| Fri 19 Feb 2010, 9:00 | | AGL - Anglo American Plc - Announces operating profit of USD5.0 billion |
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AGL
ANAAL
AGL - Anglo American Plc - Announces operating profit of USD5.0 billion
Anglo American plc
Incorporated in the United Kingdom
(Registration number: 3564138)
Short name: Anglo
Share code: AGL
ISIN number: GB00B1XZS820
Anglo American announces operating profit of USD5.0 billion
Financial results
- Group operating profit (2) of USD5.0 billion (USD4.5 billion from core
operations(3))
- Underlying earnings (4) of USD2.6 billion and underlying earnings per share
of USD2.14
- Profit attributable to equity shareholders of USD2.4 billion
- Net debt(6) maintained at USD11 billion at 31 December 2009
- Committed undrawn bank facilities and cash of over USD12 billion at 31
December 2009
Delivering operational efficiencies
- Asset optimisation and procurement delivered more than USD1.6 billion of
benefits in 2009 (USD1.4 billion from core operations), exceeding target
- Asset optimisation and procurement target of USD2 billion now to be
Delivered from core businesses alone by 2011
- Anglo Platinum - significant restructuring achieved, flat cash operating
costs target met, 3 high cost shafts on care and maintenance, labour
productivity up 21% in 2 years
- Significant cash cost reduction of USD712 million (5%) and productivity
improvements achieved across the Group - headcount reduced by 23,400(7)
Creating a more effective, focused business
- Major Group reorganisation completed, creating new generation of leadership
within a leaner, more effective structure
- Board strengthened and refreshed - new chairman and 3 new non-executive
directors to bring further mining, commercial and financial expertise
- Divestment programme under way - running businesses to maximise value; sales
of Tarmac`s European aggregates and Polish concrete products businesses
agreed with expected proceeds of approximately USD400 million; Zinc sale
process initiated with significant buyer interest
Clear strategy driving targeted, high quality growth of selected commodities
- USD17 billion of approved projects in most attractive commodities to drive
organic production growth of more than one third by 2013:
- Copper to grow by 33%; iron ore by 82%; nickel by 139%
- Development of four key strategic projects on track: Minas Rio, Los Bronces,
Barro Alto and Kolomela (previously Sishen South)
- New growth projects: Quellaveco (copper) and Grosvenor (metallurgical coal)
- first stage approvals expected in 2010
Step change in safety performance
- New safety practices embedded and delivering further improved results:
- 57% reduction in fatalities since January 2007
- 52% improvement in lost time injury rates since January 2007, on a
like-for-like basis
- Anglo Platinum achieved 4 consecutive fatality-free months through to
January 2010
Dividend
- Resumption of dividend expected in respect of 2010
Year ended Year ended
HIGHLIGHTS FOR THE YEAR ENDED 31
DECEMBER 2009
USUSD million, except per share
amounts 31 Dec 2009 31 Dec 2008 Change
Group revenue including associates (1) 24,637 32,964 (25.3)%
Operating profit including
associates before special items and
remeasurements - core operations (2)(3) 4,451 9,003 (50.6)%
Operating profit including
associates before special items and
remeasurements (2) 4,957 10,085 (50.8)%
Underlying earnings (4) 2,569 5,237 (50.9)%
EBITDA (5) 6,930 11,847 (41.5)%
Net cash inflows from operating
activities 4,087 8,065 (49.3)%
Profit for the financial year
attributable to equity shareholders 2,425 5,215 (53.5)%
Earnings per share (USUSD):
Basic earnings per share 2.02 4.34 (53.5)%
Underlying earnings per share (4) 2.14 4.36 (50.9)%
(1) Includes the Group`s attributable share of associates` revenue of USD3,779
million (2008: USD6,653 million). See note 3 to the Condensed financial
statements.
(2) Operating profit includes attributable share of associates` operating
profit (before attributable share of associates` interest, tax and minority
interests) and is before special items and remeasurements, unless otherwise
stated, see notes 3 and 4 to the Condensed financial statements. For the
definition of special items and remeasurements see note 6 to the Condensed
financial statements.
(3) Operations considered core to the Group are Platinum, Diamonds, Copper,
Nickel, Iron Ore and Manganese (Kumba Iron Ore, Iron Ore Brazil and Samancor),
Metallurgical Coal, Thermal Coal, Exploration and Corporate Activities. See
page 12 in the Financial review of Group results section for a reconciliation
of operating profit from core operations to total operating profit. Due to the
portfolio and management structure changes announced in October 2009,
operations considered core have changed from those reported at 31 December
2008. The comparative has been updated to reflect this.
(4) See note 9 to the Condensed financial statements for basis of calculation
of underlying earnings.
(5) EBITDA is operating profit before special items, remeasurements,
depreciation and amortisation in subsidiaries and joint ventures and includes
attributable share of EBITDA of associates. See note 13 to the Condensed
financial statements.
(6) Net debt excludes hedges, but includes the net debt in disposals groups.
See note 11 to the Condensed financial statements.
(7) Headcount reduction includes contractors and 100% of De Beers.
Cynthia Carroll, Chief Executive, said, "Anglo American is now a more focused
and performance-oriented international mining company. We have a clear
strategy
in place and are driving harder than ever in pursuit of being the investment,
partner and employer of choice in the mining industry. In 2009, we made
significant progress on several fronts, delivering on and exceeding our
targets
- achieving a step change in safety performance, restructuring the Group and
laying the foundation for significant cultural change. We have continued our
highly successful cost and efficiency initiatives, taking Anglo American into
a new, more dynamic era of value delivery. Against what has been an
unpredictable economic background, Anglo American delivered a solid operating
performance, with operating profit of USD5.0 billion and underlying earnings
of USD2.6 billion, with strong performances across our businesses.
In October, we announced a major corporate reorganisation to ensure the
delivery of our clear corporate strategy. We have created a more streamlined
and efficient management structure and have further focused the Group on its
core mining businesses. Through our redesign of the Group`s structure, we have
created seven focused commodity businesses, with their management teams
located in the area of core geographic focus for each commodity, responsible
for operational performance and project delivery. The rationalised corporate
centre will be responsible for providing strategic support to the businesses
and will be focused on delivering synergies, technology and business
performance. We have worked quickly to implement these new structures and we
expect full implementation by the end of the first quarter of 2010, with
associated annualised cost savings of approximately USD120 million. Taken
together with our overall Group restructuring and efficiency initiatives, this
has resulted in a reduction of 23,400 to our total headcount during 2009.
Two areas of synergy where we are continuing to deliver clear and substantial
value are in our asset optimisation and global procurement programmes. We are
now well advanced towards delivering our stated combined target of USD2
billion of uplift in 2011, generating more than USD1.6 billion in 2009, ahead
of expectations. Based on our excellent progress to date, we now expect to
achieve our USD2 billion asset optimisation and procurement targets from our
core businesses alone on the same timeline.
Cost control continues to be a major focus for Anglo American. In 2009, we
delivered significant cash cost reductions across the Group totalling USD712
million, a 5% decrease. Anglo Platinum has a clear strategy to move the cost
position of its operations to the first and second quartile while, in 2009, it
achieved flat cash operating unit costs and significant further productivity
improvements. Furthermore, following a full restructuring of the operations at
Rustenburg and Amandelbult to enable greater operational control and
flexibility, it has removed 140,000 ounces of high cost production by placing
three shafts on care and maintenance. Anglo American has provided strong
support to the recapitalisations of both Anglo Platinum and De Beers,
positioning them to take full advantage of economic recovery and to deliver on
their long term growth prospects as respective industry leaders.
Our decision to continue the development of several of our key strategic
growth projects during the economic downturn positions us to capitalise on the
next phase of global economic growth and to deliver our projected organic
production growth of more than one third by 2013. Four major projects - the
Minas Rio iron ore project and the Barro Alto nickel project, both in Brazil,
the Los Bronces copper expansion project in Chile and the Kolomela (previously
Sishen South) iron ore project in South Africa - are all well placed on their
respective industry cost curves, have long resource lives, further expansion
potential and are on track to enter production, some from next year onwards,
in what we expect to be a growing commodity demand environment.
We will be driving forward these and other projects during 2010, investing
USD4.2 billion in projects out of a total planned capital expenditure
investment of USD6.0 billion for the year. We are also modernising our project
management processes and standards to ensure they not only capture lessons
from previous projects but that they provide us with world class tools for the
future allocation of capital and control of major projects.
I am encouraged by further safety improvements during the year. Our lost time
injury frequency rate is 27% lower than 2008 and shows a 52% like-for-like
improvement since January 2007. The number of fatalities continues to be
reduced and, while still unacceptable until we reach zero, are now 32% fewer
than 2008 and nearly 60% fewer than January 2007. In January 2010, Anglo
Platinum also achieved a significant milestone of four consecutive months
without a fatal incident, a first for the company.
Looking ahead, the medium and long term outlook for the mining industry
remains strong. Demand for commodities is expected to remain robust with the
continuing shift in the pattern of economic growth towards fast-growing
emerging economies. In order to sustain its growth potential, we anticipate
that China will continue to upgrade and develop its infrastructure, while the
longer term potential of India and Brazil is expected to provide further
support. These economies also have the greatest scope for strong consumer
spending growth, the principal long term demand driver for platinum group
metals and diamonds."
Review of 2009
Financial results
Anglo American`s underlying earnings were USD2.6 billion, from USD5.2 billion
in 2008, with operating profit of USD5.0 billion, from USD10.1 billion in
2008.
The impact of the global economic downturn on realised platinum group metals
(PGMs), iron ore, export coal, nickel and diamond prices has been the key
driver of the decline in earnings, coupled with falling demand, particularly
in the Metallurgical Coal and Thermal Coal businesses. Against the backdrop of
the challenging economic environment, notable performances include Copper,
with increased production driving operating profit growth; production and
sales volume increases at Kumba Iron Ore from the Sishen jig project; and
Nickel, as well as significant cost reduction programmes at Platinum,
Metallurgical Coal and Diamonds.
Copper delivered an operating profit of USD2,010 million, 6% higher as a
result of record production and lower costs as well as marginally higher
realized copper prices.
Nickel reported an operating profit of USD2 million, USD121 million lower
despite a 32% increase in sales volumes. This reflects the impact of a 30%
decrease in the average nickel price and Venezuelan inflation of 25%.
Platinum generated an operating profit of USD32 million, down 99% due to a 38%
decrease in the dollar basket price of metals sold. Management`s focus on
costs, including moving production away from higher cost shafts, has enabled
cash operating unit costs to remain flat despite inflationary pressures.
Iron Ore and Manganese generated an operating profit of USD1,489 million, 42%
lower. Within this commodity group, Kumba Iron Ore had a strong performance
with operating profit of USD1,487 million, 6% lower, despite average export
prices falling 40%, achieving strong export sales to China and product shift
to higher margin blended fines product.
Metallurgical Coal delivered an operating profit of USD451 million, a 59%
decrease, with lower price and demand from steelmakers, partially mitigated by
cost reduction programmes.
Thermal Coal`s operating profit of USD721 million was 33% lower, principally
as a result of lower prices and demand reduction.
Diamonds recorded an attributable operating profit of USD64 million, down 87%,
with Diamond Trading Company (DTC) revenues down 45%. The second half of the
year benefited from the cost saving initiatives undertaken in the first half,
improved demand from Sightholders and delivered an operating profit of USD60
million.
Other Mining and Industrial generated an operating profit of USD506 million,
53% lower. Strong performances from the Zinc and Niobium businesses, driven by
improved production, were offset by the impact of the economic slowdown on
Tarmac and Scaw Metals.
Production
2009 saw significant improvements in operating efficiency and production,
demonstrating the Group`s flexibility to react to market demand. Copper
achieved record production, up 5%, with operating efficiencies and grade
improvements in the second half at Los Bronces and a 15% attributable increase
at Collahuasi, despite production at Collahuasi having been impacted by 44
days following the failure of a conveyor electrical control centre. Nickel
production at Codemin and Loma de Niquel was flat, despite a run out at the
EP2 furnace and an environmental permitting issue at Loma, which had a
combined impact of reducing production by 5,600 tonnes (equivalent to 30% of
full year 2009 production). Platinum achieved a 3% increase in refined
platinum ounces whilst also restructuring its two largest operations to ensure
a sustainable reduction in the unit cost of production. Iron ore production
from Kumba`s Sishen Mine increased by 16% due to the continuing ramp up of the
Sishen jig plant. Production from Diamonds, Metallurgical Coal and Thermal
Coal was aligned to lower demand, with the exception of the Mafube and Kriel
coal mines in South Africa, which increased production to Eskom.
Capital structure
Net debt, excluding hedges, of USD10,995 million was marginally lower than at
31 December 2008, and USD340 million lower than at 30 June 2009. Cash inflows
from operations of USD4.9 billion and the proceeds from the sales of the
residual holdings in AngloGold Ashanti, Tongaat Hulett and Hulamin of USD2.4
billion funded capital investment of USD4.6 billion principally in the Group`s
core assets, including combined investment in excess of USD1.8 billion in the
Los Bronces, Barro Alto, Minas Rio and Kolomela (previously Sishen South)
near-term strategic growth projects. The Group also provided USD225 million of
shareholder loans to De Beers. Net debt was adversely impacted by the strength
of the rand at the end of the year on the rand denominated debt.
Special items and remeasurements
We have recognised the need for balance sheet value adjustments via a number
of impairments, offset by gains on disposals of assets, resulting in a net
reduction in asset values of approximately USD0.5 billion (after tax and
minority interests).
Operating special items and remeasurements, including associates, amounted to
a
charge of USD1,840 million. Included in operating special items, including
associates, are impairments totalling USD2,130 million. This included an
impairment charge against the Amapa iron ore system. Amapa was acquired in
2008 as an operating asset as part of the acquisition of the Minas Rio
project. During 2009, Amapa has experienced significant operational challenges
across its mine, plant and logistics chain, producing 2.7 Mt compared to the
design capacity of 6.5 Mtpa. Management`s focus has been, and remains, on
seeking to markedly improve performance from the existing operations, rather
than investing to expand the operation. The Amapa system is currently believed
to have capacity to increase production to 5 Mtpa without significant further
capital expenditure. Due to the focus on improving operational performance and
preserving cash, limited exploration drilling has been undertaken in 2009 and
the anticipated growth potential of surrounding licence areas remains
untested. Given these operational difficulties and delays in increasing
production, the Group has recorded an impairment charge of USD1.5 billion
(after tax and minority interest) against the carrying value of the asset.
Dividends
The resumption of the dividend at the earliest possible time remains a key
priority for the board. Assuming that the commodity price environment and
outlook continue to improve and the business performance remains robust, the
board would expect to be able to announce the resumption of a dividend in
respect of the current financial year.
Delivering value through operational efficiencies
Anglo American has two Group-wide synergy initiatives which are continuing to
deliver clear and substantial value. The asset optimisation and global supply
chain and shared services programmes are both well advanced towards delivering
their combined USD2 billion target. In 2009, a total in excess of USD1.6
billion was achieved (USD1.4 billion from core operations), ahead of
expectations. On the basis of the excellent progress made, it is expected that
the USD2 billion asset optimisation and procurement targets by 2011 will now
be achieved from our core businesses alone on the same timeline.
Asset optimisation delivered USD863 million of sustainable value for the full
year 2009 (USD749 million from core operations), towards its USD1 billion
target, building on the USD335 million delivered in the first half of the
year.
Asset optimisation is a formalised process across the Group, with nominated
representatives in all mines, rigorous internal and external benchmarking and
specific targets for every mine and business, all directed towards unlocking
value from existing assets through cost and productivity improvements.
The global supply chain and shared services initiatives delivered savings of
USD510 million (USD445 million from core operations), nearly USD200 million
ahead of its target for the full year, having achieved USD131 million in the
first half of the year towards a targeted USD1 billion of savings in 2011. The
Group is leveraging its global scale to deliver cost savings across the supply
chain, taking a holistic approach and forming strategic global partnerships
with key suppliers, such as for fuels and lubricants, and consolidating the
number of different suppliers for any given product or service.
In February 2009, the Group announced a global headcount reduction of 19,000
to be achieved by the end of 2009 followed, in October, by the announcement of
the Group`s restructuring. Headcount reductions for the year have totalled
23,400.
Anglo Platinum`s strong operational performance during 2009 reflects its focus
on driving value from its operations through a series of decisive cost and
efficiency initiatives to deliver its clear strategy to move the cost position
of its operations to the first and second quartile. The Rustenburg and
Amandelbult mines were divided into smaller operating units of five and two
operations respectively to enable greater operational flexibility. The
sourcing of production ounces has been optimised, resulting in three high cost
shafts at Rustenburg being put on care and maintenance and a total of 140,000
ounces (annualised) of high cost production being removed. These efforts will
result in a sustainable reduction in the cost position of the Rustenburg mines
and effectively move them from the fourth quartile to the third quartile of
the cost curve. The benefits of such significant restructuring are clear, with
headcount reduced by 15,752 during 2009, cash operating costs per equivalent
refined platinum ounce decreasing in real terms (and flat in nominal terms)
against the prior year. Over the past two years, employee productivity,
measured as square metres mined per total operating employee per month, has
improved by 21% to 6.50m2 in the second half of 2009.
De Beers implemented a successful restructuring and achieved aggressive cost
reductions, with production and operating costs reduced by 45% and a 23%
reduction in its global workforce, as production was brought in line with
demand.
Clear strategy driving targeted, high quality growth of selected commodities
Anglo American has a clear strategy of deploying its capital in those
commodities that deliver long term, through-the-cycle returns for its
shareholders, and which have strong fundamentals and the most attractive
risk-return profiles. Those commodities are copper, diamonds, iron ore,
manganese, metallurgical coal, nickel, platinum and thermal coal.
Anglo American has developed a portfolio of world-class operating assets and
development projects focused on those commodities, with the benefits of scale,
expansion potential and cost position. The Group`s USD17 billion pipeline of
approved projects spans the core commodities and is expected to deliver
organic production growth of more than one third by 2013.
Anglo American`s decision to preserve the development of its key near-term
strategic growth projects during the economic downturn positions the Group to
capitalise on the next phase of global economic growth. The four major
projects are all well placed on their respective industry cost curves, have
long resource lives and are on track to enter production from 2011 onwards, in
what is expected to be a growing commodity demand environment.
Anglo American`s Los Bronces copper expansion project is on schedule, with
first production in the fourth quarter of 2011 and is expected to increase,
from the fourth quarter of 2012, to an average of 490 ktpa over the first
three years of full production (an average of over 400 ktpa over the first 10
years).At peak production levels, Los Bronces is expected to be the fifth
largest copper mine in the world, with reserves that support a mine life of 30
years.Resource and mineralisation studies carried out by Anglo American`s
technical teams support further potential expansion. Anglo American has also
announced two very significant and high quality new discoveries at Los
Sulfatos and San Enrique Monolito close to its Los Bronces mine in Chile.
These two new copper prospects together increase the Group`s copper resources
(excluding reserves) by approximately 50%.
The Barro Alto nickel project is also on schedule towards start up in early
2011, with the overall development almost 80% complete at the year end. This
project, which has further potential from an extensive resource base,
leverages an existing operation and proven technology and will produce an
average 36 ktpa of nickel in full production with a position in the lower half
of the cost curve.
Kumba Iron Ore`s Kolomela project, previously known as the Sishen South
project, is on track and progressing well towards first production in the
first half of 2012. Kolomela is situated 80km to the south of Kumba`s world
class Sishen mine and, when full production is achieved in 2013, will produce
9 Mtpa of high quality iron ore, with further potential for expansion.
The Minas Rio iron ore project in Brazil is a multi-billion tonne resource in
the highly attractive seaborne iron ore market with the benefit of an
integrated logistics system. Anglo American obtained a series of important
licences for the first phase of the project during the year, most notably the
first part of the Installation Licence for the mine and beneficiation plant,
awarded in December, following the earlier award of the federal permit for
land clearance at the mine. The second part of the Installation Licence is
expected to be approved during the early part of 2010. The construction of the
port at Acu is well advanced and the earthworks for the beneficiation plant
and pipeline are progressing towards first production in the second half of
2012, with ramp-up to 26.5 Mtpa. Anglo American`s forecast attributable share
of the post acquisition capital expenditure for the first phase of the project
has increased from USD2.7 billion to USD3.8 billion owing to scoping changes
at the mine, pipeline and port, as well as foreign exchange movements.
The size of the Minas Rio orebody and the project`s dedicated logistics
infrastructure means that it has considerable expansion potential, with
studies under way for the expansion of the project up to 80 Mtpa. Anglo
American acquired the Minas Rio project in two transactions in 2007 and 2008
and at the end of 2007 declared a resource of 476 Mt (Measured and Indicated)
and an additional 770 Mt of Inferred resource. After considerable geological
work, this total resource has increased fourfold since 2007 to 5 billion
tonnes, including 843 Mt of Inferred resource. The anticipated final product
Fe grade over the life of the mine, expected to be above 68%, is particularly
high compared to other products on the market and benefits from extremely low
alumina, silica and phosphorus contaminants. With such quality
characteristics, Minas Rio pellet feed will rank as a top quality product.
Across Anglo American`s iron ore interests in Brazil and South Africa, the
Group has the potential to increase iron ore production to in excess of 150
Mtpa within 10 years.
In addition, Anglo American expects to make decisions during 2010 in relation
to first stage approvals for the development of two further high quality
growth projects - the 225 ktpa Quellaveco copper project in Peru and the 4.3
Mtpa Grosvenor metallurgical coal project in Australia.
Divestment portfolio update
During 2009, Anglo American sold its residual holdings in AngloGold Ashanti,
Tongaat Hulett and Hulamin, realising total proceeds of approximately USD2.4
billion.
In October 2009, Anglo American announced that it would further sharpen the
focus of the Group onto the most attractive commodities and, building on the
programme of non-core shareholding sales completed over the last three years,
the Group`s portfolio of zinc assets, Scaw Metals, Copebras and Catalao will
be divested in due course, together with Tarmac.
The preparatory work to separate the businesses for divestment from the Group
is under way and the divestments will be carried out in a manner and to a
timetable that maximises value for Anglo American`s shareholders. It is
envisaged that there will be a different divestment timetable for each of the
businesses.
During the first quarter of 2010, Anglo American agreed the sales of Tarmac`s
aggregates businesses in France, Germany, Poland and the Czech Republic and
its Polish concrete products business, with expected total proceeds of
approximately USD400 million.
The sale process for the portfolio of zinc assets is under way and significant
levels of buyer interest have been shown.
Outlook
The medium and long term outlook for the mining industry remains strong.
Demand for commodities is expected to remain robust with the continuing shift
in the pattern of economic growth towards fast-growing emerging economies. In
order to sustain its growth potential, China is expected to continue to
upgrade and develop its infrastructure, while the longer term potential of
India and Brazil is expected to provide further support. These economies also
have the greatest scope for strong consumer spending growth, the principal
long term demand driver for platinum group metals and diamonds.
In 2009, huge policy stimulus and a turn in the inventory cycle drove the
rebound in industrial activity. In 2010, the positive effects of these factors
are likely to start to fade. The economic headwinds are most noticeable in the
advanced economies, where continuing balance sheet repair will constrain
demand prospects. However, the outlook for the emerging economies is much
brighter.China and India are likely to grow strongly, though the potential for
setbacks remains as a weak external environment combines with intensifying
domestic inflation pressures.
Selected major projects
Completed in 2009
Completion
Sector Project Country date
Iron Ore and Sishen expansion South Africa Q4 2009
Manganese
Metallurgical Coal Lake Lindsay Australia Q1 2009
Thermal Coal Mafube South Africa Q3 2009
Cerrejon Colombia Q1 2009
Capex
Sector Project Country USDm (1)
Iron Ore and Sishen expansion South Africa 657
Manganese
Metallurgical Coal Lake Lindsay Australia 726
Thermal Coal Mafube South Africa 230
Cerrejon Colombia 130
Sector Project Country Production volume (2)
Iron Ore and Sishen expansion South Africa 13.0 Mtpa iron ore
Manganese
Metallurgical Coal Lake Lindsay Australia 4.0 Mtpa
Thermal Coal Mafube South Africa 5.4 Mtpa
Cerrejon Colombia 3.0 Mtpa (2 nd stage)
Approved
First
production
Sector Project Country
date
Platinum MC Plant Capacity South Africa Q3 2009
Expansion - phase 1
Mogalakwena North South Africa Q4 2007
Dishaba (Amandelbult) South Africa Q3 2007
East Upper UG2
Styldrift Merensky phase 1 South Africa Q2 2017
Unki Mine Zimbabwe Q3 2010
Diamonds Jwaneng - Cut 8 Botswana 2010
Copper Los Bronces expansion Chile Q4 2011
Collahuasi 150 ktpd Chile Q1 2011
Nickel Barro Alto Brazil Q1 2011
Iron Ore and Minas Rio phase 1 Brazil H2 2012
Manganese
Kolomela (previously South Africa Q2 2012
Sishen South)
Thermal Coal Zibulo (previously South Africa Q3 2009
Zondagsfontein)
Full
production
Sector Project Country
date
Platinum MC Plant Capacity South Africa Q1 2010
Expansion - phase 1
Mogalakwena North South Africa 2012
Dishaba (Amandelbult) South Africa Q4 2012
East Upper UG2
Styldrift Merensky phase 1 South Africa Q2 2018
Unki Mine Zimbabwe Q4 2013
Diamonds Jwaneng - Cut 8 Botswana 2024
Copper Los Bronces expansion Chile Q4 2012
Collahuasi 150 ktpd Chile Q2 2011
Nickel Barro Alto Brazil Q3 2012
Iron Ore and Minas Rio phase 1 Brazil Q3 2013
Manganese
Kolomela (previously South Africa Q1 2013
Sishen South)
Thermal Coal Zibulo (previously South Africa Q4 2012
Zondagsfontein)
Capex
Sector Project Country USDm (1)
Platinum MC Plant Capacity South Africa 80
Expansion - phase 1
Mogalakwena North South Africa 922
Dishaba (Amandelbult) South Africa 224
East Upper UG2
Styldrift Merensky phase 1 South Africa 1,621
Unki Mine Zimbabwe 457
Diamonds Jwaneng - Cut 8 Botswana 3,000 (3)
Copper Los Bronces expansion Chile 2,300 -
2,500
Collahuasi 150 ktpd Chile 92
Nickel Barro Alto Brazil 1,800 -
1,900
Iron Ore and Minas Rio phase 1 Brazil 3,800 (6)
Manganese
Kolomela (previously South Africa 1,022
Sishen South)
Thermal Coal Zibulo (previously South Africa 512
Zondagsfontein)
Sector Project Country Production volume
(2)
Platinum MC Plant Capacity South Africa 11 ktpa waterval
converter matte
Expansion - phase 1
Mogalakwena North South Africa 350-400 kozpa refined
platinum
Dishaba (Amandelbult) South Africa 100 kozpa refined
platinum
East Upper UG2
Styldrift Merensky phase 1 South Africa 245 kozpa refined
platinum
Unki Mine Zimbabwe 65 kozpa refined
platinum
Diamonds Jwaneng - Cut 8 Botswana 95 million carats
Copper Los Bronces expansion Chile 200 ktpa
copper(4)(5)
Collahuasi 150 ktpd Chile Expansion to 150 ktpd
capacity
Nickel Barro Alto Brazil 36 ktpa nickel
Iron Ore and Minas Rio phase 1 Brazil 26.5 Mtpa iron ore
pellet feed
Manganese (wet basis)
Kolomela (previously South Africa 9.0 Mtpa iron ore
Sishen South)
Thermal Coal Zibulo (previously South Africa 6.6 Mtpa thermal coal
Zondagsfontein)
Future unapproved
First
production
Sector Project Country date
Copper Quellaveco Peru 2014
Collahuasi expansion Chile 2012
phase 1
Michiquillay Peru 2017
Pebble US TBD
Nickel Jacare phase 1 Brazil 2015
Morro Sem Bone Brazil 2015
Iron Ore and Sishen Expansion Project South Africa 2017
Manganese 2
Sishen Concentrate South Africa 2017
Minas Rio expansion Brazil TBD
Metallurgical Grosvenor Australia 2013
Coal
Thermal Coal Heidelberg underground South Africa 2013
Elders opencast South Africa 2013
Elders underground South Africa 2013
New Largo South Africa 2012
Cerrejon P40 Colombia 2012
Full
production
Sector Project Country date
Copper Quellaveco Peru 2015
Collahuasi expansion Chile 2012
phase 1
Michiquillay Peru 2018
Pebble US TBD
Nickel Jacare phase 1 Brazil 2016
Morro Sem Bone Brazil 2016
Iron Ore and Sishen Expansion Project South Africa 2019
Manganese 2
Sishen Concentrate South Africa 2018
Minas Rio expansion Brazil TBD
Metallurgical Grosvenor Australia 2016
Coal
Thermal Coal Heidelberg underground South Africa 2017
Elders opencast South Africa 2013
Elders underground South Africa 2017
New Largo South Africa 2016
Cerrejon P40 Colombia 2014
Sector Project Country Production volume (2)
Copper Quellaveco Peru 225 ktpa copper (4)
Collahuasi expansion Chile 510 ktpa copper (4)(7)
phase 1
Michiquillay Peru 155 ktpa copper (4)(8)
Pebble US 350 ktpa copper (4)
Nickel Jacare phase 1 Brazil 34 ktpa nickel
Morro Sem Bone Brazil 32 ktpa nickel
Iron Ore and Sishen Expansion Project South Africa 10.0 Mtpa iron ore
Manganese 2
Sishen Concentrate South Africa 2.0 Mtpa iron ore
pellets
Minas Rio expansion Brazil Up to 53 Mtpa iron
ore pellet feed
(wet basis)
Metallurgical Grosvenor Australia 4.3 Mtpa metallurgical
Coal
Thermal Coal Heidelberg underground South Africa 4.2 Mtpa thermal
Elders opencast South Africa 6.4 Mtpa thermal
Elders underground South Africa 3.2 Mtpa thermal
New Largo South Africa 14.7 Mtpa thermal
Cerrejon P40 Colombia 8.0 Mtpa thermal
(1) Capital expenditure shown on 100% basis in nominal terms. Platinum
projects reflect approved capital expenditure.
