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AGL - Anglo American Plc - Half year financial report for the six months ended
30 June 2010
Anglo American Plc
Incorporated in the United Kingdom
(Registration number: 3564138)
Short name: Anglo
Share code: AGL
ISIN number: GB00B1XZS820
HALF YEAR FINANCIAL REPORT
for the six months ended 30 June 2010
NEWS RELEASE
30 July 2010
Anglo American announces operating profit of USD4.4 billion and reinstates
dividend
Financial highlights
Group operating profit (1) of USD4.4 billion (USD4.1 billion from core
operations(2))
Underlying earnings (3) of USD2.2 billion and underlying earnings per share
of USD1.84
Profit attributable to equity shareholders of USD2.1 billion
Net debt (4) at USD10.9 billion at 30 June 2010
Committed undrawn bank facilities and cash of over USD12 billion at 30 June
2010
Operational performance and strategic delivery
Asset optimisation and procurement programmes ahead of expectations, with run
rate of USD1 billion from core businesses for the six month period
- Asset optimisation: USD796 million, including one-off benefits
- Procurement: USD205 million
Platinum operational turnaround to position in lower half of cost curve -
cash operating costs controlled; full year production of 2.5 million ounces on
track; labour productivity increased 11%
USD2.2 billion of expected proceeds from agreed divestments announced to date
- USD1.3 billion sale of zinc business
- USD0.5 billion sale of undeveloped Australian coal assets
- USD0.4 billion sale of Tarmac`s European businesses
Near term growth a clear differentiator
Barro Alto 36 ktpa nickel project - to more than double nickel production -
on budget and on schedule for first production in Q1 2011
Los Bronces 200 ktpa copper expansion on budget and on schedule for first
production in Q4 2011
Kolomela 9 Mtpa iron ore project on budget and on schedule for first
production in Q2 2012
Minas Rio 26.5 Mtpa iron ore project - good progress; key regulatory
approvals remain outstanding, impacting timing and capital expenditure
Further growth projects pending approval: Quellaveco (Peru, 225 ktpa copper)
and Grosvenor (Australia, 4.3 Mtpa metallurgical coal)
Further safety achievements
New safety practices embedded and delivering further improved results
- 38% reduction in fatalities vs. H1 2009
- 30% improvement in lost time injury rates vs. H1 2009
Dividend reinstated
Interim dividend of USD0.25 per share
Progressive dividend policy to maintain or steadily increase dividends in
dollar terms
HIGHLIGHTS FOR SIX MONTHS ENDED 6 months 6 months
30 JUNE 2010 ended ended
USUSD million, except per share
amounts 30 June 2010 30 June 2009 Change
Group revenue including associates (5) 15,015 11,132 35%
Operating profit including
associates before special items and
remeasurements - core operations
(1)(2) 4,071 1,900 114%
Operating profit including
associates before special items and
remeasurements (1) 4,361 2,136 104%
Underlying earnings (3) 2,212 1,096 102%
EBITDA (6) 5,414 2,985 81%
Net cash inflows from operating
activities 2,686 1,520 77%
Profit before tax (7) 3,903 3,626 8%
Profit for the financial period
attributable to equity
shareholders (7) 2,061 2,970 (31)%
Earnings per share (USUSD):
Basic earnings per share (7) 1.71 2.47 (31)%
Underlying earnings per share 1.84 0.91 102%
(1) Operating profit includes attributable share of associates` operating
profit (before attributable share of associates` interest, tax and
non-controlling 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.
(2) Operations considered core to the Group are Copper, Nickel, Platinum, Iron
Ore and Manganese (Kumba Iron Ore, Iron Ore Brazil and Samancor), Metallurgical
Coal, Thermal Coal, Diamonds, Exploration and Corporate Activities. See the
Financial review of Group results section for a reconciliation of operating
profit from core operations to Group operating profit. Due to the portfolio and
management structure changes announced in October 2009, operations considered
core have changed from those reported at 30 June 2009. The comparatives have
been adjusted accordingly.
(3) See note 9 to the Condensed financial statements for basis of calculation
of underlying earnings.
(4) Net debt includes related hedges and net debt in disposals groups. In the
current period net debt has been updated to include related hedges, being
derivative instruments that provide an economic hedge of assets and liabilities
included in net debt. The comparative has been adjusted accordingly. See note
12 to the Condensed financial statements.
(5) Includes the Group`s attributable share of associates` revenue of USD2,425
million (six months ended 30 June 2009: USD1,840 million). See note 3 to the
Condensed financial statements.
(6) EBITDA is operating profit before special items, remeasurements,
depreciation and amortisation in subsidiaries and joint ventures and includes
the attributable share of EBITDA of associates. See note 14 to the Condensed
financial statements.
(7) Stated after special items and remeasurements, the six months ended 30 June
2009 includes the profit on the disposal of the Group`s interest in AngloGold
Ashanti of USD1,139 million.
Cynthia Carroll, Chief Executive, said, "Anglo American has made further
significant progress during the first six months of 2010, delivering on our
strategic objectives. Our businesses are operating strongly under our new
organisational structure, our cost and efficiency programmes continue to
deliver ahead of expectations, our divestment programme is well under way and
we continue to make further progress on our safety performance. We achieved a
strong operating performance across our businesses against still uncertain
global economic conditions, with operating profit of USD4.4 billion and
underlying earnings of USD2.2 billion.
We continue to extract substantial synergies as a result of our organisational
structure and scale. By the end of June, our asset optimisation and procurement
programmes had achieved a run rate of USD1 billion of benefits, well ahead of
expectations, and are making excellent progress towards our stated target of
USD2 billion from our core businesses alone by 2011.
The restructuring of both Platinum and De Beers is generating a new level of
operational performance in both businesses. Platinum has achieved labour
productivity gains of 11%, is showing a 27% increase in productivity since the
first half of 2008 and continues to control its cash operating unit costs,
despite high energy and wage inflation. At De Beers, significant sustainable
cost savings have been embedded, enabling the company to benefit fully from the
improved demand and pricing environment for diamonds.
Our near term production growth is a clear differentiator for Anglo American
and will be delivered by four major strategic projects that we are developing.
The first of these is the Barro Alto nickel project in Brazil, which is on
schedule for first production in the first quarter of 2011 and will more than
double our nickel production capacity when it reaches full production of 36,000
tonnes per year. The expansion of our Los Bronces copper operation in Chile is
also on schedule for first production in the fourth quarter of next year,
increasing our low cost production at this world class mine to 490,000 tonnes
per year over the first three years. Furthermore, as we announced last year,
two recent discoveries nearby are expected to enable considerable further
expansion in due course. In South Africa, the 9 million tonne per annum
Kolomela iron ore project is making excellent progress towards first production
in the second quarter of 2012.
At Minas Rio, our 26.5 million tonne per annum phase one iron ore project in
Brazil, we have made good progress on those areas of the project where the
necessary approvals have been secured, in the context of what has become an
increasingly rigorous and more complex environmental permitting process in
Brazil in recent years. A number of key approvals remain outstanding and these
are on the critical path of the project, therefore impacting the time and cost
to complete. We have considerable resource deployed to resolve these issues,
including constructive high level dialogue with the authorities in Brazil. Once
the remaining initial approvals are granted, we believe it will take 27 to 30
months to construct and commission the mine and plant and to deliver the first
ore on ship.
Following our initial announcement in October, the divestment of our non-core
businesses is well under way. The announced sales of our zinc portfolio,
several of Tarmac`s European businesses and five undeveloped coal assets in
Australia are expected to generate proceeds in excess of USD2.2 billion. As we
stated from the outset, we will sell the balance of our divestment portfolio in
a manner and on a timetable that maximises value for our shareholders. We have
seen a lot of interest in these assets.
I am pleased to announce the resumption of dividend payments with an interim
dividend of 25 cents per share, reflecting the Group`s improved operating
performance and financial position, as well as progress on non-core asset sales
and a supportive medium term outlook.
Our safety performance has shown further considerable improvement in the first
half, with both fatality and lost time injury rates continuing to reduce. While
these results represent a step change from the position in 2007, we will
continue to strive to achieve our goal of zero harm.
The short term outlook for the world economy has become more uncertain in
recent months, with certain less favourable leading economic indicators.
However, in the medium to long term, we remain confident about prospects for
Anglo American with the process of industrialisation and urbanisation in China,
India, Brazil and other emerging countries continuing to drive demand for our
key commodities."
Review of the six months ended 30 June 2010
Financial results
Anglo American`s underlying earnings for the first half of 2010 were USD2.2
billion, double the USD1.1 billion for the same period in 2009, with operating
profit of USD4.4 billion, up from USD2.1 billion. Strong demand for steel raw
materials, driven by Chinese led consumption, resulted in favourable demand
environments in the iron ore and metallurgical coal markets, where the Group
realised the benefit of meaningful production increases. Earnings were further
supported by a resurgence of demand and prices for base metals, most notably in
the copper market, where Anglo American`s portfolio of world class assets
delivered substantial earnings. Demand recovery in the Platinum Group Metal
(PGM) and rough diamond markets, where the Group holds market leadership
positions, further bolstered earnings. The Group realised the benefit of a
continued focus on cost reduction, most notably through the significant
restructuring initiatives in the Platinum, Metallurgical Coal and Diamond
businesses, while asset optimisation initiatives across all businesses
continued to improve the effectiveness and efficiency of operations, and to
drive down costs.
Copper delivered an operating profit of USD1,185 million, 96% higher than the
first half of 2009 as a result of stronger prices, while volumes were in line
with the same period in 2009.
Nickel reported an operating profit of USD68 million, USD79 million higher
principally as a result of higher prices. Volumes remained in line despite the
adverse impact on production of power restrictions on the Venezuelan operation.
Platinum generated an operating profit of USD418 million, USD431 million
higher, driven by a 67% increase in the dollar basket price of metals sold, and
the on-going benefits of restructuring.
Iron Ore and Manganese recorded an operating profit of USD1,628 million, 126%
higher. Kumba Iron Ore delivered a strong operating performance, increasing
production to meet higher demand from its traditional markets of Europe, Japan
and South Korea, with continued strong demand from China, during a period of
high market prices. Kumba Iron Ore generated an operating profit of USD1,470
million, 103% higher than in the same period during 2009.
Metallurgical Coal delivered an operating profit of USD263 million, an 18%
decrease on the first half of 2009, primarily due to the impact of lower
realised prices and a strong Australian dollar. A focus on delivery of core
high quality coal products resulted in increased production, despite the
negative impact of the Queensland cyclone. Asset optimisation and cost
reduction initiatives continued to improve operational effectiveness.
Thermal Coal`s operating profit of USD351 million was 10% lower, as a result of
the stronger rand, and lower volumes due to challenging weather-related and
geological conditions facing South African operations. CerrejACubedn provided a
strong operating performance, despite lower prices in the Med-Atlantic market.
Diamonds recorded an attributable operating profit of USD261 million, USD257
million higher, reflecting improved trading conditions, with higher production
in response to an improvement in demand for diamonds, as well as the ongoing
benefit of cost restructuring initiatives.
Other Mining and Industrial generated an operating profit of USD290 million,
23% higher, despite the sale of the Group`s shareholdings in Tongaat Hulett and
Hulamin in 2009. The zinc business delivered an operating profit of USD150
million, 275% higher, mainly due to higher zinc and lead prices, but also
through improved zinc production and tightly controlled costs. There were
further strong performances from the Scaw Metals and CopebrAs businesses.
CatalAGBPo`s operating profit decreased 45% to USD28 million, primarily due to
the
impact of lower grades on niobium production.
Production
The first half of 2010 saw strong demand across Anglo American`s core commodity
markets. In response to continued robust demand from the steel sector in
particular, the Group markedly increased its output of steel-making raw
materials. Iron ore production from the Sishen mine in South Africa increased
by 17% as the Jig plant continued to ramp up. Production of metallurgical coal
in Australia increased by 25%, driven by a strong supply response from the
Capcoal and Moranbah complexes.
Production of export thermal coal from South Africa decreased by 6% as a result
of heavy rains and geological challenges, while CerrejACubedn production was in
line
with 2009 and Australia increased thermal coal production by 5%.
Copper production was maintained at 2009 levels. The earthquake in Chile caused
a brief loss of power supply to those operations close to the epicentre, but
did not materially impact operating performance. Nickel production from the
Nickel Business Unit in South America was also flat, whilst nickel output from
Platinum`s South African mines increased by 6%. Zinc production increased by 5%
compared to the first half of 2009.
Equivalent refined platinum production decreased by 4% from 2009, largely
attributable to the closure of three high cost shafts at the Rustenburg
operations during 2009.
The recovery in demand for diamonds continued and, accordingly, De Beers
increased output by 134% compared to the first half of 2009.
Capital structure
Net debt, including related hedges, of USD10,930 million was USD350 million
lower than at 31 December 2009, and USD672 million lower than at 30 June 2009.
Cash flows from operations of USD3.7 billion funded capital investment of
USD2.1 billion principally in the Group`s core assets, including combined
investment in excess of USD1.0 billion in the Los Bronces, Barro Alto, Minas
Rio and Kolomela near-term strategic growth projects during the first six
months of the year. In February, the Group participated in the De Beers rights
issue, resulting in a USD0.5 billion increase in net debt. This was offset by
USD0.4 billion of cash inflows from non-controlling investors participating in
Anglo Platinum Limited`s rights issue.
Special items and remeasurements
Operating special items and remeasurements, including associates, amounted to a
charge of USD145 million. This principally related to a net loss on non-hedge
derivatives of USD100 million, restructuring costs of USD59 million and
accelerated depreciation in Loma de NA-quel of USD36 million. This was partially
offset by a net realised gain on derivatives relating to capital expenditure of
USD69 million.
The net loss on disposals of USD88 million, including associates, comprises a
USD86 million charge recognised on disposal of a 27% interest in Anglo Inyosi
Coal (Proprietary) Limited in a black economic empowerment transaction, a loss
of USD81 million on the disposal of Tarmac`s French and Belgian concrete
products business, partially offset by a profit of USD107 million on the
disposal of Platinum`s 37% interest in the Western Bushveld joint venture.
Financing special items, including associates, relate to costs of USD13 million
associated with the De Beers refinancing.
Financing remeasurements, including associates, include an unrealised net gain
of USD130 million on non- hedge derivatives, principally comprising an
unrealised gain on an embedded interest rate derivatve.
Tax remeasurements amounted to a loss of USD62 million related to the foreign
currency impact on deferred tax balances.
Dividends
An interim dividend of 25 US cents per share has been declared. Anglo American
intends to follow a progressive dividend policy which seeks to maintain or
steadily increase dividends in dollar terms over time, taking into account the
earnings potential, investment needs and resultant cash flows of the Group.
Delivering value through operational performance
Anglo American continues to realise significant benefits from its global scale
and new organisational structure, striving for best in class operating
efficiencies across all its operations. Two specific and Group- wide
initiatives, namely the asset optimisation and global procurement programmes,
are well advanced and continue to deliver very significant value ahead of
expectations, and are targeted to deliver USD2 billion in benefits by 2011,
from Anglo American`s core businesses alone.
At the end of the first six months of 2010, a run rate benefit of USD1 billion
was achieved from the core businesses (USD1.2 billion from the total Group),
including one-off benefits. Of that amount, asset optimisation contributed
USD720 million of sustainable value (USD840 million from the total Group)
towards its USD1 billion target. In addition, one-off benefits of USD95 million
were reported (USD76 million from the core businesses). Global procurement
contributed USD205 million from the core businesses (USD242 million from the
total Group).
Near term growth from strategic projects
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 these commodities, with the benefits of scale,
expansion potential and cost position. Anglo American`s project management
systems and processes have been further enhanced to ensure closer collaboration
between the Group`s technical and project teams, thereby creating improved
oversight of project execution and future capital allocation.
The Group`s pipeline of approved projects spans its core commodities and is
expected to deliver significant organic production growth by 2013. In addition,
Anglo American is progressing towards approval decisions in relation to 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. Submission to the Board for approval is expected for the
Quellaveco project in the second half of 2010 and for the Grosvenor project in
the second half of 2011.
Anglo American`s four largest near term strategic growth projects are all well
placed on their respective industry cost curves, have long resource lives and
are set to enter production from early 2011 onwards, in what is expected to be
a growing commodity demand environment.
Barro Alto
The Barro Alto nickel project in Brazil is on schedule towards first production
in the first quarter of 2011, with the overall development 94% complete at 30
June. This project, which has further potential from an extensive resource
base, leverages an existing operation and proven technology and is positioned
in the lower half of the cost curve. Barro Alto will produce an average of 41
ktpa of nickel over the first five years of full production and 36 ktpa of
nickel over the life of the mine.
Los Bronces
Anglo American`s Los Bronces copper expansion project in Chile remains on
schedule for commissioning in the fourth quarter of 2011, despite the impact of
the Chilean earthquake in February 2010. Production at Los Bronces is scheduled
to increase to 490 ktpa over the first three years of full production following
project completion and average 400 ktpa over the first ten 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 and resources that support a mine life of over 30 years, with further
expansion potential. In 2009, Anglo American 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%.
Kolomela
Kumba Iron Ore`s Kolomela project in South Africa continues to make good
progress and remains on budget and on schedule to deliver initial production
during the first half of 2012. Kolomela is situated 80 km 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.
Minas Rio
At the 26.5 Mtpa Minas Rio iron ore project, progress continues to be well
executed on those areas of the project where the necessary approvals have been
secured. The development of the port at AAu, for example, is ahead of schedule
and the installation of the pipeline from the mine site to the port is under
way. However, a number of key approvals remain outstanding, principally the
award of the second part of the Installation licence, which would enable the
construction of the beneficiation plant to begin, the land clearance permit for
a section of the pipeline and land access for certain areas around the mine
site and at specific sections along the pipeline route.
It is clear that the environmental permitting processes and standards in Brazil
have become increasingly rigorous and more complex in recent years.
Considerable resource has been deployed to resolve these issues, in addition to
ongoing constructive high level dialogue with local and federal authorities in
Brazil.
Given the stage of development that the project has reached, the grant of the
approvals affects the critical path of the project towards the delivery of
first ore. Following a thorough review of the project, Anglo American estimates
that from the date of securing the remaining initial approvals, it should take
between 27 and 30 months to construct and commission the mine and plant,
complete the project and deliver the first ore on ship.
Due to the inherent uncertainty around the timing of the award of key licences
and permits, it is not possible at this stage to forecast an accurate final
capital expenditure figure for the project. However, it is expected that there
will be an increase in cost to the project relating to changes in scope and
licensing conditions of USD210 million. In addition, based on a range of
potential outcomes and in order to give as complete a picture as possible, it
is currently estimated that on the basis of initial approvals being awarded
within a nine month period from June 2010, increased schedule-related costs to
the project will be incurred, equivalent to a quarterly amount of approximately
USD180 million. As further clarity on licensing is achieved, an updated capital
expenditure figure and final completion date will be published, in line with
normal practice.
Divestment portfolio update
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 CatalAGBPo would
be divested, together with Tarmac.
During the first six months of 2010, Anglo American announced a number of
divestments, with expected total proceeds of USD2.2 billion.
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, and French and Belgian concrete products businesses, with expected
total proceeds of more than USD400 million.
In May 2010, Anglo American announced the sale of its portfolio of zinc assets
to Vedanta for USD1,338 million on an attributable, debt and cash free basis.
Of the total consideration, USD698 million relates to the Skorpion mine, USD308
million relates to the Lisheen mine and USD332 million relates to Anglo
American`s 74% interest in Black Mountain Mining (Proprietary) Limited (which
holds 100% of the Black Mountain mine and the Gamsberg project). The customary
regulatory approval and competition clearance processes to complete this
transaction are under way. Completion of the transaction is expected to be in
stages, with separate completion dates for Skorpion, Lisheen and Black Mountain
Mining (Proprietary) Limited.1
1 The agreed consideration is based on profits and cash flows for the zinc
businesses being for the benefit of the purchaser from 1 January 2010, subject
to completion.
In early July 2010, Anglo American announced that it had entered into an
agreement with a consortium to sell its interests in five undeveloped coal
assets in Australia, with expected proceeds of approximately USD500 million.
The transaction is subject to satisfaction of certain conditions and is
expected to be completed in stages from the fourth quarter of 2010.
The preparatory work to separate the remaining 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.
Outlook
The near term outlook for the world economy has become more uncertain in recent
months. In 2009, there was a rapid bounce in global industrial activity in
response to the unprecedented policy stimulus and a turn in the inventory
cycle. More recently, leading indicators have indicated less favourable
conditions. Inevitably, there will be some consolidation after the initial
bounce-back, as the positive effects from the stimulus and inventory cycle
fade.
Anglo American remains confident about the outlook for the industry in the
medium to long term, with the process of industrialisation and urbanisation in
China, India, Brazil and other emerging countries continuing to drive demand
for its key commodities.
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 Mulholland, Investor Relations
Tel: +27 (0)11 373 6683
Anglo American plc is one of the world`s largest mining companies, is
headquartered in the UK and listed on the London and Johannesburg stock
exchanges. Its portfolio of mining businesses spans precious metals and
minerals - in which it is a global leader in both platinum and diamonds; base
metals - copper and nickel; and bulk commodities - iron ore, metallurgical coal
and thermal coal. Anglo American is committed to the highest standards of
safety and responsibility across all its businesses and geographies and to
making a sustainable difference in the development of the communities around
its operations. The company`s mining operations and extensive pipeline of
growth projects are located in southern Africa, South America, Australia, North
America and Asia.
Webcast of presentation:
A live webcast of the results presentation, starting at 9.00am UK time on 30
July, can be accessed through the Anglo American website at
www.angloamerican.com.
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 are 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` and to `Cash flows
from operations` in note 14 to the Condensed financial statements. 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.
Financial review of Group results
Group operating profit was USD4,361 million, with operating profit from core
operations of USD4,071 million, 114% higher than the first half of 2009. This
improvement in operating profit was driven primarily by significant increases
in realised prices of most commodities. Price increases included a 67% increase
in the platinum basket, a 44% increase in realised copper, a weighted average
73% increase in realised export iron ore prices, a 93% increase in average
realised nickel and a 25% increase in realised South African export thermal
coal.
Copper`s operating profit was 96% higher than 2009, with production maintained
at 2009 levels and a 44% increase in the realised price of copper. Nickel`s
profits increased by USD79 million driven by increased prices, while Platinum
benefited from significantly higher average prices compared to the first half
of 2009. Kumba Iron Ore doubled operating profit, driven by a combination of
production increases at Sishen and a higher realised export price for iron ore.
Samancor`s profits increased due to higher production in response to growing
demand. Metallurgical Coal`s operating profits were lower due to the stronger
Australian dollar and lower average benchmark coking coal prices in the period,
and Thermal Coal`s profits decreased as a result of the stronger rand, and a
decline in South African production, coupled with lower prices in Colombia.
De Beers performed strongly, recording an attributable USD257 million increase
in operating profit on the back of significantly stronger sight revenue
relative to the first half of 2009.
Other Mining and Industrial`s operating profit increased overall driven by
increases at the zinc operations, which recorded a more than three-fold
increase in operating profit, and at Scaw Metals.
Group underlying earnings were USD2,212 million, a 102% increase on 2009. This
includes a net finance costs charge, before remeasurements, of USD130 million,
which was USD68 million lower than the first half of 2009. The effective tax
rate, before special items and remeasurements and including attributable share
of associates` tax, marginally increased in the period from 31.8% to 31.9%.
Group underlying earnings per share were USD1.84 compared with USD0.91 in the
first half of 2009.
6 months 6 months
ended ended
Reconciliation of profit for the period to
Underlying earnings 30 June 2010 30 June 2009
USD million
Profit for the financial period attributable
to equity shareholders of the
Company 2,061 2,970
Operating special items including associates 104 87
Operating remeasurements including associates 41 (544)
Net loss/(profit) on disposals including
associates 88 (1,441)
Financing special items including associates 13 -
Financing remeasurements including associates:
Exchange (gain)/loss on De Beers preference shares (3) 17
Net (gain)/loss on non-hedge derivatives (130) 60
Other financing remeasurements (21) -
Tax remeasurements 62 (309)
Tax on special items and remeasurements
including associates (6) 178
Non-controlling interests on special items
and remeasurements including
associates 3 78
Underlying earnings 2,212 1,096
Underlying earnings per share (USD) 1.84 0.91
The Group`s results are influenced by a variety of currencies owing to the
geographic diversity of the Group. For the first half of 2010, there was a
negative exchange variance in underlying earnings of USD399 million compared to
the first half of 2009. The Group results were impacted negatively by the
strengthening of the South African rand, Chilean peso, Brazilian real and
Australian dollar, relative to the first half of 2009.
6 months 6 months
ended ended
Summary income statement
USD million 30 June 2010 30 June 2009
Operating profit from subsidiaries and joint
ventures before special items
and remeasurements 3,715 1,824
Operating special items (93) (87)
Operating remeasurements (33) 456
Operating profit from subsidiaries and joint
ventures 3,589 2,193
Net (loss)/profit on disposals (92) 1,442
384 266
Share of net income from associates (see
reconciliation below)
Total profit from operations and associates 3,881 3,901
Net finance costs before remeasurements (130) (198)
Financing remeasurements 152 (77)
Profit before tax 3,903 3,626
Income tax expense (1,216) (355)
Profit for the financial period 2,687 3,271
Non-controlling interests (626) (301)
Profit for the financial period attributable
to equity shareholders of the
Company 2,061 2,970
Basic earnings per share (USD) 1.71 2.47
Group operating profit including associates
before special items and
remeasurements(1) 4,361 2,136
Operating profit from associates before
special items and remeasurements 646 312
Operating special items and remeasurements (19) 88
Net profit/(loss) on disposals 4 (1)
Net finance (costs)/income (before special
items and remeasurements) (56) 23
Financing special items (13) -
Financing remeasurements 2 -
Income tax expense (after special items and
remeasurements) (171) (137)
Non-controlling interests (after special
items and remeasurements) (9) (19)
Share of net income from associates 384 266
(1) Operating profit before special items and remeasurements from subsidiaries
and joint ventures was USD3,715 million and the attributable share from
associates was USD646 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 Copper, Nickel,
Platinum, Iron Ore and Manganese (Kumba Iron Ore, Iron Ore Brazil and
Samancor), Metallurgical Coal, Thermal Coal and Diamonds. The table below
reconciles operating profit from core operations to total Group operating
profit.
