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AGL
ANAAL
AGL - Anglo American Plc - Half Year Financial REPORT For The Six Months Ended
30 June 2008 and dividend declaration
Anglo American Plc
(the "Company")
Registered office: 20 Carlton House Terrace, London, SW1Y 5AN
Registered number: 356413
Share code: AGL
ISIN code: GB00B1XZS820
HALF YEAR FINANCIAL REPORT for the six months ended 30 June 2008
News Release
Half year financial report
31 July 2008
Anglo American announces record half year underlying earnings of $3.5 billion
Half year financial results
? Record Group operating profit(1) of $6.2 billion, with operating profit from
core operations(2) up 30% to $6.0 billion
? Highest ever total Group underlying earnings(3) of $3.5 billion up 14%
? Total Group underlying earnings per share up 33% to $2.90
? Strong performances from Ferrous Metals, Coal, Base Metals and Diamonds, with
increased production of iron ore, coal and copper
? Total Group profit for the period attributable to equity shareholders up 27%
at $4.3 billion
$45 billion pipeline driving production growth
? Approved project pipeline increased to $15 billion to deliver substantial
volume growth in the most attractive commodity segments:
- Significant new iron ore and coal production on stream in 2008
- Collahuasi debottlenecking on schedule to enter production in Q4 2008
- Barro Alto nickel project 40% complete and on track for Q1 2010
- Minas-Rio - phase 1 of iron ore project under construction to start up
during 2010
- Los Bronces copper expansion project on schedule for production in 2011
- Twickenham platinum expansion project approved to produce 180,000 oz per
annum
- Michiquillay copper project - community agreements reached and exploration
under way
Strong outlook for the full year
? Strong 2nd half expected from operational performance
? Executive team in place - including new CEOs for Anglo Platinum, Coal,
Kumba Iron Ore and Anglo American South Africa
? New Order Mining Right conversions awarded across Anglo American`s South
African mining businesses
? Good progress on safety, with LTIFR trending downwards
? Solutions to power supply constraints being implemented in South Africa
Dividend
? Interim dividend up 16% to 44 cents per share
HIGHLIGHTS FOR THE SIX MONTHS ENDED 6 months 6 months
30 JUNE 2008 ended ended
US$ million, except per share
amounts 30 June 2008 30 June 2007 Change
Total Group revenue including
associates(4) 17,915 19,849 (9.7)%
Operating profit including
associates before special items
and remeasurements - core continuing
operations(1)(2) 5,974 4,608 29.6%
Operating profit including
associates before special items
and remeasurements - total Group(1) 6,181 5,452 13.4%
Underlying earnings for the period
- total Group(3) 3,483 3,058 13.9%
EBITDA - total Group(5) 7,038 6,554 7.4%
Net cash inflows from operating
activities - total Group 3,822 3,678 3.9%
Profit for the period attributable
to equity shareholders - total
Group 4,281 3,379 26.7%
Earnings per share (US$):
Basic earnings per share - total
Group 3.56 2.41 47.7%
Underlying earnings per share -
total Group 2.90 2.18 33.0%
Interim dividend (US cents per
share) 44 38 15.8%
(1) Operating profit includes share of associates` operating profit (before
share of associates` tax, finance costs and minority interests) and is before
special items and remeasurements, unless otherwise stated. See note 4 to the
condensed financial statements for operating profit on a continuing Group
basis. For definition of special items and remeasurements see note 6 to the
condensed financial statements.
(2) Continuing operations considered core to the Group are Base Metals,
Platinum, Ferrous Metals` core businesses (Kumba Iron Ore, Scaw Metals,
Samancor Manganese and Minas-Rio), Coal and Diamonds. See the operating profit
and underlying earnings tables in the Financial review of Group results section
for a reconciliation of operating profit and underlying earnings from core
operations to total Group.
(3) See note 9 to the condensed financial statements for basis of calculation
of underlying earnings.
(4) Represents total Group revenue (including the revenue of discontinued
operations) and includes the Group`s share of associates` revenue of $3,384
million (six months ended 30 June 2007: $2,903 million). See note 3 and 14 to
the condensed financial statements.
(5) EBITDA is operating profit before special items, remeasurements,
depreciation and amortisation in subsidiaries and joint ventures and share of
EBITDA of associates. See note 13 to the condensed financial statements for
analysis of EBITDA by continuing and discontinued operations.
Cynthia Carroll, Chief Executive, said:
"I am pleased to announce another record performance by Anglo American,
reporting operating profit of $6.2 billion for the half year and underlying
earnings of $3.5 billion. The key drivers of this performance were production
growth in copper, iron ore, manganese ore, coal and phosphates, continued
strength in the commodity price environment and the early benefits of tighter
operational discipline across the businesses.
Our $45 billion project pipeline, which now includes some $15 billion of
approved projects, is set to deliver substantial volume growth in the most
attractive commodity segments across the near, medium and long term.
Our near term projects are on track to deliver significant new coal and iron
ore production this year, with the Dawson and Lake Lindsay coking coal projects
in Australia and the Sishen iron ore expansion project all now ramping up to
full production. We have also approved a number of new projects in South
Africa, including the Twickenham platinum expansion project, the Amandelbult
No.4 shaft platinum replacement project and, most recently, the Sishen South
iron ore project.
This half year we have seen further strategic progress with the shape of the
portfolio through the disposal of non-core holdings, including the sale of our
stake in China Shenhua Energy and the announced sale of Tarmac Iberia, with
combined proceeds in excess of $900 million.
We are focused on achieving growth in our core mining businesses, making
targeted, value enhancing acquisitions and on uplifting the performance of our
existing long life asset base. These initiatives to drive operational
improvements are particularly important at a time when the industry continues
to experience significant cost pressures across the supply chain. We are also
making excellent progress in driving cultural change across the Group by
capitalising on our scale with increased integration, knowledge-sharing across
business units and adherence to common standards and policies. We are also
embedding a performance culture throughout the organisation and building a
management team driven by value maximisation. I am delighted with the changes
we have made to strengthen our operational management capabilities,
particularly in our platinum and coal businesses.
In April, the South African Department of Minerals and Energy granted new order
mining rights across our South African mining operations. This significant
achievement provides an ever stronger platform for our $8 billion of approved
projects in South Africa, our employees, contractors and for the many black
empowered businesses with which we are partners. This is good news for Anglo
American and for South Africa as we continue to grow our businesses and
contribute to the country`s economic prosperity.
Last year we initiated a step change in our safety practices across the Group
and Anglo American today is helping to lead the way, particularly in South
Africa, working together with the unions and the government to achieve a safer,
more productive industry. I am pleased to say that our new global safety risk
management training is under way and we are continuing to make good progress at
the operations, with significant incidents reduced by more than 50%
year-on-year and extended periods of incident free, safe production. This
progress reflects increased trust and dedication on the part of our employees.
We are re-energised as a group and working on our journey to "Zero Harm".
The power constraints in South Africa continue to have an impact on our
businesses in the country and we are working closely with Eskom and the
government to identify solutions. Among many initiatives, Anglo American is
stepping up its own energy efficiency programmes, in addition to procuring some
85 MW of supplementary power.
Despite the macro outlook for the second half remaining uncertain due to the
evident slowdown in many developed economies, this is offset by continued
strong demand, particularly from the developing economies, led by China. We
expect a strong second half to the year driven by increased production, further
improvements in our operational performance and robust pricing. Anglo
American`s unique portfolio, spanning precious, base and bulks, positions us
well to maximise the benefit from the strong demand environment as we capture
the full value of our considerable growth prospects."
Review of the six months ended 30 June 2008
Financial results
Anglo American`s first half total Group underlying earnings were a record $3.5
billion as continued strong metal prices reflected the favourable trading
environment for the Group`s key commodities and volumes improved in most
commodities. Operating profit from the Group`s core operations was 30% higher
than for the corresponding period last year at $6.0 billion.
Strong contributions came from Ferrous Metals, Coal, Base Metals and Diamonds,
which all achieved higher operating profit in the period. Platinum recorded
lower operating profit due to lower refined production volumes and higher
inflation. Industrial Minerals suffered from the downturn in the UK housing
market.
Base Metals generated an operating profit of $2,454 million (41% of Anglo
American`s total operating profit from core operations), up 13%, due to
increased copper and phosphate fertiliser production and higher copper, lead
and fertiliser prices.
Platinum reported operating profit of $1,467 million (25% of Anglo American`s
total operating profit from core operations), down 3%, due to lower refined
production volumes, partially offset by higher US dollar prices and the weaker
average rand in relation to the US dollar.
Ferrous Metals` operating profit increased 80% to $1,296 million, with
operating profit from its core businesses increasing by 129% to $1,252 million,
(21% of Anglo American`s total operating profit from core operations), mainly
due to higher iron ore and manganese ore sales volumes and prices, and
manganese alloy prices.
Coal recorded operating profit of $731 million (12% of Anglo American`s total
operating profit from its core operations), 129% higher, mainly due to higher
prices for both thermal and metallurgical export coal and higher production,
particularly at the Australian operations.
Diamonds recorded attributable operating profit of $328 million (5% of Anglo
American`s total operating profit from core operations), up 23%, principally
due to the steady increase in the price of diamonds during the period.
Industrial Minerals` operating profit fell 22% to $163 million reflecting the
difficult trading conditions in key markets such as Spain and the UK, as well
as the impact of significant cost increases. Excluding the results of Tarmac
Iberia, the sale of which is due to complete during Q3, results were 17% below
the same period in the prior year.
Production
Production volumes were up for copper, zinc, iron ore, manganese ore, coal and
phosphate fertilisers. Platinum production volumes from mining operations were
down on the prior year due to flooding at the Amandelbult mine, skilled labour
shortages, safety related stoppages, lower throughput at the Mogalakwena
(formerly Potgietersrust or `PPRust`) South concentrator and electricity
constraints. Nickel production was down following labour related disruptions
and furnace downtime at Loma de Niquel.
Capital structure and increased return to shareholders
Net debt, excluding hedges, has increased by $161 million since 31 December
2007 and at 30 June 2008 amounted to $5.4 billion, reflecting the impact of the
acquisition of the Foxleigh coal mine in Queensland, Australia, planned capital
expenditure, the share buyback and the purchase of additional shares in Anglo
Platinum Limited. This was partly offset by proceeds from disposal of our
equity interest in China Shenhua Energy. The $4 billion share buyback programme
announced in August 2007, is 35% complete, with around $1.4 billion of shares
Dividends
The interim dividend has been set at 44 US cents per share (cps) - 16% higher
than the 38 cps interim dividend declared for the first half of 2007.
Strategic update
Anglo American has made further progress in 2008 as the Group focuses on its
core mining businesses and optimises its unique portfolio of assets.
In May, the disposal of our interest in China Shenhua Energy was announced,
realising cash proceeds of approximately $700 million. In June, the sale of
Tarmac Iberia to Holcim was announced for a consideration of up to $230
million. The Tarmac group continues to be managed to maximise shareholder value
while options for its sale are being explored.
The asset optimisation scheme to improve operational efficiencies at site level
and to allow performance benchmarking is delivering benefits. For example, at
the German Creek coal operation in Australia, plant debottlenecking has
resulted in a record first half performance, increasing production from 118 kt
to 167 kt per week, a 42% increase. Similarly at Dawson, blending has delivered
a 30% value increase in coking coal. The scheme is being rolled out across the
Group, delivering more value from existing assets, in terms of resources,
equipment and people.
Anglo American was granted its new order mining rights conversions by the South
African Department of Minerals and Energy in April. This relates to the
conversion of all the mineral rights in Anglo American`s South African Coal,
Ferrous Metals, Base Metals and Platinum businesses. The applications for
conversion of mineral rights associated with Anglo Platinum`s 50:50 joint
ventures with Royal Bafokeng Resources and the African Rainbow Minerals
consortium continue and are being processed based on joint submissions and
representations by all stakeholders.
Several senior management changes have been announced in 2008, marking a
significant strengthening of the leadership team, involving a combination of
internal and external appointments. Neville Nicolau was appointed CEO of Anglo
Platinum and Ian Cockerill was appointed CEO of Anglo Coal, joining from Gold
Fields.
Following Ras Myburgh`s secondment to Eskom, Chris Griffith moved from Anglo
Platinum to become CEO of Kumba Iron Ore. Kuseni Dlamini was appointed Head of
Anglo American South Africa, Russell King was appointed Chief Strategy Officer
and Andrew Hinkly was appointed Global Head of Procurement and Supply Chain.
The two previous Joint Acting CEOs of Anglo Platinum have been appointed to new
roles within the Group; Norman Mbazima becomes CEO of Scaw Metals and Duncan
Wanblad was appointed CEO of Copper in the Base Metals division of Anglo
American.
Delivering profitable growth through projects and acquisitions
Anglo American`s $45 billion project pipeline includes some $15 billion of
approved projects that are currently under development (compared to $12 billion
at 20 February 2008). These projects are set to deliver considerable organic
growth in the near, medium and long term and will build upon the Group`s
existing portfolio of assets in precious, base metals and bulk commodities.
Recently approved platinum projects in South Africa include the $800 million
Twickenham expansion project, which is expected to produce 180,000 oz of
refined platinum per annum by 2016 and the $1.6 billion Amandelbult No.4 shaft
271,000 oz replacement project. Anglo Platinum`s Mogalakwena North expansion
project is on schedule to reach full production in 2009 and to produce an
additional 230,000 oz per annum of refined platinum.
Kumba Iron Ore`s Sishen Expansion Project made its first contribution to
production during the period, having been commissioned at the end of 2007. The
$782 million Sishen South project has also been approved and is expected to
produce 9 Mtpa of iron ore, with first production forecast for 2012.
In Peru, where one of Anglo American`s key priorities has been to build strong
and supportive relationships with local communities, agreement was reached in
June with the communities around the proposed Michiquillay copper project and
exploration activity has now commenced. This project has the potential to
produce up to 300,000 tpa of copper from one of the largest undeveloped copper
deposits in the world. The feasibility study for Anglo American`s other major
investment in Peru, at the Quellaveco copper deposit, is now at an advanced
stage.
In Chile, the expansion of Los Bronces is progressing on schedule for
completion in 2011 and will increase copper production by an average of 170,000
tpa to an initial production level exceeding 400,000 tpa. The debottlenecking
project at Collahuasi, also in Chile, is on schedule to enter production in the
fourth quarter of 2008, increasing sulphide mill throughput to 140,000 tpd.
In Brazil, the 36,000 tpa Barro Alto ferronickel project is 40% complete and is
progressing well, on track to begin production in the first quarter of 2010.
Also in Brazil, Anglo American has agreed to acquire a 63.3% shareholding in a
new company ("IronX"), which holds a 51% interest in the Minas-Rio iron ore
project and 70% in the Amapa? iron ore system, from Eike Batista and other
selling shareholders for $3.5 billion. Subject to the satisfaction of final
conditions under the transaction agreements, this transaction will be completed
by 5 August 2008. Following completion of this transaction, Anglo American has
committed to extend the offer to the minority shareholders in IronX at the same
price per share. The successful completion of the offer to the minority
shareholders will result in Anglo American owning 100% of the Minas-Rio
project, 70% of the Amapa? system and 49% of LLX Minas-Rio, the owner of the
Port of Acu, at a cost of approximately $5.5 billion in cash for 100% of the
issued and outstanding shares in IronX. This would mark a significant step in
Anglo American`s aim of becoming a substantial player in the global
seaborne iron ore trade.
Anglo American`s coal projects at Dawson, Lake Lindsay and Mafube are all
ramping up towards full production. The construction of the MacWest project is
advanced, with first coal having been produced in July.
The Zondagsfontein mixed product mine is progressing well and first coal
production is due in 2009. The acquisition of a 70% shareholding in Foxleigh
was completed in February and is contributing to 2008 profits.
At De Beers, the Victor diamond mine in Ontario, Canada has been commissioned
more than eight months ahead of schedule, with full production expected in the
third quarter of 2008. The Snap Lake mine in the Northwest Territories was
brought into commercial production in early 2008 and is expected to reach full
production in the second half. In South Africa, the commissioning of Voorspoed
in the Free State is under way, and its first diamonds were recovered in June
2008, ahead of schedule.
Outlook
The global macro-economic outlook continues to be uncertain, with US economic
activity expected to be weak in the near term. It is also clear that the
constraints in the credit markets are far from resolved and risk rates have not
yet returned to normalised or long-term levels.
However, in emerging markets, the Chinese economy in particular continues to
develop and is expected to grow at around 10% in 2008/09. This growth is
relatively resilient, being driven primarily by the secular domestic trend of
urbanisation and development. Furthermore, this growth is driving an increasing
intensity of use for the commodities that China requires to build its
infrastructure, such that China now represents the largest regional consumer of
many key commodities and is the dominant driver of demand growth.
On the supply side, a number of operational challenges across the industry have
led to near-term supply being lower than anticipated (e.g. power availability
in a number of countries, infrastructure bottlenecks, weather- related
shortages and labour issues), while in the longer term the mining industry is
adjusting to the higher demand environment. It seems likely that the industry
will be working hard for some years to keep pace with this sustained higher
level of demand and that higher than inflation cost pressures will remain.
Consequently, the balance of supply and demand should sustain strong prices for
many of Anglo American`s key commodities despite the current challenges in the
developed economies.
Selected major projects
Approved
First
production
Sector Project Country date
Platinum Mototolo JV South Africa Q4 2006
Marikana JV South Africa Q1 2006
Mogalakwena North South Africa Q4 2007
expansion(3)
Mogalakwena North South Africa Q4 2007
replacement(3)
Newly approved MC plant capacity South Africa Q3 2009
expansion - phase 1
Mainstream inert grind South Africa Q4 2009
projects
Lebowa Brakfontein South Africa Q2 2008
Merensky
Newly approved Slag cleaning furnace 2 South Africa Q4 2009
Base metals refinery South Africa Q3 2009
expansion
Amandelbult East Upper South Africa Q3 2007
UG2
Townlands ore South Africa Q4 2007
replacement
Paardekraal South Africa Q2 2010
Newly approved Twickenham South Africa Q1 2012
Newly approved Amandelbult No 4 shaft South Africa Q4 2015
project
Diamonds Snap Lake Canada -
Victor Canada -
Voorspoed South Africa -
Base Metals Collahuasi Chile Q4 2008
debottlenecking
Barro Alto Brazil Q1 2010
Los Bronces expansion Chile Q1 2011
Ferrous Metals Sishen expansion South Africa Q4 2007
Minas-Rio phase 1 Brazil Q4 2010
Newly approved Sishen South(6) South Africa H1 2012
Coal Dawson Australia Q3 2007
Lake Lindsay Australia Q4 2007
Mafube SouthAfrica Q4 2007
Cerrejon Colombia Q1 2007
MacWest South Africa Q3 2008
Zondagsfontein South Africa Q2 2009
Full
production
Sector Project Country date
Platinum Mototolo JV South Africa 2008
Marikana JV South Africa 2009
Mogalakwena North South Africa 2009
expansion(3)
Mogalakwena North South Africa 2009
replacement(3)
Newly approved MC plant capacity South Africa 2009
expansion - phase 1
Mainstream inert grind South Africa 2010
projects
Lebowa Brakfontein South Africa 2010
Merensky
Newly approved Slag cleaning furnace 2 South Africa 2010
Base metals refinery South Africa 2010
expansion
Amandelbult East Upper South Africa 2012
UG2
Townlands ore South Africa 2014
replacement
Paardekraal South Africa 2015
Newly approved Twickenham South Africa 2016
Newly approved Amandelbult No 4 shaft South Africa 2019
project
Diamonds Snap Lake Canada 2008
Victor Canada 2008
Voorspoed South Africa 2009
Base Metals Collahuasi Chile 2009
debottlenecking
Barro Alto Brazil 2011
Los Bronces expansion Chile 2011
Ferrous Metals Sishen expansion South Africa 2009
Minas-Rio phase 1 Brazil 2011
Newly approved Sishen South(6) South Africa 2013
Coal Dawson Australia 2008
Lake Lindsay Australia 2008
Mafube South Africa 2008
Cerrejon Colombia 2008
MacWest South Africa 2009
Zondagsfontein South Africa 2010
Capex
Sector Project Country $m(1)
Platinum Mototolo JV South Africa 200
Marikana JV South Africa 36
Mogalakwena North South Africa 692
expansion(3)
Mogalakwena North South Africa 230
replacement(3)
Newly approved MC plant capacity South Africa 80
expansion - phase 1
Mainstream inert grind South Africa 188
projects
Lebowa Brakfontein South Africa 179
Merensky
Newly approved Slag cleaning furnace 2 South Africa 134
Base metals refinery South Africa 279
expansion
Amandelbult East Upper South Africa 224
UG2
Townlands ore South Africa 139
replacement
Paardekraal South Africa 316
Newly approved Twickenham South Africa 800
Newly approved Amandelbult No 4 shaft South Africa 1,602
project
Diamonds Snap Lake Canada 997
Victor Canada 1,021
Voorspoed South Africa 185
Base Metals Collahuasi Chile 64
debottlenecking
Barro Alto Brazil 1,500
Los Bronces expansion Chile 1,744
Ferrous Metals Sishen expansion South Africa 754
Minas-Rio phase 1 Brazil 3,456
Newly approved Sishen South(6) South Africa 782
Coal Dawson Australia 839
Lake Lindsay Australia 726
Mafube South Africa 218
Cerrejon Colombia 131
MacWest South Africa 47
Zondagsfontein South Africa 505
Sector Project Country Production volume(2)
Platinum Mototolo JV South Africa 130 kozpa refined platinum
Marikana JV South Africa 145 kozpa refined platinum
Mogalakwena North South Africa 230 kozpa refined platinum
expansion(3)
Mogalakwena North South Africa Replace 200 kozpa refined
replacement(3) platinum
Newly approved MC plant capacity South Africa 11 ktpa waterval converter
expansion - phase 1 matte
Mainstream inert grind South Africa Improve process recoveries
projects
Lebowa Brakfontein South Africa Replace 108 kozpa refined
Merensky platinum
Newly approved Slag cleaning furnace 2 South Africa 650 tpd increased slag
cleaning capacity
Base metals refinery South Africa 11 ktpa nickel
expansion
Amandelbult East Upper South Africa 100 kozpa refined platinum
UG2
Townlands ore South Africa Replace 70 kozpa refined
replacement platinum
Paardekraal South Africa Replace 120 kozpa refined
platinum
Newly approved Twickenham South Africa 180 kozpa refined platinum
Newly approved Amandelbult No 4 shaft South Africa Replace 271 kozpa refined
project platinum
Diamonds Snap Lake Canada 1.6 m carats pa
Victor Canada 0.6 m carats pa
Voorspoed South Africa 0.7 m carats pa
Base Metals Collahuasi Chile 30 ktpa copper(4)
debottlenecking
Barro Alto Brazil 36 ktpa nickel
Los Bronces expansion Chile 170 ktpa copper(4)(5)
Ferrous Metals Sishen expansion South Africa 13 mtpa iron ore
Minas-Rio phase 1 Brazil 26.5 mtpa iron ore pellet
feed (wet basis)
Newly approved Sishen South(6) South Africa 9 mtpa iron ore
Coal Dawson Australia 5.7 mtpa coking, semi-soft
and thermal
Lake Lindsay Australia 4.0 mtpa coking & semi-soft
Mafube South Africa 5.4 mtpa thermal
Cerrejon Colombia 3.0 mtpa (2nd stage) thermal
MacWest South Africa 2.7 mtpa thermal
Zondagsfontein South Africa 6.6 mtpa thermal
Future unapproved
First Full
production production
Sector Project Country date date
Base Metals Quellaveco Peru 2013 2013
Collahuasi expansion Chile 2010 2010
phase 1
Collahuasi expansion Chile 2014 2015
phase 2
Michiquillay Peru 2016 2017
Pebble USA 2015 2020
Ferrous Metals Sishen Pellet South Africa 2014 2015
Sishen Expansion 2 South Africa 2013 2014
Sishen C Grade South Africa TBD TBD
Minas-Rio phase 2 Brazil TBD TBD
Coal Heidelberg opencast South Africa 2009 2009
Elders opencast South Africa 2009 2011
Heidelberg underground South Africa 2013 2014
Elders underground South Africa 2011 2012
New Largo South Africa 2012 2015
Capex
Sector Project Country $m(7) Production volume(2)
Base Metals Quellaveco Peru 2,200 200 ktpa copper(4)
Collahuasi expansion Chile 750 650 ktpa copper(4)(8)
phase 1
Collahuasi expansion Chile TBD 1,000 ktpa
phase 2 copper(4)(8)
Michiquillay Peru TBD 300 ktpa copper(4)
Pebble USA TBD 350 ktpa copper(4)
Ferrous Metals Sishen Pellet South Africa 338 1.5 mtpa iron ore
pellets
Sishen Expansion 2 South Africa 775 10 mtpa iron ore
Sishen C Grade South Africa TBD 10 mtpa iron ore
Minas-Rio phase 2 Brazil TBD 26.5 mtpa pellet
feed (wet basis)
Coal Heidelberg opencast South Africa 35 0.9 mtpa thermal
Elders opencast South Africa 450 6.4 mtpa thermal
Heidelberg underground South Africa 300 4.2 mtpa thermal
Elders underground South Africa 240 3.2 mtpa thermal
New Largo South Africa 670 14.7 mtpa thermal
The Group has a number of other projects under evaluation including Der
Brochen, Pandora and Styldrift in Platinum, Cerrejon P40 and Roman in Coal and
Gahcho Kue in Diamonds.
(1) Capital expenditure shown on 100% basis, unless otherwise stated. Platinum
and Ferrous Metals projects reflect approved capex. Estimates for Base Metals,
Platinum and Diamonds are presented on a nominal basis, estimates for Coal and
Ferrous Metals are presented on a real basis
(2) Represents 100% of average incremental or replacement production, at full
production, unless otherwise stated
(3) Mogalakwena was formerly known as PPRust
(4) Projects will also produce molybdenum and silver by-products, Pebble will
produce molybdenum and gold by-products and Michiquillay will produce
molybdenum, gold and silver by-products
(5) Production represents average over first 10 years of the project
(6) Sishen South was approved on 30 July 2008
(7) Shown on 100% basis, approximate amounts
(8) Total production of mine when project ramps up to full production
For further information, please contact:
United Kingdom
Anna Poulter, Investor Relations
Tel: +44 (0)20 7968 2155
James Wyatt-Tilby, Media Relations
Tel: +44 (0)20 7968 8759
South Africa
Pranill Ramchander, Media Relations
Tel: +27 (0)11 638 2592
Notes to editors:
Anglo American plc is one of the world`s largest mining and natural resource
groups. With its subsidiaries, joint ventures and associates, it is a global
leader in platinum group metals and diamonds, with significant interests in
coal, base and ferrous metals, as well as an industrial minerals business. The
Group is geographically diverse, with operations in Africa, Europe, South and
North America, Australia and Asia.
(www.angloamerican.co.uk)
Webcast of presentation:
A live webcast of the annual results presentation, starting at 10.00am UK time
on 31 July, can be accessed through the Anglo American website at
www.angloamerican.co.uk.
Note: Throughout this half year financial report `$` denotes United States
dollars and `cents` refers to United States cents; operating profit includes
associates` operating profit, is before special items and remeasurements and
refers to continuing operations, unless otherwise stated; special items and
remeasurements are defined in note 6 and results of discontinued operations
are presented in note 14.
Underlying earnings refers to continuing operations unless otherwise stated and
is calculated as set out in note 9 to the condensed financial statements.
EBITDA is operating profit before special items and remeasurements,
depreciation and amortisation in subsidiaries and joint ventures and share of
EBITDA of associates and refers to continuing operations unless otherwise
stated. EBITDA is reconciled to total profit from operations and associates in
note 13 to the condensed financial statements and to cash inflows from
operations in the primary statements.
Financial review of Group results*
Group operating profit was a record $6,181 million, with operating profit from
core operations of $5,974 million up 30% compared to the corresponding period
in 2007. There was a significantly increased contribution from Ferrous Metals`
core businesses and from Coal, as well as increased contributions from Diamonds
and Base Metals where operating profit was higher than in the same period in
2007. Platinum`s operating profit was slightly lower than the corresponding
period in 2007, although contribution to underlying earnings increased.
The main driver for the increase in Group operating profit was higher prices
realised in the period, including copper, iron ore, manganese, coal and
phosphate fertilisers. Increased volumes from copper, phosphate fertilisers,
coal, iron ore and manganese ore also contributed to the increase. Coal
production in Australia in the first half was up 20% on 2007, with record
production in the latter months of the first half of 2008. Industrial Minerals`
contribution was lower as a result of the weakening housing market in the UK.