(2) Represents 100% of average incremental or replacement production, at full
production, unless otherwise stated.
(3) Debswana will provide USD500 million of the USD3 billion project
investment over the next 15 years.
(4) Pebble will produce molybdenum and gold by-products, Michiquillay will
produce molybdenum, gold and silver by-products and other projects will
produce molybdenum and silver by-products.
(5) Production represents average over first 10 years of the project.
Production over the first three years of the project will average 278 ktpa.
(6) Capital expenditure, post acquisition of Anglo American`s share holding in
Minas Rio, for 100% of the mine and pipeline, and Anglo American`s 49% share
of the port. The aggregate cost of 100% of the mine, pipeline and port - and
capital expenditure incurred both before and after Anglo American`s
shareholding in Minas Rio - has increased from USD3.6 billion to USD5 billion.
(7) Total production of mine when project has ramped up to full production.
Further phased expansions have the potential to increase production to 1 Mtpa.
(8) Expansion potential to 300 ktpa.
Financial review of Group results
Group operating profit was USD4,957 million, with operating profit from core
operations of USD4,451 million, 51% lower than 2008. This decline in operating
profit has been driven by significant decreases in realised prices of all
commodities with the exception of copper. Price decreases included a 38%
reduction in the platinum basket, an average 40% reduction in benchmark export
iron ore, a 30% decline in average nickel and a more than 20% decline in
export metallurgical coal.
Copper operating profit was 6% higher than 2008, with record production and a
2% increase in the realised price of copper, partially due to favourable final
settlements of sales into a rising market. Nickel profits declined due to a
combination of lower price with destocking in the stainless steel sector and a
25% inflation rate in Venezuela. Platinum was impacted by significantly lower
average prices compared to 2008. Kumba Iron Ore maintained a strong operating
profit margin despite a 40% decline in average benchmark export iron ore
prices, achieved through increased volumes, principally sold to China.
Samancor`s profits declined due to the decrease in global steel demand.
Metallurgical Coal and Thermal Coal profits were impacted by the decline in
export demand and prices, partially offset by cost reduction programmes.
Diamonds saw Diamond Trading Company (DTC) revenues fall by USD2.7 billion
and, through production holidays and restructuring, De Beers cut its
production and operating costs by USD900 million; however, despite these
measures, operating profit fell by 87%.
Other Mining and Industrials` operating profit increased in the Zinc and
Niobium businesses, with growth in sales volumes. This was more than offset by
lower profits from Tarmac, due to the housing market decline in Europe, and
significant volume decline for Scaw Metals` products. Other Mining and
Industrial`s operating profit in 2009 relative to 2008 was lower following the
sale of Tongaat Hulett and Hulamin in the third quarter of 2009 and also the
sale of Namakwa Sands in October 2008.
Group underlying earnings were USD2,569 million, 51% lower than 2008, which
reflects the operational results above. The net finance costs charge, before
remeasurements, of USD273 million is USD179 million lower than 2008. The
effective tax rate, before special items and remeasurements and including
attributable share of associates` tax, reduced in the year from 33.4% to
33.1%.
Group underlying earnings per share were USD2.14 compared with USD4.36 in
2008,
a 51% reduction.
Underlying earnings Year ended Year ended
USD million 31 Dec 2009 31 Dec 2008
Profit for the financial year attributable to
equity shareholders of the
Company 2,425 5,215
Operating special items including associates 2,574 477
Operating remeasurements including associates (734) 880
Net profit on disposals including associates (1,632) (1,027)
Financing special items including associates 7 -
Financing remeasurements including associates:
Exchange loss / (gain) on De Beers preference
shares 21 (28)
Unrealised net losses / (gains) on non-hedge
derivatives related to net 94 (8)
debt
Other financing remeasurements 13 -
Tax special items including associates 152 -
Tax remeasurements (469) 153
Tax on special items and remeasurements
including associates 180 (264)
Minority interests on special items and
remeasurements including (62) (161)
associates
Underlying earnings 2,569 5,237
Underlying earnings per share (USD) 2.14 4.36
The Group`s results are influenced by a variety of currencies owing to the
geographic diversity of the Group. In 2009, there was a negative exchange
variance in underlying earnings of USD68 million. The Group results benefited
from the weaker Australian dollar, Chilean peso and Brazilian real. Despite
the average rand rate in 2009 being 2% weaker than 2008, there was a negative
rand exchange impact on underlying earnings. This reflects a significantly
stronger rand in the second half of the year when operating activities
increased with stronger demand. There was a negative impact on underlying
earnings from a significant decline in prices amounting to USD2,290 million,
reflecting lower prices across all commodities.
Summary income statement Year ended Year ended
USD million 31 Dec 2009 31 Dec 2008
Operating profit before special items and
remeasurements 4,377 7,981
Operating special items (2,275) (352)
Operating remeasurements 638 (779)
Operating profit from subsidiaries and joint
ventures 2,740 6,850
Net profit on disposals 1,612 1,009
Share of net income from associates (see
reconciliation below) 84 1,113
Total profit from operations and associates 4,436 8,972
Net finance costs before remeasurements (273) (452)
Financing remeasurements (134) 51
Profit before tax 4,029 8,571
Income tax expense (1,117) (2,451)
Profit for the financial year 2,912 6,120
Minority interests (487) (905)
Profit for the financial year attributable to
equity shareholders 2,425 5,215
Basic earnings per share (USD) 2.02 4.34
Group operating profit including associates
before special items and
remeasurements(1) 4,957 10,085
Operating profit from associates before special
items and remeasurements 580 2,104
Operating special items and remeasurements (203) (226)
Net profit on disposals 20 18
Net finance costs (before special items and
remeasurements) (28) (147)
Financing special items (7) -
Financing remeasurements 6 (15)
Income tax expense (after special items and
remeasurements) (286) (606)
Minority interests (after special items and
remeasurements) 2 (15)
Share of net income from associates 84 1,113
(1) Operating profit before special items and remeasurements from subsidiaries
and joint ventures was USD4,377 million and attributable share from associates
was USD580 million.
For special items and remeasurements see note 6 to the Condensed financial
statements.
Towards the beginning of this document, reference has been made to core
operations. Operations considered core to the Group are Platinum, Diamonds,
Copper, Nickel, Iron Ore and Manganese (Kumba Iron Ore, Iron Ore Brazil and
Samancor), Metallurgical Coal and Thermal Coal. The table below reconciles
operating profit from core operations to total Group operating profit.
Operating profit Year ended Year ended
USD million 31 Dec 2009 31 Dec 2008
Platinum 32 2,169
Diamonds 64 508
Copper 2,010 1,892
Nickel 2 123
Iron Ore and Manganese 1,489 2,554
Metallurgical Coal 451 1,110
Thermal Coal 721 1,078
Exploration (172) (212)
Corporate Activities and Unallocated costs (146) (219)
Operating profit including associates before
special items and 4,451 9,003
remeasurements - core operations
Other Mining and Industrial 506 1,082
Operating profit including associates before
special items and
remeasurements 4,957 10,085
Underlying earnings - core operations (1) 2,166 4,503
(1) See note 4 to the Condensed financial statements
Special items and remeasurements
Year ended 31 Dec 2009
Excluding
USD million associates Associates Total
Operating special
items (2,275) (299) (2,574)
Operating
remeasurements 638 96 734
Operating special
items and
remeasurements (1,637) (203) (1,840)
Year ended 31 Dec 2008
Excluding
USD million associates Associates Total
Operating special
items (352) (125) (477)
Operating
remeasurements (779) (101) (880)
Operating special
items and
remeasurements (1,131) (226) (1,357)
Operating special items and remeasurements, including associates, amounted to
a
charge of USD1,840 million. Included in operating special items including
associates are impairments totalling USD2,130 million. This included an
impairment charge against the Amapa iron ore system. Amapa was acquired in
2008 as an operating asset as part of the acquisition of the Minas Rio
project.During 2009, Amapa has experienced significant operational challenges
acrossits mine, plant and logistics chain, producing 2.7 Mt compared to the
designcapacity of 6.5 Mtpa. Management`s focus has been, and remains, on
seeking to markedly improve performance from the existing operations, rather
than investing to expand the operation. The Amapa system is currently believed
to have capacity to increase production to 5 Mtpa without significant further
capital expenditure. Due to the focus on improving operational performance and
preserving cash, limited exploration drilling has been undertaken in 2009 and
the anticipated growth potential of surrounding licence areas remains
untested.Given these operational difficulties and delays in increasing
production, the Group has recorded an impairment charge of USD1.5 billion
(after tax and minority interest) against the carrying value of the asset.
In January 2008, the Venezuelan Ministry of Basic Industries and Mining
("MIBAM") published a resolution cancelling 13 of Minera Loma de Niquel`s
("MLdN") 16 exploration and exploitation concessions due to MLdN`s alleged
failure to fulfil certain conditions of the concessions. The current mining
and metallurgical facilities are located on the three concessions that have
not been cancelled. MLdN believes that it has complied with the conditions of
these concessions and has lodged administrative appeals against the notices of
termination and is waiting for a response from MIBAM. MLdN may in the future
undertake further appeals, including with Venezuela`s Supreme Court, if the
MIBAM`s ruling does not adequately protect its interests.
An impairment and associated adjustments of USD114 million has been recorded
due to increased uncertainty over the renewal of the three concessions that
have not been cancelled but that expire in 2012 and over the restoration of
the 13 concessions that were cancelled.
At 31 December 2009, Anglo American`s interest in the book value of MLdN,
including its mineral rights, was USD285 million (as included in the Group`s
balance sheet). In the 12 months to December 2009, MLdN`s production and
contribution to Group operating profit were respectively 10,400 tonnes of
nickel in ferronickel and a USD7 million loss. The average price of nickel in
2009 was 667 c/lb. As of 17 February 2010, the price of nickel was 910 c/lb.
Due to the nature of the assets, the effect of the strengthening Canadian
dollar and the impact of the global recession on pricing and production
levels, De Beers has recorded an impairment of USD595 million (attributable
share: USD267 million) in respect of its Canadian asset portfolio and written
off USD101 million (attributable share: USD45 million) of Canadian deferred
tax assets.
Also included in special items and remeasurements were one-off redundancy
costs at the corporate centre of USD47 million and within Anglo Platinum,
Metallurgical Coal and Thermal Coal of USD136 million. There were operating
remeasurement gains of USD734 million which principally related to net gains
on non-hedge capital expenditure derivatives held by Iron Ore Brazil and Los
Bronces and an unrealised gain on an embedded derivative at MLdN.
Net profit on disposals of USD1,632 million, including associates, comprises a
profit on the disposal of the residual shareholdings in AngloGold Ashanti of
USD1,139 million, USD247 million on Anglo Platinum`s disposal of its 50% share
in Booysendal and USD69 million relating to the disposal of 51% of Anglo
Platinum`s 100% share in Lebowa Platinum Mines.
Financing remeasurements including associates are made up of an unrealised net
loss of USD94 million on non-hedge derivatives and a USD21 million foreign
exchange loss on retranslating De Beers US dollar preference shares held by a
rand denominated entity.
Tax remeasurements amounted to a gain of USD469 million related to foreign
currency translation of deferred tax balances.
Net finance costs
Net finance costs, excluding a net remeasurement loss of USD134 million (2008:
gain of USD51 million), decreased to USD273 million (2008: USD452 million).
This was due to a USD70 million reduction in the total interest expense and a
USD184 million reduction in other financing losses (principally exchange
losses), partially offset by a USD75 million reduction in total investment
income.
Taxation
Year ended 31 Dec 2009
Associates`
Before special tax and
items and minority Including
USD million remeasurements interests associates
(unless otherwise stated)
Profit before tax 4,422 234 4,656
Tax (1,305) (235) (1,540)
Profit for the financial
year 3,117 (1) 3,116
Effective tax rate
including associates (%) 33.1
Year ended 31 Dec 2008
Associates`
Before special tax and
items and minority Including
USD million remeasurements interests associates
(unless otherwise stated)
Profit before tax 8,832 654 9,486
Tax (2,545) (623) (3,168)
Profit for the financial
year 6,287 31 6,318
Effective tax rate
including associates (%) 33.4
IAS 1 Presentation of Financial Statements requires income from associates to
be presented net of tax on the face of the income statement. Associates` tax
is
therefore not included within the Group`s income tax expense. Associates` tax
included within `Share of net income from associates` for the year ended 31
December 2009 was USD286 million (2008: USD606 million). Excluding special
items and remeasurements this becomes USD235 million (2008: USD623 million).
The effective rate of tax before special items and remeasurements including
attributable share of associates` tax for the year ended 31 December 2009 was
33.1%. This was broadly in line with the equivalent effective rate of 33.4%
for the year ended 31 December 2008. In future periods, it is expected that
the effective tax rate, including associates` tax, will remain above the
United Kingdom statutory tax rate.
Balance sheet
Equity attributable to equity shareholders of the Company was USD26,121
million compared with USD20,221 million at 31 December 2008. This increase
reflected additional tangible assets of USD5,653 million with capital
investment, principally in the Group`s core commodity assets. Cash at the end
of 2009 was USD498 million higher than 2008 and included a USD316 million
benefit of a weak dollar on non-US cash holdings. A weaker dollar, higher
commodity prices than at 31 December 2008, as well as a stronger trading
performance in later stages of 2009 compared to the prior year, contributed to
a USD929 million increase to inventories and current receivables.
This was offset by an increase in short, medium and long term borrowings,
which were USD320 million greater than 2008, reflecting refinancing in 2009
and the impact of a stronger rand on rand denominated debt. Deferred tax
liabilities also increased in the year by USD637 million. Investments in
associates were USD300 million lower as a result of De Beers impairing its
Canadian assets, a demand driven decline in earnings at Samancor and the
disposal of Tongaat Hulett and Hulamin.
Cash flow
Net cash inflows from operating activities were USD4,087 million compared with
USD8,065 million in 2008. EBITDA was USD6,930 million, a decrease of 42% from
USD11,847 million in 2008.
Proceeds from the sale of financial asset investments totalled USD2,041
million, including net cash inflows on the sale of the Group`s residual
interest in the shares of AngloGold Ashanti and proceeds on the sale of
preference shares as part of the disposal of the Booysendal joint venture.
Purchases of tangible assets amounted to USD4,607 million, a decrease of
USD539 million. This spend was focused on the four key near term strategic
growth projects (Los Bronces, Barro Alto, Minas Rio and Kolomela). The overall
reduction reflected the planned reduction on capital investment outside these
key projects.
Net cash used in financing activities was USD1,605 million, compared to net
cash inflows in 2008 of USD3,542 million. During the year, the Group used cash
to repay USD6,624 million of short term borrowings and the payment of USD741
million of interest. This was partially offset by the proceeds of four bond
issuances completed in the year totalling USD5,892 million.
Liquidity and funding
Net debt, excluding hedges, was USD10,995 million, a decrease of USD48 million
from 31 December 2008. Cash and cash equivalents, excluding the impact of
exchange, has increased by USD259 million. This reflected operating cash
flows, the sale of financial asset investments and investments in associates,
purchase of tangible assets and movement in financing activities as detailed
in the cash flow section.
Net debt at 31 December 2009 comprised USD14,317 million of debt, partly
offset by USD3,319 million of cash and cash equivalents (net of bank
overdrafts) and USD3 million current financial asset investments. As a result
of refinancing activities outlined below, the debt aging profile has changed
with 90% of the
total debt being due after more than one year, compared with 52% at 31
December 2008. Net debt to total capital(1) at 31 December 2009 was 30.8%,
compared with 37.8% at 31 December 2008.
In 2009, Anglo American conducted four major bond transactions raising a total
of USD5.9 billion, which refinanced the Group`s short term debt position. In
April, USD2 billion was raised in a dual tranche issuance, with USD1.25
billion maturing in 2014 and USD0.75 billion in 2019. In May, a convertible
bond was issued, maturing in 2014, which raised USD1.7 billion. In September
and December, two separate Eurobonds were issued each raising 750 million
(USD1.1 billion), maturing in 2013 and 2016 respectively.
At 31 December 2009, Anglo American had undrawn bank facilities of USD9.5
billion, cash deposits of USD3.3 billion and commercial paper maturing
throughout 2010 of USD67 million. Anglo American`s only significant facilities
maturing in 2010 are a GBP300 million (USD500 million) Eurobond which matures
in
December 2010, as well as the Amapa facilities of USD538 million. In addition,
the Group has undrawn rand facilities equivalent to USD1.9 billion with 364
day maturities, which roll automatically on a daily basis, unless notice is
served.
The Group`s forecasts and projections, taking account of reasonably possible
changes in trading performance and the refinancing of the facilities above,
show that the Group will be able to operate within the level of its current
facilities for the foreseeable future.
(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.
Group corporate cost allocation
As a result of the Group announcement on 22 October 2009 to streamline its
management structure and remove a layer of global management, certain
activities previously performed within the divisions are now to be undertaken
at the corporate centre, certain will be undertaken in the new business units
and the remainder will no longer be performed. At the same time, it has been
decided that the figure presented externally as Group corporate costs will
only comprise costs associated with parental or direct shareholder related
activities and that costs associated with activities which are value-adding to
the business units will be reported within the business units. As a result, a
proportion of corporate costs which are believed to be value-adding to the
business units will be allocated to each business unit. The Group corporate
costs, as included within the notes to the accounts, can be reconciled to the
historical basis for presentation as in the table below.
Corporate costs (on a consistent basis with those reported in the 2008 Annual
Report) of USD272 million (2008: USD345 million) were incurred in 2009, a
reduction of USD73 million. The reduction was due in part to the strengthening
dollar but principally result from stringent cost reduction measures across
the
corporate offices.
Group corporate costs
USD million 2009 2008
Corporate costs as previously reported 272 345
Costs previously reported within divisional results 76 102
Corporate costs allocated to business units (202) (228)
Corporate costs as reported under new structure 146 219
Dividends
The resumption of the dividend at the earliest possible time remains a key
priority for the board. Assuming that the commodity price environment and
outlook continue to improve and the business performance remains robust, the
board would expect to be able to announce the resumption of a dividend in
respect of the current financial year.
Analysis of dividends
US cents per share 2009 2008
Interim dividend - 44
Recommended final dividend - -
Total dividends - -
Operations review 2009
In the operations review on the following pages, operating profit includes
attributable share of associates` operating profit and is before special items
and remeasurements unless otherwise stated. Capital expenditure relates to
cash expenditure on tangible assets.
COPPER
USD million Year ended Year ended
(unless otherwise stated) 31 Dec 2009 31 Dec 2008
Operating profit 2,010 1,892
EBITDA 2,254 2,104
Net operating assets 4,763 3,148
Capital expenditure 1,068 808
Share of Group operating profit 41% 19%
Share of Group net operating assets 12% 10%
Copper generated an operating profit of USD2,010 million, an increase of 6%,
underpinned principally by record production and lower operating costs, as
well as the benefit of a marginally higher realised copper price and the
weaker Chilean peso. This was partly offset by the impact of a lower
molybdenum price.
Markets
Average market price (c/lb) 2009 2008
Copper 234 315
Copper prices rose steadily during the year, reflecting improving global
economic conditions, and ended at a high of 333 c/lb. This price increase was
driven initially by speculative and investment fund inflows and Chinese stock
building, before gaining further ground in the second half as a number of
operating incidents and industrial action impacted global supply.
Despite the price increase from 132 c/lb at the end of 2008, the average price
for the year was 26% lower than in 2008, although 2% higher on a realised
price basis, partially due to the favourable final settlements of sales prices
into a rising market.
Operating performance
2009 2008
Attributable copper production (tonnes) 669,800 639,800
Record total copper production of 669,800 tonnes was achieved in the year, an
increase of 5%, driven by annual production records at both Los Bronces and
Collahuasi. Los Bronces production was affected in the first half by lower
sulphide grades and recoveries, before improved operating efficiencies and ore
grades in the second half lifted full year production to a record high. At
Collahuasi, despite production having been impacted for 44 days following the
failure of a conveyor electrical control centre, attributable production rose
by 15% to 235,800 tonnes.
Operating costs benefited from improved operational efficiencies and price
reductions achieved for key consumable items such as sulphuric acid, diesel
and power. Lower freight costs were offset by higher concentrate treatment and
refining charges.
Projects
Construction of the Los Bronces expansion project is progressing according to
schedule with its target date for commissioning in late 2011. Engineering
design was substantially completed by the end of 2009 and construction work on
the various sites is on schedule. A significant milestone, the opening of the
Los Bronces section of the conveyor tunnel from the mine through to the
grinding plant at Confluencia, was achieved in November 2009. Production at
Los Bronces is scheduled to increase to 490 ktpa over the first three years of
full production (an average of over 400 ktpa over the first 10 years). At peak
production levels, Los Bronces is expected to be the fifth largest producing
copper mine in the world, with highly attractive cash operating costs and
reserves that support a mine life of 30 years. Resource and mineralisation
studies carried out by Anglo American`s technical teams support further
potential expansion.
Anglo American has also announced two very significant and high quality new
discoveries at Los Sulfatos and San Enrique Monolito close to its Los Bronces
mine in Chile. These two new copper prospects together increase the Group`s
copper resources (excluding reserves) by approximately 50%.
At Collahuasi, an expansion project is under way to increase sulphide
processing capacity to 150,000 tonnes per day by early 2011, while the
significant potential for subsequent phased expansions continues to be
evaluated.
At Mantoverde in Chile, pre-feasibility studies are currently under way for a
sulphide-ore life extension.
In Peru, good progress was made in the year on a revised feasibility study for
the 225 ktpa Quellaveco project. This study is targeted for completion during
2010.
The focus at the Michiquillay project, also in Peru, has been on building
relationships with the local communities and, in this respect, land access
negotiations were completed in June 2009. The geological exploration programme
that began in July had completed 16,000 metres of drilling by the end of the
year. Drilling was suspended in late 2009 pending resolution of issues
currently under discussion with local communities. Baseline environmental and
hydrological studies also commenced during the second half of the year.
Conceptual engineering studies have been completed and a decision to award the
pre-feasibility engineering studies will be taken during 2010.
Activities at the Pebble project in Alaska advanced on all fronts during 2009.
In 2010, the project team will work towards finalising the engineering design,
complete the environmental baseline document and carry out additional
exploration drilling within the claim area.
Outlook
Increased throughput is not expected to fully compensate for lower ore grades
putting pressure on production levels in 2010 prior to the commissioning of
the Los Bronces expansion project which, together with targeted throughput
improvements at Collahuasi and El Soldado, will deliver a step increase in
attributable copper production in 2011. While a continued strong copper price
through 2010 would put pressure on the Chilean peso and labour costs, further
cost and operating efficiency benefits are expected to be delivered through
the Group`s global supply chain and asset optimisation initiatives.
Demand for copper from China is expected to continue growing at a healthy
rate, while demand in North America and Europe is also showing signs of
recovery. On the supply side, production is anticipated to continue to be
constrained by industrial action, declining grades, increasing social and
environmental demands and other political risks. Notwithstanding Chinese
government measures to restrict short term credit and the high level of
restocking in 2009 giving rise to potential price volatility in 2010, the
strong long term fundamentals for copper remain in place.
NICKEL
USD million Year ended Year ended
(unless otherwise stated) 31 Dec 2009 31 Dec 2008
Operating profit 2 123
EBITDA 28 150
Net operating assets 1,787 1,401
Capital expenditure 554 530
Share of Group operating profit 0.04% 1%
Share of Group net operating assets 5% 4%
Nickel generated an operating profit of USD2 million, strongly impacted by the
30% decrease in average nickel prices for the year and Venezuelan inflation of
approximately 25%. Sales volumes of 23,635 tonnes were 32% higher, mainly due
to the drawing down of stockpiles at Loma de Ni-quel and Codemin following the
weakening in the nickel market in the fourth quarter of 2008.
Markets
Average market price (c/lb) 2009 2008
Nickel 667 953
Nickel demand increased during the second half of the year, mainly due to
higher Chinese stainless steel output and imports, after being negatively
affected in the first half by price-led substitution, destocking in the
stainless steel sector and weak global economic conditions. The nickel price
reached a low of 427 c/lb during March, increased to 956 c/lb in August and
ended the year at 838 c/lb.
Operating performance
2009 2008
Attributable nickel production (tonnes) (1) 19,900 20,000
(1) Excludes Anglo Platinum nickel production
Nickel production decreased marginally to 19,900 tonnes owing to lower
production at Loma de Ni-quel, partially offset by higher production at
Codemin.
Loma de Ni-quel produced 10,400 tonnes of nickel, a decrease of 5%. Production
was impacted in January by the non-renewal of the environmental permit to
dispose of slag from the smelting process while studies were finalised to find
disposal alternatives, an estimated impact of 1,100 tonnes. In May, a metal
run-out from the EF2 furnace resulted in its closure for the rest of the year,
with a loss of approximately 4,500 tonnes of production during 2009.
Reconstruction of the furnace was completed in January 2010 and full
production is expected during the second quarter. While only 50% of smelting
capacity was available between June and December, production achieved 59% of
budget through optimisation of the remaining plant processes.
Operating costs were kept under tight control despite Venezuelan inflation and
the artificially pegged exchange rate. Port congestion difficulties faced in
the first half were overcome through the use of an alternative port and
shipping route.
In January 2008, the Venezuelan Ministry of Basic Industries and Mining
("MIBAM") published a resolution cancelling 13 of Minera Loma de Ni-quel`s
("MLdN") 16 exploration and exploitation concessions due to MLdN`s alleged
failure to fulfil certain conditions of the concessions. The current mining
and
metallurgical facilities are located on the three concessions that have not
been cancelled. MLdN believes that it has complied with the conditions of
these concessions and has lodged administrative appeals against the notices of
termination and is waiting for a response from MIBAM. MLdN may in the future
undertake further appeals, including with Venezuela`s Supreme Court, if the
MIBAM`s ruling does not adequately protect its interests.
An impairment and associated adjustments of USD114 million has been recorded
due to increased uncertainty over the renewal of the three concessions that
have not been cancelled but that expire in 2012 and over the restoration of
the 13 concessions that were cancelled.
At 31 December 2009, Anglo American`s interest in the book value of MLdN,
including its mineral rights, was USD285 million (as included in the Group`s
balance sheet). In the 12 months to December 2009, MLdN`s production and
contribution to Group operating profits were respectively 10,400 tonnes of
nickel in ferronickel and a USD7 million loss. The average price of nickel in
2009 was 667 c/lb. As of 17 February 2010, the price of nickel was 910 c/lb.
