This document includes forward-looking statements. All statements other than statements of historical facts included in this document,
including, without limitation, those regarding Anglo American’s financial position, business, acquisition and divestment strategy, dividend
policy, plans and objectives of management for future operations, prospects and projects (including development plans and objectives
relating to Anglo American’s products, production forecasts and Ore Reserve and Mineral Resource positions) and sustainability
performance related (including environmental, social and governance) goals, ambitions, targets, visions, milestones and aspirations, are
forward-looking statements. By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of Anglo American or industry results to be materially different
from any future results, performance or achievements expressed or implied by such forward-looking statements.
Such forward-looking statements are based on numerous assumptions regarding Anglo American’s present and future business
strategies and the environment in which Anglo American will operate in the future. Important factors that could cause Anglo American’s
actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others,
levels of actual production during any period, levels of global demand and commodity market prices, mineral resource exploration and
project development capabilities and delivery, recovery rates and other operational capabilities, safety, health or environmental incidents,
the effects of global pandemics and outbreaks of infectious diseases, natural catastrophes or adverse geological conditions, climate
change and extreme weather events, the outcome of litigation or regulatory proceedings, the availability of mining and processing
equipment, the ability to produce and transport products profitably, the availability of transport infrastructure, the development, efficacy
and adoption of new technology, the impact of foreign currency exchange rates on market prices and operating costs, the availability
of sufficient credit, the effects of inflation, political uncertainty, tensions and disputes and economic conditions in relevant areas of the
world, evolving societal and stakeholder requirements and expectations, the actions of competitors, activities by courts, regulators
and governmental authorities such as in relation to permitting or forcing closure of mines and ceasing of operations or maintenance
of Anglo American’s assets and changes in taxation or safety, health, environmental or other types of regulation in the countries where
Anglo American operates, conflicts over land and resource ownership rights and such other risk factors identified in Anglo American’s
most recent Annual Report. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance
should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this document.
Anglo American expressly disclaims any obligation or undertaking (except as required by applicable law, the City Code on Takeovers and
Mergers, the UK Listing Rules, the Disclosure and Transparency Rules of the Financial Conduct Authority, the Listings Requirements of the
securities exchange of the JSE Limited in South Africa, the SIX Swiss Exchange, the Botswana Stock Exchange and the Namibian Stock
Exchange and any other applicable regulations) to release publicly any updates or revisions to any forward-looking statement contained
herein to reflect any change in Anglo American’s expectations with regard thereto or any change in events, conditions or circumstances
on which any such statement is based.
Nothing in this document should be interpreted to mean that future earnings per share of Anglo American will necessarily match or
exceed its historical published earnings per share. Certain statistical and other information about Anglo American included in this
document is sourced from publicly available third party sources. As such it has not been independently verified and presents the views
of those third parties, but may not necessarily correspond to the views held by Anglo American and Anglo American expressly disclaims
any responsibility for, or liability in respect of, such information.
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Anglo American plc
17 Charterhouse Street
London
EC1N 6RA
United Kingdom
Tel +44 (0)20 7968 8888
Fax +44 (0)20 7968 8500
Registered number 3564138
www.angloamerican.com
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