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HALF YEAR FINANCIAL REPORT
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 2012
NEWS RELEASE
27 July 2012
Anglo American announces EBITDA(1) of $4.9 billion for the half year
Financial results impacted by weaker prices
- Group operating profit(2) of $3.7 billion
- Underlying earnings(3) of $1.7 billion and underlying EPS of $1.38
- Profit attributable to equity shareholders(4) of $1.2 billion
- Net debt(5) of $3.1 billion at 30 June 2012 (pro forma net debt of $10.0 billion)(6)
Strong operational and strategic delivery
- Strong production performance across iron ore, metallurgical coal, thermal coal, copper and
nickel through successful project execution and asset optimisation
- Kumba Iron Ore record production of 21.6 Mt and record export sales of 20.7 Mt, up 13%
- Metallurgical Coal record production of export metallurgical coal of 8.6 Mt, up 40%
- De Beers acquisition has met all regulatory approvals and the transaction is expected to
complete in Q3 2012
- Increased shareholding in Kumba Iron Ore by 4.5% to 69.7% for $948 million
- Agreed to acquire 58.9% interest in Revuboè high quality metallurgical coal resource in
Mozambique for $555 million
Projects delivered and ramping up to drive high quality production growth
- Kolomela iron ore 3.3 Mt produced in H1 2012; on schedule to produce at least
6 Mt in 2012 and full capacity of 9 Mt in 2013
- Los Bronces copper 92% of design capacity achieved; on track to complete ramp-up by Q4
2012
- Barro Alto nickel H1 2012 production of 12 kt; targeting full production in early 2013
- Zibulo thermal coal ramp-up on track to full capacity of 6.6 Mtpa
Projects in execution progressing
- Minas-Rio 26.5 Mtpa iron ore project licensing and construction progress hindered by legal
actions
- Grosvenor 5 Mtpa metallurgical coal project engineering work 50% complete as of July
2012; earthworks under way
Disciplined capital allocation delivering shareholder value
- Target to maintain a strong investment grade rating
- Committed to return cash to shareholders on a sustainable basis interim dividend increased
by 14% to US 32 cents per share
- Sequencing investment in line with resulting funding capacity to focus on the most value
accretive and lowest risk growth options
Safety
- 7 employees lost their lives in work related incidents safety programmes continuing to drive
for zero harm
- 37% improvement in lost time injury frequency rates since 2007
HIGHLIGHTS 6 months 6 months
ended ended
US$ million, except per share amounts 30 June 2012 30 June 2011 Change
Group revenue including associates (7) 16,408 18,294 (10)%
Operating profit including associates before special items and
remeasurements (2) 3,724 6,024 (38)%
Underlying earnings (3) 1,691 3,120 (46)%
EBITDA (1) 4,942 7,112 (31)%
Net cash inflows from operating activities 2,478 3,986 (38)%
Profit before tax (4) 2,942 6,571 (55)%
Profit for the financial period attributable to equity shareholders (4) 1,207 3,988 (70)%
Earnings per share (US$):
Basic earnings per share (4) 0.98 3.30 (70)%
Underlying earnings per share (3) 1.38 2.58 (47)%
Dividend per share 0.32 0.28 14%
(1) Earnings before interest, tax, depreciation and amortisation (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
5 to the Condensed financial statements.
(2) 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 2 and 3 to the
Condensed financial statements. For the definition of special items and remeasurements see note 4 to the Condensed financial
statements.
(3) See note 9 to the Condensed financial statements for basis of calculation of underlying earnings.
(4) Stated after special items and remeasurements. See note 4 to the Condensed financial statements.
(5) Net debt includes related hedges and net debt in disposal groups. See note 12 to the Condensed financial statements.
(6) Pro forma net debt is net debt adjusted for the estimated effect of the acquisition of an additional 40% interest in De Beers ($6.3 billion
including De Beers net debt as at 30 June 2012) and the acquisition, announced on 24 July 2012, of a 58.9% interest in the Revuboè
metallurgical coal project in Mozambique ($0.6 billion).
(7) Includes the Group's attributable share of associates' revenue of $2,730 million (six months ended 30 June 2011: $3,057 million). See
note 2 to the Condensed financial statements.
Cynthia Carroll, Chief Executive, said: "Anglo American has continued its strong operational performance of
2011 into the first half of 2012, delivering increased volumes of thermal coal, copper and nickel and record
volumes of iron ore from Kumba in South Africa and export metallurgical coal from Australia and Canada. As a
result of markedly weaker commodity prices experienced during the first half of the year, in addition to ongoing
input cost pressures across the portfolio, Anglo American reported an operating profit of $3.7 billion, a 38%
decrease. EBITDA decreased by 31% to $4.9 billion and underlying earnings decreased by 46% to $1.7 billion.
Successful project execution, from the three new mining operations delivered and commissioned during 2011,
contributed to production growth and generated more than $650 million of operating profit. Growth projects
delivered in 2011 continue to ramp up well, with Los Bronces expansion achieving 92% of nameplate capacity
during the second quarter, while Kumba's Kolomela mine has exceeded expectations by producing in excess of 6
Mt on an annualised basis during the first half of the year both considerable achievements and ahead of
schedule.
Beyond organic growth, we have simplified our minority ownership of De Beers through the acquisition of the
Oppenheimer family's 40% interest, for which we have now received all the regulatory approvals. Our partner in
De Beers and in Debswana, the Government of the Republic of Botswana (GRB), has the opportunity to decide
whether or not to increase its interest in De Beers. Irrespective of its decision, the GRB is firmly committed to De
Beers and our interests in the continuing success of the world's leading diamond company are well aligned. We
have also chosen to increase our shareholding in Kumba Iron Ore, lifting our ownership by 4.5% to 69.7%,
reflecting our view on the quality of the business and its highly attractive performance and growth profile.
To ensure that we continue to deliver shareholder value and returns through the cycle, we will maintain our
prudent and disciplined approach to managing our businesses and allocating capital. Despite the macroeconomic
uncertainty and likely sustained higher capital and operating cost environment for the industry, we are committed
to returning cash to shareholders and have increased our interim dividend by 14% to US 32 cents per share.
We continue to work through all our projects in the construction phase, including Minas-Rio. Minas-Rio is one of
the largest and most complex projects in the world, and certainly in Brazil. We have been working to secure
permits and licences required for the project in a challenging and changing regulatory environment. Despite being
granted further major licences during the period, we continue to face legal challenges to those licences awarded
by the various regulatory bodies. We have deployed additional resources to strengthen the project management
and permitting teams to resolve these issues but, until they are cleared, we cannot as yet with confidence
determine the date for first production. As a guide, however, if we clear all the current impediments by the end of
2012 and experience no additional major unexpected interventions, we anticipate being in a position to ship our
first ore in the second half of 2014. Minas-Rio is a high quality iron ore resource with very significant expansion
potential and, despite current challenges, will prove to be a major contributor to the Group for many decades to
come.
We are sequencing investment by prioritising capital to commodities with the most attractive market dynamics and
projects with the lowest execution risks. The 5 Mtpa Grosvenor metallurgical coal project in Australia is well under
way, with engineering work now 50% complete as of July 2012 and earthworks have begun. I am also delighted
that we have reached a successful and mutually beneficial conclusion to our community dialogue process with the
local community at our Quellaveco copper project in southern Peru. This is a clear demonstration of the value we
place on engagement and the development of sustainable communities as a prerequisite to our social licence to
operate; we look forward to gaining our outstanding permits prior to the Board's review of the project. In Platinum,
we are progressing with our review of the shape and scale of the business in order that we achieve satisfactory
returns over the long term. As previously stated, we expect to complete the review by the end of the year.
Our safety performance is my absolute priority and the efforts that we have made across our safety related
programmes continue to have a positive effect. We still, however, have a long way to go in order to sustain the
progress we have made since 2007, both in terms of lives lost and lost time injuries sustained. I am deeply
saddened that seven of our colleagues have lost their lives between January and June, all at our Platinum and
Thermal Coal businesses.
Short term prospects for the world economy have deteriorated in recent months. Alongside continuing structural
problems in the euro zone, economic growth has slowed in the US and major emerging economies, such as
China, India and Brazil, albeit from high levels. Yet we see more resilient trends in the medium to longer term.
Long term supply constraints across many commodities, combined with continuing industrialisation and
urbanisation trends in key growth markets should provide considerable support for prices."
Review of the six months ended 30 June 2012
Financial results
Anglo American's underlying earnings for the first half of 2012 were $1.7 billion, 46% lower than the same
period in 2011, with an operating profit of $3.7 billion, down 38% from $6.0 billion. Weakening global
economic growth negatively impacted the majority of commodity prices during the period which, when
coupled with increasing unit costs in most of the Group's operations, compressed margins.
Iron Ore and Manganese recorded an operating profit of $1,779 million, 28% lower than the corresponding
period in 2011. This was driven by lower iron ore prices, which decreased by 21% at Kumba Iron Ore
(Kumba), together with cost increases which were partly offset by a 13% increase in export sales volumes.