Codemin`s production increased 4% to 9,500 tonnes, primarily as a result of
improved equipment availability. Cash operating costs were reduced by 11%,
aided by higher production and lower fuel oil prices.
Projects
The Barro Alto project in Brazil was nearly 80% complete at the year end and
is on schedule towards producing its first metal in early 2011 and full
production in the second half of 2012. This project makes use of an existing
operation and proven technology and will produce an average 36 ktpa of nickel
in full production (41 ktpa over the first five years), with a cost position
on the lower half of the curve. Further asset optimisation initiatives are
under way which are expected to improve its cost positioning further. When
Barro Alto reaches full production in 2012, Anglo American`s nickel production
(excluding nickel production from Anglo Platinum) will reach 61 ktpa, while
additional potentially world class projects in the pipeline could further
increase production to 120 ktpa, with further upside potential, leveraging the
Group`s considerable nickel laterite technical expertise. Barro Alto has an
approved life of mine of more than 25 years from its extensive resource base.
The unapproved Jacare and Morro Sem Bone projects submitted their PAE
(Economic Exploitation Plan) to the Brazilian mining authorities during 2009.
Outlook
In 2010, Loma de Ni-quel`s production is expected to substantially increase
following the start-up of the rebuilt EF2 furnace and the implementation of
various process improvements. Production at Codemin is expected to decrease to
approximately 8,400 tonnes (12%) due to its planned furnace relining.
The long term outlook for nickel is for robust growth, underpinned by
stainless steel uses for applications where corrosion resistance, hygiene and
strength are required, such as in the automotive and construction industries,
nickel alloys for the energy and electronic (batteries) sectors and the
broader industrialisation of the emerging economies, led by China.
PLATINUM
USD million Year ended Year ended
(unless otherwise stated) 31 Dec 2009 31 Dec 2008
Operating profit 32 2,169
EBITDA 677 2,675
Net operating assets 12,141 9,045
Capital expenditure 1,150 1,563
Share of Group operating profit 1% 22%
Share of Group net operating assets 31% 27%
Anglo Platinum generated an operating profit of USD32 million, a 99% decrease
compared with 2008. Key contributory factors included a 38% reduction in the
dollar price realised on the basket of metals sold, offset by higher sales
volumes and proceeds received from a business interruption insurance claim at
Amandelbult.
The average dollar price achieved for platinum was USD1,199 per ounce for the
year, a 24% decrease compared with USD1,570 in 2008. The average prices
achieved for palladium and rhodium sales for the year were USD257 per ounce
(2008: USD355) and USD1,509 per ounce (2008: USD5,174) respectively.
The average price achieved on nickel sales for 2009 was USD6.54 per pound
(2008: USD9.79). The overall basket price achieved for the year of USD1,715
per
platinum ounce sold compared with USD2,764 achieved in 2008.
Markets
The unprecedented volatility in platinum demand and price experienced in 2008
was followed by a period of consolidation in 2009. The inherent strength in
the structure of the platinum business saw the platinum market return to
balance during 2009, as jewellery and investment demand increased, reacting to
lower price levels in the first half of the year, and as investor sentiment
improved. These increases offset lower demand for use in autocatalysts and
from the industrial sector.
Developments in 2009 again highlight the importance of Anglo Platinum`s
continued commitment to market development which supports the maintenance of
existing, and the development of new, industrial (including autocatalyst)
applications, and the maintenance of healthy jewellery markets. Market
development for by-product metals, most specifically palladium and rhodium,
maximise the contribution to the total revenue from the basket of metals sold.
Autocatalysts
Demand for PGMs in the autocatalyst industry declined in 2009 due to lower
levels of automobile production. The reduction in metal purchased by auto
manufacturers was exacerbated, in the first half of the year, by their need to
decrease vehicle inventory levels, therefore restricting production and
selling from available stock. Some re-building of these inventories, together
with widespread government incentive schemes, saw a firming in PGM demand in
the second half of 2009. Incentive schemes resulted in an increase in the sale
of smaller gasoline vehicles and a consequent reduction in diesel vehicle
demand in Europe.
Industrial
Demand for platinum in the industrial sector reduced in line with the global
economic decline in 2009. Low utilisation rates in the chemical and petroleum
sectors further reduced demand for new metal as companies reduced inventory
levels. Glass demand was negatively affected by excess capacity and a return
of metal from decommissioned plants.
Jewellery
As expected, demand for platinum jewellery fabrication responded quickly and
strongly to the lower platinum prices in the latter part of 2008 and the first
half of 2009. The increased demand was most notable in the unsaturated Chinese
market. Total demand for jewellery in 2009 was 70% higher than in 2008.
Investment
Investor inflow into the platinum and palladium Exchange Traded Funds (ETFs)
continued strongly throughout the year. Platinum holdings increased by just
over 380,000 ounces to 680,000 ounces and palladium by just over 500,000
ounces to 1,170,000 ounces in 2009. The expected launch of the US based ETFs
supported firm investment demand towards the end of 2009.
Anglo Platinum makes use of its extensive knowledge of the PGM market to form
the basis of its operating strategy, thereby enhancing the company`s ability
to forecast the market`s needs and, consequently, the level of production
required to ensure long term market sustainability.
Operating performance
Anglo Platinum achieved a significant milestone in January 2010 when it
recorded four consecutive months without a fatal incident at its operations,
including the entire fourth quarter of 2009. Anglo Platinum`s continued focus
on safety resulted in a further 21% improvement in its lost time injury
frequency rate to 1.37, from 1.74 in 2008. Despite these improvements, sadly
13 employees lost their lives at Anglo Platinum`s managed operations during
the year.
The major restructuring of mining operations announced early in 2009 was
completed by the end of the year. The two largest operations, Rustenburg and
Amandelbult, were split into more efficient stand-alone units, of five and two
mines respectively. This new structure ensures a sustainable reduction in the
unit cost of production and underpins the commitment to extracting maximum
value from the assets. As part of the restructuring process, the source of
ounces across the portfolio was optimised, including placing three high-cost
shafts onto care and maintenance indefinitely; Siphumelele 3 shaft and
Siphumelele 2 Shaft in April and August respectively and Khuseleka 2 Shaft at
Khuseleka Mine in August. Union and Mogalakwena remain untouched by these
changes.
Production
Refined platinum production for the year was 3% higher at 2.452 million
ounces,in line with the company`s 2009 target. Equivalent refined platinum
production (equivalent ounces are mined ounces expressed as refined ounces)
was 2.464 million ounces. Sales of refined platinum for the year were 2.57
million ounces compared with 2.22 million ounces in 2008, an increase of 16%.
This increase was due to unsold metal at the end of 2008 being available for
sale in 2009 and the achievement of higher refined production volumes.
Costs
Costs were tightly controlled during 2009. The focus on cost management,
inbound supply chain projects and asset optimisation initiatives began to bear
fruit and resulted in the cash operating cost per equivalent refined platinum
ounce remaining flat at R11,236. This was achieved despite upward inflationary
pressure caused by wage and electricity tariff increases in excess of consumer
price inflation.
Cost increases were curbed through improved productivity and numerous cost
management initiatives including:
- Placing the high cost Siphumelele 3 (Bleskop), Siphumelele 2 (Brakspruit)
and Khuseleka 2 (Boschfontein) shafts onto "care and maintenance";
- Early renegotiation with suppliers for reduced prices on key input
commodities such as diesel, steel tyres and reagents;
- Changing Mogalakwena`s mining production levels without sacrificing
concentrator throughput;
- Completing the restructuring processes at the Rustenburg and Amandelbult
mines; and
- Reducing overhead costs at the corporate and regional offices.
Anglo Platinum reduced its head office and regional office headcount by 724
people in 2009, bringing the total reduction since July 2008 to 1,150. Overall
headcount was reduced by 15,752 during the year, and by 18,786 since October
2008. Productivity levels increased 13% compared with 2008, to 6.33m2 per
total operating employee on average per month.
Projects
Capital expenditure for 2009, excluding capitalised interest, was 26% lower at
USD1,150 million, of which USD708 million was spent on projects and USD442
million on stay-in-business capital.
Total expected capital expenditure for 2010 has been reduced to approximately
USD1 billion, excluding capitalised interest.
The 65,000 ounce per annum Unki platinum project in Zimbabwe is progressing
towards the commissioning of its concentrator in the fourth quarter of 2010.
The development of the underground declines is 64% complete and the supporting
infrastructure is 80% complete.
Outlook
Anglo Platinum expects the platinum market in 2010 to return to a position of
deficit as a result of a moderate increase in supply but a significant
recovery in demand. South African production is expected to remain constrained
as producers adapt to a safer working environment and as lower rand metal
prices resulted in production in 2009 being restricted at high-cost operations
across the industry.
Vehicle sales in 2010 are expected to be similar to those seen in 2009, though
production is likely to increase as fewer sales from stock are expected in
2010. Higher sales of larger sedan vehicles are expected as diesel fleet
purchases recover.
While demand for industrial products is expected to recover slowly, platinum
demand is expected to be enhanced by a substantial element of restocking.
Another good year is expected from the investment segment, particularly
following the launch of the US ETFs.
Jewellery demand is expected to decrease in 2010 in the absence of the extra
demand that re-built supply chain inventory levels in 2009. While the higher
price may discourage new jewellery demand in mature markets, the Chinese
jewellery market continues to react positively to gradual price increases and
remains the largest market for platinum jewellery.
The platinum price in 2010 is expected to remain above USD1,500 per ounce on
average as small improvements in the global economic recovery and restocking
are likely to further increase the expected demand recovery in 2010.
Firm investment demand for palladium and the strong reliance by gasoline
engines, more typical in smaller engines and in the growing Chinese market, is
likely to see the price of the metal strengthen. Rhodium remains in demand for
its particular catalytic properties, but suffered a reduction in demand owing
to thrifting at the very high prices during 2008.
Given the prevailing market conditions, the company has targeted 2010
production of 2.5 million ounces of refined platinum and to produce this
volume at a unit cost marginally above R11,000 per platinum ounce, the same
level as in the preceding two years.
IRON ORE AND MANGANESE
USD million Year ended Year ended
(unless otherwise stated) 31 Dec 2009 31 Dec 2008
Operating profit 1,489 2,554
Kumba Iron Ore 1,487 1,583
Iron Ore Brazil (141) (9)
Samancor 143 980
EBITDA 1,593 2,625
Net operating assets 10,370 10,457
Capital expenditure 1,044 783
Share of Group operating profit 30% 25%
Share of Group net operating assets 27% 32%
Iron Ore and Manganese generated an operating profit of USD1,489 million, some
42% lower than 2008. This was as a result of lower iron ore prices, partly
offset by higher iron ore sales volumes, and lower manganese ore and alloy
volumes and prices.
Markets
World crude steel production continued to increase during the second half of
2009 compared with both the first half of 2009 and second half of 2008, with
most major steel producing countries posting an increase in output. World
crude steel production of 1.2 billion tonnes was, however, markedly lower than
the 1.3 billion tonnes produced in 2008. Steel production in China in 2009
increased 13.5% to 568 Mt. China`s economic growth continues to be robust on
the back of strong domestic focused consumption and infrastructure based
stimulus spending. The increase in steel production, coupled with lower
Chinese domestic iron ore production, resulted in record seaborne iron ore
imports into China. In the second half of 2009, the European, Japanese and
South Korean markets saw a tentative recovery, with an improvement in iron ore
demand following some production increases and restocking by the steel
industry.
The manganese ore and alloy market reflected the decline in world crude steel
production. The market was characterised by uncertainty in ore and alloy
demand masked by stocking and de-stocking activities and, consequently, prices
for ore and alloy declined significantly during the year. Supply cutbacks
swept the manganese sector in an effort to match the reduced levels of demand,
which were maintained into the third quarter of 2009. Demand began to improve
during the second half of the year, when producers responded to the improved
order levels by announcing furnace restarts.
Operating performance
Kumba Iron Ore`s strong financial performance for the year was underpinned by
a
solid operational performance. The company reported operating profit of
USD1,487 million, a decrease of 6%, mainly as a result of lower average export
sales prices, mostly offset by higher export sales volumes. Despite lower
benchmark iron ore export prices, which decreased on average by 40% for the
2009/10 iron ore year, Kumba maintained a strong operating profit margin of
53%. Total sales volumes increased by 21% from 33.0 Mt to 40.0 Mt. Export
sales volumes from Sishen Mine increased by 37% from 24.9 Mt to 34.2 Mt as
volumes ramped up from the jig plant (Sishen expansion), the successful
introduction of a new blended fines product and an increase in demand from
China. Total domestic sales volumes decreased by 28% or 2.3 Mt owing to lower
demand from ArcelorMittal SA.
Total production at Sishen Mine increased by 16% from 34.0 Mt to 39.4 Mt,
principally as a result of the continued ramp up of the jig plant, which
achieved production of 10.4 Mt in 2009 and remains on schedule to achieve
approximately 13 Mt during 2010.
The Amapa iron ore system produced 2.7 Mt during the year, compared with 1.2
Mt in 2008 (of which 712,000 tonnes was produced after the Group`s acquisition
in August 2008). The production rate ramped up during the second half of the
year and, in the fourth quarter, monthly average production was 314,000
tonnes.
Amapa was acquired in 2008 as an operating asset as part of the acquisition of
the Minas Rio project. During 2009, Amapa has experienced significant
operational challenges across its mine, plant and logistics chain, producing
2.7 Mt compared to the design capacity of 6.5 Mtpa. Management`s focus has
been, and remains, on seeking to markedly improve performance from the
existing operations, rather than investing to expand the operation. The Amapa
system is currently believed to have capacity to increase production to 5 Mtpa
without significant further capital expenditure. Due to the focus on improving
operational performance and preserving cash, limited exploration drilling has
been undertaken in 2009 and the anticipated growth potential of surrounding
license areas remains untested. Given these operational difficulties and
delays in increasing production, the Group has recorded an impairment charge
of USD1.5 billion (after tax and minority interest) against the carrying value
of the asset.
Samancor achieved an operating profit of USD143 million, a 85% decrease, due
to lower manganese ore and alloy sales volumes and prices following the
decline in global steel demand.
Projects
The development of the 9 Mtpa Kolomela Mine continues and remains on budget
and on schedule to deliver first production during the first half of 2012,
ramping up to full capacity in 2013. Mining operations commenced during the
year, with the first blast carried out on 17 September 2009. To date, 4 Mt of
material has
been moved. Since the start of construction activities on the project in 2008,
capital expenditure has totalled USD367 million, of which USD290 million was
incurred during 2009.
The pace of construction and project expenditure at Minas Rio is, in large
part, dependent upon receiving a number of environmental licences and other
permits. A total of 21 licences and permits were granted in the year, key
among these were the first part of the Mine and Beneficiation Plant
Installation Licence (granted in December), the federal permit for land
clearance at the mine and the approvals of specific permits for the port road
modifications. The second part of the Installation License is expected to be
approved during the early part of 2010. Anglo American continues to work with
local, state and federal authorities and landowners to ensure that the timing
of licence and permit receipts and land acquisitions does not further impact
the overall timing of the project.
Project development on the plant and pipeline in 2009 has been focused on the
areas of earthworks and civil works. Filtration plant ground improvement works
were commenced. At the port, offshore works have continued with the
construction of the main trestle, now 2.5 km in length, and dredging works,
while the temporary jetty for breakwater construction is nearing completion.
Onshore, the quarry for production of the breakwater rock is operational and
the quarry-to-port road modifications and construction are progressing.
First iron ore production is scheduled for the second half of 2012, with a
planned annual capacity in the first phase of 26.5 Mtpa of iron ore pellet
feed. Forecast attributable capital expenditure for the first phase of the
project has increased to USD3.8 billion, owing to scoping changes at the mine,
pipeline and port, as well as foreign exchange movements.
Studies for the expansion of the Minas Rio project continued during 2009. The
latest resource statement, resulting from geological work, provides a total
resource volume (Measured, Indicated and Inferred) of 5 billion tonnes, with
further upside potential supporting the envisaged expansion of the project.
Outlook
Analyst forecasts indicate that global steel consumption should grow in excess
of 5% per annum over the next three years, which would lead to increasing iron
ore demand. Chinese demand for iron ore is expected to grow by at least 5%
during 2010. With recovery beyond China expected during 2010, the supply
pressures on seaborne iron ore continue to increase. Overall, the global
seaborne iron ore market remains structurally tight.
Kumba expects to further increase production volumes during 2010. Export sales
volumes into China are expected to normalise at around 60% of the geographical
sales mix. Although global steel demand is expected to return to growth in
2010, this is likely to be moderate and the sustainability of the increase in
demand from developed countries remains uncertain. Domestic sales volumes
remain dependent upon ArcelorMittal SA`s offtake requirements, which declined
in 2009.
The market for manganese ore and alloys is dependent upon the carbon steel
industry. Improvements in demand and prices will be underpinned by
strengthening steel production trends, the rate of furnace restarts and the
level of Chinese exports.
METALLURGICAL COAL
USD million Year ended Year ended
(unless otherwise stated) 31 Dec 2009 31 Dec 2008
Operating profit 451 1,110
EBITDA 706 1,319
Net operating assets 3,407 2,669
Capital expenditure 96 467
Share of Group operating profit 9% 11%
Share of Group net operating assets 9% 8%
Metallurgical Coal delivered an operating profit of USD451 million, a 59%
decrease, primarily due to lower prices as a result of weaker demand
conditions, partially offset by lower mining costs.
Markets
Anglo American weighted average achieved FOB (USD/tonne) 2009 2008
Export metallurgical coal 141.04 187.36
Export thermal coal 73.82 83.22
Domestic thermal coal 26.75 20.75
Attributable sales volumes (`000 tonnes) 2009 2008
Export metallurgical coal 11,542 13,147
Export thermal coal 6,239 5,780
Domestic thermal coal 8,604 9,682
Following a year of tight market conditions and record prices in 2008, demand
for coal was severely constrained in the first quarter as steelmaker
inventories were wound down, particularly impacting the PCI coal market.
Benchmark metallurgical coal prices retreated from their c.USD300 per tonne
peak in 2008 by up to 60%, reducing the average selling price for the year by
22%.
Metallurgical coal markets improved in the second quarter owing to significant
buying from China, initially of hard coking coal and subsequently a wider
range of metallurgical coals, including PCI, thereby underpinning traditional
benchmark prices at levels second only to those seen in 2008. The second half
of the year saw a significant increase in demand from traditional customers in
Japan, South Korea, India and Europe as steel industry production units ramped
up.
Operating performance
Attributable production (`000 tonnes) 2009 2008
Export metallurgical coal 12,623 13,145
Thermal coal 14,052 14,696
Production of metallurgical coal of 12.6 Mt was 4% lower than 2008, in
response to weaker demand from steel customers. However, the business was well
positioned to weather the volatile market due to its diversified product
positioning across all market segments and its strong long term relationships
with key customers, enabling market share to be gained during the period.
Total attributable coal production was 26.7 Mt, a 4% decrease.
In response to the market downturn in late 2008, Metallurgical Coal acted
swiftly to restructure its operations and reduce its cost base while
continuing development of key strategic projects. Marginal activities were
closed,headcount was reduced by 20%, a new streamlined organisational model
was implemented and significant reductions were made in maintenance and supply
costs. These initiatives resulted in significantly lower unit costs, by more
than USD10 per tonne, compared with the cost base in the second half of 2008,
and in a 24% productivity increase over 2008.
In recent years, logistics constraints in the rail to port chain have hindered
business performance. The co-ordinated three year programme to expand system
capacity at Dalrymple Bay Coal Terminal has proceeded well, with the port
expansion complete, the track expansion to be completed by March 2010 and the
last of the rolling stock to be delivered by mid-2010. This action has
improved capacity in the logistics system. Metallurgical Coal continues to
manage the port queuing challenges by building flexibility into its logistics
planning.
The initiatives taken across the business, including through asset
optimization and a 50% reduction in required stay in business capital,
resulted in a more competitive cost position for the business and position it
well to capitalize on the more buoyant market conditions expected in 2010.
Projects
Production from the brownfield expansion projects at Dawson, Drayton South and
Capcoal (Lake Lindsay) mines will continue to increase over the next two to
three years as equipment productivity is raised to benchmark standards.
Significant greenfield projects continue to be studied at Grosvenor, Moranbah
South and Dartbrook to meet expectations for growing demand for both
metallurgical and thermal coal over the next decade. It is expected that a
first stage approval decision in relation to the approval and development of
the 4.3 Mtpa Grosvenor metallurgical coal project in Australia will be taken
during 2010.
Outlook
The positive trend seen from the steel industry in both China and the
traditional markets during the second half of 2009 is expected to continue in
2010, with a return to 2008 steel production levels providing positive
momentum
for metallurgical coal prices.
THERMAL COAL
USD million Year ended Year ended
(unless otherwise stated) 31 Dec 2009 31 Dec 2008
Operating profit 721 1,078
South Africa 442 736
South America 305 375
Projects and corporate (26) (33)
EBITDA 875 1,200
Net operating assets 1,707 1,018
Capital expenditure 400 365
Share of Group operating profit 15% 11%
Share of Group net operating assets 4% 3%
Thermal Coal generated an operating profit of USD721 million, a 33% decrease,
predominantly as a result of lower thermal coal prices, mitigated in part by
the benefits of tighter cost discipline across the business.
Markets
Anglo American weighted average achieved FOB (USD/tonne) 2009 2008
RSA export thermal coal 64.46 84.54
RSA domestic thermal coal 18.48 20.41
South American export thermal coal 72.98 81.33
Attributable sales volumes (`000 tonnes) 2009 2008
RSA export thermal coal 15,857 15,916
RSA domestic thermal coal 6,251 7,046
South American export thermal coal 10,854 11,568
2009 saw considerable price and market trend changes compared with 2008. The
average 2009 FOB index price for South African thermal coal exports (API4) was
USD65 per tonne, compared with USD120 per tonne in 2008.
Driven by a suppressed industrial sector, European power demand in 2009
decreased significantly. The softer oil price and an abundance of cheap gas
contributed to lower demand for imported coal, resulting in increased
stockpiles. In contrast, the Pacific market continued to see growth, with
increasing demand for imported thermal coal. As China was able to accommodate
large volumes of Indonesian and Australian exports, India turned to South
Africa to meet its escalating demand for thermal coal. The proportion of South
African coal exports shipped to Asia in 2009 was 41%, compared with 18% in
2008, with 29% going to India. In the absence of European demand, this ability
to deploy coal eastwards gave support to both South African export volumes and
prices. With the Pacific market driving the API4 price as 2009 progressed, the
flow of coal away from the Atlantic became increasingly evident. Colombian and
US exports were generally not as competitive in the Asian markets as in the
Atlantic market due to comparatively higher freight costs during the year.
Operating performance
Attributable production (`000 tonnes) 2009 2008
RSA thermal coal 22,186 22,287
RSA Eskom coal 36,225 36,158
South American export thermal coal 10,190 10,410
South Africa
Operating profit from South African sourced coal decreased 40% to USD442
million, mainly due to the 24% decrease in export prices, coupled with lower
sales volumes and rand strength. Domestic sales prices were 2% lower. Despite
the economic downturn, annual production remained steady at some 59 Mt, driven
mainly by higher output at Mafube as it reached full capacity during 2009,
offset by lower production at New Denmark, where major geological challenges
suspended the longwall operations. A new longwall has been commissioned during
the first quarter of 2010 and is ramping up.
South America
Operating profit from Cerrejon decreased by 19% to USD305 million, driven
primarily by less favourable market conditions as average sale prices
decreased
by 8% and total sales volumes by 4%. The impact of the USD98 million decrease
in turnover was partly offset by reduced input costs arising from lower fuel
prices and price associated royalties, as well as cost control measures.
Although significant improvements in 2009 coal recovery rates continued to
reflect positively in all aspects of the operation, saleable production was
reduced in response to Cerrejon`s perception of a weaker market.
Projects
In South Africa, the USD512 million, 6.6 Mtpa Zibulo project (Zondagsfontein)
is under construction, including the building of a 50:50 joint venture coal
washing plant with BHP Billiton Energy Coal South Africa. The project is on
schedule, with first coal produced during the third quarter of 2009 and it
will
continue to ramp up during the course of 2010, reaching full production in
2012.
In Colombia, the USD130 million expansion at Cerrejon to 32 Mtpa was completed
and full production was achieved early in 2009. Feasibility studies are under
way to expand the operation to around 40 Mtpa.
Outlook
Underlying demand remains relatively strong, supported by economic growth in
the Asia-Pacific region, in particular from India and China, the steady
increase in the oil price and the cold European and Asian winter.
A significant portion of 2010 sales is exposed to market pricing. Potential
exists for market prices to increase during the first quarter, with current
API4 prices for the latter part of 2010 trending above USD80 per tonne,
significantly higher than those seen in 2009.
DIAMONDS
Year ended Year ended
USD million 31 Dec 2009 31 Dec 2008
(unless otherwise stated)
Share of associate`s operating profit 64 508
EBITDA 215 665
Group`s associate investment in De Beers (1) 1,353 1,623
Share of Group operating profit 1% 5%
(1) Excludes shareholder loans of USD367 million and preference shares of
USD88
million (2008: USD118 million and USD88 million respectively)
Anglo American`s share of operating profit from De Beers decreased by 87% to
USD64 million.
Diamond Trading Company (DTC) sales totalled USD3.23 billion, significantly
below the previous year (2008: USD5.93 billion), owing to the impact of the
global economic downturn. The DTC employed a flexible approach in response to
the volatile levels of client demand for rough diamonds during the year. This
agility enabled the DTC to continue making sales, albeit at a reduced level,
throughout the year and to steadily increase levels of supply as rough demand
and market sentiment began to improve during the year.
Markets
In line with most products in the luxury sector, the diamond industry was
severely affected in 2009 by the global recession. The impact of high stock
levels throughout the diamond pipeline, constricted liquidity in the cutting
centres and lower consumer demand led to lower demand for rough diamonds from
the DTC Sightholders. The market was hit most acutely in the first quarter
and,
as the year progressed, industry sentiment improved, which allowed the DTC to
increase prices and sales volumes throughout the second half of the year.
At the retail level, the 2009 holiday period took place amidst continued
economic weakness, with American consumers continuing to spend less than
previous years. The luxury goods and high-end jewellery sector appeared to
perform slightly above expectations, outperforming other categories. In the
emerging markets of India and China, demand for diamond jewellery remained
positive in the face of a weaker economic climate.
In accordance with the strategy to stimulate demand, the Forevermark programme
continued to expand in China, Hong Kong, Japan and Macau. The brand is now
available in 245 stores across Asia and achieved over USD100 million in retail
sales in its first 12 months. In the US, De Beers partnered with Sightholders
and retailers to roll-out an integrated marketing campaign for the holiday
shopping season. The Everlon Diamond Knot Collection was marketed by leading
major retailers and over 300 independent outlets in the US. Although sales
figures have yet to be released, anecdotal reports from participating
retailers
and Sightholders described the campaign as being one of the few successes in
an
otherwise difficult market place.
Operating performance
At the beginning of 2009 and in response to reduced demand from DTC
Sightholders, De Beers reduced its production across its portfolio of mines.
Through production holidays and extended maintenance shifts, output was
significantly reduced in the first quarter, resulting in a 91% reduction in
carats produced compared with the same period in 2008. As Sightholder demand
increased gradually in the second quarter, which continued throughout the rest
of the year, De Beers increased production to 18 million carats in the second
half of the year (2008 H2: 24 million carats), an increase of 173% compared
with the first half and a reduction of 49% year-on-year. For 2009 as a whole,
De Beers produced 24.6 million carats (2008: 48.1 million carats). Production
from Debswana totalled 17.7 million carats (2008: 32.3 million carats), Namdeb
produced 0.9 million carats from land and sea operations (2008: 2.1 million
carats), while the output from South African operations also decreased to 4.8
million carats (2008: 12.0 million carats). The Canadian mines produced 1.1
million carats (2008: 1.6 million carats).
De Beers tackled costs aggressively, achieving a USD1.1 billion reduction in
operating and capital expenditure, a 45% reduction in production and operating
costs and a 23% reduction in its global workforce.