6 months 6 months
ended ended
Operating profit 30 June 2010 30 June 2009
USD million
Copper 1,185 606
Nickel 68 (11)
Platinum 418 (13)
Iron Ore and Manganese 1,628 720
Metallurgical Coal 263 321
Thermal Coal 351 388
Diamonds 261 4
Exploration (57) (70)
Corporate Activities and Unallocated costs (46) (45)
Operating profit including associates before
special items and
remeasurements - core operations 4,071 1,900
Other Mining and Industrial 290 236
Operating profit including associates before
special items and
remeasurements 4,361 2,136
Underlying earnings - core operations (1) 1,994 927
(1) See note 4 to the Condensed financial statements
Special items and remeasurements
6 months ended 30 June 2010
Excluding
USD million associates Associates Total
Operating special
items (93) (11) (104)
Operating
remeasurements (33) (8) (41)
Operating special
items and
remeasurements (126) (19) (145)
6 months ended 30 June 2009
Excluding
USD million associates Associates Total
Operating special
items (87) - (87)
Operating
remeasurements 456 88 544
Operating special
items and
remeasurements 369 88 457
Operating special items and remeasurements, including associates, amounted to a
charge of USD145 million. Operating special items include restructuring costs
in Other Mining and Industrial of USD44 million and USD15 million within
Platinum, as well as accelerated depreciation of USD36 million at Loma de
NA-quel.
Operating remeasurements, including associates, of USD41 million principally
related to a net loss of USD100 million on non-hedge derivatives, partially
offset by a net realised gain of USD69 million on derivatives relating to
capital expenditure. The net loss on non-hedge derivatives includes a net
unrealised loss on derivatives relating to capital expenditure at Iron Ore
Brazil (Iron Ore and Manganese segment) and Los Bronces (Copper segment). The
net gain of USD69 million was realised in the period principally in respect of
the Iron Ore Brazil and Los Bronces capital expenditure derivative portfolios.
The net loss on disposals of USD88 million, including associates, comprises a
USD86 million charge recognised on disposal of a 27% interest in Anglo Inyosi
Coal (Proprietary) Limited (Thermal Coal segment) in a black economic
empowerment transaction, a loss of USD81 million on the disposal of Tarmac`s
French and Belgian concrete products business (Other Mining and Industrial
segment), partially offset by a profit of USD107 million on the disposal of the
37% interest in the Western Bushveld joint venture (Platinum segment).
A loss on financing special items of USD13 million, including associates,
relates to costs associated with the De Beers refinancing.
Financing remeasurements, including associates, totalled a net gain of USD154
million. This amount includes a net gain of USD130 million on non-hedge
derivatives, principally comprising an unrealised gain on an embedded interest
rate derivative.
Tax remeasurements amounted to a loss of USD62 million related to the foreign
currency impact on deferred tax balances.
Net finance costs
Net finance costs, before remeasurements, excluding associates, decreased to
USD130 million (six months ended 30 June 2009: USD198 million). This was
primarily due to reduced interest expense on borrowings, partially offset by
lower interest capitalised.
Tax
6 months ended 30 June 2010
Associates`
USD million Before special tax and non-
(unless otherwise items and controlling Including
stated) remeasurements interests associates
Profit before tax 3,991 184 4,175
Tax (1,159) (172) (1,331)
Profit for the financial
period 2,832 12 2,844
Effective tax rate
including associates (%) 31.9
6 months ended 30 June 2009
Associates`
Before special tax and
USD million non-
(unless otherwise items and controlling Including
stated) remeasurements interests associates
Profit before tax 1,819 142 1,961
Tax (493) (130) (623)
Profit for the financial
period 1,326 12 1,338
Effective tax rate
including associates (%) 31.8
IAS 1 (Revised) 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 six months ended 30 June 2010 was USD171 million (six months ended 30
June 2009: USD137 million; year ended 31 December 2009: USD286 million).
Excluding special items and remeasurements, this becomes USD172 million (six
months ended 30 June 2009: USD130 million; year ended 31 December 2009: USD235
million).
The effective rate of tax before special items and remeasurements including
attributable share of associates` tax for the six months ended 30 June 2010 was
31.9%. This was in line with the equivalent effective rate of 31.8% in the six
months ended 30 June 2009. 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 USD27,362 million
at 30 June 2010, increased from USD26,121 million at 31 December 2009,
reflecting increased profitability in the underlying businesses. Investments in
associates were USD715 million higher than at 31 December 2009 principally as a
result of the Group`s USD450 million contribution towards De Beers` USD1
billion rights issue in March 2010, and a significant improvement in earnings
at both De Beers and Samancor. Tangible assets decreased by USD495 million
compared to 31 December 2009, due to the significant progress made in the
Group`s divestment programme during the half year. Assets classified as held
for sale, net of associated liabilities, were USD804 million at 30 June 2010
compared to USD429 million at 31 December 2009 principally due to the
classification of zinc assets as held for sale in the period. The USD547
million increase in inventories and current receivables combined was driven by
the impact of higher commodity prices and a weaker dollar during the first half
of 2010.
Cash flow
Net cash inflows from operating activities were USD2,686 million compared with
USD1,520 million in the six months ended 30 June 2009. EBITDA was USD5,414
million, an increase of 81% from USD2,985 million in the six months ended 30
June 2009.
Net cash used in investing activities was USD2,397 million compared to USD554
million in the six months ended 30 June 2009. In the first half of 2009,
proceeds from sale of financial asset investments were USD1,988 million (six
months ended 30 June 2010: USD4 million), principally from the sale of the
Group`s residual interest in AngloGold Ashanti. During the six months ended 30
June 2010 USD504 million was paid with respect to investment in associates
which mainly relates to the Group`s share of the De Beers rights issue. This is
partially offset by cash inflows from derivatives of USD77 million compared to
outflows of USD172 million in the equivalent period in 2009 and USD160 million
proceeds from disposals (six months ended 30 June 2009: USD1 million). Proceeds
in the current period are from disposals in the Platinum and Other Mining and
Industrial segments.
Purchases of tangible assets amounted to USD2,065 million, a decrease of USD75
million, with major spend on the Group`s strategic projects in development.
Net cash used in financing activities was USD616 million compared to USD1,252
million in the six months ended 30 June 2009. During the period the Group
repaid USD634 million of short term borrowings compared to USD4,150 million in
the prior period and the Group received USD355 million proceeds from non-
controlling interests for Anglo Platinum Limited`s rights issue. In the first
half of 2009, USD3,677 million net proceeds were received on issue of
convertible and US bonds.
Liquidity and funding
Net debt, including related hedges, was USD10,930 million, a decrease of USD350
million from USD11,280 million at 31 December 2009. The decrease in net debt,
excluding the impact of exchange rates, reflects strong operating cash flows,
partially offset by the Group`s subscription to the De Beers rights issue,
capital expenditures and movement in financing activities as detailed in the
cash flow.
Net debt at 30 June 2010 comprised USD13,197 million of debt, partly offset by
USD2,956 million of cash and cash equivalents (net of bank overdrafts), USD6
million current financial asset investments, and the current position of
derivative liabilities related to net debt of USD695 million. Refer to note 12c
of the Condensed financial statements. Net debt to total capital(1) at 30 June
2010 was 26.6%, compared with 28.7% at 31 December 2009.
At 30 June 2010, Anglo American had undrawn bank facilities of USD9.5 billion.
In addition, the Group has a dedicated, committed financing facility for Minas
Rio of USD1.3 billion, subject to certain disbursement conditions and the
granting of the remaining Installation Licence.
In the six months ended 30 June 2010 the Group raised USD100 million through
the issuance of a floating rate note, due April 2012, under the Euro Medium
Term Note programme, Rand 1 billion (USD131 million) through the issuance of a
bond, due in May 2015, under the South African Domestic Medium Term Note
programme (DMTN) and Rand 392 million (USD51 million) from the issuance of
commercial paper under the DMTN programme.
In July 2010 the Group replaced a USD2.5 billion facility maturing in March
2012 with a USD3.5 billion facility maturing in July 2015.
The Group`s forecasts and projections, taking account of reasonably possible
changes in trading performance, indicate the Group`s ability 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. Total capital is net assets excluding net debt.
Group corporate cost allocation
As a result of the Group`s restructuring announced in October 2009 certain
activities previously performed within the divisions are now undertaken at the
corporate centre, certain are undertaken in the new business units and the
remainder are no longer performed. Consequently those corporate costs which are
considered to be value-adding to the business units are allocated to each
business unit and costs reported externally as Group corporate costs only
comprise costs associated with parental or direct shareholder related
activities.The Group corporate costs, as included within the notes to the
accounts, can be reconciled to the historical basis of presentation as shown in
the table below.
6 months 6 months
ended ended
Group corporate costs 30 June 2010 30 June 2009
USD million
Corporate costs as previously reported - 105
Costs previously reported within divisional - 41
results
Corporate costs as reported under new
structure before costs allocation 154 146
Corporate costs allocated to business units (108) (101)
Corporate costs as reported under new
structure after costs allocation 46 45
Dividends
An interim dividend of 25 US cents per share has been declared. Anglo American
intends to follow a progressive dividend policy which seeks to maintain or
steadily increase dividends in dollar terms over time, taking into account the
earnings potential, investment needs and resultant cash flows of the Group.
Related party transactions
Related party transactions are disclosed in note 19 to the Condensed financial
statements.
Principal risks and uncertainties
Anglo American is exposed to a variety of risks and uncertainties which may
have a financial, operational or reputational impact on the Group and which may
also impact the achievement of social, economic and environmental objectives.
The principal risks and uncertainties facing the Group at the year end were set
out in detail in the Operating and financial review section of the Annual
Report 2009, and remain appropriate in 2010. Key headline risks relate to the
following:
Commodity prices
Liquidity and counterparty risk
Currency risk
Inflation
Health and safety
Environment
Political, legal and regulatory
Supplier risk
Reserves and resources
Exploration
Natural events and damage to assets by fire or machinery breakdown
Employees
Contractors
Business integrity
Operational performance and project delivery
Acquisitions
Infrastructure
Community relations
Joint venture relationships
Critical accounting judgements and key sources of estimation and uncertainty
The Group is exposed to changes in the economic environment, as with any other
business.
Details of any key risks and uncertainties specific to the period are covered
in the Operations review section.
The Annual Report 2009 is available on the Group`s website
www.angloamerican.com.
Operations review for the six months ended 30 June 2010
In the operations review on the following pages, operating profit includes the
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. Due to the portfolio and management structure
changes announced in October 2009, the segments have changed from those
reported at 30 June 2009.
Comparatives have been reclassified to align with current presentation.
COPPER
6 months 6 months
ended ended
USD million
30 June 2010 30 June 2009
(unless otherwise stated)
Operating profit 1,185 606
EBITDA 1,312 715
Net operating assets 5,152 4,185
Capital expenditure 615 561
Share of Group operating profit 27% 28%
Share of Group net operating assets 13% 11%
Copper generated an operating profit of USD1,185 million, an increase of 96%
compared to the same period in 2009, underpinned by higher prices and sales,
and the benefit of increased molybdenum by-product revenues. Unit costs
increased only marginally despite a 10% strengthening of the Chilean peso.
Markets
6 months 6 months
ended ended
30 June 2010 30 June 2009
Average market prices (c/lb) 323 184
Average realised prices (c/lb) 308 214
Copper prices rose strongly for much of the first six months of the year,
reflecting improving global economic conditions. However, despite this, there
was high price volatility in the period as risk aversion increased in the
market, most notably in February and then again in late May and into June. This
followed specific concerns over sovereign debt (especially in Europe), the
tightening of Chinese policy to rein in the property sector and the softening
of certain leading economic indicators. The copper price at the end of June
2010 was 295 c/lb, while the LME cash price averaged 323 c/lb over the first
half, a 76% increase compared to the first half of 2009.
The decline in price towards the end of the period and the resulting
adjustments to provisional pricing, meant that the average realised price of
308 c/lb was 5% lower than the LME average price. This is in contrast to the
prior period, when rising prices throughout the period had a positive impact on
provisional pricing, delivering an average realised price of 214 c/lb, being
16% higher than the LME average price during that period.
Operating performance
6 months 6 months
ended ended
30 June 2010 30 June 2009
Attributable copper production (tonnes) 315,500 315,900
Total copper production of 315,500 tonnes was in line with production for the
same period in the prior year. The earthquake in Chile in February caused brief
loss or reduction of power supply to those operations closest to the epicentre
- Los Bronces, El Soldado and Chagres - but did not materially impact operating
performance.
At Collahuasi, attributable production increased by 8% to 117,400 tonnes,
mainly as a result of higher grades, recovery and throughput, aided by improved
concentrator plant performance. Collahuasi`s higher production level was
achieved in spite of industrial action by contract workers which led to the
operation being shut down for a number of days and a consequent loss of 5,000
tonnes of attributable production.
Los Bronces delivered marginally higher production of 111,200 tonnes due to
higher grades and recoveries. Production at El Soldado and Mantoverde was
marginally lower, at 20,200 tonnes and 29,700 tonnes respectively, while Mantos
Blancos production was 17% lower at 37,000 tonnes following a conveyor belt
failure.
While a stronger Chilean peso and higher fuel and power costs impacted unit
operating costs, their effect was offset by higher by-product revenues, lower
prices achieved on key consumables, such as sulphuric acid, and the ongoing
benefits being delivered by the asset optimisation and Group procurement
programmes. The improved agility and reach of the supply chain function
facilitated securing alternative sources of key consumables such as grinding
media, which were in short supply immediately following the Chilean earthquake
in February.
Projects
Construction of the USD2.5 billion Los Bronces expansion project remains on
schedule for commissioning in the fourth quarter of 2011 despite the impact
from the Chilean earthquake. Production at Los Bronces is scheduled to increase
to 490 ktpa over the first three years of full production following project
completion and to average 400 ktpa over the first ten 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 and
resources that support a mine life of over 30 years, with further expansion
potential.
At Collahuasi, an expansion project to increase sulphide processing capacity to
150,000 tonnes per day by early 2011 continues. Collahuasi has announced the
increase of its copper reserves and resources (combined) by 40%, or by more
than 2 billion tonnes, to 7.094 billion tonnes at 0.82% copper. A concept study
to evaluate the next phases of expansion at Collahuasi, to ultimately increase
production to at least 1 Mt of copper per annum, is expected to be completed in
the first quarter of 2011.
At Mantos Blancos, studies to evaluate an extension to the life of the
operation continue.
In Peru, good progress was made towards completing the feasibility study for
the Quellaveco project prior to expected submission of the project for Board
approval in the second half of 2010. The Engineering Procurement and
Construction Management contract negotiation is in progress, as well as
preparations for works to commence, to ensure that the scheduled project
completion date of the second half of 2014 is maintained.
Early stage work continues at the Michiquillay project, also in Peru. Drilling
relating to the geological exploration programme remains on hold pending
resolution of certain social agreement issues under discussion with the local
communities.
Activity at the Pebble project in Alaska has continued in 2010, with the focus
on engineering work to advance towards a pre-feasibility study, further
environmental study work towards completion of an environmental baseline
document, and additional geological exploration drilling.
Outlook
Lower ore grades forecast for the second half of the year are expected to lead
to lower full year production levels compared to 2009, despite targeted
improvements in plant throughput. Copper production levels are then expected to
see a step increase in late 2011 following the commissioning of the Los Bronces
expansion project.
Ongoing market uncertainty from concerns over the global economic recovery and
sovereign debt issues in a number of countries may lead to continued price
volatility in the short term. However, the medium to long term fundamentals for
copper remain strong.
NICKEL
6 months 6 months
ended ended
USD million
(unless otherwise stated) 30 June 2010 30 June 2009
Operating profit/(loss) 68 (11)
EBITDA 81 2
Net operating assets 1,988 1,671
Capital expenditure 223 251
Share of Group operating profit 2% (1)%
Share of Group net operating assets 5% 4%
Nickel generated operating profit of USD68 million, compared to a loss of USD11
million in 2009. This increase was driven largely by a higher nickel price in
the first half of 2010.
Markets
6 months 6 months
ended ended
30 June 2010 30 June 2009
Average market prices (c/lb) 962 531
Average realised prices (c/lb) 969 502
The average nickel price was 81% higher than the same period in 2009. However,
nickel prices fell sharply towards the end of the second quarter of 2010 to a
low of 814 c/lb during June, after reaching a peak of more than 1,250 c/lb in
April, amid European sovereign risk concerns.
Global nickel supply remained constrained during the first half of the year due
to strike action and delays to new supply projects experienced by a number of
nickel producers.
LME nickel stocks decreased by 23% from a high of 166,000 tonnes at the end of
January to approximately 129,000 tonnes in June, indicative of the underlying
physical demand for nickel. This was one of the key, visible fundamental
indicators that helped to support the nickel price rally during March and
April, as well as stainless steel restocking.
Operating performance
6 months 6 months
ended ended
30 June 30 June
2010 2009
Attributable nickel production (tonnes) 10,100 10,100
Nickel production of 10,100 tonnes was in line with 2009 owing to marginally
higher production at Codemin, partly offset by marginally lower production at
Loma de NA-quel.
Loma de NA-quel produced 5,500 tonnes of nickel, a decrease of 2%. The EF2
furnace, which was shut down in May 2009 due to a metal run out, restarted
operations in the first quarter after the rebuild was completed.
However, production was impacted by electricity rationing imposed by the
Venezuelan government as a result of significant shortfalls in power
generation. The operation is pursuing a staged mitigation process, initially
with the hiring of on site generators, with a further phase planned if severe
rationing persists.
Due to uncertainty over the renewal of three mining concessions, which have not
been cancelled but which will expire in 2012, and over the renewal of 13
concessions that were cancelled in 2008, an accelerated depreciation charge of
USD36 million has been recorded in the current year against Loma de NA-quel
mining properties. This has been recognised as an operating special item. Refer
to note 6 to the Condensed financial statements.
Production at Codemin increased by 2% to 4,600 tonnes. Production in the first
half of 2009 was impacted by maintenance stoppages at a reduction furnace.
Projects
The world class Barro Alto ferronickel project in Brazil was 94% complete at
the end of the first half of 2010 and is on schedule for first production in
the first quarter of 2011, and full production in the second half of 2012. The
Barro Alto project will produce an average 36 ktpa of nickel at full
production, and 41 ktpa during the first five years.
A conceptual study began on the unapproved JacarACopyright project during the
first half
of 2010 and a pre-feasibility study of the unapproved Morro Sem BonACopyright
project
will begin in the second half of 2010. These two projects have the potential to
significantly further strengthen Anglo American`s position in the nickel
market, with the potential to add at least 66 ktpa to nickel production.
Outlook
Production of nickel is expected to be higher in the second half of the year,
reflecting an increase at Loma de NA-quel due to the use of on site power
generators, partially offset by a decrease in production at Codemin due to the
shutdown of an electric furnace for planned maintenance.
For the full year, forecast global refined nickel primary consumption is
estimated to be 10% higher than in 2009, mostly because of improved stainless
steel melt rates put in place at the mills since the beginning of the year.
While there are short term concerns about the sustainability of current
stainless steel demand strength, nickel`s fundamentals remain attractive.
PLATINUM
6 months 6 months
ended ended
USD million
(unless otherwise stated) 30 June 2010 30 June 2009
Operating profit/(loss) 418 (13)
EBITDA 785 263
Net operating assets 12,169 11,658
Capital expenditure 431 579
Share of Group operating profit 10% (1)%
Share of Group net operating assets 31% 30%
Platinum recorded an operating profit of USD418 million, compared to an
operating loss of USD13 million in the comparative period in 2009. The increase
in operating profit is attributable to significantly higher metal prices,
offset by lower sales volumes and a stronger rand / dollar exchange rate.
Markets
The achieved dollar price for platinum, averaging USD1,593 per ounce for the
period, was USD508 per ounce higher than the USD1,085 per ounce achieved in
2009. The average prices achieved for palladium and rhodium sales for the half
year were USD462 and USD2,600 per ounce respectively. The average price
achieved on nickel sales in the first six months of 2010 was USD9.52 per pound.
The overall basket price achieved was 67% higher at USD2,540 per platinum ounce
sold.
The platinum market is expected to remain in balance in 2010 due to continued
strength from the autocatalyst and industrial segments. Interest in
applications for the PGMs remains buoyant as global pressures on environmental
issues, energy security and diversification retain political and consumer
interest.
Autocatalysts
Auto production consensus forecasts suggest a return to 2008 levels during
2010. During the first half of the year, recovery in diesel auto production in
European markets supported platinum demand which was also supported by high
growth rates in the Chinese and other international markets. The market has
seen a shift towards smaller vehicles across most regions but this is more than
offset by the implementation of tighter legislation. Vehicle inventory levels
remain lower than historic averages due to higher than predicted sales volumes.
This continues to offer upside potential for PGM demand as rebuilding
continues. Sales volumes across all other major markets have been significantly
higher in the period compared with 2009 levels. This trend is expected to be
dampened somewhat in the second half of 2010 as scrappage schemes are phased
out and economic uncertainty keeps consumers from making expensive purchases,
but growth is expected when compared with the second half of 2009.
Jewellery
Jewellery purchases in China declined in the first half of 2010, compared with
the first half of 2009, as inventory levels in the supply chain were at an
adequate level following the rebuilding in 2009. The sudden decrease in the
platinum price in the second quarter of 2010 saw significant increases in
purchases in most markets, as jewellers took advantage of the price
opportunity. The increased demand was most notable in the unsaturated Chinese
market. Mature markets continue to see growth as economic conditions have
improved.
Industrial
Demand for platinum in the industrial sector has recovered during the first
half, with capacity utilisation rates in the chemical and petroleum sectors
having improved and all major indices seeing significant recovery.
Demand for consumer goods has shown a strong rebound in the period as
improvements in economic conditions led to greater demand for televisions and
electronic goods. Continued focus on cleaner and more sustainable technologies
has seen more demand for fuel cell technologies across portable, niche
transport and stationery segments.
Investment
The launch of the US-based ETFs supported firm investment demand in the first
quarter of 2010 with over 200,000 ounces of additional demand. Despite the
recent price correction, ETF holdings for both platinum and palladium held up
well.
Operating performance
Equivalent refined platinum production (equivalent ounces are mined ounces
expressed as refined ounces) from the mines managed by Platinum and its joint
venture partners for the first half of 2010 was 1.196 million ounces, a
decrease of 4% when compared to the first half of 2009.
The 73,100 ounce reduction in equivalent refined platinum ounces from
Platinum`s wholly owned mines (including Union Mine) was primarily due to:
A 58,000 ounce decrease as a result of placing three Rustenburg shafts onto
care and maintenance in 2009; and
A 15,000 ounce decrease due to:
- the simultaneous intersection of five major potholes at Khomanani Mine during
the first quarter of 2010;
- geological conditions at Union Mine`s Richard shaft and the implementation of
a new shift cycle, cleaning method and changeover to owner maintenance of
equipment at Union Mine`s decline section;
- shaft and haulage failures and safety stoppages at Tumela Mine; and
- a reduction in mining and stockpile grades at Mogalakwena as mining moves
from the Zwartfontein to the North pit.
These events were partly offset by higher output from Bathopele and Thembelani
mines, and the joint venture mines BRPM, Mototolo, Kroondal and Marikana and
Bokoni associate.
Planned furnace maintenance at the Polokwane and Waterval smelters was carried
out during the first quarter of 2010. The Polokwane smelter furnace was rebuilt
and the hearth extended, resulting in a shutdown from late December 2009, until
first tap in early April. The rebuild was completed within budget and on
schedule. Repairs at Waterval smelter were carried out between February and
May, with first slag tapped in late June.
Both smelters resumed normal operations in the second quarter. Higher than
normal refined metal stocks at the start of the period provided the flexibility
to carry out the furnace maintenance.
Refined platinum production at 1 million ounces for the first half of 2010
represents a decrease of 5% when compared to the same period in 2009. The
target of 2.5 million ounces of refined platinum production for the full year
remains in place.
The cash operating costs per equivalent refined platinum ounce increased by
6.7% but decreased 2.1% compared with cash operating costs in the second half
of 2009.
Projects
As announced in 2009, the following projects have been delayed as a result of
the global economic downturn: the Amandelbult Number 4 Shaft, the Twickenham
Platinum Mine, the Number 2 Slag Cleaning Furnace, the Base Metals Refinery
project and the Styldrift Merensky Phase 1 project.
The first phase of the USD80 million MC Plant capacity expansion, which will
increase the current MC Plant capacity from 64 ktpa Waterval Converter Matte to
75 ktpa, was commissioned during the period and the Unki mine in Zimbabwe is on
track to be commissioned in the third quarter of this year. Both the USD224
million Dishaba East Upper UG2 project and the USD316 million Thembelani 2
shaft replacement project are on track to complete on time and within budget.
Outlook
For the remainder of 2010, the platinum price is expected to average at least
USD1,500 per ounce if the economic recovery continues, and at that price level,
Platinum expects to refine and sell a total of 2.5 million ounces of platinum
in 2010 - thereby expecting a stronger second half to the year.
Costs will continue to be managed as a priority by further improving
productivity, increasing efficiency and managing supply chain and procurement
costs. The cost improvements achieved to date are expected to be sustained and
Platinum aims to maintain the unit cash costs per equivalent refined platinum
ounce for the year at around the same level as in 2008 and 2009, at just above
R11,000 per equivalent refined platinum ounce. Productivity, measured as square
metres per total operating employee per month, is expected to increase to an
average of 7.0m2 for 2010 and an average of 7.3m2 for 2011.
Platinum`s strategy, based on its current view that the market is adequately
supplied, is expected to improve its cost position from the upper half to the
lower half of the cost curve. Platinum is in the process of improving the
reliability of its production capacity and entrenching cost management as a
long term and sustainable culture. This will ensure that Platinum is well
positioned to extract full value from its assets as the market recovery
continues.
IRON ORE AND MANGANESE
6 months 6 months
ended ended
USD million
(unless otherwise stated) 30 June 2010 30 June 2009
Operating profit 1,628 720
Kumba Iron Ore 1,470 723
Iron Ore Brazil (51) (82)
Samancor 209 79
EBITDA 1,711 753
Net operating assets 10,679 11,048
Capital expenditure 525 412
Share of Group operating profit 37% 34%
Share of Group net operating assets 27% 29%
Operating profit before special items and remeasurements increased by 126% from
USD720 million to USD1,628 million, principally as a result of increased export
sales volumes, and the year-on-year weighted average price increase of 73% in
export iron ore prices. This was partially offset by a decrease in profit from
shipping operations, and the strengthening of the rand.
