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Annual financial report and notice of AGM
Anglo American plc (the “Company”)
Registered office: 20 Carlton House Terrace, London SW1Y 5AN
Registered number: 3564138 (incorporated in England and Wales)
Legal Entity Identifier: 549300S9XF92D1X8ME43
ISIN: GBOOB1XZS820
JSE Share Code: AGL
NSX Share Code: ANM
9 March 2020
ANNUAL FINANCIAL REPORT AND NOTICE OF AGM
In accordance with Listing Rule 9.6 and Disclosure Guidance and Transparency Rule (“DTR”) 4.1, the
Company announces that the following documents are today published on its website:
www.angloamerican.com
- Integrated Annual Report for the year ended 31 December 2019 (the “2019 Annual Report”)
- Notice of the 2020 Annual General Meeting to be held on 5 May 2020
- Sustainability Report 2019
The 2019 Annual Report and Notice of the 2020 Annual General Meeting (and proxy form for the
2020 Annual General Meeting) have been submitted to the Financial Conduct Authority via the
National Storage Mechanism and will shortly be made available for inspection at
www.morningstar.co.uk/uk/NSM.
The above mentioned documents (except for the Proxy form) are available on our website at
www.angloamerican.com/investors/annual-reporting and
www.angloamerican.com/investors/shareholder-information/agm/agm2020 respectively, and will be
posted to shareholders on 16 March 2020. Shareholders can obtain additional copies of the proxy
form from our Registrar, Equiniti Limited at Aspect House, Spencer Road, Lancing, West Sussex
BN99 6DA or view online at www.shareview.co.uk.
This announcement should be read in conjunction with the Company’s announcement issued on
20 February 2020. Together these constitute the material required by DTR 6.3.5 to be communicated
to the media in full unedited text through a Regulatory Information Service. This material is not a
substitute for reading the Company’s 2019 Annual Report. Page references and references to notes
to the financial statements, refer to those contained in the 2019 Annual Report.
An indication of the important events that occurred in 2019 and their impact on the consolidated
financial statements and the consolidated financial statements themselves were announced to the
London Stock Exchange on 20 February 2020, forming part of the Preliminary Results announcement
for the year ended 31 December 2019. Additional content forming part of the management report are
set out in the appendices to this announcement.
Clare Davage
Deputy Company Secretary
Anglo American is a leading global mining company and our products are the essential ingredients in
almost every aspect of modern life. Our portfolio of world-class competitive mining operations and
undeveloped resources provides the metals and minerals that enable a cleaner, greener, more
sustainable world and that meet the fast growing consumer-driven demands of the world’s developed
and maturing economies. With our people at the heart of our business, we use innovative practices
and the latest technologies to discover new resources and mine, process, move and market our
products to our customers around the world – safely, responsibly and sustainably.
As a responsible miner – of diamonds (through De Beers), copper, platinum group metals, iron ore, coal
and nickel – we are the custodians of what are precious natural resources. We work together with our
business partners and diverse stakeholders to unlock the sustainable value that those resources
represent for our shareholders, the communities and countries in which we operate, and for society as
a whole. Anglo American is re-imagining mining to improve people’s lives.
www.angloamerican.com
Forward-looking statements:
This announcement includes forward-looking statements. All statements other than statements of historical facts included in
this document, including, without limitation, those regarding Anglo American’s financial position, business, acquisition and
divestment strategy, dividend policy, plans and objectives of management for future operations (including development plans
and objectives relating to Anglo American’s products, production forecasts and Ore Reserve and Mineral Resource estimates),
are forward-looking statements. By their nature, 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 availability of transportation infrastructure, 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 permitting and 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 the section of this document titled ‘Managing
Risk Effectively’. 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
document. 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 Conduct Authority, the Listings Requirements of the securities exchange of the JSE Limited in South Africa, the SIX
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. Certain statistical and other information about Anglo American included in this document is sourced from
publicly available third-party sources. As such, it has not been independently verified and presents the views of those third
parties, though these may not necessarily correspond to the views held by Anglo American and Anglo American expressly
disclaims any responsibility for, or liability in respect of, such third party information.
APPENDIX A – PRINCIPAL RISKS
We define a principal risk as a risk or combination of risks that would threaten the business model,
future performance, solvency or liquidity of Anglo American. In addition to these principal risks, we
continue to be exposed to other risks related to currency, inflation, community relations, environment,
litigation and regulatory proceedings, changing social expectations, infrastructure and human
resources. These risks are subject to our normal procedures to identify, implement and oversee
appropriate mitigation actions, supported by internal audit work to provide assurance over the status
of controls or mitigating actions. These principal risks are considered over the next three years as a
minimum, but we recognise that many of them will be relevant for a longer period.