The effects of the strengthening Canadian dollar, the impact of the global
economic downturn on pricing and production levels at Snap Lake, have led to a
non-cash impairment charge of USD595 million (attributable USD267 million)
against the value of De Beers` Canadian assets and written off USD101 million
(attributable share USD45 million) of deferred tax assets.
Projects
At the end of 2009, Debswana announced a major expansion project at Jwaneng,
the world`s flagship diamond mine in Botswana. This project, also known as
Cut-8, will extend the mine life at Jwaneng until at least 2025. Debswana will
invest USD500 million in capital expenditure, while the estimated project
investment is likely to total USD3 billion over the next 15 years. At its
peak, the project will create more than 1,000 jobs and will create access to a
further 95 million carats, which could be worth in excess of USD15 billion
over the life of the mine.
Outlook
De Beers will continue to take a cautious approach to production, sales and
cost management in 2010, whilst anticipating a steady recovery of the
industry.
As the world economy recovers, the global market for polished diamonds has
stabilised and is also recovering. De Beers is encouraged by initial stronger
levels of demand compared with those it witnessed at the same stage in 2009,
and history has shown that demand generally rebounds strongly in post-
recessionary periods as manufacturers and retailers look to re-build their
inventories. De Beers remains cautious as the global consumer demand for
luxury goods is yet to fully recover to pre-crisis levels and will therefore
continue to take a prudent approach to production during 2010. While
production is planned to increase above 2009 levels, it is not expected to
return to historic highs for the foreseeable future. De Beers will continue to
focus on cost and capital management, further increasing efficiencies and
reducing costs.
China and India are the two priority growth markets for diamonds and are
expected to collectively account for one third of global demand by the middle
of the decade. De Beers launched the Forevermark programme, a proprietary
diamond brand, in both the Chinese and Indian markets to support its partners
in driving demand for diamonds. In the US, consumers were particularly hard
hit by the economic downturn. However, the fourth quarter Everlon marketing
initiative was received well and trends indicate the downturn has bottomed
out, with growth over the Christmas season providing encouragement for the
world`s largest diamond consumer market.
OTHER MINING AND INDUSTRIAL
USD million Year ended Year ended
(unless otherwise stated) 31 Dec 2009 31 Dec 2008
Operating profit 506 1,082
Tarmac 101 229
Zinc 175 136
Scaw Metals 131 274
Copebras (40) 217
Catalao 106 78
Coal Americas (8) 29
Other 41 119
EBITDA 878 1,513
Net operating assets 5,029 5,231
Capital expenditure 268 603
Share of Group operating profit 10% 11%
Share of Group net operating assets 13% 16%
Tarmac
Tarmac generated an operating profit of USD101 million, a 56% decrease,
reflecting a USD1.5 billion, or 35%, decrease in turnover resulting from both
a
fall in demand and the weaker sterling exchange rate, mitigated by significant
cost reductions. Volumes showed a further significant decline in the year,
with overall demand 20% lower, although Tarmac`s leading market positions were
maintained. Capacity was mothballed and production curtailed to align with
falling demand, which resulted in considerable reductions in fixed costs. In
addition, improvements in operating efficiency and a programme of overhead
reductions were deepened and accelerated, helping to maintain the EBITDA
margin at 11%. Total fixed and support costs were reduced by USD464 million,
or 29%.Despite the substantial decline in turnover, Tarmac generated net cash
inflow from operating activities after capital expenditure of USD88 million,
compared with USD97 million in 2008.
2009 saw a deepening of the difficult market conditions faced by the
construction industry in the UK. Driven by the wider economic issues,
industrial and commercial construction spending decreased significantly.
Continental Europe did not suffer as severely as the UK in 2008, but in 2009
saw declines in construction activity comparable with those in the UK.
Significantly lower demand in the housing and commercial sectors resulted in
UK
volumes declining by 24%, including asphalt volumes, which had shown more
resilience in 2008 than other products. On a like-for-like basis, UK operating
profits decreased by 71%.
On a like-for-like basis, Tarmac International`s underlying operating profits
were 52% lower, with worsening market conditions in France, Poland and the
Czech Republic offsetting resilience in Germany and cost savings of USD9
million.
Total cost savings of USD82 million were achieved by Tarmac in 2009, including
headcount reductions of more than 1,200 made across Tarmac during the year,
representing a reduction of 11%.
Zinc
2009 2008
Attributable zinc production (tonnes) 350,400 340,500
Attributable lead production (tonnes) 68,300 62,900
Average market price - zinc (c/lb) 75 85
Average market price - lead (c/lb) 78 95
Zinc generated a 29% increase in operating profit to USD175 million, despite
lower zinc and lead prices during the year, largely as a result of improved
production and sales, as well as lower costs.
Production at Skorpion increased by 3% to 150,400 tonnes, a record production
year, where nameplate production was exceeded. While electricity constraints,
cathode crane failure and cell repairs were again experienced, the combined
impact was negated by various asset optimisation initiatives. Tight cost
control and record production resulted in mine operating unit costs being 9%
lower than 2008.
At Lisheen, zinc production increased by 3% to 171,800 tonnes due to higher
grades and tonnage mined, while lead output increased by 21% due to higher
grades, improved recoveries and tonnes mined. Asset optimisation initiatives
in the mine and mill resulted in a record production year.
At Black Mountain, tonnes milled increased by 7% as a result of increased ore
production from the Deeps mine. Zinc production was 1% higher at 28,200
tonnes, while lead production increased by 5% to 49,100 tonnes, with the
higher tones milled being offset by lower feed grades. Zinc and lead
metallurgical recoveries, however, improved by 1% and 3% respectively.
Scaw Metals
Despite the tough operating conditions in the steel industry during the year,
Scaw Metals generated an operating profit of USD131 million. The 52% decrease
in operating profit was due to the difficult economic environment across all
operations, with reduced demand in some key markets resulting in downward
pressure on prices. The lower steel prices and the impact of high input and
consumable costs resulted in pressure on margins. However, the integrated
nature of Scaw Metals enabled the rolling mills to continue to supply the
downstream businesses with product at a time when most major steel mills were
curtailing capacity and running at losses. In addition, the careful management
of working capital and capital expenditure resulted in strong cash generation.
Total production of steel products was 1,411,000 tonnes, with the South
African
operations producing 693,000 tonnes and the balance of 718,000 tonnes from the
international operations.
Copebras
Copebras delivered an operating loss of USD40 million, due principally to
reduced fertiliser prices, partially offset by a 30% increase in sales volumes
to 1.06 Mt following good weather conditions in the second half and depressed
fertiliser prices, leading farmers to either restock or increase consumption.
Catalao
Catalao generated an operating profit of USD106 million, 36% higher than the
previous year, with sales volumes of 5,200 tonnes, a 12% increase, resulting
from increased capacity at the tailings operation.
Coal - Americas
Canada - Peace River Coal generated an operating profit of USD13 million for
the year, having successfully completed its USD102 million transition to owner
operated mining, resulting in a 16% improvement in mined waste volumes, part
of
which constituted overburden waste pre-stripping for 2010 and 2011.
Metallurgical coal sales increased by 14%, though lower average realised
prices, arising from generally weaker market conditions, offset the tonnage
increase. Drilling, definitional modelling and environmental approval work
were
substantially progressed on the Roman Mountain project, which targets the
construction of the 4 Mtpa brownfield operation adjacent to the existing Trend
Mine.
Venezuela - Carbones del Guasare ("CdG") was subject to further economic
uncertainty and delivered an operating loss of USD21 million in 2009. Sales
and production volumes of 0.7 Mt were sharply lower (30%) than 2008 and
significantly below the performance potential of the mine.
CONDENSED FINANCIAL STATEMENTS
for the year ended 31 December 2009
Before Special 2009
special items and
items and remeasure-
remeasure- ments
Note ments (note 6) Total
US$ million
Group revenue 3 20,858 - 20,858
Total operating costs (16,481) (1,637) (18,118)
Operating profit from
subsidiaries and joint
ventures 3 4,377 (1,637) 2,740
Net profit on disposals 6 - 1,612 1,612
Share of net income from
associates 3 318 (234) 84
Total profit from
operations and associates 4,695 (259) 4,436
Investment income 514 - 514
Interest expense (780) - (780)
Other financing losses (7) (134) (141)
Net finance costs 7 (273) (134) (407)
Profit before tax 4,422 (393) 4,029
Income tax expense 8 (1,305) 188 (1,117)
Profit for the financial
year 3,117 (205) 2,912
Attributable to:
Minority interests 548 (61) 487
Equity shareholders of the
Company 4 2,569 (144) 2,425
Earnings per share (US$)
Basic 9 2.02
Diluted 9 1.98
Before Special 2008
special items and
items and remeasure-
remeasure- ments
ments (note 6) Total
US$ million
Group revenue 26,311 - 26,311
Total operating costs (18,330) (1,131) (19,461)
Operating profit from subsidiaries
and joint
ventures 7,981 (1,131) 6,850
Net profit on disposals - 1,009 1,009
Share of net income from associates 1,303 (190) 1,113
Total profit from operations and
associates 9,284 (312) 8,972
Investment income 589 - 589
Interest expense (850) - (850)
Other financing losses (191) 51 (140)
Net finance costs (452) 51 (401)
Profit before tax 8,832 (261) 8,571
Income tax expense (2,545) 94 (2,451)
Profit for the financial year 6,287 (167) 6,120
Attributable to:
Minority interests 1,050 (145) 905
Equity shareholders of the Company 5,237 (22) 5,215
Earnings per share (US$)
Basic 4.34
Diluted 4.29
Underlying earnings and underlying earnings per share are set out in note 9.
Consolidated statement of comprehensive income
for the year ended 31 December 2009
US$ million Note 2009 2008
Profit for the financial year 2,912 6,120
Net gain/(loss) on revaluation of available
for sale investments 741 (888)
Net gain/(loss) on cash flow hedges 122 (874)
Net (loss)/gain on cash flow hedges -
associates (2) 4
Net exchange gain/(loss) on translation of
foreign operations 3,819 (4,514)
Actuarial net loss on post retirement benefit
schemes (217) (129)
Actuarial net loss on post retirement benefit
schemes - associates (5) (7)
Deferred tax 10 (74) 167
Net income/(expense) recognised directly in
equity 4,384 (6,241)
Transferred to income statement: sale of
available for sale investments (1,554) (476)
Transferred to income statement: cash flow
hedges 162 380
Transferred to initial carrying amount of
hedged items: cash flow hedges 30 637
Transferred to income statement: exchange
differences on disposal of foreign operations (2) 2
Tax on items transferred from equity 10 77 (94)
Total transferred from equity (1,287) 449
Total comprehensive income for the financial
year 6,009 328
Attributable to:
Equity shareholders of the Company 783 487
Equity shareholders of the Company 5,226 (159)
Consolidated balance sheet
as at 31 December 2009
US$ million Note 2009 2008 2007
Intangible assets 2,776 3,006 1,556
Tangible assets 35,198 29,545 23,534
Environmental rehabilitation
trusts 342 244 252
Investments in associates 3,312 3,612 3,341
Financial asset investments 2,726 3,115 4,780
Trade and other receivables 206 94 159
Deferred tax assets 288 258 474
Other financial assets
(derivatives)(1) 238 117 160
Other non-current assets 191 167 105
Total non-current assets 45,277 40,158 34,361
Inventories 3,212 2,702 2,344
Trade and other receivables 3,348 2,929 3,572
Current tax assets 214 471 223
Other financial assets
(derivatives)(1) 365 259 375
Financial asset investments 11b 3 173 -
Cash and cash equivalents 11b 3,269 2,771 3,129
Total current assets 10,411 9,305 9,643
Assets classified as held
for sale 16 620 275 758
Total assets 56,308 49,738 44,762
Trade and other payables (4,395) (4,770) (3,950)
Short term borrowings 11b, 12 (1,499) (6,784) (5,895)
Short term provisions (209) (168) (142)
Current tax liabilities (566) (804) (992)
Other financial liabilities
(derivatives)(1) (76) (598) (375)
Total current liabilities (6,745) (13,124) (11,354)
Medium and long term
borrowings 11b, 12 (12,816) (7,211) (2,404)
Retirement benefit
obligations (706) (401) (444)
Other financial liabilities
(derivatives)(1) (583) (899) (211)
Deferred tax liabilities (5,192) (4,555) (4,650)
Provisions for liabilities
and charges (1,583) (1,317) (1,082)
Other non-current liabilities (423) (395) -
Total non-current liabilities (21,303) (14,778) (8,791)
Liabilities directly
associated with assets
classified as held for
sale 16 (191) (80) (287)
Total liabilities (28,239) (27,982) (20,432)
Net assets 28,069 21,756 24,330
Equity
Called-up share capital 738 738 738
Share premium account 2,713 2,713 2,713
Other reserves 1,379 (2,057) 3,155
Retained earnings 21,291 18,827 15,855
Equity attributable to
equity shareholders of the
Company 26,121 20,221 22,461
Minority interests 1,948 1,535 1,869
Total equity 28,069 21,756 24,330
(1) Comparatives have been adjusted in accordance with IAS 1 Presentation of
Financial Statements - Improvements, as described in note 2.
The financial statements of Anglo American plc, registered number 3564138,
were approved by the Board of directors on 18 February 2010.
Cynthia Carroll Rene Medori
Chief executive Finance director
Consolidated cash flow statement
for the year ended 31 December 2009
US$ million Note 2009 2008
Cash inflows from operations 11a 4,904 9,579
Dividends from associates 616 609
Dividends from financial asset investments 23 50
Income tax paid (1,456) (2,173)
Net cash inflows from operating activities 4,087 8,065
Cash flows from investing activities
Acquisition of subsidiaries, net of cash and
cash equivalents acquired(1) 14 (79) (5,887)
Investment in joint ventures 14 (5) (609)
Investment in associates (31) (9)
Cash flows from derivatives related to
acquisitions - (661)
Purchase of tangible assets 3 (4,607) (5,146)
Purchase of financial asset investments (269) (741)
Investment of advance received in
anticipation of disposal(2) - (281)
Loans granted (134) (108)
Interest received and other investment income 244 291
Disposal of subsidiaries, net of cash and
cash equivalents disposed 15 69 468
Sale of interests in associates 662 205
Repayment of loans and capital by associates - 42
Proceeds from disposal of tangible assets 46 30
Proceeds from sale of financial asset
investments 2,041 851
Cash flows from derivatives related to
investing activities (excluding acquisitions) (150) (166)
Other investing activities (10) (29)
Net cash used in investing activities (2,223) (11,750)
Cash flows from financing activities
Issue of shares by subsidiaries to minority
interests 96 62
Sale of treasury shares to employees 29 40
Purchase of treasury shares (75) (710)
Interest paid (741) (741)
Dividends paid to minority interests (472) (796)
Dividends paid to Company shareholders - (1,550)
(Repayment)/receipt of short term borrowings (6,624) 1,432
Net proceeds from issue of convertible bond 1,685 -
Net proceeds from issue of US bond 1,992 -
Net proceeds from bonds issued under EMTN programme 2,215 2,404
Receipt of other medium and long term borrowings 361 2,777
Cash flows from derivatives related to net debt (85) 380
Advance received in anticipation of disposal(2) - 307
Other financing activities 14 (63)
Net cash (used in)/inflows from financing activities (1,605) 3,542
Net increase/(decrease) in cash and cash equivalents 259 (143)
Cash and cash equivalents at start of year 11c 2,744 3,074
Cash movements in the year 259 (143)
Effects of changes in foreign exchange rates 316 (187)
Cash and cash equivalents at end of year 11c 3,319 2,744
(1) Includes amounts paid to acquire minority interests in subsidiaries.
(2) Advance received in the year ended 31 December 2008 in respect of
anticipated disposal of the Group`s 50% interest in the Booysendal joint
venture, invested in unlisted preference shares and an escrow account, pending
completion of the transaction which occurred in June 2009. Following
completion of the transaction the preference shares were sold and the proceeds
are shown within `Proceeds from sale of financial asset investments`. At 31
December 2009 a further amount of $72 million remains in an escrow account
pending completion of documentation.
Consolidated statement of changes in equity
for the year ended 31 December 2009
Share- Cumulative
Total based translation
share Retained payment adjustment
capital(1) earnings reserve reserve
US$ million
Balance at 1 January
2008 3,451 15,855 262 20
Total comprehensive
income - 5,113 - (4,097)
Dividends paid - (1,538) - -
Dividends paid to
minority interests - - - -
Acquisition and
disposal of businesses
(including issue of
shares to minority
interests) - 6 - -
Minority conversion of
Anglo Platinum`s
preference shares - 6 - -
Share buybacks - (595) - -
Purchase of shares for
share schemes - (88) - -
Share-based payment
charges on equity
settled schemes - - 146 -
Issue of shares under
employee share
schemes - 97 (70) -
Current tax on
exercised employee
share
schemes - 10 - -
Issue/purchase of
treasury shares in
subsidiary entities - 6 - -
Other - (45) (50) -
Balance at 1 January
2009 3,451 18,827 288 (4,077)
Total comprehensive
income - 2,257 - 3,526
Dividends paid to
minority interests - - - -
Acquisition and
disposal of businesses
(including issue of
shares to minority
interests) - - (14) -
Purchase of shares for
share schemes - (32) - -
Share-based payment
charges on equity
settled schemes - - 194 -
Issue of shares under
employee share
schemes - 108 (87) -
Current tax on
exercised employee
share
schemes - (1) - -
Issue/purchase of
treasury shares in
subsidiary entities - (11) - -
Issue of convertible
bond - - - -
Other - 143 20 -
Balance at 31 December
2009 3,451 21,291 401 (551)
Total equity
attributable
to equity
Fair value share-
and other holders
reserves of the Minority Total
(note 10) Company interests equity
US$ million
Balance at 1 January
2008 2,873 22,461 1,869 24,330
Total comprehensive
income (1,175) (159) 487 328
Dividends paid - (1,538) - (1,538)
Dividends paid to
minority interests - - (796) (796)
Acquisition and
disposal of
businesses
(including issue of
shares to minority
interests) - 6 (45) (39)
Minority conversion
of Anglo Platinum`s
preference shares - 6 (6) -
Share buybacks - (595) - (595)
Purchase of shares
for share schemes - (88) - (88)
Share-based payment
charges on equity
settled schemes - 146 11 157
Issue of shares under
employee share
schemes - 27 - 27
Current tax on
exercised employee
share
schemes - 10 - 10
Issue/purchase of
treasury shares in
subsidiary entities - 6 - 6
Other 34 (61) 15 (46)
Balance at 1 January
2009 1,732 20,221 1,535 21,756
Total comprehensive
income (557) 5,226 783 6,009
Dividends paid to
minority interests - - (472) (472)
Acquisition and
disposal of
businesses
(including issue of
shares to minority
interests) (1) (15) 57 42
Purchase of shares
for share schemes - (32) - (32)
Share-based payment
charges on equity
settled schemes - 194 16 210
Issue of shares under
employee share
schemes - 21 - 21
Current tax on
exercised employee
share
schemes - (1) - (1)
Issue/purchase of
treasury shares in
subsidiary entities - (11) 15 4
Issue of convertible
bond 355 355 - 355
Other - 163 14 177
Balance at 31
December 2009 1,529 26,121 1,948 28,069
(1) Total share capital comprises called-up share capital of $738 million
(2008: $738 million) and the share premium account of $2,713 million (2008:
$2,713 million).
Dividends
2009 2008
Proposed ordinary dividend per share (US cents) - -
Proposed ordinary dividend (US$ million) - -
Ordinary dividends paid during the year
per share (US cents) - 130
Ordinary dividends paid during the year (US$ million) - 1,538
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
IFRS financial measures are presented in notes 3, 4, 9 and 13 to these
consolidated financial statements (the Condensed financial statements).
The financial information for the year ended 31 December 2009 does not
constitute statutory accounts as defined in sections 435 (1) and (2) of the
Companies Act 2006. Statutory accounts for the year ended 31 December 2008
have been delivered to the Registrar of Companies and those for 2009 will be
delivered following the Company`s annual general meeting convened for 22 April
2010. The auditors have reported on these accounts; their reports were
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 498 (2) or (3) of the Companies Act 2006.
2. Basis of preparation
Condensed financial statements and accounting policies
Whilst the preliminary announcement (the Condensed financial statements) has
been prepared in accordance with IFRS and International Financial Reporting
Interpretation Committee (IFRIC) interpretations adopted for use by the
European Union, with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS and with the requirements of the United Kingdom
Listing Authority (UKLA) Listing rules, these Condensed financial statements
do not contain sufficient information to comply with IFRS. The Group will
publish full financial statements that comply with IFRS in March 2010.
The Condensed financial statements have been prepared under the historical
cost convention as modified by the revaluation of pension assets and
liabilities 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
2008, with the exception of the adoption of IFRS 8 Operating Segments, IAS 1
Presentation of Financial Statements - Revised, IAS 1 Presentation of
Financial Statements - Improvements and IFRS 7 Financial Instruments:
Disclosures - Amendment.
The adoption of IFRS 8 has resulted in the segmental disclosures previously
required by IAS 14 Segment Reporting being replaced by those required under
IFRS 8. The segments identified in accordance with IFRS 8 are aligned to the
Group`s structure of Business Units based around core commodities. In addition
assets identified for divestment are managed as a separate Business Unit,
Other
Mining and Industrial.
The adoption of the revision to IAS 1 has resulted in the Consolidated
statement of changes in equity being presented as a primary statement
(previously disclosed as a note titled `Reconciliation of changes in equity`)
and disclosure of the tax impact of individual items in the Consolidated
statement of comprehensive income (by way of note). In addition, the Group has
elected to continue to present a separate income statement and statement of
comprehensive income.
The adoption of the improvements to IAS 1 has resulted in non-hedge
derivatives whose expected settlement date is more than one year from the
period end being reclassified from current to non-current and therefore the
comparative information in the Consolidated balance sheet has been adjusted as
follows:
2008 2007
US$ million Current Non-current Current Non-current
Other financial
assets (derivatives)
As previously reported 372 4 535 -
Reclassification (113) 113 (160) 160
As reported 259 117 375 160
Other financial
liabilities
(derivatives)
As previously reported (1,436) (61) (501) (85)
Reclassification 838 (838) 126 (126)
As reported (598) (899) (375) (211)
Assets
As previously reported 9,418 40,045 9,803 34,201
Reclassification (113) 113 (160) 160
As reported 9,305 40,158 9,643 34,361
Liabilities
As previously reported(13,962) (13,940) (11,480) (8,665)
Reclassification 838 (838) 126 (126)
As reported (13,124) (14,778) (11,354) (8,791)
Due to the adoption of the revision and improvements to IAS 1, certain 2007
information has been included in the 2009 Condensed financial statements.
IFRS 7 Financial Instruments: Disclosures - Amendment has resulted in
additional disclosures in relation to financial assets and liabilities which
are carried at fair value on the balance sheet. The amendment also reinforces
existing principles for disclosure about liquidity risk. Comparative
information is not required in relation to additional disclosures required by
the amendment.
A number of other amendments to accounting standards and new interpretations
issued by the International Accounting Standards Board were applicable from 1
January 2009. They have not had a material impact on the accounting policies,
methods of computation or presentation applied by the Group.
3. Segmental information
The Group`s segments are aligned to the structure of Business Units based
around core commodities. In addition assets identified for divestment are
managed as a separate Business Unit, Other Mining and Industrial. The Kumba
Iron Ore, Iron Ore Brazil and Samancor Business Units have been aggregated as
the Iron Ore and Manganese segment on the basis of the ultimate product
produced (ferrous metals). Each Business Unit has a management team that is
accountable to the Chief executive.
The Group`s Executive Committee evaluates the financial performance of the
Group and its segments principally with reference to operating profit before
special items and remeasurements which includes the Group`s attributable share
of associates` operating profit before special items and remeasurements.
Segments predominantly derive revenue as follows - Platinum: platinum group
metals; Diamonds: rough and polished diamonds and diamond jewellery; Copper
and Nickel: base metals; Iron Ore and Manganese: iron ore, manganese ore and
alloys; Metallurgical Coal: metallurgical coal; Thermal Coal: thermal coal;
and Other Mining and Industrial: heavy building materials, zinc and steel
products.
The segment results are stated after elimination of inter-segment transactions
and include an allocation of corporate costs.
The Corporate Activities and Unallocated Costs segment includes insurance
costs.
Due to the portfolio and management structure changes announced in October
2009, the segments have changed from those reported at 31 December 2008.
Comparatives have been reclassified to align with current year presentation.
Operating
Revenue (1) profit/(loss)
US$ million 2009 2008 2009 2008 (2)
Platinum 4,535 6,327 32 2,169
Diamonds 1,728 3,096 64 508
Copper 3,967 3,907 2,010 1,892
Nickel 348 408 2 123
Iron Ore and Manganese 3,419 4,099 1,489 2,554
Metallurgical Coal 2,239 3,119 451 1,110
Thermal Coal 2,490 3,051 721 1,078
Other Mining and
Industrial 5,908 8,951 506 1,082
Exploration - - (172) (212)
Corporate Activities
and Unallocated Costs 3 6 (146) (219)
Segment measure 24,637 32,964 4,957 10,085
Reconciliation:
Less: Associates (3,779) (6,653) (580) (2,104)
Operating special
items and
remeasurements - - (1,637) (1,131)
Statutory measure 20,858 26,311 2,740 6,850
(1) Segment revenue includes the Group`s attributable share of associates`
revenue. This is reconciled to Group revenue from subsidiaries and joint
ventures as presented in the Consolidated income statement.
(2) Segment operating profit is revenue less operating costs before special
items and remeasurements, and includes the Group`s attributable share of
associates` operating profit. This is reconciled to Operating profit from
subsidiaries and joint ventures after special items and remeasurements as
presented in the Consolidated income statement.
Associates` revenue and operating profit are as follows:
Associates`
Associates` operating
revenue profit/(loss) (1)
US$ million 2009 2008 2009 2008
Platinum 47 39 (26) 20
Diamonds 1,728 3,096 64 508
Iron Ore and Manganese 603 1,526 143 980
Metallurgical Coal 164 170 48 102
Thermal Coal 742 841 303 375
Other Mining and
Industrial 495 981 48 119
3,779 6,653 580 2,104
Reconciliation:
Associates` net
finance costs (before
special
items and
remeasurements) (28) (147)
Associates` income
tax expense (before
special items and
remeasurements) (235) (623)
Associates` minority
interests (before
special
items and
remeasurements) 1 (31)
Share of net income
from associates
(before
special items and
remeasurements) 318 1,303
Associates` special
items and
remeasurements (184) (223)
Associate`s tax
special item (45) -
Associates` tax on
special items and
remeasurements (6) 17
Associates` minority
interests on special
items
and remeasurements 1 16
Share of net income
from associates 84 1,113
(1) Associates` operating profit is the Group`s attributable share of
associates` revenue less operating costs before special items and
remeasurements.
Significant non-cash items included within operating profit are as follows:
Depreciation and Other non-cash
amortisation(1) expenses (2)
US$ million 2009 2008 2009 2008
Platinum 636 507 92 7
Copper 244 212 71 50
Nickel 26 27 9 4
Iron Ore and Manganese 81 52 4 51
Metallurgical Coal 249 205 26 43
Thermal Coal 107 78 13 61
Other Mining and Industrial 360 404 94 108
Exploration - - 4 -
Corporate Activities and Unallocated Costs 22 24 79 67
1,725 1,509 392 391
(1) The Group`s attributable share of depreciation and amortisation in
associates is $248 million (2008: $253 million) and is split by segment as
follows: Platinum $9 million (2008: $2 million), Diamonds $151 million (2008:
$157 million), Iron Ore and Manganese $23 million (2008: $19 million),
Metallurgical Coal $6 million (2008: $4 million), Thermal Coal $47 million
(2008: $44 million) and Other Mining and Industrial $12 million (2008: $27
million).
(2) Other non-cash expenses include equity settled share-based payment charges
and amounts included in operating costs in respect of provisions.