Markets
The increased demand for iron ore during 2010 is underpinned by higher world
crude steel production, which is estimated to increase to 1.37 billion tonnes
in 2010, a 4.6% increase. China`s crude steel production during the first five
months of 2010 increased by 21%, whilst iron ore imports into China over the
same period increased by 4.1%. This relatively lower increase in iron ore
imports was mainly due to the re-opening of many domestic iron ore mines in
China, driven by higher iron ore spot prices, higher freight rates and an
increasing demand for iron ore in the traditional markets of Europe, Japan and
South Korea, which further reduced the seaborne iron ore available to China.
Having assessed industry developments, Kumba Iron Ore has moved to implement
quarterly pricing for its long term contracts. The majority of export sales
volumes are currently committed to long term contracts and the remainder is
sold at index prices, mainly to annual customers and as additional volume to
long term customers in China. Quarterly benchmark prices for the April-June
quarter have been negotiated on the basis of average index prices in the period
December 2009 to February 2010, and have increased on average by 100% compared
to 2009/10 iron ore year benchmark prices. However, a pricing mechanism for
future quarters is still under negotiation with customers and changing market
conditions have led to significant uncertainty in iron ore prices in the short
term.
Operating performance
Kumba Iron Ore
Kumba Iron Ore delivered a strong financial and operating performance, achieved
by a 10% increase in total sales volumes and an average increase in contract
iron ore export prices of 100% for the second quarter relative to contract
prices during the first quarter of 2010. Operating profit before special items
and remeasurements increased by 103% to USD1,470 million.
Mining activity increased at Kumba Iron Ore`s Sishen Mine with a 23% increase
in waste mined to mitigate for decreasing geological qualities in the pit and
to cater for increased production. Total production at Sishen Mine increased by
17% from 18.0 Mt to 21.1 Mt. Production from the Dense Media Separation (DMS)
plant increased by 1.0 Mt or 8%. The Jig plant`s production increased by 7%
from the 6.0 Mt achieved in the second half of 2009 to 6.4 Mt, and now
contributes 30% of Sishen`s Mine production.
Kumba Iron Ore increased total sales volumes by 10% from 20.0 Mt to 21.9 Mt.
Export sales volumes from Sishen Mine for the period increased by 1.7 Mt or 10%
from 17.1 Mt to 18.8 Mt. During the first half of 2010, Kumba Iron Ore sold 5.2
Mt (or 28% of export sales volumes) at index prices, taking advantage of higher
prices during this period. Aggregate domestic sales volumes of 3.1 Mt increased
by 0.2 Mt.
Iron Ore Brazil
Iron Ore Brazil made an operating loss of USD51 million in the first half of
2010, the first financial year that AmapA is considered to be operating
commercially. AmapA produced 1.85 Mt, 57% ahead of production in the same
period last year. The operation benefited from strong first half iron ore
prices and the sale of lower grade sinter feed stockpiles, partly offset by
changes in the expected production mix owing to issues experienced with the ore
quality, which resulted in a lower proportion of pellet feed production.
The operational issues experienced in the early part of the year at AmapA have
been resolved and therefore production volumes in the second half are expected
to be higher than those of the first half; however, the change in product mix
referred to above will continue to impact the price that can be obtained in the
market.
Samancor
Samancor achieved an operating profit of USD209 million, a 165% increase,
mainly due to a deliberate reduction of output in 2009 due to prevailing
economic conditions. Samancor is now operating at near full capacity. Demand
from the steel industry for manganese alloy is expected to grow over the next
18 months and to place upward pressure on prices.
Projects
The development of Kumba Iron Ore`s 9 Mtpa Kolomela Mine continues and overall
project progress remains on budget and on schedule to deliver initial
production during the first half of 2012. To date, 8.2 Mt of waste material has
been moved and significant key deliverables and major construction elements are
well advanced. USD579 million of capital expenditure has been incurred to date,
of which USD153 million was incurred during the first half of 2010.
At the 26.5 Mtpa Minas Rio iron ore project, progress continues to be well
executed on those areas of the project where the necessary approvals have been
secured. The development of the port at AAu, for example, is ahead of schedule
and the installation of the pipeline from the mine site to the port is under
way. However, a number of key approvals remain outstanding, principally the
award of the second part of the Installation licence, which would enable the
construction of the beneficiation plant to begin, the land clearance permit for
a section of the pipeline and land access for certain areas around the mine
site and at specific sections along the pipeline route.
It is clear that the environmental permitting processes and standards in Brazil
have become increasingly rigorous and more complex in recent years.
Considerable resource has been deployed to resolve these issues, in addition to
ongoing constructive high level dialogue with local and federal authorities in
Brazil.
Given the stage of development that the project has reached, the grant of the
approvals affects the critical path of the project towards the delivery of
first ore. Following a thorough review of the project, Anglo American estimates
that from the date of securing the remaining initial approvals, it should take
between 27 and 30 months to construct and commission the mine and plant,
complete the project and deliver the first ore on ship.
Due to the inherent uncertainty around the timing of the award of key licences
and permits, it is not possible at this stage to forecast an accurate final
capital expenditure figure for the project. However, it is expected that there
will be an increase in cost to the project relating to changes in scope and
licensing conditions of USD210 million. In addition, based on a range of
potential outcomes and in order to give as complete a picture as possible, it
is currently estimated that on the basis of initial approvals being awarded
within a nine month period from June 2010, increased schedule-related costs to
the project will be incurred, equivalent to a quarterly amount of approximately
USD180 million. As further clarity on licensing is achieved, an updated capital
expenditure figure and final completion date will be published, in line with
normal practice.
Outlook
Waste mining at all the operational sites is anticipated to increase, which is
expected to put upward pressure on unit cash costs of production. Kumba remains
committed to a 5% increase in annual production volumes during 2010, with the
continued ramp-up of the Jig plant.
Due to the large gap between current index prices which are lower than the
implied July-September 2010 quarterly benchmark prices, uncertainty exists
around future export iron ore pricing mechanisms and price levels for iron ore.
In an operating environment where steel production rates are being reduced, it
is uncertain whether increased iron ore prices under the quarterly pricing
mechanism can be passed on to customers. Chinese steel production and iron ore
imports in the second half of 2010 are expected to be marginally below levels
achieved during the first half as Chinese steel mills prioritise cost over
productivity and therefore focus on the use of domestic iron ore. The momentum
of the recovery of Kumba Iron Ore`s traditional markets is slowing. Export
sales volumes into China are expected to normalise at around 60% of the
geographical sales mix.
Kumba Iron Ore`s Sishen Iron Ore Company (SIOC) and ArcelorMittal reached an
interim pricing agreement on 21 July 2010 in respect of the supply of iron ore
to ArcelorMittal from Sishen Mine. The duration of the interim agreement will
be retrospective to 1 March 2010, and will endure until 31 July 2011.
ArcelorMittal will pay to SIOC a fixed price of USD50 per ton of iron ore
deliverable to ArcelorMittal`s Saldanha Steel plant, and USD70 per ton of iron
ore deliverable to ArcelorMittal`s inland plants, which price is calculated on
a free on rail ex-Sishen Mine gate basis. The Group has recognised revenue at
cost plus 3% in preparing the financial results for the period ended 30 June
2010. Upon completion of documentation, revenue will be recognised under the
interim pricing arrangement for ore supplied since 1 March 2010. For the period
ended 30 June 2010, the difference between revenue recognised and amounts
outstanding under the interim arrangement amounted to USD53 million.
Events occurring after 30 June 2010
On 27 July 2010, Anglo American increased its shareholding in Kumba Iron Ore
Limited by 2.8% through the exercise of options purchased in 2008 for USD301
million, thereby increasing its shareholding from 62.5% to 65.3%.
METALLURGICAL COAL
6 months 6 months
ended ended
USD million
(unless otherwise stated) 30 June 2010 30 June 2009
Operating profit 263 321
EBITDA 416 422
Net operating assets 3,172 3,096
Capital expenditure 21 47
Share of Group operating profit 6% 15%
Share of Group net operating assets 8% 8%
Metallurgical Coal delivered an operating profit of USD263 million, an 18%
decrease on the first half of 2009, primarily due to the impact of lower
realised prices and a strong Australian dollar. A focus on delivery of core
high quality coal products resulted in increased production, despite the
negative impact of the Queensland cyclone. Asset optimisation and cost
reduction initiatives continued to improve operational effectiveness.
Markets
6 months 6 months
ended ended
Anglo American weighted average achieved FOB
sales prices
(USD/tonne) 30 June 2010 30 June 2009
Australian export metallurgical coal 148 161
Australian export thermal coal 83 78
Australian domestic thermal coal 29 25
6 months 6 months
ended ended
30 June 2010 30 June 2009
Attributable sales volumes (`000 tonnes)
Australian export metallurgical coal 7,345 5,138
Australian export thermal coal 3,182 3,099
Australian domestic thermal coal 4,267 4,149
An improved global steel outlook, supply constraints due to infrastructure and
weather disruptions in Queensland drove a strong metallurgical coal market in
the first six months of 2010. World steel production recovered to pre-global
financial crisis levels due to higher blast furnace utilisation rates,
increased production in China and restocking. The metallurgical coal market was
underpinned by continued high levels of metallurgical coal imports by Chinese
mills and sustained high demand from India. Metallurgical coal suppliers appear
to have responded strongly to the increased demand and new trade flows emerged,
such as significant tonnages of US coal being delivered into China.
Cyclone Ului severely disrupted production and seaborne coal exports in the
first quarter and spot prices peaked due to concerns over Australian coal
supply. Despite the above challenges, Metallurgical Coal increased its high
margin metallurgical coal sales by 43% to 7.3 million tonnes through asset
optimisation initiatives and coal logistics chain management.
Operating performance
6 months 6 months
ended ended
Attributable production (`000 tonnes) 30 June 2010 30 June 2009
Export metallurgical coal 7,080 5,669
Thermal coal 7,320 6,950
Metallurgical Coal delivered record half year saleable production across all
coal products and record half year sales for export metallurgical coal.
Production of metallurgical coal of 7.1 million tonnes was 25% higher than the
prior year in response to stronger demand and the benefits of asset
optimisation plans. Thermal coal production of 7.3 million tonnes was 5% higher
than the prior year. Successful stock management and asset rotation were key to
ensuring that production targets were achieved following the weather
disruption.
Australian dollar FOB unit costs reduced by 7% compared to the first half of
2009, but increased by 16% in US dollar terms over the same period as a result
of the stronger Australian dollar.
Having assessed the market transition to shorter term pricing, a number of
commercial agreements have been agreed. The majority of Metallurgical Coal`s
sales for 2010 are priced quarterly, though there is some volume with
favourable longer term pricing arrangements.
Projects
At the greenfield projects of Grosvenor, Moranbah South, Dartbrook and Drayton
South, studies continue in order to meet expectations of growing demand for
both metallurgical and thermal coal. It is expected that a Board approval
decision in relation to the development of the 4.3 Mtpa Grosvenor metallurgical
coal project in Australia will be taken in late 2011.
Outlook
Production volumes are forecast to increase in the second half of the year as
asset optimisation programmes ramp up.
The global outlook for hard coking coal remains firm, in particular with 2010
steel output growth of approximately 10% in China and India. Price increases
were secured for the third quarter of 2010 under fixed volume agreements, while
operational improvements are under way in coal logistics chain management to
deliver additional sales in the second half of the year.
THERMAL COAL
6 months 6 months
ended ended
USD million
(unless otherwise stated) 30 June 2010 30 June 2009
Operating profit 351 388
South Africa 220 233
Colombia 143 171
Projects and corporate (12) (16)
EBITDA 433 456
Net operating assets 1,740 1,279
Capital expenditure 140 169
Share of Group operating profit 8% 18%
Share of Group net operating assets 4% 3%
Thermal Coal generated an operating profit of USD351 million, a 10% decrease,
primarily as a result of lower production volumes in South Africa caused by
heavy rains that continued through to the middle of the second quarter,
challenging geological conditions and the impact of the stronger rand. These
effects were partially offset by higher South African export thermal coal
prices. Pricing for CerrejACubedn`s coal was affected by weaker demand in the
European and American markets.
Markets
6 months 6 months
ended ended
Anglo American weighted average achieved FOB
sales prices
30 June 2010 30 June 2009
(USD/tonne)
South Africa export thermal coal 81 65
South Africa domestic thermal coal 23 20
Colombia export thermal coal 68 77
6 months 6 months
ended ended
30 June 2010 30 June 2009
Attributable sales volumes (`000 tonnes)
South Africa export thermal coal (1) (2) 7,689 7,710
South Africa domestic thermal coal(1) (2) 2,613 3,485
Colombia export thermal coal 5,026 5,033
(1) Includes metallurgical coal
(2) Includes sales from Zibulo mine
South African and Colombian coal exports were in line with the prior year at
7.7 Mt and 5.0 Mt respectively.
In 2010, India is expected to import around 67 Mt of thermal coal, a
significant increase from the 57 Mt imported in 2009. In May alone, an
additional 550 MW of electricity generation capacity was added to the Indian
power grid as the government pursued its target of electrification for all by
2015. The majority of imports into India are sourced from Indonesia and South
Africa. In the year to date, a higher than usual proportion of exports from
South Africa landed in India.
Operating performance
6 months 6 months
ended ended
30 June 2010 30 June 2009
Attributable production (`000 tonnes)
RSA thermal coal (3) 9,913 10,807
RSA Eskom coal (3) 16,487 17,377
Columbian export thermal coal 5,318 5,352
(3) Includes production from Zibulo mine
South Africa
Operating profit from South Africa sourced coal decreased by 6% to USD220
million, mainly due to the stronger rand and lower volumes, partially offset by
higher South African export coal prices. Costs were impacted by the new royalty
bill coming into effect from March 2010, as well as higher than inflation cost
increases for power and labour. Production for the first half of the year
decreased by 7% to 27 Mt, partially due to high rainfall affecting opencast
operations, and adverse geological conditions. Export prices for the first half
at USD81.05 per tonne were 25% higher than the prices achieved in the first
half of 2009.
Columbia
At CerrejACubedn, operating profit of USD143 million was 16% lower, principally
due
to lower thermal coal prices in the European and American markets as a result
of weaker demand, leading to considerable supply-side pressure, as well as the
continuation of low gas and energy pricing in the United States. These effects
were partially offset by cost reductions and operational efficiencies.
Projects
The 6.6 Mtpa Zibulo project (previously known as Zondagsfontein) in South
Africa produced its first coal from the opencast mine in the third quarter of
2009. The project will continue to ramp up during the course of 2010 and is
expected to reach full production in 2012.
Outlook
For the full year, Thermal Coal anticipates South African production levels
broadly in line with 2009, with increasing contributions from the Mafube and
Zibulo operations. Colombian production is expected to increase through the
remainder of the year. Market demand continues to be driven by Asia, with India
in particular the focus for South African exports. Colombian sales are expected
to continue to be supported by opportunities in Asia.
DIAMONDS
6 months 6 months
ended ended
USD million
30 June 2010 30 June 2009
(unless otherwise stated)
Share of associate`s operating profit 261 4
EBITDA 340 75
Group`s associate investment in De Beers (1) 1,783 1,640
Share of Group operating profit 6% 0.2%
(1) Excludes shareholder loans of USD367 million and preference shares of USD88
million (2009: USD367 million and USD88 million respectively)
Anglo American`s first half attributable operating profit from De Beers
increased by USD257 million to USD261 million due to the stabilisation of, and
improvement in, trading conditions compared to the first half of 2009.
Markets
The first half of the year saw strong double digit growth in consumer demand
from China and India and a modest improvement in demand from the US. Since the
2008 launch, Forevermark (a diamond brand from the De Beers Group) has expanded
rapidly across Asia, with 289 doors in China, Hong Kong and Japan.
Much of this growth can be attributed to mainland China where the brand has
been rolled out to 10 cities with plans for further expansion this year. After
a difficult 2009, De Beers Diamond Jewellers, De Beers` joint venture with
LVMH, has seen a healthy rebound in sales in the first half of 2010. Element
Six had a strong first half with all business lines contributing to the
improved performance and profitability. Element Six is also benefiting from
restructuring and commercial measures implemented in 2009 and early 2010.
Operating performance
Diamond operations generated an attributable operating profit of USD261
million, due to the improvement in trading conditions during the first half of
2010. Attributable sales of rough diamonds by the Diamond Trading Company
(DTC), the marketing arm of De Beers, including those through joint ventures,
were USD1.2 billion, an increase of 84%, as a result of increased demand from
retail markets, particularly India and China, and restocking by the trade.
Carats recovered amounted to 15.4 million, a 134% increase (2009: 6.6 million
carats) in order to meet increased demand from the DTC Sightholders.
Attributable production and operating costs were USD315 million (2009: USD216
million) as a result of increased production across the Group. However, the
focus remains on cash management and continuing the efficiency improvements
achieved in 2009. After reducing its cost base globally by 45%, and staffing
levels by 25% in 2009, many of those gains are expected to remain permanent
without stifling growth.
De Beers` commitment to safety remains the company`s most important priority.
After a fatality-free year in 2009, there were no fatalities during the first
half of 2010.
Projects
Debswana`s Cut-8, the major expansion project at Jwaneng mine, has commenced.
The Group continues to focus on highly prospective target areas in Canada and
Angola, while reconnaissance prospecting for new kimberlite discoveries in
Botswana and India is ongoing.
Outlook
While the strengthening demand during the first half of 2010 was encouraging,
the global economic climate remains fragile, especially in the important
diamond markets of the US, Japan and Europe, and the view for the remainder of
the year incorporates a balance of caution and measured optimism. A period of
market stabilisation is expected in the second half of the year. With most
restocking activity by the trade now largely completed, further demand growth
is dependent upon increases in consumer demand, and De Beers remains encouraged
by the strength of demand in the emerging markets of Asia, particularly China
and India.
OTHER MINING AND INDUSTRIAL
6 months 6 months
ended ended
USD million
30 June 2010 30 June 2009
(unless otherwise stated)
Operating profit 290 236
Tarmac 29 28
Zinc 150 40
Scaw Metals 83 71
CopebrAs 12 5
CatalAGBPo 28 51
Coal Americas (1) (4)
Other (11) 45
EBITDA 427 402
Net operating assets 4,213 5,667
Capital expenditure 104 115
Share of Group operating profit 7% 11%
Share of Group net operating assets 11% 15%
Tarmac
Tarmac`s operating profit of USD29 million was 4% higher than the first half of
2009, however on a directly comparable basis (taking into consideration the
impact of suspending depreciation on assets classified as held for sale and
disposals) was USD9 million lower. Tarmac`s directly comparable EBITDA
performance, taking into consideration the impact of businesses that have been
disposed, was 10% lower. This reflects a resilient performance in a difficult
market where European, and in particular UK macroeconomic conditions, continue
to be challenging for the industry.
The UK Quarry Materials business experienced robust demand in the first half,
with the effect of the adverse weather conditions in the first two months of
the year partially mitigated in later months. Volumes increased, with overall
demand showing a 5% increase. Pricing pressures remain a key issue for the
business, though their effect has been mitigated by continued success in cost
saving initiatives.
The UK Building Products business saw a significant turnaround, with EBITDA
ahead of 2009, reflecting the results of a major restructuring programme in
2009. The impact of weak demand was partially mitigated by cost reduction
initiatives.
The 2010 outlook in the UK remains weak, but further clarity is expected when
government spending plans are set out in the coming months.
Zinc
6 months 6 months
ended ended
30 June 30 June
2010 2009
Attributable zinc production (tonnes) 178,700 169,900
Attributable lead production (tonnes) 30,800 31,000
Average market price - zinc (c/lb) 98 60
Average market price - lead (c/lb) 95 60
Zinc generated a 275% increase in operating profit to USD150 million, mainly
due to higher zinc and lead prices during the year, as well as improved zinc
production and tightly controlled costs.
Skorpion produced 75,700 tonnes of zinc in the first half of 2010, in line with
production levels in the first half of 2009.
At Lisheen, zinc metal production increased by 6% to 87,300 tonnes, primarily
due to an increase in ore tonnes milled, which more than offset lower feed
grades. Lead metal production decreased by 700 tonnes as lower feed grades
outweighed the favourable throughput.
Black Mountain produced 15,700 tonnes of zinc and 22,600 tonnes of lead, an
increase of 29% and 2% respectively compared to the prior year. Tonnes mined
increased by 7% as a result of higher machine hours and an increase in workable
faces. The increase in contained metal production (metal-in-concentrate
production) was primarily due to higher zinc and lead grades. Tonnes milled
were lower due to scheduled mill maintenance.
Scaw Metals
The Scaw Metals Group generated an operating profit of USD83 million, 17%
higher than the 2009 operating profit of USD71 million. Revenue increased 4% to
USD767 million. The main contributors to the improved profitability were the
MolyCop and South African Grinding Media operations which benefited from
improved demand from mining customers. This was partially offset by the
challenging trading conditions in the Cast and Wire Rod products operations,
primarily due to weaker demand within the construction sector, a stronger rand
and rising production costs. Margins in the South African and Canadian rolling
mills remained under pressure as the result of rising input costs. However, a
strong focus by management on cost saving initiatives and sales to down-stream
businesses mitigated the effects of weak margins. Both performed marginally
better than the prior year.
Total production of steel products was 757,800 tonnes, with 379,000 tonnes
produced by South African operations and 378,800 tonnes from the international
operations.
CopebrAs
CopebrAs achieved an operating profit of USD12 million, a 140% increase, due to
higher sales volumes of phosphoric acid, sulphuric acid and animal feed, as
well as lower mining costs. This was partially offset by lower achieved prices
for certain fertiliser products which were negotiated in late 2009. Prices for
high analysis fertilisers and sulphuric acid were strong as a result of higher
international index prices for benchmark fertiliser products and sulphur
respectively.
Non-fertiliser products, such as acids and animal feed, were important
contributors to volume for the first half of 2010 compared with 2009, with
higher seasonal fertiliser sales expected in the second half.
CatalAGBPo
CatalAGBPo achieved an operating profit of USD28 million, a 45% decrease,
primarily due to reduced niobium output as a result of lower than expected
grades compared with 2009, exacerbated by unexpected lower recoveries and
grades at Boa Vista mine resulting from changes to the 2010 mine plan after the
slope failure towards the end of 2009. The Boa Vista mine revamp project was
consequently launched to increase production, which has shown significant
improvement in the second quarter of 2010.
Coal - Americas
Canada - Peace River Coal recorded an operating loss of USD1 million. Clean
metallurgical coal production, at 401,400 tonnes, was 21% higher compared to
the first six months of 2009. This reflected the steadier production arising
from the new site infrastructure and the transition to owner mining, the
implementation of key systems and the further development of the management
team. The first phase of the Plant Upgrade Project to stabilise throughput was
successfully commissioned in May. The second and third phases of the Plant
Upgrade Project commenced in June and are expected to be commissioned by the
second quarter of 2011. Environmental approval and mine permitting are
progressing on the Roman Mountain deposit, adjacent to Trend Mine, where an
integrated 4-5 Mtpa Trend/Roman mining operation is targeted. Relationships
continue to be developed and improved with the communities in the area.
Venezuela - Carbones del Guasare continued to be impacted by operational and
management issues, which hampered performance in the six months to June 2010.
Production volumes of 262,900 tonnes were 12% lower than the first six months
of 2009 and remain significantly below the performance potential of the mine.
CONDENSED FINANCIAL STATEMENTS
for the six months ended 30 June 2010
Consolidated income statement
for the six months ended 30 June 2010
6 months ended 30.06.10
Before Special
special items and
items and remeasure-
remeasure- ments
ments (note 6) Total
USUSD million Note
Group revenue 3 12,590 - 12,590
Total operating costs (8,875) (126) (9,001)
Operating profit from
subsidiaries and joint
ventures 3 3,715 (126) 3,589
Net (loss)/profit on
disposals 6 - (92) (92)
Share of net income from
associates 3 406 (22) 384
Total profit from operations
and associates 4,121 (240) 3,881
Investment income 273 - 273
Interest expense (403) - (403)
Other financing
gains/(losses) - 152 152
Net finance income/(costs) 7 (130) 152 22
Profit before tax 3,991 (88) 3,903
Income tax expense 8 (1,159) (57) (1,216)
Profit for the financial
period 2,832 (145) 2,687
Attributable to:
Non-controlling interests 620 6 626
Equity shareholders of the
Company 4 2,212 (151) 2,061
Earnings per share (USUSD)
Basic 9 1.71
Diluted 9 1.65
6 months ended 30.06.09
Before Special
special items and
items and remeasure-
remeasure- ments
ments (note 6) Total
USUSD million
Group revenue 9,292 - 9,292
Total operating costs (7,468) 369 (7,099)
Operating profit from subsidiaries
and joint ventures 1,824 369 2,193
Net (loss)/profit on disposals - 1,442 1,442
Share of net income from associates 193 73 266
Total profit from operations and
associates 2,017 1,884 3,901
Investment income 253 - 253
Interest expense (404) - (404)
Other financing gains/(losses) (47) (77) (124)
Net finance income/(costs) (198) (77) (275)
Profit before tax 1,819 1,807 3,626
Income tax expense (493) 138 (355)
Profit for the financial period 1,326 1,945 3,271
Attributable to:
Non-controlling interests 230 71 301
Equity shareholders of the Company 1,096 1,874 2,970
Earnings per share (USUSD)
Basic 2.47
Diluted
Year ended 31.12.09
Before Special
special items and
items and remeasure-
remeasure- ments
ments (note 6) Total
USUSD million
Group revenue 20,858 - 20,858
Total operating costs (16,481) (1,637) (18,118)
Operating profit from subsidiaries
and joint ventures 4,377 (1,637) 2,740
Net (loss)/profit on disposals - 1,612 1,612
Share of net income from associates 318 (234) 84
Total profit from operations and
associates 4,695 (259) 4,436
Investment income 514 - 514
Interest expense (780) - (780)
Other financing gains/(losses) (7) (134) (141)
Net finance income/(costs) (273) (134) (407)
Profit before tax 4,422 (393) 4,029
Income tax expense (1,305) 188 (1,117)
Profit for the financial period 3,117 (205) 2,912
Attributable to:
Non-controlling interests 548 (61) 487
Equity shareholders of the Company 2,569 (144) 2,425
Earnings per share (USUSD)
Basic 2.02
Diluted 2.42 1.98
Underlying earnings and underlying earnings per share are set out in note 9.