Group underlying earnings per share on a continuing basis for the period were
$2.90, an increase of 45% compared with 2007. Record Group underlying earnings
were $3,483 million, with underlying earnings from core operations up 28% to
$3,314 million.
Underlying earnings 6 months ended 6 months ended
$ million 30 June 2008 30 June 2007(1)
Profit for the financial period
attributable to equity shareholders 4,281 3,034
Operating special items including
associates 26 (4)
Operating remeasurements including
associates (8) (13)
Net profit on disposals including
associates (643) (195)
Financing remeasurements including
associates:
Foreign exchange gain on De Beers
preference shares (18) (1)
Unrealised net gains on non-hedge
derivatives (182) (27)
Tax on special items and remeasurements
including associates 8 43
Minority interests on special items and
remeasurements including
associates 19 (33)
Underlying earnings - continuing
operations 3,483 2,804
Underlying earnings - discontinued
operations - 254
Underlying earnings - total Group 3,483 3,058
Underlying earnings - core continuing
operations 3,314 2,590
Underlying earnings per share ($) -
continuing operations 2.90 2.00
Underlying earnings per share ($) -
discontinued operations - 0.18
Underlying earnings per share ($) -
total Group 2.90 2.18
(1) Comparatives have been adjusted to reclassify amounts relating to
discontinued operations
Profit for the period attributable to equity shareholders after special items
and remeasurements increased by 41% to $4,281 million compared with $3,034
million in the corresponding period in the prior year. The increase relates
mainly to strong operational results, as discussed above and in the Chief
Executive`s statement, and an increase in net profit on disposals as well as a
higher net unrealised gain on non-hedge derivatives related to net debt.
Net profit on disposals of $643 million including associates, was $448 million
higher than in the same period in 2007, and includes the net profit of $551
million arising on sale of the investment in China Shenhua Energy.
* Throughout the financial review, the Group results are presented on a
continuing basis unless otherwise stated
The Group`s results are influenced by a variety of currencies owing to the
geographic diversity of the Group.
The South African rand on average weakened against the US dollar compared with
the same period in 2007, with an average exchange rate of R7.66 compared with
R7.16. Currency movements positively impacted underlying earnings by $66
million. The weaker rand benefited operating results, although this was partly
offset by the stronger Brazilian real, Chilean peso and Australian dollar.
There was a significant beneficial effect on underlying earnings from increased
prices amounting to $1,265 million, particularly in respect of platinum,
palladium, rhodium, copper, iron ore, manganese, coal and phosphates.
Summary income statement 6 months ended 6 months ended
$ million 30 June 2008 30 June 2007(1)
Operating profit before special items
and remeasurements 5,121 4,496
Operating special items (22) 7
Operating remeasurements 25 19
Operating profit from subsidiaries and
joint ventures 5,124 4,522
Net profit on disposals 640 175
Share of net income from associates(2) 658 321
Total profit from operations and
associates 6,422 5,018
Net finance costs before special items
and remeasurements (159) (65)
Financing special items and
remeasurements 205 21
Profit before tax 6,468 4,974
Income tax expense (1,590) (1,480)
Profit for the financial period -
continuing operations 4,878 3,494
Minority interests (597) (460)
Profit for the financial period
attributable to equity shareholders -
continuing operations 4,281 3,034
Profit for the financial period
attributable to equity shareholders -
discontinued operations - 345
Profit for the financial period
attributable to equity shareholders -
total Group 4,281 3,379
Basic earnings per share ($) -
continuing operations 3.56 2.17
Basic earnings per share ($) -
discontinued operations - 0.24
Basic earnings per share ($) - total
Group 3.56 2.41
Group operating profit including
associates before special items and
remeasurements - continuing operations 6,181 4,990
Group operating profit including
associates before special items and
remeasurements - discontinued operations - 462
Group operating profit including
associates before special items and
remeasurements - total Group 6,181 5,452
(1) Comparatives have been adjusted to
reclassify amounts relating to
discontinued operations
(2) Operating profit from associates
before special items and remeasurements
-
continuing operations 1,060 494
Operating special items and
remeasurements (21) (9)
Operating profit from associates after
special items and remeasurements -
continuing operations 1,039 485
Net profit on disposals 3 20
Net finance costs (before remeasurements) (41) (40)
Financing remeasurements (5) 7
Income tax expense (after special items
and remeasurements) (313) (130)
Minority interests (after special items
and remeasurements) (25) (21)
Share of net income from associates -
continuing operations 658 321
In this document, reference has been made to core continuing operations.
Operations considered core to the Group are Base Metals, Platinum, Ferrous
Metals` core businesses (Kumba Iron Ore, Scaw Metals, Samancor Manganese and
Minas-Rio), Coal and Diamonds. The tables below reconcile operating profit and
underlying earnings from core operations to total Group operating profit and
underlying earnings.
Operating profit 6 months ended 6 months ended
$ million 30 June 2008 30 June 2007(1)
Base Metals 2,454 2,165
Platinum 1,467 1,517
Ferrous Metals - core businesses(2) 1,252 546
Coal 731 319
Diamonds 328 266
Corporate and Exploration(3) (258) (205)
Operating profit including associates
before special items and
remeasurements - core continuing
operations 5,974 4,608
Industrial Minerals 163 209
Ferrous Metals - other businesses(2) 44 173
Operating profit including associates
before special items and
remeasurements - continuing operations 6,181 4,990
Operating profit including associates
before special items and
remeasurements - discontinued operations - 462
Operating profit including associates
before special items and
remeasurements - total Group 6,181 5,452
Underlying earnings 6 months ended 6 months ended
$ million 30 June 2008 30 June 2007(1)
Base Metals 1,494 1,504
Platinum 850 717
Ferrous Metals - core businesses 675 236
Coal 543 242
Diamonds 166 156
Corporate and Exploration(3) (414) (265)
Underlying earnings including associates
before special items and
remeasurements - core continuing
operations 3,314 2,590
Industrial Minerals 139 181
Ferrous Metals - other businesses 30 33
Underlying earnings including associates
before special items and
remeasurements - continuing operations 3,483 2,804
Underlying earnings including associates
before special items and
remeasurements - discontinued operations - 254
Underlying earnings including associates
before special items and
remeasurements - total Group 3,483 3,058
(1) In the second half of 2007, Yang Quarry was reclassified from Industrial
Minerals to Coal to align with internal management reporting.
As such, the comparative data has been reclassified
(2)See Ferrous Metals and Industries operations review
(3) Corporate includes corporate activities, unallocated costs and insurance
costs
Special items and remeasurements
6 months ended
30 June 2008
Excluding
$ million associates Associates Total
Operating special items (22) (4) (26)
Operating remeasurements 25 (17) 8
Operating special items and
remeasurements 3 (21) (18)
6 months ended
30 June 2007(1)
Excluding
$ million associates Associates Total
Operating special items 7 (3) 4
Operating remeasurements 19 (6) 13
Operating special items and
remeasurements 26 (9) 17
(1) Comparatives have been adjusted to exclude amounts relating to discontinued
operations
Operating special items and remeasurements, including associates, amounted to
$18 million. The $8 million operating remeasurement gain relates to net gains
on non-hedge derivatives, principally due to a net gain on foreign currency
instruments held by MMX Minas-Rio and LLX Minas-Rio, partially offset by an
unrealised loss on an embedded derivative at Minera Loma de Niquel and net
losses on non-hedge derivatives from associates. This was offset by operating
special items of $26 million which included costs associated with the "One
Anglo" restructuring initiatives amounting to $24 million.
Net profit on the sale of operations, including associates, amounted to $643
million (2007: $195 million), and arises mainly on the sale of the Group`s
investment in China Shenhua Energy which generated a profit on disposal of $551
million.
Financing remeasurements, including associates, are made up of unrealised net
gains of $182 million on non- hedge derivatives related to net debt and a $18
million foreign exchange gain on De Beers dollar preference shares held by a
rand denominated entity. The unrealised net gains on non-hedge derivatives
principally comprise an unrealised gain on an embedded interest rate
derivative.
The De Beers US dollar preference shares held by a rand functional currency
entity are classified as `financial asset investments` and are retranslated at
each period end. The resulting rand:US dollar foreign exchange gains and losses
are reported through the income statement as a financing remeasurement.
Discontinued operations
On 2 July 2007 the Paper and Packaging business was demerged from the Group by
way of a dividend in specie paid to shareholders.
On 2 October 2007 the Group sold 67.1 million shares in AngloGold Ashanti which
reduced the Group`s shareholding from 41.6% to 17.3%. The Group`s
representation on the company`s board was also withdrawn at this time. The
remaining investment is accounted for as a financial asset investment. At 30
June 2008, the Group`s percentage shareholding was 16.6%. On 7 July 2008, the
Group subscribed for 11,172,254 additional shares in AngloGold Ashanti Limited
as part of a rights issue. The total cash paid for the subscription was $280
million and the Group`s shareholding in AngloGold Ashanti Limited reduced from
16.6% to 16.3%.
Both of these operations were considered discontinued in the financial
statements for the year ended 31 December 2007.
6 months ended 6 months ended
$ million 30 June 2008 30 June 2007
Profit for the financial period -
discontinued operations - 288
Special items and remeasurements - 91
Profit for the financial period after
special items and
remeasurements- discontinued operations - 379
Minority interests - discontinued
operations - (34)
Profit for the financial period
attributable to equity shareholders -
discontinued operations - 345
Please refer to note 14 for further details of the discontinued operations.
Net finance costs
Net finance costs from continuing operations, excluding a $205 million gain on
special items and remeasurements (2007: gain of $21 million), increased from
$65 million in 2007, to $159 million. The increase reflects higher interest
costs due to an increase in average net debt.
Taxation
6 months ended
Before special 30 June 2008
items and Associates` tax
remeasurements and minority Including
$ million interests associates
Profit before tax 5,643 338 5,981
Tax (1,582) (313) (1,895)
Profit for
financial period 4,061 25 4,086
Effective tax
rate including
associates % 31.7%
6 months ended
30 June 2007(1)
Before special Associates` tax
items and and minority Including
$ million remeasurements interests associates
Profit before tax 4,737 148 4,885
Tax (1,440) (127) (1,567)
Profit for
financial period 3,297 21 3,318
Effective tax
rate including
associates % 32.1%
(1) Comparatives have been adjusted to exclude amounts relating to discontinued
operations
IAS 1 Presentation of Financial Statements requires income from associates to
be presented net of tax on the face of the income statement. The associates`
tax is therefore not included within the Group`s total tax charge.
Associates` tax before special items and remeasurements included within `Share
of net income from associates` for the period ended 30 June 2008 was $313
million (2007: $127 million).
The effective rate of tax before special items and remeasurements including
share of associates` tax was 31.7%. This was a decrease from the equivalent
effective rate of 32.1% in the six months ended 30 June 2007.
The main reason for this net decrease was the relative impact of the statutory
tax rates, on a fully distributed basis where appropriate, of the countries in
which the Group`s operations are based, and a reduction of the statutory tax
rate in South Africa. In future periods it is expected that the effective tax
rate, including associates` tax, will remain above the UK statutory tax rate.
Balance sheet
Equity attributable to equity shareholders of the Company was $23,250 million
compared with $22,461 million at 31 December 2007.
The share buyback programme of $4 billion, announced in August 2007 is 35%
complete, with around $1.4 billion of shares having been repurchased at 30 July
2008.
Net debt, excluding hedges, was $5,400 million, an increase of $161 million
from 31 December 2007. The increase reflects the impact of the acquisition of
the Foxleigh joint venture in Queensland, Australia, increased planned capital
expenditure on projects in Base Metals and Ferrous Metals, the share buyback
and the acquisition of a larger stake in Anglo Platinum Limited.
Net debt at 30 June 2008 comprised $8,745 million of debt, offset by $3,345
million of cash and cash equivalents. Net debt to total capital(1) at 30 June
2008 was 20.1%, compared with 20.0% at 31 December 2007.
(1) Net debt to total capital is calculated as net debt divided by total
capital, less investments in associates. Total capital is net assets excluding
net debt.
Cash flow
6 months ended 6 months ended
$ million 30 June 2008 30 June 2007
Net cash inflows from operating
activities - continuing operations 3,822 3,218
Net cash inflows from operating
activities - discontinued operations - 460
Net cash inflows from operating
activities - total Group 3,822 3,678
Net cash inflows from operating activities on a continuing operations basis
were $3,822 million compared with $3,218 million in the first half of 2007.
Acquisition expenditure from continuing operations accounted for an outflow of
$1,495 million compared with $58 million in the same period in 2007. This
included $605 million in respect of the Group`s acquisition of a 70% interest
in the Foxleigh joint venture in Queensland, Australia and $578 million in
respect of the purchase of additional Anglo Platinum Limited shares.
Cash outflow from the purchases of tangible assets amounted to $1,998 million,
an increase of $394 million compared to the same period in 2007. Increased
capital expenditure by Platinum, Base Metals, Ferrous Metals and Industrial
Minerals was partly offset by lower spend at Coal.
Proceeds from disposals on a continuing basis totalled $707 million and include
net proceeds of $704 million from the sale of our holding in China Shenhua
Energy.
Capital expenditure on tangible assets and biological assets
6 months ended 6 months ended
$ million 30 June 2008 30 June 2007(1)
Platinum 697 643
Base Metals 554 148
Ferrous Metals and Industries 268 250
Coal 352 444
Industrial Minerals 118 104
Other 9 15
Investment in biological assets -
continuing operations - -
Capital expenditure on tangible assets
and biological assets -
continuing operations 1,998 1,604
Paper and Packaging - 186
Investment in biological assets -
discontinued operations - 26
Capital expenditure on tangible assets
and biological assets -
discontinued operations - 212
Capital expenditure on tangible assets
and biological assets - total
Group 1,998 1,816
(1) In the second half of 2007, Yang Quarry was reclassified from Industrial
Minerals to Coal to align with internal management reporting.
As such, the comparative data has been reclassified
Capital expenditure shown above comprises cash expenditure on tangible assets
and biological assets.
Segmental capital expenditure shown in note 3 includes accruals, expenditure on
acquisitions and intangible assets and capitalised interest, but excludes
expenditure on biological assets.
Weighted average number of shares
The weighted average number of shares used to determine earnings per share in
2008 was 1,203 million compared with 1,400 million in the same period in 2007.
This reflects the effect of the share buyback programme as well as the Anglo
American share consolidation on demerger of Mondi which, on 2 July 2007,
resulted in every 100 existing Anglo American ordinary shares being exchanged
for 91 new Anglo American ordinary shares.
Dividends
An interim dividend of 44 US cents per share, to be paid on 18 September 2008,
has been declared.
Principal risks and uncertainties
Anglo American is exposed to a variety of risks and uncertainties which may
have a financial or reputational impact on the Group and which may also impact
the achievement of social, economic and environmental objectives.
The principal risks and uncertainties facing the Group at the year end were set
out in detail in the Operating and financial review section in the Annual
Report 2007, and remain appropriate in 2008. Key headline risks relating to the
following were identified:
* Safety, health and environmental
* Treasury and capital, which includes currency and commodity prices
* Suppliers
* Contractors
* Political, legal and regulatory
* Inflation
* Natural events and damage to assets by fire or machinery breakdown
* Reserves and resources
* Exploration
* Employees
* Operational performance, including project execution
* Community relations
* Acquisitions
* Infrastructure
* Critical accounting judgements and key sources of estimation and uncertainty
The Group is exposed to changes in the economic environment, as with any other
business. This is discussed throughout the Principal risks and uncertainties
section of the Annual Report 2007.
Details of any risks and uncertainties specific to the year are covered in the
Operations review section.
The Annual Report 2007 is available on our website www.angloamerican.co.uk.
Forward looking statements
This half year financial report contains certain forward looking statements
with respect to the financial condition, results, operations and businesses of
the Group. These statements and forecasts involve risk and uncertainty because
they relate to events that depend on circumstances in the future. There are a
number of factors that could cause actual results or developments to differ
from those expressed or implied by these forward looking statements.
Operations review for the six months ended 30 June 2008
In the operations review on the following pages, operating profit includes
associates` operating profit and is before special items and remeasurements
unless otherwise stated. Capital expenditure relates to cash expenditure on
tangible and biological assets. Share of Group operating profit and share of
Group net operating assets for both 2008 and 2007 are based on continuing
operations and therefore, in 2007, exclude the contribution of Mondi and
AngloGold Ashanti.
BASE METALS
6 months 6 months
$ million ended ended
(unless otherwise stated) 30 June 2008 30 June 2007
Operating profit 2,454 2,165
Copper 1,941 1,428
Nickel, Niobium, Mineral Sands and Phosphates 425 436
Zinc 149 345
Other (61) (44)
EBITDA 2,623 2,329
Net operating assets 5,666 4,937
Capital expenditure 554 148
Share of Group operating profit 40% 43%
Share of Group net operating assets 19% 22%
Anglo Base Metals generated its highest ever operating profit of $2,454 million
(2007: $2,165 million). The copper and zinc divisions and the phosphate
fertiliser operation increased production in an environment of strong copper
and fertiliser prices. Labour related disruptions and furnace downtime
contributed to lower nickel production. Lower nickel and zinc prices combined
with adverse exchange rate movements and further rises in the costs of energy,
labour and most key consumables to put pressure on margins.
Markets
6 months 6 months
ended ended
Average(1) prices (c/lb) 30 June 2008 30 June 2007
Copper 368 307
Nickel 1,237 2,024
Zinc 103 162
Lead 118 90
(1) Represents average market price for the period
With the exception of copper and lead, the prices of base metals declined over
the period, particularly in the second quarter against a backdrop of weakening
demand, rising stocks and price induced demand erosion. The copper market
remained in balance, with stocks at low levels due to supply side disruptions
remaining, for the fourth consecutive year, at the top end of estimates.
Phosphate fertiliser prices attained record levels, more than doubling since
the comparable period of 2007, due to increased demand following improved
agricultural market conditions as soya and corn prices have risen. Demand for
agricultural products has been driven by growing demand for food in emerging
markets and for biofuels worldwide.
Operating performance
6 months 6 months
ended ended
30 June 2008 30 June 2007
Copper division
Operating profit ($m) 1,941 1,428
Attributable production (tonnes) 320,700 308,300
Collahuasi production on an attributable basis was 98,500 tonnes or 18% above
2007 as a result of anticipated higher sulphide ore grades and higher sulphide
ore processed (mainly as a result of the Q1 2007 shutdown of the mill to
replace the SAG mill 3 motor stator), partially offset by lower cathode
production from heaps due to a decline in oxide ore grade processed. Los
Bronces production was marginally higher, at 117,300 tonnes largely as a result
of sulphide ore feed grade.
Mantos Blancos saw cathode production fall as a result of reduced purchases of
third party solutions, but was able to partially offset this as a result of
increased sulphide mill throughput, with the net effect that production fell 9%
to 41,700 tonnes. El Soldado production decreased as a result of lower grades
and ore treated and first half production was 29,600 tonnes (2007: 35,800).
Mantoverde production rose 9% to 32,300 tonnes with increased heap leach ore
treated and improved heap leach recoveries offsetting slightly lower heap and
dump leach grades.
Chagres production was 75,000 tonnes, 9% down on the same period in 2007
largely as a result of a scheduled 10 day maintenance shutdown and lower
concentrate grades.
Anglo American inherited a 1978 agreement with Empresa Nacional de Mineria
(Enami), the Chilean state mining company, when it acquired Disputada de Las
Condes (since renamed Anglo American Sur) in 2002.
The agreement grants Enami the right, subject to certain conditions and
limitations, to acquire up to a 49% minority interest in Anglo American Sur,
the wholly owned Group company that owns the Los Bronces and El Soldado copper
mines and the Chagres smelter. These conditions include limiting the window for
exercising the right to once every three years in the month of January until
January 2027. Whilst not exercised in the past, the next such window for
exercising the right is January 2009, although it is not known whether Enami
will choose to exercise its right then or during any subsequent window. The
calculations of the price at which Enami can exercise its right are complex and
confidential but do, inter alia, take account of company profitability over a
five year period and the exercise price would therefore reflect the highly
favourable pricing environment for copper in the five years to 31 December
2008.
6 months 6 months
ended ended
Nickel, Niobium, Mineral Sands and Phosphates 30 June 2008 30 June 2007
Operating profit ($m) 425 436
Attributable nickel production (tonnes) 9,600 12,900
Falling nickel prices, combined with significant cost and exchange rate
pressures, impacted nickel operating profits, but was largely offset by a
record performance from the phosphate operations at Copebras. Codemin output
increased marginally to 4,900 tonnes due to higher grades and recoveries. Loma
de Niquel had a difficult first half year with production falling by 43% to
4,700 tonnes. Strike action in February and March was followed by a number of
ramp up difficulties. Heavy rains in the second quarter and ongoing unplanned
refractory and equipment failures further impacted production. Sales
performance at 5,900 tonnes (2007: 7,700) fared better than production.
At Catalao, niobium production was flat.
Copebras continues to operate at satisfactory levels and, despite cost
(particularly sulphur) and foreign exchange pressures, reported record profits
on the back of improved sales volumes (an average of around 5% across the
various fertiliser product lines) and prices that have more than doubled over
the past year.
In January 2008, Minera Loma de Niquel ("MLdN") was notified of the intention of
the Venezuelan Ministry of Basic Industries and Mining ("MIBAM") to cancel 13
of its exploration and exploitation concessions due to MLdN`s alleged failure
to fulfil certain conditions of the concessions. These concessions do not
include the concessions where the current mining operations and metallurgical
facilities are located. MLdN believes that it has complied with the conditions
of these concessions and has lodged administrative appeals against the notices
of termination. Since the MIBAM has not ruled on these appeals within the
applicable statutory time periods, MLdN is now entitled to file further appeals
with the Tribunal Supremo de Justicia, a course of action which it is currently
considering. Operations are continuing as normal. Anglo American and MLdN
continue to strive to resolve the matter by way of constructive dialogue;
however Anglo American and MLdN believe that there is a valid legal basis to
reverse the notices of termination and will pursue all appropriate legal and
other remedies and actions to protect their respective interests both under
Venezuelan and international law.
At 30 June 2008, Anglo American`s interest in the book value of MLdN, including
its mineral rights, was $571 million (as included in the Group`s balance
sheet). In the six months ended June 2008, MLdN`s production and contribution
to the Group`s operating profits were 4,700 tonnes of nickel in ferronickel and
$67 million respectively. The average price of nickel in the six months ended
June 2008 was 1,237 c/lb. At 29 July 2008, the price of nickel was 829 c/lb.
6 months 6 months
ended ended
Zinc division 30 June 2008 30 June 2007
Operating profit ($m) 149 345
Attributable zinc production (tonnes) 171,100 168,500
Attributable lead production (tonnes) 31,800 30,400
Skorpion produced 68,600 tonnes of zinc in the first half of 2008 (2007: 74,600
tonnes) primarily due to decreased mining throughput arising from power
shortages that were experienced in southern Africa in the first quarter of the
year. Plant throughput was, however, maintained throughout three weeks of
industrial action in May.
Black Mountain produced 15,300 tonnes of zinc, and 23,600 tonnes of lead
(14,900 tonnes and 21,400 tonnes respectively, in the first half of 2007).
Notwithstanding the aforementioned power shortages, ore mined and ore milled
were higher than last year as the Deeps Shaft continued to ramp up production.
Zinc grades were lower than the same period in 2007, largely due to lower
tonnages of higher grade Gamsberg ore being processed, while lead grades rose.
Lisheen produced 87,200 tonnes of zinc and 8,200 tonnes of lead in six months
ended 30 June 2008 (79,000 tonnes and 9,000 tonnes respectively, in the first
half of 2007). Ore production was impacted by poor ground conditions but zinc
head grades increased as higher grade stopes in the Bog Zone orebody were
brought into production.
Projects
The Barro Alto project, which will result in the construction of a 36,000 tpa
ferronickel operation in Brazil, is currently 40% complete in terms of major
milestones and remains on track to achieve first metal-tap in the first quarter
of 2010, with 70% of orders now having been placed.
The Los Bronces expansion project remains on schedule to enter production in
early 2011. The project is contending with significant cost pressures and
efforts to limit their impact are ongoing.
The debottlenecking project at Collahuasi, which will result in increasing
sulphide mill throughput to 140,000 tpd, will enter production in October 2008.
The phase 1 expansion, up to a level of circa 170,000 tpd, will be presented
for approval in the second half of 2008 with commissioning currently forecast
for 2010. With the significant exploration success at Rosario Oeste, studies
are under way targeting a phase 2 expansion to increase production to around
the 1 million tpa level within a five to seven year time horizon.
The 200,000 tpa Quellaveco project revised feasibility study remains on target
for completion before year end.
Both Mantoverde (sulphide ore life extension) and Chagres (refinery plus
possible expansion) have pre- feasibility and conceptual studies under way.
Following the successful $403 million tender for Michiquillay in April 2007,
the focus has been on developing a productive relationship with the local
communities, culminating, in June 2008, in reaching formal agreements with
those communities. As a result, a four year programme comprising exploration,
pre-feasibility study and feasibility study has now commenced.
Progress is being made at the 50% owned Pebble project with the aim of
completing a pre-feasibility study and then assessing all options during 2009.
The objective is to obtain permits and to engineer, construct and operate a
world class mine which operates to the highest environmental standards and
which contributes to the sustainable development of the Alaskan economy.
Following the success of exploration drilling at Gamsberg East and the supply
side outlook for the zinc industry, a decision has been made to commence an
optimisation evaluation of Gamsberg. This evaluation, which will take 18 months
to complete, will consider the 2000 feasibility study but will also look at
other options as to scale as well as opportunities arising from technological
evolution since 2000.
A feasibility study is under way at Copebras for an expansion project that will
more than double fertiliser production to approximately 2.3 Mtpa. The
feasibility study is expected to be completed by late 2009.
Scoping studies, examining what will be the first phase of the JacarA??c nickel
project in Brazil, have commenced and preliminary indications of the project
scale and economics are anticipated in 2009.
Outlook
Production of copper, zinc, lead, niobium and fertilisers are all forecast to
be higher than in 2007, while nickel production will be lower, primarily as a
result of the first half performance of Loma de Niquel. Exchange rate and cost
pressures remain, while power constraints in northern Chile and southern Africa
remain of concern. A balanced market is forecast for copper as a result of the
magnitude of supply side disruptions.
PLATINUM
6 months 6 months
$ million ended ended
(unless otherwise stated) 30 June 2008 30 June 2007
Operating profit 1,467 1,517
EBITDA 1,714 1,737
Net operating assets 9,369 7,617
Capital expenditure 697 643
Share of Group operating profit 24% 30%
Share of Group net operating assets 31% 34%
Anglo Platinum`s operating profit for the first six months of 2008 was $1,467
million, a decrease of 3% when compared with the same period in 2007. The
decrease was attributable to lower production volumes, offset by higher US
dollar prices realised on metals sold and a weaker rand / US$ exchange rate.
Strong demand together with constrained supply to the market by major producers
resulted in Anglo Platinum achieving significantly higher US dollar metal
prices on its sales. The average dollar price realised for the basket of metals
sold equated to $3,115 per platinum ounce, 19% higher than in 2007, with firmer
platinum, rhodium and palladium prices making the largest contribution to the
increase. The average prices achieved on platinum, palladium and nickel sales
for the half year were $1,906 per ounce, $436 per ounce and $12.14 per pound
respectively. The contract sales terms for rhodium were successfully
renegotiated in the first quarter of 2008. As a result of the revised contract
terms, the specific details of which are subject to contractual confidentiality
the sales price of rhodium will move closer towards market prices during 2008
and 2009.
Consequently, the average price achieved on rhodium sales in the first six
months of 2008 increased to $5,833 per ounce.
Equivalent refined platinum production from the mines managed by Anglo Platinum
and its joint venture partners for the first half of 2008 was 1,128,200 oz, a
decrease of 11%, or 145,800 oz, when compared with the first half of 2007.
Factors contributing to the decrease include:
? the disruption of operations at the Amandelbult mine as a result of
underground working areas being flooded. Production has now been restored;
? lower throughput at the Mogalakwena South concentrator;
? the suspension of operations to rehabilitate shaft steelwork at the
Turffontein shaft of Rustenburg Mine;
? an overall expected reduction in built-up head grade;
? the electricity supply constraints in January and the associated ramp up
period when supply resumed.
Repair work at the Polokwane Smelter, following a minor run-out in February,
was completed in the first half of 2008 and normal smelting operations have
recommenced. When combined with the scheduled rebuild of Mortimer furnace and
slag cleaning furnace repairs, this resulted in an increase in pipeline stocks
in the first half of 2008.