Balance sheet measures are as follows:
Capital expenditure Net debt(2)
US$ million 2009 2008 2009 2008
Platinum 1,150 1,563 196 995
Copper 1,068 808 (187) (622)
Nickel 554 530 380 (66)
Iron Ore and Manganese 1,044 783 874 698
Metallurgical Coal 96 467 (9) (18)
Thermal Coal 400 365 23 (139)
Other Mining and Industrial 268 603 341 354
Exploration - 1 - -
Corporate Activities and
Unallocated Costs 27 26 9,425 9,849
4,607 5,146 11,043 11,051
Reconciliation:
Interest capitalised 246 215
Non-cash movements(3) 379 365
Tangible asset additions 5,232 5,726
Tangible assets acquired
through business
combinations 28 7,358
Intangible asset additions 50 1,731
Net debt in disposal groups (48) (8)
5,310(4) 14,815(4) 10,995 11,043
(1) Capital expenditure is segmented on a cash basis and is reconciled to
balance sheet additions. Cash capital expenditure excludes cash flows on
related derivatives.
(2) Segment net debt excludes net debt in disposal groups and hedges. A
reconciliation of net debt to the balance sheet is provided in note 11. At 31
December 2007 net debt of $5,170 million was split by segment as follows:
Platinum $846 million, Copper $(298) million, Nickel $(233) million, Iron Ore
and Manganese $(123) million, Metallurgical Coal $(3) million, Thermal Coal
$(76) million, Other Mining and Industrial $182 million, Exploration $(1)
million and Corporate Activities and Unallocated Costs $4,876 million. Group
net debt of $5,239 million included a further $69 million of net debt in
disposal groups.
(3) Includes movements on tangible asset accruals and the impact of cash flow
hedge derivatives.
(4) Capital expenditure on an accruals basis and including additions resulting
from acquisitions of interests in subsidiaries and joint ventures is split by
segment as follows: Platinum $1,445 million (2008: $3,026 million), Copper
$1,186 million (2008: $1,087 million), Nickel $570 million (2008: $597
million), Iron Ore and Manganese $1,157 million (2008: $7,569 million),
Metallurgical Coal $173 million (2008: $1,222 million), Thermal Coal $409
million (2008: $383 million), Other Mining and Industrial $323 million (2008:
$882 million), Exploration nil (2008: $1 million) and Corporate Activities and
Unallocated Costs $47 million (2008: $48 million).
The following balance sheet segment measures are provided for information:
Segment assets (1)
US$ million 2009 2008
Platinum 13,082 9,713
Copper 5,643 4,134
Nickel 1,888 1,485
Iron Ore and Manganese 10,758 10,768
Metallurgical Coal 4,176 3,369
Thermal Coal 2,343 1,624
Other Mining and Industrial 6,231 6,435
Exploration 4 3
Corporate Activities and Unallocated
Costs 311 251
44,436 37,782
Other assets and liabilities
Investments in associates(3) 3,312 3,612
Financial asset investments 2,729 3,288
Deferred tax assets/(liabilities) 288 258
Cash and cash equivalents 3,269 2,771
Other financial assets/(liabilities) -
derivatives 603 376
Other non-operating assets/(liabilities) 1,671 1,651
Other provisions - -
Borrowings - -
Net assets 56,308 49,738
Segment liabilities (2)
US$ million 2009 2008
Platinum (941) (668)
Copper (880) (986)
Nickel (101) (84)
Iron Ore and Manganese (388) (311)
Metallurgical Coal (769) (700)
Thermal Coal (636) (606)
Other Mining and Industrial (1,202) (1,204)
Exploration (2) (7)
Corporate Activities and Unallocated
Costs (409) (310)
(5,328) (4,876)
Other assets and liabilities
Investments in associates(3) - -
Financial asset investments - -
Deferred tax assets/(liabilities) (5,192) (4,555)
Cash and cash equivalents - -
Other financial assets/(liabilities) -
derivatives (659) (1,497)
Other non-operating
assets/(liabilities) (2,128) (2,515)
Other provisions (617) (544)
Borrowings (14,315) (13,995)
Net assets (28,239) (27,982)
Net segment assets
US$ million 2009 2008
Platinum 12,141 9,045
Copper 4,763 3,148
Nickel 1,787 1,401
Iron Ore and Manganese 10,370 10,457
Metallurgical Coal 3,407 2,669
Thermal Coal 1,707 1,018
Other Mining and Industrial 5,029 5,231
Exploration 2 (4)
Corporate Activities and Unallocated
Costs (98) (59)
39,108 32,906
Other assets and liabilities
Investments in associates(3) 3,312 3,612
Financial asset investments 2,729 3,288
Deferred tax assets/(liabilities) (4,904) (4,297)
Cash and cash equivalents 3,269 2,771
Other financial assets/(liabilities) -
derivatives (56) (1,121)
Other non-operating assets/(liabilities) (457) (864)
Other provisions (617) (544)
Borrowings (14,315) (13,995)
Net assets 28,069 21,756
(1) Segment assets at 31 December 2009 are operating assets and consist of
intangible assets of $2,776 million (2008: $3,006 million), tangible assets of
$35,198 million (2008: $29,545 million), biological assets of $4 million
(2008: $3 million), environmental rehabilitation trusts of $342 million (2008:
$244 million), retirement benefit assets of $54 million (2008: $32 million),
inventories of $3,212 million (2008: $2,702 million) and operating receivables
of $2,850 million (2008: $2,250 million).
(2) Segment liabilities at 31 December 2009 are operating liabilities and
consist of non-interest bearing current liabilities of $3,447 million (2008:
$3,534 million), retirement benefit obligations of $706 million (2008: $401
million) and environmental restoration and decommissioning provisions of
$1,175 million (2008: $941 million).
(3) Investments in associates is split by segment as follows: Platinum $447
million (2008: $57 million), Diamonds $1,353 million (2008: $1,623 million),
Iron Ore and Manganese $658 million (2008: $784 million), Metallurgical Coal
$146 million (2008: $111 million), Thermal Coal $689 million (2008: $678
million) and Other Mining and Industrial $19 million (2008: $359 million).
Entity wide information
The Group`s analysis of segment revenue by product (including attributable
share of revenue from associates) is as follows:
US$ million 2009 2008
Platinum 3,101 3,570
Palladium 361 531
Rhodium 527 1,632
Diamonds 1,728 3,096
Copper 3,783 3,639
Nickel 625 734
Iron ore 2,330 2,281
Manganese 603 1,526
Metallurgical coal 1,693 2,775
Thermal coal 3,197 3,637
Zinc 445 467
Steel products 1,371 1,927
Heavy building materials 2,870 4,399
Other 2,003 2,750
The Group`s geographical analysis of segment revenue (including attributable
share of revenue from associates) allocated based on the country in which the
customer is located, and non-current segment assets, allocated based on the
country in which the assets are located, is as follows:
Non-current segment assets(1)
Revenue
US$ million 2009 2008 2009 2008
South Africa 2,567 3,951 15,161 11,040
Other Africa 139 322 599 309
United Kingdom (Anglo American
plc`s country of domicile) 3,850 4,672 2,686 2,491
Other Europe 5,014 7,279 241 712
US 790 1,294 123 92
Other North America 507 1,078 575 414
Brazil 662 1,423 10,105 10,468
Chile 1,229 1,398 4,280 3,448
Venezuela 5 8 281 462
Other South America 185 178 293 206
Australia 427 344 3,584 2,863
China 3,469 1,956 4 3
India 1,222 1,599 - -
Japan 2,697 4,516 - -
Other Asia 1,874 2,946 46 46
24,637 32,964 37,978 32,554
(1) Non-current segment assets are non-current operating assets and consist of
tangible assets, intangible assets and biological assets. Non-current segment
assets at 31 December 2007 were $25,093 million.
Segment revenue and operating profit/(loss) before special items and
remeasurements by origin (including attributable share of revenue and
operating
profit from associates) has been provided for information:
Revenue
US$ million 2009 2008
South Africa 10,293 13,786
Other Africa 1,539 2,530
Europe 2,976 4,805
North America 510 705
South America 6,040 6,743
Australia and Asia 3,279 4,395
24,637 32,964
Operating profit/(loss) before special
items and remeasurements
US$ million 2009 2008
South Africa 2,023 5,107
Other Africa 78 467
Europe (54) (183)
North America (20) (29)
South America 2,310 2,985
Australia and Asia 620 1,738
4,957 10,085
The Group`s geographical analysis of segment assets and liabilities, allocated
based on where assets and liabilities are located, has been provided for
information:
Segment assets(1)
US$ million 2009 2008
South Africa 18,309 13,540
Other Africa 664 364
Europe 3,820 4,045
North America 805 629
South America 16,528 15,688
Australia and Asia 4,310 3,516
44,436 37,782
Segment liabilities
US$ million 2009 2008
South Africa (2,148) (1,633)
Other Africa (66) (30)
Europe (907) (910)
North America (132) (119)
South America (1,262) (1,431)
Australia and Asia (813) (753)
(5,328) (4,876)
Net segment assets
US$ million 2009 2008
South Africa 16,161 11,907
Other Africa 598 334
Europe 2,913 3,135
North America 673 510
South America 15,266 14,257
Australia and Asia 3,497 2,763
39,108 32,906
(1) Investments in associates are not included in segment assets. The
geographical distribution of these investments, based on the location of the
underlying assets, is as follows: South Africa $1,934 million (2008: $1,752
million), Other Africa $914 million (2008: $891 million), Europe $(957)
million (2008: $(324) million), North America $320 million (2008: $98
million), South America $675 million (2008: $686 million) and Australia and
Asia $426 million (2008: $509 million).
4. Reconciliation of Underlying earnings to Profit for the financial year
attributable to equity shareholders of the Company
The table below analyses the contribution of each segment to the Group`s
operating profit (including attributable share of operating profit from
associates) for the financial year and Underlying earnings, which the
directors consider to be a useful additional measure of the Group`s
performance. A reconciliation from `Profit for the financial year attributable
to equity shareholders of the Company` to `Underlying earnings for the
financial year` is given in note 9.
Due to the portfolio and management structure changes announced in October
2009, the segments have changed from those reported at 31 December 2008.
Comparatives have been reclassified to align with current year presentation.
Operating profit (including attributable share of operating profit from
associates) is reconciled to `Underlying earnings` and `Profit for the
financial year attributable to equity shareholders of the Company` in the
table below:
Operating Operating
profit/(loss) before profit/(loss) after Operating
special items and special items and special items and
US$ million remeasurements(1) remeasurements remeasurements(2)
By segment
Platinum 32 (72) 104
Diamonds 64 (139) 203
Copper 2,010 2,114 (104)
Nickel 2 (86) 88
Iron Ore and Manganese 1,489 350 1,139
Metallurgical Coal 451 423 28
Thermal Coal 721 715 6
Exploration (172) (172) -
Corporate Activities and
Unallocated Costs (146) (377) 231
Core operations 4,451 2,756 1,695
Other Mining and Industrial 506 361 145
Total/Underlying earnings 4,957 3,117 1,840
Underlying earnings adjustments (1,840)
Profit for the financial year
attributable to equity shareholders of the Company
Financing
Net profit on special items and
US$ million disposals (2) remeasurements (2)
By segment
Platinum 323 -
Diamonds 20 -
Copper - -
Nickel - -
Iron Ore and Manganese 6 -
Metallurgical Coal 33 -
Thermal Coal 21 -
Exploration 10 -
Corporate Activities and
Unallocated Costs - -
Core operations 413 -
Other Mining and Industrial 1,219 -
Total/Underlying earnings 1,632 -
Underlying earnings adjustments 1,632 (135)
Profit for the financial year
attributable to equity shareholders of the Company
Net interest, tax 2009
and minority
US$ million interests Total
By segment
Platinum 12 44
Diamonds (154) (90)
Copper (809) 1,201
Nickel (15) (13)
Iron Ore and Manganese (918) 571
Metallurgical Coal (129) 322
Thermal Coal (204) 517
Exploration 5 (167)
Corporate Activities and
Unallocated Costs (73) (219)
Core operations (2,285) 2,166
Other Mining and Industrial (103) 403
Total/Underlying earnings (2,388) 2,569(3)
Underlying earnings adjustments 199 (144)
Profit for the financial year
attributable to equity shareholders of the Company 2,425
Operating Operating
profit/(loss) before profit/(loss) after
special items and special items and
US$ million remeasurements(1) remeasurements
By segment
Platinum 2,169 2,150
Diamonds 508 282
Copper 1,892 1,825
Nickel 123 (7)
Iron Ore and Manganese 2,554 1,934
Metallurgical Coal 1,110 1,088
Thermal Coal 1,078 1,080
Exploration (212) (162)
Corporate Activities and
Unallocated Costs (219) (305)
Core operations 9,003 7,885
Other Mining and Industrial 1,082 843
Total/Underlying earnings 10,085 8,728
Underlying earnings adjustments
Profit for the financial year
attributable to equity
shareholders
of the Company
Operating
special items and Net profit on
US$ million remeasurements (2) disposals (2)
By segment
Platinum 19 106
Diamonds 226 18
Copper 67 142
Nickel 130 (1)
Iron Ore and Manganese 620 (4)
Metallurgical Coal 22 -
Thermal Coal (2) -
Exploration (50) -
Corporate Activities and
Unallocated Costs 86 2
Core operations 1,118 263
Other Mining and Industrial 239 764
Total/Underlying earnings 1,357 1,027
Underlying earnings adjustments (1,357) 1,027
Profit for the financial year
attributable to equity shareholders
of the Company
Financing
special items and Net interest, tax 2008
and minority
US$ million remeasurements(2) interests Total
By segment
Platinum - (913) 1,256
Diamonds - (252) 256
Copper - (848) 1,044
Nickel - (158) (35)
Iron Ore and Manganese - (1,404) 1,150
Metallurgical Coal - (346) 764
Thermal Coal - (324) 754
Exploration - 12 (200)
Corporate Activities
and
Unallocated Costs - (267) (486)
Core operations - (4,500) 4,503
Other Mining and
Industrial - (348) 734
Total/Underlying
earnings - (4,848) 5,237(3)
Underlying earnings
adjustments 36 272 (22)
Profit for the
financial year
attributable to equity
shareholders
of the Company 5,215
(1) Operating profit includes attributable share of 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.
(3) This represents Underlying earnings for the financial year and is equal to
profit for the financial year attributable to equity shareholders of the
Company before special items and remeasurements.
5. Exploration expenditure
Exploration expenditure is stated before special items.
US$ million 2009 2008
By commodity (1)
Platinum group metals 17 36
Copper 43 60
Nickel 22 20
Iron ore 8 18
Metallurgical coal 10 17
Thermal coal 25 18
Zinc 10 8
Central exploration activities 37 35
172 212
(1) Following the portfolio and management structure changes announced in
October 2009, exploration expenditure is presented by commodity. Comparatives
have been reclassified to align with current year presentation.
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 year`s
results and require separate disclosure in accordance with IAS 1 (revised
2007) paragraph 97. 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
year end (in respect of future transactions) and the reversal of the
historical marked to market value of such instruments settled in the year. The
full realised gains or losses are recorded in underlying earnings in the same
year as the underlying transaction for which such instruments provide an
economic, but not formally designated, hedge (if the underlying transaction is
recorded in the balance sheet, e.g. capital expenditure, the realised amount
remains in remeasurements on settlement of the derivative). Such amounts are
classified in the income statement as financing when the underlying exposure
is in respect of net debt and otherwise as operating.
(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. This is classified as financing.
(iii) foreign exchange impact arising in US dollar functional currency
entities where tax calculations are generated based on local currency
financial information (and hence deferred tax is susceptible to currency
fluctuations). Such amounts are included within income tax expense.
6. Special items and remeasurements (continued)
Subsidiaries and joint ventures` special items and remeasurements
Operating special items
US$ million 2009 2008
Impairment of Amapa system (1,667) -
Costs associated with `One Anglo` initiatives (148) (72)
Impairment of Loma de Niquel (114) -
Restructuring costs:
Other Mining and Industrial (78) (20)
Corporate (47) -
Anglo Platinum (37) -
Metallurgical Coal and Thermal Coal (21) -
Impairment of Tarmac assets (50) (71)
Anglo Platinum assets written off (51) -
Bid defence costs (45) -
Impairment of Iron Ore Brazil transshipping vessel (27) -
Provisions for onerous contracts 15 (39)
Costs associated with proposed sale of Tarmac - (3)
Impairment of Lisheen - (78)
Impairment of Black Mountain - (62)
Impairment of Metallurgical Coal assets - (40)
Reversal of impairment of Silangan exploration asset - 45
Other (5) (12)
Total operating special items (2,275) (352)
Tax 107 42
Minority interests 107 1
Net total attributable to equity shareholders of the
Company (2,061) (309)
Amapa iron ore system (Amapa) was acquired in 2008 as an operating asset as
part of the acquisition of the Minas Rio project. During 2009 Amapa has
experienced significant operational challenges across its mine, plant and
logistics chain, producing 2.7 million tonnes compared to the design capacity
of 6.5 million tonnes per annum (Mtpa). Management`s focus has been, and
remains, on seeking to markedly improve performance from the existing
operations, rather than investing to expand the operation. The Amapa system is
currently believed to have capacity to increase production to 5 Mtpa without
significant further capital expenditure. Due to the focus on improving
operational performance and preserving cash, limited exploration drilling has
been undertaken in 2009 and the anticipated growth potential of surrounding
licence areas remains untested. Given these operational difficulties and
delays in increasing production, the Group has recorded an impairment charge
of $1,512 million (after tax and minority interest) against the carrying value
of the asset. Of this charge, $342 million has been recorded against
intangible assets (primarily goodwill), $1,325 million has been recorded
against tangible assets (primarily mining properties) with associated deferred
tax credit of $76 million and minority interest credit of $79 million. The
impairment brings the carrying value of the Amapa system in line with fair
value (less costs to sell) determined on a discounted cash flow basis.
In January 2008 the Venezuelan Ministry of Basic Industries and Mining (MIBAM)
published a resolution cancelling 13 of Minera Loma de Niquel`s (MLdN) 16
exploration and exploitation concessions due to MLdN`s alleged failure to
fulfil certain conditions of the concessions. The current mining and
metallurgical facilities are located on the three concessions that have not
been cancelled. MLdN believes that it has complied with the conditions of
these concessions and has lodged administrative appeals against the notices of
termination and is waiting for a response from MIBAM. MLdN may in the future
undertake further appeals, including with Venezuela`s Supreme Court, if the
MIBAM`s ruling does not adequately protect its interests.
An impairment and associated adjustments of $114 million has been recorded due
to increased uncertainty over the renewal of the three concessions that have
not been cancelled but that expire in 2012 and over the restoration of the 13
concessions that were cancelled. The charge is based on a value in use
assessment of recoverable amount, includes the impact of recycling a related
cash flow hedge reserve and an associated reduction in the related embedded
derivative liability. Recoverable amount has been determined using discounted
cash flows which use pre-tax discount rates equivalent to a real post tax
discount rate of 6%.
Restructuring costs relate to retrenchment costs.
Subsidiaries and joint ventures` special items and remeasurements (continued)
Costs associated with `One Anglo` initiatives principally comprise advisory
costs and include costs associated with the corporate review, procurement,
shared services and information systems.
Operating remeasurements
US$ million 2009 2008
Net gain/(loss) on non-hedge derivatives 757 (696)
Realised loss on derivatives relating to capital expenditure(105) (120)
Other remeasurements (14) 37
Total operating remeasurements 638 (779)
Tax (207) 252
Minority interests 2 135
Net total attributable to equity shareholders of the Company 433 (392)
The net gain on non-hedge derivatives principally includes net unrealised
gains on derivatives relating to capital expenditure held by Iron Ore Brazil
and Los Bronces and an unrealised gain on an embedded derivative at Minera
Loma de Niquel. A net loss of $105 million was realised in the year in respect
of the Iron Ore Brazil and Los Bronces capital expenditure derivative
portfolios.
Profits and (losses) on disposals
US$ million 2009 2008
Disposal of interest in AngloGold Ashanti 1,139 -
Disposal of interest in Booysendal joint venture(1) 247 -
69 -
Disposal of interest in Lebowa Platinum Mines Limited(1)
Disposal of interest in Tongaat Hulett and Hulamin 53 -
Disposal of financial asset investments 54 -
Disposal of Tarmac fixed assets 15 -
Disposal of Silangan exploration asset 10 -
Disposal of interest in China Shenhua Energy - 551
Disposal of interest in Minera Santa Rosa SCM - 142
Disposal of Northam Platinum Limited - 101
Copebras property compensation - 96
Disposal of Tarmac Iberia - 65
Disposal of Namakwa Sands(1) - 49
Other 25 5
Net profit on disposals 1,612 1,009
Tax (76) (47)
Minority interests (66) (43)
Net total attributable to equity
shareholders of the Company 1,470 919
(1) See Disposals of subsidiaries and businesses note 15.
During 2009 the Group sold its remaining investment in AngloGold Ashanti for
total proceeds of $1,770 million, generating a profit on disposal of $1,139
million.
Ministerial approval for the sale of Anglo Platinum`s 50% interest in the
Booysendal joint venture to Mvelaphanda Resources Limited (Mvela) was received
in June 2009. Total consideration was $275 million (excluding transaction and
deal facilitation costs), of which $270 million was received in advance in the
prior year. At 31 December 2009 $72 million of this remains in an escrow
account pending completion of documentation.
The sale of 51% of Anglo Platinum`s holding in Lebowa Platinum Mines Limited
(Lebowa) and 1% interest in the Ga Phasha, Boikgantsho and Kwanda joint
ventures to Anooraq Resources Corporation (Anooraq) completed on 30 June 2009
for consideration of $363 million (excluding transaction and deal facilitation
costs). The fair value of the consideration was $247 million (excluding
transaction and deal facilitation costs). The profit on disposal of Lebowa has
been revised since 30 June 2009 after finalisation of the valuations of
financial instruments and loan commitments.
During 2009 the Group sold its remaining investments in Tongaat Hulett and
Hulamin for total proceeds of $671 million (excluding transaction costs)
generating a net profit on disposal of $53 million.
Subsidiaries and joint ventures` special items and remeasurements (continued)
Financing remeasurements
US$ million 2009 2008
Unrealised net (loss)/gain on non-hedge derivatives related
to net debt (100) 23
Foreign exchange (loss)/gain on De Beers preference shares (21) 28
Other remeasurements (13) -
Total financing remeasurements (134) 51
Tax 2 -
Minority interests (2) -
Net total attributable to equity shareholders of the Company (134) 51
The unrealised net loss on non-hedge derivatives related to net debt
principally comprises an unrealised loss on an embedded interest rate
derivative.
Tax special item
US$ million 2009 2008
Write off of deferred tax asset related to Amapa system (107) -
Minority interests 32 -
Net total attributable to equity shareholders of the Company (75) -
Tax remeasurements
US$ million 2009 2008
Foreign currency translation of deferred tax balances 469 (153)
Minority interests (12) 52
Net total attributable to equity shareholders of the Company 457 (101)
Total special items and remeasurements
US$ million 2009 2008
Total special items and remeasurements before tax and
minority interests (159) (71)
Tax special item (107) -
Tax remeasurements 469 (153)
Tax on special items and remeasurements (174) 247
Minority interests 61 145
Net total special items and remeasurements attributable to
equity shareholders of the Company 90 168
Associates` special items and remeasurements
Associates` operating special items and remeasurements
US$ million 2009 2008
Impairment of De Beers` Canadian assets (267) -
Impairment of De Beers` businesses - (79)
Share of De Beers` restructuring costs (27) (37)
Unrealised net gain/(loss) on non-hedge derivatives 96 (101)
Share of De Beers` class action payment and related costs - (3)
Other impairments (5) (6)
Total associates` operating special items and remeasurements(203) (226)
Tax (6) 17
Minority interests 1 16
Net total associates` operating special items and
remeasurements (208) (193)
Due to the nature of the assets, the effects of the strengthening Canadian
dollar and the impact of the global recession on pricing and production
levels,
De Beers has recorded an impairment of $595 million (attributable share $267
million) in respect of its Canadian asset portfolio. The impairment brings the
carrying value of the Canadian asset portfolio in line with fair value (less
costs to sell), determined using discounted cash flow techniques.
Associates` profits and (losses) on disposals
US$ million 2009 2008
Disposal of AK06 diamond deposit 22 -
Disposal of interests in Williamson, Cullinan and
Koffiefontein - 15
Other (2) 3
Associates` net profit on disposals 20 18
Associates` financing special items
US$ million 2009 2008
Costs associated with refinancing (7) -
Associates` financing remeasurements
US$ million 2009 2008
Unrealised net gain/(loss) on non-hedge derivatives related
to net debt 6 (15)
Associate`s tax special item
US$ million 2009 2008
Write off of deferred tax asset related to De Beers` Canadian
assets (45) -
Total associates` special items and remeasurements
US$ million 2009 2008
Total associates` special items and remeasurements before
tax and minority interests (184) (223)
Tax special item (45) -
Tax on special items and remeasurements (6) 17
Minority interests 1 16
Net total associates` special items and remeasurements (234) (190)
Operating special items and remeasurements
US$ million 2009 2008
Operating special items (2,275) (352)
Operating remeasurements 638 (779)
Total operating special items and remeasurements
(excluding associates) (1,637) (1,131)
Associates` operating special items (299) (125)
Associates` operating remeasurements 96 (101)
Total associates` operating special items and
remeasurements (203) (226)
Total operating special items and remeasurements
(including associates) (1,840) (1,357)
Operating special items (including associates) (2,574) (477)
Operating remeasurements (including associates) 734 (880)
Total operating special items and remeasurements
(including associates) (1,840) (1,357)
7. Net finance costs
Finance costs and exchange gains/(losses) are presented net of effective cash
flow hedges for respective interest bearing and foreign currency borrowings.
The weighted average capitalisation rate applied to qualifying capital
expenditure was 6.5% (2008: 12.0%). Financing remeasurements are set out in
note 6.
2009
Before After
US$ million remeasurements remeasurements
Investment income
Interest and other financial income 334 334
Expected return on defined benefit
arrangements 157 157
Dividend income from financial asset
investments 23 23
Total investment income 514 514
Interest expense
Interest and other finance expense (724) (724)
Interest paid on convertible bond (44) (44)
Unwinding of discount on convertible bond (39) (39)
Interest on defined benefit arrangements (174) (174)
Amortisation of discount relating to
provisions (45) (45)
Dividend on redeemable preference shares - -
(1,026) (1,026)
Less: interest capitalised 246 246
Total interest expense (780) (780)
Other financing (losses)/gains
Net foreign exchange losses (24) (45)
Fair value gains/(losses) on derivatives 29 (71)
Net fair value gains on fair value hedges 29 29
Other net fair value losses (41) (54)
Total other financing losses (7) (141)
Net finance costs (273) (407)
2008
Before After
US$ million remeasurements remeasurements
Investment income
Interest and other financial income 324 324
Expected return on defined benefit
arrangements 215 215
Dividend income from financial asset
investments 50 50
Total investment income 589 589
Interest expense
Interest and other finance expense (815) (815)
Interest paid on convertible bond - -
Unwinding of discount on convertible bond - -
Interest on defined benefit arrangements (201) (201)
Amortisation of discount relating to
provisions (33) (33)
Dividend on redeemable preference shares (16) (16)
(1,065) (1,065)
Less: interest capitalised 215 215
Total interest expense (850) (850)
Other financing (losses)/gains
Net foreign exchange losses (173) (145)
Fair value gains/(losses) on derivatives (2) 21
Net fair value gains on fair value hedges 2 2
Other net fair value losses (18) (18)
Total other financing losses (191) (140)
Net finance costs (452) (401)
8. Tax on profit on ordinary activities
a) Analysis of charge for the year
US$ million 2009 2008
United Kingdom corporation tax at 28% 50 -
United Kingdom corporation tax at 28.5% - 18
South Africa tax 567 840
Other overseas tax 700 1,155
Prior year adjustments (45) (78)
Current tax (excluding special items and remeasurements tax)1,272 1,935
Deferred tax (excluding special items and remeasurements
tax) 33 610
Tax (excluding special items and remeasurements tax) 1,305 2,545
Special items and remeasurements tax (188) (94)
Income tax expense 1,117 2,451
b) Factors affecting tax charge for the year
The effective tax rate for the year of 27.7% (2008: 28.6%) is lower (2008:
higher) than the applicable standard rate of corporation tax for 2009 in the
United Kingdom (28%) (2008: 28.5%). The reconciling items are:
US$ million 2009 2008
Profit on ordinary activities before tax 4,029 8,571
Tax on profit on ordinary activities calculated at United
Kingdom corporation tax rate of 28% 1,128 -
Tax on profit on ordinary activities calculated at United
Kingdom corporation tax rate of 28.5% - 2,443
Tax effect of share of net income from associates (24) (317)
Tax effects of:
Special items and remeasurements
Operating special items and remeasurements 558 28
Profits and losses on disposals and financing remeasurements(340) (255)
Tax special item 107 -
Tax remeasurements (469) 153
Items not taxable/deductible for tax purposes
Exploration expenditure 22 20
Non-deductible net foreign exchange loss 6 28
Non-taxable/deductible net interest (income)/expense (2) 10
Other non-deductible expenses 65 127
Other non-taxable income (39) (78)
Temporary difference adjustments
Changes in tax rates - (84)
Movements in tax losses 5 38
Enhanced tax depreciation - (26)
Other temporary differences (45) 42
Other adjustments
Secondary tax on companies and dividend withholding taxes 356 634
Effect of differences between local and United Kingdom rates(139) (181)
Prior year adjustments to current tax (45) (78)
Other adjustments (27) (53)
Income tax expense 1,117 2,451
IAS 1 requires income from associates to be presented net of tax on the face
of
the income statement. Associates` tax is therefore not included within the
Group`s income tax expense. Associates` tax included within `Share of net
income from associates` for the year ended 31 December 2009 is $286 million
(2008: $606 million). Excluding special items and remeasurements this becomes
$235 million (2008: $623 million).