Consolidated statement of comprehensive income
for the six months ended 30 June 2010
6 months ended 30.06.10
USUSD million Note
Profit for the financial period 2,687
Net gain on revaluation of available
for sale investments 54
Net (loss)/gain on cash flow hedges (78)
Net loss on cash flow hedges -
associates -
Net exchange (loss)/gain on
translation of foreign operations (849)
Actuarial net loss on post retirement
benefit schemes (59)
Actuarial net loss on post retirement
benefit schemes - associates (3)
Deferred tax 11 21
Net (expense)/income recognised
directly in equity (914)
Transferred to income statement: sale
of available for sale investments -
Transferred to income statement: cash
flow hedges 2
Transferred to initial carrying
amount of hedged items: cash flow
hedges 31
Transferred to income statement:
exchange differences on disposal of
foreign operations 3
Tax on items transferred from equity 11 (4)
Total transferred from equity 32
Total comprehensive income for the
financial period 1,805
Attributable to:
Non-controlling interests 545
Equity shareholders of the Company 1,260
6 months ended Year ended
USUSD million 30.06.09 31.12.09
Profit for the financial period 3,271 2,912
Net gain on revaluation of available
for sale investments 383 741
Net (loss)/gain on cash flow hedges 120 122
Net loss on cash flow hedges -
associates (3) (2)
Net exchange (loss)/gain on
translation of foreign operations 2,432 3,819
Actuarial net loss on post retirement
benefit schemes (105) (217)
Actuarial net loss on post retirement
benefit schemes - associates (1) (5)
Deferred tax (70) (74)
Net (expense)/income recognised
directly in equity 2,756 4,384
Transferred to income statement: sale
of available for sale investments (1,323) (1,554)
Transferred to income statement: cash
flow hedges (7) 162
Transferred to initial carrying
amount of hedged items: cash flow
hedges 32 30
Transferred to income statement:
exchange differences on disposal of
foreign operations (2) (2)
Tax on items transferred from equity 130 77
Total transferred from equity (1,170) (1,287)
Total comprehensive income for the
financial period 4,857 6,009
Attributable to:
Non-controlling interests 539 783
Equity shareholders of the Company 4,318 5,226
Consolidated balance sheet
as at 30 June 2010
USUSD million Note 30.06.10 30.06.09 31.12.09
Intangible assets 2,551 3,108 2,776
Tangible assets 34,703 34,237 35,198
Environmental rehabilitation
trusts 299 292 342
Investments in associates 4,027 4,064 3,312
Financial asset investments 2,918 2,113 2,726
Trade and other receivables 264 290 206
Deferred tax assets 285 264 288
Other financial assets
(derivatives) 511 241 238
Other non-current assets 103 133 191
Total non-current assets 45,661 44,742 45,277
Inventories 3,368 3,165 3,212
Trade and other receivables 3,739 3,232 3,348
Current tax assets 147 318 214
Other financial assets
(derivatives) 204 134 365
Financial asset investments 12b 6 - 3
Cash and cash equivalents 12b 2,868 2,626 3,269
Total current assets 10,332 9,475 10,411
Assets classified as held for
sale 17 1,146 - 620
Total assets 57,139 54,217 56,308
Trade and other payables (4,169) (4,171) (4,395)
Short term borrowings 12b,13 (3,121) (3,304) (1,499)
Provisions for liabilities
and charges (224) (188) (209)
Current tax liabilities (536) (739) (566)
Other financial liabilities
(derivatives) (114) (211) (76)
Total current liabilities (8,164) (8,613) (6,745)
Medium and long term
borrowings 12b,13 (10,076) (10,657) (12,816)
Retirement benefit obligations (705) (573) (706)
Deferred tax liabilities (4,989) (4,924) (5,192)
Other financial liabilities
(derivatives) (1,065) (654) (583)
Provisions for liabilities
and charges (1,488) (1,429) (1,583)
Other non-current liabilities (113) (410) (423)
Total non-current liabilities (18,436) (18,647) (21,303)
Liabilities directly
associated with assets
classified as held for sale 17 (342) - (191)
Total liabilities (26,942) (27,260) (28,239)
Net assets 30,197 26,957 28,069
Equity
Called-up share capital 10 738 738 738
Share premium account 2,713 2,713 2,713
Other reserves 587 (271) 1,379
Retained earnings 23,324 21,901 21,291
Equity attributable to equity
shareholders of the Company 27,362 25,081 26,121
Non-controlling interests 2,835 1,876 1,948
Total equity 30,197 26,957 28,069
The Condensed financial statements of Anglo American plc, registered number
3564138, were approved by the Board of directors on 29 July 2010.
Cynthia Carroll RenACopyright
MACopyrightdori
Chief executive Finance director
Consolidated cash flow statement
for the six months ended 30 June 2010
6 months ended
USUSD million Note 30.06.10
Cash flows from operations 12a 3,729
Dividends from associates 72
Dividends from financial asset investments 15
Income tax paid (1,130)
Net cash inflows from operating activities 2,686
Cash flows from investing activities
Acquisition of subsidiaries, net of cash and cash
equivalents acquired(1) 15 -
Investment in joint ventures -
Investment in associates (504)(2)
Purchase of tangible assets 3 (2,065)
Purchase of financial asset investments (123)
Loans granted (75)
Interest received and other investment income 102
Disposal of subsidiaries, net of cash and cash
equivalents disposed 16 130
Sale of interests in joint ventures 16 30
Sale of interests in associates -
Repayment of loans and capital by associates 28
Proceeds from disposal of tangible assets 10
Proceeds from sale of financial asset investments 4
Cash flows from derivatives related to investing
activities 77
Other investing activities (11)
Net cash used in investing activities (2,397)
Cash flows from financing activities
Issue of shares by subsidiaries to non-controlling
interests 234
Proceeds from non-controlling interests for Anglo
Platinum Limited`s rights issue 355
Sale of shares under employee share schemes 11
Purchase of shares by subsidiaries for employee
share schemes(3)
(91)
Interest paid (425)
Dividends paid to non-controlling interests (225)
Repayment of short term borrowings (634)
Net proceeds from issue of convertible bond -
Net proceeds from issue of US bond -
Net proceeds from bonds issued under EMTN programme 100
(Repayment)/receipt of medium and long term
borrowings (179)
Cash flows from derivatives related to financing
activities 238
Other financing activities -
Net cash used in financing activities (616)
Net (decrease)/increase in cash and cash equivalents (327)
Cash and cash equivalents at start of period 12c 3,319
Cash movements in the period (327)
Effects of changes in foreign exchange rates (36)
Cash and cash equivalents at end of period 12c 2,956
6 months ended Year ended
USUSD million 30.06.09 31.12.09
Cash flows from operations 1,676 4,904
Dividends from associates 340 616
Dividends from financial asset investments 14 23
Income tax paid (510) (1,456)
Net cash inflows from operating activities 1,520 4,087
Cash flows from investing activities
Acquisition of subsidiaries, net of cash and
cash equivalents acquired(1) (67) (79)
Investment in joint ventures - (5)
Investment in associates - (31)
Purchase of tangible assets (2,140) (4,607)
Purchase of financial asset investments (266) (269)
Loans granted (62) (134)
Interest received and other investment income 141 244
Disposal of subsidiaries, net of cash and
cash equivalents disposed 1 69
Sale of interests in joint ventures - -
Sale of interests in associates - 662
Repayment of loans and capital by associates 2 -
Proceeds from disposal of tangible assets 17 46
Proceeds from sale of financial asset
investments 1,988 2,041
Cash flows from derivatives related to
investing activities (172) (150)
Other investing activities 4 (10)
Net cash used in investing activities (554) (2,223)
Cash flows from financing activities
Issue of shares by subsidiaries to
non-controlling interests 40 96
Proceeds from non-controlling interests for
Anglo Platinum Limited`s rights issue - -
Sale of shares under employee share schemes 21 29
Purchase of shares by subsidiaries for
employee share schemes(3)
(63) (75)
Interest paid (421) (741)
Dividends paid to non-controlling interests (279) (472)
Repayment of short term borrowings (4,150) (6,624)
Net proceeds from issue of convertible bond 1,685 1,685
Net proceeds from issue of US bond 1,992 1,992
Net proceeds from bonds issued under EMTN
programme - 2,215
(Repayment)/receipt of medium and long term
borrowings (41) 361
Cash flows from derivatives related to
financing activities (45) (85)
Other financing activities 9 14
Net cash used in financing activities (1,252) (1,605)
Net (decrease)/increase in cash and cash
equivalents (286) 259
Cash and cash equivalents at start of period 2,744 2,744
Cash movements in the period (286) 259
Effects of changes in foreign exchange rates 145 316
Cash and cash equivalents at end of period 2,603 3,319
(1) Includes amounts paid to acquire non-controlling interests in subsidiaries.
(2) Includes USD450 million cash paid to subscribe to the Group`s share of De
Beers` rights issue. Refer to note 19.
(3) Includes purchase of Kumba Iron Ore Limited and Anglo Platinum Limited
shares for their respective employee share schemes.
Consolidated statement of changes in equity
for the six months ended 30 June 2010
Share- Cumulative
Total based translation
share Retained payment adjustment
capital (1) earnings reserve reserve
USUSD million
Balance at 1 January
2009 3,451 18,827 288 (4,077)
Total comprehensive
income - 2,895 - 2,191
Dividends paid to
non-controlling
interests - - - -
Acquisition and
disposal of businesses
(including issue of
shares to
non-controlling
interests) - - - -
Purchase of shares for
employee share schemes - (32) - -
Share-based payment
charges on equity
settled schemes - - 84 -
Issue of shares under
employee share schemes - 85 (78) -
Issue/purchase of
shares in listed
subsidiaries for
employee share schemes - (16) - -
Issue of convertible
bond - - - -
Other - 142 2 -
Balance at 30 June 2009 3,451 21,901 296 (1,886)
Total comprehensive
income - (638) - 1,335
Dividends paid to
non-controlling
interests - - - -
Acquisition and
disposal of businesses
(including issue of
shares to
non-controlling
interests) - - (14) -
Share-based payment
charges on equity
settled schemes - - 110 -
Issue of shares under
employee share schemes - 23 (9) -
Issue/purchase of
shares in listed
subsidiaries for
employee share schemes - 5 - -
Other - - 18 -
Balance at 31 December
2009 3,451 21,291 401 (551)
Total comprehensive
income - 2,015 - (763)
Dividends paid to
non-controlling
interests - - - -
Anglo Platinum Limited
rights issue - 12 - -
Anglo Inyosi Coal BEE
transaction - 78 - -
Other issues of shares
to non-controlling
interests - - - -
Consolidation by De
Beers of
non-controlling
interest - (128) - -
Disposal of businesses - 6 - -
Purchase of shares for
employee share schemes - (43) - -
Share-based payment
charges on equity
settled schemes - - 92 -
Issue of shares under
employee share schemes - 127 (116) -
Issue/purchase of
shares in listed
subsidiaries for
employee share schemes - (31) - -
Other - (3) (7) -
Balance at 30 June 2010 3,451 23,324 370 (1,314)
Total equity
attributable
Fair value to equity
and other shareholders Non-
reserves of the controlling Total
(note 11) Company interests equity
USUSD million
Balance at 1 January
2009 1,732 20,221 1,535 21,756
Total comprehensive
income (768) 4,318 539 4,857
Dividends paid to
non-controlling
interests - - (279) (279)
Acquisition and
disposal of
businesses
(including issue of
shares to
non-controlling
interests) - - 43 43
Purchase of shares
for employee share
schemes - (32) - (32)
Share-based payment
charges on equity
settled schemes - 84 8 92
Issue of shares
under employee share
schemes - 7 - 7
Issue/purchase of
shares in listed
subsidiaries for
employee share
schemes - (16) (6) (22)
Issue of convertible
bond 355 355 - 355
Other - 144 36 180
Balance at 30 June
2009 1,319 25,081 1,876 26,957
Total comprehensive
income 211 908 244 1,152
Dividends paid to
non-controlling
interests - - (193) (193)
Acquisition and
disposal of
businesses
(including issue of
shares to
non-controlling
interests) (1) (15) 14 (1)
Share-based payment
charges on equity
settled schemes - 110 8 118
Issue of shares
under employee share
schemes - 14 - 14
Issue/purchase of
shares in listed
subsidiaries for
employee share
schemes - 5 21 26
Other - 18 (22) (4)
Balance at 31
December 2009 1,529 26,121 1,948 28,069
Total comprehensive
income 8 1,260 545 1,805
Dividends paid to
non-controlling
interests - - (225) (225)
Anglo Platinum
Limited rights issue - 12 343 355
Anglo Inyosi Coal
BEE transaction - 78 7 85
Other issues of
shares to
non-controlling
interests - - 220 220
Consolidation by De
Beers of
non-controlling
interest - (128) - (128)
Disposal of
businesses (6) - - -
Purchase of shares
for employee share
schemes - (43) - (43)
Share-based payment
charges on equity
settled schemes - 92 11 103
Issue of shares
under employee share
schemes - 11 - 11
Issue/purchase of
shares in listed
subsidiaries for
employee share
schemes - (31) (9) (40)
Other - (10) (5) (15)
Balance at 30 June
2010 1,531 27,362 2,835 30,197
(1) Total share capital comprises called-up share capital of USD738 million (30
June 2009: USD738 million; 31 December 2009: USD738 million) and the share
premium account of USD2,713 million (30 June 2009: USD2,713 million; 31
December 2009: USD2,713 million).
Dividends
6 months ended 6 months ended Year ended
30.06.10 30.06.09 31.12.09
Proposed ordinary dividend
per share (US cents) 25 - -
Proposed ordinary dividend
(USUSD million) 302 - -
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 14 to these interim
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. This information was derived from the statutory accounts
for the year ended 31 December 2009, a copy of which has been delivered to the
Registrar of Companies. The auditors` report on those accounts was unqualified,
did not include a reference to any matters to which the auditors drew attention
by way of emphasis of matter and did not contain a statement under sections 498
(2) or (3) of the Companies Act 2006.
2. Basis of preparation
Condensed financial statements and accounting policies
The Condensed financial statements are for the six months ended 30 June 2010
and have been prepared in accordance with IFRS adoptedfor use by the European
Union, including International Accounting Standard (IAS) 34 Interim Financial
Reporting and the requirements of the Disclosure and Transparency Rules (DTR)
of the Financial Services Authority (FSA) in the United Kingdom as applicable
to interim financial reporting.
The Condensed financial statements represent a `condensed set of financial
statements` as referred to in the DTR issued by the FSA. Accordingly, they do
not include all of the information required for a full annual financial report
and are to be read in conjunction with the Group`s financial statements for the
year ended 31 December 2009.
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 2009, with
the exception of the adoption of IFRS 3 (Revised) Business Combinations and IAS
27 (Revised) Consolidated and Separate Financial Statements, which applied
prospectively from 1 January 2010.
IFRS 3 (Revised) makes a number of changes to the accounting for and disclosure
of business combinations. The revised standard introduces changes to the
accounting for contingent consideration and transaction costs, as well as
allowing an option to calculate goodwill based on the parent`s share of net
assets only or including goodwill relating to non-controlling interests. There
have been no material acquisitions in the six months ended 30 June 2010.
IAS 27 (Revised) requires the effects of all transactions with non-controlling
interests to be recognised in equity where there is no change in control.
Transactions within the scope of this revision have been accounted for
accordingly, effective from 1 January 2010.
The adoption of the revised standards has resulted in references to minority
interests being amended to non-controlling interests. There has been no impact
on the Group apart from terminology.
Other amendments to accounting standards or new interpretations issued by the
International Accounting Standards Board, which were applicable from 1 January
2010, do not have a material impact on the Group.
Going concern
The financial position of the Group, its cash flows, liquidity position and
borrowing facilities are set out in the Financial review of Group results on
pages 11 to 16. The Group`s gross debt at 30 June 2010 was USD13.9 billion
(including related hedges) and gearing was 26.6%. Net debt is set out in note
12 and details of borrowings and facilities are set out in note 13. In the six
months ended 30 June 2010 the Group has benefited from stronger commodity
prices and stronger cash flows from operations.
At 30 June 2010 the Group had undrawn bank facilities of USD9.5 billion and
cash deposits of USD3.0 billion. The Group`s significant debt facilities
maturing in the next 18 months are a GBP300 million (approximately USD450
million) Eurobond maturing in December 2010 and a USD4.5 billion facility
maturing in June 2011 (USD2.25 billion drawn at 30 June 2010). The directors
have considered the Group`s cash flow forecasts for the period to 31 December
2011. The Board is satisfied that the Group`s forecasts and projections, taking
account of reasonably possible changes in trading performance, indicate the
Group`s ability to operate within the level of its current facilities for the
foreseeable future. For this reason the Group continues to adopt the going
concern basis (as interpreted by the Guidance on Going Concern and Liquidity
Risk: Guidance for Directors of UK Companies 2009, published in October 2009)
in preparing the Condensed financial statements.
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 - Copper and Nickel: base
metals; Platinum: platinum group metals; Iron Ore and Manganese: iron ore,
manganese ore and alloys; Metallurgical Coal: metallurgical coal; Thermal Coal:
thermal coal; Diamonds: rough and polished diamonds and diamond jewellery; and
Other Mining and Industrial: heavy building materials, zinc and steel products.
The Exploration segment includes the cost of the Group`s exploration activities
across all segments, excluding Diamonds.
The segment results are stated after elimination of inter-segment transactions
and include an allocation of corporate costs.
Due to the portfolio and management structure changes announced in October
2009, the segments have changed from those reported at 30 June 2009.
Comparatives have been reclassified to align with current presentation.
Revenue(1)
6 months ended 6 months ended Year ended
USUSD million 30.06.10 30.06.09 31.12.09
Copper 2,142 1,472 3,967
Nickel 209 113 348
Platinum 2,870 1,905 4,535
Iron Ore and Manganese 3,005 1,576 3,419
Metallurgical Coal 1,444 1,139 2,239
Thermal Coal 1,317 1,222 2,490
Diamonds 1,340 770 1,728
Other Mining and Industrial 2,686 2,933 5,908
Exploration - - -
Corporate Activities and
Unallocated Costs 2 2 3
Segment measure 15,015 11,132 24,637
Reconciliation:
Less: Associates (2,425) (1,840) (3,779)
Operating special items
and remeasurements - - -
Statutory measure 12,590 9,292 20,858
Operating profit
/(loss)(2)
6 months ended 6 months ended Year ended
USUSD million 30.06.10 30.06.09 31.12.09
Copper 1,185 606 2,010
Nickel 68 (11) 2
Platinum 418 (13) 32
Iron Ore and
Manganese 1,628 720 1,489
Metallurgical Coal 263 321 451
Thermal Coal 351 388 721
Diamonds 261 4 64
Other Mining and
Industrial 290 236 506
Exploration (57) (70) (172)
Corporate Activities
and Unallocated
Costs (46) (45) (146)
Segment measure 4,361 2,136 4,957
Reconciliation:
Less: Associates (646) (312) (580)
Operating special
items and
remeasurements (126) 369 (1,637)
Statutory measure 3,589 2,193 2,740
(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` revenue
6 months ended 6 months ended Year ended
30.06.10 30.06.09 31.12.09
USUSD million
Platinum 91 9 47
Iron Ore and
Manganese 505 248 603
Metallurgical Coal 103 66 164
Thermal Coal 344 389 742
Diamonds 1,340 770 1,728
Other Mining and
Industrial 42 358 495
2,425 1,840 3,779
Reconciliation:
Associates` net
finance
(costs)/income
(before
special items and
remeasurements)
Associates`
income tax
expense (before
special
items and
remeasurements)
Associates`
non-controlling
interests (before
special
items and
remeasurements)
Share of net
income from
associates
(before special
items and
remeasurements)
Associates`
special items and
remeasurements
Associate`s tax
special item
Associates` tax
on special items
and
remeasurements
Associates`
non-controlling
interests on
special items
and remeasurements
Share of net
income from
associates
operating
Associates` profit/(loss)(1)
6 months ended 6 months ended Year ended
30.06.10 30.06.09 31.12.09
USUSD million
Platinum (19) (2) (26)
Iron Ore and
Manganese 209 79 143
Metallurgical Coal 49 8 48
Thermal Coal 143 170 303
Diamonds 261 4 64
Other Mining and
Industrial 3 53 48
646 312 580
Reconciliation:
Associates` net
finance
(costs)/income
(before
special items and
remeasurements) (56) 23 (28)
Associates` income
tax expense (before
special
items and
remeasurements) (172) (130) (235)
Associates`
non-controlling
interests (before
special
items and
remeasurements) (12) (12) 1
Share of net income
from associates
(before special
items and
remeasurements) 406 193 318
Associates` special
items and
remeasurements (26) 87 (184)
Associate`s tax
special item - - (45)
Associates` tax on
special items and
remeasurements 1 (7) (6)
Associates`
non-controlling
interests on special
items
and remeasurements 3 (7) 1
Share of net income
from associates 384 266 84
(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 amortisation (1)
6 months ended 6 months ended Year ended
30.06.10 30.06.09 31.12.09
USUSD million
Copper 127 109 244
13(3) 13 26
Nickel
Platinum 358 276 636
Iron Ore and Manganese 66 23 81
Metallurgical Coal 148 98 249
Thermal Coal 58 45 107
Other Mining and Industrial 137 158 360
Exploration - - -
Corporate Activities and
Unallocated Costs 12 12 22
919 734 1,725
Other non-cash expenses (2)
6 months ended 6 months ended Year ended
30.06.10 30.06.09 31.12.09
USUSD million
Copper 43 8 71
2 4 9
Nickel
Platinum 56 42 92
Iron Ore and Manganese 38 (7) 4
Metallurgical Coal 2 7 26
Thermal Coal 14 17 13
Other Mining and Industrial 19 (8) 34
Exploration 2 2 4
Corporate Activities and
Unallocated Costs 30 31 64
206 96 317
(1) The Group`s attributable share of depreciation and amortisation in
associates is USD134 million (six months ended 30 June 2009: USD115 million;
year ended 31 December 2009: USD248 million) and is split by segment as
follows: Platinum USD9 million (six months ended 30 June 2009: nil; year ended
31 December 2009: USD9 million), Iron Ore and Manganese USD17 million (six
months ended 30 June 2009: USD10 million; year ended 31 December 2009: USD23
million), Metallurgical Coal USD5 million (six months ended 30 June 2009: USD3
million; year ended 31 December 2009: USD6 million), Thermal Coal USD24 million
(six months ended 30 June 2009: USD23 million; year ended 31 December 2009:
USD47 million), Diamonds USD79 million (six months ended 30 June 2009: USD71
million; year ended 31 December 2009: USD151 million) and Other Mining and
Industrial nil (six months ended 30 June 2009: USD8 million; year ended 31
December 2009: USD12 million).
(2) Other non-cash expenses include equity settled share-based payment charges
and amounts included in operating costs in respect of provisions, excluding
amounts recorded within special items. Comparatives have been reclassified to
align with current period presentation.
(3) In addition USD36 million of accelerated depreciation at Loma de NA-quel has
been recorded within operating special items (refer to note 6).
Balance sheet measures are as follows:
Capital expenditure (1)
6 months ended 6 months ended Year ended
USUSD million 30.06.10 30.06.09 31.12.09
Copper 615 561 1,068
Nickel 223 251 554
Platinum 431 579 1,150
Iron Ore and Manganese 525 412 1,044
Metallurgical Coal 21 47 96
Thermal Coal 140 169 400
Other Mining and Industrial 104 115 268
Exploration - - -
Corporate Activities and
Unallocated Costs 6 6 27
2,065 2,140 4,607
Reconciliation:
Interest capitalised 113 156 246
Non-cash movements (3) 5 (98) 379
Tangible asset additions 2,183 2,198 5,232
Tangible assets acquired
through business
combinations 2 15 28
Intangible asset additions 12 4 50
Net cash in disposal groups
2,197(4) 2,217(4) 5,310(4)
(2)
Net debt
USUSD million 30.06.10 30.06.09 31.12.09
Copper (396) 56 (187)
Nickel 481 163 380
Platinum (53) 894 196
Iron Ore and Manganese 246 582 874
Metallurgical Coal (42) (18) (9)
Thermal Coal 74 (138) 23
Other Mining and Industrial 394 405 341
Exploration (1) (1) -
Corporate Activities and Unallocated
Costs 10,315 9,659 9,710
11,018 11,602 11,328
Reconciliation:
Interest capitalised
Non-cash movements (3)
Tangible asset additions
Tangible assets acquired through business
combinations
Intangible asset additions
Net cash in disposal groups (88) - (48)
10,930 11,602 11,280
(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 includes related hedges and excludes net debt in disposal
groups. Comparatives have been adjusted to include related hedges (refer to
note 12c). For a reconciliation of net debt to the balance sheet refer to note
12b.
(3) Includes movements on tangible asset accruals and the impact of cash flow
hedges.
(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: Copper USD700 million (30 June 2009: USD503 million; 31
December 2009: USD1,186 million), Nickel USD272 million (30 June 2009: USD253
million; 31 December 2009: USD570 million), Platinum USD417 million (30 June
2009: USD691 million; 31 December 2009: USD1,445 million), Iron Ore and
Manganese USD504 million (30 June 2009: USD407 million; 31 December 2009:
USD1,157 million), Metallurgical Coal USD57 million (30 June 2009: USD47
million; 31 December 2009: USD173 million), Thermal Coal USD140 million (30
June 2009: USD175 million; 31 December 2009: USD409 million), Other Mining and
Industrial USD90 million (30 June 2009: USD131 million; 31 December 2009:
USD323 million) and Corporate Activities and Unallocated Costs USD17 million
(30 June 2009: USD10 million; 31 December 2009: USD47 million).