Consequently, refined platinum of 1,001,100 oz for the first half of 2008
represents a decrease of 16% when compared to the same period in 2007. To
ensure that Anglo Platinum met contractual delivery of refined platinum to its
customers, some 111,000 oz were sold from normal working levels of refined
stock, resulting in refined platinum sales for the six months ended 30 June
2008 of 1,112,000 oz.
The cash operating cost per equivalent refined platinum ounce in rand terms
increased by 46% due primarily to reduced mining production and expected lower
grades than achieved in the strong first half of 2007, intensified by above
inflation pressures experienced in key input costs, including diesel,
chemicals, steel grinding media, explosives and cement.
Anglo Platinum remains confident of continued robust demand for platinum and is
continuing with its expansion programme. In the first half of 2008, Anglo
Platinum approved a number of projects including Aman delbult No.4
Shaft, the Twickenham Platinum Mine project and the Waterval Slag Cleaning
Furnace 2 project.
The $1.6 billion Amandelbult No.4 Shaft project will replace 271,000 oz of
refined platinum per annum from 2019. The project will co-extract the Merensky
and UG2 reefs and will partially replace diminishing Merensky reserves while
providing a moderate increase in UG2 production. The lengthy process of shaft
sinking and build up to steady state volumes results in an overall project
duration of 12 years, with first production expected at the end of 2015.
The $800 million Twickenham platinum mine project, at steady state, will
contribute an additional 180,000 oz of refined platinum from 2016. The project
will expand current operations and exploit the UG2 reef horizon.
The $134 million Slag Cleaning Furnace will double the existing Waterval
Converter Slag smelting capacity during 2010. The increased capacity
requirement is a direct result of Anglo Platinum`s expansion strategy and the
requirement to maintain current recoveries.
The $80 million MC Plant capacity expansion project (phase 1) will increase the
current capacity from 64 ktpa Waterval Converter Matte to 75 ktpa during 2009.
Markets
High platinum prices will continue to be supported by lower than anticipated
supplies from South Africa, the weak US dollar and investment demand.
Platinum auto and industrial demand remains firm, with the switch to smaller
cars in the US impacting palladium more than platinum. Automobile growth in
emerging markets continues, offsetting some of the weakness in the major
markets.
Consistently high prices coupled with price volatility this year have reduced
confidence in platinum jewellery at the trade level, despite strong consumer
demand. Evidence of such strong demand is seen through the increasing levels of
recycling of platinum jewellery in China.
Outlook
Management continues to vigorously address unit costs. The emphasis on
increasing volumes and improving operating efficiencies remains a key driver of
performance at operations. Risks affecting future production include the impact
of constrained electricity supply on production and expansion projects, the
ongoing skills shortage and production stoppages related to safety.
Anglo Platinum`s commitment to employee safety will continue to be an area of
focus. Mining output in the second half of the year will increase significantly
as Amandelbult and the Turffontein shaft have returned to full production and
the Mogalakwena North project ramp up is almost complete. Smelter availability
for the balance of 2008 will assist in reducing pipeline stocks accumulated at
the half-year. Consequently, the outlook for refined platinum production
remains 2.4 million ounces for 2008.
FERROUS METALS AND INDUSTRIES
6 months 6 months
$ million ended ended
(unless otherwise stated) 30 June 2008 30 June 2007
Operating profit 1,296 719
Kumba Iron Ore 677 409
Scaw Metals 121 84
Samancor Manganese 485 57
Minas-Rio (16) -
Other (15) (4)
Core businesses 1,252 546
Highveld Steel - 108
Tongaat-Hulett / Hulamin 44 65
Other businesses 44 173
EBITDA 1,359 780
Net operating assets 5,360 1,865
Capital expenditure 268 250
Share of Group operating profit 21% 14%
Share of Group net operating assets 18% 8%
Ferrous Metals achieved a record operating profit of $1,296 million, an
increase of 80% on the same period in 2007, with operating profit from core
businesses (Kumba Iron Ore, Scaw Metals, Samancor Manganese and Minas-Rio)
increasing by 129%, mainly due to higher iron ore and manganese ore sales
volumes and prices, and alloy prices.
Kumba Iron Ore achieved a record operating profit of $677 million, an increase
of 66% on 2007, due to higher iron ore sales volumes and prices. Operating
costs increased owing to inflationary pressures, the rising costs of fuels and
lubricants and an increase in maintenance related activities. Production
increased 9% to 17.1 million tonnes of iron ore, mainly due to the Sishen
Expansion Project which commenced commercial production towards the end of
2007.
Export sales for the first three months of 2008 were based on the 9.5% increase
in the iron ore benchmark price for the 2007/2008 iron ore year. Final
settlement for 2008/2009 between Kumba and its customers is anticipated in the
third quarter of 2008. In preparing the financial results, Kumba has used a
prudent estimate of future prices. These price estimates (April to June 2008)
are based on settlements announced by the three iron ore majors and take into
account Kumba`s lump-to-fines ratio, its importance as a supplier to the Asian
market and the physical characteristics of its products.
Scaw delivered a record operating profit of $121 million, up 44% on 2007, with
strong demand for most products in South Africa and internationally. Margins
remained under pressure owing to significant price increases in key raw
materials. In June 2008, Scaw South Africa acquired Ozz Industries, a
manufacturer of crusher and mill consumable steel wear parts principally for
the mining and aggregate industries in Africa, Australia, Europe and North
America.
The attributable share of Samancor Manganese operating profit increased more
than eight-fold to $485 million, mainly due to significantly higher manganese
ore and alloy prices driven by the high demand for steel, as well as higher
manganese ore sales volumes.
The Tongaat-Hulett and Hulamin contribution to operating profit declined by 32%
to $44 million. These businesses, which were consolidated for the first six
months of 2007, were equity accounted for the first half of 2008 following the
unbundling of Hulamin from Tongaat-Hulett and related empowerment transactions
in June 2007.
Projects
The $782 million, 9 Mtpa Sishen South Project, which involves the development
of an opencast mine some 80 kilometres south of Sishen mine, has been approved,
with first production anticipated in 2012.
The $754 million, 13 Mtpa Sishen Expansion Project has commenced commercial
production. Ramp up continues and full design capacity is expected to be
achieved in 2009.
In Brazil, Anglo American has agreed to acquire a 63.3% shareholding in a new
company ("IronX"), which holds a 51% interest in the Minas-Rio iron ore project
and 70% in the Amapa? iron ore system, from Eike Batista and other selling
shareholders for $3.5 billion. Subject to the satisfaction of final conditions
under the transaction agreements, this transaction will be completed by 5
August 2008. Following completion of this transaction, Anglo American has
committed to extend the offer to the minority shareholders in IronX at the same
price per share. The successful completion of the offer to the minority
shareholders will result in Anglo American owning 100% of the Minas-Rio
project, 70% of the Amapa? system and 49% of LLX Minas-Rio, the owner of the
Port of Acu, at a cost of approximately $5.5 billion in cash for 100% of the
issued and outstanding shares in IronX. This would mark a significant step in
Anglo American`s aim of becoming a substantial player in the global seaborne
iron ore trade.
Planned annual capacity of the Minas-Rio iron ore project will be 26.5 Mtpa of
iron ore pellet feed, with start up expected during 2010.
Outlook
Global demand for steel is expected to remain strong through 2008, underpinning
demand for iron ore. The prospects for iron ore are positive, with strong
Chinese demand continuing. Major producers, including Kumba Iron Ore, are
expanding production to meet incremental demand.
Manganese ore and alloy demand is forecast to remain strong which, together
with constraints in global seaborne supply, will continue to have a favourable
impact on prices through 2008.
Demand for Scaw`s products is forecast to remain strong, driven by mining
demand in Latin America and mining and construction led growth in South Africa
and Canada. Increasing input costs will, however, place further pressure on
Scaw`s margins.
COAL
6 months 6 months
$ million ended ended
(unless otherwise stated) 30 June 2008 30 June 2007(1)
Operating profit 731 319
South Africa 369 178
Australia 225 38
South America 157 115
Canada 3 -
Projects and corporate (23) (12)
EBITDA 900 441
Net operating assets 5,071 3,388
Capital expenditure 352 444
Share of Group operating profit 12% 6%
Share of Group net operating assets 17% 15%
(1) In the second half of 2007, Yang Quarry was reclassified from Industrial
Minerals to Coal to align with internal management reporting. As such, the
comparative data has been reclassified.
Operating Profit increased by 129% to $731 million. Profits increased in all
the regions in which Coal operates.
Markets
The first half of the year has seen historically high prices for both thermal
and metallurgical coal export prices.
Metallurgical coal benchmark prices saw a three-fold increase from 2007 on the
back of continued high demand, coupled with exceptional supply constraint
issues. Queensland experienced its worst floods in more than 10 years and this
impacted materially on supplies into the metallurgical coal market. Rail and
port constraints continued, albeit at a less disruptive level than in 2007.
Thermal coal prices reached a historical high at the half year mark, double
that at the beginning of the year, on the back of tight demand and supply
dynamics. Supply into the thermal coal market has been affected by the
electricity shortages in South Africa and China`s harsh winter, which resulted
in China reducing exports and increasing imports.
Operating performance
South Africa
Operating profit from South Africa sourced coal was $369 million, 107% higher
than the corresponding period in the prior year of $178 million. Export prices
were 52% higher for the first half of 2008, more than outweighing lower
domestic and export sales volumes that were 3% lower than the prior year.
Production for the year to date at 28.0 Mt (29.4 Mt 2007) was 5% lower than
prior year. Production at all operations, with the exception of Kleinkopje,
Mafube, Greenside and New Vaal, was below the prior year. This was mainly as a
result of power supply restrictions in South Africa during the first two months
of the year and higher rainfall than in the prior year affecting the opencast
operations. At Kleinkopje and Landau, additional tonnes were produced (at 100%
yield) for supply to Eskom in response to its shortage of coal stocks, while
Mafube is ramping up to full production in the current year.
Total sales for the year to date at 28.0 Mt were 3% lower than prior year
reflecting the lower production. Export sales were lower by 0.4 Mt or 5%
compared to the prior year as the shipping schedule was negatively impacted by
below target performance from Transnet Freight Rail, as well as the lower
production. Total domestic sales were 0.4 Mt or 2% below the prior year, with
marginally higher Eskom sales being offset by lower domestic non- Eskom sales.
Capital expenditure increased by $31 million due to higher expansionary capital
related to the Mafube, Zondagsfontein and MacWest projects, offset by lower
stay-in-business capital at the trade collieries.
The construction of the Zondagsfontein project which will produce 6.6 Mtpa of
Export and Eskom coal is under way, with production anticipated during 2009.
Australia
Operating profit of $225 million from the Australian operations was
significantly higher than 2007. Heavy rainfall limited production early in the
year, with the later months achieving record volumes in the second quarter.
High sales prices and solid production from the coking coal operations have
delivered additional turnover, with a 22% half-on-half increase in coking coal
sales. Port constraints which affected the 2007 results have been partly
mitigated by securing alternative and additional port entitlements.
The Lake Lindsay project commissioning is progressing successfully, with design
rates achieved in week 2 of the commissioning schedule. Year to date milestones
have been achieved ahead of plan, with the overland conveyor on target for
August. The Dawson expansion project continues to ramp up in 2008, with the
implementation of improvement plans and the addressing of short term
constraints.
Supply constraints further increased the price of export coal with the heavy
rain compounding the infrastructure constraints. The full benefit of the high
prices will be realised during the second half of 2008 with coking coal market
fundamentals expected to remain firm and the price of thermal coal expected to
increase.
South America
Sales volume increased overall, as growth at Cerrejon continued as planned
towards the 32 Mt profile. This offset lower sales from Carbones del Guasare
("CDG") in Venezuela, arising from the ongoing political and social
uncertainty. Attributable coal production from Cerrejon rose by 11% to 5.2 Mt,
whereas coal production at CDG was marginally lower at 0.6 Mt over the period.
Canada
In Canada, Peace River Coal commenced commercial production in January. Total
coal production for the first six months of 2008 was 0.4 Mt.
Outlook
Export prices are expected to remain strong and exceed those of the previous
year. Many initiatives have been implemented to maximise production to take
advantage of the prevailing strong market conditions.
Metallurgical coal exports from Australia are sold on contracts which are
negotiated annually. Many such contracts have commencement dates of April or
July. Consequently the prices to be received in the second half will reflect
the newer higher price contracted. This will drive a higher level of
profitability in the second half of the financial year and the first half of
2009.
DIAMONDS
6 months 6 months
$ million ended ended
(unless otherwise stated) 30 June 2008 30 June 2007
Share of associate`s operating profit 328 266
EBITDA 397 310
Group`s aggregate investment in De Beers 1,844 2,201
Share of Group operating profit 5% 5%
The Group`s share of operating profit from De Beers increased by 23% to $328
million as strong demand enabled the Diamond Trading Company ("DTC") to
increase prices steadily during the first half of the year and expansion
projects came on stream in the period. Sales of rough diamonds (including
those through joint ventures) were 10% higher than the same period in the prior
year at $3.3 billion. The DTC completed its Sightholder selection process,
appointing 78 clients for the new three year contract period.
De Beers has completed the construction and handover of a new $83 million
diamond valuing and sorting facility in Gaborone, home to DTC Botswana, the
largest and most sophisticated of its kind in the world. In the first half of
2008, the DTC supplied approximately $637 million worth of rough diamonds to 16
clients operating in Botswana, 11 in Namibia and 17 in South Africa, and
approximately $13 million to the State Diamond Trader in South Africa.
The `Forevermark` brand announced plans to launch in selected jewellers in Hong
Kong and China in Q4 2008 and in South Africa, Japan, India and Taiwan in the
first half of 2009. The `Forevermark` brand will also launch its own
independent grading operations, exclusively for its diamonds, in Belgium and
the UK, with further new locations planned for 2009 and 2010.
In South Africa, the sale of the Cullinan Diamond Mine and the Kimberley
Underground operations to Petra Diamonds Ltd will be finalised in the second
half of 2008. New order mining rights have been granted in respect of the
Cullinan and Voorspoed mines, and the new order rights for Venetia are in the
process of being executed. The applications for conversion of De Beers`
remaining rights are being processed by the South African Department of
Minerals and Energy.
Archangel Diamond Corporation (Archangel), 58% owned by De Beers, announced an
agreement with LUKoil to purchase 49% of Arkhangelshoe Geologodobychnoe
Predpriyatie (AGD), which owns the Verkhotina licence in Russia. The Verkhotina
licence area contains the Grib pipe, which is one of the world`s largest known
diamond deposits. Completion of the transaction is subject to Russian
government approval.
In May 2008, the United States Federal District Court of New Jersey approved
the settlement agreement in respect of the various US class actions. Appeals
against the judgement have been filed and are expected to be heard in 2009.
Markets
The first half of 2008 has seen negative to low single digit growth in retail
sales of jewellery in the US, as increased fuel prices, high debt burdens, a
poor housing market and higher unemployment have restrained consumer confidence
and spending. While there is some optimism as inventory levels are being
reduced in the better quality categories, markets remain cautious.
In Asia, jewellery sales for the first quarter of 2008 were robust but growth
in China is slowing, impacted by the earthquake in Sichuan province and the
Chinese stockmarket fall. This slowdown for the Chinese jewellery market is
believed to be temporary and the outlook for the year remains bullish.
In Japan, trading conditions continue to be difficult with consumer confidence
low, cash earnings down and non- essential spending being reined in, depressing
demand further compared with previous years.
In India, the growth in the jewellery market is still close to 7%, with double
digit growth expected by the end of the year.
Operating performance
In the first half of 2008, De Beers` production was 24.2 million carats, 4%
below production in the same period in 2007 mainly as a result of disruptions
to power supplies in southern Africa and high rainfall at Venetia.
De Beers Diamond Jewellers ("DBDJ") has performed strongly in the first half of
2008, with double digit sales growth on 2007, driven by both the Bridal and
High-End diamond categories. DBDJ`s network now stands at 32 stores worldwide,
with further expansion planned for the second half of the year.
Projects
In Canada, Snap Lake in the Northwest Territories commenced commercial
production in early 2008.
Construction of the underground crusher and conveyor was completed in early Q2
and the final phase (the construction of permanent accommodation) is scheduled
for completion in 2009. The Victor Mine has been commissioned eight months
ahead of schedule, and is expected to reach full production in early Q3, and is
exceeding targets. Following an agreement in principle reached with the
Government of Ontario, 10% of production by value from Victor will be made
available for local cutting and polishing in Canada, an arrangement which
mirrors that for Snap Lake.
In South Africa, the commissioning of the Voorspoed mine in the Free State is
under way and its first diamonds were recovered in June. Voorspoed is expected
to produce 0.7 million carats per year. The commissioning of the Finsch
Treatment Plant Upgrade is progressing well and the plant is now officially
open.
Outlook
Mass market retail diamond jewellery sales have been impacted by economic
issues in the most important market, the United States. While strong growth in
China, India, Russia and the Middle East has helped to mitigate the impact of
the US slowdown, the overall retail market is likely to be challenging.
Demand for high end diamonds will likely remain robust, while the smaller low
and medium qualities which are more dependent upon US demand will remain
subdued. Given the current level of supply availability, DTC distribution
policies and current high levels of demand for rough diamonds from its clients,
De Beers remains positive for the full year 2008.
INDUSTRIAL MINERALS
6 months 6 months
$ million ended ended
(unless otherwise stated) 30 June 2008 30 June 2007(1)
Operating profit 163 209
Operating profit excluding Tarmac Iberia 169 204
Operating profit - Tarmac Iberia (6) 5
EBITDA 291 326
Net operating assets 4,574 4,638
Capital expenditure 118 104
Share of Group operating profit 3% 4%
Share of Group net operating assets 15% 21%
(1) In the second half of 2007, Yang Quarry was reclassified from Industrial
Minerals to Coal to align with internal management reporting. As such, the
comparative data has been reclassified.
Tarmac group operating profit decreased by 22% to $163 million compared with
the same period in 2007. This decrease reflects some significant cost
increases, particularly energy related, and difficult trading conditions in key
markets such as the UK and Spanish residential sectors. In spite of these
external challenges, Tarmac has maintained market share in most key products in
the UK, while continuing to deliver cost savings and operational efficiencies.
Excluding the results of Tarmac Spain, the sale of which is due to be completed
during Q3, operating profit was 17% below the prior year.
Profits in the UK Aggregate Products business were 9% lower than 2007. Volumes
of aggregates and ready- mix concrete declined in line with the overall market,
while sales of asphalt increased as a result of some sustained demand from the
infrastructure sector, as well as through a strong order book in the National
Contracting business. Significant cost inflation was experienced in all areas,
particularly transportation and bitumen, although price increases were achieved
without losing market share despite a strongly competitive environment.
The UK Building Products division fared less well in the economic conditions,
with profits down 46% compared to the prior year. The slump in the UK housing
market in particular led to a deterioration in volumes of products such as
mortar, blocks and flooring, while hydrocarbon price rises over the past 12
months dramatically increased the cost of energy-intensive products such as
lime and cement. These factors were mitigated by price increases, however the
dual effects of slowing demand and cost inflation made this difficult to
achieve while maintaining a policy of holding market share where possible.
Tarmac International division`s profits were down by 7% for the first half of
2008, although these results were distorted by currency movements and losses in
Tarmac Spain. Excluding the impact of foreign exchange and portfolio changes,
results were actually 8% better than in the same period in 2007, reflecting
strong performances in Central Europe, France Aggregates and the Middle East,
where further improvements are anticipated as key investment projects come
under way during the second half of 2008.
In January 2008, Tarmac UK successfully completed the acquisition of the
remaining 50% of United Marine Holdings Ltd. (a marine aggregates business that
had previously been a joint venture with Hanson Quarry Products Europe Ltd., a
subsidiary of HeidelbergCement AG) for a consideration of GBP55 million. Plans
to
integrate the business into UK Aggregate Products are well under way.
Tarmac`s International division was streamlined in 2008, with the elimination
of a layer of management, helping to reduce operating costs. In June 2008,
Tarmac announced that an agreement had been signed to sell Tarmac`s business in
Spain to Holcim for up to 148 million ($230 million).
During the period, Tarmac`s Building Products division also announced its
intention to double its cement production capacity, and a feasibility study for
the construction of a second cement facility at its Tunstead site is already in
progress.
Tarmac has continued to focus on its cost savings initiatives during the year,
which delivered total savings of $36 million, driven by procurement and
operational efficiencies. It also has in place a number of initiatives to
maximise commercial opportunities from its market positions and product range.
Outlook
The outlook for demand from the construction market in the UK and Europe
remains weak, with the effects of inflation, the credit crisis and a general
economic slowdown expected to continue for the near term at least. In the
longer run, however, the fundamental supply and demand outlook remains
favourable in the markets in which Tarmac operates.
CONDENSED FINANCIAL STATEMENTS
for the six months ended 30 June 2008
Consolidated income statement
for the six months ended 30 June 2008
Before Special
special Items and
Items and remeasure-
remeasure- ments
ments (note 6)
6 months 6 months 6 months
US$ million ended ended ended
30.06.08 30.06.08 30.06.08
Note
Group revenue 3 14,531 - 14,531
Total operating costs (9,410) 3 (9,407)
Operating profit from
subsidiaries and joint
ventures 3 5,121 3 5,124
Net profit on disposals 6 - 640 640
Share of net income from
associates 3 681 (23) 658
Total profit from
operations and associates 3 5,802 620 6,422
Investment income 322 228 550
Interest expense (481) (23) (504)
Net finance income/(costs) 7 (159) 205 46
Profit before tax 5,643 825 6,468
Income tax expense 8 (1,582) (8) (1,590)
Profit for the financial
period - continuing
operations 4,061 817 4,878
Profit for the financial
period - discontinued
operations 14 - - -
Profit for the financial
period - total Group 4,061 817 4,878
Attributable to (continuing
operations):
Minority interests 578 19 597
Equity shareholders of the
Company 4 3,483 798 4,281
Attributable to
(discontinued operations):
Minority interests - - -
Equity shareholders of the
Company 4 - - -
Attributable to (total
Group):
Minority interests 578 19 597
Equity shareholders of the
Company 4 3,483 798 4,281
Earnings per share (US$)
Basic - continuing
operations 9 3.56
Basic - discontinued
operations 9 -
Basic - total Group 9 3.56
Diluted - continuing
operations 9 3.51
Diluted - discontinued
operations 9 -
Diluted - total Group 9 3.51
Dividends
Proposed ordinary dividend
per share (US cents) 44
Proposed ordinary dividend
(US$ million) 530
Ordinary dividends paid
during the period per
share (US cents) 86
Ordinary dividends paid
during the period
(US$ million) 1,021
Dividend in specie -
Before Special
special Items and
Items and remeasure-
remeasure- ments
ments (note 6)
6 months 6 months 6 months
US$ million ended ended ended
30.06.07(1) 30.06.07(1) 30.06.07(1)
Note
Group revenue 3 12,884 - 12,884
Total operating costs (8,388) 26 (8,362)
Operating profit from
subsidiaries and joint
ventures 3 4,496 26 4,522
Net profit on disposals 6 - 175 175
Share of net income
from associates 3 306 15 321
Total profit from
operations and
associates 3 4,802 216 5,018
Investment income 326 34 360
Interest expense (391) (13) (404)
Net finance
income/(costs) 7 (65) 21 (44)
Profit before tax 4,737 237 4,974
Income tax expense 8 (1,440) (40) (1,480)
Profit for the
financial period -
continuing
operations 3,297 197 3,494
Profit for the
financial period -
discontinued
operations 14 288 91 379
Profit for the
financial period -
total Group 3,585 288 3,873
Attributable to
(continuing
operations):
Minority interests 493 (33) 460
Equity shareholders of
the Company 4 2,804 230 3,034
Attributable to
(discontinued
operations):
Minority interests 34 - 34
Equity shareholders of
the Company 4 254 91 345
Attributable to (total
Group):
Minority interests 527 (33) 494
Equity shareholders of
the Company 4 3,058 321 3,379
Earnings per share
(US$)
Basic - continuing
operations 9 2.17
Basic - discontinued
operations 9 0.24
Basic - total Group 9 2.41
Diluted - continuing
operations 9 2.14
Diluted - discontinued
operations 9 0.24
Diluted - total Group 9 2.38
Dividends
Proposed ordinary
dividend per share (US
cents) 38
Proposed ordinary
dividend (US$ million) 523
Ordinary dividends
paid during the period
per
share (US cents) 75
Ordinary dividends
paid during the period
(US$ million) 1,058
Dividend in specie -
Before Special
special Items and
Items and remeasure-
remeasure- ments
ments (note 6)
Year Year Year
US$ million ended ended ended
31.12.07 31.12.07 31.12.07
Note
Group revenue 3 25,470 - 25,470
Total operating costs (16,952) (246) (17,198)
Operating profit from
subsidiaries and joint
ventures 3 8,518 (246) 8,272
Net profit on disposals 6 - 460 460
Share of net income from
associates 3 640 (443) 197
Total profit from
operations and associates 3 9,158 (229) 8,929
Investment income 684 58 742
Interest expense (821) (29) (850)
Net finance income/(costs) 7 (137) 29 (108)
Profit before tax 9,021 (200) 8,821
Income tax expense 8 (2,676) (17) (2,693)
Profit for the financial
period - continuing
operations 6,345 (217) 6,128
Profit for the financial
period - discontinued
operations 14 318 1,726 2,044
Profit for the financial
period - total Group 6,663 1,509 8,172
Attributable to (continuing
operations):
Minority interests 868 (34) 834
Equity shareholders of the
Company 4 5,477 (183) 5,294
Attributable to
(discontinued operations):
Minority interests 34 - 34
Equity shareholders of the
Company 4 284 1,726 2,010
Attributable to (total
Group):
Minority interests 902 (34) 868
Equity shareholders of the
Company 4 5,761 1,543 7,304
Earnings per share (US$)
Basic - continuing
operations 9 4.04
Basic - discontinued
operations 9 1.54
Basic - total Group 9 5.58
Diluted - continuing
operations 9 3.99
Diluted - discontinued
operations 9 1.51
Diluted - total Group 9 5.50
Dividends
Proposed ordinary dividend
per share (US cents) 86
Proposed ordinary dividend
(US$ million) 1,031
Ordinary dividends paid
during the period per
share (US cents) 113
Ordinary dividends paid
during the period
(US$ million) 1,527
Dividend in specie 3,718
(1) Comparatives have been adjusted to reclassify amounts relating to
discontinued operations.
Underlying earnings and underlying earnings per share are set out in note 9.
