Anglo geared for higher production


Anglo geared for higher production

Published Date: 2019-12-11 | Source: Stephen Gunnion | Author: Stephen Gunnion

Anglo geared for higher production

While the diversified miner is targeting a strong rise in production, it has trimmed its short-term guidance for diamonds, coal and iron ore.

Anglo American plans to grow production by as much as a quarter by 2023 as it upgrades its portfolio of mining assets and brings high quality growth projects online. And the diversified miner says the restructuring of its portfolio over the last six years already places it amongst the most cost efficient miners in the world.

Updating investors on improvements to its operational and financial performance improvements, Anglo said production volumes for the year would be higher, while unit costs were expected to reduce by 5%. That's despite subsidiary Anglo American Platinum warning that it would miss its cost guidance for the year, exacerbated by the recent load shedding. Anglo said production was expected to increase by 3% next year, with cost inflation largely absorbed by productivity and cost improvements. It expected to meet a $3-4 billion target of incremental annual EBITDA (earnings before interest, tax, depreciation and amortisation) between 2017 and 2022.

However, while the outlook for copper and palladium production had improved, it trimmed its guidance for diamonds, coal and iron ore from subsidiary Kumba Iron Ore for the next two years.

Finance director Stephen Pearce said share buybacks of up to $1 billion would result in a natural increase in net debt, but it would remain within a comfortable level of under 1.5x EBITDA. He said the company had returned $4.2 billion to shareholders over the last three years, while substantially reducing net debt.

CEO Mark Cutifani said new projects such as the Quellaveco copper mine in Peru would help support growing volumes, while new technologies would also drive a "step change" in its performance.

Anglo's shares closed 1.6% up at R406.50 yesterday.

Similar Stories