Metallurgical Coal delivered an operating profit of $159 million, a 68% decrease on the first half of 2011,
primarily due to the impact of lower realised export prices, partly offset by higher sales volumes.
Thermal Coal's operating profit of $433 million was 17% lower than the equivalent period in 2011 as a result
of decreasing realised prices partly offset by higher sales volumes, supported by record half year production
at Cerrejón.
Copper delivered an operating profit of $978 million, 30% lower than the first half of 2011, underpinned by a
12% lower realised average copper price combined with lower grades. Sales volumes increased by 14%
following the ramp-up of the Los Bronces expansion project.
Nickel reported an operating profit of $58 million, 38% lower than the first half of 2011. Operating profit
includes a self insurance recovery of $57 million and was significantly impacted by a 28% decrease in prices
coupled with high inflation in Venezuela. Profit from Barro Alto project continues to be capitalised during
ramp-up.
Platinum generated an operating profit of $84 million, 85% lower than the corresponding period in 2011,
following lower prices and sales volume. A positive stock adjustment of $172 million relating to the annual
physical count contributed to the operating profit.
Diamonds recorded an attributable operating profit of $250 million, 44% lower than the first half of 2011 due
to lower average prices, reflecting lower demand and changing product requirements from customers.
Other Mining and Industrial's operating profit was $180 million, 32% higher than the first half of 2011
attributable to the increase in Amapá's operating profit which is now included as part of Other Mining and
Industrial. Amapá generated an operating profit of $112 million compared to $45 million in 2011 due to the
reversal of penalty provisions, which were in place at the end of 2011, as a result of contract re-negotiations.
Copebrás' operating profit was 46% lower owing to lower international fertiliser prices, while Catalão
increased operating profit by $24 million due to increased production. Tarmac's operating loss of $24 million
and Scaw South Africa's operating profit of $28 million were both in line with the same period in 2011.
Production
Production across most of the Group's operations increased compared to the same period in 2011.
Successful project execution and asset optimisation delivered volume growth in iron ore, metallurgical coal,
thermal coal, copper and nickel. Total Group iron ore production increased by 15% to 24.6 Mt due to the
ramp-up of the Kolomela mine and production improvements at Amapá. The Group's Metallurgical Coal
production increased by 40% to 8.6 Mt, benefiting from both productivity improvements and a reduction in
weather related stoppages.
Copper production increased by 14% to 329,500 tonnes, driven by the ramp-up at the Los Bronces
expansion project, partly offset by expected lower ore grades at Collahuasi. Nickel production increased by
80% to 22,900 tonnes due to the ramp-up from Barro Alto. Platinum equivalent refined production was
marginally ahead of 2011 following shorter and more localised safety-related stoppages during the first half
of the year. Production at De Beers decreased by 13% to 13.4 million carats. In light of prevailing rough
diamond market trends, and in keeping with De Beers' stated production strategy from the fourth quarter of
2011, operations continued to focus on maintenance and waste stripping backlogs.
Capital structure
Net debt, including related hedges, of $3,124 million was $1,750 million higher than at 31 December 2011,
and $3,670 million lower than at 30 June 2011.
During the period, the Group issued corporate bonds with a US$ equivalent value of $2.8 billion in the US,
European and South African markets. In addition, 99% of the Group's $1.7 billion convertible bonds were
converted into equity, resulting in the issue of 62.5 million new shares, a reduction in net debt of $1.5 billion,
and an aggregate interest saving of $0.3 billion compared to the cost of holding the bonds to maturity.
Dividends
An interim dividend of 32 US cents per share (30 June 2011: 28 US cents per share) has been declared,
signalling the Board's commitment to have a disciplined balance between the maintenance of an investment
grade rating, returns to shareholders and sequencing of future investment in line with resulting funding
capacity.
Anglo American's dividend policy is to provide a base dividend that will be maintained or increased through
the cycle.
Project delivery to continue to drive high quality production growth
Anglo American's extensive portfolio of undeveloped world class resources and pipeline of growth
opportunities projects spans its chosen core commodities. It offers considerable options for sequencing of
investment in line with the Group's view of market dynamics and the geopolitical environment. Capital will be
prioritised to focus on the most value accretive and lowest risk growth options, taking into consideration the
Group's resulting funding capacity.
Anglo American commissioned three major new mining operations on or ahead of schedule during 2011
the Kolomela iron ore mine in South Africa, the Los Bronces copper expansion in Chile and the Barro Alto
nickel operation in Brazil. These three new operations are ramping up successfully and have contributed to
the Group's strong production performance during the first half of 2012.
Beyond the near term, the Group has a number of projects in the execution phase, as summarised below,
and is progressing towards approval decisions in relation to the development of further high quality growth
projects, including the 225 ktpa Quellaveco greenfield copper project in Peru.
Anglo American has a clear strategy of deploying its capital in those commodities with strong fundamentals
and the most attractive risk-return profiles that deliver long term, through-the-cycle returns for its
shareholders. The Group has developed a portfolio of world class operating assets and development
projects with the benefits of scale, expansion potential and attractive cost position and capital intensity.
Anglo American's project management systems and processes ensure close collaboration between the
Group's technical and project teams to execute projects effectively.
Minas-Rio
The Minas-Rio iron ore project in Brazil is expected to produce 26.5 Mtpa of iron ore in its first phase of
development. Project progress has been affected by ongoing licensing challenges which have impacted the
completion of the project. Subject to resolving the existing licensing challenges and not encountering
additional unexpected interventions, first ore on ship is now anticipated to be in the second half of 2014.
Pre-feasibility studies for the expansion phases of the Minas-Rio iron ore project commenced during 2011,
supported by an estimated resource base of 5.8 billion tonnes, as detailed in our annual resource statement.
Cerrejón P500 expansion on track
In Colombia, the first phase of the brownfield expansion project, P500 Phase 1, aims to maximise value by
increasing export thermal coal production capacity by 8 Mtpa to 40 Mtpa (100% basis), through additional
mining equipment and the de-bottlenecking of key logistics infrastructure along the coal chain. The project
was approved by Cerrejón'sshareholders in the third quarter of 2011. The project is progressing well and is
expected to be delivered on schedule and on budget. First coal is targeted for the fourth quarter of 2013, with
full production by the end of 2015. Further expansion opportunities, in the form of P500 Phase 2, are
currently under investigation.
Grosvenor on track
The brownfield Grosvenor metallurgical coal project is situated immediately to the south of Anglo American's
Moranbah North metallurgical coal mine in the Bowen Basin of Queensland, Australia. The mine is expected
to produce 5 Mtpa of high quality metallurgical coal from its underground longwall operation over a projected
life of 26 years and to benefit from operating costs in the lower half of the cost curve.
Grosvenor forms a major part of the Group's strategy of tripling production of metallurgical coal from its
Australian assets by 2020, equivalent to a 12% compound annual growth rate from 2010, using a standard
longwall and coal handling and preparation plant (CHPP) design model. In its first phase of development,
Grosvenor will consist of a single new underground longwall mine, targeting the same well understood
Goonyella Middle coal seam as Moranbah North, and will process its coal through the existing Moranbah
North CHPP and train loading facilities. A pre-feasibility study for expansion by adding a second longwall at
Grosvenor is under way.
The Grosvenor expansion project is currently in execution, with engineering work approximately 50%
complete as the first half of 2012, while earthworks commenced on the site in June 2012. Construction of
the drifts (tunnels) is expected to begin in August 2012.
Quellaveco successful conclusion to community dialogue process
Quellaveco is a greenfield copper project in the Moquegua region of southern Peru which has the potential to
produce 225 ktpa of copper from an open pit over a mine life of more than 30 years. The project is expected
to operate in the lower half of the cash operating cost curve, benefiting from attractive ore grades, low waste
stripping and molybdenum by-product production. Anglo American completed the feasibility study for the
project in late 2010 and took the decision to suspend progress in order to engage more actively with the local
communities through a formal dialogue table process, following requests from local stakeholders. The
dialogue process reached agreement in early July 2012 in relation to water usage, environmental
responsibility and Anglo American's social contribution over the life of the mine, and has been held up as a
model for stakeholder engagement in Peru. The project will be put forward for review by the Board once
outstanding permits are received.
M&A update
De Beers
In November 2011, Anglo American agreed to acquire the Oppenheimer family's 40% interest in De Beers
for $5.1 billion, subject to adjustment as provided for in the agreement and pending regulatory and
government approvals, increasing Anglo American's current 45% shareholding to up to 85%.
This transaction is a unique opportunity for Anglo American to consolidate control of the world's leading
diamond company, marking the Group's commitment to an industry with highly attractive long term supply
and demand fundamentals. Underpinned by the security of supply offered by a new 10-year sales agreement
with the Government of the Republic of Botswana (GRB), this forms a compelling proposition.
The benefits brought by Anglo American's scale, technical, operational and exploration expertise and
financial resources, combined with the unquestionable leadership of De Beers' business and iconic brand,
will enable De Beers to enhance its position across the diamond pipeline and capture the potential presented
by a rapidly evolving diamond market.