Consolidated balance sheet
as at 30 June 2008
US$ million Note 30.06.08 30.06.07 31.12.07
Intangible assets 1,597 2,184 1,556
Tangible assets 26,488 23,992 23,534
Biological assets 3 299 3
Environmental rehabilitation
trusts 235 215 252
Investments in associates 3,694 5,338 3,341
Financial asset investments 3,526 2,150 4,780
Deferred tax assets 527 449 474
Other financial assets
(derivatives) - 9 -
Other non-current assets 196 263 102
Total non-current assets 36,266 34,899 34,042
Inventories 2,719 2,992 2,344
Trade and other receivables 4,734 5,554 3,731
Current tax assets 181 236 223
Other current financial
assets (derivatives) 487 388 535
Cash and cash equivalents 12b 3,316 2,962 3,129
Total current assets 11,437 12,132 9,962
Assets classified as held for
sale 17 999 366 758
Total assets 48,702 47,397 44,762
Trade and other payables (4,581) (5,046) (3,950)
Short term borrowings 12b (3,969) (3,427) (5,895)
Short term provisions (107) (117) (142)
Current tax liabilities (1,064) (1,198) (992)
Other current financial
liabilities (derivatives) (739) (403) (501)
Total current liabilities (10,460) (10,191) (11,480)
Medium and long term
borrowings 12b (4,765) (4,884) (2,404)
Retirement benefit obligations (585) (661) (444)
Other financial liabilities
(derivatives) (349) (139) (85)
Deferred tax liabilities (5,167) (3,916) (4,650)
Provisions for liabilities
and charges (1,231) (983) (1,082)
Other non-current liabilities (662) - -
Total non-current liabilities (12,759) (10,583) (8,665)
Liabilities directly
associated with assets
classified as held for sale 17 (312) (100) (287)
Total liabilities (23,531) (20,874) (20,432)
Net assets 25,171 26,523 24,330
Equity
Called-up share capital 10, 11 738 771 738
Share premium account 11 2,713 2,713 2,713
Other reserves 11 1,139 1,492 3,155
Retained earnings 11 18,660 19,189 15,855
Equity attributable to equity
shareholders of the Company 23,250 24,165 22,461
Minority interests 11 1,921 2,358 1,869
Total equity 25,171 26,523 24,330
The condensed financial statements were approved by the Board of directors on
30 July 2008.
Cynthia Carroll Rene Medori
Chief executive Finance director
Consolidated cash flow statement
for the six months ended 30 June 2008
6 months ended 6 months ended Year ended
US$ million Note 30.06.08 30.06.07(1) 31.12.07
Cash inflows from
continuing
operations 12a 4,831 4,617 9,375
Dividends from
associates 194 125 275
Dividends from
financial asset
investments 29 1 36
Income tax paid (1,232) (1,525) (2,886)
Net cash inflows
from operating
activities -
continuing
operations 3,822 3,218 6,800
Net cash inflows
from operating
activities -
discontinued
operations - 460 464
Net cash inflows
from operating
activities -
total Group 3,822 3,678 7,264
Cash flows from
investing
activities
Acquisition of
subsidiaries, net
of cash and cash
equivalents
acquired(2) 15 (765) (54) (772)
Investment in
joint ventures 15 (607) - (1,114)
Purchase of
tangible assets (1,998) (1,604) (3,931)
Purchase of
financial asset
investments (123) (4) (47)
Loans granted (52) (42) (108)
Interest received
and other
investment income 145 108 228
Disposal and
demerger of
subsidiaries, net
of cash and cash
equivalents
disposed 16 - 94 110
Repayment of
loans and capital
from associates - 25 119
Proceeds from
disposal of
tangible assets 12 22 111
Proceeds from
sale of financial
asset investments 707 160 601
Cash flows from
derivatives not
related to net
debt 86 12 (2)
Other investing
activities (7) (19) (31)
Net cash used in
investing
activities -
continuing
operations (2,602) (1,302) (4,836)
Net cash inflows
from investing
activities -
discontinued
operations - 11 2,575
Net cash used in
investing
activities -
total Group (2,602) (1,291) (2,261)
Cash flows from
financing
activities
Issue of shares
by subsidiaries
to minority
interests 32 17 29
Sale of treasury
shares to
employees 28 82 134
Purchase of
treasury shares (418) (3,100) (6,217)
Interest paid (307) (171) (483)
Dividends paid to
minority
interests (301) (388) (728)
Dividends paid to
Company
shareholders (1,030) (1,068) (1,538)
(Repayment)/receipt of
short term borrowings (2,019) 424 2,780
Receipt of medium
and long term
borrowings 2,777 1,041 341
Cash flows from
derivatives
related to net
debt 380 - -
Other financing
activities (75) 37 21
Net cash used in
financing
activities -
continuing
operations (933) (3,126) (5,661)
Net cash inflows
from financing
activities -
discontinued
operations - 692 692
Net cash used in
financing
activities -
total Group (933) (2,434) (4,969)
Net
increase/(decreas
e) in cash and
cash equivalents 287 (47) 34
Cash and cash
equivalents at
start of period 12c 3,074 2,980 2,980
Cash movements in
the period 287 (47) 34
Effects of
changes in
foreign exchange
rates (16) (39) 60
Cash and cash
equivalents at
end of period 12c 3,345 2,894 3,074
(1) Comparatives have been adjusted to reclassify amounts relating to
discontinued operations.
(2) Includes amounts paid to acquire minority interests in subsidiaries.
Consolidated statement of recognised income and expense
for the six months ended 30 June 2008
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07 31.12.07
Net (loss)/gain on
revaluation of available
for sale investments (332) 306 2,326
Net gain on revaluation of
available for sale
investments - associates - - 10
Loss on cash flow hedges (339) (88) (286)
Gain/(loss) on cash flow
hedges - associates 2 (9) (41)
Net exchange (loss)/gain
on translation of foreign
operations (1,245) 225 (303)
Actuarial net (loss)/gain
on post retirement benefit
schemes (185) 140 (37)
Actuarial net loss on post
retirement benefit schemes
- associates - - (6)
Deferred tax 149 (40) (123)
Net (expense)/income
recognised directly in
equity (1,950) 534 1,540
Transferred to income
statement: sale of
available for sale
investments (467) (82) (298)
Transferred to income
statement: cash flow
hedges 114 94 315
Transferred to income
statement: cash flow
hedges - associates - 9 -
Transferred to income
statement: exchange
differences on disposal of
foreign operations - (25) 337
Tax on items transferred
from equity (20) (2) 3
Total transferred from
equity (373) (6) 357
Profit for the period 4,878 3,873 8,172
Total recognised income
and expense for the
period(1) 2,555 4,401 10,069
Attributable to:
Minority interests 414 511 844
Equity shareholders of the
Company 2,141 3,890 9,225
(1) Total recognised income and expense for the period of nil (six months ended
30 June 2007: $372 million; year ended 31 December 2007: $2,026 million)
relates to discontinued operations.
Reconciliation from EBITDA(1) to cash inflows from continuing operations
for the six months ended 30 June 2008
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07(2) 31.12.07
EBITDA - continuing
operations 7,038 5,729 11,171
Share of operating profit
of associates before
special items and
remeasurements (1,060) (494) (1,072)
Depreciation and
amortisation in associates (115) (66) (183)
Share-based payment charges 108 64 138
Fair value gains before
special items and
remeasurements - (19) (12)
Provisions (67) (16) 77
Increase in inventories (524) (147) (352)
Increase in operating
receivables (1,162) (400) (389)
Increase/(decrease) in
operating payables 624 (3) 53
Other adjustments (11) (31) (56)
Cash inflows from
continuing operations 4,831 4,617 9,375
(1) EBITDA is operating profit before special items, remeasurements,
depreciation and amortisation in subsidiaries and joint ventures and share of
EBITDA of associates:
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07(2) 31.12.07
Operating profit,
including associates,
before special items and
remeasurements -
continuing operations(3) 6,181 4,990 9,590
Depreciation and
amortisation
Subsidiaries and joint
ventures 742 673 1,398
Associates 115 66 183
EBITDA - continuing
operations 7,038 5,729 11,171
(2) Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
(3) `Operating profit, including associates, before special items and
remeasurements - continuing operations` is reconciled to `Profit for the
financial period - continuing operations` in note 3.
Notes to the condensed financial statements
1. General information
Investors should consider non-GAAP financial measures in addition to, and not
as a substitute for or as superior to, measures of financial performance
reported in accordance with International Financial Reporting Standards (IFRS).
The IFRS results reflect all items that affect reported performance and
therefore it is important to consider the IFRS measures alongside the non-GAAP
measures. Reconciliations of key non-GAAP data to directly comparable GAAP
financial measures are presented in notes 3, 4, 9 and 13 to this report.
The financial information for the year ended 31 December 2007 does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. This information was derived from the statutory accounts for the year
ended 31 December 2007, a copy of which has been delivered to the Registrar of
Companies. The auditors` report on those accounts was unqualified, did not
include a reference to any matters to which the auditors drew attention by way
of emphasis of matter and did not contain a statement under section 237 (2) or
(3) of the Companies Act 1985.
2. Basis of preparation
General
These interim consolidated financial statements (the condensed financial
statements) are for the six months ended 30 June 2008 and have been prepared in
accordance with IFRS adopted for use by the European Union, including
International Accounting Standard (IAS) 34 Interim Financial Reporting and the
requirements of the UK Disclosure and Transparency Rules (DTR) of the Financial
Services Authority (FSA) in the United Kingdom as applicable to interim
financial reporting.
The condensed financial statements represent a `condensed set of financial
statements` as referred to in the DTR issued by the FSA. Accordingly, they do
not include all of the information required for a full annual financial report
and are to be read in conjunction with the Group`s financial statements for the
year ended 31 December 2007.
The condensed financial statements have been prepared under the historical cost
convention as modified by the recording of pension assets and liabilities and
revaluation of biological assets and certain financial instruments.
The accounting policies applied are consistent with those adopted and disclosed
in the Group`s financial statements for the year ended 31 December 2007, with
the exception of the adoption of IFRIC 14 The Limit on a Defined Benefit Asset,
Minimum Funding Requirements and their Interaction and IFRIC 11 Group and
Treasury Share Transactions. These have not had a material impact from a Group
perspective. While IFRIC 14 had not been endorsed by the European Union at 30
June 2008, adoption of the interpretation at the half year is considered
appropriate as it provides clarification of existing requirements in IAS 19
Employee benefits and endorsement is expected by the end of the year.
Discontinued operations
On 2 July 2007 the Paper and Packaging business was demerged from the Group by
way of a dividend in specie paid to shareholders.
On 2 October 2007 the Group sold 67.1 million shares in AngloGold Ashanti
Limited which reduced the Group`s shareholding from 41.6% to 17.3%. The Group`s
representation on the company`s board was also withdrawn at this time.
The remaining investment is accounted for as a financial asset investment.
Both of these operations were considered discontinued in the Group`s financial
statements for the year ended 31 December 2007 and therefore the Consolidated
income statement, the Consolidated cash flow statement, the Reconciliation from
EBITDA to cash inflows from continuing operations and the related notes for the
six months ended 30 June 2007 have been adjusted in accordance with IFRS 5
Non-current Assets Held for Sale and Discontinued Operations.
3. Segmental information
Based on risks and returns the directors consider the primary reporting format
is by business segment and the secondary reporting format is by geographical
segment.
The analysis of associates` revenue by business segment is provided here for
completeness and consistency.
The Corporate Activities and Unallocated Costs segment includes insurance costs.
In the second half of 2007 Yang Quarry was reclassified from Industrial
Minerals to Coal. This was to align with internal management reporting. As
such, the comparative data for the six months ended 30 June 2007 has been
reclassified.
3. Segmental information (continued)
Discontinued operations comprise the Paper and Packaging and Gold segments. The
results for discontinued operations are disclosed in note 14.
Primary reporting format - by business segment
Segment
revenue
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07(2) 31.12.07
Subsidiaries and joint ventures
Platinum 3,588 3,305 6,673
Base Metals 4,077 3,435 7,129
Ferrous Metals and Industries 2,093 2,606 4,207
Coal 2,335 1,303 2,880
Industrial Minerals 2,438 2,235 4,581
Exploration - - -
Corporate Activities and
Unallocated Costs - - -
Total subsidiaries and joint
ventures -
continuing operations 14,531(3) 12,884(3) 25,470(3)
Revenue and net income from
associates
Platinum 17 76 116
Diamonds 1,684 1,531 3,076
Ferrous Metals and Industries 1,193 281 1,193
Coal 489 331 694
Industrial Minerals 1 2 10
Total associates - continuing
operations 3,384 2,221 5,089
Total operations including net
income from
associates - continuing operations 17,915 15,105 30,559
Net profit on disposals -
continuing operations
Total profit from operations and
associates -
continuing operations
Segment result before
special items and remeasurements(1)
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07(2) 31.12.07
Subsidiaries and joint ventures
Platinum 1,457 1,473 2,635
Base Metals 2,454 2,165 4,338
Ferrous Metals and Industries 764 661 1,155
Coal 541 193 365
Industrial Minerals 163 209 474
Exploration (98) (55) (157)
Corporate Activities and Unallocated
Costs (160) (150) (292)
Total subsidiaries and joint ventures
-
continuing operations 5,121 4,496 8,518
Revenue and net income from associates
Platinum 7 28 38
Diamonds 158 147 223
Ferrous Metals and Industries 380 37 189
Coal 136 94 190
Industrial Minerals - - -
Total associates - continuing
operations 681 306 640
Total operations including net income
from
associates - continuing operations 5,802 4,802 9,158
Net profit on disposals - continuing
operations
Total profit from operations and
associates -
continuing operations
Segment result after
special items and remeasurements(1)
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07(2) 31.12.07
Subsidiaries and joint ventures
Platinum 1,457 1,473 2,635
Base Metals 2,360 2,165 4,338
Ferrous Metals and Industries 840 679 1,158
Coal 583 202 224
Industrial Minerals 162 209 407
Exploration (94) (54) (157)
Corporate Activities and Unallocated
Costs (184) (152) (333)
Total subsidiaries and joint ventures
- continuing operations 5,124 4,522 8,272
Revenue and net income from associates
Platinum 7 28 38
Diamonds 144 153 (229)
Ferrous Metals and Industries 379 46 198
Coal 128 94 190
Industrial Minerals - - -
Total associates - continuing
operations 658 321 197
Total operations including net income
from
associates - continuing operations 5,782 4,843 8,469
Net profit on disposals - continuing
operations 640 175 460
Total profit from operations and
associates -
continuing operations 6,422 5,018 8,929
(1) Segment result is defined as being segment revenue less segment expense;
that is operating profit. In addition `Share of net income from associates` is
shown by segment. There are no material inter-segment transfers or transactions
that would affect the segment result. Special items and remeasurements are set
out in note 6.
(2) Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
(3) This represents segment revenue; the Group`s share of associates` revenue
is provided for additional information.
The table above represents continuing operations only, as disclosed in the
income statement. Total Group revenue including share of revenue from
associates and revenue from discontinued operations is $17,915 million (six
months ended 30 June 2007: $19,849 million; year ended 31 December 2007:
$35,674 million) being $17,915 million (six months ended 30 June 2007: $15,105
million; year ended 31 December 2007: $30,559 million) from continuing
operations and nil (six months ended 30 June 2007: $4,744 million; year ended
31 December 2007: $5,115 million) from discontinued operations. See note 14 for
summarised segmental disclosures relating to discontinued operations.
For information, a segmental analysis of associates` operating profit is set
out below to show operating profit for the Group`s continuing operations
including associates.
Operating profit before special items
and remeasurements(1)
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07(2) 31.12.07
Total subsidiaries and joint ventures
- continuing operations 5,121 4,496 8,518
Associates
Platinum 10 44 62
Diamonds 328 266 484
Ferrous Metals and Industries 532 58 277
Coal 190 126 249
Total associates - continuing
operations 1,060 494 1,072
Operating profit including associates
- continuing operations 6,181 4,990 9,590
Operating profit after special items
and remeasurements(1)
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07(2) 31.12.07
Total subsidiaries and joint ventures
- continuing operations 5,124 4,522 8,272
Associates
Platinum 10 44 62
Diamonds 315 257 19
Ferrous Metals and Industries 532 58 277
Coal 182 126 249
Total associates - continuing
operations 1,039 485 607
Operating profit including associates
- continuing operations 6,163 5,007 8,879
(1) Associates` operating profit is reconciled to `Share of net income from
associates` as follows:
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07(2) 31.12.07
Operating profit from associates
before special items and
remeasurements - continuing
operations 1,060 494 1,072
Operating special items and
remeasurements (21) (9) (465)
Operating profit from associates
after special items and
remeasurements - continuing
operations 1,039 485 607
Net profit on disposals 3 20 24
Net finance costs (before
remeasurements) (41) (40) (85)
Financing remeasurements (5) 7 (4)
Income tax expense (after special
items and remeasurements) (313) (130) (303)
Minority interests (after special
items and remeasurements) (25) (21) (42)
Share of net income from associates -
continuing operations 658 321 197
(2) Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
3. Segmental information (continued)
Primary reporting format - by business segment (continued)
`Operating profit, including associates, before special items and
remeasurements - continuing operations` is reconciled to `Profit for the
financial period - continuing operations` as follows:
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07(1) 31.12.07
Operating profit, including
associates, before special items and
remeasurements - continuing
operations 6,181 4,990 9,590
Operating special items and
remeasurements
Subsidiaries and joint ventures 3 26 (246)
Base Metals (94) - -
Ferrous Metals and Industries 76 18 3
Coal 42 9 (141)
Industrial Minerals (1) - (67)
Exploration 4 1 -
Corporate Activities and Unallocated
Costs (24) (2) (41)
Associates (21) (9) (465)
Diamonds (13) (9) (465)
Coal (8) - -
Operating profit, including
associates, after special items and
remeasurements - continuing
operations 6,163 5,007 8,879
Net profit on disposals
Subsidiaries and joint ventures 640 175 460
Associates 3 20 24
Associates` net finance costs (41) (40) (85)
Associates` financing remeasurements (5) 7 (4)
Associates` income tax expense (313) (127) (305)
Associates` tax on special items and
remeasurements - (3) 2
Associates` minority interests (25) (21) (42)
Total profit from operations and
associates - continuing operations 6,422 5,018 8,929
Net finance costs before special
items and remeasurements (159) (65) (137)
Financing remeasurements 205 21 29
Profit before tax - continuing
operations 6,468 4,974 8,821
Income tax expense (1,590) (1,480) (2,693)
Profit for the financial period -
continuing operations 4,878 3,494 6,128
(1)Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
3. Segmental information (continued)
Primary reporting format - by business segment (continued)
Primary segment disclosures for segment assets, liabilities and capital
expenditure are as follows:
Segment assets(1)
US$ million 30.06.08 30.06.07 31.12.07
Platinum 10,327 8,299 9,926
Base Metals 6,638 5,633 5,897
Ferrous Metals and
Industries 5,930 2,271 4,517
Coal 6,331 4,271 4,987
Industrial Minerals 5,573 5,533 5,370
Exploration 7 3 1
Corporate Activities
and Unallocated Costs 237 211 225
Continuing
operations 35,043 26,221 30,923
Paper and Packaging - 8,388 -
Discontinued
operations - 8,388 -
Total Group 35,043 34,609 30,923
Unallocated
Investments in
associates 3,694 5,338 3,341
Financial asset
investments 3,526 2,150 4,780
Deferred tax
assets/(liabilities) 527 449 474
Cash and cash
equivalents 3,316 2,962 3,129
Other financial
assets/(liabilities) -
derivatives 487 397 535
Other non-operating
assets/(liabilities) 2,109 1,492 1,580
Other provisions - - -
Borrowings - - -
Net assets 48,702 47,397 44,762
Segment liabilities(2)
US$ million 30.06.08 30.06.07 31.12.07
Platinum (958) (682) (692)
Base Metals (972) (696) (908)
Ferrous Metals and
Industries (570) (406) (530)
Coal (1,260) (883) (1,003)
Industrial Minerals (999) (895) (861)
Exploration (1) - -
Corporate Activities
and Unallocated Costs (367) (382) (346)
Continuing
operations (5,127) (3,944) (4,340)
Paper and Packaging - (1,188) -
Discontinued
operations - (1,188) -
Total Group (5,127) (5,132) (4,340)
Unallocated
Investments in
associates - - -
Financial asset
investments - - -
Deferred tax
assets/(liabilities) (5,167) (3,916) (4,650)
Cash and cash
equivalents - - -
Other financial
assets/(liabilities) -
derivatives (1,088) (542) (586)
Other non-operating
assets/(liabilities) (3,028) (2,654) (2,264)
Other provisions (387) (319) (293)
Borrowings (8,734) (8,311) (8,299)
Net assets (23,531) (20,874) (20,432)
Net segment assets
US$ million 30.06.08 30.06.07 31.12.07
Platinum 9,369 7,617 9,234
Base Metals 5,666 4,937 4,989
Ferrous Metals and
Industries 5,360 1,865 3,987
Coal 5,071 3,388 3,984
Industrial Minerals 4,574 4,638 4,509
Exploration 6 3 1
Corporate Activities
and Unallocated Costs (130) (171) (121)
Continuing
operations 29,916 22,277 26,583
Paper and Packaging - 7,200 -
Discontinued
operations - 7,200 -
Total Group 29,916 29,477 26,583
Unallocated
Investments in
associates 3,694 5,338 3,341
Financial asset
investments 3,526 2,150 4,780
Deferred tax
assets/(liabilities) (4,640) (3,467) (4,176)
Cash and cash
equivalents 3,316 2,962 3,129
Other financial
assets/(liabilities) -
derivatives (601) (145) (51)
Other non-operating
assets/(liabilities) (919) (1,162) (684)
Other provisions (387) (319) (293)
Borrowings (8,734) (8,311) (8,299)
Net assets 25,171 26,523 24,330
Capital expenditure(3)
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07 31.12.07
Platinum 1,312 650 2,512
Base Metals 677 148 582
Ferrous Metals and
Industries 1,301 293 2,412
Coal 1,118 613 1,052
Industrial Minerals 273 167 352
Exploration 1 - -
Corporate Activities
and Unallocated Costs 9 15 44
Continuing
operations 4,691 1,886 6,954
Paper and Packaging - 198 198
Discontinued
operations - 198 198
Total Group 4,691 2,084 7,152
Unallocated
Investments in
associates
Financial asset
investments
Deferred tax
assets/(liabilities)
Cash and cash
equivalents
Other financial
assets/(liabilities) -
derivatives
Other non-operating
assets/(liabilities)
Other provisions
Borrowings
Net assets
(1) Segment assets at 30 June 2008 are operating assets and consist of tangible
assets of $26,488 million (30 June 2007: $23,992 million; 31 December 2007:
$23,534 million), intangible assets of $1,597 million (30 June 2007: $2,184
million; 31 December 2007: $1,556 million), biological assets of $3 million (30
June 2007: $299 million; 31 December 2007: $3 million), environmental
rehabilitation trusts of $235 million (30 June 2007: $215 million; 31 December
2007: $252 million), inventories of $2,719 million (30 June 2007: $2,992
million; 31 December 2007: $2,344 million), retirement benefit assets of $54
million (30 June 2007: $210 million; 31 December 2007: $52 million) and
operating receivables of $3,947 million (30 June 2007: $4,717 million; 31
December 2007: $3,182 million).
(2) Segment liabilities at 30 June 2008 are operating liabilities and consist
of non-interest bearing current liabilities of $3,591 million (30 June 2007:
$3,691 million; 31 December 2007: $2,965 million), restoration and
decommissioning provisions of $951 million (30 June 2007: $780 million; 31
December 2007: $931 million) and retirement benefit obligations of $585 million
(30 June 2007: $661 million; 31 December 2007: $444 million).
(3) Capital expenditure reflects cash payments and accruals in respect of
additions to tangible assets of $2,215 million (six months ended 30 June 2007:
$1,794 million; year ended 31 December 2007: $4,129 million), intangible assets
of nil (six months ended 30 June 2007:
$1 million; year ended 31 December 2007: $9 million) and additions resulting
from acquisitions of interests in subsidiaries and joint ventures of $2,476
million (six months ended 30 June 2007: $289 million; year ended 31 December
2007: $3,014 million).
Other primary segment items included in the income statement are as follows:
Depreciation and amortisation
6 months 6 months Year
ended ended ended
30.06.08 30.06.07 31.12.07
US$ million
Platinum 246 218 455
Base Metals 168 165 344
Ferrous Metals and Industries 42 60 100
Coal 145 100 221
Industrial Minerals 128 119 258
Exploration - - -
Corporate Activities and Unallocated
Costs 13 11 20
Continuing operations 742 673 1,398
Paper and Packaging - 234 234
Discontinued operations - 234 234
Total Group 742 907 1,632
(Impairments)/reversal(1)
6 months 6 months Year
ended ended ended
30.06.08 30.06.07 31.12.07
US$ million
Platinum - - -
Base Metals - - -
Ferrous Metals and Industries - - -
Coal - 8 (153)
Industrial Minerals (1) - (43)
Exploration - - -
Corporate Activities and Unallocated
Costs - - -
Continuing operations (1) 8 (196)
Paper and Packaging - (5) (5)
Discontinued operations - (5) (5)
Total Group (1) 3 (201)
Other non-cash expenses(2)
6 months 6 months Year
ended ended ended
30.06.08 30.06.07 31.12.07
US$ million
Platinum (1) (9)(3) 8(3)
Base Metals 54 91 94
Ferrous Metals and Industries 16 16 48
Coal 23 15 42
Industrial Minerals 12 2 55
Exploration - 1 -
Corporate Activities and Unallocated
Costs 24 23 45
Continuing operations 128 139 292
Paper and Packaging - 12 12
Discontinued operations - 12 12
Total Group 128 151 304
(1) See operating special items in note 6.
(2) Other non-cash expenses include share-based payment charges and charges in
respect of environmental rehabilitation provisions and other provisions.
(3) Includes the reversal of a share-based payment over provision of $30
million relating to prior periods.
3. Segmental information (continued)
Secondary reporting format - by geographical segment
The Group`s geographical analysis of revenue, allocated based on the country in
which the customer is located, is as follows. The geographical analysis of the
Group`s attributable revenue from associates is provided for completeness and
consistency.
Revenue
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07(1) 31.12.07
Subsidiaries and joint ventures
South Africa 1,720 2,474 4,014
Rest of Africa 57 145 178
Europe 5,574 5,192 10,718
North America 885 647 1,686
South America 1,834 1,384 2,545
Australia and Asia 4,461 3,042 6,329
Total subsidiaries and joint ventures
- continuing operations 14,531 12,884 25,470
Associates
South Africa 467 263 796
Rest of Africa 185 12 82
Europe 987 787 1,498
North America 353 233 520
South America 32 18 52
Australia and Asia 1,360 908 2,141
Total associates - continuing
operations 3,384 2,221 5,089
Total operations including associates
- continuing operations 17,915 15,105 30,559
(1) Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
The Group`s geographical analysis of segment assets, liabilities and capital
expenditure, allocated based on where assets and liabilities are located, is as
follows:
Segment assets
US$ million 30.06.08 30.06.07 31.12.07
South Africa 14,399 13,557 13,879
Rest of Africa 433 550 526
Europe 5,891 11,869 5,658
North America 565 523 465
South America 9,228 5,065 7,212
Australia and Asia 4,527 3,045 3,183
35,043 34,609 30,923
Segment liabilities
US$ million 30.06.08 30.06.07 31.12.07
South Africa (1,971) (1,715) (1,661)
Rest of Africa (31) (36) (32)
Europe (1,293) (2,025) (1,057)
North America (146) (103) (106)
South America (965) (643) (935)
Australia and Asia (721) (610) (549)
(5,127) (5,132) (4,340)
Net segment assets
US$ million 30.06.08 30.06.07 31.12.07
South Africa 12,428 11,842 12,218
Rest of Africa 402 514 494
Europe 4,598 9,844 4,601
North America 419 420 359
South America 8,263 4,422 6,277
Australia and Asia 3,806 2,435 2,634
29,916 29,477 26,583
Capital expenditure
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07 31.12.07
South Africa 1,668 1,083 3,303
Rest of Africa 9 51 64
Europe 259 326 526
North America 64 208 151
South America 1,718 114 2,436
Australia and Asia 973 302 672
4,691 2,084 7,152
Additional disclosure of secondary segmental information by origin (including
attributable revenue and operating profit from associates) is as follows:
Revenue
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07(2) 31.12.07
Subsidiaries and joint ventures
South Africa 6,154 6,385 12,003
Rest of Africa 156 274 540
Europe 2,589 2,446 4,995
North America 221 110 230
South America 3,973 2,981 6,234
Australia and Asia 1,438 688 1,468
Total subsidiaries and joint ventures
- continuing operations 14,531 12,884 25,470
Associates
South Africa 849 492 1,374
Rest of Africa 1,216 1,087 2,160
Europe 124 171 872
North America 129 27 63
South America 415 298 96
Australia and Asia 651 146 524
Total associates - continuing
operations 3,384 2,221 5,089
Total operations including associates
- continuing operations 17,915 15,105 30,559
Operating profit/(loss) before special
items and remeasurements(1)
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07(2) 31.12.07
Subsidiaries and joint ventures
South Africa 2,454 2,228 4,043
Rest of Africa 71 188 351
Europe 49 204 425
North America (17) 15 30
South America 2,311 1,835 3,697
Australia and Asia 253 26 (28)
Total subsidiaries and joint ventures
- continuing operations 5,121 4,496 8,518
Associates
South Africa 202 136 248
Rest of Africa 232 183 342
Europe 62 45 88
North America 35 3 17
South America 156 92 198
Australia and Asia 373 35 179
Total associates - continuing
operations 1,060 494 1,072
Total operations including associates
- continuing operations 6,181 4,990 9,590
Operating profit/(loss) after special
items and remeasurements(1)
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07(2) 31.12.07
Subsidiaries and joint ventures
South Africa 2,451 2,229 4,044
Rest of Africa 71 188 351
Europe 29 203 320
North America (8) 40 31
South America 2,286 1,836 3,697
Australia and Asia 295 26 (171)
Total subsidiaries and joint ventures
- continuing operations 5,124 4,522 8,272
Associates
South Africa 194 130 222
Rest of Africa 234 183 342
Europe 54 45 88
North America 35 - (422)
South America 149 92 198
Australia and Asia 373 35 179
Total associates - continuing
operations 1,039 485 607
Total operations including associates
- continuing operations 6,163 5,007 8,879
(1) Special items and remeasurements are set out in note 6.
(2) Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
4. Profit for the financial period
The table below analyses the contribution of each business segment to the
Group`s operating profit including operating profit from associates for the
financial period and its underlying earnings, which the directors consider to
be a useful additional measure of the Group`s performance. A reconciliation
from `Profit for the financial period attributable to equity shareholders of
the Company` to `Underlying earnings for the financial period` is given in
note 9.
