BASE METALS

Anglo tips increased production, lower costs in 2021

London-based miner Anglo American expects to increase production by 14% and decrease unit costs by 3% in 2021, according to an investor update.

Staff reporter
 Anglo American’s Quellaveco copper JV in Peru is expected to start production in 2022

Anglo American’s Quellaveco copper JV in Peru is expected to start production in 2022

It also provided a production outlook to 2023, with the biggest increase seen in copper from 640,000-650,000t this year to 890,000t-1 million tonnes in 2023, once its 60:40 Quellaveco copper joint venture with Mitsubishi in Peru has come online.

"We expect to deliver sector leading volume growth of 20-25% over the next three to five years that includes first copper production from Quellaveco in 2022," CEO Mark Cutifani said.

"Together with our P101 and technology improvement initiatives, we are on track to deliver our targeted US$3-4 billion run-rate of incremental annual improvement by the end of 2022."

Anglo said its Marine Namibia diamonds project was also on track for delivery in 2022.

Forecast 2021 capex was increased from $4.7-$5.5 billion excluding Woodsmith to $5.7-6.2 billion.

The figure reflected carry-over from 2020 deferrals, additional investment in new business improvement opportunities, and targeting critical path items for the Woodsmith polyhalite project in the UK.

Anglo has earmarked $0.5 billion capex for Woodsmith in 2021, up from an earlier forecast $0.3 billion.

It said a technical review for the project was ongoing and due to be completed in mid-2021.

The company highlighted its moves to address greenhouse gas emissions and Cutifani said it was aiming to achieve carbon neutrality across its operations by 2040.

It also stated it was aiming to exit its South Africa thermal coal business within 1.5-2.5 years.

"We have a diversified mix of premium products that are increasingly tilted towards a low carbon economy and broad-based consumer demand," Cutifani said.

Anglo said it had maintained a strong performance in 2020 despite COVID-19 and other operational impacts and expected its mining EBITDA margin to remain about 42% next year, supported by cost control and price strength in copper and iron ore.

"Our balanced investment programme is driving considerable business improvement, with associated emissions and water benefits, while also delivering margin-enhancing growth - taking us towards our longer-term target of a 45-50% mining EBITDA margin," finance director Stephen Pearce said.

Board change

Anglo American also announced last week Hilary Maxson, the CFO of Paris-based Schneider Electrical, would join the board from June 1 next year.

Jim Rutherford was retiring with effect from December 31 after seven years with the company.

Anglo shares closed down 2.3% on Friday to 2,443p, at the upper end of a one-year range, valuing it at £33.5 billion (US$44.6 billion).

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

editions

Mining Journal Intelligence Investor Sentiment Report 2024

Survey revealing the plans, priorities, and preferences of 120+ mining investors and their expectations for the sector in 2024.

editions

Mining Journal Intelligence Mining Equities Report 2023

Access an exclusive, inside look on the quarterly mining IPOs and secondary raisings data and mining equities performance tables with an annual Stock Exchange Comparisons supplement.

editions

Mining Journal Intelligence World Risk Report 2023 (feat. MineHutte ratings)

A detailed analysis of mining investment risks across 121 jurisdictions globally, built on 11 ‘hard risk’ metrics and an industrywide survey.

editions

Mining Journal Intelligence Global Leadership Report 2023: Social licence

Gain insights into social licence trends and best practices from interviews with 20+ top mining company executives and an industrywide survey.