In July 2012, Anglo American announced that all conditions precedent had been fulfilled and all required
regulatory approvals had been obtained. The GRB has a pre-emption right in respect of the De Beers
interests to be sold by CHL, and its affiliates, enabling it to participate in the transaction and increase its
interest in De Beers, on a pro rata basis, to 25%.
In the event that the GRB exercises its pre-emption rights in full, Anglo American would acquire an
incremental 30% interest in De Beers, taking its total interest to 75%, and the consideration payable by
Anglo American would be reduced proportionately. Cash consideration will be paid on completion of the
transaction, which is expected to occur during the third quarter of 2012.
Anglo American Sur
In November 2011, entirely in accordance with its rights, Anglo American announced the completion of the
sale of a 24.5% stake in Anglo American Sur (AA Sur), comprising a number of the Group's copper assets in
Chile, to Mitsubishi Corporation LLC (Mitsubishi) for $5.4 billion in cash. This transaction highlighted the
inherent value of AA Sur as a world class, tier one copper business with extensive reserves and resources
and significant further growth options from its exploration discoveries, valuing AA Sur at $22 billion on a
100% basis.
Litigation between Anglo American and Codelco in respect of the option agreement between them relating to
AA Sur (described fully in Note 15 to the Condensed financial statements) is currently suspended to allow
Anglo American and Codelco to explore the possibility of negotiating an agreement in relation to Anglo
American Sur. Should this prove successful, it will enable the two parties to overcome their legal dispute.
Revuboè
On 24 July 2012, Anglo American announced that it had agreed to acquire a 58.9% interest in the Revuboè
metallurgical coal project in Mozambique from the Talbot Estate for a total cash consideration of A$540
million (approximately US$555 million). The Revuboè project is a joint venture partnership and includes
Nippon Steel Corporation (33.3% interest), and POSCO (7.8% interest). Revuboè has a reported JORC
resource of 1.4 billion tonnes of hard coking and thermal coal suitable for open cut mining, with the potential
to support the export of six to nine million tonnes per annum on a 100% basis.
The acquisition of a majority interest in Revuboè is in line with Anglo American's strategic commitment to
grow its global metallurgical coal business to supply customers from each of the key metallurgical coal
supply regions of Australia, Canada and Mozambique. Revuboè is located in the most attractive area of
Mozambique's Moatize coal basin and has a number of infrastructure development options. The transaction
is subject to a number of conditions and is expected to be completed during the third quarter of 2012.
Update on divestment programme
Subject to regulatory approvals, Anglo American's divestment programme, as set out in October 2009, has
been completed, raising $3.8 billion of cumulative proceeds on a debt- and cash-free basis.
In April 2012, Anglo American announced the final stage of the $1.4 billion Scaw Metals Group (Scaw)
divestment with the sale of Scaw South Africa (Pty) Ltd (Scaw South Africa), a leading South Africa-based
integrated steel maker, to an investment consortium led by the Industrial Development Corporation of South
Africa (IDC) and Anglo American's partners in Scaw South Africa, being Izingwe Holdings (Pty) Limited,
Shanduka Resources (Pty) Limited and the Southern Palace Group of Companies (Pty) Limited, for a total
consideration of R3.4 billion ($440 million) on a debt- and cash-free basis. This transaction follows the sale
of Scaw's international businesses, Moly-Cop and AltaSteel, to OneSteel in December 2010 for a total
consideration of $932 million on a debt- and cash-free basis. In aggregate, the total consideration achieved
from the sale of all Scaw's businesses has amounted to $1.4 billion on a debt- and cash-free basis.
On 18 February 2011, Anglo American and Lafarge announced their agreement to combine their cement,
aggregates, ready-mixed concrete, asphalt and contracting businesses in the United Kingdom; Tarmac
Limited, Lafarge Cement UK, Lafarge Aggregates and Concrete UK. The 50:50 joint venture will create a
leading UK construction materials company, with a portfolio of high quality assets drawing on the
complementary geographical distribution of operations and assets, the skills of two experienced
management teams and a portfolio of well-known and innovative brands. This transaction continues to
progress through the regulatory clearance processes.
On 1 May 2012, the UK Competition Commission approved the proposed joint venture subject to a number
of prior conditions. These conditions include the need to divest certain cement, aggregates, asphalt and
ready-mixed concrete sites of both businesses. Both parties will work with the regulators to implement the
required divestments and establish the proposed joint venture as soon as practicable.
Outlook
The short term outlook for the world economy has deteriorated in recent months. The eurozone crisis has
intensified, adding to economic uncertainty both inside and outside the euro zone. After a promising start to
the year, the US economy has weakened in response to greater fiscal uncertainty. The major emerging
economies notably China, India and Brazil have also slowed. Significant policy easing, however, should
underpin a recovery.
We continue to see more sustainable growth in the medium to longer term despite significant volatility in the
short term. The rapid 'catch-up' in living standards, notably in China and India, combined with a medium term
need for infrastructure replacement in the developed countries, presents an attractive proposition for the
early cycle commodities. Over time the considerable scope for an expanding middle class in many emerging
economies should boost consumption, which positions Anglo American well due to its late cycle exposure
through platinum and diamonds. Long term prices for Anglo American's products are expected to be
supported by widespread supply constraints and the challenges producers face in bringing new supply into
production, leading to increasing capital intensity and tight market fundamentals. In addition, economic
uncertainty is likely to lead to a reduction in capital investment further restraining future supply.
For further information, please contact:
Media Investors
UK UK
James Wyatt-Tilby Leng Lau
Tel: +44 (0)20 7968 8759 Tel: +44 (0)20 7968 8540
Emily Blyth Caroline Crampton
Tel: +44 (0)20 7968 8481 Tel: +44 (0)20 7968 2192
South Africa South Africa
Pranill Ramchander Nicholas Gordon
Tel: +27 (0)11 638 2592 Tel: +27 (0)11 638 3262
Anglo American is one of the world's largest mining companies, is headquartered in the UK and listed on the
London and Johannesburg stock exchanges. Anglo American's portfolio of mining businesses spans bulk
commodities iron ore and manganese, metallurgical coal and thermal coal; base metals copper and
nickel; and precious metals and minerals in which it is a global leader in both platinum and diamonds.
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, extensive pipeline of growth projects and exploration activities
span southern Africa, South America, Australia, North America, Asia and Europe. www.angloamerican.com
Webcast of presentation:
A live webcast of the results presentation, starting at 9.00am UK time on 27 July, can be accessed through
the Anglo American website at www.angloamerican.com.
Note: Throughout this results announcement, '$' 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 4 to the Condensed financial statements. Underlying earnings, unless otherwise
stated, is calculated as set out in note 9 to the Condensed financial statements. Earnings before interest, tax, depreciation and
amortisation (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 5 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, though these may not necessarily correspond to the views held by
Anglo American.
Financial review of Group results
Operating profit 6 months ended 6 months ended
$ million 30 June 2012 30 June 2011
Iron Ore and Manganese 1,779 2,462
Metallurgical Coal 159 501
Thermal Coal 433 521
Copper 978 1,401
Nickel 58 93
Platinum 84 542
Diamonds 250 450
Other Mining and Industrial 180 136
Exploration (72) (46)
Corporate Activities and Unallocated costs (125) (36)
Operating profit including associates before special items and
remeasurements 3,724 6,024
Group operating profit for the first half of 2012 was $3,724 million, 38% lower than the first half of 2011. This
reduction in operating profit was primarily driven by decreases in the realised prices of commodities. These
included a 24% decrease in achieved Australian export metallurgical coal prices, a 21% decrease in
achieved FOB iron ore prices, an 18% decrease in realised South African export thermal coal prices, a 12%
decrease in realised copper prices and a 13% decrease in realised platinum prices. In addition, mining cost
pressures affecting the industry resulted in higher unit costs of production across the Group. The decrease in
operating profit was partly offset by the increase in production across the Group's operations, mainly due to
the ramp-up of the Los Bronces, Kolomela and Zibulo projects and through asset optimisation.
Corporate costs for the first half of 2012 were $125 million, $89 million higher than the first half of 2011. This
increase was driven by a $90 million increase in the self insurance captive loss, mainly due to one-off events
in previous years at our Nickel and Copper operations being settled in 2012.
Exploration costs for the first half of 2012 were $72 million, 57% higher than the first half of 2011. This is
mainly driven by increased metres drilled due to favourable weather conditions in Australia and Chile, and a
ramp-up in drilling activities at the Sakatti polymetallic project in Finland.
Geographic diversity in both the Group's production and customer base drives material exposure to foreign
exchange fluctuations. For the first half of 2012, the Group recognised a favourable variance of $527 million
in foreign exchange, primarily driven by the appreciation of the US dollar against the South African rand.
Group underlying earnings were $1,691 million, a 46% decrease on the first half of 2011. Group underlying
earnings per share were $1.38 compared with $2.58 in the first half of 2011.