In the second half of 2007 Yang Quarry was reclassified from Industrial
Minerals to Coal. This was to align with internal management reporting. As such
the comparative data for the six months ended 30 June 2007 has been
reclassified.
Operating profit including operating profit from associates is reconciled to
`Underlying earnings` and `Profit for the financial period attributable to
equity shareholders of the Company` in the table below:
Operating Operating
profit/(loss) before profit/(loss) after Operating
special items and special items and special items and
US$ million remeasurements(1) remeasurements remeasurements(2)
By
business
segment
Platinum 1,467 1,467 -
Diamonds 328 315 13
Base
Metals 2,454 2,360 94
Ferrous
Metals
and
Industries 1,296 1,372 (76)
Coal 731 765 (34)
Industrial Minerals 163 162 1
Exploration (98) (94) (4)
Corporate Activities and
Unallocated Costs (160) (184) 24
Total/Underlying earnings -
continuing operations and
total Group 6,181 6,163 18
Underlying earnings
adjustments - continuing
operations and total Group (18)
Profit for the financial period
attributable to equity
shareholders of the Company
- continuing operations and total Group
Financing
Net profit on special items and
US$ million disposals(2) remeasurements(2)
By business segment
Platinum - -
Diamonds - -
Base Metals - -
Ferrous Metals and Industries - -
Coal - -
Industrial Minerals - -
Exploration - -
Corporate Activities and
Unallocated Costs - -
Total/Underlying earnings -
continuing operations and
total Group - -
Underlying earnings adjustments -
continuing operations and total Group 643 200
Profit for the financial period
attributable to
equity shareholders of the Company -
continuing operations and total Group
6 months ended 30.06.08
Net interest, tax
and minority
US$ million interests Total
By business segment
Platinum (617) 850
Diamonds (162) 166
Base Metals (960) 1,494
Ferrous Metals and Industries (591) 705
Coal (188) 543
Industrial Minerals (24) 139
Exploration 5 (93)
Corporate Activities and
Unallocated Costs (161) (321)
Total/Underlying earnings -
continuing operations and
total Group (2,698) 3,483
Underlying earnings adjustments -
continuing operations and total Group (27) 798
Profit for the financial period attributable to
equity shareholders of the Company -
continuing operations and total Group 4,281
(1) Operating profit includes associates` operating profit which is reconciled
to `Share of net income from associates` in note 3.
(2) Special items and remeasurements are set out in note 6.
Operating Operating
profit/(loss) before profit/(loss) after Operating
special items and special items and special items and
remeasurements(1) remeasurements remeasurements(2)
US$ million
By business segment
Platinum 1,517 1,517 -
Diamonds 266 257 9
Base Metals 2,165 2,165 -
Ferrous Metals and
Industries 719 737 (18)
Coal 319 328 (9)
Industrial Minerals 209 209 -
Exploration (55) (54) (1)
Corporate Activities and
Unallocated Costs (150) (152) 2
Total/Underlying earnings -
continuing operations 4,990 5,007 (17)
Underlying earnings adjustments
- continuing operations 17
Profit for the financial period attributable
to equity shareholders of the Company
- continuing operations
Total/Underlying earnings -
discontinued operations 462 403 59
Underlying earnings adjustments
- discontinued operations (59)
Profit for the financial period
attributable to equity shareholders
of the Company
- discontinued operations
Total/Underlying earnings
- total Group 5,452 5,410 42
Underlying earnings adjustments
- total Group (42)
Profit for the financial period attributable
to equity shareholders of the Company
- total Group
Financing
Net profit on special items and
disposals(2) remeasurements(2)
US$ million
By business segment
Platinum - -
Diamonds - -
Base Metals - -
Ferrous Metals and Industries - -
Coal - -
Industrial Minerals - -
Exploration - -
Corporate Activities and
Unallocated Costs - -
Total/Underlying earnings -
continuing operations - -
Underlying earnings adjustments
- continuing operations 195 28
Profit for the financial period
attributable
to equity shareholders of the Company
- continuing operations
Total/Underlying earnings -
discontinued operations - -
Underlying earnings adjustments
- discontinued operations 124 21
Profit for the financial period
attributable
to equity shareholders of the Company
- discontinued operations
Total/Underlying earnings - total Group - -
Underlying earnings adjustments - total
Group 319 49
Profit for the financial period
attributable
to equity shareholders of the Company
- total Group
6 months ended 30.06.07
Net interest, tax
and minority
US$ million interests Total
By business segment
Platinum (800) 717
Diamonds (110) 156
Base Metals (661) 1,504
Ferrous Metals and Industries (450) 269
Coal (77) 242
Industrial Minerals (28) 181
Exploration 5 (50)
Corporate Activities and
Unallocated Costs (65) (215)
Total/Underlying earnings -
continuing operations (2,186) 2,804
Underlying earnings adjustments
- continuing operations (10) 230
Profit for the financial period attributable
to equity shareholders of the Company
- continuing operations 3,034
Total/Underlying earnings -
discontinued operations (208) 254
Underlying earnings adjustments
- discontinued operations 5 91
Profit for the financial period attributable
to equity shareholders of the Company
- discontinued operations 345
Total/Underlying earnings - total Group (2,394) 3,058
Underlying earnings adjustments - total Group (5) 321
Profit for the financial period attributable
to equity shareholders of the Company
- total Group 3,379
(1) Operating profit includes associates` operating profit which is reconciled
to `Share of net income from associates` in note 3.
(2) Special items and remeasurements are set out in note 6.
4. Profit for the financial period (continued)
Operating Operating
profit/(loss) before profit/(loss) after Operating
special items and special items and special items and
US$ million remeasurements(1) remeasurements remeasurements(2)
By business segment
Platinum 2,697 2,697 -
Diamonds 484 19 465
Base Metals 4,338 4,338 -
Ferrous Metals and Industries 1,432 1,435 (3)
Coal 614 473 141
Industrial Minerals 474 407 67
Exploration (157) (157) -
Corporate Activities and
Unallocated Costs (292) (333) 41
Total/Underlying earnings -
continuing operations 9,590 8,879 711
Underlying earnings adjustments
- continuing operations (711)
Profit for the financial year attributable
to equity shareholders of the Company
- continuing operations
Total/Underlying earnings -
discontinued operations 526 291 235
Underlying earnings adjustments
- discontinued operations (235)
Profit for the financial year attributable
to equity shareholders of the Company
- discontinued operations
Total/Underlying earnings
- total Group 10,116 9,170 946
Underlying earnings adjustments
- total Group (946)
Profit for the financial year attributable
to equity shareholders of the Company
- total Group
Financing
Net profit on special items and
US$ million disposals(2) remeasurements(2)
By business segment
Platinum - -
Diamonds - -
Base Metals - -
Ferrous Metals and Industries - -
Coal - -
Industrial Minerals - -
Exploration - -
Corporate Activities and
Unallocated Costs - -
Total/Underlying earnings -
continuing operations - -
Underlying earnings adjustments
- continuing operations 484 25
Profit for the financial year
attributable
to equity shareholders of the Company
- continuing operations
Total/Underlying earnings -
discontinued operations - -
Underlying earnings adjustments
- discontinued operations 2,086 13
Profit for the financial year
attributable
to equity shareholders of the Company
- discontinued operations
Total/Underlying earnings
- total Group - -
Underlying earnings adjustments
- total Group 2,570 38
Profit for the financial year
attributable
to equity shareholders of the Company
- total Group
Year ended 31.12.07
Net interest,tax
and minority
US$ million interests Total
By business segment
Platinum (1,398) 1,299
Diamonds (245) 239
Base Metals (1,238) 3,100
Ferrous Metals and Industries (827) 605
Coal (124) 490
Industrial Minerals (90) 384
Exploration 12 (145)
Corporate Activities and
Unallocated Costs (203) (495)
Total/Underlying earnings -
continuing operations (4,113) 5,477
Underlying earnings adjustments
- continuing operations 19 (183)
Profit for the financial year attributable
to equity shareholders of the Company
- continuing operations 5,294
Total/Underlying earnings -
discontinued operations (242) 284
Underlying earnings adjustments
- discontinued operations (138) 1,726
Profit for the financial year attributable
to equity shareholders of the Company
- discontinued operations 2,010
Total/Underlying earnings
- total Group (4,355) 5,761
Underlying earnings adjustments
- total Group (119) 1,543
Profit for the financial year attributable
to equity shareholders of the Company
- total Group 7,304
(1) Operating profit includes associates` operating profit which is reconciled
to `Share of net income from associates` in note 3.
(2) Special items and remeasurements are set out in note 6.
5. Exploration expenditure
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07 31.12.07
By business segment 17 17 36
Platinum 55 29 77
Base Metals 13 4 12
Ferrous Metals and
Industries 13 5 32
Coal 98 55 157
6. Special items and remeasurements
`Special items` are those items of financial performance that the Group
believes should be separately disclosed on the face of the income statement to
assist in the understanding of the underlying financial performance achieved by
the Group. Such items are material by nature or amount to the period`s results
and require separate disclosure in accordance with IAS 1 Presentation of
Financial Statements paragraph 86. Special items that relate to the operating
performance of the Group are classified as operating special items and include
impairment charges and reversals and other exceptional items, including
significant legal provisions. Non-operating special items include profits and
losses on disposals of investments and businesses.
Remeasurements comprise other items which the Group believes should be reported
separately to aid an understanding of the underlying financial performance of
the Group. This category includes (i) unrealised gains and losses on `non-
hedge` derivative instruments open at period end (in respect of future
transactions) and the reversal of the historical marked to market value of such
instruments settled in the period. The full realised gains or losses are
recorded in underlying earnings in the same period as the underlying
transaction for which such instruments provide an economic, but not formally
designated, hedge and (ii) foreign exchange gains and losses arising on the
retranslation of dollar denominated De Beers preference shares held by a rand
functional currency subsidiary of the Group. Remeasurements are defined as
operating, non-operating or financing according to the nature of the underlying
exposure.
6. Special items and remeasurements (continued)
Subsidiaries and joint ventures` special items and remeasurements
Operating special items
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07(1) 31.12.07
Costs associated with `One
Anglo` restructuring
initiatives (24) - -
Impairment of Coal
Australia assets - - (153)
Costs associated with
proposed sale of Tarmac - - (55)
Impairment of Tarmac assets (1) - (43)
Other 3 7 -
Total operating special
items - continuing
operations (22) 7 (251)
Tax 4 - 60
Net total attributable to
equity shareholders of the
Company - continuing
operations (18) 7 (191)
(1) Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
Operating remeasurements
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07(1) 31.12.07
Net gain on non-hedge
derivatives 25 19 5
Tax (6) (6) (1)
Minority interests 6 - -
Net total attributable to
equity shareholders of the
Company - continuing
operations 25 13 4
(1) Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
The net gain on non-hedge derivatives principally relates to a net gain on
foreign currency instruments held by MMX Minas-Rio, LLX Minas-Rio and Coal
Australia, partially offset by an unrealised loss on an embedded derivative at
Minera Loma de Niquel.
Profits and (losses) on disposals
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07(1) 31.12.07
Disposal of interest in
China Shenhua Energy 551 - -
Copebras property
compensation 96 - -
Part disposal of Exxaro
(formerly Kumba Resources) - 68 234
Disposal of remaining
interest in Highveld(2) - 140 140
Part disposal of AngloGold
Ashanti - - 67
Tongaat-Hulett and Hulamin
BBBEE transactions(2) - (68) (68)
Tarmac land sales - - 25
Disposal of Boschendal
Phase II - - 21
Other (7) 35 41
Net profit on disposals -
continuing operations(3) 640 175 460
Tax 1 (24) (71)
Minority interests (25) 35 34
Net total attributable to
equity shareholders of the
Company - continuing
operations 616 186 423
(1) Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
(2) See Disposals and demerger of subsidiaries and businesses note 16.
(3) Includes charges associated with IFRS 2 Share-based Payments on broad based
black economic empowerment (BBBEE) and black economic empowerment (BEE)
transactions of nil (six months ended 30 June 2007: $68 million; year ended 31
December 2007: $68 million).
In April 2008 the Group sold its investment in China Shenhua Energy for $704
million, generating a profit on disposal of $551 million.
Financing remeasurements
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07(1) 31.12.07
Foreign exchange
gain/(loss) on De Beers
preference shares 18 1 (3)
Unrealised net gain on
non-hedge derivatives
related to net debt 187 20 32
Total financing
remeasurements -
continuing operations 205 21 29
Tax (7) (10) (5)
Minority interests - (2) -
Net total attributable to
equity shareholders of the
Company - continuing
operations 198 9 24
(1) Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
The unrealised net gain on non-hedge derivatives related to net debt
principally comprises an unrealised gain on an embedded interest rate
derivative.
6. Special items and remeasurements (continued)
Total special items and remeasurements - continuing operations
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07(1) 31.12.07
Total special items and
remeasurements before tax
and minority interests -
continuing operations 848 222 243
Tax (8) (40) (17)
Minority interests (19) 33 34
Net total special items
and remeasurements
attributable to equity
shareholders of the
Company - continuing
operations 821 215 260
(1) Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
Associates` special items and remeasurements
Associates` operating special items and remeasurements
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07(1) 31.12.07
Impairment of De Beers`
Canadian assets - - (434)
Share of De Beers`
restructuring costs - - (15)
Share of De Beers` class
action payment and related
costs (2) (3) (5)
Unrealised net loss on
non-hedge derivatives (17) (6) (3)
Other impairments (2) - (8)
Total associates`
operating special items
and remeasurements -
continuing operations (21) (9) (465)
(1) Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
Associates` profits on disposals
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07(1) 31.12.07
Disposal of interests in
Acerinox - 12 12
Disposal of interest in
Gope Exploration Company - - 8
Other 3 8 4
Associates` net profit on
disposals - continuing
operations 3 20 24
(1) Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
Associates` financing remeasurements
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07(1) 31.12.07
Unrealised net (loss)/gain
on non-hedge derivatives
related to net debt (5) 7 (4)
Total associates`
financing remeasurements -
continuing operations (5) 7 (4)
(1) Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
Total associates` special items and remeasurements - continuing operations
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07(1) 31.12.07
Total associates` special
items and remeasurements
before tax and minority
interests - continuing
operations (23) 18 (445)
Tax - (3) 2
Net total associates`
special items and
remeasurements -
continuing operations (23) 15 (443)
(1) Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
Operating special items and remeasurements - continuing operations
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07(1) 31.12.07
Operating special items (22) 7 (251)
Operating remeasurements 25 19 5
Total operating special
items and remeasurements
(excluding associates) -
continuing operations 3 26 (246)
Associates` operating
special items (4) (3) (462)
Associates` operating
remeasurements (17) (6) (3)
Total associates`
operating special items
and remeasurements -
continuing operations (21) (9) (465)
Total operating special
items and remeasurements
(including associates) -
continuing operations (18) 17 (711)
Operating special items
(including associates) (26) 4 (713)
Operating remeasurements
(including associates) 8 13 2
Total operating special
items and remeasurements
(including associates) -
continuing operations (18) 17 (711)
(1) Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
7. Net finance income/(costs)
Finance costs and exchange gains/(losses) are presented net of effective cash
flow hedges for respective interest bearing and foreign currency borrowings.
Fair value gains/(losses) on derivatives, presented below, include the mark to
market value changes of interest rate and currency derivatives designated as
fair value hedges, net of fair value changes in the associated hedged risk; and
fair value changes of non-hedge derivatives of non-operating items.
Before special After special Before special
items and items and items and
remeasure- remeasure- remeasure-
ments ments ments
6 months 6 months 6 months
ended ended ended
US$ million 30.06.08 30.06.08 30.06.07(1)
Investment income
Interest and other
financial income 156 156 143
Expected return on
defined benefit
arrangements 115 115 151
Foreign exchange gains 22 40 28
Dividend income from
financial asset
investments 29 29 1
Fair value gains on
derivatives - 210 -
Other fair value gains - - 3
Total investment income
- continuing operations 322 550 326
Interest expense
Amortisation of
discount relating to
provisions (16) (16) (15)
Interest and other
finance expense (322) (322) (246)
Interest on defined
benefit arrangements (108) (108) (132)
Foreign exchange losses (103) (103) (2)
Dividend on redeemable
preference shares (6) (6) (2)
Fair value losses on
derivatives - (23) (1)
Other fair value losses (22) (22) -
(577) (600) (398)
Less: interest
capitalised 96 96 7
Total interest expense
- continuing operations (481) (504) (391)
Net finance
income/(costs) -
continuing operations (159) 46 (65)
After special Before special After special
items and items and items and
remeasure- remeasure- remeasure-
ments ments ments
6 months Year Year
ended ended ended
US$ million 30.06.07(1) 31.12.07 31.12.07
Investment income
Interest and other
financial income 143 323 323
Expected return on
defined benefit
arrangements 151 257 257
Foreign exchange gains 29 68 68
Dividend income from
financial asset
investments 1 36 36
Fair value gains on
derivatives 33 - 34
Other fair value gains 3 - 24
Total investment income
- continuing operations 360 684 742
Interest expense
Amortisation of discount
relating to provisions (15) (36) (36)
Interest and other
finance expense (246) (565) (565)
Interest on defined
benefit arrangements (132) (229) (229)
Foreign exchange losses (2) (9) (12)
Dividend on redeemable
preference shares (2) (9) (9)
Fair value losses on
derivatives (8) (1) (22)
Other fair value losses (6) (14) (19)
(411) (863) (892)
Less: interest
capitalised 7 42 42
Total interest expense -
continuing operations (404) (821) (850)
Net finance
income/(costs) -
continuing operations (44) (137) (108)
(1) Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
The weighted average interest rate applicable to interest on general borrowings
capitalised for continuing operations was 12.6% (six months ended 30 June 2007:
10.0%; year ended 31 December 2007: 11.4%). Financing remeasurements are set
out in note 6.
8. Income tax expense
a) Analysis of charge for
the period from
continuing operations
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07(1) 31.12.07
- 59 145
United Kingdom corporation
tax at 30% 22 - -
United Kingdom corporation
tax at 28.5% 436 527 830
South Africa tax 956 658 1,258
Other overseas tax 1,414 1,244 2,233
Current tax (excluding tax
on special items and
remeasurements) 168 196 443
Deferred tax (excluding
tax on special items and
remeasurements) 1,582 1,440 2,676
Tax (excluding tax on
special items and
remeasurements) 8 40 17
Tax on special items and
remeasurements 1,590 1,480 2,693
Total tax charge - continuing operations
(1) Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
8. Income tax expense (continued)
b) Factors affecting tax charge for the period
The effective tax rate for the period of 24.6% (six months ended 30 June 2007:
29.8%; year ended 31 December 2007:
30.5%) is lower than the weighted average standard rate of corporation tax for
2008 in the United Kingdom (28.5%). The differences are explained below:
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07(1) 31.12.07
Profit on ordinary activities before tax -
continuing operations 6,468 4,974 8,821
Tax on profit on ordinary activities calculated
at United Kingdom corporation tax rate of 30% - 1,492 2,646
Tax on profit on ordinary activities calculated
at United Kingdom corporation tax rate of 28.5% 1,843 - -
Tax effect of share of net income from associates (188) (96) (59)
Tax effects of:
Expenses not deductible for tax purposes
Operating special items and remeasurements 1 (2) 15
Exploration expenditure 7 4 19
Other non-deductible expenses 55 52 85
Non-taxable income
Profits and losses on disposals and financing
remeasurements (235) (25) (71)
Other non-taxable income (32) (28) (41)
Temporary difference adjustments
Changes in tax rates (84) (26) 12
Movements in tax losses - 5 13
Enhanced tax depreciation - - (91)
Other temporary differences (10) (22) (14)
Other adjustments
South African secondary tax on companies 82 90 175
Effect of differences between local and UK rates 140 (43) (48)
Other adjustments 11 79 52
Tax charge for the period - continuing operations 1,590 1,480 2,693
(1) Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
IAS 1 requires income from associates to be presented net of tax on the face of
the income statement. The associates` tax is therefore not included within the
Group`s total tax charge. Associates` tax included within `Share of net income
from associates` for the six months ended 30 June 2008 is $313 million (six
months ended 30 June 2007: $130 million; year ended 31 December 2007: $303
million). Excluding special items and remeasurements this is unchanged at $313
million (six months ended 30 June 2007: $127 million; year ended 31 December
2007: $305 million).
The effective rate of tax before special items and remeasurements including
share of associates` tax for the six months ended 30 June 2008 was 31.7%. This
was a decrease from the equivalent effective rate of 32.1% in the six months
ended 30 June 2007. The main reason for this net decrease was the relative
impact of the statutory tax rates, on a fully distributed basis where
appropriate, of the countries in which the Group`s operations are based, and a
reduction of the statutory tax rate in South Africa. In future periods it is
expected that the effective tax rate, including associates` tax, will remain
above the United Kingdom statutory tax rate.
9. Earnings per share
6 months ended 30.06.08
Continuing Discontinued Total
US$ operations operations Group
Profit for the financial period
attributable
to equity shareholders of the Company
Basic earnings per share 3.56 - 3.56
Diluted earnings per share 3.51 - 3.51
Headline earnings for the financial
period(1)
Basic earnings per share 3.04 - 3.04
Diluted earnings per share 3.00 - 3.00
Underlying earnings for the financial
period(1)
Basic earnings per share 2.90 - 2.90
Diluted earnings per share 2.85 - 2.85
6 months ended 30.06.07
Continuing Discontinued Total
US$ operations operations Group
Profit for the financial period
attributable
to equity shareholders of the
Company
Basic earnings per share 2.17 0.24 2.41
Diluted earnings per share 2.14 0.24 2.38
Headline earnings for the financial
period(1)
Basic earnings per share 1.97 0.17 2.14(2)
Diluted earnings per share 1.94 0.17 2.11(2)
Underlying earnings for the
financial
period(1)
Basic earnings per share 2.00 0.18 2.18
Diluted earnings per share 1.98 0.18 2.16
Year ended 31.12.07
Continuing Discontinued Total
US$ operations operations Group
Profit for the financial period
attributable
to equity shareholders of the Company
Basic earnings per share 4.04 1.54 5.58
Diluted earnings per share 3.99 1.51 5.50
Headline earnings for the financial
period(1)
Basic earnings per share 4.10 0.08 4.18
Diluted earnings per share 4.04 0.08 4.12
Underlying earnings for the financial
period(1)
Basic earnings per share 4.18 0.22 4.40
Diluted earnings per share 4.13 0.21 4.34
(1) Basic and diluted earnings per share are shown based on headline earnings,
a Johannesburg stock exchange (JSE Limited) defined performance measure, and
underlying earnings, which the directors consider to be a useful additional
measure of the Group`s performance. Both earnings measures are further
explained below.
(2) Comparatives have been adjusted to comply with revised guidance on headline
earnings.
9. Earnings per share (continued)
The calculation of the basic and diluted earnings per share is based on the
following data:
6 months ended 30.06.08
Continuing Discontinued Total
US$ million (unless otherwise stated) operations operations Group
Basic and diluted earnings
Profit for the financial period
attributable to
equity shareholders of the Company 4,281 - 4,281
Number of shares (million)
Basic number of ordinary shares
outstanding(1) 1,203
Effect of dilutive potential ordinary
shares(2)
Share options 17
Diluted number of ordinary shares
outstanding(1) 1,220
6 months ended 30.06.07
Continuing Discontinued Total
US$ million (unless otherwise stated) operations operations Group
Basic and diluted earnings
Profit for the financial period
attributable to
equity shareholders of the Company 3,034 345 3,379
Number of shares (million)
Basic number of ordinary shares
outstanding(1) 1,400
Effect of dilutive potential ordinary
shares(2)
Share options 19
Diluted number of ordinary shares
outstanding(1) 1,419
Year ended 31.12.07
Continuing Discontinued Total
US$ million (unless otherwise stated) operations operations Group
Basic and diluted earnings
Profit for the financial period
attributable to
equity shareholders of the Company 5,294 2,010 7,304
Number of shares (million)
Basic number of ordinary shares
outstanding(1) 1,309
Effect of dilutive potential ordinary
shares(2)
Share options 18
Diluted number of ordinary shares
outstanding(1) 1,327
(1) Basic and diluted number of ordinary shares outstanding represent the
weighted average for the period. The average number of ordinary shares in issue
excludes the shares held by the employee benefit trusts and other Anglo
American shares held by the Group.
(2) Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares in issue on the assumption of conversion of all
potentially dilutive ordinary shares.
All outstanding share options and awards are potentially dilutive and
have been included in the calculation of diluted earnings per share. No
instruments are anti-dilutive for the period ended 30 June 2008.
The weighted average number of ordinary shares, and accordingly earnings per
share, of the Group have been impacted by the effect of the share buyback
programme as well as the Anglo American share consolidation which on 2 July
2007 resulted in 100 existing Anglo American ordinary shares being exchanged
for 91 new Anglo American ordinary shares.
`Underlying earnings` is an alternative earnings measure, which the directors
believe provides a clearer picture of the underlying financial performance of
the Group`s operations. Underlying earnings is presented after minority
interests and excludes special items and remeasurements (see note 6).
Underlying earnings is distinct from `Headline earnings`, which is a JSE
Limited defined performance measure.
The calculation of basic and diluted earnings per share for continuing
operations, based on headline and underlying earnings for continuing
operations, uses the following earnings data:
Earnings (US$ million)
6 months 6 months Year
ended ended ended
Continuing operations 30.06.08 30.06.07(1) 31.12.07
Profit for the financial period
attributable to equity shareholders
of the Company -
continuing operations 4,281 3,034 5,294
Operating special items (2) (7) 196
Operating special items - tax - - (54)
Net profit on disposals(2) (640) (243) (528)
Net profit on disposals - tax (1) 24 71
Net profit on disposals - minority
interests 25 (35) (34)
Associates` special items (1) (20) 418
Associates` special items - tax - 3 -
Headline earnings for the financial
period - continuing operations 3,662 2,756 5,363
Operating special items(3) 24 - 55
Operating special items - tax (4) - (6)
Operating remeasurements (25) (19) (5)
Operating remeasurements - tax 6 6 1
Operating remeasurements - minority
interests (6) - -
Financing remeasurements (205) (21) (29)
Financing remeasurements - tax 7 10 5
Financing remeasurements - minority
interests - 2 -
Associates` remeasurements 22 (1) 7
Associates` special items(4) 2 3 20
Associates` special items - tax - - (2)
IFRS 2 charges on BBBEE and BEE
transactions - 68 68
Underlying earnings for the financial
period - continuing operations 3,483 2,804 5,477
Underlying earnings for the financial
period - discontinued operations - 254 284
Underlying earnings for the financial
period - total Group 3,483 3,058 5,761
Basic earnings per share (US$)
6 months 6 months Year
ended ended ended
Continuing operations 30.06.08 30.06.07(1) 31.12.07
Profit for the financial period
attributable to equity shareholders
of the Company -
continuing operations 3.56 2.17 4.04
Operating special items - (0.01) 0.15
Operating special items - tax - - (0.04)
Net profit on disposals(2) (0.54) (0.17) (0.40)
Net profit on disposals - tax - 0.02 0.05
Net profit on disposals - minority
interests 0.02 (0.03) (0.02)
Associates` special items - (0.01) 0.32
Associates` special items - tax - - -
Headline earnings for the financial
period - continuing operations 3.04 1.97 4.10
Operating special items(3) 0.02 - 0.04
Operating special items - tax - - -
Operating remeasurements (0.02) (0.01) -
Operating remeasurements - tax - - -
Operating remeasurements - minority
interests - - -
Financing remeasurements (0.17) (0.02) (0.02)
Financing remeasurements - tax 0.01 0.01 -
Financing remeasurements - minority
interests - - -
Associates` remeasurements 0.02 - -
Associates` special items(4) - - 0.01
Associates` special items - tax - - -
IFRS 2 charges on BBBEE and BEE
transactions - 0.05 0.05
Underlying earnings for the financial
period - continuing operations 2.90 2.00 4.18
Underlying earnings for the financial
period - discontinued operations - 0.18 0.22
Underlying earnings for the financial
period - total Group 2.90 2.18 4.40
(1) Comparatives have been reclassified to comply with revised guidance on
headline earnings.
(2) Excluding associated IFRS 2 charges on BBBEE and BEE transactions.
(3) Six months ended 30 June 2008 includes costs associated with `One Anglo`
restructuring initiatives. Year ended 31 December 2007 includes costs
associated with proposed sale of Tarmac.
(4) Includes restructuring costs and legal settlements.