Principal risks 2- 11 on pages 46 – 49
CATASTROPHIC RISKS
We also face certain risks that we deem catastrophic risks. These are very high severity, very low
likelihood events that could result in multiple fatalities or injuries, an unplanned fundamental change
to strategy or the way we operate and have significant financial consequences. We do not consider
likelihood when assessing these risks, as the potential impacts mean these risks must be treated as a
priority. Catastrophic risks are included as principal risks.
For more on catastrophic risks see page 46
RISK APPETITE
We define risk appetite as ‘the nature and extent of risk Anglo American is willing to accept in relation
to the pursuit of its objectives’. We look at risk appetite from the context of severity of the
consequences should the risk materialise, any relevant internal or external factors influencing the risk,
and the status of management actions to mitigate or control the risk. A scale is used to help determine
the limit of appetite for each risk, recognising that risk appetite will change over time.
If a risk exceeds appetite, it will threaten the achievement of objectives and may require a change to
strategy. Risks that are approaching the limit of the Group’s risk appetite may require management
actions to be accelerated or enhanced to ensure the risks remain within appetite levels.
For catastrophic and operational risks, our risk appetite for exceptions or deficiencies in the status of
our controls that have safety implications is very low. Our internal audit programme evaluates these
controls with technical experts at operations and the results of that audit work will determine
the risk appetite evaluation, along with the management response to any issues identified.
Further details on the risk management and internal control systems and the review of their
effectiveness is provided on page 108
1. CATASTROPHIC RISKS
We are exposed to the Impact: Multiple fatalities and Risk movement: No change.
following risks we deem as injuries, damage to assets,
potentially catastrophic: environmental damage, Risk appetite: Tailings dam
tailings dam failure; slope production loss, reputational failure, mineshaft failure and slope
wall failure; mineshaft damage and loss of licence to and underground excavation
failure; and fire and operate. Financial costs failure risks are operating within
explosion. associated with recovery and the limits of our appetite. Fire and
liability claims may be explosion risks are currently
Root cause: Any of these risks significant. Regulatory issues operating outside of our risk
may result from inadequate may result and community appetite, but actions are in
design or construction, adverse relations may be affected. progress and/or awaiting
geological conditions, independent verification to bring
shortcomings in operational Mitigation: Technical these risks back within our risk
performance, natural events standards exist that provide appetite during 2020.
such as seismic activity or minimum criteria for design
flooding, and failure of and operational performance Commentary: These very high
structures or machinery and requirements, the impact but very low frequency risks
equipment. implementation of which is are treated with the highest
regularly inspected by priority.
technical experts. Additional
assurance work is conducted
to assess the adequacy of
controls associated with these
risks.
2. PRODUCT PRICES
Global macro-economic Impact: Low product prices Risk movement: Increased since
conditions leading to can result in lower levels of 2018.
sustained low product prices cash flow, profitability and
and/or volatility. valuation. Debt costs may rise Risk appetite: Operating within
Root cause: The most owing to ratings agency the limits of our appetite.
significant factors contributing downgrades and the possibility
to this risk at present are a of restricted access to funding. Commentary: We believe macro-
continued slowdown in growth The Group may be unable to economic uncertainty has
in China and other emerging complete any divestment increased, primarily as a result of
markets, low growth rates in programme within the desired tensions between the US and
developed economies and an timescales or achieve China. This may result in price
oversupply of commodities into expected values. The capacity volatility in the products mined,
the market. Other factors such to invest in growth projects is and marketed, by Anglo American.
as weak regional economies, constrained during periods of
fiscal crises and conflict can low product prices – which
also influence the economic may, in turn, affect future
environment and contribute to performance.
weak product prices.
Mitigation: The successful
delivery of cash improvement
and operational performance
targets remains the key
mitigation strategy for this risk.
Regular updates of economic
analysis and product price
assumptions are discussed
with executive management
and the Board.