6 months 6 months
Summary income statement ended ended
$ million 30 June 2012 30 June 2011
Operating profit from subsidiaries and joint ventures before
special items and remeasurements 3,241 5,180
Operating special items (368) (25)
Operating remeasurements (84) 328
Operating profit from subsidiaries and joint ventures 2,789 5,483
Non-operating special items (39) 417
Share of net income from associates (see reconciliation below) 315 605
Total profit from operations and associates 3,065 6,505
Net finance (costs)/income before remeasurements (138) 20
Financing remeasurements 15 46
Profit before tax 2,942 6,571
Income tax expense (1,008) (1,556)
Profit for the financial period 1,934 5,015
Non-controlling interests (727) (1,027)
Profit for the financial period attributable to equity shareholders of
the Company 1,207 3,988
Basic earnings per share ($) 0.98 3.30
Group operating profit including associates before special items
and remeasurements (1) 3,724 6,024
Operating profit from associates before special items and remeasurements 483 844
Operating special items and remeasurements (12) 8
Non operating special items 6
Net finance costs (before special items and remeasurements) (35) (26)
Financing special items and remeasurements 1 3
Income tax expense (after special items and remeasurements) (118) (221)
Non-controlling interests (after special items and remeasurements) (4) (9)
Share of net income from associates 315 605
Reconciliation of profit for the period to underlying
earnings (2) 6 months ended 6 months ended
$ million 30 June 2012 30 June 2011
Profit for the financial period attributable to equity shareholders of
the Company 1,207 3,988
Operating special items 384 25
Operating remeasurements 80 (336)
Non-operating special items 39 (423)
Financing remeasurements (16) (49)
Special items and remeasurements tax 51 (136)
Non-controlling interests on special items and remeasurements (54) 51
Underlying earnings 1,691 3,120
Underlying earnings per share ($) 1.38 2.58
(1) Operating profit before special items and remeasurements from subsidiaries and joint ventures was $3,241 million (six months ended
30 June 2011: $5,180 million) and the attributable share from associates was $483 million (six months ended 30 June 2011:
$844 million). For special items and remeasurements, see note 4 to the Condensed financial statements.
(2) Amounts shown include the Group's attributable share of the equivalent items in associates.
Special items and remeasurements
6 months ended 30 June 2012 6 months ended 30 June 2011
Subsidiaries Subsidiaries
and joint and joint
$ million ventures Associates Total ventures Associates Total
Operating special
items (368) (16) (384) (25) (25)
Operating
remeasurements (84) 4 (80) 328 8 336
Operating special
items and
remeasurements (452) (12) (464) 303 8 311
Non-operating special
items (39) (39) 417 6 423
Financing
remeasurements 15 1 16 46 3 49
Special items and
remeasurements tax (54) 3 (51) 140 (4) 136
Operating special items and remeasurements, including associates, amounted to a loss of $464 million,
principally in respect of impairment and related charges of $384 million in the six months ended 30 June
2012 (six months ended 30 June 2011: $15 million) and net losses on non-hedge derivatives related to
capital expenditure in Iron Ore Brazil. Derivatives which have been realised during the period resulted in a
net operating remeasurement gain since their inception of $13 million (six months ended 30 June 2011: gain
of $224 million).
The Kumba Envision Trust charge of $39 million relates to Kumba's broad based employee share scheme
provided solely for the benefit of non-managerial Historically Disadvantaged South African employees who
do not participate in other Kumba share schemes.
There were no gains or losses on disposals of businesses in the six months ended 30 June 2012 (six
months ended 30 June 2011: gain of $423 million).
Financing remeasurements, including associates, reflect a net gain of $16 million relating to fair value
movements on interest rate swaps and other derivatives.
Special items and remeasurements tax, including associates, amounted to a charge of $51 million relating to
a tax remeasurement charge of $152 million partially offset by a tax credit on special items and
remeasurements of $83 million and a credit for one-off tax items of $18 million.
Net finance costs
Net finance costs, before remeasurements, excluding associates, were $138 million (compared to income of
$20 million in the six months ended 30 June 2011). This reflected foreign exchange losses on net debt of
$73 million compared to gains of $32 million in 2011, lower interest income and lower capitalised interest.
Tax
6 months ended 30 June 2012 6 months ended 30 June 2011
Associates' Associates'
tax and tax and
Before special non- Before special non-
$ million items and controlling Including items and controlling Including
(unless otherwise stated) remeasurements interests associates remeasurements interests associates
Profit before tax 3,427 124 3,551 5,793 225 6,018
Tax (954) (121) (1,075) (1,696) (217) (1,913)
Profit for the financial
period 2,473 3 2,476 4,097 8 4,105
Effective tax rate
including associates (%) 30.3 31.8
IAS 1 Presentation of Financial Statements requires income from associates to be presented net of tax on
the face of the income statement. Associates' tax is therefore not included within the Group's income tax
expense. Associates' tax included within 'Share of net income from associates' for the six months ended
30 June 2012 is $118 million. Excluding special items and remeasurements, this becomes $121 million.
The effective rate of tax before special items and remeasurements including attributable share of associates'
tax for the six months ended 30 June 2012 was 30.3%. This was lower than the equivalent effective rate of
31.8% in the six months ended 30 June 2011 due to the further recognition of previously unrecognised
losses. 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 $40,628 million at 30 June 2012, up from
$39,092 million at 31 December 2011, reflecting the profit for the period of $1,207 million and the issue of
shares on conversion of convertible bonds ($1,507 million), offset by the payment of the 2011 final dividend
of $559 million and other movements in equity. Following the agreement to sell the Group's interest in Scaw
South Africa, it was classified as a disposal group and its assets and liabilities are presented as held for sale
on the balance sheet.
Cash flow
Net cash inflows from operating activities were $2,478 million compared with $3,986 million in the six months
ended 30 June 2011. EBITDA was $4,942 million, a decrease of 31% from $7,112 million in the prior period,
reflecting decreasing prices across the Group's core commodities.
Net cash used in investing activities of $2,121 million was higher compared to the amount in the six months
ended 30 June 2011 of $1,682 million, primarily due to disposal proceeds of $505 million received in 2011
(mainly relating to Zinc asset disposals).
Net cash used in financing activities was $767 million compared with $1,909 million in the six months ended
30 June 2011. This includes the payment of $1,015 million in tax relating to the sale of 24.5% of Anglo
American Sur to Mitsubishi in 2011, dividend payments to Company shareholders and non-controlling
interests totalling $1,312 million and other financing activities, offset by cash inflows relating to net additional
borrowings of $2,771 million, largely due to corporate bond issuances in the period.
Liquidity and funding
Net debt, including related hedges, was $3,124 million, an increase of $1,750 million from $1,374 million at
31 December 2011. The increase reflects net cash outflows of $3,293 million before receipts and
borrowings, partly offset by non-cash movements including a $1,507 million reduction due to the conversion
of the convertible bond.
Net debt at 30 June 2012 comprised $14,048 million of debt, offset by $11,290 million of cash and cash
equivalents, and the current position of derivative liabilities related to net debt of $366 million. Net debt to
total capital at 30 June 2012 was 6.5%, compared with 3.1% at 31 December 2011.
At 30 June 2012, the Group had undrawn bank facilities of $8.0 billion.
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.
Group corporate cost allocation
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.
Dividends
An interim dividend of 32 US cents per share (30 June 2011: 28 US cents per share) has been declared.
Related party transactions
Related party transactions are disclosed in note 16 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 have an impact on 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 2011, and remain appropriate in 2012. Key headline risks
relate to the following:
- Commodity prices
- Liquidity risk
- Counterparty risk
- Currency risk
- Inflation
- Health and safety
- Environment
- Exploration
- Political, legal and regulatory
- Climate change
- Supply risk
- Ore reserves and mineral resources
- Operational performance and project delivery
- Event risk
- Employees
- Contractors
- Business integrity
- Joint ventures
- Acquisitions and divestments
- Infrastructure
- Community relations
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 2011 is available on the Group's website www.angloamerican.com.
Operations review for the six months ended 30 June 2012
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 property, plant and equipment (net of related derivatives).
IRON ORE AND MANGANESE
6 months 6 months
$ million ended 30 June 2012 ended 30 June 2011
Operating profit 1,779 2,462
Kumba Iron Ore 1,840 2,437
Iron Ore Brazil (1) (81) (81)
Samancor 20 106
EBITDA 1,912 2,554
Net operating assets 13,315 12,212
Capital expenditure 784 563
Share of Group operating profit 48% 41%
Share of Group net operating assets 29% 26%
(1) In 2012 Amapá has been reclassified from Iron Ore and Manganese to Other Mining and Industrial, to align with internal management reporting.
Comparatives have been reclassified to align with current year presentation.
Operating profit decreased by 28% from $2,462 million to $1,779 million, principally due to substantially
weaker iron ore export prices and cost increases which were partially offset by higher export sales volumes.