The effective rate of tax before special items and remeasurements including
attributable share of associates` tax for the year ended 31 December 2009 was
33.1%. This was broadly in line with the equivalent effective rate of 33.4%
for the year ended 31 December 2008. In future periods it is expected that the
effective tax rate, including associates` tax, will remain above the United
Kingdom statutory tax rate.
9. Earnings per share
US$ 2009 2008
Profit for the financial year attributable to equity
shareholders of the Company
Basic earnings per share 2.02 4.34
Diluted earnings per share 1.98 4.29
Headline earnings for the financial year(1)
Basic earnings per share 2.46 3.78
Diluted earnings per share 2.40 3.74
Underlying earnings for the financial year(1)
Basic earnings per share 2.14 4.36
Diluted earnings per share 2.10 4.31
(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.
The calculation of the basic and diluted earnings per share is based on the
following data:
US$ million (unless otherwise stated) 2009 2008
Earnings
Basic earnings, being profit for the financial year
attributable to equity shareholders of the Company 2,425 5,215
Effect of dilutive potential ordinary shares
Interest paid on convertible bond (net of tax) 32 -
Unwinding of discount on convertible bond (net of tax) 28 -
Diluted earnings 2,485 5,215
Number of shares (million)
Basic number of ordinary shares outstanding (1) 1,202 1,202
Effect of dilutive potential ordinary shares (2)
Share options and awards 11 13
Convertible bond 40 -
Diluted number of ordinary shares outstanding (1) 1,253 1,215
(1) Basic and diluted number of ordinary shares outstanding represent the
weighted average for the year. The average number of ordinary shares in issue
excludes the shares held by employee benefit trusts and Anglo American plc
shares held by Group companies.
(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.
In the year ended 31 December 2009 there were 231,351 share options which were
potentially dilutive but have not been included in the calculation of diluted
earnings per share because they were anti-dilutive. In the year ended 31
December 2008 no share options were anti-dilutive.
In the year ended 31 December 2008 share buybacks took place which had an
impact on the weighted average number of ordinary shares at 31 December 2008.
In April 2009 the Group issued $1.7 billion of senior convertible notes. The
senior convertible notes were issued with a coupon of 4%, a conversion price
of
GBP18.6370 and unless redeemed, converted or cancelled, will mature in 2014.
The
Group will have the option to call the senior convertible notes after three
years from the issuance date subject to certain conditions.
Underlying earnings is an alternative earnings measure, which the directors
believe provides a clearer picture of the underlying financial performance of
the Group`s operations. Underlying earnings is presented after minority
interests and excludes special items and remeasurements (see note 6).
Underlying earnings is distinct from `Headline earnings`, which is a JSE
Limited defined performance measure.
The calculation of basic and diluted earnings per share, based on Headline and
Underlying earnings, uses the following earnings data:
Earnings (US$ million)
2009 2008
Profit for the financial year
attributable to equity shareholders of
the Company 2,425 5,215
Operating special items 1,908 209
Operating special items - tax (66) (27)
Operating special items - minority
interests (100) (1)
Net profit on disposals (1,612) (1,009)
Net profit on disposals - tax 76 47
Net profit on disposals - minority
interests 66 43
Associates` special items 259 67
Associates` special items - tax (1) (1)
Associates` special items - minority
interests (2) (2)
Headline earnings for the financial year 2,953 4,541
Operating special items(1) 367 143
Operating special items - tax (41) (15)
Operating special items - minority
interests (7) -
Operating remeasurements (638) 779
Operating remeasurements - tax 207 (252)
Operating remeasurements - minority
interests (2) (135)
Financing remeasurements 134 (51)
Financing remeasurements - tax (2) -
Financing remeasurements - minority
interests 2 -
Tax special item 107 -
Tax special item - minority interests (32) -
Tax remeasurements (469) 153
Tax remeasurements - minority interests 12 (52)
Associates` special items(2) 72 40
Associates` special items - tax (2) (7)
Associates` special items - minority
interests (7) (5)
Associates` remeasurements (102) 116
Associates` remeasurements - tax 9 (9)
Associates` remeasurements - minority
interests 8 (9)
Underlying earnings for the financial
year 2,569 5,237
Basic earnings per share
(US$)
2009 2008
Profit for the financial year
attributable to equity shareholders of
the Company 2.02 4.34
Operating special items 1.59 0.17
Operating special items - tax (0.05) (0.02)
Operating special items - minority interests (0.08) -
Net profit on disposals (1.34) (0.84)
Net profit on disposals - tax 0.06 0.04
Net profit on disposals - minority interests 0.05 0.04
Associates` special items 0.21 0.05
Associates` special items - tax - -
Associates` special items - minority interests - -
Headline earnings for the financial year 2.46 3.78
Operating special items(1) 0.30 0.12
Operating special items - tax (0.03) (0.01)
Operating special items - minority interests (0.01) -
Operating remeasurements (0.53) 0.65
Operating remeasurements - tax 0.17 (0.21)
Operating remeasurements - minority interests - (0.11)
Financing remeasurements 0.11 (0.04)
Financing remeasurements - tax - -
Financing remeasurements - minority interests - -
Tax special item 0.09 -
Tax special item - minority interests (0.03) -
Tax remeasurements (0.39) 0.12
Tax remeasurements - minority interests 0.01 (0.04)
Associates` special items(2) 0.06 0.03
Associates` special items - tax - (0.01)
Associates` special items - minority interests (0.01) -
Associates` remeasurements (0.08) 0.10
Associates` remeasurements - tax 0.01 (0.01)
Associates` remeasurements - minority interests 0.01 (0.01)
Underlying earnings for the financial year 2.14 4.36
(1) Year ended 31 December 2009 includes costs associated with `One Anglo`
initiatives, restructuring costs, bid defence costs and provisions for onerous
contracts (2008: includes costs associated with `One Anglo` initiatives,
restructuring costs and costs associated with proposed sale of Tarmac and
provisions for onerous contracts).
(2) Year ended 31 December 2009 includes restructuring costs and the tax
special item (2008: includes restructuring costs and legal settlements).
10. Consolidated equity analysis
An analysis of Deferred tax and Tax on items transferred from equity by
individual item presented in the Consolidated statement of comprehensive
income is presented below:
US$ million 2009 2008
Deferred tax
Revaluation of available for sale investments (105) 79
Cash flow hedges (22) 56
Actuarial net loss on post retirement benefit schemes 53 32
Net deferred tax recognised directly in equity (74) 167
Tax on items transferred from equity
Transferred to income statement: sale of available for sale
investments 135 -
Transferred to income statement: cash flow hedges (51) (94)
Transferred to initial carrying amount of hedged items: cash
flow hedges (7) -
Net tax on total transferred from equity 77 (94)
Fair value and other reserves comprise:
Convertible Available for Cash flow
US$ million debt reserve sale reserve hedge reserve
Balance at 1 January 2008 - 2,373 (304)
Total comprehensive income - (1,285) 110
Other - - -
Balance at 1 January 2009 - 1,088 (194)
Total comprehensive income - (783) 226
Issue of convertible bond 355 - -
Disposal of businesses - - (1)
Balance at 31 December 2009 355 305 31
Total fair value
US$ million Other reserves (1) and other reserves
Balance at 1 January 2008 804 2,873
Total comprehensive income - (1,175)
Other 34 34
Balance at 1 January 2009 838 1,732
Total comprehensive income - (557)
Issue of convertible bond - 355
Disposal of businesses - (1)
Balance at 31 December 2009 838 1,529
(1) Other reserves comprise a legal reserve of $689 million (2008: $689
million), a revaluation reserve of $34 million (2008: $34 million) and a
capital redemption reserve of $115 million (2008: $115 million).
11. Consolidated cash flow analysis
a) Reconciliation of profit before tax to cash inflows from operations
US$ million 2009 2008
Profit before tax 4,029 8,571
Depreciation and amortisation 1,725 1,509
Share-based payment charges 204 155
Net profit on disposals (1,612) (1,009)
Operating and financing remeasurements (504) 728
Non-cash element of operating special items 1,981 284
Net finance costs before remeasurements 273 452
Share of net income from associates (84) (1,113)
Provisions (46) 46
Decrease/(increase) in inventories 23 (999)
(Increase)/decrease in operating receivables (360) 80
(Decrease)/increase in operating payables (573) 896
Deferred stripping (150) (89)
Other adjustments (2) 68
Cash inflows from operations 4,904 9,579
b) Reconciliation to the balance sheet
Cash and cash
equivalents (1)
US$ million 2009 2008
Balance sheet 3,269 2,771
Balance sheet - disposal
groups(2) 64 8
Bank overdrafts (1) (35)
Bank overdrafts - disposal
groups(2) (13) -
Net debt classifications 3,319 2,744
Short term
borrowings
US$ million 2009 2008
Balance sheet (1,499) (6,784)
Balance sheet - disposal
groups(2) - -
Bank overdrafts 1 35
Bank overdrafts - disposal
groups(2) - -
Net debt classifications (1,498) (6,749)
Medium and
long term
borrowings
US$ million 2009 2008
Balance sheet (12,816) (7,211)
Balance sheet - disposal
groups(2) (3) -
Bank overdrafts - -
Bank overdrafts - disposal
groups(2) - -
Net debt classifications (12,819) (7,211)
Current financial
asset investments
US$ million 2009 2008
Balance sheet 3 173
Balance sheet - disposal -
groups(2) -
Bank overdrafts - -
Bank overdrafts - disposal -
groups(2) -
Net debt classifications 3 173
(1) `Short term borrowings` on the balance sheet include overdrafts which are
included within cash and cash equivalents in determining 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 Debt due Debt due
cash within after
equivalents (1) one year one year
US$ million
Balance at 1 January 2008 3,074 (5,909) (2,404)
Cash flow (143) (1,432) (5,181)
Acquisition of businesses - (209) (461)
Reclassifications - 190 (190)
Movement in fair value - (11) (176)
Other non-cash movements - - (15)
Currency movements (187) 622 1,216
Balance at 1 January 2009 2,744 (6,749) (7,211)
Cash flow(4) 259 6,624 (6,253)
Unwinding of discount on
convertible bond - - (39)
Equity component of convertible
bond(4) - - 355
Reclassifications - (917) 917
Movement in fair value - - 63
Other non-cash movements - (15) (26)
Currency movements 316 (441) (625)
Balance at 31 December 2009 3,319 (1,498) (12,819)
Current
financial Net debt
asset excluding
investments hedges
US$ million
Balance at 1 January 2008 - (5,239)
Cash flow 210 (6,546)
Acquisition of businesses - (670)
Reclassifications - -
Movement in fair value - (187)
Other non-cash movements - (15)
Currency movements (37) 1,614
Balance at 1 January 2009 173(3) (11,043)
Cash flow(4) (200) 430
Unwinding of discount on convertible bond - (39)
Equity component of convertible bond(4) - 355
Reclassifications - -
Movement in fair value - 63
Other non-cash movements 3 (38)
Currency movements 27 (723)
Balance at 31 December 2009 3 (10,995)
Total
net debt
including
Hedges (2) hedges
US$ million
Balance at 1 January 2008 388 (4,851)
Cash flow (380) (6,926)
Acquisition of businesses - (670)
Reclassifications - -
Movement in fair value (305) (492)
Other non-cash movements - (15)
Currency movements - 1,614
Balance at 1 January 2009 (297) (11,340)
Cash flow(4) 85 515
Unwinding of discount on convertible bond - (39)
Equity component of convertible bond(4) - 355
Reclassifications - -
Movement in fair value (73) (10)
Other non-cash movements - (38)
Currency movements - (723)
Balance at 31 December 2009 (285) (11,280)
(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. In addition, the use of cash balances of $111 million
(2008: $91 million) are subject to certain legal restrictions. 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 assets and
liabilities in net debt are included above to reflect the true net debt
position of the Group at the year end. These consist of net current derivative
assets of $41 million (2008: $437 million net liabilities) and net non-current
derivative liabilities of $326 million (2008: $140 million net assets) which
are classified within other financial assets and other financial liabilities
respectively on the balance sheet.
(3) Relates to amounts invested in unlisted preference shares (guaranteed by
Nedbank Limited and Nedbank Group Limited) pending completion of the disposal
of the Group`s 50% interest in the Booysendal joint venture. This amount was
received upon completion of the transaction in June 2009.
(4) The issue of the convertible bond had a net impact on debt due after one
year of $1,330 million due to the conversion feature of $355 million which is
presented separately in equity.
12. Financial liabilities analysis
An analysis of borrowings is set out below:
2009
Due within Due after
one year(1)
US$ million one year Total
Secured
Bank loans and overdrafts 416 413 829
Obligations under finance leases 8 11 19
Unsecured 424 424 848
Bank loans and overdrafts 351 3,982 4,333
Bonds issued under EMTN programme(2) 572 4,410 4,982
US bond - 1,935 1,935
Convertible bond(3) - 1,369 1,369
Commercial paper 67 - 67
Obligations under finance leases - - -
Other loans 85 696 781
1,075 12,392 13,467
Total 1,499 12,816 14,315
2008
Due within Due after
one year(1)
US$ million one year Total
Secured
Bank loans and overdrafts 346 678 1,024
Obligations under finance leases 12 56 68
Unsecured 358 734 1,092
Bank loans and overdrafts 5,114 3,335 8,449
Bonds issued under EMTN programme(2) 154 2,679 2,833
US bond - - -
Convertible bond(3) - - -
Commercial paper 1,116 - 1,116
Obligations under finance leases 4 13 17
Other loans 38 450 488
6,426 6,477 12,903
Total 6,784 7,211 13,995
(1) Bank loans and overdrafts due within one year include short term
borrowings
under long term committed facilities of $48 million (2008: $2.8 billion).
(2) In the year ended 31 December 2009 the Group issued $2,215 million of
bonds
under the EMTN programme (2008: $2,404 million). All notes are guaranteed by
Anglo American plc.
(3) Represents the fair value of the debt component of the convertible bond at
the date of issue of $1,330 million (net of fees) adjusted for unwinding of
discount of $39 million. The fair value of the equity conversion feature was
$355 million and is presented in equity (refer to the Consolidated statement
of
changes in equity).
The Group had the following undrawn committed borrowing facilities at 31
December:
US$ million 2009 2008
Expiry date
Within one year(1) 2,247 2,994
Greater than one year, less than two years 3,090 5
Greater than two years, less than five years 4,093 3,081
Greater than five years 90 25
9,520 6,105
(1) Includes undrawn rand facilities equivalent to $1.9 billion (2008: $0.9
billion) in respect of a series of facilities with 364 day maturities which
roll automatically on a daily basis, unless notice is served.
In addition, the Group has a dedicated, committed financing facility for Minas
Rio of $1.4 billion subject to certain disbursement conditions and the
granting
of the remaining Installation Environmental licence (regarded as likely to
occur in 2010) (2008: for Minas Rio and Barro Alto totalling $1.6 billion).
The Group also had a $2 billion European Commercial Paper Programme
established in October 2004. Drawings of nil were made at 31 December 2009
(2008: $304 million). The Group also had a Rand 20 billion South African
Medium Term Note Programme, established in November 2007, on which total
drawings of Rand 691 million ($94 million) were made at 31 December 2009
(2008: Rand 7,273 million ($782 million)). Of this drawing, Rand 491 million
($67 million) was issued as commercial paper (2008: Rand 7,074 million ($761
million)).
During 2009 the Group has raised $2 billion through the issuance of senior
notes, $1.7 billion through the issuance of senior convertible notes and $2.2
billion through the issuance of bonds under the EMTN programme. The senior
note offering comprised $1,250 million 9.375% senior notes due in 2014 and
$750
million 9.375% senior notes due in 2019. The senior convertible notes were
issued with a coupon of 4%, a conversion price of GBP18.6370 and unless
redeemed, converted or cancelled, will mature in 2014. The Group will have the
option to call the senior convertible note after three years from the issuance
date subject to certain conditions. The issues under the EMTN programme in
2009 comprised a 750 million ($1.1 billion) 4.25% bond due in 2013 and a 750
million ($1.1 billion) 4.375% bond due in 2016. The proceeds from the sale of
AngloGold Ashanti (refer to note 6), senior notes, senior convertible notes
and bonds issued under the EMTN programme have been used to prepay the $3
billion revolving bank facility which was due to mature in December 2009, fund
capital expenditure and repay other short term debt owing on Group facilities.
13. EBITDA by segment
US$ million 2009 2008
By segment(1)
Platinum 677 2,675
Diamonds 215 665
Copper 2,254 2,104
Nickel 28 150
Iron Ore and Manganese 1,593 2,625
Metallurgical Coal 706 1,319
Thermal Coal 875 1,200
Other Mining and Industrial 878 1,513
Exploration (172) (212)
Corporate Activities and Unallocated Costs (124) (192)
EBITDA 6,930 11,847
(1) Due to the portfolio and management structure changes announced in October
2009, the segments have changed from those reported at 31 December 2008.
Comparatives have been reclassified to align with current year presentation.
EBITDA is stated before special items and remeasurements and is reconciled to
operating profit, including attributable share of associates, before special
items and remeasurements and to `Total profit from operations and associates`
as follows:
US$ million 2009 2008
Total profit from operations and associates 4,436 8,972
Operating special items and remeasurements (including
associates) 1,840 1,357
Net profit on disposals (including associates) (1,632) (1,027)
Associates` financing special items and remeasurements 1 15
Share of associates` interest, tax and minority
interests 312 768
Operating profit, including associates, before special
items and remeasurements 4,957 10,085
Depreciation and amortisation: subsidiaries and joint
ventures 1,725 1,509
Depreciation and amortisation: associates 248 253
EBITDA 6,930 11,847
EBITDA is reconciled to `Cash inflows from operations`
as follows:
US$ million 2009 2008
EBITDA 6,930 11,847
Share of operating profit of associates before special
items and remeasurements (580) (2,104)
Cash element of operating special items (294) (68)
Depreciation and amortisation in associates (248) (253)
Share-based payment charges 204 155
Provisions (46) 46
Decrease/(increase) in inventories 23 (999)
(Increase)/decrease in operating receivables (360) 80
(Decrease)/increase in operating payables (573) 896
Deferred stripping (150) (89)
Other adjustments (2) 68
Cash inflows from operations 4,904 9,579
14. Acquisitions
Acquisition of subsidiaries
The Group made no material acquisitions of subsidiaries in the year ended 31
December 2009.
In the year ended 31 December 2009 fair values shown principally include final
adjustments to the fair value of assets acquired and liabilities assumed in
the Anglo Ferrous Brazil SA acquisition, including the recognition of
provisions in respect of certain power arrangements.
The carrying value and fair value of the net assets at the date of acquisition
of a controlling interest and related net cash outflows are shown below:
2009 2008
Total Total Total
carrying fair fair
value value value
US$ million
Net assets acquired
Tangible assets 1 (4) 997
Other non-current assets - - 109
Current assets 2 4 457
Current liabilities (1) (8) (314)
Non-current liabilities - (11) (547)
Minority interests - - (230)
2 (19) 472
21 1,649
Add: Value attributable to reserves
and resources acquired, net of
deferred tax(1)
Fair value of net assets acquired 2 2,121
Goodwill arising on acquisitions 2 1,610
Total cost of acquisitions 4 3,731
Satisfied by
Net cash acquired - 255
4 3,476
Net cash paid(2)
(1) Represents the Group`s share of value (implicit in the transaction) of
reserves and resources, capitalised within tangible assets.
(2) Represents net cash paid to acquire a controlling interest and therefore
excludes $75 million paid to acquire minority interests in existing
subsidiaries (2008: $2,411 million). In the year ended 31 December 2009 this
principally related to Anglo Ferrous Brazil SA (2008: Anglo Ferrous Brazil SA
and Anglo Platinum Limited). When totalled with net cash paid to acquire
control, the net cash paid for acquisition of subsidiaries in the year ended
31 December 2009 is $79 million (2008: $5,887 million).
In the year ended 31 December 2008 the Group purchased 7,941,964 shares in
Anglo Platinum Limited for total consideration of $1,108 million. The cash
paid in the year ended 31 December 2008 was $1,113 million. At 31 December
2009 the Group`s shareholding in Anglo Platinum Limited was 79.7% (2008:
79.6%). The increase in the Group`s shareholding since 31 December 2008 is due
to treasury shares purchased by Anglo Platinum in the year.
On 5 August 2008 the Group acquired a 63.3% shareholding in Anglo Ferrous
Brazil SA, which holds a 51% interest in the Minas Rio iron ore project (Minas
Rio) and a 70% interest in Amapa at a price of R$28.147 ($18.056) per share.
At that time the Group committed to extend the offer to the minority
shareholders of Anglo Ferrous Brazil SA. This offer was formally made on 31
October 2008 and remained open through the first quarter of 2009, resulting in
a Group shareholding in Anglo Ferrous Brazil SA at 31 December 2009 of 100%
(2008: 98.9%). Total cash paid to acquire a controlling interest was $3.5
billion and a further $2.0 billion (including cash settlement of a related
derivative instrument ($0.7 billion)) was paid to acquire minority interests.
In the year ended 31 December 2009 $49 million was paid to acquire remaining
minority interests. These transactions followed on from the acquisition in
2007 of a 49% interest in each of Minas Rio and LLX Minas Rio, which owns the
Port of Acu. As a result of these transactions the Group`s effective
shareholding in each of the operating entities at 31 December 2009 was 100% in
Minas Rio, 49% in LLX Minas Rio and 70% in Amapa (2008: 99.4% in Minas Rio,
49% in LLX Minas Rio and 69.2% in Amapa).
Acquisition of material joint ventures
The Group made no material acquisitions of joint ventures in the year ended 31
December 2009 (2008: one).
The fair value of the net assets at the date of acquisition and related net
cash outflow for the prior year material joint venture acquisition are shown
below:
2008(1)
US$ million
Net assets acquired
Tangible assets
Value attributable to reserves and resources acquired 835
Other tangible assets 108
Current assets 41
Current liabilities (37)
Non-current liabilities (97)
850
Fair value of net assets acquired and total cost of acquisitions
Satisfied by
Net cash acquired 1
Deferred consideration 242
607
Net cash paid(2)
(1) Relates to the acquisition of Foxleigh and fair value adjustments on the
acquisition of a 49% interest in Minas Rio (which took place in 2007).
During 2008 further consideration of $284 million (which is contingent on
certain criteria being met) was recognised in respect of the acquisition of
the
49% interest in Minas Rio. This was reduced from the $600 million recognised
in
the six months ended 30 June 2008, as a result of a change in the assumptions
with regards to payment and purchase of an additional interest in Minas Rio,
together with an adjustment to the net deferred tax liability recognised to
reflect the future tax benefit from cash payments made on acquisition. These
adjustments resulted in amendments to the `Value attributable to reserves and
resources acquired` and deferred tax in the acquisition balance sheet.
(2) In the year ended 31 December 2009 there was net cash paid of $5 million
(2008: $2 million) for other joint venture acquisitions. This resulted in
total net cash paid for investments in joint ventures in the year ended 31
December 2009 of $5 million (2008: $609 million).
On 29 February 2008 Metallurgical Coal completed the acquisition of a 70%
interest in the Foxleigh joint venture in Queensland, Australia. The total
cost of acquisition was $606 million. The Group has proportionately
consolidated 70% of Foxleigh from 29 February 2008.
15. Disposals of subsidiaries and businesses
US$ million 2009 2008
Net assets disposed
Tangible assets 425 479
Other non-current assets 2 43
Current assets 48 210
Current liabilities (34) (83)
Non-current liabilities (65) (113)
Net assets 376 536(1)
Minority interests (3) (116)
Group`s share of net assets immediately prior to disposal 373 420
Less: Retained investments in associates (235) -
Net assets disposed 138 420
Cumulative translation differences recycled from reserves - (2)
Net gain on disposals 316 119
Net sale proceeds 454 537
Proceeds received in prior year (270) -
Non-cash consideration (212) -
Costs accrued 6 4
Deal facilitation charges 41 -
Deferred consideration - (56)
Net cash and cash equivalents disposed (10) (4)
Proceeds not yet received (4) -
Realised foreign exchange - (13)
468
Net cash inflow from disposals 5(2)
(1) Includes net assets of $79 million no longer consolidated following loss
of control of a subsidiary.
(2) Net cash of $64 million has been received in the year ended 31 December
2009 in respect of deferred consideration for disposals in 2008. This resulted
in a total net cash inflow of $69 million from disposals of subsidiaries and
businesses in the year ended 31 December 2009.
Disposals of subsidiaries and businesses in the year ended 31 December 2009
The disposals of Lebowa and Booysendal were the only material disposals of a
subsidiary or a joint venture in the year. The only material disposals of
associates in the year related to the sale of the Group`s remaining
investments in Tongaat Hulett and Hulamin, which generated a combined net cash
inflow of $662 million (net of transaction costs).
Lebowa and Booysendal
During the year ended 31 December 2009 the Group disposed of a 50% interest in
the Booysendal joint venture and a 51% interest in Lebowa (and certain other
joint venture projects). The disposal of Booysendal to Mvela took place on 24
June 2009. Total consideration was $275 million (excluding transaction and
deal facilitation costs), of which $270 million was received in advance in the
prior year (invested in unlisted preference shares and an escrow account).
Upon completion of the transaction the preference shares were sold whilst $72
million remains in an escrow account pending completion of documentation. The
disposal of Lebowa to Anooraq was completed on 30 June 2009 for total
consideration of $363 million (excluding transaction and deal facilitation
costs). The fair value of the consideration was $247 million (excluding
transaction and deal facilitation costs). The Group commenced equity
accounting
its remaining 49% interest in Lebowa from 30 June 2009. At 31 December 2009
the Group held a 49% interest in Lebowa. These transactions were part of
previously announced black economic empowerment deals.
The net asset position at the dates of disposal, together with the resulting
profit on disposal and related net cash inflow is shown below:
US$ million 2009
Net assets disposed
Tangible assets 336
Current assets 11
Current liabilities (24)
Non-current liabilities (64)
Group`s share of net assets immediately prior to disposal 259
Less: Retained investments in associates (125)
Net assets disposed 134
Net gain on disposals 316
Net sale proceeds 450
(270)
Proceeds received in prior year(1)
(212)
Non-cash consideration(2)
Costs accrued 6
Deal facilitation charges 41
Net cash and cash equivalents disposed (9)
Net cash inflow from disposals of Lebowa and Booysendal 6
(1) A portion of the proceeds were invested in unlisted preference shares when
received. Following completion of the transaction these were sold and $200
million is included in the Consolidated cash flow statement within `Proceeds
from sale of financial asset investments`.
(2) Represents ordinary shares in Anooraq and preference shares in Plateau
Resources (Proprietary) Limited.
Disposals of businesses in the year ended 31 December 2008
In the year ended 31 December 2008 Namakwa Sands was the only material
disposal of a business. On 1 October 2008 Namakwa Sands was sold to Exxaro
Resources Limited for consideration of $330 million including deferred
consideration. On 3 November 2008 as part of the same transaction, the Group
completed the sale of a 26% interest in both the Black Mountain zinc, lead and
copper operation and the Gamsberg zinc project for consideration of $23
million. For further details of the disposal of Namakwa Sands refer to the
Group`s financial statements for the year ended 31 December 2008.
