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Resilient, agile Anglo American eyes 35% growth over next decade

Anglo American’s chief executive Mark Cutifani said on Friday that Anglo was a resilient and agile business set to deliver 35 percent growth over the next decade at an attractive 50 percent margin. Photo: File

Anglo American’s chief executive Mark Cutifani said on Friday that Anglo was a resilient and agile business set to deliver 35 percent growth over the next decade at an attractive 50 percent margin. Photo: File

Published Dec 13, 2021

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Anglo American’s chief executive Mark Cutifani said on Friday that Anglo was a resilient and agile business set to deliver 35 percent growth over the next decade at an attractive 50 percent margin.

“We are also increasing our near-term performance improvement target, to $3.5 billion (R55.4bn) to $4.5bn by 2023, as we accelerate the delivery of our P101 and technology programmes, while also bringing growth projects on stream,” said Cutifani.

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This as the firm reported a 7 percent increase in 2021 production on strong platinum group metals (PGMs) performance and higher rough diamond demand.

So far, 2021 has been a year of mega returns for Anglo shareholders thanks to the rally in metal prices.

Stephen Pearce, the financial director of Anglo American, said Anglo had delivered $10.3bn in cash returns to shareholders since 2017, and $4bn in the second half of 2021 alone.

“Our balanced approach is supporting sequenced investment in value-accretive growth and considerable long-term business improvement, alongside attractive shareholder returns,” Pearce said.

Anglo American Platinum (Amplats) declared a record interim cash dividend of R46.6bn during the half year ended June 2021, representing a record 100 percent payout ratio of headline earnings. Amplats shot the lights out with a strong balance sheet and rode the wave of surging metal prices and an improved operational performance.

Shareholders have also had good returns from Kumba Iron Ore and were rewarded with more than R23bn in dividends, 100 percent of its earnings for the half year to June.

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The positive sentiment on the back of positive jewellery diamond demand in the US has been a tailwind for De Beers and a reprieve following the Covid-19 induced slump.

The company accelerated its focus on reducing its carbon footprint with the de-merger of its South African thermal coal assets into an independent entity called Thungela Resources.

Anglo is also investing in decarbonisation projects and earlier this year announced its ambition to halve Scope 3 emissions by 2040.

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“We are clear that climate change is the defining challenge of our time, and we have a crucial role to play in supporting the transition to a low-carbon economy by producing many of the metals and minerals that enable decarbonised energy and transport,” said Cutifani.

The group also said on Friday that it was expecting to invest $700 million in the Woodsmith polyhalite project in the UK.

Anglo American’s share price closed 0.16 percent higher on Friday, to R620.01.

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BUSINESS REPORT ONLINE

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