9. Earnings per share (continued)
The calculation of basic and diluted earnings per share for discontinued
operations, based on headline and underlying earnings for discontinued
operations, uses the following earnings data:
Earnings (US$ million)
6 months 6 months Year
ended ended ended
Discontinued operations 30.06.08 30.06.07 31.12.07
Profit for the financial period
attributable to equity shareholders of
the Company -
discontinued operations - 345 2,010
Operating special items - 13 13
Operating special items - tax - (2) (2)
Financing special items - 2 2
Financing special items - tax - (8) (8)
Net profit on disposals - (119) (2,079)
Net profit on disposals - tax - 8 165
Associates` special items - (3) 1
Associates` special items - tax - 2 2
Headline earnings for the financial
period - discontinued operations - 238 104
Operating remeasurements - (3) (3)
Operating remeasurements - tax - 1 1
Financing remeasurements - (2) (2)
Associates` remeasurements - 26 204
Associates` remeasurements - tax - (6) (20)
Underlying earnings for the financial
period - discontinued operations - 254 284
Basic earnings per share (US$)
6 months 6 months Year
ended ended ended
Discontinued operations 30.06.08 30.06.07 31.12.07
Profit for the financial period
attributable to equity shareholders of
the Company -
discontinued operations - 0.24 1.54
Operating special items - 0.01 0.01
Operating special items - tax - - -
Financing special items - - -
Financing special items - tax - (0.01) (0.01)
Net profit on disposals - (0.08) (1.59)
Net profit on disposals - tax - 0.01 0.13
Associates` special items - - -
Associates` special items - tax - - -
Headline earnings for the financial
period - discontinued operations - 0.17 0.08
Operating remeasurements - - -
Operating remeasurements - tax - - -
Financing remeasurements - - -
Associates` remeasurements - 0.02 0.16
Associates` remeasurements - tax - (0.01) (0.02)
Underlying earnings for the financial
period - discontinued operations - 0.18 0.22
10. Called-up share capital
30.06.08
Number of shares US$ million
Authorised:
5% cumulative preference shares of GBP1 each 50,000 -
Ordinary shares of 5486/91 US cents (30
June
2007: 50 US cents; 31 December 2007:
54:86/91 US cents) 1,820,000,000 1,000
1,000
Called-up, allotted and fully paid:
5% cumulative preference shares of GBP1 each 50,000 -
Ordinary shares of 5486/91 US cents (30
June 2007: 50 US cents; 31 December 2007:
54:86/91 US cents) 1,342,915,273 738
738
30.06.07
Number of shares US$ million
Authorised:
5% cumulative preference shares of GBP1 each 50,000 -
Ordinary shares of 5486/91 US cents (30
June 2007: 50 US cents; 31 December 2007:
54:86/91 US cents) 2,000,000,000 1,000
1,000
Called-up, allotted and fully paid:
5% cumulative preference shares of GBP1 each 50,000 -
Ordinary shares of 5486/91 US cents (30
June 2007: 50 US cents; 31 December 2007:
54:86/91 US cents) 1,541,657,700 771
771
31.12.07
Number of shares US$ million
Authorised:
5% cumulative preference shares of GBP1 each 50,000 -
Ordinary shares of 5486/91 US cents (30
June 2007: 50 US cents; 31 December 2007:
54:86/91 US cents) 1,820,000,000 1,000
1,000
Called-up, allotted and fully paid:
5% cumulative preference shares of GBP1 each 50,000 -
Ordinary shares of 5486/91 US cents (30
June 2007: 50 US cents; 31 December 2007:
54:86/91 US cents) 1,342,911,897 738
738
Following the demerger of Mondi on 2 July 2007, a share consolidation became
effective with the result that for every 100 existing ordinary shares of 50 US
cents each, shareholders received 91 new ordinary shares of 5486/91 US cents
each. This resulted in a reduction in the number of ordinary shares held of
138,749,193.
In the six months ended 30 June 2008, 5,943,721 ordinary shares of 5486/91 US
cents each were purchased by the Company and held in treasury (six months ended
30 June 2007: 27,073,161 ordinary shares of 50 US cents; year ended 31 December
2007: 27,073,161 ordinary shares of 50 US cents and 14,631,542 ordinary shares
of 5486/91 US cents).
On 3 August 2007 the Company cancelled 60,000,000 ordinary shares of 5486/91 US
cents previously held in treasury.
In the event of winding up, the holders of the cumulative preference shares
will be entitled to the repayment of a sum equal to the nominal capital paid
up, or credited as paid up, on the cumulative preference shares held by them
and any accrued dividend, whether such dividend has been earned or declared or
not, calculated up to the date of the winding up.
11. Reconciliation of changes in equity
Attributable to equity shareholders of the Company
Total Share-based
share Retained payment
capital(1)
US$ million earnings reserve
Balance at 1 January 2007 3,484 19,738 247
Total recognised income and expense - 3,480 -
Dividends paid - (1,058) -
Dividends paid to minority interests - - -
Acquisition and disposal of
businesses - - -
Issue of shares to minority
interests - - -
Share buybacks - (3,066) -
Purchase of shares for share schemes - (17) -
Share-based payment charges on
equity settled schemes - - 80
Issue of shares under employee
share schemes - 64 (47)
Current tax on exercised employee
share awards - 7 -
Group reinvestment of dividends in
Anglo Platinum - - -
Minority conversion of Anglo
Platinum`s preference shares - 41 -
Other - - -
Balance at 30 June 2007 3,484 19,189 280
Total recognised income and expense - 3,796 -
Dividends paid - (469) -
Dividends paid to minority interests - - -
Dividend in specie relating to
Mondi demerger - (3,718) -
Acquisition, disposal and demerger
of businesses - 41 (45)
Share buybacks - (3,101) -
Purchase of shares for share schemes - (6) -
Share-based payment charges on
equity settled schemes - - 76
Issue of shares under employee
share schemes - 67 (47)
Current tax on exercised employee
share awards - 16 -
Minority conversion of Anglo
Platinum`s preference shares - 4 -
Exercise of share options in Anglo
Platinum - - -
Cancellation of treasury shares (33) - -
IFRS 2 charges arising on BBBEE and
BEE transactions - 33 -
Other - 3 (2)
Balance at 31 December 2007 3,451 15,855 262
Total recognised income and expense - 4,138 -
Dividends paid - (1,021) -
Dividends paid to minority interests - - -
Acquisition and disposal of
businesses (including issue of
shares to minority interests) - 11 -
Minority conversion of Anglo
Platinum`s preference shares - 6 -
Share buybacks - (337) -
Purchase of shares for share schemes - (63) -
Share-based payment charges on
equity settled schemes - - 67
Issue of shares under employee
share schemes - 60 (69)
Current tax on exercised employee
share awards - 9 -
Treasury shares issued in
subsidiary entities - 2 -
Other - - (17)
Balance at 30 June 2008 3,451 18,660 243
Cumulative
translation
adjustment Fair value and
US$ million reserve other reserves
Balance at 1 January 2007 (38) 840
Total recognised income and expense 186 224
Dividends paid - -
Dividends paid to minority interests - -
Acquisition and disposal of businesses - -
Issue of shares to minority interests - -
Share buybacks - -
Purchase of shares for share schemes - -
Share-based payment charges on equity
settled schemes - -
Issue of shares under employee share schemes - -
Current tax on exercised employee share
awards - -
Group reinvestment of dividends in Anglo
Platinum - -
Minority conversion of Anglo Platinum`s
preference shares - -
Other - -
Balance at 30 June 2007 148 1,064
Total recognised income and expense (128) 1,667
Dividends paid - -
Dividends paid to minority interests - -
Dividend in specie relating to Mondi demerger - -
Acquisition, disposal and demerger of
businesses - 112
Share buybacks - -
Purchase of shares for share schemes - -
Share-based payment charges on equity
settled schemes - -
Issue of shares under employee share schemes - -
Current tax on exercised employee share
awards - -
Minority conversion of Anglo Platinum`s
preference shares - -
Exercise of share options in Anglo Platinum - -
Cancellation of treasury shares - 33
IFRS 2 charges arising on BBBEE and BEE
transactions - -
Other - (3)
Balance at 31 December 2007 20 2,873
Total recognised income and expense (1,063) (934)
Dividends paid - -
Dividends paid to minority interests - -
Acquisition and disposal of businesses
(including issue of
shares to minority interests) - -
Minority conversion of Anglo Platinum`s
preference shares - -
Share buybacks - -
Purchase of shares for share schemes - -
Share-based payment charges on equity
settled schemes - -
Issue of shares under employee share schemes - -
Current tax on exercised employee share
awards - -
Treasury shares issued in subsidiary entities - -
Other - -
Balance at 30 June 2008 (1,043) 1,939
Minority Total
US$ million interests equity
Balance at 1 January 2007 2,856 27,127
Total recognised income and expense 511 4,401
Dividends paid - (1,058)
Dividends paid to minority interests (417) (417)
Acquisition and disposal of businesses (651) (651)
Issue of shares to minority interests 28 28
Share buybacks - (3,066)
Purchase of shares for share schemes - (17)
Share-based payment charges on equity settled schemes - 80
Issue of shares under employee share schemes - 17
Current tax on exercised employee share awards - 7
Group reinvestment of dividends in Anglo Platinum 86 86
Minority conversion of Anglo Platinum`s preference
shares (41) -
Other (14) (14)
Balance at 30 June 2007 2,358 26,523
Total recognised income and expense 333 5,668
Dividends paid - (469)
Dividends paid to minority interests (340) (340)
Dividend in specie relating to Mondi demerger - (3,718)
Acquisition, disposal and demerger of businesses (545) (437)
Share buybacks - (3,101)
Purchase of shares for share schemes - (6)
Share-based payment charges on equity settled schemes - 76
Issue of shares under employee share schemes - 20
Current tax on exercised employee share awards - 16
Minority conversion of Anglo Platinum`s preference
shares (4) -
Exercise of share options in Anglo Platinum 51 51
Cancellation of treasury shares - -
IFRS 2 charges arising on BBBEE and BEE transactions 35 68
Other (19) (21)
Balance at 31 December 2007 1,869 24,330
Total recognised income and expense 414 2,555
Dividends paid - (1,021)
Dividends paid to minority interests (301) (301)
Acquisition and disposal of businesses (including
issue of
shares to minority interests) (52) (41)
Minority conversion of Anglo Platinum`s preference
shares (6) -
Share buybacks - (337)
Purchase of shares for share schemes - (63)
Share-based payment charges on equity settled schemes 2 69
Issue of shares under employee share schemes - (9)
Current tax on exercised employee share awards - 9
Treasury shares issued in subsidiary entities - 2
Other (5) (22)
Balance at 30 June 2008 1,921 25,171
(1) Total share capital comprises called-up share capital of $738 million (30
June 2007: $771 million; 31 December 2007: $738 million) and the share premium
account of $2,713 million (30 June 2007: $2,713 million; 31 December
2007: $2,713 million).
Fair value and other reserves comprise:
US$ million Available for sale reserve Cash flow hedge reserve
Balance at 1 January 2007 491 (422)
Total recognised income and expense 218 6
Balance at 30 June 2007 709 (416)
Total recognised income and expense 1,671 (4)
Acquisition, disposal and demerger of businesses (7) 116
Cancellation of treasury shares - -
Other - -
Balance at 31 December 2007 2,373 (304)
Total recognised income and expense (785) (149)
Balance at 30 June 2008 1,588 (453)
Total fair value and
US$ million Other reserves (1) other reserves
Balance at 1 January 2007 771 840
Total recognised income and expense - 224
Balance at 30 June 2007 771 1,064
Total recognised income and expense - 1,667
Acquisition, disposal and demerger of businesses 3 112
Cancellation of treasury shares 33 33
Other (3) (3)
Balance at 31 December 2007 804 2,873
Total recognised income and expense - (934)
Balance at 30 June 2008 804 1,939
(1) Other reserves comprise a $689 million (30 June 2007: $693 million; 31
December 2007: $689 million) legal reserve and a $115 million (30 June 2007:
$82 million; 31 December 2007: $115 million) capital redemption reserve. At 30
June 2007 these balances were partially offset by a negative revaluation
reserve of $4 million which was subsequently disposed.
12. Consolidated cash flow analysis
a) Reconciliation of profit before tax to cash inflows from continuing
operations
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07(1) 31.12.07
Profit before tax -
continuing operations 6,468 4,974 8,821
Depreciation and
amortisation 742 673 1,398
Share-based payment charges 108 64 138
Special items and
remeasurements of
subsidiaries and joint
ventures (848) (222) (243)
Net finance costs before
remeasurements 159 65 137
Fair value gains before
special items and
remeasurements - (19) (12)
Share of net income from
associates (658) (321) (197)
Provisions (67) (16) 77
Increase in inventories (524) (147) (352)
Increase in operating
receivables (1,162) (400) (389)
Increase/(decrease) in
operating payables 624 (3) 53
Other adjustments (11) (31) (56)
Cash inflows from
continuing operations 4,831 4,617 9,375
(1) Comparatives have been adjusted to exclude amounts relating to discontinued
operations.
b) Reconciliation to the balance sheet
Cash and cash equivalents(1)
US$ million 30.06.08 30.06.07 31.12.07
Balance sheet 3,316 2,962 3,129
Balance sheet - disposal groups(2) 52 - -
Bank overdrafts (23) (68) (17)
Bank overdrafts - disposal groups(2) - - (38)
Net debt classifications 3,345 2,894 3,074
Short term borrowings
US$ million 30.06.08 30.06.07 31.12.07
Balance sheet (3,969) (3,427) (5,895)
Balance sheet - disposal groups(2) (34) - (31)
Bank overdrafts 23 68 17
Bank overdrafts - disposal groups(2) - - -
Net debt classifications (3,980) (3,359) (5,909)
Medium and long term borrowings
US$ million 30.06.08 30.06.07 31.12.07
Balance sheet (4,765) (4,884) (2,404)
Balance sheet - disposal groups(2) - - -
Bank overdrafts - - -
Bank overdrafts - disposal groups(2) - - -
Net debt classifications (4,765) (4,884) (2,404)
(1) `Short term borrowings` on the balance sheet include overdrafts which are
included within cash and cash equivalents for net debt.
(2) Disposal group balances are shown within `Assets classified as held for
sale` and `Liabilities directly associated with assets classified as held for
sale` on the balance sheet.
c) Movement in net debt
Cash and
cash Debt due within Debt due after
US$ million equivalents(1) one year one year
Balance at 1 January
2007 2,980 (2,076) (4,228)
Cash flow(3) (47) (262) (2,034)
Acquisition and
disposal of
businesses - 362 21
Reclassifications - (1,353) 1,381
Movement in fair value - - 33
Other non-cash
movements - (1) 14
Currency movements (39) (29) (71)
Balance at 30 June
2007 2,894 (3,359) (4,884)
Cash flow(3) 81 (2,356) 700
Acquisition, disposal
and demerger of
businesses - 106 1,837
Reclassifications - (41) 39
Movement in fair value - (7) (23)
Other non-cash
movements - 1 4
Currency movements 99 (253) (77)
Balance at 31
December 2007 3,074 (5,909) (2,404)
Cash flow(3) 287 2,019 (2,777)
Acquisition of
businesses - (9) (85)
Reclassifications - (133) 133
Movement in fair value - (11) 183
Other non-cash
movements - - 5
Currency movements (16) 63 180
Balance at 30 June
2008 3,345 (3,980) (4,765)
Net debt Total net debt
excluding including
US$ million hedges Hedges(2) hedges
Balance at 1 January 2007 (3,324) 193 (3,131)
Cash flow(3) (2,343) - (2,343)
Acquisition and disposal of
businesses 383 - 383
Reclassifications 28 - 28
Movement in fair value 33 16 49
Other non-cash movements 13 - 13
Currency movements (139) - (139)
Balance at 30 June 2007 (5,349) 209 (5,140)
Cash flow(3) (1,575) - (1,575)
Acquisition, disposal and
demerger of businesses 1,943 - 1,943
Reclassifications (2) - (2)
Movement in fair value (30) 179 149
Other non-cash movements 5 - 5
Currency movements (231) - (231)
Balance at 31 December 2007 (5,239) 388 (4,851)
Cash flow(3) (471) (380) (851)
Acquisition of businesses (94) - (94)
Reclassifications - - -
Movement in fair value 172 (79) 93
Other non-cash movements 5 - 5
Currency movements 227 - 227
Balance at 30 June 2008 (5,400) (71) (5,471)
(1) The Group operates in certain countries (principally South Africa and
Venezuela) where the existence of exchange controls may restrict the use of
certain cash balances. These restrictions are not expected to have a material
effect on the Group`s ability to meet its ongoing obligations.
(2) Derivative instruments that provide an economic hedge of net debt items are
included above to reflect the true net debt position of the Group at the period
end. These consist of net current derivative assets of $83 million (30 June
2007: $134 million; 31 December 2007: $396 million) and net non-current
derivative liabilities of $154 million (30 June 2007: $75 million net assets;
31 December 2007: $8 million net liabilities) which are classified within other
financial assets and other financial liabilities respectively on the balance
sheet.
(3) Cash flow on debt due within one year includes nil relating to discontinued
operations (six months ended 30 June 2007: repayments of $162 million; year
ended 31 December 2007: repayments of $162 million). Similarly, cash flow on
debt due after one year includes nil relating to discontinued operations (six
months ended 30 June 2007: receipts of $993 million; year ended 31 December
2007: receipts of $993 million).
13. EBITDA by business segment
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07 31.12.07
By business segment
Platinum 1,714 1,737 3,155
Diamonds 397 310 587
Base Metals 2,623 2,329 4,683
Ferrous Metals and
Industries 1,359 780 1,561
Coal(1) 900 441 882
Industrial Minerals(1) 291 326 732
Exploration (98) (55) (157)
Corporate Activities and
Unallocated Costs (148) (139) (272)
EBITDA - continuing
operations 7,038 5,729 11,171
EBITDA - discontinued
operations - 825 961
EBITDA - total Group 7,038 6,554 12,132
(1) In the second half of 2007 Yang Quarry was reclassified from Industrial
Minerals to Coal. This was to align with internal management reporting. As
such, the comparative data for the six months ended 30 June 2007 has been
reclassified.
EBITDA is stated before special items and remeasurements and is reconciled to
`Total profit from operations and associates` as follows:
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07 31.12.07
Total profit from
operations and associates 6,422 5,018 8,929
Operating special items
and remeasurements
(including associates) 18 (17) 711
Net profit on disposals
(including associates) (643) (195) (484)
Associates` financing
remeasurements 5 (7) 4
Depreciation and
amortisation: subsidiaries
and joint ventures 742 673 1,398
Share of associates`
interest, tax,
depreciation, amortisation
and minority interests 494 257 613
EBITDA - continuing
operations 7,038 5,729 11,171
EBITDA - discontinued
operations - 825 961
EBITDA - total Group 7,038 6,554 12,132
14. Discontinued operations
On 2 July 2007 the Paper and Packaging business was demerged from the Group by
way of a dividend in specie paid to shareholders.
On 2 October 2007 the Group sold 67.1 million shares in AngloGold Ashanti
Limited which reduced the Group`s shareholding from 41.6% to 17.3%. The Group`s
representation on the company`s board was also withdrawn at this time.
The remaining investment is accounted for as a financial asset investment.
Both of these operations were considered discontinued in the Group`s financial
statements for the year ended 31 December 2007.
The results of the discontinued businesses are shown below:
Before special items and remeasurements
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07 31.12.07
Revenue - 4,062 4,062
Total operating costs - (3,741) (3,741)
Operating profit from subsidiaries and
joint
ventures - discontinued operations - 321 321
Net profit on disposals - - -
Share of net income from associates - 67 97
Total profit from discontinued
operations and
associates - 388 418
Net finance costs - (19) (19)
Profit before tax - discontinued
operations - 369 399
Income tax (expense)/income - (81) (81)
Profit for the financial period -
discontinued
operations - 288 318
Profit on partial disposal of AngloGold
Ashanti(1) - - -
Transaction costs relating to the
demerger of
Mondi(1) - - -
Tax on net profit on disposal and
demerger of
discontinued operations - - -
Net profit after tax on disposal and
demerger of
discontinued operations - - -
Total profit for the financial period -
discontinued operations - 288 318
Special items and remeasurements
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07 31.12.07
Revenue - - -
Total operating costs - (10) (10)
Operating profit from subsidiaries and
joint
ventures - discontinued operations - (10) (10)
Net profit on disposals - 119 119
Share of net income from associates - (19) (187)
Total profit from discontinued
operations and
associates - 90 (78)
Net finance costs - - -
Profit before tax - discontinued
operations - 90 (78)
Income tax (expense)/income - 1 1
Profit for the financial period -
discontinued
operations - 91 (77)
Profit on partial disposal of AngloGold
Ashanti(1) - - 1,970
Transaction costs relating to the
demerger of
Mondi(1) - - (10)
Tax on net profit on disposal and
demerger of
discontinued operations - - (157)
Net profit after tax on disposal and
demerger of
discontinued operations - - 1,803
Total profit for the financial period -
discontinued operations - 91 1,726
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07 31.12.07
Revenue - 4,062 4,062
Total operating costs - (3,751) (3,751)
Operating profit from subsidiaries and
joint
ventures - discontinued operations - 311 311
Net profit on disposals - 119 119
Share of net income from associates - 48 (90)
Total profit from discontinued
operations and
associates - 478 340
Net finance costs - (19) (19)
Profit before tax - discontinued
operations - 459 321
Income tax (expense)/income - (80) (80)
Profit for the financial period -
discontinued
operations - 379 241
Profit on partial disposal of AngloGold
Ashanti(1) - - 1,970
Transaction costs relating to the
demerger of
Mondi(1) - - (10)
Tax on net profit on disposal and
demerger of
discontinued operations - - (157)
Net profit after tax on disposal and
demerger of
discontinued operations - - 1,803
Total profit for the financial period -
discontinued operations - 379 2,044
(1) For further details of the demerger of the Paper and Packaging business and
disposal of AngloGold Ashanti refer to note 16.
14. Discontinued operations (continued)
Summary discontinued segment information
Segment revenue and segment result by discontinued business segment were:
Segment revenue
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07 31.12.07
Subsidiaries and joint ventures
Paper and Packaging - 4,062 4,062
Total subsidiaries and joint
ventures - 4,062(2) 4,062(2)
Revenue and net income from
associates
Gold - 633 1,004
Paper and Packaging - 49 49
Total associates - 682 1,053
Total discontinued operations
including net
income from associates - 4,744 5,115
Net profit on disposals
Total profit from discontinued
operations and
associates
Segment result before special items and
remeasurements(1)
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07 31.12.07
Subsidiaries and joint ventures
Paper and Packaging - 321 321
Total subsidiaries and joint
ventures - 321 321
Revenue and net income from
associates
Gold - 65 95
Paper and Packaging - 2 2
Total associates - 67 97
Total discontinued operations
including net
income from associates - 388 418
Net profit on disposals - - -
Total profit from discontinued
operations and
associates - 388 418
Segment result after special items and
remeasurements(1)
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07 31.12.07
Subsidiaries and joint ventures
Paper and Packaging - 311 311
Total subsidiaries and joint
ventures - 311 311
Revenue and net income from
associates
Gold - 46 (92)
Paper and Packaging - 2 2
Total associates - 48 (90)
Total discontinued operations
including net
income from associates - 359 221
Net profit on disposals - 119 119
Total profit from discontinued
operations and
associates - 478 340
(1) Segment result is defined as being segment revenue less segment expense;
that is operating profit.
(2) This represents segment revenue; the Group`s share of associates of
discontinued operations and discontinued associates` revenue figures are
provided for additional information.
Summary discontinued special items and remeasurements
The following tables provide an analysis of special items and remeasurements
for discontinued operations:
Subsidiaries and joint ventures` special items and remeasurements -
discontinued operations
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07 31.12.07
Operating special items - (13) (13)
Operating remeasurements - 3 3
Total operating special
items and remeasurements -
discontinued operations - (10) (10)
Tax - 1 1
Net total attributable to
equity shareholders of the
Company - discontinued
operations - (9) (9)
Profits on disposals - discontinued operations
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07 31.12.07
Net profit on disposals(1) - 119 119
Tax - (8) (8)
Net total attributable to
equity shareholders of the
Company - discontinued
operations - 111 111
(1) Net profit on disposals in the six months ended 30 June 2007 and the year
ended 31 December 2007 includes part disposal of Mondi Packaging Paper Swiecie
($77 million) and disposal of Bischoff + Klein ($26 million).
Financing special items and remeasurements - discontinued operations
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07 31.12.07
Financing special items - (2) (2)
Financing remeasurements - 2 2
Total financing special
items and remeasurements -
discontinued operations - - -
Tax - 8 8
Net total attributable to
equity shareholders of the
Company - discontinued
operations - 8 8
Total special items and remeasurements - discontinued operations
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07 31.12.07
Total special items and
remeasurements before tax
and minority interests -
discontinued operations - 109 109
Tax - 1 1
Net total special items
and remeasurements
attributable to equity
shareholders of the
Company -
discontinued operations - 110 110
14. Discontinued operations (continued)
Associates` special items and remeasurements - discontinued operations
6 months ended 6 months ended Year ended
US$ million 30.06.08 30.06.07 31.12.07
Associates` operating
special items and
remeasurements(1) - (49) (225)
Associates` net profit on
disposals - 5 7
Associates` financing
remeasurements(2) - 21 13
Total associates` special
items and remeasurements
before tax and minority
interests - discontinued
operations - (23) (205)
Tax - 4 18
Net total associates` special
items and remeasurements
- discontinued operations - (19) (187)
(1) Includes net losses of nil (six months ended 30 June 2007: $47 million;
year ended 31 December 2007: $217 million) on non-hedge derivatives of
AngloGold Ashanti incurred in the period it was held as an associate.
(2) Relates to fair value gains of nil (six months ended 30 June 2007: $21
million; year ended 31 December 2007: $13 million) on the AngloGold Ashanti
convertible bond incurred in the period it was held as an associate.
15. Acquisitions
Acquisition of subsidiaries
The Group has made no material acquisitions of subsidiaries in the six months
ended 30 June 2008 (six months ended 30 June 2007: none; year ended 31 December
2007: none). The Group increased its shareholding in Anglo Platinum Limited
from 74.7% and 76.5% at 30 June 2007 and 31 December 2007 respectively, to
77.9% at 30 June 2008.
In the six months ended 30 June 2008 the Group purchased 3,833,029 shares (six
months ended 30 June 2007: nil; year ended 31 December 2007: 4,435,086 shares)
in Anglo Platinum Limited for total consideration of $617 million (six months
ended 30 June 2007: nil; year ended 31 December 2007: $671 million). The cash
paid in the six months ended 30 June 2008 was $578 million (six months ended 30
June 2007: nil; year ended 31 December 2007: $658 million). In addition, in the
six months ended 30 June 2007 the Group acquired 3,353,108 shares in Anglo
Platinum Limited through a dividend reinvestment plan.
The carrying value and fair value of the net assets at the date of acquisition
and related net cash outflows in total for all acquisitions of subsidiaries
(excluding purchases of shares in Anglo Platinum Limited) are shown below:
6 months ended
30.06.08(1)
US$ million Total carrying value Total fair value
Net assets acquired
Tangible assets 55 55
Other non-current assets 1 1
Current assets 62 62
Current liabilities (29) (29)
Non-current liabilities (43) (46)
Minority interests - -
46 43
Add: Value attributable to
reserves and resources acquired,
net of deferred tax(2) 83
Less: Investments in associates
previously recorded -
Less: Fair value of assets
contributed -
Fair value of net assets acquired 126
Partial funding of partner cash
calls -
Goodwill arising on acquisitions 70
Negative goodwill arising on
acquisitions -
Total cost of acquisitions 196
Satisfied by
Net cash acquired 9
Cash paid in prior period -
Net cash paid(3) 187
6 months ended Year ended
30.06.07 31.12.07
US$ million Total fair value Total fair value
Net assets acquired
Tangible assets 279 314
Other non-current assets 12 12
Current assets 54 65
Current liabilities (50) (54)
Non-current liabilities (52) (66)
Minority interests (76) (80)
167 191
Add: Value attributable to reserves
and resources acquired, net of
deferred tax(2) - 4
Less: Investments in associates
previously recorded (9) (9)
Less: Fair value of assets contributed (59) (59)
Fair value of net assets acquired 99 127
Partial funding of partner cash calls - (12)
Goodwill arising on acquisitions 8 51
Negative goodwill arising on
acquisitions (9) (2)
Total cost of acquisitions 98 164
Satisfied by
Net cash acquired 5 11
Cash paid in prior period 30 30
Net cash paid(3) 63 123
(1) In the six months ended 30 June 2008, revenue of $100 million and an
operating profit before special items and remeasurements of $10 million have
been contributed to the Group from these acquisitions of subsidiaries. Had all
these acquisitions of subsidiaries taken place at 1 January 2008, the Group`s
revenue would have been $14,679 million and the Group`s operating profit before
special items and remeasurements would have been $5,133 million for the six
months ended 30 June 2008.