The following balance sheet segment measures are provided for information:
Segment assets(1)
USUSD million 30.06.10 30.06.09 31.12.09
Copper 5,938 4,847 5,643
Nickel 2,096 1,794 1,888
Platinum 13,131 12,492 13,082
Iron Ore and Manganese 11,073 11,381 10,758
Metallurgical Coal 4,020 3,837 4,176
Thermal Coal 2,395 1,977 2,343
Other Mining and Industrial 5,332 6,973 6,231
Exploration 4 7 4
Corporate Activities and Unallocated
Costs 278 253 311
44,267 43,561 44,436
Other assets and liabilities
Investments in associates (3) 4,027 4,064 3,312
Financial asset investments 2,924 2,113 2,729
Deferred tax assets/(liabilities) 285 264 288
Cash and cash equivalents 2,868 2,626 3,269
Other financial assets/(liabilities) -
derivatives 715 375 603
Other non-operating assets/(liabilities) 2,053 1,214 1,671
Other provisions - - -
Borrowings - - -
Net assets 57,139 54,217 56,308
Segment liabilities(2)
USUSD million 30.06.10 30.06.09 31.12.09
Copper (786) (662) (880)
Nickel (108) (123) (101)
Platinum (962) (834) (941)
Iron Ore and Manganese (394) (333) (388)
Metallurgical Coal (848) (741) (769)
Thermal Coal (655) (698) (636)
Other Mining and Industrial (1,119) (1,306) (1,202)
Exploration (1) (2) (2)
Corporate Activities and Unallocated
Costs (254) (320) (409)
(5,127) (5,019) (5,328)
Other assets and liabilities
Investments in associates (3) - - -
Financial asset investments - - -
Deferred tax assets/(liabilities) (4,989) (4,924) (5,192)
Cash and cash equivalents - - -
Other financial assets/(liabilities) -
derivatives (1,179) (865) (659)
Other non-operating assets/(liabilities) (1,844) (1,953) (2,128)
Other provisions (606) (538) (617)
Borrowings (13,197) (13,961) (14,315)
Net assets (26,942) (27,260) (28,239)
Net segment assets
USUSD million 30.06.10 30.06.09 31.12.09
Copper 5,152 4,185 4,763
Nickel 1,988 1,671 1,787
Platinum 12,169 11,658 12,141
Iron Ore and Manganese 10,679 11,048 10,370
Metallurgical Coal 3,172 3,096 3,407
Thermal Coal 1,740 1,279 1,707
Other Mining and Industrial 4,213 5,667 5,029
Exploration 3 5 2
Corporate Activities and Unallocated
Costs 24 (67) (98)
39,140 38,542 39,108
Other assets and liabilities
Investments in associates (3) 4,027 4,064 3,312
Financial asset investments 2,924 2,113 2,729
Deferred tax assets/(liabilities) (4,704) (4,660) (4,904)
Cash and cash equivalents 2,868 2,626 3,269
Other financial assets/(liabilities) -
derivatives (464) (490) (56)
Other non-operating assets/(liabilities) 209 (739) (457)
Other provisions (606) (538) (617)
Borrowings (13,197) (13,961) (14,315)
Net assets 30,197 26,957 28,069
(1) Segment assets at 30 June 2010 are operating assets and consist of
intangible assets of USD2,551 million (30 June 2009: USD3,108 million; 31
December 2009: USD2,776 million), tangible assets of USD34,703 million (30 June
2009: USD34,237 million; 31 December 2009: USD35,198 million), biological
assets of USD3 million (30 June 2009: USD3 million; 31 December 2009: USD4
million), environmental rehabilitation trusts of USD299 million (30 June 2009:
USD292 million; 31 December 2009: USD342 million), retirement benefit assets of
USD41 million (30 June 2009: USD23 million; 31 December 2009: USD54 million),
inventories of USD3,368 million (30 June 2009: USD3,165 million; 31 December
2009: USD3,212 million) and operating receivables of USD3,302 million (30 June
2009: USD2,733 million; 31 December 2009: USD2,850 million).
(2) Segment liabilities at 30 June 2010 are operating liabilities and consist
of non-interest bearing current liabilities of USD3,316 million (30 June 2009:
USD3,367 million; 31 December 2009: USD3,447 million), restoration and
decommissioning provisions of USD1,106 million (30 June 2009: USD1,079 million;
31 December 2009: USD1,175 million) and retirement benefit obligations of
USD705 million (30 June 2009: USD573 million; 31 December 2009: USD706
million).
(3) Investments in associates are split by segment as follows: Platinum USD516
million (30 June 2009: USD306 million; 31 December 2009: USD447 million), Iron
Ore and Manganese USD813 million (30 June 2009: USD771 million; 31 December
2009: USD658 million), Metallurgical Coal USD156 million (30 June 2009: USD115
million; 31 December 2009: USD146 million), Thermal Coal USD740 million (30
June 2009: USD677 million; 31 December 2009: USD689 million), Diamonds USD1,783
million (30 June 2009: USD1,640 million; 31 December 2009: USD1,353 million)
and Other Mining and Industrial USD19 million (30 June 2009: USD555 million; 31
December 2009: USD19 million).
Entity wide information
The Group`s analysis of segment revenue by product (including attributable
share of revenue from associates) is as follows:
6 months ended 6 months ended Year ended
USUSD million 30.06.10 30.06.09 31.12.09
Copper 2,085 1,403 3,783
Nickel 414 215 625
Platinum 1,706 1,313 3,101
Palladium 278 145 361
Rhodium 367 234 527
Iron ore 2,282 1,135 2,330
Manganese ore and alloys 505 248 603
Metallurgical coal 1,128 838 1,693
Thermal coal 1,721 1,576 3,197
Diamonds 1,340 770 1,728
Heavy building materials 1,254 1,370 2,870
Zinc 291 171 445
Steel products 760 732 1,371
Other 884 982 2,003
15,015 11,132 24,637
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:
Revenue
6 months ended 6 months ended Year ended
USUSD million 30.06.10 30.06.09 31.12.09
South Africa 1,565 1,110 2,567
Other Africa 246 102 139
United Kingdom (Anglo
American plc`s country of
1,592 1,615 3,850
domicile)
Other Europe 2,607 2,230 5,014
North America 815 516 1,297
Brazil 494 288 662
Chile 799 480 1,229
Other South America 106 101 190
Australia 460 201 427
China 2,337 1,555 3,469
India 904 493 1,222
Japan 1,805 1,410 2,697
Other Asia 1,285 1,031 1,874
15,015 11,132 24,637
Non-current segment assets (1)
USUSD million 30.06.10 30.06.09 31.12.09
South Africa 14,810 13,874 15,161
Other Africa 309 573 599
United Kingdom (Anglo American plc`s
country of
2,455 2,777 2,686
domicile)
Other Europe 59 702 241
North America 709 561 698
Brazil 10,208 10,994 10,105
Chile 4,763 3,829 4,280
Other South America 602 727 574
Australia 3,293 3,261 3,584
China 4 3 4
India - - -
Japan - - -
Other Asia 45 47 46
37,257 37,348 37,978
(1) Non-current segment assets are non-current operating assets and consist of
tangible assets, intangible assets and biological assets.
Segment revenue and operating profit/(loss) before special items and
remeasurements by origin (including attributable share of revenue and operating
profit/(loss) from associates) has been provided for information:
Revenue
6 months ended 6 months ended Year ended
USUSD million 30.06.10 30.06.09 31.12.09
South Africa 6,849 4,734 10,293
Other Africa 1,216 720 1,539
Europe 1,335 1,382 2,976
North America 329 225 510
South America 3,280 2,453 6,040
Australia and Asia 2,006 1,618 3,279
15,015 11,132 24,637
Operating profit/(loss) before special
items and remeasurements
6 months ended 6 months ended Year ended
USUSD million 30.06.10 30.06.09 31.12.09
South Africa 2,190 974 2,023
Other Africa 265 37 78
Europe (22) (63) (54)
North America 47 10 (20)
South America 1,452 772 2,310
Australia and Asia 429 406 620
4,361 2,136 4,957
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)
USUSD million 30.06.10 30.06.09 31.12.09
South Africa 18,495 16,952 18,309
Other Africa 314 643 664
Europe 3,533 4,390 3,820
North America 865 694 805
South America 16,920 16,902 16,528
Australia and Asia 4,140 3,980 4,310
44,267 43,561 44,436
Segment liabilities
USUSD million 30.06.10 30.06.09 31.12.09
South Africa (2,186) (1,976) (2,148)
Other Africa (34) (52) (66)
Europe (787) (1,022) (907)
North America (117) (104) (132)
South America (1,115) (1,085) (1,262)
Australia and Asia (888) (780) (813)
(5,127) (5,019) (5,328)
Net segment assets
USUSD million 30.06.10 30.06.09 31.12.09
South Africa 16,309 14,976 16,161
Other Africa 280 591 598
Europe 2,746 3,368 2,913
North America 748 590 673
South America 15,805 15,817 15,266
Australia and Asia 3,252 3,200 3,497
39,140 38,542 39,108
(1) Investments in associates of USD4,027 million (30 June 2009: USD4,064
million; 31 December 2009: USD3,312 million) 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 USD1,868 million
(30 June 2009: USD2,075 million; 31 December 2009: USD1,934 million), Other
Africa USD1,030 million (30 June 2009: USD994 million; 31 December 2009: USD914
million), Europe USD(485) million (30 June 2009: USD(626) million; 31 December
2009: USD(957) million), North America USD422 million (30 June 2009: USD443
million; 31 December 2009: USD320 million), South America USD722 million (30
June 2009: USD681 million; 31 December 2009: USD675 million) and Australia and
Asia USD470 million (30 June 2009: USD497 million; 31 December 2009: USD426
million).
4. Reconciliation of Underlying earnings to Profit for the financial period
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 period 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 period
attributable to equity shareholders of the Company` to `Underlying earnings for
the financial period` is provided in note 9.
Due to the portfolio and management structure changes announced in October
2009, the segments have changed from those reported at 30 June 2009.
Comparatives have been reclassified to align with current presentation.
Operating profit (including attributable share of operating profit from
associates) is reconciled to `Underlying earnings` and `Profit for the
financial period attributable to equity shareholders of the Company` in the
table below:
Operating Operating
profit/(loss) before profit/(loss) after Operating
special items and special items and special items and
remeasurements(1) remeasurements remeasurements(2)
USUSD million
By segment
Copper 1,185 1,154 31
Nickel 68 31 37
Platinum 418 393 25
Iron Ore and Manganese 1,628 1,623 5
Metallurgical Coal 263 281 (18)
Thermal Coal 351 350 1
Diamonds 261 242 19
Exploration (57) (57) -
Corporate Activities and
Unallocated Costs (46) (47) 1
Core operations 4,071 3,970 101
Other Mining and Industrial 290 246 44
Total/Underlying earnings 4,361 4,216 145
Underlying earnings adjustments (145)
Profit for the financial period
attributable to equity shareholders
of the Company
Net Financing special
profit/(loss) items and
on disposals(2) remeasurements(2)
USUSD million
By segment
Copper - -
Nickel - -
Platinum 107 -
Iron Ore and Manganese - -
Metallurgical Coal - -
Thermal Coal (86) -
Diamonds 4 -
Exploration - -
Corporate Activities and
Unallocated Costs 5 -
Core operations 30 -
Other Mining and Industrial (118) -
Total/Underlying earnings (88) -
Underlying earnings adjustments (88) 141
Profit for the financial period
attributable to equity shareholders
of the Company
6 months ended 30.06.10
Net interest, tax
and non-
controlling
interests Total
USUSD million
By segment
Copper (479) 706
Nickel (4) 64
Platinum (196) 222
Iron Ore and Manganese (1,014) 614
Metallurgical Coal (86) 177
Thermal Coal (93) 258
Diamonds (113) 148
Exploration 2 (55)
Corporate Activities and
Unallocated Costs (94) (140)
Core operations (2,077) 1,994
Other Mining and Industrial (72) 218
Total/Underlying earnings (2,149) 2,212(3)
Underlying earnings adjustments (59) (151)
Profit for the financial period
attributable to equity shareholders
of the Company 2,061
Operating Operating
profit/(loss) before profit/(loss) after
special items and special items and
USUSD million remeasurements(1) remeasurements
By segment
Copper 606 691
Nickel (11) 25
Platinum (13) (6)
Iron Ore and Manganese 720 1,035
Metallurgical Coal 321 307
Thermal Coal 388 382
Diamonds 4 92
Exploration (70) (70)
Corporate Activities and
Unallocated Costs (45) (69)
Core operations 1,900 2,387
Other Mining and Industrial 236 206
Total/Underlying earnings 2,136 2,593
Underlying earnings adjustments
Profit for the financial period
attributable to equity
shareholders of the Company
Operating Net
special items and profit/(loss)
USUSD million remeasurements(2) on disposals(2)
By segment
Copper (85) -
Nickel (36) -
Platinum (7) 289
Iron Ore and Manganese (315) 3
Metallurgical Coal 14 -
Thermal Coal 6 -
Diamonds (88) (1)
Exploration - 10
Corporate Activities and
Unallocated Costs 24 -
Core operations (487) 301
Other Mining and Industrial 30 1,140
Total/Underlying earnings (457) 1,441
Underlying earnings adjustments 457 1,441
Profit for the financial period
attributable to equity
shareholders of the Company
6 months ended 30.06.09
Net interest, tax
Financing special and non-
items and controlling
USUSD million remeasurements(2) interests Total
By segment
Copper - (223) 383
Nickel - (10) (21)
Platinum - 22 9
Iron Ore and Manganese - (470) 250
Metallurgical Coal - (97) 224
Thermal Coal - (119) 269
Diamonds - (71) (67)
Exploration - 3 (67)
Corporate Activities
and
Unallocated Costs - (8) (53)
Core operations - (973) 927
Other Mining and
Industrial - (67) 169
Total/Underlying
earnings - (1,040) 1,096(3)
Underlying earnings
adjustments (77) 53 1,874
Profit for the
financial period
attributable to equity
shareholders of the
Company 2,970
Operating Operating
profit/(loss) before profit/(loss) after
special items and special items and
remeasurements(1) remeasurements
USUSD million
By segment
Copper 2,010 2,114
Nickel 2 (86)
Platinum 32 (72)
Iron Ore and Manganese 1,489 350
Metallurgical Coal 451 423
Thermal Coal 721 715
Diamonds 64 (139)
Exploration (172) (172)
Corporate Activities and
Unallocated Costs (146) (377)
Core operations 4,451 2,756
506 361
Other Mining and Industrial
Total/Underlying earnings 4,957 3,117
Underlying earnings adjustments
Profit for the financial year
attributable to equity
shareholders
of the Company
Operating Net
special items and profit/(loss)
remeasurements(2) on disposals(2)
USUSD million
By segment
Copper (104) -
Nickel 88 -
Platinum 104 323
Iron Ore and Manganese 1,139 6
Metallurgical Coal 28 33
Thermal Coal 6 21
Diamonds 203 20
Exploration - 10
Corporate Activities and
Unallocated Costs 231 -
Core operations 1,695 413
145 1,219
Other Mining and Industrial
Total/Underlying earnings 1,840 1,632
Underlying earnings adjustments (1,840) 1,632
Profit for the financial year
attributable to equity
shareholders
of the Company
Year ended 31.12.09
Net interest, tax
Financing special and non-
items and controlling
remeasurements(2) interests Total
USUSD million
By segment
Copper - (809) 1,201
Nickel - (15) (13)
Platinum - 12 44
Iron Ore and Manganese - (918) 571
Metallurgical Coal - (129) 322
Thermal Coal - (204) 517
Diamonds - (154) (90)
Exploration - 5 (167)
Corporate Activities
and
Unallocated Costs - (73) (219)
Core operations - (2,285) 2,166
- (103) 403
Other Mining and
Industrial
2,569(3)
Total/Underlying
earnings - (2,388)
Underlying earnings
adjustments (135) 199 (144)
Profit for the
financial year
attributable to equity
shareholders
of the Company 2,425
(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 period and is equal
to profit for the financial period attributable to equity shareholders of the
Company before special items and remeasurements.
5. Exploration expenditure
Exploration expenditure is stated before special items.
Year ended
6 months ended 6 months ended
30.06.09(1) 31.12.09
USUSD million 30.06.10
By commodity
Copper 8 17 43
Nickel 10 9 22
Platinum group metals 4 10 17
Iron ore 3 4 8
Metallurgical coal 3 3 10
Thermal coal 9 8 25
Zinc 3 3 10
Central exploration
activities 17 16 37
57 70 172
(1) Following the portfolio and management structure changes announced in
October 2009, exploration expenditure is presented by commodity. Comparatives
have been adjusted accordingly.
6. Special items and remeasurements
`Special items` are those items of financial performance that the Group
believes should be separately disclosed on the face of the income statement to
assist in the understanding of the underlying financial performance achieved by
the Group. Such items are material by nature or amount to the period`s results
and require separate disclosure in accordance with IAS 1 (Revised) Presentation
of Financial Statements 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 restructuring costs. Non-operating special items include profits and
losses on disposals of investments and businesses as well as transactions
relating to business combinations.
`Remeasurements` comprise other items which the Group believes should be
reported separately to aid an understanding of the underlying financial
performance of the Group. This category includes:
(i) unrealised gains and losses on `non-hedge` derivative instruments open at
period end (in respect of future transactions) and the reversal of the
historical marked to market value of such instruments settled in the period.
The full realised gains or losses are recorded in underlying earnings in the
same period as the underlying transaction for which such instruments provide an
economic, but not formally designated, hedge (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 based on local currency financial information (and
hence deferred tax is susceptible to currency fluctuations). Such amounts are
included within income tax expense.
Subsidiaries` and joint ventures` special items and remeasurements
Operating special items
Year ended
6 months ended 6 months ended
31.12.09
USUSD million 30.06.10 30.06.09
Restructuring costs:
Other Mining and Industrial (44) (14) (78)
Platinum (15) - (37)
Corporate - - (47)
Metallurgical Coal and
Thermal Coal - (18) (21)
Accelerated depreciation
at Loma de NA-quel (36) - -
Impairment of Loma de
NA-quel - - (114)
Platinum assets written off (12) - (51)
Costs associated with `One
Anglo` initiatives (2) (39) (148)
Dawson Seamgas impairment
reversal 17 - -
Impairment of AmapA system - - (1,667)
Impairment of Tarmac assets - (5) (50)
Bid defence costs - - (45)
Impairment of Iron Ore
Brazil transshipping
vessel - (27) (27)
Provisions for onerous
contracts - - 15
Other (1) 16 (5)
Total operating special
items (93) (87) (2,275)
Tax 10 13 107
Non-controlling interests 9 7 107
Net total attributable to
equity shareholders of the
Company (74) (67) (2,061)
Restructuring costs principally relate to retrenchment and consultancy costs.
In the year ended 31 December 2009 an impairment with associated adjustments of
USD114 million was recorded at Loma de NA-quel due to increased uncertainty over
the renewal of three concessions that expire in 2012 and over the restoration
of 13 concessions that have been cancelled. As a result, in the six months
ended 30 June 2010, accelerated depreciation of USD36 million has been
recorded.
Subsidiaries` and joint ventures` special items and remeasurements (continued)
Operating remeasurements
Year ended
6 months ended 6 months ended
31.12.09
USUSD million 30.06.10 30.06.09
Net (loss)/gain on
non-hedge derivatives (100) 628 757
Net realised gain/(loss)
on derivatives relating to
capital expenditure 69 (169) (105)
Other remeasurements (2) (3) (14)
Total operating
remeasurements (33) 456 638
Tax 6 (142) (207)
Non-controlling interests - (2) 2
Net total attributable to
equity shareholders of the
Company (27) 312 433
The net loss on non-hedge derivatives includes a net unrealised loss on
derivatives relating to capital expenditure at Iron Ore Brazil (Iron Ore and
Manganese segment) and Los Bronces (Copper segment). A net gain of USD69
million was realised in the period principally in respect of the Iron Ore
Brazil and Los Bronces capital expenditure derivative portfolios.
Profits and losses on disposals
Year ended
6 months ended 6 months ended
31.12.09
USUSD million 30.06.10 30.06.09
Disposal of interest in W
estern Bushveld joint
venture 107 - -
Anglo Inyosi Coal BEE
transaction (86) - -
Disposal of interest in
Tarmac`s French and Belgian
concrete products business (81) - -
Partial reversal of CopebrAs
property compensation (36) - -
Disposal of interest in
AngloGold Ashanti - 1,139 1,139
Disposal of interest in
Booysendal joint venture - 247 247
Disposal of interest in
Lebowa Platinum Mines
Limited (1) - 42 69
Disposal of financial asset
investments - - 54
Disposal of interest in
Tongaat Hulett and Hulamin - - 53
Disposal of Silangan
exploration asset - 10 10
Other 4 4 40
Net (loss)/profit on
disposals (92) 1,442 1,612
Tax (2) (40) (76)
Non-controlling interests (12) (65) (66)
Net total attributable to
equity shareholders of the
Company (106) 1,337 1,470
(1) The profit on disposal was revised after finalisation of the valuations of
financial instruments and loan commitments.
In April 2010 the Group sold its 37% interest in the Western Bushveld joint
venture (Platinum segment) for consideration of USD107 million. This investment
had a nominal carrying value.
In June 2010 completion occurred of the previously announced black economic
empowerment (BEE) transaction to dispose of a 27% interest in Anglo Inyosi Coal
(Proprietary) Limited (Thermal Coal segment). The amount recognised on disposal
principally relates to an IFRS 2 Share-based Payment charge of USD78 million.
In May 2010 the Group sold Tarmac`s French and Belgian concrete products
business (Other Mining and Industrial segment) for proceeds of USD86 million.
Financing remeasurements
6 months ended Year ended
USUSD million 6 months ended 30.06.10 30.06.09 31.12.09
Net gain/(loss)
on non-hedge
derivatives 128 (60) (100)
Foreign exchange
gain/(loss) on De
Beers preference
shares 3 (17) (21)
Other
remeasurements 21 - (13)
Total financing
remeasurements 152 (77) (134)
Tax (9) (2) 2
Non-controlling
interests (3) - (2)
Net total
attributable to
equity
shareholders of
the Company 140 (79) (134)
The net gain on non-hedge derivatives principally comprises an unrealised gain
on an embedded interest rate derivative.
Tax special item and tax remeasurements
6 months ended 30.06.10 6 months ended Year ended
USUSD million 30.06.09 31.12.09
Tax special item
Write off of
deferred tax
asset related to
AmapA - - (107)
Non-controlling
interest - - 32
Net total
attributable to
equity
shareholders of
the Company - - (75)
Tax remeasurements
Foreign currency
impact on
deferred tax
balances (62) 309 469
Non-controlling
interests - (11) (12)
Net total
attributable to
equity
shareholders of
the Company (62) 298 457
Total special items and remeasurements
6 months ended 30.06.10 6 months ended Year ended
USUSD million 30.06.09 31.12.09
Total special
items and
remeasurements
before tax and
non-controlling
interests (66) 1,734 (159)
Tax special item - - (107)
Tax remeasurements (62) 309 469
Tax on special
items and
remeasurements 5 (171) (174)
Non-controlling
interests (6) (71) 61
Net total special
items and
remeasurements
attributable to
equity
shareholders of
the Company (129) 1,801 90
Associates` special items and remeasurements
6 months
ended 30.06.10 6 months ended Year ended
USUSD million 30.06.09 31.12.09
Associates` operating
special items and
remeasurements
Impairment of De Beers`
Canadian assets - - (267)
Other impairments (11) - (5)
Share of De Beers`
restructuring costs - - (27)
Net (loss)/gain on
non-hedge derivatives (6) 88 96
Other remeasurements (2) - -
Total associates`
operating special items
and remeasurements (19) 88 (203)
Tax 1 (7) (6)
Non-controlling interests 3 (7) 1
Net total associates`
operating special items
and remeasurements (15) 74 (208)
Associates` profits and
losses on disposals
Disposal of AK06 diamond
deposit - - 22
Other 4 (1) (2)
Associates` net
profit/(loss) on disposals 4 (1) 20
Associates` financing
special items and
remeasurements
Costs associated with
refinancing (13) - (7)
Net gain on non-hedge
derivatives 2 - 6
Total associates`
financing special items
and remeasurements (11) - (1)
Associate`s tax special
item
Write off of deferred tax
asset related to De Beers`
Canadian assets - - (45)
Total associates` special items and remeasurements
6 months ended 30.06.10 6 months ended Year ended
USUSD million 30.06.09 31.12.09
Total associates`
special items and
remeasurements
before tax and
non-controlling
interests (26) 87 (184)
Tax special item - - (45)
Tax on special
items and
remeasurements 1 (7) (6)
Non-controlling
interests 3 (7) 1
Net total
associates`
special items and
remeasurements (22) 73 (234)
Operating special items and remeasurements
Year ended
6 months ended
31.12.09
USUSD million 6 months ended 30.06.10 30.06.09
Operating special
items (93) (87) (2,275)
Operating
remeasurements (33) 456 638
Total operating
special items and
remeasurements
(excluding
associates) (126) 369 (1,637)
Associates`
operating special
items (11) - (299)
Associates`
operating
remeasurements (8) 88 96
Total associates`
operating special
items and
remeasurements (19) 88 (203)
Total operating
special items and
remeasurements
(including
associates) (145) 457 (1,840)
Operating special
items (including
associates) (104) (87) (2,574)
Operating
remeasurements
(including
associates) (41) 544 734
Total operating
special items and
remeasurements
(including
associates) (145) 457 (1,840)
7. Net finance income/(costs)
Finance costs and exchange gains/(losses) are presented net of effective
hedges for respective interest bearing and foreign currency borrowings.
The weighted average capitalisation rate applied to qualifying capital
expenditure was 5.5% (six months ended 30 June 2009: 8.7%; year ended 31
December 2009: 6.5%). Financing remeasurements are set out in note 6.