Markets
Global crude steel production increased marginally to 775 Mt for the first half of 2012 compared to 772 Mt for
the same period in 2011. China's crude steel production for the first half of the year of 355 Mt was up 1%
year on year. At current production run rates it is anticipated that Chinese crude steel production could
increase by 4% year on year to around 715 Mt for 2012, supporting a 2% increase in global crude steel
production. Seaborne iron ore supply of some 533 Mt for the first half of 2012 was impacted by adverse
weather conditions in Australia and Brazil during the first quarter, but saw a substantial rebound during the
second quarter. Iron ore index prices traded in a range between $130/t and $150/t, with a high of
approximately $150/t (CFR China 62% Fe) during April 2012, and averaged $142/t during the first six months
(30 June 2011: $179/t). Index prices declined steadily from these levels to just above $130/t towards the end
of May as Chinese steel mills reduced their offtake. Iron ore prices have since stabilised to around $135/t as
Chinese steel mills returned to the market to replenish stockpiles.
Operating performance
Kumba Iron Ore
Total tonnes mined at Sishen mine increased by 16% from 76.7 Mt in the first half of 2011 to 88.9 Mt, of
which waste mined was 68.8 Mt, an increase of 33% over the first six months of 2011. Total production at
Sishen mine decreased by 4% from 18.6 Mt in 2011 to 17.9 Mt. Production was impacted by the availability
of material supplied to the mine's dense media separation plant and jig plant. This was as expected given a
currently constrained pit, and is being addressed through the planned increase in waste stripping. This
position was further impacted by wet pit conditions resulting from heavy rainfall, and poor operator
attendance during the first quarter of 2012. Production run rates recovered in the second quarter of 2012 as
the ramp-up in waste mining continued to improve, resulting in a 12% increase from 8.5 Mt in the first quarter
of 2012.
Following successful commissioning in 2011, Kolomela mine continues to ramp up well with 3.3 Mt produced
during the six months, a substantial increase on the 1.2 Mt produced in the fourth quarter of 2011. Should
the current ramp-up performance be sustained, the mine should exceed the 4 to 5 Mt production guidance
for 2012, increasing to 9 Mtpa design capacity in 2013. Total tonnes mined at Kolomela mine increased by
25% from 15.3 Mt in 2011 to 19.1 Mt, of which waste mined was 15.6 Mt, an increase of 6% over the first six
months of 2011.
Total sales volumes for Kumba for the half year were a record at 23.4 Mt, a 6% increase compared to the 22
Mt in 2011. Export sales volumes for the half year increased 13% from 18.4 Mt in 2011 to 20.7 Mt. Kumba's
export sales volumes to China totalled 71% of total export volumes for the six months, against 69% during
the first half of 2011.
Iron Ore Brazil
Iron Ore Brazil generated an operating loss of $81 million, largely reflecting the pre-operational state of the
Minas-Rio project.
Samancor
Operating profit of $20 million was $86 million lower than the prior period, driven by lower prices and lower
alloy volumes, offset by strong ore sales volumes.
Production of ore increased by 31% from 1.3 Mt to record 1.6 Mt (attributable basis) due to consistently
strong operating performance and improved plant availability at both GEMCO in Australia and Hotazel in
South Africa.
Production of alloy decreased by 41% from 144,900 tonnes to 85,200 tonnes (attributable basis) due to
termination of energy-intensive silica-manganese production at the Metalloys plant in South Africa and the
temporary suspension of production at TEMCO in Australia during the first quarter of the current year.
TEMCO is expected to return to full capacity by the end of the third quarter in 2012.
A general oversupply in the industry as a result of a slowdown in steel production and high stock levels in
China continue to weigh heavily on ore and alloy prices. Despite recent reductions in Chinese imports, low
short term demand expectations are slowing the rate at which stocks can reach normal levels.
Projects
Iron Ore Brazil
Construction is under way at the first phase of the 26.5 Mtpa Minas-Rio iron ore project, with significant
progress made. Earthworks continue in order to support civil work activities at the beneficiation plant site and
land access at the tailings dam area continues to be obtained. Progress on the pipeline route continues and
by the end of June 2012, 216 km or 41% of the pipeline had been completed. At the port, most off-shore civil
works have been concluded while on- and off-shore mechanical erection has commenced.
While progress is being made, legal challenges have affected construction activities at the beneficiation plant
and along the pipeline. The heavy rains at the beginning of the year, together with the various legal
challenges and consequent stoppages, the unresolved cave 3 radius reduction and the outstanding land
access at the pipeline route, are impacting the completion of the project. Taking these issues into account, a
detailed review of the Minas-Rio schedule has been commissioned and completed. The outcome of this
review is that subject to obtaining the outstanding licences; resolving current legal challenges; and not being
impacted by any further unexpected disruptions, first ore on ship is anticipated to be in the second half of
2014. The financial impact of the delay in the completion date is being assessed.
Samancor
Following on from its approval in 2011, the $279 million GEEP2 project (Anglo American's 40% share:
$112 million) will increase GEMCO's beneficiated product capacity from 4.2 Mtpa to 4.8 Mtpa through the
introduction of a dense media circuit by-pass facility. The project is expected to be completed in late 2013.
The expansion will also address infrastructure constraints by increasing road and port capacity to 5.9 Mtpa,
creating 1.1 Mtpa of latent capacity for future expansions.
The addition of the high carbon ferro-manganese furnace, M14, at the Metalloys smelter in Meyerton, South
Africa will add an additional 75,000 tonnes of per annum capacity. The cost of project is $90 million (on a
100% basis) and is scheduled for completion, on budget, in the fourth quarter of 2012.
Outlook
Kumba Iron Ore
Although China's annualised crude steel production rate remains above 700 Mtpa, underlying steel demand
remains weak, resulting in depressed steel prices. Iron ore prices, however, are expected to trade in a
similar range as seen during the first half of the year, supported by high-cost Chinese domestic iron ore
production. The recently announced monetary policy stimulus of an interest rate cut in China should support
demand for steel, but the effect of it remains to be seen especially in light of economic uncertainty emanating
from Europe.
The ramp-up in waste mining at Sishen mine continues, which will support an improvement in production
rates at the mine during the second half of 2012. Production at Sishen mine for the full year is anticipated to
be in line with 2011 levels. The ramp-up of Kolomela remains on track and will support export sales volume
growth of 3 Mt to 4 Mt in 2012.
Samancor
The downward pressure on ore pricing is expected to ease during the second half of 2012, with the speed of
the recovery being determined by continued supply curtailments.
On 23 February 2012, Samancor announced a 90-day suspension of operations at its TEMCO manganese
alloy facility in Tasmania, Australia, to review the economic viability of continuing operations. With that
review now complete, significant cost reduction opportunities have been identified which should allow
TEMCO to return to a globally competitive cost position. The planned safe and full restart of the operation
has commenced. The company's intention is to have all four furnaces operating by the end of August 2012.
METALLURGICAL COAL
$ million 6 months ended 6 months ended
(unless otherwise stated) 30 June 2012 30 June 2011
Operating profit 159 501
EBITDA 379 683
Net operating assets 4,796 4,683
Capital expenditure 370 222
Share of Group operating profit 4% 8%
Share of Group net operating assets 11% 10%
Metallurgical Coal recorded an operating profit of $159 million, a 68% decrease, due to the reduction in
realised export prices partly offset by higher sales volumes. Average realised metallurgical coal prices were
24% lower than prices achieved in the first half of last year. Productivity improvements at the open cut
operations and a reduction in weather related stoppages supported by the rigorous preparation for seasonal
rains led to a significant increase in metallurgical coal production and sales.
Markets
6 months 6 months
Anglo American weighted average achieved sales prices ended 30 June 2012 ended 30 June 2011
Export metallurgical coal (FOB) 191 251
Export thermal coal (FOB Australia) 103 103
Domestic thermal coal 37 35
Attributable sales volumes 6 months ended 6 months ended
('000 tonnes) 30 June 2012 30 June 2011
Export metallurgical coal 8,602 6,252
Export thermal coal 2,748 2,547
Domestic thermal coal 3,183 3,759
Despite subdued demand sentiment, the seaborne metallurgical coal market showed a price recovery
towards the end of the second quarter of 2012. Continued industrial action in Queensland has limited the
availability of premium quality hard coking coal, supporting price increases over recent months.
Semi-soft and PCI prices, however, experienced downward pricing pressure as a result of subdued global
steel demand impacting the consumption of metallurgical coal and in particular PCI. In addition, falling
thermal coal prices, which increased availability of lower grade coking coals from the US, have resulted in a
widening price differential between premium quality and lower grade coking coals.
Operating performance
Attributable production 6 months ended 6 months ended
('000 tonnes) 30 June 2012 30 June 2011
Export metallurgical coal 8,589 6,114
Thermal coal 5,857 6,090
Export metallurgical coal production increased by 40% to 8.6 Mt, a record half-year total, while thermal coal
production decreased by 4% to 5.9 Mt. Production at Queensland operations benefited from a reduction in
weather-related stoppages, supported by rain mitigation initiatives implemented during 2011 and asset
optimisation across key mines. Peace River Coal in Canada, for example, lifted its coal production by a
substantial 42% following a combination of improved management systems, productivity improvements and
upgrades to the coal handling and preparation plant. Thermal coal production was impacted by wet weather
in the New South Wales Hunter Valley and industrial action in the first quarter at Drayton.