(2) Represents the Group`s share of value (implicit in the transaction) of
reserves and resources, capitalised within tangible assets.
(3) Includes net cash paid by discontinued operations of nil (six months ended
30 June 2007: $9 million; year ended 31 December 2007: $9 million).
15. Acquisitions (continued)
Acquisition of material joint ventures
The Group made one material acquisition of a joint venture in the six months
ended 30 June 2008 (six months ended 30 June 2007: none; year ended 31 December
2007: one).
On 29 February 2008 Anglo Coal Australia completed the acquisition of a 70%
interest in the Foxleigh joint venture (Foxleigh) in Queensland, Australia. The
total cost of acquisition was $606 million. The Group has proportionately
consolidated 70% of Foxleigh from 29 February 2008.
In the prior year, on 18 July 2007, the Group completed its acquisition of a
49% interest in the MMX Minas-Rio integrated iron ore project in Brazil
(Minas-Rio). The acquisition was effected through the purchase of a 30%
interest in the project companies - MMX Minas-Rio Mineracao SA and LLX
Minas-Rio Logistica SA - from Centennial Asset Mining Fund LLC and the
subscription for shares in the project companies equivalent to a 19% interest.
The total acquisition cost of $1.2 billion comprises $1.15 billion plus
transaction costs and provision for post closing adjustments. In addition there
is a further amount of $600 million which is contingent on certain criteria
being met (brought to account in the current period as payment is considered
probable). The Group`s 49% interest in Minas-Rio is accounted for as a joint
venture entity and, hence, has been proportionately consolidated with effect
from 18 July 2007.
The carrying value and provisional fair value of the net assets at the date of
acquisition and related net cash outflow for material joint venture
acquisitions are shown below:
Foxleigh Minas-Rio
Carrying Provisional Provisional
US$ million value fair value fair value
Net assets acquired
Tangible assets
Value attributable to reserves and
resources acquired - 658 911
Other tangible assets 108 108 -
Other non-current assets 13 13 -
Current assets 41 41 -
Current liabilities (37) (37) -
Non-current liabilities (47) (177) (309)
Fair value of net assets acquired
and total cost of acquisitions 78 606 602
Satisfied by
Net cash acquired 1 -
Deferred consideration - 600
Costs accrued - -
Net cash paid 605 2
6 months ended Year ended
30.06.08 31.12.07
Total Minas-Rio
provisional Provisional
US$ million fair value fair value
Net assets acquired
Tangible assets
Value attributable to reserves and resources
acquired 1,569 1,770
Other tangible assets 108 86
Other non-current assets 13 16
Current assets 41 52
Current liabilities (37) (84)
Non-current liabilities (486) (632)
Fair value of net assets acquired and total
cost of acquisitions 1,208 1,208
Satisfied by
Net cash acquired 1 48
Deferred consideration 600 47
Costs accrued - 1
Net cash paid 607 1,112(1)
(1) In addition in the year ended 31 December 2007 there was further net cash
paid of $2 million for other joint venture acquisitions. This resulted in total
net cash paid for joint ventures of $1,114 million.
16. Disposals and demerger of subsidiaries and businesses
Disposals of subsidiaries
There were no disposals of subsidiaries in the six months ended 30 June 2008.
6 months ended Year ended
US$ million 30.06.07 31.12.07
Net assets disposed
Tangible assets 1,336 6,197
Other non-current assets 82 1,208
Current assets 1,119 4,194
Current liabilities (882) (2,416)
Non-current liabilities (409) (3,064)
Net assets 1,246 6,119
Minority interests (727) (1,200)
Group`s share of net assets immediately prior
to disposal 519 4,919
Less: Retained investments in associates (393) (393)
Less: Retained financial asset investments - (318)
Net assets disposed 126 4,208
Cumulative translation differences recycled
from reserves 25 (334)
Fair value losses arising on transactions 68 68
Dividend in specie relating to Mondi demerger - (3,718)
Other 4 3
Net gain on disposals 165 157
Net sale proceeds 388 384
Net cash and cash equivalents disposed (140) (437)
Costs accrued - 4
Less: Cash proceeds not yet received (10) -
Net cash inflow/(outflow) from disposals and
demerger(1) 238 (49)
(1) For the six months ended 30 June 2007 includes net cash inflow from
disposals in relation to discontinued operations of $144 million (year
ended 31 December 2007: $159 million net cash outflow).
Significant disposals of subsidiaries recorded during the year ended 31
December 2007 are summarised below. For details of these disposals refer to the
Group`s financial statements for the year ended 31 December 2007.
Mondi
On 2 July 2007, the Paper and Packaging business, Mondi, was demerged from the
Group by way of a dividend in specie paid to shareholders of $3,718 million.
The Paper and Packaging business has been presented as a discontinued
operation. Refer to note 14 for financial information on discontinued
operations.
Highveld Steel and Vanadium Corporation (Highveld)
On 4 May 2007, the Group announced the disposal of the remaining 29.2%
shareholding in Highveld to the Evraz Group SA (Evraz) for $238 million. Evraz
was granted an option, subject to regulatory approvals, over this stake as part
of the original transaction in which the Group sold 49.8% of Highveld to Evraz
and Credit Suisse (in July 2006). Evraz exercised their option on 26 April 2007
following requisite regulatory approvals.
Tongaat-Hulett Group
In December 2006 the Tongaat-Hulett Group announced the proposed unbundling and
listing of Hulamin and simultaneous introduction of BBBEE into both companies.
This transaction was effected on 25 June 2007, and empowerment parties acquired
25% of Tongaat-Hulett and 15% of Hulamin`s operations. The Group commenced
equity accounting both Tongaat-Hulett and Hulamin as of 25 June 2007.
However, in accordance with SIC 12 Consolidation - Special Purpose Entities
Tongaat-Hulett and Hulamin are required to consolidate the entities housing the
empowerment interests (as they supplied significant funding to these parties to
effect the transaction). This has the effect, in accounting terms, of
cancelling the shares issued to these parties. As a result, the Group has
equity accounted 49.8% and 44.9% of Tongaat-Hulett and Hulamin, respectively.
The Group`s legal interest in these companies at 30 June 2008, 30 June 2007 and
31 December 2007 was 37.2% and 38.4%, respectively.
Disposal of material associates
There were no material disposals of associates in the six months ended 30 June
2008.
AngloGold Ashanti
On 2 October 2007, the Group sold 67.1 million shares in AngloGold Ashanti
Limited for $2.9 billion. This reduced the Group`s shareholding from 41.6% to
17.3%. The Group`s representation on the company`s board was also withdrawn at
this time. The remaining investment is accounted for as a financial asset
investment. The Gold business has been presented as a discontinued operation.
Refer to note 14 for financial information on discontinued operations. The
Group`s shareholding at 30 June 2008 was 16.6% (30 June 2007: 41.6%; 31
December 2007: 16.6%). Subsequent to the period end, the Group`s shareholding
reduced to 16.3%.
17. Disposal groups and non-current assets held for sale
The following assets and liabilities relating to disposal groups were
classified as held for sale. The Group expects to complete the sale of these
businesses within 12 months of the period end.
Namakwa Platinum Tarmac
US$ million Sands(1) disposal groups(2) Iberia SAU(3)
Intangible assets 2 - 33
Tangible assets 306 254 94
Investments in associates - 55 -
Other non-current assets 2 - 12
Total non-current assets 310 309 139
Inventories 50 - 21
Trade and other
receivables 33 - 85
Cash and cash equivalents - 41 11
Total current assets 83 41 117
Total assets 393 350 256
Trade and other payables (18) (31) (64)
Short term borrowings - (34) -
Other current liabilities - (3) -
Total current liabilities (18) (68) (64)
Retirement benefit
obligations (4) - -
Deferred tax liabilities (78) (63) (8)
Provisions for
liabilities and charges (6) (3) -
Total non-current
liabilities (88) (66) (8)
Total liabilities (106) (134) (72)
Net assets 287 216 184
30.06.08 30.06.07 31.12.07
US$ million Total Total Total
Intangible assets 35 3 3
Tangible assets 654 295 589
Investments in associates 55 - 74
Other non-current assets 14 3 4
Total non-current assets 758 301 670
Inventories 71 40 38
Trade and other receivables 118 25 50
Cash and cash equivalents 52 - -
Total current assets 241 65 88
Total assets 999 366 758
Trade and other payables (113) (17) (53)
Short term borrowings (34) - (69)
Other current liabilities (3) - (4)
Total current liabilities (150) (17) (126)
Retirement benefit obligations (4) (3) (4)
Deferred tax liabilities (149) (75) (148)
Provisions for liabilities and charges (9) (5) (9)
Total non-current liabilities (162) (83) (161)
Total liabilities (312) (100) (287)
Net assets 687 266 471
(1) Namakwa Sands disposal group is included in the Base Metals segment.
Namakwa Sands continued to be held as a disposal group at 30 June 2008 whilst
awaiting receipt of formal documentation for conversion of old order to new
order mining rights. This documentation was received on 30 July 2008 and the
sale of Namakwa Sands is expected to complete in 2008.
(2) This reflects the reclassification of operations to be sold under
previously announced BEE deals. The split of the total assets, total
liabilities and net assets is as follows:
30.06.08
Total Total Net
US$ million assets liabilities assets
Lebowa Platinum Mines Limited 279 (130) 149
Northam Platinum Limited 55 - 55
Other 16 (4) 12
350 (134) 216
31.12.07
Total Total Net
US$ million assets liabilities assets
Lebowa Platinum Mines Limited 243 (166) 77
Northam Platinum Limited 74 - 74
Other 11 (2) 9
328 (168) 160
(3) Tarmac Iberia SAU disposal group is included in the Industrial Minerals
segment.
At 31 December 2007 disposal groups included Namakwa Sands and the Platinum
disposal groups. The only disposal group at 30 June 2007 was Namakwa Sands.
The net carrying amount of assets and associated liabilities reclassified as
held for sale was not written down in any of the periods.
18. Contingent liabilities, contingent assets and other
i) Contingent liabilities
The Group is subject to various claims which arise in the ordinary course of
business. Additionally, and as set out in the demerger agreement, Anglo
American and Mondi have agreed to indemnify each other, subject to certain
limitations, against certain liabilities. Having taken appropriate legal
advice, the Group believes that the likelihood of a material liability arising
is remote. At 30 June 2008 contingent liabilities in respect of the Group`s
subsidiaries comprise aggregate amounts of $590 million (30 June 2007: $298
million; 31 December 2007: $488 million) in respect of loans and performance
guarantees given to banks and other third pa
rties and are primarily in respect of environmental restoration
and decommissioning obligations.
No contingent liabilities were secured on the assets of the Group at 30 June
2008, 30 June 2007 or 31 December 2007.
ii) Contingent assets
There were no significant contingent assets in the Group at 30 June 2008, 30
June 2007 or 31 December 2007.
18. Contingent liabilities, contingent assets and other (continued)
iii) Other
Minera Loma de Niquel
In January 2008, Minera Loma de Niquel (MLdN) was notified of the intention of
the Venezuelan Ministry of Basic Industries and Mining (MIBAM) to cancel 13 of
its exploration and exploitation concessions due to MLdN`s alleged failure to
fulfil certain conditions of the concessions. These concessions do not include
the concessions where the current mining operations and metallurgical
facilities are located. MLdN believes that it has complied with the conditions
of these concessions and has lodged administrative appeals against the notices
of termination. Since the MIBAM has not ruled on these appeals within the
applicable statutory time periods, MLdN is now entitled to file further appeals
with the Tribunal Supremo de Justicia, a course of action which it is currently
considering. Operations are continuing as normal.
Anglo American and MLdN continue to strive to resolve the matter by way of
constructive dialogue; however Anglo American and MLdN believe that there is a
valid legal basis to reverse the notices of termination and will pursue all
appropriate legal and other remedies and actions to protect their respective
interests both under Venezuelan and international law.
At 30 June 2008 Anglo American`s interest in the book value of MLdN, including
its mineral rights, was $571 million (as included in the Group`s balance
sheet). In the six months ended 30 June 2008, MLdN`s production and
contribution to the Group`s operating profit were 4,700 tonnes of nickel in
ferronickel and $67 million, respectively.
Anglo American Sur
Anglo American inherited a 1978 agreement with Empresa Nacional de Mineria
(Enami), the Chilean state mining company, when it acquired Disputada de Las
Condes (since renamed Anglo American Sur) in 2002. The agreement grants Enami
the right, subject to certain conditions and limitations, to acquire up to a
49% minority interest in Anglo American Sur, the wholly owned Group company
that owns the Los Bronces and El Soldado copper mines and the Chagres smelter.
These conditions include limiting the window for exercising the right to once
every three years in the month of January until January 2027. Whilst not
exercised in the past, the next such window for exercising the right is January
2009, although it is not known whether Enami will choose to exercise its right
then or during any subsequent window. The calculations of the price at which
Enami can exercise its right are complex and confidential but do, inter alia,
take account of company profitability over a five year period and the exercise
price would therefore reflect the highly favourable pricing environment for
copper in the five years to 31 December 2008.
19. Related party transactions
The Group has a related party relationship with its subsidiaries, associates
and joint ventures.
At 30 June 2008 the Group held $131 million (30 June 2007: $175 million; 31
December 2007: $131 million) of 10% non- cumulative redeemable preference
shares in DB Investments, the holding company of De Beers Societe Anonyme.
The Company and its subsidiaries, in the ordinary course of business, enter
into various sale, purchase and service transactions with joint ventures and
associates and others in which the Group has a material interest. These
transactions are under terms that are no less favourable than those arranged
with third parties. These transactions are not considered to be significant.
Dividends received from associates during the period totalled $194 million (six
months ended 30 June 2007: $125 million;
year ended 31 December 2007: $275 million), excluding nil (six months ended 30
June 2007: $38 million; year ended 31 December 2007: $52 million) from
discontinued operations, as disclosed in the Consolidated cash flow statement.
At 30 June 2008 the directors of the Company and their immediate relatives
controlled 3% (30 June 2007: 3%;
31 December 2007: 3%) of the voting shares of the Company.
20. Events occurring after the period end
Acquisition of IronX
On 28 July 2008 the Group announced that it is progressing the acquisition of
63.3% of IronX Mineracao S.A. (IronX), which holds a 51% interest in the MMX
Minas-Rio integrated iron ore project (Minas-Rio) and a 70% interest in the
Amapa? iron ore mine, for $3.5 billion. Subject to the satisfaction of final
conditions under the transaction agreements, the transaction will be completed
by 5 August 2008. Following the completion of this transaction, Anglo American
has committed to extend the offer to the minority shareholders of IronX at the
same price per share. The successful completion of the offer to the minority
shareholders will result in Anglo American having paid a total of approximately
$5.5 billion in cash for 100% of the issued and outstanding shares of IronX.
In the prior year the Group acquired 49% of Minas-Rio which has been accounted
for as a joint venture (refer to note 15).
Following the acquisition of 63.3% of IronX, both Minas-Rio (total effective
interest of 81.3%) and Amapa? will be accounted for as subsidiaries of the
Group.
AngloGold Ashanti Limited
On 7 July 2008 the Group subscribed for 11,172,254 additional shares in
AngloGold Ashanti Limited as part of a rights issue. The total cash paid for
the subscription was $280 million and the Group`s shareholding in AngloGold
Ashanti Limited reduced from 16.6% to 16.3%.
Responsibility statements
We confirm that to the best of our knowledge:
(a) the condensed financial statements have been prepared in accordance with
IAS 34 Interim Financial Reporting;
(b) the half year financial report includes a fair review of the information
required by DTR 4.2.7 R (being an indication of important events that have
occurred during the first six months of the financial year, and their impact on
the half year financial report and a description of the principal risks and
uncertainties for the remaining six months of the financial year); and
(c) the half year financial report includes a fair review of the information
required by DTR 4.2.8 R (being disclosure of related party transactions that
have taken place in the first six months of the financial year and that have
materially affected the financial position or the performance of the Group
during that period and any changes in the related party transactions described
in the last annual report that could have a material effect on the financial
position or performance of the Group in the first six months of the current
financial year).
By order of the Board
Cynthia Carroll Rene Medori
Chief executive Finance
director
INDEPENDENT REVIEW REPORT TO ANGLO AMERICAN PLC
We have been engaged by the Company to review the condensed set of financial
statements in the half year financial report for the six months ended 30 June
2008 which comprises the consolidated income statement, the consolidated
balance sheet, the consolidated cash flow statement, the consolidated statement
of recognised income and expense, the reconciliation from EBITDA to cash
inflows from continuing operations and related notes 1 to 20. We have read the
other information contained in the half year financial report and considered
whether it contains any apparent misstatements or material inconsistencies with
the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim
Financial Information Performed by the Independent Auditor of the Entity"
issued by the Auditing Practices Board for use in the United Kingdom ("ISRE
2410"). Our work has been undertaken so that we might state to the Company
those matters we are required to state to them in an independent review report
and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company, for our
review work, for this report, or for the conclusions we have formed.
Directors` responsibilities
The half year financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half year
financial report in accordance with the Disclosure and Transparency Rules of
the United Kingdom`s Financial Services Authority.
As disclosed in note 2, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half year financial
report has been prepared in accordance with International Accounting Standard
34, "Interim Financial Reporting" ("IAS 34"), as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half year financial report based on our
review.
Scope of Review
We conducted our review in accordance with ISRE 2410 (UK and Ireland) issued by
the Auditing Practices Board. A review of interim financial information
consists of making inquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK and Ireland) and consequently does
not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half year
financial report for the six months ended 30 June 2008 is not prepared, in all
material respects, in accordance with IAS 34 as adopted by the European Union
and the Disclosure and Transparency Rules of the United Kingdom`s Financial
Services Authority.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditor
London
30 July 2008
Production statistics
The figures below include the entire output of consolidated entities and the
Group`s share of joint ventures, joint arrangements and associates where
applicable, except for Collahuasi in Base Metals and De Beers which are quoted
on a 100% basis.
6 months ended 6 months ended Year ended
30.06.08 30.06.07 31.12.07
Anglo Platinum (troy
ounces)(1)(2)
Platinum 1,001,100 1,193,700 2,474,000
Palladium 546,600 665,000 1,389,700
Rhodium 116,900 160,700 328,800
1,664,600 2,019,400 4,192,500
Nickel (tonnes)(3) 7,400 10,200 19,200
Copper (tonnes)(3) 4,400 6,000 11,000
Gold 37,800 50,500 97,900
Anglo Coal (tonnes)
South Africa
Eskom 17,000,000 16,963,700 34,064,000
Trade - Thermal 10,490,300 11,501,500 23,952,400
Trade - Metallurgical 463,000 952,400 1,143,700
27,953,300 29,417,600 59,160,100
Australia
Thermal 7,423,600 6,783,700 15,059,300
Metallurgical 6,576,400 4,884,300 10,145,400
14,000,000 11,668,000 25,204,700
South America
Thermal 5,766,800 5,288,400 11,259,800
Canada
Thermal 302,100 - -
Metallurgical 122,900 - -
425,000 - -
Total 48,145,100 46,374,000 95,624,600
Anglo Coal (tonnes)
South Africa
Bank - 51,900 51,900
Greenside 1,591,400 1,591,000 3,314,900
Goedehoop 3,668,000 4,056,400 8,456,200
Isibonelo 2,325,000 2,612,500 5,001,000
Kriel 4,867,200 5,830,600 11,210,100
Kleinkopje 1,907,400 1,845,900 3,490,700
Landau 1,883,100 1,885,300 4,058,200
New Denmark 2,752,000 2,768,900 5,134,700
New Vaal 8,072,800 8,056,000 17,119,500
Nooitgedacht 237,000 283,300 565,700
Mafube 649,400 435,800 757,200
27,953,300 29,417,600 59,160,100
Australia
Callide 4,841,400 4,678,200 10,031,100
Drayton 1,727,000 1,547,900 3,902,700
German Creek (Capcoal) 2,756,000 1,884,600 4,115,700
Jellinbah East 508,200 458,500 891,800
Moranbah 1,881,600 1,544,700 3,211,600
Dawson Complex 1,833,000 1,554,100 3,051,800
Foxleigh 452,800 - -
14,000,000 11,668,000 25,204,700
South America
Carbones del Guasare 598,600 612,400 1,384,400
Carbones del Cerrejon 5,168,200 4,676,000 9,875,400
5,766,800 5,288,400 11,259,800
Canada
Peace River Coal 425,000 - -
Total 48,145,100 46,374,000 95,624,600
(1) See the published results of Anglo Platinum Limited for further analysis of
production information.
(2) Northam Platinum Limited was transferred to a disposal group in September
2007. Production information excludes Northam Platinum Limited and 2007
information has been adjusted accordingly.
(3) Also disclosed within total attributable nickel and copper production.
Production statistics (continued)
6 months ended
30.06.08
De Beers
(diamonds
recovered
- carats)
100% basis
(Anglo
American
45%)
Debswana 16,171,000
Namdeb 998,000
De Beers
Consolidat
ed Mines 6,373,000
Williamson 68,000
Canada 616,000
24,226,000
Anglo Base
Metals
Copper(1)
Collahuasi
100% basis
(Anglo
American
44%)
Ore mined tonnes 26,311,600
Ore
processed Oxide tonnes 3,596,800
Sulphide tonnes 21,492,900
Ore grade
processed Oxide % Cu 0.7
Sulphide % Cu 1.1
Production Copper concentrate dry metric tonnes 737,100
Copper cathode tonnes 25,300
Copper in concentrate tonnes 198,500
Total
copper
production
for
Collahuasi tonnes 223,800
Anglo
American
Sur
(formerly
Minera Sur
Andes)
Los
Bronces
mine
Ore mined tonnes 10,850,900
Marginal
ore mined tonnes 18,768,800
Las
Tortolas
concentrator
Ore processed tonnes 9,682,900
Ore grade processed % Cu 1.1
Average recovery % 86.4
Production Copper concentrate dry metric tonnes 322,200
Copper cathode tonnes 22,800
Copper in concentrate tonnes 94,500
Total tonnes 117,300
El Soldado
mine
Ore mined Open pit - ore mined tonnes 2,812,700
Open pit - marginal ore
mined tonnes 21,700
Underground (sulphide) tonnes 624,500
Total tonnes 3,458,900
Ore
processed Oxide tonnes 391,500
Sulphide tonnes 3,457,300
Ore grade
processed Oxide % Cu 1.4
Sulphide % Cu 1.0
Production Copper concentrate dry metric tonnes 103,100
Copper cathode tonnes 3,500
Copper in concentrate tonnes 26,100
Total tonnes 29,600
Chagres
Smelter
Copper
concentrat
e smelted tonnes 76,300
Production Copper blister/anodes tonnes 75,000
Acid tonnes 239,900
Total
copper
production
for Anglo
American
Sur tonnes 146,900
Anglo
American
Norte
(formerly
Mantos
Blancos)
Mantos
Blancos
mine
Ore
processed Oxide tonnes 2,362,100
Sulphide tonnes 2,098,200
Marginal ore mined tonnes 2,062,300
Ore grade
processed Oxide % Cu (soluble) 0.7
Sulphide % Cu (insoluble) 1.1
Marginal ore % Cu (soluble) 0.3
Production Copper concentrate dry metric tonnes 57,000
Copper cathode tonnes 20,200
Copper in concentrate tonnes 21,500
Total tonnes 41,700
6 months ended
30.06.07
De Beers
(diamonds
recovered -
carats)
100% basis
(Anglo
American
45%)
Debswana 16,407,000
Namdeb 1,184,000
De Beers
Consolidated
Mines 7,567,000
Williamson 116,000
Canada -
25,274,000
Anglo Base
Metals
Copper(1)
Collahuasi
100% basis
(Anglo
American
44%)
Ore mined tonnes 31,190,000
Ore processedOxide tonnes 3,689,600
Sulphide tonnes 20,033,900
Ore grade
processed Oxide % Cu 0.8
Sulphide % Cu 0.9
Production Copper concentrate dry metric tonnes 548,900
Copper cathode tonnes 29,500
Copper in concentrate tonnes 160,600
Total copper
production
for
Collahuasi tonnes 190,100
Anglo
American Sur
(formerly
Minera Sur
Andes)
Los Bronces
mine
Ore mined tonnes 11,811,000
Marginal ore
mined tonnes 18,857,800
Las Tortolas
concentrator Ore processed tonnes 10,875,000
Ore grade processed % Cu 0.9
Average recovery % 85.5
Production Copper concentrate dry metric tonnes 291,500
Copper cathode tonnes 23,500
Copper in concentrate tonnes 88,900
Total tonnes 112,400
El Soldado
mine
Ore mined Open pit - ore mined tonnes 3,169,700
Open pit - marginal ore
mined tonnes 47,200
Underground (sulphide) tonnes 808,300
Total tonnes 4,025,200
Ore processedOxide tonnes 366,800
Sulphide tonnes 3,744,500
Ore grade
processed Oxide % Cu 1.6
Sulphide % Cu 1.1
Production Copper concentrate dry metric tonnes 114,400
Copper cathode tonnes 3,900
Copper in concentrate tonnes 31,900
Total tonnes 35,800
Chagres
Smelter
Copper
concentrate
smelted tonnes 84,500
Production Copper blister/anodes tonnes 82,700
Acid tonnes 245,300
Total copper
production
for Anglo
American Sur tonnes 148,200
Anglo
American
Norte
(formerly
Mantos
Blancos)
Mantos
Blancos mine
Ore processedOxide tonnes 2,260,400
Sulphide tonnes 1,924,900
Marginal ore mined tonnes 2,258,600
Ore grade
processed Oxide % Cu (soluble) 0.7
Sulphide % Cu (insoluble) 1.1
Marginal ore % Cu (soluble) 0.3
Production Copper concentrate dry metric tonnes 51,900
Copper cathode tonnes 26,000
Copper in concentrate tonnes 19,700
Total tonnes 45,700
Year ended
31.12.07
De Beers
(diamonds
recovered -
carats)
100% basis
(Anglo
American 45%)
Debswana 33,638,000
Namdeb 2,176,000
De Beers
Consolidated
Mines 14,998,000
Williamson 220,000
Canada 81,000
51,113,000
Anglo Base
Metals
Copper(1)
Collahuasi
100% basis
(Anglo
American 44%)
Ore mined tonnes 61,969,800
Ore processed Oxide tonnes 7,129,200
Sulphide tonnes 43,679,900
Ore grade
processed Oxide % Cu 0.8
Sulphide % Cu 1.0
Production Copper concentrate dry metric tonnes 1,346,000
Copper cathode tonnes 58,100
Copper in concentrate tonnes 393,900
Total copper
production for
Collahuasi tonnes 452,000
Anglo American
Sur
(formerly
Minera Sur
Andes)
Los Bronces
mine
Ore mined tonnes 26,503,300
Marginal ore
mined tonnes 35,744,000
Las Tortolas
concentrator Ore processed tonnes 21,125,300
Ore grade processed % Cu 1.0
Average recovery % 85.3
Production Copper concentrate dry metric tonnes 607,400
Copper cathode tonnes 48,300
Copper in concentrate tonnes 182,900
Total tonnes 231,200
El Soldado mine
Ore mined Open pit - ore mined tonnes 6,283,000
Open pit - marginal ore
mined tonnes 76,600
Underground (sulphide) tonnes 1,514,900
Total tonnes 7,874,500
Ore processed Oxide tonnes 791,900
Sulphide tonnes 7,400,900
Ore grade
processed Oxide % Cu 1.4
Sulphide % Cu 1.1
Production Copper concentrate dry metric tonnes 229,700
Copper cathode tonnes 7,500
Copper in concentrate tonnes 65,300
Total tonnes 72,800
Chagres Smelter
Copper
concentrate
smelted tonnes 168,100
Production Copper blister/anodes tonnes 164,100
Acid tonnes 493,400
Total copper
production for
Anglo American
Sur tonnes 304,000
Anglo American
Norte
(formerly
Mantos
Blancos)
Mantos Blancos
mine
Ore processed Oxide tonnes 4,587,900
Sulphide tonnes 3,879,800
Marginal ore mined tonnes 5,862,900
Ore grade
processed Oxide % Cu (soluble) 0.7
Sulphide % Cu (insoluble) 1.1
Marginal ore % Cu (soluble) 0.3
Production Copper concentrate dry metric tonnes 105,900
Copper cathode tonnes 48,700
Copper in concentrate tonnes 40,200
Total tonnes 88,900
(1) Copper production figures exclude Palabora.