3. SAFETY
Failure to eliminate fatalities. Impact: Loss of life, workplace Risk movement: No change.
injuries and safety-related
Root cause: Inability to stoppages all immediately Risk appetite: Operating within
eliminate fatalities will result affect production, while, over the limits of our appetite.
from management the longer term, such factors
interventions and training are also a threat to our licence Commentary: During 2019, there
initiatives failing to translate to operate. were four work-related fatalities in
into behavioural change by all our managed operations,
employees and contractors. compared with five in 2018. This is
Non-compliance with critical Mitigation: All operations still an unacceptable level.
controls is a common failure in continue to implement safety Management remains committed
safety incidents. improvement plans, with a to the elimination of fatalities.
focus on: effective
management of critical
controls required to manage
significant safety risks; learning
from high potential incidents
and hazards; embedding a
safety culture; and leadership
engagement and
accountability. An elimination
of fatalities taskforce is
assessing safety risks at all
operations to establish further
actions necessary to improve
safety performance.
4. POLITICAL AND REGULATORY
Uncertainty and adverse Impact: Uncertainty over Risk movement: No change.
changes to mining industry future business conditions
regulation, legislation or tax leads to a lack of confidence in Risk appetite: Operating within
rates can occur in any making investment decisions, the limits of our appetite.
country in which we operate. which can influence future
financial performance. Commentary: Global economic
Root cause: The Group has Increased costs can be conditions can have a significant
no control over political acts, incurred through additional impact on countries whose
actions of regulators, or regulations or resource taxes, economies are exposed to
changes in local tax rates. Our while the ability to execute commodities, placing greater
licence to operate through strategic initiatives that reduce pressure on governments to find
mining rights is dependent on a costs or divest assets may also alternative means of raising
number of factors, including be restricted, all of which may revenues, and increasing the risk
compliance reduce profitability and affect of social and labour unrest. These
with regulations. future performance. Political factors could increase the political
instability can also result in civil risks faced by the Group.
unrest and nullification or non-
renewal of existing
agreements, mining permits,
sales agreements or leases.
These may adversely affect the
Group’s operations or
performance of those
operations.
Mitigation: Anglo American
has an active engagement
strategy with governments,
regulators and other
stakeholders within the
countries in which we operate,
or plan to operate, as well as at
an international level. We
assess portfolio capital
investments against political
risks and avoid or minimise
exposure to jurisdictions with
unacceptable risk levels. We
actively monitor regulatory and
political developments at a
national level, as well as global
themes and international policy
trends, on a continuous basis.
See pages 10-11 for more
detail on how we engage with
our key stakeholders.
5. CORRUPTION
Bribery or other forms of Impact: Potential criminal Risk movement: No change.
corruption committed by an investigations, adverse media
employee or agent of Anglo attention and reputational
American. damage. A possible negative Risk appetite: Operating within
impact on licensing processes the limits of our appetite.
Root cause: Anglo American and valuation.
has operations in some Commentary: Our anti-bribery
countries where there is a Mitigation: A comprehensive programme was strengthened in
relatively high risk of anti-bribery and corruption 2019 as we implemented
corruption. policy and programme, recommendations from an external
including risk assessment, review conducted in 2018.
training and awareness, with
active monitoring, is in place.
6. CYBER SECURITY
Loss or harm to our Impact: Theft or loss of Risk movement: Increased since
technical infrastructure and intellectual property, financial 2018.
the use of technology within losses, increased costs and
the organisation from damage to reputation. Risk appetite: Operating within
malicious or unintentional the limits of our appetite.
sources. Mitigation: We have employed
a specialist third party to Commentary: Cyber security risk
Root cause: The number and oversee our network security. was re-assessed and was deemed
sophistication of cyber-criminal We have achieved UK Cyber to have increased in 2019, owing
attacks are increasing. Essentials Certification and an to the greater sophistication of
ongoing cyber awareness attempted cyber attacks. While our
programme is in place across control environment continued to
the Group. strengthen, and no attack was
successful on Anglo American’s
network, other organisations have
been targeted, resulting in
significant interruption to their
normal business operations.
7. FUTURE DEMAND FOR DIAMONDS
Demand for diamonds Impact: Potential loss of rough Risk movement: No change.
affected as production and diamond sales, leading to a
marketing of synthetics negative impact on revenue, Risk appetite: Operating within
increases. cash flow, profitability and the limits of our appetite.
value.
Root cause: Technological Commentary: We believe that
developments have led to the Mitigation: While research production of, and demand for,
production of higher quality underlines consumers’ disclosed gem synthetics over the
gem synthetics. Producers and continued desire for natural natural business has increased
distributors of this material may diamonds owing to their owing to the factors described;
attempt to sell fraudulently into inherent value, emotional however, De Beers’ mitigation
the diamond pipeline connection and rarity, De strategies have matured over 2019
(undisclosed) or market and Beers has a comprehensive to enable us to respond to this
sell as gem synthetics strategy to mitigate the risk of development.