6 months ended 30.06.10
Before After
remeasure- remeasure-
USUSD million ments ments
Investment income
Interest and other financial income 159 159
Expected return on defined benefit arrangement
assets 104 104
Dividend income from financial asset investments 15 15
278 278
Less: interest capitalised (5) (5)
Total investment income 273 273
Interest expense
Interest and other finance expense (314) (314)
Interest payable on convertible bond (34) (34)
Unwinding of discount on convertible bond (31) (31)
Interest cost on defined benefit arrangements (112) (112)
Unwinding of discount relating to provisions and
other non-current liabilities (30) (30)
(521) (521)
Less: interest capitalised 118 118
Total interest expense (403) (403)
Other financing gains/(losses)
Net foreign exchange gains/(losses) 20 23
Fair value gains/(losses) on non-hedge derivatives - 128
Net fair value gains/(losses) on fair value hedges 3 3
Other net fair value losses (23) (2)
Total other financing gains/(losses) - 152
Net finance income/(costs) (130) 22
6 months ended 30.06.09
Before After
remeasure- remeasure-
USUSD million ments ments
Investment income
Interest and other financial income 164 164
Expected return on defined benefit arrangement
assets 75 75
Dividend income from financial asset investments 14 14
253 253
Less: interest capitalised - -
Total investment income 253 253
Interest expense
Interest and other finance expense (441) (441)
Interest payable on convertible bond (10) (10)
Unwinding of discount on convertible bond (8) (8)
Interest cost on defined benefit arrangements (84) (84)
Unwinding of discount relating to provisions and
other non-current liabilities (17) (17)
(560) (560)
Less: interest capitalised 156 156
Total interest expense (404) (404)
Other financing gains/(losses)
Net foreign exchange gains/(losses) (31) (48)
Fair value gains/(losses) on non-hedge derivatives - (60)
Net fair value gains/(losses) on fair value hedges (6) (6)
Other net fair value losses (10) (10)
Total other financing gains/(losses) (47) (124)
Net finance income/(costs) (198) (275)
Year ended 31.12.09
Before After
remeasure- remeasure-
USUSD million ments ments
Investment income
Interest and other financial income 334 334
Expected return on defined benefit arrangement
assets 157 157
Dividend income from financial asset investments 23 23
514 514
Less: interest capitalised - -
Total investment income 514 514
Interest expense
Interest and other finance expense (724) (724)
Interest payable on convertible bond (44) (44)
Unwinding of discount on convertible bond (39) (39)
Interest cost on defined benefit arrangements (174) (174)
Unwinding of discount relating to provisions and
other non-current liabilities (45) (45)
(1,026) (1,026)
Less: interest capitalised 246 246
Total interest expense (780) (780)
Other financing gains/(losses)
Net foreign exchange gains/(losses) (24) (45)
Fair value gains/(losses) on non-hedge derivatives - (100)
Net fair value gains/(losses) on fair value hedges 29 29
Other net fair value losses (12) (25)
Total other financing gains/(losses) (7) (141)
Net finance income/(costs) (273) (407)
8. Tax on profit on ordinary activities
a) Analysis of charge for the period
6 months ended 6 months ended Year ended
USUSD million 30.06.10 30.06.09 31.12.09
United Kingdom corporation
tax 19 7 50
South Africa tax 473 276 567
Other overseas tax 625 281 700
Prior year adjustments (26) (31) (45)
Current tax (excluding
special items and
remeasurements tax) 1,091 533 1,272
Deferred tax (excluding
special items and
remeasurements tax) 68 (40) 33
Tax (excluding special
items and remeasurements
tax) 1,159 493 1,305
Special items and
remeasurements tax 57 (138) (188)
Income tax expense 1,216 355 1,117
b) Factors affecting tax charge for the period
The effective tax rate for the period of 31.2% (six months ended 30 June 2009:
9.8%; year ended 31 December 2009: 27.7%) is higher (six months ended 30 June
2009 and year ended 31 December 2009: lower) than the applicable standard rate
of corporation tax in the United Kingdom (28%). The reconciling items are:
6 months 6 months Year ended
USUSD million ended 30.06.10 ended 30.06.09 31.12.09
Profit on ordinary
activities before tax 3,903 3,626 4,029
Tax on profit on ordinary
activities calculated at
United Kingdom corporation
tax rate of 28% 1,093 1,015 1,128
Tax effect of share of net
income from associates (108) (74) (24)
Tax effects of:
Special items and
remeasurements
Operating special items
and remeasurements 19 26 558
Profits and losses on
disposals and financing
remeasurements (6) (340) (340)
Tax special item - - 107
Tax remeasurements 62 (309) (469)
Items not
taxable/deductible for tax
purposes
Exploration expenditure 10 13 22
Non-deductible/taxable net
foreign exchange
loss/(gain) 5 (4) 6
Non-taxable net interest
income (4) (10) (2)
Other non-deductible
expenses 62 30 65
Other non-taxable income (19) (13) (39)
Temporary difference
adjustments
Movements in tax losses (7) 49 5
Other temporary differences 15 10 (45)
Other adjustments
Secondary tax on companies
and dividend withholding
taxes 265 53 356
Effect of differences
between local and United
Kingdom rates (139) (49) (139)
Prior year adjustments to
current tax (26) (31) (45)
Other adjustments (6) (11) (27)
Income tax expense 1,216 355 1,117
IAS 1 (Revised) 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 six months ended 30 June 2010 is USD171
million (six months ended 30 June 2009: USD137 million; year ended 31 December
2009: USD286 million). Excluding special items and remeasurements this becomes
USD172 million (six months ended 30 June 2009: USD130 million; year ended 31
December 2009: USD235 million).
The effective rate of tax before special items and remeasurements including
attributable share of associates` tax for the six months ended 30 June 2010 was
31.9%. This was in line with the equivalent effective rate of 31.8% in the six
months ended 30 June 2009. In future periods it is expected that the effective
tax rate, including associates` tax, will remain above the United Kingdom
statutory tax rate.
9. Earnings per share
6 months Year
6 months ended ended ended
USUSD 30.06.10 30.06.09 31.12.09
Profit for the financial period
attributable to equity
shareholders of the Company
Basic earnings per share 1.71 2.47 2.02
Diluted earnings per share 1.65 2.42 1.98
Headline earnings for the
financial period(1)
Basic earnings per share 1.74 1.37 2.46
Diluted earnings per share 1.68 1.34 2.40
Underlying earnings for the
financial period(1)
Basic earnings per share 1.84 0.91 2.14
Diluted earnings per share 1.76 0.90 2.10
(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 basic and diluted earnings per share is based on the
following data:
6 months ended 6 months ended Year ended
USUSD million (unless
otherwise stated) 30.06.10 30.06.09 31.12.09
Earnings
Basic earnings, being
profit for the financial
period attributable to
equity shareholders of the
Company 2,061 2,970 2,425
Effect of dilutive
potential ordinary shares
Interest payable on
convertible bond (net of
tax) 24 7 32
Unwinding of discount on
convertible bond (net of
tax) 22 6 28
Diluted earnings 2,107 2,983 2,485
Number of shares (million)
Basic number of ordinary
shares outstanding(1) 1,205 1,201 1,202
Effect of dilutive
potential ordinary
shares(2)
Share options and awards 14 14 11
Convertible bond 61 18 40
Diluted number of ordinary
shares outstanding(1) 1,280 1,233 1,253
(1) Basic and diluted number of ordinary shares outstanding represent the
weighted average for the period. The average number of ordinary shares in issue
excludes 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 six months ended 30 June 2010 and the six months ended 30 June 2009
there were no share options which were anti-dilutive. In the year ended 31
December 2009 there were 231,351 share options which were potentially dilutive
but were not included in the calculation of diluted earnings per share because
they were anti-dilutive.
In April 2009 the Group issued USD1.7 billion 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. The impact of this
potential conversion has been included in diluted earnings and diluted number
of ordinary shares outstanding.
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 non-controlling
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 (USUSD million)
6 months 6 months Year
ended ended ended
30.06.10 30.06.09 31.12.09
Profit for the financial period
attributable to equity shareholders of
the Company 2,061 2,970 2,425
Operating special items (4) 16 1,908
Operating special items - tax 1 - (66)
Operating special items -
non-controlling interests (2) (7) (100)
Net loss/(profit) on disposals 6 (1,442) (1,612)
Net loss/(profit) on disposals - tax 4 40 76
Net loss/(profit) on disposals -
non-controlling interests 12 65 66
Associates` special items 20 1 259
Associates` special items - tax - - (1)
Associates` special items -
non-controlling interests - - (2)
Headline earnings for the financial
period 2,098 1,643 2,953
Operating special items(1) 97 71 367
Operating special items - tax (11) (13) (41)
Operating special items -
non-controlling interests (7) - (7)
Operating remeasurements 33 (456) (638)
Operating remeasurements - tax (6) 142 207
Operating remeasurements -
non-controlling interests - 2 (2)
Anglo Inyosi Coal BEE transaction 86 - -
Anglo Inyosi Coal BEE transaction - tax (2) - -
Financing remeasurements (152) 77 134
Financing remeasurements - tax 9 2 (2)
Financing remeasurements -
non-controlling interests 3 - 2
Tax special item - - 107
Tax special item - non-controlling
interest - - (32)
Tax remeasurements 62 (309) (469)
Tax remeasurements - non-controlling
interests - 11 12
Associates` special items(2) - - 72
Associates` special items - tax - - (2)
Associates` special items -
non-controlling interests - - (7)
Associates` remeasurements 6 (88) (102)
Associates` remeasurements - tax (1) 7 9
Associates` remeasurements -
non-controlling interests (3) 7 8
Underlying earnings for the financial
period 2,212 1,096 2,569
Basic earnings per share (USUSD)
6 months 6 months Year
ended ended ended
30.06.10 30.06.09 31.12.09
Profit for the financial period
attributable to equity shareholders of
the Company 1.71 2.47 2.02
Operating special items - 0.01 1.59
Operating special items - tax - - (0.05)
Operating special items -
non-controlling interests - - (0.08)
Net loss/(profit) on disposals - (1.20) (1.34)
Net loss/(profit) on disposals - tax - 0.03 0.06
Net loss/(profit) on disposals -
non-controlling interests 0.01 0.06 0.05
Associates` special items 0.02 - 0.21
Associates` special items - tax - - -
Associates` special items -
non-controlling interests - - -
Headline earnings for the financial
period 1.74 1.37 2.46
Operating special items(1) 0.08 0.06 0.30
Operating special items - tax (0.01) (0.01) (0.03)
Operating special items -
non-controlling interests - - (0.01)
Operating remeasurements 0.03 (0.38) (0.53)
Operating remeasurements - tax - 0.12 0.17
Operating remeasurements -
non-controlling interests - - -
Anglo Inyosi Coal BEE transaction 0.07 - -
Anglo Inyosi Coal BEE transaction - tax - - -
Financing remeasurements (0.13) 0.07 0.11
Financing remeasurements - tax 0.01 - -
Financing remeasurements -
non-controlling interests - - -
Tax special item - - 0.09
Tax special item - non-controlling
interest - - (0.03)
Tax remeasurements 0.05 (0.26) (0.39)
Tax remeasurements - non-controlling
interests - 0.01 0.01
Associates` special items(2) - - 0.06
Associates` special items - tax - - -
Associates` special items -
non-controlling interests - - (0.01)
Associates` remeasurements - (0.07) (0.08)
Associates` remeasurements - tax - - 0.01
Associates` remeasurements -
non-controlling interests - - 0.01
Underlying earnings for the financial
period 1.84 0.91 2.14
(1) Six months ended 30 June 2010: includes restructuring costs, accelerated
depreciation at Loma de NA-quel and costs associated with `One Anglo`
initiatives (six months ended 30 June 2009: includes restructuring costs and
costs associated with `One Anglo` initiatives; year ended 31 December 2009:
includes restructuring costs, costs associated with `One Anglo` initiatives,
bid defence costs and provisions for onerous contracts).
(2) Year ended 31 December 2009: includes restructuring costs and the tax
special item.
10. Called-up share capital
30.06.10 30.06.09
Number of USUSD Number of
shares million shares
Authorised:
5% cumulative preference
shares of GBP1
each 50,000 - 50,000
Ordinary shares of
5486/91 US cents each 1,820,000,000 1,000 1,820,000,000
1,000
Called-up, allotted and
fully paid:
5% cumulative preference
shares of GBP1
each 50,000 - 50,000
Ordinary shares of
5486/91 US cents each 1,342,929,799 738 1,342,924,336
738
31.12.09
USUSD Number of USUSD
million shares million
Authorised:
5% cumulative preference
shares of GBP1
each - 50,000 -
Ordinary shares of
5486/91 US cents each 1,000 1,820,000,000 1,000
1,000 1,000
Called-up, allotted and
fully paid:
5% cumulative preference
shares of GBP1
each - 50,000 -
Ordinary shares of
5486/91 US cents each 738 1,342,927,138 738
738 738
In the six months ended 30 June 2010 2,661 ordinary shares of 5486/91 US cents
each were allotted to certain non- executive directors by subscription of their
after tax directors` fees (six months ended 30 June 2009: 5,316 ordinary
shares; year ended 31 December 2009: 8,118 ordinary shares).
In the event of winding up, the holders of the cumulative preference shares
will be entitled to the repayment of a sum equal to the nominal capital paid
up, or credited as paid up, on the cumulative preference shares held by them
and any accrued dividend, whether such dividend has been earned or declared or
not, calculated up to the date of the winding up.
11. Consolidated equity analysis
An analysis of deferred tax and tax on items transferred from equity by
individual related item presented in the Consolidated statement of
comprehensive income is presented below:
6 months ended 6 months ended Year ended
USUSD million 30.06.10 30.06.09 31.12.09
Deferred tax
Revaluation of available
for sale investments (9) (77) (105)
Cash flow hedges 14 (24) (22)
Actuarial net loss on post
retirement benefit schemes 16 31 53
Net deferred tax
recognised directly in
equity 21 (70) (74)
Tax on items transferred
from equity
Transferred to income
statement: sale of
available for sale
investments - 136 135
Transferred to income
statement: cash flow
hedges - 2 (51)
Transferred to initial
carrying amount of hedged
items: cash flow hedges (4) (8) (7)
Net tax on total
transferred from equity (4) 130 77
Fair value and other reserves comprise:
Convertible Available for Cash flow
USUSD million debt reserve sale reserve hedge reserve
Balance at 1 January 2009 - 1,088 (194)
Total comprehensive income - (881) 113
Issue of convertible bond 355 - -
Balance at 30 June 2009 355 207 (81)
Total comprehensive income - 98 113
Disposal of businesses - - (1)
Balance at 31 December 2009 355 305 31
Total comprehensive income - 45 (37)
Disposal of businesses - - -
Balance at 30 June 2010 355 350 (6)
Total fair value
USUSD million Other reserves (1) and other reserves
Balance at 1 January 2009 838 1,732
Total comprehensive income - (768)
Issue of convertible bond - 355
Balance at 30 June 2009 838 1,319
Total comprehensive income - 211
Disposal of businesses - (1)
Balance at 31 December 2009 838 1,529
Total comprehensive income - 8
Disposal of businesses (6) (6)
Balance at 30 June 2010 832 1,531
(1) Other reserves comprise a legal reserve of USD683 million (30 June 2009:
USD689 million; 31 December 2009: USD689 million), a revaluation reserve of
USD34 million (30 June 2009: USD34 million; 31 December 2009: USD34 million)
and a capital redemption reserve of USD115 million (30 June 2009:
USD115 million; 31 December 2009: USD115 million).
12. Consolidated cash flow analysis
a) Reconciliation of profit before tax to cash flows from operations
6 months ended 6 months ended Year ended
USUSD million 30.06.10 30.06.09 31.12.09
Profit before tax 3,903 3,626 4,029
Depreciation and
amortisation 919 734 1,725
Share-based payment charges 103 117 204
Net loss/(profit) on
disposals 92 (1,442) (1,612)
Operating and financing
remeasurements (119) (379) (504)
Non-cash element of
operating special items 49 18 1,981
Net finance costs before
remeasurements 130 198 273
Share of net income from
associates (384) (266) (84)
Provisions 59 (33) (46)
(Increase)/decrease in
inventories (386) (37) 23
Increase in operating
receivables (671) (202) (360)
Increase/(decrease) in
operating payables 140 (597) (573)
Deferred stripping (100) (64) (150)
Other adjustments (6) 3 (2)
Cash flows from operations 3,729 1,676 4,904
b) Reconciliation to the balance sheet
Cash and cash equivalents(1)
USUSD million 30.06.10 30.06.09 31.12.09
Balance sheet 2,868 2,626 3,269
Balance sheet - disposal groups(2) 99 - 64
Bank overdrafts (2) (23) (1)
Bank overdrafts - disposal groups(2) (9) - (13)
Net debt classifications 2,956 2,603 3,319
Short term borrowings
USUSD million 30.06.10 30.06.09 31.12.09
Balance sheet (3,121) (3,304) (1,499)
Balance sheet - disposal groups(2) (1) - -
Bank overdrafts 2 23 1
Bank overdrafts - disposal groups(2) - - -
Net debt classifications (3,120) (3,281) (1,498)
Medium and long term borrowings
USUSD million 30.06.10 30.06.09 31.12.09
Balance sheet (10,076) (10,657) (12,816)
Balance sheet - disposal groups(2) (1) - (3)
Bank overdrafts - - -
Bank overdrafts - disposal groups(2) - - -
Net debt classifications (10,077) (10,657) (12,819)
Current financial asset investments
USUSD million 30.06.10 30.06.09 31.12.09
Balance sheet 6 - 3
Balance sheet - disposal groups(2) - - -
Bank overdrafts - - -
Bank overdrafts - disposal groups(2) - - -
Net debt classifications 6 - 3
(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 Current
cash(1) within after financial asset
equivalents one year one year investments
USUSD million
Balance at 1
January 2009 2,744 (6,749) (7,211) 173 (3)
Cash flow(4) (286) 4,150 (3,636) (200)
Unwinding of
discount on
convertible bond - - (8) -
Equity component
of convertible
bond(4) - - 355 -
Reclassifications - (412) 412 -
Movement in fair
value - - 45 -
Other non-cash
movements - (1) (31) -
Currency movements 145 (269) (583) 27
Balance at 30
June 2009 2,603 (3,281) (10,657) -
Cash flow 545 2,474 (2,617) -
Unwinding of
discount on
convertible bond - - (31) -
Reclassifications - (505) 505 -
Movement in fair
value - - 18 -
Other non-cash
movements - (14) 5 3
Currency movements 171 (172) (42) -
Balance at 31
December 2009 3,319 (1,498) (12,819) 3
Cash flow (327) 634 79 3
Unwinding of
discount on
convertible bond - - (31) -
Disposal of
businesses - - 1 -
Reclassifications - (2,310) 2,310 -
Movement in fair
value - 8 (266) -
Other non-cash
movements - - (8) -
Currency movements (36) 46 657 -
Balance at 30
June 2010 2,956 (3,120) (10,077) 6
Net debt
excluding Net debt including
hedges Hedges(2) hedges
USUSD million
Balance at 1 January 2009 (11,043) (297) (11,340)
Cash flow(4) 28 45 73
Unwinding of discount on
convertible bond (8) - (8)
Equity component of
convertible bond(4) 355 - 355
Reclassifications - - -
Movement in fair value 45 (15) 30
Other non-cash movements (32) - (32)
Currency movements (680) - (680)
Balance at 30 June 2009 (11,335) (267) (11,602)
Cash flow 402 40 442
Unwinding of discount on
convertible bond (31) - (31)
Reclassifications - - -
Movement in fair value 18 (58) (40)
Other non-cash movements (6) - (6)
Currency movements (43) - (43)
Balance at 31 December 2009 (10,995) (285) (11,280)
Cash flow 389 (238) 151
Unwinding of discount on
convertible bond (31) - (31)
Disposal of businesses 1 - 1
Reclassifications - - -
Movement in fair value (258) (172) (430)
Other non-cash movements (8) - (8)
Currency movements 667 - 667
Balance at 30 June 2010 (10,235) (695) (10,930)
(1) The Group operates in certain countries (principally South Africa and
Venezuela) where the existence of exchange controls may restrict the use of
certain cash balances. These restrictions are not expected to have a material
effect on the Group`s ability to meet its ongoing obligations.
(2) Derivative instruments that provide an economic hedge of assets and
liabilities in net debt are included above to reflect the true net debt
position of the Group at the period end. These consist of net current
derivative liabilities of USD37 million (30 June 2009: USD27 million net
liabilities; 31 December 2009: USD41 million net assets) and net non-current
derivative liabilities of USD658 million (30 June 2009: USD240 million net
liabilities; 31 December 2009: USD326 million net liabilities) which are
classified within `Other financial assets (derivatives)` and `Other financial
liabilities (derivatives)` 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 USD1,330 million due to the conversion feature of USD355 million which
is presented separately in equity.
13. Financial liabilities analysis
An analysis of borrowings, as presented on the Consolidated balance sheet, is
set out below:
30.06.10
Due within Due after
one year(1) one year Total
USUSD million
Secured
Bank loans and overdrafts 36 398 434
Obligations under finance leases 7 7 14
Other loans - - -
Unsecured 43 405 448
Bank loans and overdrafts 2,394 1,374 3,768
Bonds issued under EMTN programme 513 4,028 4,541
US bond - 2,051 2,051
Convertible bond(2) - 1,400 1,400
Commercial paper 50 - 50
Obligations under finance leases - - -
Other loans 121 818 939
3,078 9,671 12,749
Total 3,121 10,076 13,197
30.06.09
Due within Due after
one year(1) one year Total
USUSD million
Secured
Bank loans and overdrafts 380 441 821
Obligations under finance leases 5 10 15
Other loans - 2 2
Unsecured 385 453 838
Bank loans and overdrafts 2,363 3,636 5,999
Bonds issued under EMTN programme 92 2,757 2,849
US bond - 1,948 1,948
Convertible bond(2) - 1,338 1,338
Commercial paper 419 - 419
Obligations under finance leases 2 7 9
Other loans 43 518 561
2,919 10,204 13,123
Total 3,304 10,657 13,961
31.12.09
Due within Due after
one year(1) one year Total
USUSD million
Secured
Bank loans and overdrafts 416 413 829
Obligations under finance leases 8 11 19
Other loans - - -
Unsecured 424 424 848
Bank loans and overdrafts 351 3,982 4,333
Bonds issued under EMTN programme 572 4,410 4,982
US bond - 1,935 1,935
Convertible bond(2) - 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
(1) Bank loans and overdrafts due within one year include short term borrowings
under long term committed facilities of USD25 million (30 June 2009: USD915
million; 31 December 2009: USD48 million).
(2) Represents the fair value of the debt component of the convertible bond at
the date of issue of USD1,330 million (net of fees) adjusted for cumulative
unwinding of discount of USD70 million (six months ended 30 June 2009: USD8
million; year ended 31 December 2009: USD39 million). The fair value of the
equity conversion feature was USD355 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 the
period end:
USUSD million 30.06.10 30.06.09 31.12.09
Expiry date
Within one year(1) 4,442 1,838 2,247
Greater than one year, less than two
years 2,942 1,376 3,090
Greater than two years, less than five
years 2,052 4,490 4,093
Greater than five years 54 199 90
9,490 7,903 9,520
(1) Includes undrawn rand facilities equivalent to USD1.5 billion (30 June
2009: USD1.5 billion; 31 December 2009: USD1.5 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 USD1.3 billion, subject to certain disbursement conditions and the
granting of the remaining Installation licence (30 June 2009: USD1.2 billion;
31 December 2009: USD1.4 billion).
In the six months ended 30 June 2010 the Group raised USD100 million through
the issuance of a floating rate note, due April 2012, under the Euro Medium
Term Note (EMTN) programme, Rand 1 billion (USD131 million) through the
issuance of a bond, due in May 2015, under the South African Domestic Medium
Term Note (DMTN) programme and Rand 392 million (USD51 million) from the
issuance of commercial paper under the DMTN programme.
In July 2010 the Group replaced a USD2.5 billion facility maturing in March
2012 with a USD3.5 billion facility maturing in July 2015.
14. EBITDA by segment
Year ended
6 months ended
30.06.09(1) 31.12.09
USUSD million 6 months ended 30.06.10
By segment
Copper 1,312 715 2,254
Nickel 81 2 28
Platinum 785 263 677
Iron Ore and
Manganese 1,711 753 1,593
Metallurgical Coal 416 422 706
Thermal Coal 433 456 875
Diamonds 340 75 215
Other Mining and
Industrial 427 402 878
Exploration (57) (70) (172)
Corporate
Activities and
Unallocated Costs (34) (33) (124)
EBITDA 5,414 2,985 6,930
(1) Due to the portfolio and management structure changes announced in October
2009, the segments have changed from those reported at 30 June 2009.
Comparatives have been reclassified to align with current 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:
6 months 6 months Year ended
USUSD million ended 30.06.10 ended 30.06.09 31.12.09
Total profit from
operations and associates 3,881 3,901 4,436
Operating special items
and remeasurements
(including associates) 145 (457) 1,840
Net loss/(profit) on
disposals (including
associates) 88 (1,441) (1,632)
Associates` financing
special items and
remeasurements 11 - 1
Share of associates`
interest, tax and
non-controlling interests 236 133 312
Operating profit,
including associates,
before special items and
remeasurements 4,361 2,136 4,957
Depreciation and
amortisation: subsidiaries
and joint ventures 919 734 1,725
Depreciation and
amortisation: associates 134 115 248
EBITDA 5,414 2,985 6,930
EBITDA is reconciled to `Cash flows from operations` as follows:
6 months ended 6 months ended Year ended
USUSD million 30.06.10 30.06.09 31.12.09
EBITDA 5,414 2,985 6,930
Share of operating profit
from associates before
special items and
remeasurements (646) (312) (580)
Cash element of operating
special items (44) (69) (294)
Share of associates`
depreciation and
amortisation (134) (115) (248)
Share-based payment charges 103 117 204
Provisions 59 (33) (46)
(Increase)/decrease in
inventories (386) (37) 23
Increase in operating
receivables (671) (202) (360)
Increase/(decrease) in
operating payables 140 (597) (573)
Deferred stripping (100) (64) (150)
Other adjustments (6) 3 (2)
Cash flows from operations 3,729 1,676 4,904
15. Acquisitions
The Group made no material acquisitions of subsidiaries or joint ventures in
the six months ended 30 June 2010, the six months ended 30 June 2009 or the
year ended 31 December 2009.
No cash was paid to acquire a controlling interest in the six months ended 30
June 2010 (six months ended 30 June 2009: USD4 million; year ended 31 December
2009: USD4 million). No cash was paid to acquire non-controlling interests in
existing subsidiaries (six months ended 30 June 2009: USD63 million; year ended
31 December 2009: USD75 million). The prior period amounts principally related
to Anglo Ferrous Brazil SA.
16. Disposals
6 months 6 months ended Year ended
USUSD million ended 30.06.10 30.06.09 31.12.09
Net assets disposed
Tangible assets 125 336 425
Other non-current assets 61 - 2
Current assets 123 11 48
Current liabilities (45) (24) (34)
Non-current liabilities (23) (64) (65)
Net assets 241 259 376
Non-controlling interests - - (3)
Group`s share of net
assets immediately prior
to disposal 241 259 373
Less: Retained investments
in associates - (125) (235)
Net assets disposed 241 134 138
Cumulative translation
differences recycled from
reserves (3) - -
Net gain on disposals 25 289 316
Net sale proceeds 263 423 454
Net cash and cash
equivalents disposed (20) (9) (10)
Deferred consideration (19) - -
(64)(1) (2) (2)
(186) (212)
Non-cash consideration
Proceeds received in prior
period(3) - (270) (270)
Proceeds received after
period end - (39) (4)
Costs accrued - 31 6
Deal facilitation charges - 41 41
Net cash inflow/(outflow)
from disposals(4) 160 (9) 5
(1) Represents ordinary shares in W esizwe Platinum Limited received as
consideration on disposal of the Western Bushveld joint venture.
(2) Represents an interest in Anooraq Resources Corporation and preference
shares in Plateau Resources (Proprietary) Limited received from the Platinum
disposals in 2009.