Production statistics (continued)
6 months ended
30.06.08
Anglo Base
Metals
(continued)
Mantoverde mine
Ore processed Oxide tonnes 4,714,100
Marginal ore tonnes 1,977,700
Ore grade
processed Oxide % Cu (soluble) 0.7
Marginal ore % Cu (soluble) 0.4
Production Copper cathode tonnes 32,300
Total copper
production for
Anglo American
Norte tonnes 74,000
Black Mountain tonnes 1,300
Total Anglo
Base Metals
copper
production tonnes 320,700
Anglo Platinum
copper
production
Production(1) tonnes 4,400
Total
attributable
copper
production tonnes 325,100
Nickel,
Niobium,
Mineral Sands
and Phosphates
Nickel
Codemin
Ore mined tonnes 180,300
Ore processed tonnes 258,800
Ore grade
processed % Ni 2.1
Production tonnes 4,900
Loma de Niquel
Ore mined tonnes 368,800
Ore processed tonnes 290,300
Ore grade
processed % Ni 1.6
Production tonnes 4,700
Total Anglo
Base Metals
nickel
production tonnes 9,600
Anglo Platinum
nickel
production
Production(1) tonnes 7,400
Total
attributable
nickel
production tonnes 17,000
Niobium
Catalao
Ore mined tonnes 181,500
Ore processed tonnes 420,400
Ore grade
processed Kg Nb/tonne 10.5
Production tonnes 2,300
Mineral Sands
Namakwa Sands
Ore mined tonnes 9,040,700
Production Ilmenite tonnes 162,100
Rutile tonnes 13,200
Zircon tonnes 64,400
Smelter
production Slag tapped tonnes 85,600
Iron tapped tonnes 56,900
Phosphates
Copebras
Sodium
tripolyphosphat
e tonnes 10,200
Phosphates tonnes 505,900
Zinc and Lead
Black Mountain
Ore mined tonnes 623,900
Ore processed tonnes 609,500
Ore grade
processed Zinc % Zn 3.1
Lead % Pb 4.3
Copper % Cu 0.4
Production Zinc in concentrate tonnes 15,300
Lead in concentrate tonnes 23,600
Copper in concentrate tonnes 1,300
6 months ended
30.06.07
Anglo Base
Metals
(continued)
Mantoverde mine
Ore processed Oxide tonnes 4,427,500
Marginal ore tonnes 3,155,300
Ore grade
processed Oxide % Cu (soluble) 0.7
Marginal ore % Cu (soluble) 0.4
Production Copper cathode tonnes 29,600
Total copper
production for
Anglo American
Norte tonnes 75,300
Black Mountain tonnes 1,200
Total Anglo
Base Metals
copper
production tonnes 308,300
Anglo Platinum
copper
production
Production(1) tonnes 6,000
Total
attributable
copper
production tonnes 314,300
Nickel,
Niobium,
Mineral Sands
and Phosphates
Nickel
Codemin
Ore mined tonnes 237,000
Ore processed tonnes 250,800
Ore grade
processed % Ni 2.1
Production tonnes 4,700
Loma de Niquel
Ore mined tonnes 614,200
Ore processed tonnes 581,600
Ore grade
processed % Ni 1.6
Production tonnes 8,200
Total Anglo
Base Metals
nickel
production tonnes 12,900
Anglo Platinum
nickel
production
Production(1) tonnes 10,200
Total
attributable
nickel
production tonnes 23,100
Niobium
Catalao
Ore mined tonnes 298,500
Ore processed tonnes 409,600
Ore grade
processed Kg Nb/tonne 10.8
Production tonnes 2,300
Mineral Sands
Namakwa Sands
Ore mined tonnes 8,740,900
Production Ilmenite tonnes 140,500
Rutile tonnes 10,200
Zircon tonnes 48,000
Smelter
production Slag tapped tonnes 73,700
Iron tapped tonnes 50,500
Phosphates
Copebras
Sodium
tripolyphosphat
e tonnes 30,100
Phosphates tonnes 494,300
Zinc and Lead
Black Mountain
Ore mined tonnes 518,100
Ore processed tonnes 565,000
Ore grade
processed Zinc % Zn 3.6
Lead % Pb 3.8
Copper % Cu 0.3
Production Zinc in concentrate tonnes 14,900
Lead in concentrate tonnes 21,400
Copper in concentrate tonnes 1,200
Year ended
31.12.07
Anglo Base Metals
(continued)
Mantoverde mine
Ore processed Oxide tonnes 9,280,700
Marginal ore tonnes 5,511,100
Ore grade processed Oxide % Cu (soluble) 0.7
Marginal ore % Cu (soluble) 0.3
Production Copper cathode tonnes 61,000
Total copper
production for
Anglo American
Norte tonnes 149,900
Black Mountain tonnes 2,200
Total Anglo Base
Metals copper
production tonnes 655,000
Anglo Platinum
copper production
Production(1) tonnes 11,000
Total attributable
copper production tonnes 666,000
Nickel, Niobium,
Mineral Sands and
Phosphates
Nickel
Codemin
Ore mined tonnes 539,300
Ore processed tonnes 522,600
Ore grade processed % Ni 2.1
Production tonnes 9,900
Loma de Niquel
Ore mined tonnes 1,183,200
Ore processed tonnes 1,096,100
Ore grade processed % Ni 1.6
Production tonnes 15,700
Total Anglo Base
Metals nickel
production tonnes 25,600
Anglo Platinum
nickel production
Production(1) tonnes 19,200
Total attributable
nickel production tonnes 44,800
Niobium
Catalao
Ore mined tonnes 852,500
Ore processed tonnes 831,700
Ore grade processed Kg Nb/tonne 10.9
Production tonnes 4,700
Mineral Sands
Namakwa Sands
Ore mined tonnes 18,111,700
Production Ilmenite tonnes 300,300
Rutile tonnes 24,500
Zircon tonnes 114,800
Smelter production Slag tapped tonnes 151,300
Iron tapped tonnes 101,800
Phosphates
Copebras
Sodium
tripolyphosphate tonnes 56,700
Phosphates tonnes 1,037,800
Zinc and Lead
Black Mountain
Ore mined tonnes 1,065,200
Ore processed tonnes 1,099,600
Ore grade processed Zinc % Zn 3.2
Lead % Pb 4.3
Copper % Cu 0.3
Production Zinc in concentrate tonnes 28,300
Lead in concentrate tonnes 41,900
Copper in concentrate tonnes 2,200
(1) Northam Platinum Limited was transferred to a disposal group in September
2007. Production information excludes Northam Platinum Limited and 2007
information has been adjusted accordingly.
Production statistics (continued)
6 months ended
30.06.08
Anglo Base
Metals
(continued)
Lisheen
Ore mined tonnes 777,100
Ore processed tonnes 761,300
Ore grade
processed Zinc % Zn 12.5
Lead % Pb 1.7
Production Zinc in concentrate tonnes 87,200
Lead in concentrate tonnes 8,200
Skorpion
Ore mined tonnes 637,600
Ore processed tonnes 629,300
Ore grade
processed Zinc % Zn 11.9
Production Zinc tonnes 68,600
Total
attributable
zinc
production tonnes 171,100
Total
attributable
lead
production tonnes 31,800
Anglo
Ferrous
Metals and
Industries
Kumba Iron
Ore
Lump tonnes 10,180,000
Fines tonnes 6,883,000
Total iron
ore tonnes 17,063,000
Scaw Metals
South Africa
- Steel
Products tonnes 417,000
International
- Steel Products tonnes 434,000
Samancor
Manganese(1)
Manganese ore tonnes 1,407,000
Manganese
alloys(2) tonnes 153,000
Anglo
Industrial
Minerals
Aggregates tonnes 48,073,000
Lime products tonnes 712,000
Concrete m3 3,840,000
Anglo Paper
and
Packaging
Mondi
Packaging
Packaging
papers tonnes -
Corrugated
board and
boxes m m2 -
Paper sacks m units -
Coating and
release
liners m m2 -
Pulp -
external tonnes -
Mondi
Business
Paper
Uncoated
wood free
paper tonnes -
Newsprint tonnes -
Pulp -
external tonnes -
Wood chips green metric tonnes -
Mondi
Packaging
South Africa
Packaging
papers tonnes -
Corrugated
board and
boxes m m2 -
Newsprint
Joint
Ventures and
other
Newsprint
(attributabl
e share) tonnes -
Aylesford tonnes -
Shanduka tonnes -
6 months ended
30.06.07
Anglo Base
Metals
(continued)
Lisheen
Ore mined tonnes 800,100
Ore processed tonnes 747,100
Ore grade
processed Zinc % Zn 11.7
Lead % Pb 1.8
Production Zinc in concentrate tonnes 79,000
Lead in concentrate tonnes 9,000
Skorpion
Ore mined tonnes 667,100
Ore processed tonnes 675,100
Ore grade
processed Zinc % Zn 11.7
Production Zinc tonnes 74,600
Total
attributable
zinc
production tonnes 168,500
Total
attributable
lead
production tonnes 30,400
Anglo
Ferrous
Metals and
Industries
Kumba Iron
Ore
Lump tonnes 9,161,000
Fines tonnes 6,434,000
Total iron
ore tonnes 15,595,000
Scaw Metals
South Africa
- Steel
Products tonnes 401,000
International
- Steel Products tonnes 394,000
Samancor
Manganese(1)
Manganese ore tonnes 1,188,000
Manganese
alloys(2) tonnes 144,000
Anglo
Industrial
Minerals
Aggregates tonnes 46,965,300
Lime products tonnes 750,400
Concrete m3 4,460,600
Anglo Paper
and
Packaging
Mondi
Packaging
Packaging
papers tonnes 1,480,557
Corrugated
board and
boxes m m2 985
Paper sacks m units 1,910
Coating and
release
liners m m2 1,549
Pulp -
external tonnes 91,834
Mondi
Business
Paper
Uncoated
wood free
paper tonnes 1,039,145
Newsprint tonnes 99,738
Pulp -
external tonnes 84,563
Wood chips green metric tonnes 362,089
Mondi
Packaging
South Africa
Packaging
papers tonnes 141,339
Corrugated
board and
boxes m m2 171
Newsprint
Joint
Ventures and
other
Newsprint
(attributabl
e share) tonnes 156,103
Aylesford tonnes 94,354
Shanduka tonnes 61,749
Year ended
31.12.07
Anglo Base
Metals
(continued)
Lisheen
Ore mined tonnes 1,584,700
Ore processed tonnes 1,513,600
Ore grade
processed Zinc % Zn 12.0
Lead % Pb 1.9
Production Zinc in concentrate tonnes 164,700
Lead in concentrate tonnes 20,200
Skorpion
Ore mined tonnes 1,402,300
Ore processed tonnes 1,379,600
Ore grade
processed Zinc % Zn 11.7
Production Zinc tonnes 150,100
Total
attributable
zinc production tonnes 343,100
Total
attributable
lead production tonnes 62,100
Anglo Ferrous
Metals and
Industries
Kumba Iron Ore
Lump tonnes 19,043,000
Fines tonnes 13,357,000
Total iron ore tonnes 32,400,000
Scaw Metals
South Africa -
Steel Products tonnes 776,000
International -
Steel Products tonnes 803,000
Samancor
Manganese(1)
Manganese ore tonnes 2,411,000
Manganese
alloys(2) tonnes 310,000
Anglo Industrial
Minerals
Aggregates tonnes 95,393,300
Lime products tonnes 1,468,222
Concrete m3 8,858,400
Anglo Paper and
Packaging
Mondi Packaging
Packaging papers tonnes 1,480,577
Corrugated board
and boxes m m2 985
Paper sacks m units 1,910
Coating and
release liners m m2 1,549
Pulp - external tonnes 91,834
Mondi Business
Paper
Uncoated wood
free paper tonnes 1,039,145
Newsprint tonnes 99,738
Pulp - external tonnes 84,563
Wood chips green metric tonnes 362,089
Mondi Packaging
South Africa
Packaging papers tonnes 141,339
Corrugated board
and boxes m m2 171
Newsprint Joint
Ventures and
other
Newsprint
(attributable
share) tonnes 156,103
Aylesford tonnes 94,354
Shanduka tonnes 61,749
(1) Saleable production.
(2) Production includes Medium Carbon Ferro Manganese.
Production statistics (continued)
Quarterly production statistics
Quarter ended
June 2008 March 2008 June 2007
Anglo Platinum(1)
Platinum (troy ounces) 572,500 428,600 628,600
Palladium (troy ounces) 300,800 245,800 338,200
Rhodium (troy ounces) 59,400 57,500 82,300
Nickel (tonnes) 3,700 3,700 5,200
Anglo Base Metals (tonnes)
Copper 161,000 159,700 161,900
Nickel 5,000 4,600 6,400
Zinc 88,200 82,900 86,400
Lead 14,700 17,100 13,500
Anglo Ferrous Metals and
Industries (tonnes)
Iron ore 8,873,000 8,190,000 7,957,000
Scaw - South Africa Steel
Products 211,000 206,000 204,000
Scaw - International Steel
Products 221,000 213,000 200,000
Manganese ore(2) 741,000 666,000 608,000
Manganese alloys(2)(3) 76,000 77,000 66,000
Anglo Coal (tonnes)
Eskom 8,637,000 8,363,000 8,294,000
Thermal 12,819,800 11,163,000 11,945,000
Metallurgical 4,389,300 2,773,000 3,193,000
De Beers (diamonds recovered -
carats)
100% basis (Anglo American 45%)
Diamonds 12,452,000 11,774,000 12,642,000
% Change
June Q08 v June Q08 v
March Q08 June Q07
Anglo Platinum(1)
Platinum (troy ounces) 33.6% (8.9)%
Palladium (troy ounces) 22.4% (11.1)%
Rhodium (troy ounces) 3.3% (27.8)%
Nickel (tonnes) - (28.8)%
Anglo Base Metals (tonnes)
Copper 0.8% (0.6)%
Nickel 8.7% (21.9)%
Zinc 6.4% 2.1%
Lead (14.0)% 8.9%
Anglo Ferrous Metals and Industries (tonnes)
Iron ore 8.3% 11.5%
Scaw - South Africa Steel Products 2.4% 3.4%
Scaw - International Steel Products 3.8% 10.5%
Manganese ore(2) 11.3% 21.9%
Manganese alloys(2)(3) (1.3)% 15.2%
Anglo Coal (tonnes)
Eskom 3.3% 4.1%
Thermal 14.8% 7.3%
Metallurgical 58.3% 37.5%
De Beers (diamonds recovered - carats)
100% basis (Anglo American 45%)
Diamonds 5.8% (1.5)%
(1) Northam Platinum Limited was transferred to a disposal group in September
2007. Production information excludes Northam Platinum Limited and 2007
information has been adjusted accordingly.
(2) Saleable production.
(3) Production includes Medium Carbon Ferro Manganese.
Reconciliation of subsidiaries` and associates` reported earnings to the
underlying earnings included in the condensed financial statements
for the six months ended 30 June 2008
Note only key reported lines are reconciled.
Anglo Platinum Limited US$ million
IFRS headline earnings (US$ equivalent of published) 1,102
Exploration 17
Exchange rate difference (7)
Other adjustments (3)
1,109
Minority interests (251)
Depreciation on assets fair valued on acquisition (net of tax) (8)
Contribution to Anglo American plc underlying earnings 850
DB Investments (DBI) US$ million
De Beers underlying earnings (100%) 350
Difference in IAS 19 accounting policy 1
De Beers underlying earnings - Anglo American plc basis (100%) 351
Anglo American plc`s 45% ordinary share interest 158
Income from preference shares 8
Contribution to Anglo American plc underlying earnings 166
Kumba Iron Ore Limited (KIO) US$ million
IFRS headline earnings (US$ equivalent of published)(1) 368
Exploration 3
Elimination of intercompany interest 5
Other adjustments 14
390
Minority interests (142)
Depreciation on assets fair valued on acquisition (net of tax) (1)
Contribution to Anglo American plc underlying earnings 247
(1) KIO IFRS headline earnings for the six months ended 30 June 2008 assume a
minority interest of 20% in KIO`s underlying mining assets.
Exchange rates and commodity prices
6 months ended 6 months ended Year ended
US$ exchange rates 30.06.08 30.06.07 31.12.07
Average spot prices for
the period
Rand 7.66 7.16 7.05
Sterling 0.51 0.51 0.50
Euro 0.65 0.75 0.73
Australian dollar 1.08 1.24 1.19
Chilean peso 467 534 522
Closing spot prices
Rand 7.83 7.05 6.84
Sterling 0.50 0.50 0.50
Euro 0.63 0.74 0.68
Australian dollar 1.04 1.18 1.14
Chilean peso 527 527 498
6 months ended 6 months ended Year ended
Commodity
prices 30.06.08 30.06.07 31.12.07
Average
market
prices for
the period
Platinum US$/oz 1,947 1,238 1,304
Palladium US$/oz 443 355 355
Rhodium US$/oz 8,860 6,064 6,200
Copper US cents/lb 368 307 323
Nickel US cents/lb 1,237 2,024 1,686
Zinc US cents/lb 103 162 147
Lead US cents/lb 118 90 118
Summary by business segment
Revenue(1)
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07 31.12.07
Continuing operations
Platinum 3,605 3,381 6,789
Diamonds 1,684 1,531 3,076
Base Metals 4,077 3,435 7,129
Copper 2,843 2,127 4,507
Collahuasi 899 561 1,383
Anglo American Sur
(formerly Minera Sur Andes)(4) 1,419 1,100 2,273
Anglo American Norte
(formerly Mantos Blancos)(4) 525 466 851
Other - - -
Nickel, Niobium, Mineral
Sands and Phosphates 869 794 1,583
Codemin 148 193 325
Loma de Niquel 162 292 553
Catalao 63 52 106
Namakwa Sands 111 83 184
Copebras 385 174 415
Zinc 365 514 1,039
Black Mountain 78 85 165
Lisheen 133 184 364
Skorpion 154 245 510
Other - - -
Ferrous Metals and
Industries 3,286 2,887 5,400
Kumba Iron Ore 1,176 758 1,635
Scaw Metals 937 691 1,432
Samancor Manganese 760 265 665
Highveld Steel - 369 369
Tongaat-Hulett/Hulamin(5) 410 801 1,293
Minas-Rio - - -
Other 3 3 6
Coal(6) 2,824 1,634 3,574
South Africa 1,131 676 1,538
Australia 1,198 653 1,389
South America 427 298 627
Canada 63 - -
Projects and corporate 5 7 20
Industrial Minerals(6) 2,439 2,237 4,591
Exploration - - -
Corporate Activities and
Unallocated Costs - - -
Total continuing
operations 17,915 15,105 30,559
Discontinued operations
Gold - 633 1,004
Paper and Packaging - 4,111 4,111
Mondi Packaging - 2,296 2,296
Mondi Business Paper - 1,204 1,204
Other - 611 611
Total discontinued
operations - 4,744 5,115
Total Group 17,915 19,849 35,674
EBITDA(2)
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07 31.12.07
Continuing operations
Platinum 1,714 1,737 3,155
Diamonds 397 310 587
Base Metals 2,623 2,329 4,683
Copper 2,041 1,527 3,192
Collahuasi 717 441 1,062
Anglo American Sur
(formerly Minera Sur Andes)(4) 1,049 801 1,630
Anglo American Norte
(formerly Mantos Blancos)(4) 279 287 507
Other (4) (2) (7)
Nickel, Niobium, Mineral
Sands and Phosphates 457 463 842
Codemin 118 153 242
Loma de Niquel 76 224 390
Catalao 35 29 57
Namakwa Sands 39 19 44
Copebras 189 38 109
Zinc 185 382 729
Black Mountain 45 51 93
Lisheen 46 127 242
Skorpion 94 204 394
Other (60) (43) (80)
Ferrous Metals and
Industries 1,359 780 1,561
Kumba Iron Ore 701 432 879
Scaw Metals 138 99 204
Samancor Manganese 496 57 249
Highveld Steel - 108 108
Tongaat-Hulett/Hulamin(5) 55 87 140
Minas-Rio (16) - (9)
Other (15) (3) (10)
Coal(6) 900 441 882
South Africa 405 207 481
Australia 330 111 166
South America 181 135 271
Canada 7 - -
Projects and corporate (23) (12) (36)
Industrial Minerals(6) 291 326 732
Exploration (98) (55) (157)
Corporate Activities and
Unallocated Costs (148) (139) (272)
Total continuing
operations 7,038 5,729 11,171
Discontinued operations
Gold - 265 401
Paper and Packaging - 560 560
Mondi Packaging - 316 316
Mondi Business Paper - 198 198
Other - 46 46
Total discontinued
operations - 825 961
Total Group 7,038 6,554 12,132
Operating profit/(loss)(3)
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07 31.12.07
Continuing operations
Platinum 1,467 1,517 2,697
Diamonds 328 266 484
Base Metals 2,454 2,165 4,338
Copper 1,941 1,428 2,983
Collahuasi 684 411 998
Anglo American Sur
(formerly Minera Sur Andes)(4) 998 748 1,518
Anglo American Norte
(formerly Mantos Blancos)(4) 263 271 474
Other (4) (2) (7)
Nickel, Niobium, Mineral
Sands and Phosphates 425 436 786
Codemin 113 149 234
Loma de Niquel 67 214 370
Catalao 34 28 55
Namakwa Sands 39 19 44
Copebras 172 26 83
Zinc 149 345 654
Black Mountain 40 46 83
Lisheen 37 119 227
Skorpion 72 180 344
Other (61) (44) (85)
Ferrous Metals and
Industries 1,296 719 1,432
Kumba Iron Ore 677 409 834
Scaw Metals 121 84 172
Samancor Manganese 485 57 225
Highveld Steel - 108 108
Tongaat-Hulett/Hulamin(5) 44 65 114
Minas-Rio (16) - (9)
Other (15) (4) (12)
Coal(6) 731 319 614
South Africa 369 178 414
Australia 225 38 9
South America 157 115 227
Canada 3 - -
Projects and corporate (23) (12) (36)
Industrial Minerals(6) 163 209 474
Exploration (98) (55) (157)
Corporate Activities and
Unallocated Costs (160) (150) (292)
Total continuing
operations 6,181 4,990 9,590
Discontinued operations
Gold - 138 202
Paper and Packaging - 324 324
Mondi Packaging - 195 195
Mondi Business Paper - 105 105
Other - 24 24
Total discontinued
operations - 462 526
Total Group 6,181 5,452 10,116
Underlying earnings
6 months 6 months Year
ended ended ended
US$ million 30.06.08 30.06.07 31.12.07
Continuing operations
Platinum 850 717 1,299
Diamonds 166 156 239
Base Metals 1,494 1,504 3,100
Copper 1,204 931 2,060
Collahuasi 450 276 701
Anglo American Sur
(formerly Minera Sur Andes)(4) 602 482 1,026
Anglo American Norte
(formerly Mantos Blancos)(4) 156 175 340
Other (4) (2) (7)
Nickel, Niobium, Mineral
Sands and Phosphates 229 303 555
Codemin 76 115 178
Loma de Niquel 1 137 243
Catalao 32 25 60
Namakwa Sands 31 12 31
Copebras 89 14 43
Zinc 124 312 558
Black Mountain 28 35 65
Lisheen 28 94 174
Skorpion 68 183 319
Other (63) (42) (73)
Ferrous Metals and
Industries 705 269 605
Kumba Iron Ore 247 141 274
Scaw Metals 72 52 97
Samancor Manganese 354 42 169
Highveld Steel - 18 18
Tongaat-Hulett/Hulamin(5) 30 15 44
Minas-Rio 11 - 5
Other (9) 1 (2)
Coal(6) 543 242 490
South Africa 268 130 296
Australia 168 34 24
South America 112 86 175
Canada 5 - -
Projects and corporate (10) (8) (5)
Industrial Minerals(6) 139 181 384
Exploration (93) (50) (145)
Corporate Activities and
Unallocated Costs (321) (215) (495)
Total continuing
operations 3,483 2,804 5,477
Discontinued operations
Gold - 65 95
Paper and Packaging - 189 189
Mondi Packaging - 137 137
Mondi Business Paper - 62 62
Other - (10) (10)
Total discontinued
operations - 254 284
Total Group 3,483 3,058 5,761
(1) Revenue includes the Group`s share of revenue of joint ventures and
associates. Base Metals` revenue is shown after deduction of treatment and
refining charges (TC/RCs).
(2) EBITDA is operating profit before special items, remeasurements,
depreciation and amortisation in subsidiaries and joint ventures and share of
EBITDA of associates.
(3) Operating profit includes operating profit before special items and
remeasurements from subsidiaries and joint ventures and share of operating
profit (before interest, tax, minority interests, special items and
remeasurements) of associates.
(4) Revenue in 2007 includes intercompany sales between Anglo American Norte
and Anglo American Sur. The external revenue for the six months ended 30 June
2007 was $1,093 million (year ended 31 December 2007: $2,266 million) for Anglo
American Sur and $473 million (year ended 31 December 2007: $858 million) for
Anglo American Norte.
(5) Includes 100% of the results of the Tongaat-Hulett Group from 1 January to
25 June 2007, and the Group`s equity accounted share of Tongaat-Hulett and
Hulamin since that date. For more detail see note 16 Disposal and demerger of
subsidiaries and businesses.
(6) In the second half of 2007 Yang Quarry was reclassified from Industrial
Minerals to Coal, to align with internal management reporting. As such the
comparative data has been reclassified accordingly.
ANGLO AMERICAN plc
(Incorporated in England and Wales - Registered number 3564138)
(the Company)
Notice of Interim Dividend
(Dividend No. 19)
Notice is hereby given that an interim dividend on the Company`s ordinary share
capital in respect of the year to 31 December 2008 will be paid as follows:
Amount (United States currency) 44 cents per ordinary share (note 1)
Amount (South African currency) R3.2490 per ordinary share
Last day to effect removal of shares
between the UK and SA registers Wednesday 30 July 2008
Last day to trade on the JSE Limited
(JSE) to qualify for dividend Friday 15 August 2008
Ex-dividend on the JSE from the
commencement of trading on Monday 18 August 2008 (note 2)
Ex-dividend on the London Stock
Exchange from the commencement of
trading on Wednesday 20 August 2008
Record date (applicable to both the
United Kingdom principal register
and South African branch register) Friday 22 August 2008
Currency conversion US$:GBP/ rates
announced on Wednesday 27 August 2008
Removal of shares between the UK and
SA registers permissible from Wednesday 27 August 2008
Last day for receipt of Dividend
Reinvestment Plan (DRIP) mandate forms
by Central Securities Depository
Participants (CSDPs) (notes 3, 4 and 5) Wednesday 27 August 2008
Last day for receipt of DRIP mandate
forms by the UK Registrars or the
South African Transfer Secretaries
(notes 3, 4 and 5) Thursday 28 August 2008
Dividend warrants posted Wednesday 17 September 2008
Payment date of dividend Thursday 18 September 2008
Notes
1. Shareholders on the United Kingdom register of members with an address in
the United Kingdom will be paid in pounds sterling and those with an address
in a country in the European Union which has adopted the euro, will be paid
in euros. Such shareholders may, however, elect to be paid their dividends
in US dollars provided the UK Registrars receive such election by Friday 22
August 2008. Shareholders with an address elsewhere will be paid in US
dollars except those registered on the South African branch register who
will be paid in South African rand. The currency conversion rates and the
amounts per share in pounds sterling/euros will be announced on Wednesday 27
August 2008.
2. Dematerialisation and rematerialisation of registered share certificates in
South Africa will not be effected by CSDPs during the period from Monday 18
August 2008 to Friday 22 August 2008 (both days inclusive).
3. Those shareholders who already participate in the DRIP need not complete a
DRIP mandate form for each dividend as such forms provide an ongoing
authority to participate in the DRIP until cancelled in writing.
Shareholders who wish to participate in the DRIP should obtain a mandate
form from the UK Registrars, the South African Transfer Secretaries or, in
the case of those who hold their shares through the STRATE system, their
CSDP.
4. In terms of the DRIP, and subject to the purchase of shares in the open
market, share certificates/CREST notifications are expected to be mailed and
CSDP investor accounts credited/updated on Tuesday 23 September 2008.
5. Copies of the terms and conditions of the DRIP are available from the UK
Registrars or the South African Transfer Secretaries.
By order of the Board
N Jordan
Secretary
30 July 2008
Registered office
20 Carlton House Terrace
London
SW1Y 5AN
England
UK Registrars
Equiniti
The Causeway
Worthing
West Sussex
BN99 6DA
England
South African Transfer Secretaries
Link Market Services South Africa (Pty) Limited
11 Diagonal Street
Johannesburg 2001
South Africa
(PO Box 4844, Johannesburg 2000)
Date: 31/07/2008 08:01:22 Produced by the JSE SENS Department.
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