(disclosed), with manufacturing both the entry of undisclosed
and distribution sources for the synthetics into the pipeline and
latter increasing. the potentially misleading
marketing of disclosed
synthetics.
In addition, measures to
emphasise, protect and
enhance the inherent value of
natural diamonds include:
increased marketing
investment, including through
the Diamond Producers
Association, e.g. reasserting
the emotional symbolism of
diamonds through the Real is
Rare campaign; investment in
blockchain to give consumers
confidence as to the natural
provenance of a diamond;
investment in bespoke
technology to readily detect all
synthetics; and the launch of
Lightbox™ to reinforce with
consumers the inherent
difference between synthetic
and natural diamonds.
8. OPERATIONAL PERFORMANCE
Unplanned operational Impact: Inability to achieve Risk movement: No change.
stoppages impacting production, cash flow or
production. profitability targets. There are
potential safety-related matters Risk appetite: Operating within
Root cause: Unplanned and associated with unplanned the limits of our appetite.
unexpected operational issues operational stoppages, along
will affect delivery of the with a loss of investor Commentary: During 2019, there
underlying EBITDA target. confidence. were no unplanned operational
Failure to implement the stoppages that had a material
Operating Model, manage cost Mitigation: Implementation of impact on production.
inflation or maintain critical our Operating Model,
plant, machinery and supported by operational risk
infrastructure, will affect our management and assurance
performance levels. We are processes, is the key mitigation
also exposed to risks of against this risk. Compliance
interruptions of power supply with our technical standards
and the failure of third-party- will prevent certain operational
owned and -operated risks occurring. Regular
infrastructure, e.g. rail networks tracking and monitoring of
and ports. Our operations may progress against the
also be exposed to natural underlying EBITDA targets
catastrophes or extreme is undertaken.
weather.
9. WATER
Inability to obtain or sustain Impact: Loss of production Risk movement: No change.
the level of water security and inability to achieve cash
needed to support flow or volume improvement
operations over the current targets. Damage to Risk appetite: Operating within
life of mine plan or future stakeholder relationships or the limits of our appetite.
growth options. reputational damage can result
from failure to manage this Commentary: This continues to
Root cause: Poor water critical resource. be a risk to the majority of our
resource management or operations
inadequate onsite storage, Mitigation: Various projects
combined with reduced water have been implemented at
supply at some operations as operations most exposed to
weather patterns change, can this risk, focused on: water
affect production. Water is a efficiency; water security; water
shared resource with local treatment; and discharge
communities and permits to management; as well as
use water in our operations are alternative supplies. New
at risk if we do not manage the technologies are being
resource in a sustainable developed that will reduce
manner. water demand.
10. FUTURE DEMAND FOR PGMS
Longer term demand for Impact: A negative impact on Risk movement: No change.
PGMs is affected by revenue, cash flow, profitability
fundamental shifts in market and valuation.
forces. Risk appetite: Operating within
Mitigation: Our PGMs the limits of our appetite
Root cause: Longer term business has a strategy to
demand is at risk from grow PGM demand in Commentary: We see this as a
declining internal combustion industrial and jewellery sectors longer term threat to the business
engine manufacturing, and a through marketing and
switch to battery operated investment initiatives in
vehicles instead of fuel cell research, product development
electric vehicles, which and market development
continue to use higher volumes opportunities, particularly in the
of PGMs. automotive sector and in Indian
and Chinese jewellery markets
11. EVOLVING STAKEHOLDER REQUIREMENTS AND EXPECTATIONS
Failure to align the business Impact: Potential loss of Risk movement: A new principal
with evolving stakeholder stakeholder confidence leading risk.
expectations regarding ESG to negative impact on value,
matters, particularly linked to cash flow and profitability.
climate change, fossil fuels Risk appetite: Operating within
and carbon emissions, may Mitigation: We have the limits of our appetite
result in a reduced valuation articulated our climate change
of the company and/or failure plans, policies and progress Commentary: This is a new
to be viewed as a trusted and engage with key principal risk in 2019.
corporate leader. stakeholders to ensure they
understand them. Our
Root cause: Stakeholder Sustainable Mining Plan
requirements and expectations includes operation-specific and
continue to evolve, and Group targets for the reduction
different stakeholder groups in carbon emissions, power
can have opposing and water usage. For more
requirements and expectations information on our climate
of us. For example, an change policy, see page 33,
increasing number of financial and for further information on
stakeholders are adopting how we engage with key
stricter investment criteria with stakeholders, see pages 10-
regards to fossil fuels and 11.
carbon emissions. This is
having a growing impact on
industries that are major
producers, and users, of fossil
fuels and which are major
emitters of CO2 and other
greenhouse gases. Yet such
industries, particularly in poor
and developing countries, are
often a significant
development player, helping to
fast-track such countries’
economic progress, providing
employment, along with
valuable earnings and foreign
exchange.
