The unique selling point of Anglo American

When that happens, the ghosts of Anglo's yesteryear can be laid to rest - in particular, the pain of having to write off billions after it acquired Brazilian iron ore producer Minas Rio at the top of the last cycle.But there are bigger things here. First-production at Quellaveco will be an important moment for the entire global mining industry, not just Anglo, and for a host of reasons.Yes, it shows above all, that Anglo has been able to deliver on time, on budget - and despite the pandemic - a new mine atop one of the largest new copper resources on the planet. To succeed, it has had to construct a complex network of sites sprawling across high mountains, in the teeth of electrical storms and frequent heavy rainfall.And Anglo has shown it can bring a large-scale greenfield operation into production without the sort of hitches that have bedevilled the industry, and one that will make a very significant difference to the bottom line.But the wider story is this: recently retired CEO Mark Cutifani recognised earlier than competitors the pivotal and irreversible importance of ESG in the mining mix. Few, if any, companies have as ambitious targets to cut Scope 3 emissions. The company has set a goal of cutting its Scope 3 emissions by 50% by 2040. Soon, half the power used in Anglo's worldwide operations will come from renewables. The power needed for Quellaveco will come only from renewable sources, said the company.Additionally, Anglo is rolling out the first of a fleet of massive - and clean - hybrid haulage trucks, each powered by a hydrogen fuel cell and a battery pack. With Scope 3 emissions in mind, it has ordered ten liquified natural gas vessels for its chartered fleet, which are said to offer environmental benefits that include a 35% reduction in carbon dioxide emissions, compared with standard marine fuel.Cutifani, said the Canadian Globe & Mail, "deserves credit for anticipating mining's move to ESG principles. [And] saving his company along the way". The heavily indebted Anglo (let's not forget!) had a near-death experience in 2015/6 after Cutifani took over.Veteran mining analyst Myles Allsop at UBS said in a 2021 report: "In our opinion, Anglo is a technology leader in mining and this positions it well medium-term."One could list a number of other tech-laden, low-cost wonders, but suffice to say bulge bracket investment banks have expressed their approval.Quellaveco stands out for another reason: it has successfully navigated the very challenging jurisdictional risks inherent in mining in Peru where a newly elected left-wing government is to hike taxes and where there's widespread hostility against miners in general. Thousands of police and troops have been mobilised to quell protests at the Chinese-owned Las Bambas copper project where crowds have been angered by dust damaging nearby crops. Southern Copper's Peruvian Tia Maria copper project has been shelved amid an outcry (sometimes violent) about the threat to scarce water resources. True, there have been protests at Quellaveco over Covid payments, and prior to 2018, protestors blocked roads to the camp over fears about water usage, but compared to opposition elsewhere, there has been relative calm.Anglo has played a deft hand in managing risk - de-risking Quellaveco by bringing in Japan's Mitsubishi as a significant shareholder with 40%; Anglo speaks for 44%.Cutifani has displayed determination to try and rid the industry of it dirty, dangerous and toxic image. He once attended a Vatican mining conference in a bid to inject more empathy into the business. Or to put it another way, to try and learn how to use cultural and religious respect and engagement to win the support of indigenous communities. He told the Globe & Mail: "If you can do a good job in your local communities, invariably, the regional and federal government players will be supportive because, in the end, all politics is local."Let's not forget the basics: the $5 billion Quellaveco project is expected to deliver on average 300,000 tonnes per annum of copper in the first ten years of operation. It has 1.7 billion million tonnes of estimated ore reserves containing 7.5 million tonnes of copper with a 0.57% grade, as well as a mine life of 36 years. More resource on the same wider property means production could last for 100 years.Cutifani is on Anglo's payroll until June 30. So, he'll be there when Quelleveco presses the button on first-production. That in itself is cause for celebration. So too is the fact Anglo is no longer viewed as a sector laggard. Today, it stands out as being less iron-ore-centric than Rio and BHP, and with a more diversified portfolio that includes offshoots, De Beers and Amplats.A re-rating of the shares is surely within the grasp of new CEO Duncan Wanblad.

ABOUT

SOLUTIONS

LEGAL

SOCIAL

LONDON TO A BRICK

The unique selling point of Anglo American

Already have an account? Sign in here

MORE ON THIS TOPIC

FROM OUR PARTNERS

RESOURCE STOCKS

Forsys Metals' pipeline of catalysts to excite the market

RESOURCE STOCKS

The largest mineable measured uranium deposit in the USA

MOST POPULAR

MINERS

Sibanye-Stillwater cuts around 300 jobs across US PGM operations

ENERGY MINERALS

Lithium the new oil? London hears from stakeholders

EXPLORERS

Nusrat Ghani says UK is punching above its weight

REGULATION

Miners protest as government orders Cobre Panamá closure

RESEARCH

Premium subscribers only

View more

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

Mining Journal Intelligence Mining Equities Report 2023

Mining Journal Intelligence Global Leadership Report 2023: Social licence

Mining Journal Intelligence Project Pipeline Handbook 2023

THE ASPERMONT BRAND PORTFOLIO

Login

Not a Subscriber?

Subscribe Now