Projects
In June 2012, the Queensland Government granted Anglo American the mining lease for the $1.7 billion
Grosvenor project. The Grosvenor project is 100% owned by Anglo American, and was approved by the
Board in December 2011. This forms a major part of the Group's strategy to triple metallurgical coal
production by 2020. Grosvenor will consist of a single new underground longwall mine targeting the same
well understood Goonyella Middle coal seam as Moranbah North mine.
In addition, studies for the next phase of our investment programme in high margin hard coking coal
continue, aligned with our expectations of growing seaborne demand. This includes Grosvenor Phase 2, a 6
Mtpa second longwall for the Grosvenor project; and Moranbah South, a 50% 12 Mtpa joint venture
comprising two longwalls.
Anglo American is continuing to evaluate long term port expansion opportunities to support Queensland
growth projects, as well as medium term port capacity options, to meet the export requirements for the initial
years of production from the Grosvenor project.
Outlook
Overall global demand for seaborne metallurgical coal remained relatively stable in the first half of 2012. In
the near term, demand is expected to be impacted by global economic uncertainty. Supply disruptions owing
to industrial actions in Australia have recently subsided. Pricing differentiation between the premium and
lower quality product is expected to remain with continued supply from US.
In the second half of 2012, Anglo American production of high margin export products is expected to
increase, supported by productivity improvements at both open cut and underground operations.
THERMAL COAL
$ million 6 months ended 6 months ended
(unless otherwise stated) 30 June 2012 30 June 2011
Operating profit 433 521
South Africa 235 319
Colombia 214 212
Projects and corporate (16) (10)
EBITDA 522 611
Net operating assets 1,742 2,080
Capital expenditure 101 31
Share of Group operating profit 12% 9%
Share of Group net operating assets 4% 5%
Thermal Coal generated an operating profit of $433 million, a 17% decrease on the equivalent period of
2011, driven by lower average export thermal coal prices and above-inflation cost pressures. This was partly
offset by a weaker South African rand and increased sales volumes, supported by record half year
production at Cerrejón.
Markets
6 months 6 months
Anglo American weighted average achieved sales prices ended 30 June 2012 ended 30 June 2011
South Africa export thermal coal (FOB) 99 120
South Africa domestic thermal coal 21 22
Colombia export thermal coal (FOB) 92 101
6 months 6 months
Attributable sales volumes ('000 tonnes) ended 30 June 2012 ended 30 June 2011
South Africa export thermal coal (1) 8,239 6,781
South Africa domestic thermal coal (1) (2) 19,357 19,392
Colombia export thermal coal 5,594 5,000
(1) Zibulo commended commercial production on 1 October 2011. Six months ended 30 June 2011 includes capitalised sales from Zibulo
mine of 879,000 tonnes export thermal coal and 356,000 tonnes Eskom coal.
(2) Includes domestic metallurgical coal of 92,000 tonnes for the six months ended 30 June 2012 (six months ended 30 June 2011:
172,000).
Seaborne thermal coal prices have weakened in the first half of 2012. Low US gas prices have displaced a
significant volume of domestic US thermal coal, resulting in higher US thermal coal exports. Prices were
further impacted by increased coal supply from South Africa, Colombia, Indonesia and Australia as
production and logistics infrastructure continued to ramp up in these regions.
Demand in the Asia Pacific region remains relatively robust, as higher cost domestic supply is substituted for
lower cost seaborne imports. At the same time, consumers continued to hold back on purchases in light of
comfortable stock levels and the anticipation of a further reduction in price. High cost producers within the
Appalachian basin in the US have cut production as prices eased. International seaborne prices have
declined, with API 4 dropping from $106/t in January to $85/t in June.
South African thermal coal exports have seen a dramatic change in their destination markets, with India and
Asia now accounting for around two-thirds of shipments. Within Asia, Taiwan, South Korea and Malaysia
have picked up a share of India's imports from last year. The continued improved performance by Transnet
Freight and Rail (TFR) saw South African coal exports 4.7 Mt, or 17%, higher at 32.1 Mt for the first six
months of 2012 (first six months of 2011: 27.4 Mt).
Operating performance
6 months 6 months
Attributable production ('000 tonnes) ended 30 June 2012 ended 30 June 2011
South Africa export thermal coal (1) (2) 7,918 7,945
Colombia export thermal coal 6,058 5,147
South Africa Eskom coal (1) 16,089 17,058
South Africa domestic other (2) 3,168 2,562
(1) Zibulo commended commercial production on 1 October 2011. Six months ended 30 June 2011 includes capitalised production from
Zibulo mine of 936,400 tonnes thermal coal and 396,900 tonnes Eskom coal.
(2) Includes domestic metallurgical coal of 74,100 tonnes for the six months ended 30 June 2012 (six months ended 30 June 2011:
163,300).
South Africa
Operating profit from South African operations decreased by 26% to $235 million, driven by lower average
export thermal coal prices and above-inflation cost increases, in labour, power and fuel. This was partly
offset by a weaker South African rand and higher sales volumes, supported by the improved TFR rail
performance relative to the first half of 2011.
Export production for the first half was in line with the prior period as Zibulo's continued ramp-up was offset
by the planned closure of high-cost sections at Goedehoop, Greenside and Kleinkopje, as well as industrial
actions in the first quarter of the year at most operations.
Colombia
At Cerrejón, operating profit of $214 million was broadly in line with the prior period, driven by strong
production, which was up 18%, partly offset by lower thermal coal prices.
Projects
Feasibility studies on the New Largo project have been completed. There are two elements to this project: a
new opencast mine and a conveyor which will run from an existing coal plant to an Eskom power station.
The planned commencement date for coal on conveyor is the third quarter of 2014, with first coal production
for New Largo currently expected in the fourth quarter of 2015. Anglo American will contribute a minority
portion of the establishment capital.
In Colombia, the Cerrejón P500 Phase 1 expansion project to increase production by 8 Mtpa was approved
by its shareholders in the third quarter of 2011. First coal is targeted for the fourth quarter of 2013, with the
project expected to achieve full production by the end of 2015.
Outlook
Current industry oversupply, coupled with lacklustre demand in the Atlantic and delayed procurement in the
Asia region, continues to weigh on thermal coal prices. Pricing pressure is expected to remain for the rest of
2012, though the Chinese domestic market price and the high US break-even price for producers should act
as a natural floor to the seaborne price.
Current prices are expected to trigger supply-side response, with US producers already announcing 76 Mt of
production cuts to date and demand in China and India expected to remain robust driven by seasonal power
generation in the fourth quarter. This should rebalance the market in the final quarter of 2012.
COPPER
$ million 6 months ended 6 months ended
(unless otherwise stated) 30 June 2012 30 June 2011
Operating profit 978 1,401
EBITDA 1,210 1,527
Net operating assets 8,062 7,050
Capital expenditure 488 831
Share of Group operating profit 26% 23%
Share of Group net operating assets 18% 15%
Copper generated an operating profit of $978 million, a decrease of 30% as a result of a lower average
copper price, declining grade profile and lower recoveries compared to the six months ended 30 June 2011.
This was partially offset by higher sales volumes from the strong ramp-up of the Los Bronces expansion
project.
Markets
6 months 6 months
ended 30 June 2012 ended 30 June 2011
Average market prices (c/lb) 367 426
Average realised prices (c/lb) 370 422
Copper prices were stable during the first four months of the year before easing in the second quarter on the
back of increased global economic uncertainty. The market continues to forecast a small deficit globally for
the full year, despite further deterioration in Europe and slower economic growth in China impacting demand.
Supply continues to disappoint due to grade declines and various disruptions.
The LME copper price ended the half year period at 345 c/lb, averaging 367 c/lb for the first six months, a
14% decrease compared with the same period in 2011. A net positive provisional pricing adjustment of $20
million was recorded in the first half of 2012 compared to a negative price adjustment of $36 million in 2011,
resulting in a realised price of 370 c/lb versus 422 c/lb for the prior period.
Operating performance
6 months 6 months
ended 30 June 2012 ended 30 June 2011
Attributable copper production (tonnes) 329,500 289,100
Total copper production of 329,500 tonnes was 14% higher than the same period in 2011.
Los Bronces' production was 80% higher at 183,000 tonnes, with the Los Bronces expansion project
contributing 93,100 tonnes of production. The new processing plant is ramping up strongly, with mill
throughput of 92% of design capacity achieved during the quarter. Production performance at Los Bronces
was impacted by lower ore grades.
El Soldado's output was 46% higher at 26,100 tonnes due to improved plant performance, higher ore grades
and better recovery. Mantos Blancos' production of 26,200 tonnes was 27% lower, impacted by an incident
which resulted in a lower ore grade area being mined. Mantoverde's production of 30,300 tonnes was in line
with the prior year.