16. Disposal groups and non-current assets held for sale
Platinum disposal groups (including Booysendal and Lebowa), which were
previously classified as held for sale at 31 December 2008, were disposed of
in
June 2009. Refer to note 15 for more details on the Platinum disposals.
The following assets and liabilities relating to disposal groups were
classified as held for sale. The Group expects to complete the sale of these
businesses within 12 months of the year end.
2009 2008
Tarmac disposal
US$ million groups (1) Total (2)
Intangible assets 13 -
Tangible assets 422 257
Deferred tax assets 5 -
Other non-current assets 2 2
Total non-current assets 442 259
Inventories 42 -
Trade and other receivables 72 8
Cash and cash equivalents 64 8
Total current assets 178 16
Total assets 620 275
Trade and other payables (66) (21)
Short term borrowings (13) -
Short term provisions (4) -
Total current liabilities (83) (21)
Medium and long term borrowings (3) -
Retirement benefit obligations (1) -
Deferred tax liabilities (46) (56)
Provisions for liabilities and charges (55) (3)
Other non-current liabilities (3) -
Total non-current liabilities (108) (59)
Total liabilities (191) (80)
Net assets 429 195
(1) Tarmac disposal groups relate to certain of its European businesses.
Tarmac is included in the Other Mining and Industrial segment.
(2) Relates to Platinum disposal groups.
The net carrying amount of assets and associated liabilities classified as
held for sale during 2009 was written down by $46 million (2008: nil).
17. Contingent liabilities and contingent assets
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 2007 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 31 December 2009 contingent liabilities in respect of the
Group`s subsidiaries comprise aggregate amounts of $704 million (2008: $548
million) in respect of loans and performance guarantees given to banks and
other third parties and are primarily in respect of environmental restoration
and decommissioning obligations.
No contingent liabilities were secured on the assets of the Group at 31
December 2009 or 31 December 2008.
ii) Contingent assets
There were no significant contingent assets in the Group at 31 December 2009
or 31 December 2008.
iii) Other
Anglo American Sur
Anglo American inherited a 1978 agreement with Codelco, the Chilean state
mining company, when it acquired Disputada de Las Condes (since renamed Anglo
American Sur) in 2002. The agreement grants Codelco 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. The right was not exercised in
2009. The calculations of the price at which Codelco can exercise its right
are complex and confidential but do, inter alia, take account of company
profitability over a five year period.
Anglo American South Africa Limited
Anglo American South Africa Limited (AASA), a wholly owned subsidiary of the
Company, is a defendant in 25 separate lawsuits, each one on behalf of a
former mineworker (or his dependents or survivors) who allegedly contracted
silicosis working for gold mining companies in which AASA was a shareholder
and to which AASA provided various technical and administrative services. The
aggregate amount of the 25 claims is less than $5 million, although if these
claims are determined adversely to AASA, there are a substantial number of
additional former mineworkers who may seek to bring similar claims. The first
trial of these claims is expected to be in 2011, but the arrangements have not
yet been agreed.
18. Related party transactions
The Group has a related party relationship with its subsidiaries, associates
and joint ventures.
The Company and its subsidiaries, in the ordinary course of business, enter
into various sales, 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 year totalled $616 million
(2008: $609 million), as disclosed in the Consolidated cash flow statement.
At 31 December 2009 the Group had provided loans to joint ventures of $93
million (2008: $20 million). These loans are included in financial asset
investments.
At 31 December 2009 the directors of the Company and their immediate relatives
controlled 3% (2008: 3%) of the voting shares of the Company.
Related party transactions with De Beers
At 31 December 2009 the Group held $88 million (2008: $88 million) of 10%
non-cumulative redeemable preference shares in DB Investments, the holding
company of De Beers Societe Anonyme.
Set out below are details of certain transactions and arrangements entered
into by the Group with, or for the benefit of, certain related parties of the
Company for the purposes of the UKLA Listing Rules, being Central Holdings
Limited (and certain of its subsidiaries, together `CHL`) and DB Investments
SA and De Beers SA (together, `De Beers`) which are related parties for the
purposes of such rules by virtue of being companies in which Mr N.F.
Oppenheimer, a director of the Company, has a relevant interest for the
purposes of such rules.
It was agreed that the dividends declared by De Beers to the Group and the
other shareholders in De Beers (including CHL) would be exchanged for loan
obligations. The total amount of dividends exchanged amounted to $118 million
in the year ended 31 December 2008. This total has increased during 2009 by
$24 million. The loans are subordinated and are interest free for two years at
which point they become interest bearing in line with market rates at the
dates of the initial reinvestment.
In April 2009 the shareholders of De Beers provided an additional loan to De
Beers, proportionate to their shareholdings, totalling $500 million. Anglo
American holds a 45% interest and therefore provided a loan of $225 million.
The loan is interest free for two years, at which point it reverts to a rate
of interest equal to LIBOR plus 700 basis points until April 2016 and then,
provided all interest payments are up to date, reduces to LIBOR plus 300 basis
points. In the event of a rights issue or other share issue by De Beers, the
Group would have the option to apply amounts outstanding under the loan in
subscribing for ordinary shares in De Beers at the issue price applicable to
the relevant share issue, which will be determined at the time of the relevant
issue. The loan is subordinated in favour of third party banks/lenders and
preference shareholders (including Anglo American) and is repayable after ten
years. These loans are included in financial asset investments.
In February 2010 the shareholders of De Beers agreed, as part of the De Beers
Group`s refinancing, including third party debt refinancing, that additional
equity was required by De Beers. The shareholders of De Beers (including CHL)
have accordingly all agreed to subscribe, in proportion to their current
shareholding, for $1 billion of additional equity in De Beers, subject to the
fulfilment of certain conditions. The Group`s share of such additional equity,
in line with its equity holding in De Beers, amounts to $450 million. CHL`s
share of such additional equity, in line with its equity holding in De Beers,
amounts to $400 million. The shareholders have further agreed that the
subscription does not constitute a subscription event under the 2009
arrangements.
Pursuant to the refinancing of De Beers and to satisfy the requirements of the
lenders to De Beers, the shareholders of De Beers, including the Group, have,
as applicable, agreed to:
(i) defer the receipt of dividends or capital on their ordinary shares until
certain financial tests (`Normalisation`) are met and this is currently
anticipated to be during 2011;
(ii) defer the receipt of dividends and mandatory redemption under the
preference shares in De Beers SA until Normalisation. The total amount
deferred by Anglo American is approximately $96.5 million. The dividends (or
interest in respect of such dividends) will continue to accrue on the
preference shares until they are paid and the preference shares redeemed; and
(iii) enter into an agreement which effectively formalises, in favour of the
lenders to De Beers, the deferral of the rights to dividends or other
distributions in respect of their respective ordinary shares, and, as
applicable, preference shares and payments under the shareholder loans, until
Normalisation; and the subordination thereof.
As part of the process of facilitating the agreed equity subscription by all
the shareholders of De Beers, a temporary re-ranking of distribution rights
was agreed which will result, following Normalisation, in a $20 million
distribution to the shareholders of De Beers (including the Group and CHL),
pro-rata to their individual equity subscriptions as referred to above, which
will be paid in priority to existing preferences on distributions under the
terms of the preference shares in De Beers. The net effect of this
re-prioritisation on Anglo American, in the event of there being insufficient
cash to pay all dividends then due, is a deferral of approximately $8 million
of dividends, which will continue to accrue interest until paid.
19. Events occurring after end of year
In February 2010 the Group announced its commitment to take up its full
allocation of shares under the rights offer announced by Anglo Platinum. Anglo
Platinum expects to raise approximately $1.6 billion through the rights offer,
of which the Group`s share of 79.7% is approximately $1.3 billion. The Group
has also agreed to underwrite the minority portion of the rights offer.
Subsequent to 31 December 2009 De Beers has announced a $1 billion rights
issue. The Group has accordingly agreed to subscribe for additional equity in
proportion to its current shareholding and will therefore contribute $450
million. Refer to note 18 for further details.
During the first quarter of 2010, Anglo American agreed the sales of Tarmac`s
aggregates businesses in France, Germany, Poland and the Czech Republic and
its Polish concrete products business with expected total proceeds of
approximately $400 million.
With the exception of the above there have been no material reportable events
since 31 December 2009.
Production statistics
The figures below include the entire output of consolidated entities and the
Group`s attributable share of joint ventures, joint arrangements and
associates where applicable, except for Collahuasi in Copper and De Beers
which are quoted on a 100% basis.
Due to the portfolio and management structure changes announced in October
2009, the segments have changed from those reported at 31 December 2008.
Comparatives have been reclassified to align with current year presentation.
2009
Platinum
segment (troy
ounces)(1)(2)
Platinum 2,451,600
Palladium 1,360,500
Rhodium 349,900
4,162,000
Nickel
(tonnes)(3) 19,500
Copper
(tonnes)(3) 11,200
Gold 90,900
Diamonds
segment (De
Beers)
(diamonds
recovered -
carats)
100% basis
(Anglo
American 45%)
Debswana 17,734,000
Namdeb 929,000
De Beers
Consolidated
Mines 4,797,000
Williamson(4) -
Canada 1,140,000
24,600,000
Copper segment
Collahuasi
100% basis
(Anglo
American 44%)
Ore mined tonnes 71,197,800
Ore processed Oxide tonnes 7,293,800
Sulphide tonnes 45,348,300
Ore grade
processed Oxide % Cu 0.6
Sulphide % Cu 1.1
Production Copper concentrate dry metric tonnes 1,837,900
Copper cathode tonnes 43,100
Copper in concentrate tonnes 492,700
Total copper
production for
Collahuasi tonnes 535,800
Anglo American
Sur
Los Bronces
mine
Ore mined tonnes 21,115,900
Marginal ore
mined tonnes 19,368,700
Las Tortolas
concentrator Ore processed tonnes 20,512,300
Ore grade processed % Cu 1.1
Average recovery % 86.3
Production Copper concentrate dry metric tonnes 676,100
Copper cathode tonnes 48,400
Copper in concentrate tonnes 190,000
Total tonnes 238,400
El Soldado mine
Ore mined Open pit - ore mined tonnes 7,348,500
Open pit - marginal ore
mined tonnes 505,600
Underground (sulphide) tonnes 1,501,000
Total tonnes 9,355,100
Ore processed Oxide tonnes 1,689,700
Sulphide tonnes 7,481,500
Ore grade
processed Oxide % Cu 0.7
Sulphide % Cu 0.7
Production Copper concentrate dry metric tonnes 158,700
Copper cathode tonnes 4,200
Copper in concentrate tonnes 37,200
Total tonnes 41,400
2008
Platinum
segment (troy
ounces)(1)(2)
Platinum 2,386,600
Palladium 1,318,800
Rhodium 299,300
4,004,700
Nickel
(tonnes)(3) 15,500
Copper
(tonnes)(3) 8,800
Gold 78,500
Diamonds
segment (De
Beers)
(diamonds
recovered -
carats)
100% basis
(Anglo
American 45%)
Debswana 32,276,000
Namdeb 2,122,000
De Beers
Consolidated
Mines 11,960,000
134,000
Williamson(4)
Canada 1,640,000
48,132,000
Copper segment
Collahuasi
100% basis
(Anglo
American 44%)
Ore mined tonnes 57,699,800
Ore processed Oxide tonnes 7,317,400
Sulphide tonnes 42,377,400
Ore grade
processed Oxide % Cu 0.6
Sulphide % Cu 1.1
Production Copper concentrate dry metric tonnes 1,574,000
Copper cathode tonnes 49,400
Copper in concentrate tonnes 415,000
Total copper
production for
Collahuasi tonnes 464,400
Anglo American
Sur
Los Bronces
mine
Ore mined tonnes 21,045,100
Marginal ore
mined tonnes 36,008,900
Las Tortolas
concentrator Ore processed tonnes 20,012,700
Ore grade processed % Cu 1.1
Average recovery % 84.9
Production Copper concentrate dry metric tonnes 677,900
Copper cathode tonnes 45,800
Copper in concentrate tonnes 190,000
Total tonnes 235,800
El Soldado mine
Ore mined Open pit - ore mined tonnes 5,305,800
Open pit - marginal ore
mined tonnes 21,700
Underground (sulphide) tonnes 1,312,700
Total tonnes 6,640,200
Ore processed Oxide tonnes 821,800
Sulphide tonnes 7,179,700
Ore grade
processed Oxide % Cu 1.3
Sulphide % Cu 0.8
Production Copper concentrate dry metric tonnes 174,100
Copper cathode tonnes 6,700
Copper in concentrate tonnes 43,100
Total tonnes 49,800
(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. Northam
Platinum Limited was sold on 20 August 2008.
(3) Also disclosed within total attributable nickel and copper production.
(4) Williamson was disposed of on 10 November 2008.
2009
Copper
segment
(continued)
Chagres
Smelter
Copper concentrate
tonnes 140,900
smelted
Production Copper blister/anode tonnes 137,700
Copper blister/anode (third
party) tonnes 2,500
Acid tonnes 457,600
Total
copper
production
for
Anglo
American
Sur(1) tonnes 282,300
Anglo
American
Norte
Mantos
Blancos
mine
Ore
processed Oxide tonnes 4,361,300
Sulphide tonnes 4,248,100
Marginal ore mined tonnes 3,360,000
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 125,100
Copper cathode tonnes 37,600
Copper cathode (third
tonnes 8,600
party)
Copper in concentrate tonnes 44,000
Total tonnes 90,200
Mantoverde
mine
Ore
processed Oxide tonnes 9,676,300
Marginal ore tonnes 4,058,000
Ore grade
processed Oxide % Cu (soluble) 0.7
Marginal ore % Cu (soluble) 0.3
Production Copper cathode tonnes 61,500
Total
copper
production
for Anglo
American
Norte tonnes 151,700
Total
Copper
segment
copper
production
(1) tonnes 669,800
tonnes 11,200
Platinum
copper
production
(2)
Black
Mountain
copper
production tonnes 2,200
Total
attributab
le copper
production tonnes 683,200
Nickel
segment
Codemin
Ore mined tonnes 547,700
Ore
processed tonnes 512,000
Ore grade
processed % Ni 2.1
Production tonnes 9,500
Loma de
Niquel
Ore mined tonnes 822,700
Ore
processed tonnes 641,800
Ore grade
processed % Ni 1.6
Production tonnes 10,400
Total
Nickel
segment
nickel
production tonnes 19,900
tonnes 19,500
Platinum
nickel
production
(2)
Total
attributab
le nickel
production tonnes 39,400
Iron Ore
and
Manganese
segment
Kumba Iron
Ore
Lump tonnes 25,300,000
Fines tonnes 16,643,000
Amapa(3)
Sinter feed tonnes 576,100
Pellet feed tonnes 2,077,100
Total iron
ore
production tonnes 44,596,200
Samancor(4)
Manganese
ore tonnes 1,570,000
Manganese
alloys(5) tonnes 129,000
2008
Copper
segment
(continued)
Chagres
Smelter
Copper concentrate
tonnes 148,400
smelted
Production Copper blister/anode tonnes 146,100
Copper blister/anode (third
party) tonnes 1,000
Acid tonnes 486,600
Total
copper
production
for
Anglo
American
Sur(1) tonnes 286,600
Anglo
American
Norte
Mantos
Blancos
mine
Ore
processed Oxide tonnes 4,694,800
Sulphide tonnes 4,311,100
Marginal ore mined tonnes 5,003,000
Ore grade
processed Oxide % Cu (soluble) 0.7
Sulphide % Cu (insoluble) 1.2
Marginal ore % Cu (soluble) 0.3
Production Copper concentrate dry metric tonnes 132,300
Copper cathode tonnes 34,300
Copper cathode (third
tonnes 5,300
party)
Copper in concentrate tonnes 46,800
Total tonnes 86,400
Mantoverde
mine
Ore
processed Oxide tonnes 9,556,900
Marginal ore tonnes 4,300,400
Ore grade
processed Oxide % Cu (soluble) 0.7
Marginal ore % Cu (soluble) 0.4
Production Copper cathode tonnes 62,500
Total
copper
production
for Anglo
American
Norte tonnes 148,900
Total
Copper
segment
copper
production
(1) tonnes 639,800
tonnes 8,800
Platinum
copper
production
(2)
Black
Mountain
copper
production tonnes 2,500
Total
attributab
le copper
production tonnes 651,100
Nickel
segment
Codemin
Ore mined tonnes 498,400
Ore
processed tonnes 475,900
Ore grade
processed % Ni 2.1
Production tonnes 9,100
Loma de
Niquel
Ore mined tonnes 811,000
Ore
processed tonnes 676,800
Ore grade
processed % Ni 1.6
Production tonnes 10,900
Total
Nickel
segment
nickel
production tonnes 20,000
tonnes 15,500
Platinum
nickel
production
(2)
Total
attributab
le nickel
production tonnes 35,500
Iron Ore
and
Manganese
segment
Kumba Iron
Ore
Lump tonnes 22,042,000
Fines tonnes 14,657,000
Amapa(3)
Sinter feed tonnes 128,000
Pellet feed tonnes 584,000
Total iron
ore
production tonnes 37,411,000
Samancor(4)
Manganese
ore tonnes 2,704,000
Manganese
alloys(5) tonnes 306,000
(1) Total copper production includes total concentrate and cathode production
and blister/anode produced from third party purchased material.
(2) Northam Platinum Limited was transferred to a disposal group in September
2007. Production information excludes Northam Platinum Limited. Northam
Platinum Limited was sold on 20 August 2008.
(3) Production from Amapa is included from 5 August 2008. Amapa production for
full year 2008 was 1.2 Mt. At 31 December 2009 Amapa was not in commercial
production and therefore to this date all revenue and related costs were
capitalised. Commercial production commenced on 1 January 2010.
(4) Saleable production.
(5) Production includes Medium Carbon Ferro Manganese.
2009 2008
Coal (tonnes)
Metallurgical Coal segment
Australia
Metallurgical 12,622,600 13,144,900
Thermal 14,051,800 14,696,300
Total Metallurgical Coal segment coal
production 26,674,400 27,841,200
Thermal Coal segment
South Africa
Trade - Metallurgical 747,100 971,900
Trade - Thermal 22,185,900(1) 22,286,800
Eskom 36,225,100 36,158,100
59,158,100(1) 59,416,800
South America
Thermal 10,189,600 10,410,300
Total Thermal Coal segment coal production 69,347,700(1) 69,827,100
Other Mining and Industrial segment
South America
Thermal 750,700 1,074,200
Canada
Metallurgical 645,300 632,300
Thermal 73,000 140,100
718,300 772,400
Total Other Mining and Industrial segment
coal production 1,469,000 1,846,600
Total coal production 97,491,100 (1) 99,514,900
Coal (tonnes)
Metallurgical Coal segment
Australia
Callide 8,766,400 9,582,700
Drayton 3,630,200 3,711,500
Capcoal 4,598,900 5,621,900
Jellinbah East 1,745,800 1,033,900
Moranbah 2,581,000 3,181,500
Dawson Complex 3,756,200 3,537,200
Foxleigh 1,595,900 1,172,500
Total Metallurgical Coal segment coal
production 26,674,400 27,841,200
Thermal Coal segment
South Africa
Greenside 3,294,600 3,401,100
Goedehoop 6,905,000 7,449,400
Isibonelo 5,061,900 5,152,100
Kriel 11,161,700 10,344,400
Kleinkopje 4,414,000 4,545,600
Landau 4,231,500 4,089,300
New Denmark 3,728,900 5,272,500
New Vaal 17,553,700 17,034,400
Nooitgedacht 475,000 454,600
Mafube 2,212,800 1,673,400
Zibulo 119,000 -
59,158,100(1) 59,416,800
South America
Carbones del CerrejACubedn 10,189,600
10,410,300
Total Thermal Coal segment coal production 69,347,700(1) 69,827,100
Other Mining and Industrial segment
South America
Carbones del Guasare 750,700 1,074,200
Canada
Peace River Coal 718,300 772,400
Total Other Mining and Industrial segment
coal production 1,469,000 1,846,600
Total coal production 97,491,100 (1) 99,514,900
(1) Includes 119kt of capitalised production from Zibulo (previously
Zondagsfontein).
2009 2008
Coal (continued)
Total coal production by commodity (tonnes)
Metallurgical
South Africa 747,100 971,900
Australia 12,622,600 13,144,900
Canada 645,300 632,300
Total metallurgical coal production 14,015,000 14,749,100
Thermal
South Africa - Thermal 22,185,900(1) 22,286,800
South Africa - Eskom 36,225,100 36,158,100
Australia 14,051,800 14,696,300
South America 10,940,300 11,484,500
Canada 73,000 140,100
Total thermal coal production 83,476,100(1) 84,765,800
Total coal production 97,491,100(1) 99,514,900
(1) Includes 119kt of capitalised production from Zibulo (previously
Zondagsfontein).
2009
Other Mining and
Industrial segment (1)
Tarmac
Aggregates tonnes 70,437,100
Lime products tonnes 1,214,400
m3
Concrete 3,521,200
Zinc and Lead
Skorpion
Ore mined tonnes 1,495,900
Ore processed tonnes 1,426,800
Ore grade processed Zinc % Zn 11.5
Production Zinc tonnes 150,400
Lisheen
Ore mined tonnes 1,534,500
Ore processed tonnes 1,526,200
Ore grade processed Zinc % Zn 12.4
Lead % Pb 1.8
Production Zinc in concentrate tonnes 171,800
Lead in concentrate tonnes 19,200
Black Mountain
Ore mined tonnes 1,249,700
Ore processed tonnes 1,293,200
Ore grade processed Zinc % Zn 2.8
Lead % Pb 4.0
Copper % Cu 0.3
Production Zinc in concentrate tonnes 28,200
Lead in concentrate tonnes 49,100
Copper in concentrate tonnes 2,200
Total attributable
zinc production tonnes 350,400
Total attributable
lead production tonnes 68,300
Scaw Metals
South Africa Steel
Products tonnes 693,000
International Steel
Products tonnes 718,000
Niobium
Catalao
Ore mined tonnes 906,700
Ore processed tonnes 873,500
Ore grade processed Kg Nb/tonne 9.3
Production tonnes 5,100
Phosphates
Copebras
Sodium tripolyphosphate tonnes -
Phosphates tonnes 829,000
Mineral Sands
Namakwa Sands (2)
tonnes -
Ore mined
Production IImenite tonnes -
Rutile tonnes -
Zircon tonnes -
Smelter production Slag tapped tonnes -
Iron tapped tonnes -
2008
Other Mining and
Industrial segment (1)
Tarmac
Aggregates tonnes 93,095,000
Lime products tonnes 1,353,000
m3
Concrete 6,312,000
Zinc and Lead
Skorpion
Ore mined tonnes 1,390,400
Ore processed tonnes 1,333,300
Ore grade processed Zinc % Zn 11.7
Production Zinc tonnes 145,400
Lisheen
Ore mined tonnes 1,561,900
Ore processed tonnes 1,516,900
Ore grade processed Zinc % Zn 12.1
Lead % Pb 1.6
Production Zinc in concentrate tonnes 167,200
Lead in concentrate tonnes 15,900
Black Mountain
Ore mined tonnes 1,199,800
Ore processed tonnes 1,204,800
Ore grade processed Zinc % Zn 3.0
Lead % Pb 4.2
Copper % Cu 0.4
Production Zinc in concentrate tonnes 27,900
Lead in concentrate tonnes 47,000
Copper in concentrate tonnes 2,500
Total attributable zinc
production tonnes 340,500
Total attributable lead
production tonnes 62,900
Scaw Metals
South Africa Steel
Products tonnes 771,000
International Steel
Products tonnes 879,000
Niobium
Catalao
Ore mined tonnes 768,100
Ore processed tonnes 818,100
Ore grade processed Kg Nb/tonn 11.1
Production tonnes 4,600
Phosphates
Copebras
Sodium tripolyphosphate tonnes 10,200
Phosphates tonnes 982,100
Mineral Sands
Namakwa Sands (2)
tonnes 13,418,600
Ore mined
Production IImenite tonnes 240,900
Rutile tonnes 19,100
Zircon tonnes 97,400
Smelter production Slag tapped tonnes 118,500
Iron tapped tonnes 78,800
(1) Production for Coal Americas is included in Coal production section.
(2) Production information included until date of disposal on 1 October 2008.
Quarterly production statistics(1)
December 2009 September 2009 June 2009
Platinum segment (2)
Platinum (troy
ounces) 766,000 629,200 652,400
Palladium (troy
ounces) 426,300 337,500 361,600
Rhodium (troy
ounces) 93,900 92,100 90,100
Nickel (tonnes) 5,300 5,500 5,400
De Beers segment
(diamonds recovered
- carats)
100% basis (Anglo
American 45%)
Diamonds 10,124,000 7,885,000 5,509,000
Copper segment
(tonnes)(3) 185,900 168,100 165,300
Nickel segment
(tonnes)(4) 4,900 4,900 5,600
Iron Ore and
Manganese segment
(tonnes)
Iron ore(5) 12,407,200 11,861,000 10,336,000
Manganese ore(6) 615,000 462,000 200,000
Manganese
alloys(6)(7) 52,000 25,000 10,000
Metallurgical
Coal segment (tonnes)
Metallurgical 3,805,500 3,147,800 3,354,000
Thermal 3,487,400 3,614,300 3,738,600
Thermal Coal
segment (tonnes)
Metallurgical 130,500 224,300 172,300
Thermal 7,785,400(8) 8,431,600 8,429,300
Eskom 8,448,400 10,400,200 8,938,400
Other Mining and
Industrial segment
(tonnes)
Metallurgical coal 149,900 164,900 152,600
Thermal coal 310,200 214,500 169,000
Zinc 86,500 94,000 87,100
Lead 18,900 18,400 16,400
South Africa Steel
Products 167,000 183,000 164,000
International Steel
Products 177,000 164,000 158,000
Coal production
by commodity (tonnes)
Metallurgical 4,085,900 3,537,000 3,678,900
Thermal 11,583,000(8) 12,260,400 12,336,900
Eskom 8,448,400 10,400,200 8,938,400
March 2009 Quarter ended
December 2008 December 2008
Platinum segment (2)
Platinum (troy
ounces) 404,000 842,300
Palladium (troy
ounces) 235,100 450,500
Rhodium (troy
ounces) 73,800 107,100
Nickel (tonnes) 3,300 4,100
De Beers segment
(diamonds recovered
- carats)
100% basis (Anglo
American 45%)
Diamonds 1,082,000 10,795,000
Copper segment
(tonnes)(3) 150,500 172,600
Nickel segment
(tonnes)(4) 4,500 4,800
Iron Ore and
Manganese segment
(tonnes)
Iron ore(5) 9,992,000 10,098,000
Manganese ore(6) 293,000 565,000
Manganese
alloys(6)(7) 42,000 72,000
Metallurgical
Coal segment (tonnes)
Metallurgical 2,315,300 3,410,800
Thermal 3,211,500 4,051,200
Thermal Coal
segment (tonnes)
Metallurgical 220,000 408,300
Thermal 7,729,200 7,961,800
Eskom 8,438,100 9,465,900
Other Mining and
Industrial segment
(tonnes)
Metallurgical coal 177,900 136,100
Thermal coal 130,000 234,300
Zinc 82,800 82,900
Lead 14,600 14,400
South Africa Steel
Products 179,000 167,000
International Steel
Products 219,000 215,000
Coal production
by commodity (tonnes)
Metallurgical 2,713,200 3,955,200
Thermal 11,070,700 12,247,300
Eskom 8,438,100 9,465,900
December Q09 v % Change
September Q09 December Q08
Platinum segment (2)
Platinum (troy
ounces) 22% (9)%
Palladium (troy
ounces) 26% (5)%
Rhodium (troy
ounces) 2% (12)%
Nickel (tonnes) (4)% 29%
De Beers segment
(diamonds recovered
- carats)
100% basis (Anglo
American 45%)
Diamonds 28% (6)%
Copper segment
(tonnes)(3) 11% 8%
Nickel segment
(tonnes)(4) - 2%
Iron Ore and
Manganese segment
(tonnes)
Iron ore(5) 5% 23%
Manganese ore(6) 33% 9%
Manganese
alloys(6)(7) 108% (28)%
Metallurgical
Coal segment (tonnes)
Metallurgical 21% 12%
Thermal (4)% (14)%
Thermal Coal
segment (tonnes)
Metallurgical (42)% (68)%
Thermal (8)% (2)%
Eskom (19)% (11)%
Other Mining and
Industrial segment
(tonnes)
Metallurgical coal (9)% 10%
Thermal coal 45% 32%
Zinc (8)% 4%
Lead 3% 31%
South Africa Steel
Products (9)% -
International Steel
Products 8% (18)%
Coal production
by commodity (tonnes)
Metallurgical 16% 3%
Thermal (6)% (5)%
Eskom (19)% (11)%
(1) Excludes Tarmac.