APPENDIX B – RELATED PARTY TRANSACTIONS
35. RELATED PARTY TRANSACTIONS
The Group has related party relationships with its subsidiaries, joint operations, associates and joint
ventures (see notes 34 and 35). Members of the Board and the Group Management Committee are
considered to be related parties.
The Company and its subsidiaries, in the ordinary course of business, enter into various sale,
purchase and service transactions with joint operations, associates, joint ventures and others in which
the Group has a material interest. These transactions are under terms that are no more or less
favourable to the Group than those arranged with third parties.
Associates Joint ventures Joint operations
US$ million 2019 2018 2019 2018 2019 2018
Transactions with related parties
Sale of goods and services – 1 – – 163 184
Purchase of goods and services (20) (382) (170) (50) (2,893) (3,266)
Balances with related parties
Trade and other receivables from related parties 3 2 – 5 17 16
Trade and other payables to related parties (5) (44) (31) (7) (128) (97)
Loans receivable from related parties – – 230 211 – –
Balances and transactions with joint operations or joint operation partners represent the portion that
the Group does not have the right to offset against the corresponding amount recorded by the
respective joint operations. These amounts primarily relate to purchases by De Beers and Platinum
Group Metals from their joint operations in excess of the Group’s attributable share of their
production.
Loans receivable from related parties are included in Financial asset investments on the Consolidated
balance sheet.
Remuneration and benefits received by directors are disclosed in the Remuneration report.
Remuneration and benefits of key management personnel, including directors, are disclosed in note
26. Information relating to pension fund arrangements is disclosed in note 27.
APPENDIX C – STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the Annual Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. The
directors are required to prepare the Group financial statements in accordance with International
Financial Reporting Standards (IFRS), as adopted by the European Union and Article 4 of the IAS
regulation, and have elected to prepare the parent Company financial statements in accordance with
Financial Reporting Standard 101 Reduced Disclosure Framework. The directors must not approve
the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that period.
In preparing the parent Company financial statements, the directors are required to:
- Select suitable accounting policies and then apply them consistently
- Make judgements and accounting estimates that are reasonable and prudent
- State whether Financial Reporting Standard 101 Reduced Disclosure Framework has been
followed, subject to any material departures disclosed and explained in the financial
statements
- Prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the Company will continue in business.
In preparing the Group financial statements, IAS 1 requires that directors:
- Properly select and apply accounting policies
- Present information, including accounting policies, in a manner that provides relevant,
reliable, comparable and understandable information
- Provide additional disclosures when compliance with the specific requirements in IFRS is
insufficient to enable users to understand the impact of particular transactions, other events
and conditions on the entity’s financial position and financial performance
- Make an assessment of the Group’s ability to continue as a going concern.
The directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the Group’s transactions, disclose with reasonable accuracy at any time the financial position
of the Company and enable them to ensure that the financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial
information included on the Group’s website. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
RESPONSIBILITY STATEMENT
for the year ended 31 December 2019
We confirm that to the best of our knowledge:
(a) The financial statements, prepared in accordance with the applicable set of accounting standards,
give a true and fair view of the assets, liabilities, financial position and profit of Anglo American plc
and the undertakings included in the consolidation taken as a whole
(b) The strategic report includes a fair review of the development and performance of the business
and the position of Anglo American plc and the undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and uncertainties that they face
(c) The Annual Report and financial statements, taken as a whole, are fair, balanced and
understandable and provide the information necessary for shareholders to assess the Group’s
performance, business model and strategy.
By order of the Board
Mark Cutifani Stephen Pearce
Chief Executive Finance Director
The Company has a primary listing on the Main Market of the London Stock Exchange and secondary
listings on the Johannesburg Stock Exchange, the Botswana Stock Exchange, the Namibia Stock
Exchange and the SIX Swiss Exchange.
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 09-03-2020 11:00:00
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