Collahuasi's attributable production of 63,900 tonnes was 38% lower, partially due to expected lower grades
during 2012. This was exacerbated by lower recoveries, adverse weather conditions, safety stoppages and a
ball mill failure. In response to poor performance at Collahuasi, the joint venture partners have put in place a
business improvement plan, including assigning joint CEOs from Anglo American and Xstrata and a team of
30 specialists seconded from the three partners to draw up and implement an action plan.
Projects
At Collahuasi, the expansion project to increase concentrator plant throughput to 160,000 tonnes of ore per
day equivalent to an annual average production increment of 20,000 tonnes per year of copper over the
estimated life of mine, remains on schedule for 2013. The pre-feasibility study for the next phase of
expansion at Collahuasi is expected to be completed in the second half of 2012, with options to substantially
increase annual production from the current levels.
In Peru, the focus continues to be on obtaining the permits required to take the Quellaveco project forward
for Board approval. Community engagement has continued through a dialogue table process, with
agreement being reached in early June in relation to water usage, environmental responsibility and Anglo
American's social contribution over the life of mine. The concept level study for the Michiquillay project was
completed in the period and is under review.
Activity at the Pebble project in Alaska continues, with the focus on completing a pre-feasibility study. The
draft Bristol Bay Watershed Assessment was released by the Environmental Protection Agency (EPA) in
May 2012. The EPA has estimated that the report will be finalised by the end of the year.
Outlook
Full year copper production for 2012 is expected to be higher than 2011, driven by the continued ramp-up to
design capacity of the Los Bronces expansion project in the second half. Production at Los Bronces will,
however, be impacted by increased waste stripping and lower ore grades. In addition, lower grade and
recoveries and repair of the ball mill at Collahuasi will have a negative impact into the second half of the
year. Production is expected to continue to increase in 2013, as the Los Bronces expansion project reaches
full capacity for the year, and through improved operating performance and ore grades at Collahuasi.
Challenges remain in managing industry-wide input cost pressures, although these will be partially mitigated
by the expanded Los Bronces operation's increased production.
Ongoing market concerns arising from uncertainties over the near term outlook for the global economy may
lead to short term volatility in the copper price. However, the medium to long term fundamentals for copper
remain strong, predominantly driven by robust demand from the emerging economies, ageing mines with
ongoing grade decline and a lack of new supply.
NICKEL
6 months 6 months
$ million ended ended
(unless otherwise stated) 30 June 2012 30 June 2011
Operating profit 58 93
EBITDA 72 106
Net operating assets 2,642 2,526
Capital expenditure 89 177
Share of Group operating profit 2% 2%
Share of Group net operating assets 6% 5%
Nickel generated an operating profit of $58 million, 38% lower than the first half of 2011. Operating profit
includes a self insurance recovery of $57 million but was significantly impacted by a 28% decline in the LME
nickel price and inflationary pressures in Venezuela. This was in part offset by a weaker Brazilian real.
Operating profit for Barro Alto is capitalised whilst ramp-up continues.
Markets
6 months 6 months
ended ended
30 June 2012 30 June 2011
Average market prices (c/lb) 836 1,159
Average realised prices (c/lb) 798 1,105
Despite LME price strengthening at the start of 2012, reaching 983 c/lb at the end of January, prices in the
first half of the year were lower due to the worsening macroeconomic environment which negatively affected
stainless steel production and nickel demand. In combination with the ramp-up of new nickel supply, market
fundamentals have worsened during the first half of 2012.
Operating performance
6 months 6 months
ended ended
30 June 2012 30 June 2011
Attributable nickel production (tonnes) 22,900 12,700
Nickel production increased by 80% to 22,900 tonnes owing to the ramp-up of Barro Alto, which produced
first metal in March of 2011.
Barro Alto produced 12,000 tonnes during the first half of 2012, including the impact of a one month, Line 1
shutdown in June 2012. Line 1 has ramped up well achieving average feed rates of almost 80% of nominal
capacity in the period since the shutdown. In addition, recovery continues to improve and delivery of full
capacity rates in early 2013 continues to be targeted.
Loma de Níquel's three remaining concessions (after the cancellation of 13 other concessions) are due to
expire in November 2012 and consistent with the prior year, the operation is reflected in the Group's results
as if it will close in November. However, discussions with the authorities regarding Anglo American's
possible continued operation of the asset are ongoing.
Projects
Jacaré and Morro Sem Boné, both promising unapproved nickel projects in Brazil, continue to be under
study. The Jacaré pre-feasibility study commenced in 2012 and exploration is ongoing at Morro Sem Boné.
Outlook
Production of nickel during the second half of the year is expected to be higher as Barro Alto continues to
ramp up.
With slower demand than previously expected due to the economic situation and the ramp-up of new
production facilities, global nickel supply is expected to increase faster than demand in 2012, leading to an
increase in the surplus of supply over demand. On the supply side, however, the delivery of new projects has
been slower than expected. In addition, lower nickel prices are leading to production stoppages at some
nickel pig iron producers in China which will also lower supply. Most experts forecast the supply surplus to
reduce in 2013 due to better demand and lower supply growth. This is expected to lead to a tighter market
and moderate improvement in prices.
PLATINUM
6 months 6 months
$ million ended ended
(unless otherwise stated) 30 June 2012 30 June 2011
Operating profit 84 542
EBITDA 439 931
Net operating assets 11,668 13,258
Capital expenditure 356 410
Share of Group operating profit 2% 9%
Share of Group net operating assets 26% 29%
Platinum recorded an operating profit of $84 million, an 85% decrease, primarily driven by lower sales
volumes and weaker realised prices. The operating profit of $84 million also reflects the recognition of the
inventory revaluation following the annual physical count. On a month to month basis, and in line with
industry practice, Platinum's metal inventory is estimated, with an annual physical stocktake undertaken
each year in February to validate theoretical inventory levels. In 2012, Platinum recorded a pre-tax gain of
$172 million compared to theoretical stock levels, in contrast to a gain of $61 million in 2011.
Refined platinum production and sales volume decreased by 13% and 21% respectively. This was partially
offset by a weaker average rand against the dollar. Cash operating costs per equivalent refined platinum
ounce increased by 11% compared with the first half of 2011, primarily due to increases in the costs of
labour, electricity and electrical components, diesel and reagents.
Markets
Global demand for platinum during the first half of 2012 was marginally weaker than expected. Firmer
jewellery demand stimulated by current depressed price levels was unable to offset weak autocatalyst and
investment demand. Industrial demand for platinum remained flat as expected.
Labour and safety related stoppages in South Africa reduced planned supply of refined platinum from South
Africa in the first half of 2012, as did production curtailment at a number of unprofitable mines. Despite the
reduction in supply forecasts for 2012, platinum metal investment sentiment and prices remain poor.
Palladium demand remained firm as growth in demand for gasoline vehicles continues and expectations of a
deficit market provided price support. Rhodium demand remained weak, and a reversal of substitution
implemented during periods of historic high prices remains unlikely.
Autocatalysts
Ongoing economic uncertainty in Europe continued to impact demand for new vehicles, with sales
approximately 7% below those in the first half of 2011. European autocatalyst demand represents
approximately 47% of global demand, and platinum loading per catalyst, particularly in light duty diesel
vehicles in Europe, continues to increase ahead of the Euro 6 emissions limits commencing in September
2014.
Supply of platinum and palladium from recycled autocatalysts increased at a slower rate than in 2011 as the
distortions that resulted from scrappage incentive schemes have largely worked their way out of the supply
system.
Industrial
Gross platinum demand for industrial applications is not expected to increase in 2012. The record demand in
2011, driven by delayed consumption, is unlikely to be repeated. Indications in 2012 are that industrial
demand is flat, with potential for further weakness in the second half.
Jewellery
Jewellery demand remained firm during the first half of the year with China benefiting most from the current
low price as strong demand from manufacturers on price dips continues. Platinum jewellery demand
continues to benefit from platinum trading at a discount, of over $100/oz, to gold. Improved confidence in
platinum jewellery by Chinese and Hong Kong retail brands has resulted in increased platinum stock levels
in both existing and newly opened stores.
Investment
Platinum investment demand in the first half of 2012 remained muted as ongoing macroeconomic
uncertainty maintained negative investor sentiment. Reduced participation in non-visible or over-the-counter
metal trade continues to depress prices which, in turn, reduces demand for Exchange Traded Funds.
Operating performance
Equivalent refined platinum production (1) for the first half of 2012 was 1.18 million ounces, an increase of 1%
when compared to the first half of 2011.