(3) Relates to the Platinum disposals in 2009. A portion of the proceeds was
invested in unlisted preference shares when received. Following completion of
the transaction in June 2009 these were sold and USD200 million was included in
the Consolidated cash flow statement within `Proceeds from sale of financial
asset investments`.
(4) No cash has been received in the six months ended 30 June 2010 in respect
of deferred consideration for disposals in prior periods (six months ended 30
June 2009: USD10 million in respect of disposals in 2008; year ended 31
December 2009: USD64 million in respect of disposals in 2008). This resulted in
a total net cash inflow of USD160 million from disposals of subsidiaries and
joint ventures in the six months ended 30 June 2010 (six months ended 30 June
2009: USD1 million; year ended 31 December 2009: USD69 million).
Disposals in the six months ended 30 June 2010
Disposals of subsidiaries and joint ventures during the six months ended 30
June 2010 mainly related to disposals in the Platinum and Other Mining and
Industrial segments.
In April 2010 Platinum sold its 37% interest in the Western Bushveld joint
venture for consideration of USD107 million. This investment had a nominal
carrying value. In March 2010 Tarmac (included in the Other Mining and
Industrial segment) sold its Polish concrete products business for proceeds of
USD65 million. In May 2010 Tarmac sold its French and Belgian concrete products
business for proceeds of USD86 million.
Disposals in 2009
Disposals of subsidiaries and joint ventures during 2009 mainly related to
disposals in the Platinum segment.
In June 2009 Platinum disposed of a 50% interest in the Booysendal joint
venture and a 51% interest in Lebowa Platinum Mines Limited (and certain other
joint venture projects). These transactions were part of previously announced
BEE deals.
17. Disposal groups and non-current assets held for sale
Tarmac`s Polish concrete products business, which was previously classified as
held for sale at 31 December 2009, was disposed of in 2010.
The following assets and liabilities relating to disposal groups were
classified as held for sale at 30 June 2010 and 31 December 2009. There were no
disposal groups or non-current assets held for sale at 30 June 2009. The Group
expects to complete the sale of these businesses within 12 months of the period
end.
Zinc Tarmac
disposal disposal
USUSD million groups(1) groups(2) Other
Intangible assets 5 11 -
Tangible assets 402 342 17
Deferred tax assets - - -
Other non-current assets 45 8 -
Total non-current assets 452 361 17
Inventories 84 26 -
Trade and other receivables 51 56 -
Cash and cash equivalents 67 32 -
Total current assets 202 114 -
Total assets 654 475 17
Trade and other payables (66) (45) -
Short term borrowings - (10) -
Provisions for liabilities and charges - (4) -
Total current liabilities (66) (59) -
Medium and long term borrowings - (1) -
Retirement benefit obligations (7) (1) -
Deferred tax liabilities (28) (37) (1)
Provisions for liabilities and charges (93) (47) -
Other non-current liabilities - (2) -
Total non-current liabilities (128) (88) (1)
Total liabilities (194) (147) (1)
Net assets 460 328 16
30.06.10 31.12.09
USUSD million Total Total(2)
Intangible assets 16 13
Tangible assets 761 422
Deferred tax assets - 5
Other non-current assets 53 2
Total non-current assets 830 442
Inventories 110 42
Trade and other receivables 107 72
Cash and cash equivalents 99 64
Total current assets 316 178
Total assets 1,146 620
Trade and other payables (111) (66)
Short term borrowings (10) (13)
Provisions for liabilities and charges (4) (4)
Total current liabilities (125) (83)
Medium and long term borrowings (1) (3)
Retirement benefit obligations (8) (1)
Deferred tax liabilities (66) (46)
Provisions for liabilities and charges (140) (55)
Other non-current liabilities (2) (3)
Total non-current liabilities (217) (108)
Total liabilities (342) (191)
Net assets 804 429
(1) Relates to the Group`s portfolio of zinc assets comprising the Skorpion
mine, the Lisheen mine and a 74% interest in Black Mountain Mining
(Proprietary) Limited, which holds 100% of the Black Mountain mine and the
Gamsberg project. These assets are included in the Other Mining and Industrial
segment.
(2) Relates to certain of Tarmac`s European businesses. Tarmac is included in
the Other Mining and Industrial segment.
The net carrying amount of assets and associated liabilities classified as held
for sale was written down by nil during the six months ended 30 June 2010 (six
months ended 30 June 2009: nil; year ended 31 December 2009: USD46 million).
18. 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 30 June 2010 contingent liabilities in respect of the Group`s
subsidiaries comprise aggregate amounts of USD757 million (30 June 2009: USD508
million; 31 December 2009: USD704 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 30 June
2010, 30 June 2009 or 31 December 2009.
ii) Contingent assets
Kumba Iron Ore Limited
On 26 February 2010 Kumba Iron Ore Limited (Kumba) issued an announcement
indicating that its subsidiary, Sishen Iron Ore Company (Pty) Limited (SIOC)
had notified ArcelorMittal on 5 February 2010, that it was no longer entitled
to receive 6.25 Mtpa of iron ore mined by SIOC at cost plus 3% from Sishen
Mine, as a result of the fact that ArcelorMittal had failed to convert its old
order mining rights. This contract mining agreement, concluded in 2001, was
premised on ArcelorMittal owning an undivided 21.4% interest in the mineral
rights of Sishen Mine and as a result of ArcelorMittal`s failure to convert its
old order mining rights, accordingly the contract mining agreement became
inoperative in its entirety as of 1 May 2009.
As a result, a dispute arose between SIOC and ArcelorMittal as to whether the
contract mining agreement became inoperative, which SIOC has referred to
arbitration. SIOC served its statement of claim on 19 April 2010. SIOC has
continued to supply ArcelorMittal with iron ore from Sishen Mine and has
invoiced ArcelorMittal for the delivery of 1.45 Mt of iron ore since March 2010
at commercial prices. The Group has recognised revenue at cost plus 3% in
preparing the financial results for the period ended 30 June 2010.
SIOC and ArcelorMittal reached an interim pricing agreement on 21 July 2010 in
respect of the supply of iron ore to ArcelorMittal from Sishen Mine. The
duration of the interim agreement will be retrospective to 1 March 2010, and
will endure until 31 July 2011. ArcelorMittal will pay to SIOC a fixed price of
USD50 per ton of iron ore deliverable to ArcelorMittal`s Saldanha Steel plant,
and USD70 per ton of iron ore deliverable to ArcelorMittal`s inland plants,
which price is calculated on a free on rail ex-Sishen Mine gate basis. The
difference between the revenue recognised and amounts outstanding under the
interim agreement for the period ended 30 June 2010 amounted to USD53 million.
Upon completion of documentation, this amount will be recognised within Kumba`s
revenue in the second half of 2010.
There were no other significant contingent assets in the Group at 30 June 2010
(30 June 2009 and 31 December 2009:
no significant contingent assets).
iii) Other
Kumba Iron Ore Limited
After ArcelorMittal failed to convert its old order rights, SIOC applied for
the residual 21.4% mining right previously held by ArcelorMittal and its
application was accepted by the Department of Mineral Resources (DMR) on 4 May
2009. A competing application for a prospecting right over the same area was
also accepted by the DMR. SIOC objected to this acceptance. Notwithstanding
this objection, a prospecting right over the 21.4% interest was granted by the
DMR to Imperial Crown Trading 289 (Pty) Limited (ICT). SIOC has lodged an
appeal against the grant of the prospecting right by the DMR. This appeal
process remains ongoing.
In addition, SIOC initiated a review application in the North Gauteng High
Court on 21 May 2010 in relation to the decision of the DMR to grant a
prospecting right to ICT.
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% non-controlling
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 USD5 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 or 2012.
19. Related party transactions
The Group has a related party relationship with its subsidiaries, joint
ventures and associates.
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 six months ended 30 June 2010
totalled USD72 million (six months ended 30 June 2009: USD340 million; year
ended 31 December 2009: USD616 million), as disclosed in the Consolidated cash
flow statement.
At 30 June 2010 the Group had provided loans to joint ventures of USD284
million (30 June 2009: USD201 million; 31 December 2009: USD262 million). These
loans are included in financial asset investments.
At 30 June 2010 the directors of the Company and their immediate relatives
controlled 3% (30 June 2009: 3%; 31 December 2009: 3%) of the voting shares of
the Company.
Related party transactions with De Beers
At 30 June 2010 the Group held USD88 million (30 June 2009: USD88 million; 31
December 2009: USD88 million) of 10% non-cumulative redeemable preference
shares in DB Investments, the holding company of De Beers
SociACopyrighttACopyright 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 United Kingdom Listing Authority Listing Rules,
being Central Holdings Limited (and certain of its subsidiaries, together
`CHL`), 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 cumulative amount of dividends exchanged amounted to USD142
million as at 30 June 2010 (30 June 2009: USD142 million; 31 December 2009:
USD142 million). The loans are subordinated and are interest free for two years
from the date of initial reinvestment at which point they become interest
bearing in line with market rates as at that date.
In April 2009 the shareholders of De Beers provided an additional loan to De
Beers, proportionate to their shareholdings, totalling USD500 million (the
Group`s share was USD225 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. 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 subscribed, in proportion to their shareholding, for USD1 billion of
additional equity in De Beers (the Group`s share was USD450 million; CHL`s
share was USD400 million).
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, 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 by 30 June 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 at 30 June 2010 is USD101 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) defer their 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 USD20 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 USD8 million
of dividends, which will continue to accrue interest until paid.
20. Events occurring after the period end
Sale of undeveloped coal assets in Australia
On 5 July 2010 the Group announced it had entered into a conditional agreement
with a consortium, composed of Korea Electric Power Corporation, Pohang Iron
and Steel Company and Cockatoo Coal Limited, to sell its interests in five
undeveloped coal assets in Australia for approximately USD500 million in cash.
The assets comprise two wholly owned underground coal deposits in New South
Wales (Bylong and Sutton Forest) and the Group`s share in three open cut coal
deposits in Queensland (Collingwood, Ownaview and Taroom, all of which are held
51% by the Group and 49% by Mitsui Moura Investment Pty Limited (Mitsui)). The
assets have total estimated resources of 847 million tonnes.
The transaction is subject to customary regulatory approvals, Cockatoo Coal
Limited obtaining necessary financing and Mitsui`s pre-emptive rights over the
Queensland assets. The transaction is expected to complete in stages from the
fourth quarter of 2010.
Kumba Iron Ore Limited
On 27 July 2010 Anglo American increased its shareholding in Kumba Iron Ore
Limited by 2.8% through the exercise of options purchased in 2008 for USD301
million, thereby increasing its shareholding from 62.5% to 65.3%.
Responsibility statements
We confirm that to the best of our knowledge:
(a) the Condensed financial statements have been prepared in accordance with
IAS 34 Interim Financial Reporting, and give a true and fair view of the
assets, liabilities, financial position and profit of the undertakings included
in the consolidation as a whole;
(b) the Half year financial report includes a fair review of the information
required by DTR 4.2.7 R (being an indication of important events that have
occurred during the first six months of the financial year, and their impact on
the Half year financial report, and a description of the principal risks and
uncertainties for the remaining six months of the financial year); and
(c) the Half year financial report includes a fair review of the information
required by DTR 4.2.8 R (being disclosure of related party transactions that
have taken place in the first six months of the current financial year and that
have materially affected the financial position or the performance of the Group
during that period and any changes in the related party transactions described
in the last annual report that could have a material effect on the financial
position or performance of the Group in the first six months of the current
financial year).
By order of the Board
Cynthia Carroll RenACopyright
MACopyrightdori
Chief executive Finance director
INDEPENDENT REVIEW REPORT TO ANGLO AMERICAN PLC
We have been engaged by the Company to review the Condensed financial
statements in the Half year financial report for the six months ended 30 June
2010 which comprises the Consolidated income statement, the Consolidated
statement of comprehensive income, the Consolidated balance sheet, the
Consolidated cash flow statement, the Consolidated statement of changes in
equity and related notes 1 to 20. We have read the other information contained
in the Half year financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the information in the
Condensed financial statements.
This report is made solely to the Company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim
Financial Information Performed by the Independent Auditor of the Entity"
issued by the Auditing Practices Board for use in the United Kingdom (ISRE
2410). Our work has been undertaken so that we might state to the Company those
matters we are required to state to them in an independent review report and
for no other purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Company, for our review work,
for this report, or for the conclusions we have formed.
Directors` responsibilities
The Half year financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the Half year
financial report in accordance with the Disclosure and Transparency Rules of
the United Kingdom`s Financial Services Authority.
As disclosed in note 2, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the European Union. The
Condensed financial statements included in this Half year financial report has
been prepared in accordance with International Accounting Standard 34, Interim
Financial Reporting (IAS 34), as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the Condensed
financial statements in the Half year financial report based on our review.
Scope of Review
We conducted our review in accordance with ISRE 2410 (UK and Ireland) issued by
the Auditing Practices Board. A review of interim financial information
consists of making inquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK and Ireland) and consequently does
not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an
audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the Condensed financial statements in the Half year financial
report for the six months ended 30 June 2010 is not prepared, in all material
respects, in accordance with IAS 34 as adopted by the European Union and the
Disclosure and Transparency Rules of the United Kingdom`s Financial Services
Authority.
Deloitte LLP
Chartered Accountants and Statutory Auditors
London, United Kingdom
29 July 2010
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 the Copper segment 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 30 June 2009.
Comparatives have been reclassified to align with current presentation.
6 months ended
30.06.10
Copper segment
Collahuasi
100% basis (Anglo American 44%)
Ore mined tonnes 47,222,700
Ore processed Oxide tonnes 3,387,300
Sulphide tonnes 24,412,600
Ore grade processed Oxide % Cu 0.5
Sulphide % Cu 1.1
Production Copper concentrate dry metric
tonnes 949,800
Copper cathode tonnes 19,900
Copper in concentrate tonnes 246,900
Total copper production
for Collahuasi tonnes 266,800
Anglo American`s share
of copper production for
Collahuasi tonnes 117,400
Anglo American Sur
Los Bronces mine
Ore mined tonnes 9,608,200
Marginal ore mined tonnes 21,744,400
Las Tortolas concentrator Ore processed tonnes 9,423,300
Ore grade processed % Cu 1.1
Average recovery % 87.8
Production Copper concentrate dry metric
tonnes 296,600
Copper cathode tonnes 22,000
Copper in sulphate tonnes 2,100
Copper in concentrate tonnes 87,100
Total tonnes 111,200
El Soldado mine
Ore mined Open pit - ore mined tonnes 2,507,500
Open pit - marginal
ore mined tonnes 101,900
Underground (sulphide)tonnes 681,900
Total tonnes 3,291,300
Ore processed Oxide tonnes 770,600
Sulphide tonnes 3,638,700
Ore grade processed Oxide % Cu 0.7
Sulphide % Cu 0.6
Production Copper concentrate
dry metric tonnes 91,600
Copper cathode tonnes 2,100
Copper in concentrate tonnes 18,100
Total tonnes 20,200
Chagres Smelter
Copper concentrate
smelted tonnes 69,400
Production Copper blister/anode tonnes 67,600
Copper blister/anode
(third party) tonnes -
Acid tonnes 224,900
Total copper production
for Anglo American Sur(1) tonnes 131,400
6 months ended
30.06.09
Copper segment
Collahuasi
100% basis (Anglo American 44%)
Ore mined tonnes 28,750,800
Ore processed Oxide tonnes 3,743,300
Sulphide tonnes 22,166,400
Ore grade processed Oxide % Cu 0.6
Sulphide % Cu 1.1
Production Copper concentrate
dry metric tonnes 836,600
Copper cathode tonnes 21,700
Copper in concentrate tonnes 226,200
Total copper production
for Collahuasi tonnes 247,900
Anglo American`s share of
copper production for
Collahuasi tonnes 109,100
Anglo American Sur
Los Bronces mine
Ore mined tonnes 10,191,300
Marginal ore mined tonnes 10,717,400
Las Tortolas concentrator Ore processed tonnes 10,152,000
Ore grade processed % Cu 1.0
Average recovery % 83.7
Production Copper concentrate
dry metric tonnes 330,800
Copper cathode tonnes 22,800
Copper in sulphate tonnes 1,200
Copper in concentrate tonnes 86,700
Total tonnes 110,700
El Soldado mine
Ore mined Open pit - ore mined tonnes 3,769,000
Open pit - marginal
ore mined tonnes 12,700
Underground (sulphide)tonnes 747,500
Total tonnes 4,529,200
Ore processed Oxide tonnes 640,700
Sulphide tonnes 3,714,200
Ore grade processed Oxide % Cu 0.7
Sulphide % Cu 0.7
Production Copper concentrate
dry metric tonnes 75,900
Copper cathode tonnes 2,000
Copper in concentrate tonnes 18,900
Total tonnes 20,900
Chagres Smelter
Copper concentrate
smelted tonnes 64,600
Production Copper blister/anode tonnes 63,200
Copper blister/anode
(third party) tonnes -
Acid tonnes 222,200
Total copper production
for Anglo American Sur(1) tonnes 131,600
Year ended
31.12.09
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`s share of
copper production for
Collahuasi tonnes 235,800
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 45,500
Copper in sulphate tonnes 2,900
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
Chagres Smelter
Copper concentrate
smelted tonnes 140,900
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
(1) Total copper production includes total concentrate, cathode and copper in
sulphate production and blister/anode produced from third party purchased
material.
6 months ended
30.06.10
Copper segment (continued)
Anglo American Norte
Mantos Blancos mine
Ore processed Oxide tonnes 2,185,100
Sulphide tonnes 1,749,400
Marginal ore mined tonnes 2,649,700
Ore grade processed Oxide % Cu (soluble) 0.6
Sulphide % Cu (insoluble) 1.1
Marginal ore % Cu (soluble) 0.2
Production Copper concentrate dry metric tonnes 53,800
Copper cathode (third party) tonnes -
Copper cathode tonnes 19,300
Copper in concentrate tonnes 17,700
Total tonnes 37,000
Mantoverde mine
Ore processed Oxide tonnes 4,474,200
Marginal ore tonnes 2,559,000
Ore grade processed Oxide % Cu (soluble) 0.7
Marginal ore % Cu (soluble) 0.3
Production Copper cathode tonnes 29,700
Total copper production for Anglo American Norte(1) tonnes 66,700
Total Copper segment copper production(1) tonnes 315,500
Platinum copper production tonnes 5,600
Black Mountain copper production tonnes 1,000
Total attributable copper production(1) tonnes 322,100
Nickel segment
Codemin
Ore mined tonnes 458,400
Ore processed tonnes 262,900
Ore grade processed % Ni 1.9
Production tonnes 4,600
Loma de NA-quel
Ore mined tonnes 382,500
Ore processed tonnes 356,100
Ore grade processed % Ni 1.6
Production tonnes 5,500
Total Nickel segment nickel production tonnes 10,100
Platinum nickel production tonnes 9,200
Total attributable nickel production tonnes 19,300
Platinum segment(2)
Platinum troy ounces 1,000,500
Palladium troy ounces 541,400
Rhodium troy ounces 128,900
troy ounces 1,670,800
Nickel(3) tonnes 9,200
Copper(3) tonnes 5,600
Gold troy ounces 38,900
Equivalent refined platinum troy ounces 1,195,700
Iron Ore and Manganese segment
Kumba Iron Ore
Lump tonnes 13,214,000
Fines tonnes 8,720,000
AmapA(4)
Sinter feed tonnes 682,000
Pellet feed tonnes 1,170,000
Total iron ore production tonnes 23,786,000
Samancor(5)
Manganese ore tonnes 1,358,000
Manganese alloys (6) tonnes 155,100
6 months ended
30.06.09
Copper segment (continued)
Anglo American Norte
Mantos Blancos mine
Ore processed Oxide tonnes 2,172,500
Sulphide tonnes 2,192,900
Marginal ore mined tonnes 1,640,000
Ore grade processed Oxide % Cu (soluble) 0.6
Sulphide % Cu (insoluble) 1.2
Marginal ore % Cu (soluble) 0.3
Production Copper concentrate dry metric tonnes 69,000
Copper cathode (third party) tonnes 4,500
Copper cathode tonnes 17,000
Copper in concentrate tonnes 23,200
Total tonnes 44,700
Mantoverde mine
Ore processed Oxide tonnes 4,769,800
Marginal ore tonnes 2,296,200
Ore grade processed Oxide % Cu (soluble) 0.7
Marginal ore % Cu (soluble) 0.3
Production Copper cathode tonnes 30,500
Total copper production for Anglo American Norte(1) tonnes 75,200
Total Copper segment copper production(1) tonnes 315,900
Platinum copper production tonnes 4,900
Black Mountain copper production tonnes 1,100
Total attributable copper production(1) tonnes 321,900
Nickel segment
Codemin
Ore mined tonnes 235,200
Ore processed tonnes 247,600
Ore grade processed % Ni 2.0
Production tonnes 4,500
Loma de NA-quel
Ore mined tonnes 508,500
Ore processed tonnes 373,100
Ore grade processed % Ni 1.6
Production tonnes 5,600
Total Nickel segment nickel production tonnes 10,100
Platinum nickel production tonnes 8,700
Total attributable nickel production tonnes 18,800
Platinum segment(2)
Platinum troy ounces 1,056,400
Palladium troy ounces 596,700
Rhodium troy ounces 163,900
troy ounces 1,817,000
Nickel(3) tonnes 8,700
Copper(3) tonnes 4,900
Gold troy ounces 44,100
Equivalent refined platinum troy ounces 1,243,900
Iron Ore and Manganese segment
Kumba Iron Ore
Lump tonnes 11,671,000
Fines tonnes 7,476,000
AmapA(4)
Sinter feed tonnes 191,000
Pellet feed tonnes 990,000
Total iron ore production tonnes 20,328,000
Samancor(5)
Manganese ore tonnes 493,000
Manganese alloys (6) tonnes 52,000
Year ended
31.12.09
Copper segment (continued)
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 (third party) tonnes 8,600
Copper cathode tonnes 37,600
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(1) tonnes 151,700
Total Copper segment copper production(1) tonnes 669,800
Platinum copper production tonnes 11,200
Black Mountain copper production tonnes 2,200
Total attributable copper production(1) 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 NA-quel
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
Platinum nickel production tonnes 19,500
Total attributable nickel production tonnes 39,400
Platinum segment(2)
Platinum troy ounces 2,451,600
Palladium troy ounces 1,360,500
Rhodium troy ounces 349,900
troy ounces 4,162,000
Nickel(3) tonnes 19,500
Copper(3) tonnes 11,200
Gold troy ounces 90,900
Equivalent refined platinum troy ounces 2,464,300
Iron Ore and Manganese segment
Kumba Iron Ore
Lump tonnes 25,300,000
Fines tonnes 16,643,000
AmapA(4)
Sinter feed tonnes 576,100
Pellet feed tonnes 2,077,100
Total iron ore production tonnes 44,596,200
Samancor(5)
Manganese ore tonnes 1,570,000
Manganese alloys (6) tonnes 29,000
(1) Total copper production includes total concentrate, cathode and copper in
sulphate production and blister/anode produced from third party purchased
material.
(2) See the published results of Anglo Platinum Limited for further analysis of
production information.
(3) Also disclosed within total attributable nickel and copper production.
(4) 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.
(5) Saleable production.
(6) Production includes Medium Carbon Ferro Manganese.
6 months ended 6 months ended Year ended
30.06.10 30.06.09 31.12.09
Coal (tonnes)
Metallurgical Coal segment
Australia
Metallurgical 7,079,500 5,669,300 12,622,600
Thermal 7,320,000 6,950,100 14,051,800
Total Metallurgical Coal
segment coal production 14,399,500 12,619,400 26,674,400
Thermal Coal segment
South Africa
221,800 392,300 747,100
Metallurgical
Thermal 9,913,300 10,806,800 22,185,900
Eskom 16,487,300 17,376,500 36,225,100
26,622,400 28,575,600 59,158,100
South America
Thermal 5,317,800 5,351,700 10,189,600
Total Thermal Coal segment
coal production(1) 31,940,200 33,927,300 69,347,700
Other Mining and
Industrial segment
South America
Thermal 262,900 299,000 750,700
Canada
Metallurgical 401,400 330,500 645,300
Thermal - - 73,000
401,400 330,500 718,300
Total Other Mining and
Industrial segment coal
production 664,300 629,500 1,469,000
Total coal production(1) 47,004,000 47,176,200 97,491,100
Coal (tonnes)
Metallurgical Coal segment
Australia
Callide 4,377,900 4,386,500 8,766,400
Drayton 2,202,900 1,824,300 3,630,200
Capcoal 2,797,700 1,725,400 4,598,900
Jellinbah East 979,500 845,800 1,745,800
Moranbah 1,727,400 1,410,800 2,581,000
Dawson Complex 1,505,900 1,687,100 3,756,200
Foxleigh 808,200 739,500 1,595,900
Total Metallurgical Coal
segment coal production 14,399,500 12,619,400 26,674,400
Thermal Coal segment
South Africa
Greenside 1,655,100 1,547,900 3,294,600
Goedehoop 2,890,300 3,416,800 6,905,000
Isibonelo 2,040,400 2,453,400 5,061,900
Kriel 4,519,400 5,211,000 11,161,700
Kleinkopje 2,108,000 2,267,100 4,414,000
Landau 1,955,000 2,139,100 4,231,500
New Denmark 2,267,200 1,810,000 3,728,900
New Vaal 7,629,800 8,584,900 17,553,700
Nooitgedacht - 249,700 475,000
Mafube 1,097,000 895,700 2,212,800
Zibulo (1) 460,200 - 119,000
South America 26,622,400 28,575,600 59,158,100
Carbones del CerrejACubedn 5,317,800 5,351,700 10,189,600
Total Thermal Coal segment
coal production(1) 31,940,200 33,927,300 69,347,700
Other Mining and
Industrial segment
South America
Carbones del Guasare 262,900 299,000 750,700
Canada
Peace River Coal 401,400 330,500 718,300
Total Other Mining and
Industrial segment coal
production 664,300 629,500 1,469,000
Total coal production(1) 47,004,000 47,176,200 97,491,100
(1) Includes 460 kt (six months ended 30 June 2009: nil; year ended 31 December
2009: 119 kt) of capitalised production from Zibulo (previously
Zondagsfontein). The 460 kt includes Eskom coal production of 262 kt (six
months ended 30 June 2009: nil; year ended 31 December 2009: 33 kt) and thermal
coal production of 198 kt (six months ended 30 June 2009: nil; year ended 31
December 2009: 86 kt).