(2) Northam Platinum Limited was transferred to a disposal group in September
2007. Production information excludes Northam Platinum Limited. Northam
Platinum Limited was sold on 20 August 2008.
(3) Excludes Anglo Platinum and Black Mountain mine copper production.
(4) Excludes Anglo Platinum nickel production.
(5) Production from Amapa is included from 5 August 2008. Amapa production for
full year 2008 was 1.2 Mt. At 31 December 2009 Amapa was not in commercial
production and therefore to this date all revenue and related costs were
capitalised. Commercial production commenced on 1 January 2010.
(6) Saleable production.
(7) Production includes Medium Carbon Ferro Manganese.
(8) Includes 119kt of capitalised production from Zibulo (previously
Zondagsfontein).
Reconciliation of subsidiaries` and associate`s reported earnings to the
Underlying earnings included in the Condensed financial statements
For the year ended 31 December 2009
Note only key reported lines are reconciled
Anglo Platinum Limited
US$ million 2009 2008 (1)
IFRS headline earnings (US$ equivalent of published) 84 1,607
Exploration 17 36
Exchange rate difference - 64
Operating and financing remeasurements (net of tax) 27 17
Restructuring costs included in headline earnings 27 -
Other adjustments 2 (2)
157 1,722
Minority interests (31) (376)
Elimination of intercompany interest 47 8
Depreciation on assets fair valued on acquisition (net of
tax) (83) (41)
Corporate cost allocation (46) (57)
Contribution to Anglo American plc underlying earnings 44 1,256
DB Investments
US$ million 2009 2008
De Beers underlying earnings (100%) (220) 515
Difference in IAS 19 accounting policy 5 18
De Beers underlying earnings - Anglo American plc basis
(100%) (215) 533
Anglo American plc`s 45% ordinary share interest (97) 240
Income from preference shares 9 13
Other (2) 3
Contribution to Anglo American plc underlying earnings (90) 256
Kumba Iron Ore Limited (Kumba)
US$ million 2009 2008 (1)
IFRS headline earnings (US$ equivalent of published)(2) 845 872
Exploration 3 8
Other adjustments (2) 12
846 892
Minority interests (314) (328)
-
Elimination of intercompany interest (10)
Depreciation on assets fair valued on acquisition (net
of tax) (7) (6)
Corporate cost allocation (39) (35)
Other adjustments 14 -
Contribution to Anglo American plc underlying earnings 490 523
(1) Comparatives have been updated to include an allocation of corporate
costs.
(2) Kumba`s IFRS headline earnings for the year ended 31 December 2009 assume
a
minority interest of 20% in Kumba`s underlying mining assets (2008: 20%).
Exchange rates and commodity prices
US$ exchange rates 2009 2008
Average prices for the year
Rand 8.41 8.27
Sterling 0.64 0.54
Euro 0.72 0.68
Australian dollar 1.26 1.17
Chilean peso 559 524
Brazilian real 2.00 1.84
Closing spot prices
Rand 7.38 9.30
Sterling 0.62 0.69
Euro 0.70 0.72
Australian dollar 1.11 1.44
Chilean peso 507 637
Brazilian real 1.74 2.33
Commodity prices 2009 2008
Average market prices for the year
Platinum(1) US$/oz 1,211 1,585
Palladium(1) US$/oz 266 355
US$/oz 1,592 6,564
Rhodium(1)
Copper(2) US cents/lb 234 315
US cents/lb 667 953
Nickel(2)
Zinc(2) US cents/lb 75 85
US cents/lb 78 95
Lead(2)
31 December spot prices
Platinum(1) US$/oz 1,475 922
US$/oz 402 186
Palladium(1)
Rhodium(1) US$/oz 2,500 1,250
US cents/lb 333 132
Copper(2)
Nickel(2) US cents/lb 838 490
US cents/lb 117 51
Zinc(2)
Lead(2) US cents/lb 109 43
(1) Source: Johnson Matthey.
(2) Source: LME daily prices.
Key financial data
US$ million (unless otherwise stated) 2009 2008 2007
Group revenue including associates 24,637 32,964 30,559
Less: Share of associates` revenue (3,779) (6,653) (5,089)
Group revenue 20,858 26,311 25,470
Operating profit including associates
before special items and remeasurements 4,957 10,085 9,590
Special items and remeasurements (excluding
financing and tax special items and
remeasurements) (208) (330) (227)
Net finance costs (including financing
special items and remeasurements), tax and
minority interests of associates (313) (783) (434)
Total profit from operations and associates 4,436 8,972 8,929
Net finance costs (including financing
special items and remeasurements) (407) (401) (108)
Profit before tax 4,029 8,571 8,821
Income tax expense (including special items
and remeasurements) (1,117) (2,451) (2,693)
Profit for the financial year - continuing
operations 2,912 6,120 6,128
Profit for the financial year -
discontinued operations - - 2,044
Profit for the financial year - total Group 2,912 6,120 8,172
Minority interests (487) (905) (868)
Profit attributable to equity shareholders
of the Company 2,425 5,215 7,304
Underlying earnings(2) - continuing
operations 2,569 5,237 5,477
Underlying earnings(2) - discontinued
operations - - 284
Underlying earnings(2) - total Group 2,569 5,237 5,761
Earnings per share ($) - continuing
operations 2.02 4.34 4.04
Earnings per share ($) - discontinued
operations - - 1.54
Earnings per share ($) - total Group 2.02 4.34 5.58
Underlying earnings per share ($) -
continuing operations 2.14 4.36 4.18
Underlying earnings per share ($) -
discontinued operations - - 0.22
Underlying earnings per share ($) - total
Group 2.14 4.36 4.40
Ordinary dividend per share (US cents) - 44.0 124.0
Special dividend per share (US cents) - - -
Weighted average basic number of shares
outstanding (million) 1,202 1,202 1,309
EBITDA(3) - continuing operations 6,930 11,847 11,171
EBITDA(3) - discontinued operations - - 961
EBITDA(3) - total Group 6,930 11,847 12,132
EBITDA interest cover(4) - total Group 23.0 28.3 42.0
Operating margin (before special items and
remeasurements) - total Group 20.1% 30.6% 28.4%
Ordinary dividend cover (based on
underlying earnings per share) - total
Group - 9.9 3.5
US$ million (unless otherwise stated) 2006 (1) 2005 (1) 2004(1)
Group revenue including associates 29,404 24,872 22,610
Less: Share of associates` revenue (4,413) (4,740) (5,429)
Group revenue 24,991 20,132 17,181
Operating profit including associates
before special items and remeasurements 8,888 5,549 3,832
Special items and remeasurements
(excluding financing and tax special
items and
remeasurements) 24 16 556
Net finance costs (including financing
special items and remeasurements), tax and
minority interests of associates (398) (315) (391)
Total profit from operations and
associates 8,514 5,250 3,997
Net finance costs (including financing
special items and remeasurements) (71) (220) (385)
Profit before tax 8,443 5,030 3,612
Income tax expense (including special
items and remeasurements) (2,518) (1,208) (765)
Profit for the financial year -
continuing operations 5,925 3,822 2,847
Profit for the financial year -
discontinued operations 997 111 1,094
Profit for the financial year - total Group 6,922 3,933 3,941
Minority interests (736) (412) (440)
Profit attributable to equity
shareholders of the Company 6,186 3,521 3,501
Underlying earnings(2) - continuing
operations 5,019 3,335 2,178
Underlying earnings(2) - discontinued
operations 452 401 506
Underlying earnings(2) - total Group 5,471 3,736 2,684
Earnings per share ($) - continuing
operations 3.51 2.35 1.84
Earnings per share ($) - discontinued
operations 0.70 0.08 0.60
Earnings per share ($) - total Group 4.21 2.43 2.44
Underlying earnings per share ($) -
continuing operations 3.42 2.30 1.52
Underlying earnings per share ($) -
discontinued operations 0.31 0.28 0.35
Underlying earnings per share ($) - total
Group 3.73 2.58 1.87
Ordinary dividend per share (US cents) 108.0 90.0 70.0
Special dividend per share (US cents) 67.0 33.0 -
Weighted average basic number of shares
outstanding (million) 1,468 1,447 1,434
EBITDA(3) - continuing operations 10,431 7,172 5,359
EBITDA(3) - discontinued operations 1,766 1,787 1,672
EBITDA(3) - total Group 12,197 8,959 7,031
EBITDA interest cover(4) - total Group 45.5 20.0 18.5
Operating margin (before special items
and remeasurements) - total Group 25.4% 18.5% 14.7%
Ordinary dividend cover (based on
underlying earnings per share) - total Group 3.5 2.9 2.7
See following page for footnotes.
US$ million (unless otherwise stated) 2009 2008 2007
Balance sheet
Intangible and tangible assets 37,974 32,551 25,090
Other non-current assets and
investments(5) 7,303 7,607 9,271
Working capital 2,165 861 1,966
Other net current liabilities(5) (272) (840) (911)
Other non-current liabilities and
obligations(5) (8,487) (7,567) (6,387)
Cash and cash equivalents and
borrowings(6) (11,043) (11,051) (5,170)
Net assets classified as held for sale 429 195 471
Net assets 28,069 21,756 24,330
Minority interests (1,948) (1,535) (1,869)
Equity attributable to equity
shareholders of the Company 26,121 20,221 22,461
Total capital(7) 39,064 32,799 29,569
Cash inflows from operations - continuing
operations 4,904 9,579 9,375
Cash inflows from operations -
discontinued operations - - 470
Cash inflows from operations - total Group 4,904 9,579 9,845
Dividends received from associates and
financial asset investments -
continuing operations 639 659 311
Dividends received from associates and
financial asset investments -
discontinued operations - - 52
Dividends received from associates and
financial asset investments - total Group 639 659 363
Return on capital employed(8) - total
Group 14.6% 36.8% 37.8%
EBITDA/average total capital(7) - total
Group 19.3% 38.0% 40.4%
Net debt to total capital (gearing)(9) 30.8% 37.8% 20.0%
US$ million (unless otherwise stated) 2006 (1) 2005 (1) 2004 (1)
Balance sheet
Intangible and tangible assets 25,632 33,368 35,816
Other non-current assets and
investments(5) 8,258 5,585 5,547
Working capital 3,096 3,538 3,543
Other net current liabilities(5) (1,430) (1,429) (611)
Other non-current liabilities and
obligations(5) (5,826) (8,491) (8,339)
Cash and cash equivalents and
borrowings(6) (3,244) (4,993) (8,243)
Net assets classified as held for sale 641 - -
Net assets 27,127 27,578 27,713
Minority interests (2,856) (3,957) (4,588)
Equity attributable to equity
shareholders of the Company 24,271 23,621 23,125
Total capital(7) 30,451 32,571 35,956
Cash inflows from operations -
continuing operations 9,012 5,963 3,857
Cash inflows from operations -
discontinued operations 1,045 1,302 1,434
Cash inflows from operations - total
Group 10,057 7,265 5,291
Dividends received from associates and
financial asset investments -
continuing operations 251 468 380
Dividends received from associates and
financial asset investments -
discontinued operations 37 2 16
Dividends received from associates and
financial asset investments - total
Group 288 470 396
Return on capital employed(8) - total
Group 32.4% 19.2% 14.6%
EBITDA/average total capital(7) - total
Group 38.7% 26.1% 21.2%
Net debt to total capital (gearing)(9) 12.9% 17.0% 25.4%
(1) Comparatives for 2006, 2005 and 2004 were adjusted in the 2007 Annual
Report to reclassify amounts relating to discontinued operations where
applicable.
(2) Underlying earnings is net profit attributable to equity shareholders,
adjusted for the effect of special items and remeasurements and any related
tax
and minority interests.
(3) EBITDA is operating profit before special items, remeasurements,
depreciation and amortisation in subsidiaries and joint ventures and includes
attributable share of EBITDA of associates.
(4) EBITDA interest cover is EBITDA divided by net finance costs, excluding
other net financial income, exchange gains and losses on monetary assets and
liabilities, amortisation of discounts on provisions, special items and
financial remeasurements, but including attributable share of associates` net
interest expense.
(5) Comparatives for 2008, 2007, 2006 and 2005 have been adjusted in
accordance with IAS 1 Presentation of Financial Statements - Improvements as
described in note 2.
(6) This differs from the Group`s measure of net debt as it excludes the net
debt of disposal groups (2009: $48 million; 2008: $8 million; 2007: $(69)
million; 2006: $(80) million; 2005: nil; 2004: nil), and excludes the impact
of
derivative instruments that provide an economic hedge of assets and
liabilities in net debt (2009: liabilities of $285 million; 2008: liabilities
of $297 million; 2007: assets of $388 million; 2006: assets of $193 million;
2005: nil; 2004: nil). For more detail see note 11 Consolidated cash flow
analysis.
(7) Total capital is net assets excluding net debt (excluding the impact of
derivative instruments).
(8) Return on capital employed is calculated as total operating profit before
impairments for the year divided by the average of total capital less other
investments and adjusted for impairments.
(9) Net debt to total capital is calculated as net debt (excluding the impact
of derivative instruments) divided by total capital less investments in
associates.
Summary by business operation(1)
Revenue(2)
US$ million 2009 2008
Platinum 4,535 6,327
Diamonds 1,728 3,096
Copper 3,967 3,907
Collahuasi 1,411 1,134
Anglo American Sur 1,723 1,965
Anglo American Norte 833 808
Projects and corporate - -
Nickel 348 408
Codemin 157 198
Loma de Niquel 191 210
Projects and corporate - -
Iron Ore and Manganese 3,419 4,099
Kumba Iron Ore 2,816 2,573
Iron Ore Brazil - -
Samancor 603 1,526
Metallurgical Coal 2,239 3,119
Australia 2,239 3,119
Projects and corporate - -
Thermal Coal 2,490 3,051
South Africa 1,747 2,210
South America 743 841
Projects and corporate - -
Other Mining and Industrial 5,908 8,951
Tarmac(5) 2,870 4,399
Skorpion 236 279
Lisheen 208 196
Black Mountain 148 115
Scaw Metals 1,384 1,927
Copebras 320 655
Catalao 184 141
Coal Americas 165 245
Tongaat Hulett/Hulamin(6) 393 817
Namakwa Sands - 177
Projects and corporate - -
Exploration - -
Corporate Activities and
Unallocated Costs 3 6
24,637 32,964
EBITDA (3)
US$ million 2009 2008
Platinum 677 2,675
Diamonds 215 665
Copper 2,254 2,104
Collahuasi 952 682
Anglo American Sur 994 1,265
Anglo American Norte 408 288
Projects and corporate (100) (131
Nickel 28 150
Codemin 49 132
Loma de Niquel 11 48
Projects and corporate (32) (30
Iron Ore and Manganese 1,593 2,625
Kumba Iron Ore 1,562 1,632
Iron Ore Brazil (135) (5)
Samancor 166 998
Metallurgical Coal 706 1,319
Australia 729 1,353
Projects and corporate (23) (34)
Thermal Coal 875 1,200
South Africa 550 814
South America 352 419
Projects and corporate (27) (33
Other Mining and Industrial 878 1,513
Tarmac(5) 313 488
Skorpion 100 132
Lisheen 74 40
Black Mountain 59 37
Scaw Metals 172 309
Copebras (9) 244
Catalao 111 80
Coal Americas 6 42
Tongaat Hulett/Hulamin(6) 73 115
Namakwa Sands - 59
Projects and corporate (21) (33
Exploration (172) (212
Corporate Activities and
Unallocated Costs (124) (192
6,930 11,847
Operating profit/(loss)(4)
US$ million 2009 2008
Platinum 32 2,169
Diamonds 64 508
Copper 2,010 1,892
Collahuasi 880 613
Anglo American Sur 862 1,157
Anglo American Norte 369 255
Projects and corporate (101) (133
Nickel 2 123
Codemin 41 123
Loma de Ni-quel (7) 30
Projects and corporate (32) (30
Iron Ore and Manganese 1,489 2,554
Kumba Iron Ore 1,487 1,583
Iron Ore Brazil (141) (9)
Samancor 143 980
Metallurgical Coal 451 1,110
Australia 474 1,144
Projects and corporate (23) (34)
Thermal Coal 721 1,078
South Africa 442 736
South America 305 375
Projects and corporate (26) (33
Other Mining and Industrial 506 1,082
Tarmac(5) 101 229
Skorpion 43 88
Lisheen 73 22
Black Mountain 59 26
Scaw Metals 131 274
Copebras (40) 217
Catalao 106 78
Coal Americas (8) 29
Tongaat Hulett/Hulamin(6) 62 92
Namakwa Sands - 59
Projects and corporate (21) (32
Exploration (172) (212
Corporate Activities and
Unallocated Costs (146) (219
4,957 10,085
Underlying
earnings
US$ million 2009 2008
Platinum 44 1,256
Diamonds (90) 256
Copper 1,201 1,044
Collahuasi 663 367
Anglo American Sur 444 699
Anglo American Norte 197 113
Projects and corporate (103) (135)
Nickel (13) (35)
Codemin 24 94
Loma de Niquel 17 (97)
Projects and corporate (54) (32)
Iron Ore and Manganese 571 1,150
Kumba Iron Ore 490 523
Iron Ore Brazil (119) (31)
Samancor 200 658
Metallurgical Coal 322 764
Australia 345 797
Projects and corporate (23) (33)
Thermal Coal 517 754
South Africa 328 543
South America 215 243
Projects and corporate (26) (32)
Other Mining and Industrial 403 734
Tarmac(5) 81 173
Skorpion 40 85
Lisheen 67 15
Black Mountain 60 28
Scaw Metals 70 165
Copebras 7 105
Catalao 77 70
Coal Americas (12) 25
Tongaat Hulett/Hulamin(6) 31 53
Namakwa Sands - 46
Projects and corporate (18) (31)
Exploration (167) (200)
Corporate Activities and
Unallocated Costs (219) (486)
2,569 5,237
(1) Due to the portfolio and management structure changes announced in October
2009, the segments have changed from those reported at 31 December 2008.
Comparatives have been reclassified to align with current year presentation.
The segment results include an allocation of corporate costs. A reconciliation
of operating profit and underlying earnings by segment as reported in the 2008
Annual Report to the amounts reflected above is shown in the `Reconciliation
of earnings by segment`.
(2) Revenue includes the Group`s attributable share of revenue of joint
ventures and associates. Revenue for copper and zinc operations is shown after
deduction of treatment charges and refining charges (TC/RCs).
(3) EBITDA is operating profit before special items, remeasurements,
depreciation and amortisation in subsidiaries and joint ventures and includes
attributable share of EBITDA of associates.
(4) Operating profit includes operating profit before special items and
remeasurements from subsidiaries and joint ventures and attributable share of
operating profit (before interest, tax, minority interests, special items and
remeasurements) of associates.
(5) Tarmac is made up of the former Industrial Minerals segment and Yang
Quarry, which was previously included in the Coal segment.
(6) The Group`s investments in Tongaat Hulett and Hulamin were disposed of in
August 2009 and July 2009, respectively.
Reconciliation of earnings by segment
The following tables reconcile operating profit and underlying earnings by
segment as reported in the 2008 Annual Report to the comparative amounts
reported in notes 3 and 4 respectively. The adjustments reflect the portfolio
and management changes announced in October 2009.
Operating profit
Pre- Structural
US$ million restructuring changes
2008
Platinum 2,226 -
Diamonds 508 -
Base Metals 2,505
Copper 2,017 (67)
Codemin, Loma de Niquel 153 (19)
Catalao, Namakwa Sands,
Copebras, Zinc 490 (490)
Other (155) 90
Ferrous Metals and Industries 2,935
Kumba Iron Ore, Iron Ore Brazil,
Samancor 2,590 -
Scaw, Tongaat Hulett/Hulamin 366 (366)
Other (21) 2
Coal 2,240
Australia 1,144 (5)
South Africa 736 372
South America 396 (396)
Canada 8 (8)
Projects and corporate (44) 16
Industrial Minerals 228 881
Exploration (212) -
Corporate Activities and
Unallocated Costs (345) (10)
10,085 -
Divisional cost Corporate cost
US$ million apportionment allocation
2008
Platinum - (57)
Diamonds - -
Base Metals
Copper (5) (53)
Codemin, Loma de Niquel (5) (6)
Catalao, Namakwa Sands,
Copebras, Zinc - -
Other 65 -
Ferrous Metals and Industries
Kumba Iron Ore, Iron Ore Brazil,
Samancor - (36)
Scaw, Tongaat Hulett/Hulamin - -
Other 19 -
Coal
Australia - (29)
South Africa (4) (26)
South America - -
Canada - -
Projects and corporate 28 -
Industrial Minerals (6) (21)
Exploration - -
Corporate Activities and
Unallocated Costs (92) 228
- -
As reported
US$ million (note 3)
2008
Platinum 2,169 Platinum
Diamonds 508 Diamonds
Base Metals
Copper 1,892 Copper
Codemin, Loma de Niquel 123 Nickel
Catalao, Namakwa Sands,
Copebras, Zinc -
Other -
Ferrous Metals and Industries
Kumba Iron Ore, Iron Ore Brazil,
Samancor 2,554 Iron Ore and Manganese
Scaw, Tongaat Hulett/Hulamin -
Other -
Coal
Australia 1,110 Metallurgical Coal
South Africa 1,078 Thermal Coal
South America -
Canada -
Projects and corporate -
Industrial Minerals 1,082 Other Mining and Industrial
Exploration (212) Exploration
Corporate Activities and Corporate Activities and
Unallocated Costs (219) Unallocated Costs
10,085
Underlying earnings
Pre- Structural
US$ million restructuring changes
2008
Platinum 1,313 -
Diamonds 256 -
Base Metals 1,369
Copper 1,171 (69)
Codemin, Loma de Niquel (3) (21)
Catalao, Namakwa Sands,
Copebras, Zinc 349 (349)
Other (148) 83
Ferrous Metals and Industries 1,396
Kumba Iron Ore, Iron Ore Brazil,
Samancor 1,186 -
Scaw, Tongaat Hulett/Hulamin 218 (218)
Other (8) (11)
Coal 1,581
Australia 797 (4)
South Africa 543 241
South America 257 (257)
Canada 11 (11)
Projects and corporate (27) (1)
Industrial Minerals 173 588
Exploration (200) -
Corporate Activities and
Unallocated Costs (651) 29
5,237 -
Divisional cost Corporate cost
US$ million apportionment allocation
2008
Platinum - (57)
Diamonds - -
Base Metals
Copper (5) (53)
Codemin, Loma de Niquel (5) (6)
Catalao, Namakwa Sands,
Copebras, Zinc - -
Other 65 -
Ferrous Metals and Industries
Kumba Iron Ore, Iron Ore Brazil,
Samancor - (36)
Scaw, Tongaat Hulett/Hulamin - -
Other 19 -
Coal
Australia - (29)
South Africa (4) (26)
South America - -
Canada - -
Projects and corporate 28 -
Industrial Minerals (6) (21)
Exploration - -
Corporate Activities and
Unallocated Costs (92) 228
- -
As reported
US$ million (note 4)
2008
Platinum 1,256 Platinum
Diamonds 256 Diamonds
Base Metals
Copper 1,044 Copper
Codemin, Loma de Niquel (35) Nickel
Catalao, Namakwa Sands,
Copebras, Zinc -
Other -
Ferrous Metals and Industries
Kumba Iron Ore, Iron Ore Brazil,
Samancor 1,150 Iron Ore and Manganese
Scaw, Tongaat Hulett/Hulamin -
Other -
Coal
Australia 764 Metallurgical Coal
South Africa 754 Thermal Coal
South America -
Canada -
Projects and corporate -
Industrial Minerals 734 Other Mining and Industrial
Exploration (200) Exploration
Corporate Activities and Corporate Activities and
Unallocated Costs (486) Unallocated Costs
5,237
For further information, please contact:
United Kingdom
James Wyatt-Tilby, Media Relations
Tel: +44 (0)20 7968 8759
Caroline Metcalfe, Investor Relations
Tel: +44 (0)20 7968 2192
Leisha Wemyss, Investor Relations
Tel: +44 (0)20 7968 8607
South Africa
Pranill Ramchander, Media Relations
Tel: +27 (0)11 638 2592
Anna Poulter, Investor Relations
Tel: +27 (0)11 638 2079
Anglo American plc is one of the world`s largest mining groups. With its
subsidiaries, joint ventures and associates, it is a global leader in platinum
group metals and diamonds, with significant interests in copper, iron ore,
metallurgical coal, nickel and thermal coal, as well as a divestment portfolio
of other mining and industrial businesses. The Group is geographically
diverse, with operations in Africa, Europe, South and North America, Australia
and Asia.
Webcast of presentation:
A live webcast of the results presentation, starting at 9.00am UK time on 19
February, can be accessed through the Anglo American website at
www.angloamerican.co.uk.
Note: Throughout this results announcement, `USD` denotes United States
dollars and `cents` refers to United States cents; operating profit includes
attributable share of associates` operating profit and is before special items
and remeasurements, unless otherwise stated; special items and remeasurements
are defined in note 6 to the Condensed financial statements. Underlying
earnings unless otherwise stated 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 includes attributable share of EBITDA of associates. 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
note 13. Tonnes are metric tons, `Mt` denotes million tonnes and `kt` denotes
thousand tonnes unless otherwise stated.
Forward-looking statements
This announcement includes forward-looking statements. All statements other
than statements of historical facts included in this announcement, including,
without limitation, those regarding Anglo American`s financial position,
business and acquisition strategy, plans and objectives of management for
future operations (including development plans and objectives relating to
Anglo American`s products, production forecasts and reserve and resource
positions), are forward-looking statements. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of Anglo American, or
industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements.
Such forward-looking statements are based on numerous assumptions regarding
Anglo American`s present and future business strategies and the environment in
which Anglo American will operate in the future. Important factors that could
cause Anglo American`s actual results, performance or achievements to differ
materially from those in the forward-looking statements include, among others,
levels of actual production during any period, levels of global demand and
commodity market prices, mineral resource exploration and development
capabilities, recovery rates and other operational capabilities, the
availability of mining and processing equipment, the ability to produce and
transport products profitably, the impact of foreign currency exchange rates
on market prices and operating costs, the availability of sufficient credit,
the effects of inflation, political uncertainty and economic conditions in
relevant areas of the world, the actions of competitors, activities by
governmental authorities such as changes in taxation or safety, health,
environmental or other types of regulation in the countries where Anglo
American operates, conflicts over land and resource ownership rights and such
other risk factors identified in Anglo American`s most recent Annual Report.
Forward-looking statements should, therefore, be construed in light of such
risk factors and undue reliance should not be placed on forward-looking
statements. These forward-looking statements speak only as of the date of this
announcement. Anglo American expressly disclaims any obligation or undertaking
(except as required by applicable law, the City Code on Takeovers and Mergers
(the "Takeover Code"), the UK Listing Rules, the Disclosure and Transparency
Rules of the Financial Services Authority, the Listings Requirements of the
securities exchange of the JSE Limited in South Africa, the SWX Swiss
Exchange, the Botswana Stock Exchange and the Namibian Stock Exchange and any
other applicable regulations) to release publicly any updates or revisions to
any forward-looking statement contained herein to reflect any change in Anglo
American`s expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.
Nothing in this announcement should be interpreted to mean that future
earnings per share of Anglo American will necessarily match or exceed its
historical published earnings per share.
Certain statistical and other information about Anglo American included in
this announcement is sourced from publicly available third party sources. As
such it presents the views of those third parties, but may not necessarily
correspond to the views held by Anglo American.
Catherine Marshall
Companies Secretary
Anglo American plc
19 February 2010
Sponsor: UBS South Africa (Pty) Ltd
Date: 19/02/2010 09:00:02 Produced by the JSE SENS Department.
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