Production statistics (continued)
6 months ended 6 months ended Year ended
30.06.10 30.06.09 31.12.09
Coal (tonnes) (continued)
Total coal production by commodity
Metallurgical
South Africa 221,800 392,300 747,100
Australia 7,079,500 5,669,300 12,622,600
Canada 401,400 330,500 645,300
Total metallurgical coal production 7,702,700 6,392,100 14,015,000
Thermal
South Africa - Thermal 9,913,300 10,806,800 22,185,900
South Africa - Eskom 16,487,300 17,376,500 36,225,100
Australia 7,320,000 6,950,100 14,051,800
South America 5,580,700 5,650,700 10,940,300
Canada
- - 73,000
Total thermal coal production(1) 39,301,300 40,784,100 83,476,100
Total coal production(1) 47,004,000 47,176,200 97,491,100
Diamonds segment (De Beers)
(diamonds recovered - carats)
100% basis (Anglo American 45%)
Debswana 10,267,000 3,915,000 17,734,000
Namdeb 794,000 385,000 929,000
De Beers Consolidated Mines 3,589,000 1,655,000 4,797,000
Canada 782,000 636,000 1,140,000
15,432,000 6,591,000 24,600,000
Other Mining and
Industrial segment(2)
Tarmac
Aggregates tonnes 33,527,600 34,449,700 70,437,100
Lime products tonnes 628,600 585,700 1,214,400
m3 1,761,500 1,770,700 3,521,200
Concrete
Zinc and lead
Skorpion
Ore mined tonnes 811,300 733,000 1,495,900
Ore processed tonnes 739,200 709,600 1,426,800
Ore grade processed Zinc
% Zn 11.4 11.7 11.5
Production Zinc
tonnes 75,700 75,700 150,400
Lisheen
Ore mined tonnes 765,300 759,300 1,534,500
Ore processed tonnes 790,300 726,300 1,526,200
Ore grade processed Zinc % Zn 12.2 12.5 12.4
Lead % Pb 1.6 1.8 1.8
Production Zinc in
concentrate
tonnes 87,300 82,000 171,800
Lead in
concentrate
tonnes 8,200 8,900 19,200
Black Mountain
Ore mined tonnes 641,500 602,300 1,249,700
Ore processed tonnes 598,100 616,900 1,293,200
Ore grade processed Zinc % Zn 3.3 2.6 2.8
Lead % Pb 4.2 3.9 4.0
Copper % Cu 0.3 0.3 0.3
Production Zinc in
concentrate
tonnes 15,700 12,200 28,200
Lead in
concentrate
tonnes 22,600 22,100 49,100
Copper in
concentrate
tonnes 1,000 1,100 2,200
Total attributable
zinc production tonnes 178,700 169,900 350,400
Total attributable
lead production tonnes 30,800 31,000 68,300
Scaw Metals
South Africa Steel Products tonnes 379,000 343,000 693,000
International Steel Products tonnes 378,800 377,000 718,000
CopebrAs
Phosphates tonnes 471,100 319,900 829,000
Niobium
CatalAGBPo
Ore mined tonnes 809,100 376,300 906,700
Ore processed tonnes 451,600 404,800 873,500
Ore grade processed Kg Nb/tonne 6.0 10.6 9.3
Production tonnes 1,900 2,600 5,100
(1) Includes 460 kt (six months ended 30 June 2009: nil; year ended 31 December
2009: 119 kt) of capitalised production from Zibulo (previously
Zondagsfontein). The 460 kt includes Eskom coal production of 262 kt (six
months ended 30 June 2009: nil; year ended 31 December 2009: 33 kt) and thermal
coal production of 198 kt (six months ended 30 June 2009: nil; year ended 31
December 2009: 86 kt).
(2) Production for Coal Americas is included in the Coal production section.
Quarterly production statistics
30.06.10 31.03.10 31.12.09 30.09.09
Copper segment
(tonnes)(1) 154,700 160,800 185,900 168,100
Nickel segment
(tonnes)(2) 5,300 4,800 4,900 4,900
Platinum segment
Platinum (troy
ounces) 553,800 446,700 766,000 629,200
Palladium (troy
ounces) 294,400 247,000 426,300 337,500
Rhodium (troy
ounces) 67,300 61,600 93,900 92,100
Nickel (tonnes) 4,800 4,400 5,300 5,500
Equivalent refined
platinum
(troy ounces) 601,000 594,700 603,900 616,500
Iron Ore and
Manganese segment
(tonnes)
Iron ore(3) 11,458,000 12,328,000 12,407,200 11,861,000
Manganese ore(4) 674,000 684,000 615,000 462,000
Manganese alloys
(4) (5) 87,000 68,100 52,000 25,000
Metallurgical Coal
segment (tonnes)
Metallurgical 3,797,900 3,281,600 3,805,500 3,147,800
Thermal 3,970,200 3,349,800 3,487,400 3,614,300
Thermal Coal
segment (tonnes)(6)
Metallurgical 110,400 111,400 130,500 224,300
Thermal 7,813,000 7,418,100 7,785,400 8,431,600
Eskom 8,275,300 8,212,000 8,448,400 10,400,200
Diamonds segment
(De Beers)
(diamonds recovered
- carats)
100% basis (Anglo
American 45%)
Diamonds 8,420,000 7,012,000 10,124,000 7,885,000
Other Mining and
Industrial
segment (tonnes)(7)
Metallurgical coal 206,700 194,700 149,900 164,900
Thermal coal 89,900 173,000 310,200 214,500
Zinc 91,000 87,700 86,500 94,000
Lead 15,400 15,400 18,900 18,400
South Africa Steel
Products 197,000 182,000 167,000 183,000
International Steel
Products 188,800 190,000 177,000 164,000
Coal production by
commodity
(tonnes)(6)
Metallurgical 4,115,000 3,587,700 4,085,900 3,537,000
Thermal 11,873,100 10,940,900 11,583,000 12,260,400
Eskom 8,275,300 8,212,000 8,448,400 10,400,200
Quarter ended % Change (Quarter ended)
30.06.10 v 30.06.10 v
30.06.09 31.03.10 30.06.09
Copper segment (tonnes)(1) 165,300 (4)% (6)%
Nickel segment (tonnes)(2) 5,600 10% (5)%
Platinum segment
Platinum (troy ounces) 652,400 24% (15)%
Palladium (troy ounces) 361,600 19% (19)%
Rhodium (troy ounces) 90,100 9% (25)%
Nickel (tonnes) 5,400 9% (11)%
Equivalent refined platinum
(troy ounces) 630,500 1% (5)%
Iron Ore and Manganese
segment
(tonnes)
Iron ore(3) 10,336,000 (7)% 11%
Manganese ore(4) 200,000 (1)% 237%
Manganese alloys (4) (5) 10,000 28% 770%
Metallurgical Coal segment
(tonnes)
Metallurgical 3,354,000 16% 13%
Thermal 3,738,600 19% 6%
Thermal Coal segment
(tonnes)(6)
Metallurgical 172,300 (1)% (36)%
Thermal 8,429,300 5% (7)%
Eskom 8,938,400 1% (7)%
Diamonds segment (De Beers)
(diamonds recovered -
carats)
100% basis (Anglo American
45%)
Diamonds 5,509,000 20% 53%
Other Mining and Industrial
segment (tonnes)(7)
Metallurgical coal 152,600 6% 35%
Thermal coal 169,000 (48)% (47)%
Zinc 87,100 4% 4%
Lead 16,400 - (6)%
South Africa Steel Products 164,000 8% 20%
International Steel
Products 158,000 (1)% 19%
Coal production by
commodity
(tonnes)(6)
Metallurgical 3,678,900 15% 12%
Thermal 12,336,900 9% (4)%
Eskom 8,938,400 1% (7)%
(1) Excludes Platinum and Black Mountain mine copper production.
(2) Excludes Platinum nickel production.
(3) 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.
(6) Includes 460 kt (six months ended 30 June 2009: nil; year ended 31 December
2009: 119 kt) of capitalised production from Zibulo (previously
Zondagsfontein). The 460 kt includes Eskom coal production of 262 kt (six
months ended 30 June 2009: nil; year ended 31 December 2009: 33 kt) and thermal
coal production of 198 kt (six months ended 30 June 2009: nil; year ended 31
December 2009: 86 kt).
(7) Excludes Tarmac, CopebrAs and CatalAGBPo.
Reconciliation of subsidiaries` and associate`s reported earnings to the
Underlying earnings included in the Condensed financial statements
for the six months ended 30 June 2010
Only key reported lines are reconciled
Anglo Platinum Limited
Year ended
6 months ended 6 months ended
30.06.09(1) 31.12.09
USUSD million 30.06.10
IFRS headline earnings
(USUSD equivalent of
published) 340 44 84
Exploration 4 10 17
Operating and financing
remeasurements (net of
tax) (17) - 27
Restructuring costs
included in headline
earnings (net of tax) 11 - 27
Other adjustments (3) - 2
335 54 157
Non-controlling interests (68) (11) (31)
Elimination of
intercompany interest 26 26 47
Depreciation on assets
fair valued on acquisition
(net of tax) (47) (39) (83)
Corporate cost allocation (24) (21) (46)
Contribution to Anglo
American plc underlying
earnings 222 9 44
Kumba Iron Ore Limited
Year ended
6 months ended 6 months ended
30.06.09(1) 31.12.09
USUSD million 30.06.10
IFRS headline earnings
(USUSD equivalent of
published) (2) 864 379 845
Exploration 3 1 3
Other adjustments - (1) (2)
867 379 846
Non-controlling interests (325) (138) (314)
Elimination of
intercompany interest 1 (8) (10)
Depreciation on assets
fair valued on acquisition
(net of tax) (4) (3) (7)
Corporate cost allocation (19) (19) (39)
Other adjustments - - 14
Contribution to Anglo
American plc underlying
earnings 520 211 490
DB Investments
6 months ended 6 months ended Year ended
USUSD million 30.06.10 30.06.09 31.12.09
De Beers underlying
earnings (100%) 304 (164) (220)
Difference in IAS 19
accounting policy 14 4 5
De Beers underlying
earnings - Anglo American
plc basis (100%) 318 (160) (215)
Anglo American plc`s 45%
ordinary share interest 143 (72) (97)
Income from preference
shares 8 5 9
Other (3) - (2)
Contribution to Anglo
American plc underlying
earnings 148 (67) (90)
(1) Comparatives have been updated to include an allocation of corporate costs.
(2) Kumba`s headline earnings for the six months ended 30 June 2010 assume a
non-controlling interest of 20% in Kumba`s underlying mining assets (six months
ended 30 June 2009: 20%; year ended 31 December 2009: 20%).
Exchange rates and commodity prices
USUSD exchange rates 30.06.10 30.06.09 31.12.09
Average prices for the period
Rand 7.53 9.20 8.41
Sterling 0.66 0.67 0.64
Euro 0.75 0.75 0.72
Australian dollar 1.12 1.40 1.26
Chilean peso 525 586 559
Brazilian real 1.80 2.19 2.00
Period end spot prices
Rand 7.65 7.74 7.38
Sterling 0.67 0.61 0.62
Euro 0.82 0.71 0.70
Australian dollar 1.18 1.24 1.11
Chilean peso 547 532 507
Brazilian real 1.80 1.96 1.74
Commodity prices 30.06.10 30.06.09 31.12.09
Average market prices for the period
Copper(1) US cents/lb 323 184 234
Nickel(1) US cents/lb 962 531 667
Platinum (2) USUSD/oz 1,602 1,103 1,211
Palladium(2) USUSD/oz 471 218 266
Rhodium(2) USUSD/oz 2,631 1,291 1,592
Zinc(1) US cents/lb 98 60 75
Lead(1) US cents/lb 95 60 78
Period end spot prices
Copper(1) US cents/lb 295 232 333
Nickel(1) US cents/lb 881 726 838
Platinum(2) USUSD/oz 1,533 1,204 1,475
Palladium(2) USUSD/oz 455 253 402
Rhodium(2) USUSD/oz 2,500 1,450 2,500
Zinc(1) US cents/lb 78 71 117
Lead(1) US cents/lb 77 78 109
(1) Source: LME daily prices.
(2) Source: Johnson Matthey.
Summary by business operation
Revenue(1)
6 months 6 months Year
ended ended ended
30.06.10 30.06.09(4) 31.12.09
USUSD million
Copper 2,142 1,472 3,967
Anglo American Sur 941 656 1,723
Anglo American Norte 477 323 833
Collahuasi 724 493 1,411
Projects and corporate - - -
Nickel 209 113 348
Codemin 107 62 157
Loma de NA-quel 102 51 191
Projects and corporate - - -
Platinum 2,870 1,905 4,535
Iron Ore and Manganese 3,005 1,576 3,419
Kumba Iron Ore 2,375 1,328 2,816
Iron Ore Brazil 125 - -
Samancor 505 248 603
Metallurgical Coal 1,444 1,139 2,239
Australia 1,444 1,139 2,239
Projects and corporate - - -
Thermal Coal 1,317 1,222 2,490
South Africa 973 833 1,748
South America 344 389 742
Projects and corporate - - -
Diamonds 1,340 770 1,728
Other Mining and Industrial 2,686 2,933 5,908
Tarmac(5) 1,254 1,369 2,870
Skorpion(6) 170 104 236
Lisheen(6) 116 69 208
Black Mountain(6) 54 49 148
Scaw Metals 767 738 1,384
CopebrAs 165 151 320
CatalAGBPo 70 81 184
Coal Americas 90 54 165
Tongaat Hulett/Hulamin(7) - 318 393
Projects and corporate - - -
Exploration - - -
Corporate Activities and
Unallocated Costs 2 2 3
15,015 11,132 24,637
EBITDA(2)
6 months 6 months Year
ended ended ended
30.06.10 30.06.09(4) 31.12.09
USUSD million
Copper 1,312 715 2,254
Anglo American Sur 560 301 994
Anglo American Norte 293 142 408
Collahuasi 512 321 952
Projects and corporate (53) (49) (100)
Nickel 81 2 28
Codemin 61 11 49
Loma de NA-quel 36 4 11
Projects and corporate (16) (13) (32)
Platinum 785 263 677
Iron Ore and Manganese 1,711 753 1,593
Kumba Iron Ore 1,526 749 1,562
Iron Ore Brazil (40) (85) (135)
Samancor 225 89 166
Metallurgical Coal 416 422 706
Australia 427 435 729
Projects and corporate (11) (13) (23)
Thermal Coal 433 456 875
South Africa 277 277 550
South America 168 195 352
Projects and corporate (12) (16) (27)
Diamonds 340 75 215
Other Mining and Industrial 427 402 878
Tarmac(5) 101 123 313
Skorpion(6) 101 35 100
Lisheen(6) 55 17 74
Black Mountain(6) 15 12 59
Scaw Metals 104 89 172
CopebrAs 22 17 (9)
CatalAGBPo 31 54 111
Coal Americas 9 3 6
Tongaat Hulett/Hulamin(7) - 60 73
Projects and corporate (11) (8) (21)
Exploration (57) (70) (172)
Corporate Activities and
Unallocated Costs (34) (33) (124)
5,414 2,985 6,930
Operating profit/(loss) (3)
6 months 6 months Year
ended ended ended
30.06.10 30.06.09(4) 31.12.09
USUSD million
Copper 1,185 606 2,010
Anglo American Sur 494 243 862
Anglo American Norte 272 125 369
Collahuasi 472 287 880
Projects and corporate (53) (49) (101)
Nickel 68 (11) 2
Codemin 57 7 41
Loma de NA-quel 26 (5) (7)
Projects and corporate (15) (13) (32)
Platinum 418 (13) 32
Iron Ore and Manganese 1,628 720 1,489
Kumba Iron Ore 1,470 723 1,487
Iron Ore Brazil (51) (82) (141)
Samancor 209 79 143
Metallurgical Coal 263 321 451
Australia 274 334 474
Projects and corporate (11) (13) (23)
Thermal Coal 351 388 721
South Africa 220 233 442
South America 143 171 305
Projects and corporate (12) (16) (26)
Diamonds 261 4 64
Other Mining and Industrial 290 236 506
Tarmac(5) 29 28 101
Skorpion(6) 81 11 43
Lisheen(6) 54 17 73
Black Mountain(6) 15 12 59
Scaw Metals 83 71 131
CopebrAs 12 5 (40)
CatalAGBPo 28 51 106
Coal Americas (1) (4) (8)
Tongaat Hulett/Hulamin(7) - 55 62
Projects and corporate (11) (10) (21)
Exploration (57) (70) (172)
Corporate Activities and
Unallocated Costs (46) (45) (146)
4,361 2,136 4,957
Underlying earnings
6 months 6 months Year
ended ended ended
30.06.10 30.06.09(4) 31.12.09
USUSD million
Copper 706 383 1,201
Anglo American Sur 302 141 444
Anglo American Norte 170 79 197
Collahuasi 287 215 663
Projects and corporate (53) (52) (103)
Nickel 64 (21) (13)
Codemin 41 7 24
Loma de NA-quel 32 (18) 17
Projects and corporate (9) (10) (54)
Platinum 222 9 44
Iron Ore and Manganese 614 250 571
Kumba Iron Ore 520 211 490
Iron Ore Brazil (42) (94) (119)
Samancor 136 133 200
Metallurgical Coal 177 224 322
Australia 188 237 345
Projects and corporate (11) (13) (23)
Thermal Coal 258 269 517
South Africa 167 167 328
South America 103 118 215
Projects and corporate (12) (16) (26)
Diamonds 148 (67) (90)
Other Mining and Industrial 218 169 403
Tarmac(5) 25 19 81
Skorpion(6) 79 14 40
Lisheen(6) 47 18 67
Black Mountain(6) 11 12 60
Scaw Metals 52 40 70
CopebrAs 5 11 7
CatalAGBPo 17 39 77
Coal Americas 1 (3) (12)
Tongaat Hulett/Hulamin(7) - 28 31
Projects and corporate (19) (9) (18)
Exploration (55) (67) (167)
Corporate Activities and
Unallocated Costs (140) (53) (219)
2,212 1,096 2,569
(1) 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 and refining charges (TC/RCs).
(2) EBITDA is operating profit before special items, remeasurements,
depreciation and amortisation in subsidiaries and joint ventures and includes
attributable share of EBITDA of associates.
(3) Operating profit includes operating profit before special items and
remeasurements from subsidiaries and joint ventures and attributable share of
operating profit (before interest, tax, non-controlling interests, special
items and remeasurements) of associates.
(4) Due to the portfolio and management structure changes announced in October
2009, the segments have changed from those reported at 30 June 2009.
Comparatives have been reclassified to align with current presentation. The
segment results include an allocation of corporate costs. A reconciliation of
operating profit and underlying earnings by segment, as reported in the 2009
Half year financial report, to the amounts reflected above is shown in the
`Reconciliation of earnings by segment`.
(5) Tarmac is made up of the former Industrial Minerals segment and Yang
Quarry, which was previously included in the Coal segment. In the six months
ended 30 June 2010 Tarmac has sold its Polish, French and Belgian concrete
products businesses. See Disposals note 16.
(6) Skorpion, Lisheen and Black Mountain comprise the Group`s portfolio of
operating zinc assets which were classified as held for sale at 30 June 2010.
See Disposal groups and non-current assets held for sale note 17.
(7) 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 2009 Half year financial report to the comparative
amounts reported in notes 3 and 4 respectively. The adjustments reflect the
portfolio and management structure changes announced in October 2009.
Operating profit
Structural Divisional cost
USUSD million Pre-restructuring changes apportionment
6 months ended 30.06.09
Base Metals 695
Copper 651 (12) (3)
Codemin, Loma de NA-quel 2 (7) (4)
Zinc, CopebrAs, CatalAGBPo 96 (96) -
Other (54) 22 32
Platinum 8 - -
Ferrous Metals and
Industries 857
Kumba Iron Ore, Iron
Ore Brazil, Samancor 739 - -
Scaw, Tongaat
Hulett/Hulamin 126 (126) -
Other (8) 2 6
Coal 720
Australia 334 (1) -
South Africa 233 169 (2)
South America 165 (165) -
Canada 2 (2) -
Projects and corporate (14) 4 10
Diamonds 4 - -
Industrial Minerals 27 216 (2)
Exploration (70) - -
Corporate Activities
and Unallocated Costs (105) (4) (37)
2,136 - -
Corporate cost As reported
USUSD million allocation (note 3)
6 months ended 30.06.09
Base Metals
Copper (30) 606 Copper
Codemin, Loma de NA-quel (2) (11) Nickel
Zinc, CopebrAs, CatalAGBPo - -
Other - -
Platinum (21) (13) Platinum
Ferrous Metals and Industries
Kumba Iron Ore, Iron Ore Brazil,
Samancor (19) 720 Iron Ore and
Manganese
Scaw, Tongaat Hulett/Hulamin - -
Other - -
Coal
Australia (12) 321 Metallurgical Coal
South Africa (12) 388 Thermal Coal
South America - -
Canada - -
Projects and corporate - -
Diamonds - 4 Diamonds
Industrial Minerals (5) 236 Other Mining and
Industrial
Exploration - (70) Exploration
Corporate Activities and
Unallocated Costs 101 (45) Corporate
Activities and
Unallocated Costs
- 2,136
Underlying earnings
Structural Divisional cost
USUSD million Pre-restructuring changes apportionment
6 months ended 30.06.09
Base Metals 454
Copper 431 (15) (3)
Codemin, Loma de NA-quel (11) (4) (4)
Zinc, CopebrAs, CatalAGBPo 94 (94) -
Other (60) 28 32
Platinum 30 - -
Ferrous Metals and
Industries 336
Kumba Iron Ore, Iron
Ore Brazil, Samancor 269 - -
Scaw, Tongaat
Hulett/Hulamin 68 (68) -
Other (1) (5) 6
Coal 505
Australia 237 (1) -
South Africa 167 116 (2)
South America 113 (113) -
Canada 2 (2) -
Projects and corporate (14) 4 10
Diamonds (67) - -
Industrial Minerals 18 158 (2)
Exploration (67) - -
Corporate Activities
and Unallocated Costs (113) (4) (37)
1,096 - -
Corporate cost As reported
USUSD million allocation (note 4)
6 months ended 30.06.09
Base Metals
Copper (30) 383 Copper
Codemin, Loma de NA-quel (2) (21) Nickel
Zinc, CopebrAs, CatalAGBPo - -
Other - -
Platinum (21) 9 Platinum
Ferrous Metals and Industries
Kumba Iron Ore, Iron Ore Brazil,
Samancor (19) 250 Iron Ore and
Manganese
Scaw, Tongaat Hulett/Hulamin - -
Other - -
Coal
Australia (12) 224 Metallurgical
Coal
South Africa (12) 269 Thermal Coal
South America - -
Canada - -
Projects and corporate - -
Diamonds - (67) Diamonds
Industrial Minerals (5) 169 Other Mining
and Industrial
Exploration - (67) Exploration
Corporate Activities and
Unallocated Costs 101 (53) Corporate
Activities and
Unallocated Costs
- 1,096
ANGLO AMERICAN plc
(Incorporated in England and Wales - Registered number 3564138)
(the Company)
Notice of Interim Dividend
(Dividend No. 20)
Notice is hereby given that an interim dividend on the Company`s ordinary share
capital in respect of the year to 31 December 2010 will be paid as follows:
Amount (United States currency) 25 cents per ordinary share (note 1)
Amount (South African currency) R1.8309 per ordinary share
Last day to effect removal of shares
between the UK and SA registers Thursday 29 July 2010
Last day to trade on the JSE Limited
(JSE) to qualify for dividend Friday 13 August 2010
Ex-dividend on the JSE from the
commencement of trading on Monday 16 August 2010 (note 2)
Ex-dividend on the London Stock
Exchange from the commencement of
trading on Wednesday 18 August 2010
Record date (applicable to both the
United Kingdom principal register and
South African branch register) Friday 20 August 2010
Last day for receipt of USUSD/
currency elections by the UK
Registrars (note 1) Friday 20 August 2010
Last day for receipt of Dividend
Reinvestment Plan (DRIP) mandate forms
by the UK
Registrars (notes 3, 4 and 5) Friday 20 August 2010
Currency conversion USUSD:GBP/ rates
announced on Tuesday 31 August 2010
Removal of shares between the UK and
SA registers permissible from Tuesday 31 August 2010
Last day for receipt of DRIP mandate
forms by Central Securities Depository
Participants
(CSDPs) (notes 3, 4 and 5) Tuesday 31 August 2010
Last day for receipt of DRIP mandate
forms by the South African Transfer
Secretaries
(notes 3, 4 and 5) Wednesday 1 September 2010
Dividend warrants posted Wednesday 15 September 2010
Payment date of dividend Thursday 16 September 2010
Notes
1. Shareholders on the United Kingdom register of members with an address in
the United Kingdom will be paid in pounds sterling and those with an address in
a country in the European Union which has adopted the euro, will be paid in
euros. Such shareholders may, however, elect to be paid their dividends in US
dollars provided the UK Registrars receive such election by Friday 20 August
2010. Shareholders with an address elsewhere will be paid in US dollars except
those registered on the South African branch register who will be paid in South
African rand.
2. Dematerialisation and rematerialisation of registered share certificates in
South Africa will not be effected by CSDPs during the period from Monday 16
August 2010 to Friday 20 August 2010 (both days inclusive).
3. Those shareholders who already participate in the DRIP need not complete a
DRIP mandate form for each dividend as such forms provide an ongoing authority
to participate in the DRIP until cancelled in writing.
Shareholders who wish to participate in the DRIP should obtain a mandate form
from the UK Registrars, the South African Transfer Secretaries or, in the case
of those who hold their shares through the STRATE system, their CSDP.
4. In terms of the DRIP, and subject to the purchase of shares in the open
market, share certificates/CREST notifications are expected to be mailed and
CSDP investor accounts credited/updated on Tuesday 21 September 2010 in the UK
and Thursday 23 September 2010 in South Africa. CREST accounts will be credited
on Wednesday 22 September 2010.
5. Copies of the terms and conditions of the DRIP are available from the UK
Registrars or the South African Transfer Secretaries.
Registered office
20 Carlton House Terrace
London
SW1Y 5AN
England
UK Registrars
Equiniti
The Causeway
Worthing
West Sussex
BN99 6DA
England
South African Transfer Secretaries
Link Market Services South Africa (Pty) Limited
11 Diagonal Street
Johannesburg 2001
South Africa
(PO Box 4844, Johannesburg 2000)
30 July 2010
Sponsor: UBS South Africa (Pty) Ltd
Date: 30/07/2010 08:00:09 Supplied by www.sharenet.co.za
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