Own mines, including Western Limb Tailings Retreatment, produced 802,600 equivalent refined platinum
ounces, an increase of 5% compared with the first half of 2011. The Rustenburg Complex mines increased
output by 42,900 ounces or 17%. Increases in output were also recorded at Dishaba, Union South and Unki
mines. This improvement in underground mines performance was as a result of a reduction in the scope and
duration of regulator imposed safety stoppages, successful ramp-up of Khuseleka 2 shaft and productivity
improvements. Mogalakwena mine output was 160,200 platinum ounces, 9% higher than the first half of
2011 due to improved concentrator recoveries. The increased production was partly offset by lower volumes
from Union North, Thembelani and Tumela mines.
Refined platinum production decreased by 13% to 1.03 million ounces in the first half of 2012 compared to
the same period in 2011 despite higher output from mining operations. This was due to planned annual
maintenance at the converter plant in Rustenburg, completed by the end of March 2012, experiencing
operational and equipment related difficulties upon restart. These difficulties, however, have been resolved
and the furnace matte converter in June 2012 exceeded the previous monthly record by 5%. Delayed
production is expected to be processed during the third quarter of 2012 as the converter plant reached
steady state operating level shortly after the completion of maintenance.
Five employees lost their lives during the period and Platinum extends its sincere condolences to their
families, friends and colleagues. The causes of the fatalities include falls of ground, tramming and transport
related incidents. Loss of life in the workplace is unacceptable. Our safety performance has improved since
2007, and we have reduced fatalities and the lost-time-injury frequency rate by 72% and 42% respectively.
While our safety strategy is still sound, we continue to review and adjust it in the pursuit of zero harm, to
ensure that we specifically target the major causes of injuries and fatalities. We continue to work relentlessly
with our partners in government and our workforce to implement more effective means of addressing major
risks and non-compliance with standards. The journey to zero harm remains our key strategic objective.
Projects
Capital expenditure for the first half of 2012 amounted to $356 million, a 13% decrease (flat in rand terms) on
the comparative period in 2011. An amount of $171 million was spent on projects, $146 million on stay-in-
business capital and $39 million on waste stripping at Mogalakwena Mine.
The majority of project capital expenditure for the first half of 2012 was invested on the Twickenham mine
($45 million excluding pre-production costs), Unki mine ($12 million) and the Khuseleka ore replacement
project ($11 million).
The Bathopele 5 and slag cleaning furnace 2 projects have recently entered implementation phase and are
progressing on schedule. The Thembelani 2 project has been stopped and a co-extraction project study of
the resource is currently under way, with a scheduled completion period of three years.
(1) Equivalent ounces are mined ounces expressed as refined ounces.
Outlook
The main objective of the strategic review announced in February 2012 is to establish a long term portfolio
with sustainable competitive advantage that will deliver through the cycle value for shareholders and
stakeholders. The review covers the entire value chain, from overhead and indirect costs, resources to
mining to processing, marketing and commercial strategy, as well as the shape and size of portfolio which
will leverage Platinum's industry leading resource base. The portfolio review is expected to be completed by
the end of the year.
Since the start of the year, the operating environment has deteriorated further. The rand basket price is
under pressure due to the weaker global economic environment, mining inflation has remained above the
South African consumer price index and labour unrest has increased across the industry presenting
additional challenges.
We have taken swift and disciplined measures to preserve Platinum's balance sheet position and support
ongoing operations.
- Platinum, together with its joint venture partner, has suspended production at Marikana mine and
placed the operation on care and maintenance. Other joint venture operations are under review. We
are also considering the selective and opportunistic exit from some marginal assets.
- The Platinum project portfolio is under review to ensure effective capital allocation and appropriate
prioritisation of projects. In February, we announced a cut in our 2012 capital expenditure target from
$1.2 billion to $1.0 billion. In light of the continued market volatility and uncertainty, this is being
further reduced by $100 million to an estimated $900 million for the full year. We will also continue to
focus on asset optimisation and supply chain management and increasing production from lower
cost mines like Mogalakwena.
- To conserve cash further, Platinum has also embarked on a programme to review overhead costs.
Significant cuts will be made to overhead costs over the next 12 to 18 months. As well as reducing
costs, the review is intended to position the organisation appropriately ahead of any portfolio
changes and to simplify current ways of working.
- Platinum is also reviewing its marketing and commercial strategy, having identified a number of
opportunities to match its product offering better to the needs of current and potential customers and
improve its market intelligence and market development initiatives. We expect to see incremental
benefits develop over the next two years.
Under the auspices of the tripartite Mining Industry Growth Development and Employment Task Team
(MIGDETT), the stakeholders in the South African Platinum Group Metals mining industry have established a
Platinum Task Team to investigate and action proposals on how to assist the sector weather the short term
challenges that the industry faces and, in parallel, develop a common strategy for promoting the sustainable
growth and transformation of the sector in the long term.
As a result of further market deterioration, we are now planning on total refined production of between 2.4
and 2.5 million platinum ounces for 2012, but will continue to monitor market conditions closely with a view to
reacting to further soft market demand or to take advantage of any upturns in demand in the short term.
Given the fixed-cost nature of the business and ongoing input cost inflation, offset by the significant cost-
cutting efforts by management highlighted above, we believe that unit costs for the full year will be able to be
contained to R15,000 per equivalent refined platinum ounce.
DIAMONDS
6 months 6 months
$ million ended ended
(unless otherwise stated) 30 June 2012 30 June 2011
Share of associate's operating profit 250 450
EBITDA 306 517
Group's associate investment in De Beers (1) 2,382 2,234
Share of Group operating profit 7% 7%
(1) Excludes shareholder loans of $309 million (30 June 2011: $315 million)
Anglo American's recorded share of operating profit from De Beers of $250 million, was 44% lower than the
first half of 2011 as prices moderated from record levels achieved previously. De Beers continues to focus
on scheduled maintenance and waste stripping activities in light of lower demand.
All regulatory consents have been granted in relation to Anglo American's proposed acquisition of Central
Holdings Ltd's (representing the Oppenheimer family interests) 40% interest in De Beers. The Government
of the Republic of Botswana is expected to indicate its intention regarding its pre-emption rights within the
third quarter of 2012 and accordingly it is anticipated that the transaction will close during the same quarter.
Markets
De Beers Group sales (including the sales of rough diamonds by the Diamond Trading Company (DTC)) for
the first half of 2012 decreased from $3.9 billion in 2011 to $3.3 billion, primarily as a result of lower demand
for rough diamonds and changing product requirements from Sightholders. After a very strong first half of
2011, the difficult trading conditions experienced during the fourth quarter in 2011 continued, as expected,
during the first half of 2012. While consumer demand for polished diamonds remained relatively healthy,
Sightholder demand was impacted by increased stock in the cutting centres, tightening liquidity and
challenging conditions in India. However, early indications are that the US market continued to perform well,
and the Chinese market, while slowing considerably, still showed strong positive growth.
Operating performance
De Beers continued to have some success in the first half of 2012 in reducing its lost-time-injury frequency
rate. However, safety remains the first priority and, subsequent to a slope failure at Debswana's Jwaneng
mine, management suspended all operations in the pit to conduct a comprehensive review of procedures
and risks; pit operations have now resumed, albeit slowly.
In the first half of 2012, De Beers' production decreased by 13% to 13.4 million carats. In light of prevailing
rough diamond market trends, and in keeping with the company's stated production strategy from the fourth
quarter of 2011, operations continued to focus on maintenance and waste stripping backlogs. This strategy
has enabled De Beers to meet Sightholder demand for rough diamonds while gradually positioning the
mines for future increases in demand.
In downstream activities, Forevermark (the diamond brand owned by the De Beers family of companies)
continues to grow, particularly in the core markets of China, Japan, India and the US. The brand has also
launched in South Africa, Canada and the UAE this year, and is on track for the ambitious growth targets
planned.
De Beers Diamond Jewellers saw growth in its core jewellery market but saw a decline in the high-end
market, reflecting overall retail trends. De Beers' retail network expansion continues with plans to open three
new stores in China before the end of the year.
Projects
Debswana's Jwaneng mine Cut-8 extension project is progressing satisfactorily, on schedule and on budget,
with infrastructure construction 98% complete.
In South Africa, De Beers Consolidated Mines' (DBCM) Venetia Underground Project is progressing through
the final approvals and regulatory assurances.
In Namibia, Namdeb is now ramping up production at Elizabeth Bay mine.
In Canada, the Gahcho Kué project permitting process is on schedule.
Outlook
De Beers expects trading conditions in the mid-stream to remain challenging during the second half of 2012.
De Beers will continue to produce in line with Sightholder demand and invest in stimulating and capturing
consumer demand growth.
Provided there are no unforeseen economic shocks, De Beers expects to see moderately positive growth in
global diamond jewellery sales for the full year 2012 albeit at relatively modest levels, especially when
compared to the exceptional growth levels seen in 2011. In the short term, the US, China, the Gulf and
Japan are expected to contribute the bulk of the growth, while India and Europe are expected to remain
weak.
In the long term, the fundamentals of the diamond industry remain strong as demand will continue to outstrip
supply.
OTHER MINING AND INDUSTRIAL
6 months 6 months
$ million ended ended
(unless otherwise stated) 30 June 2012 30 June 2011
Operating profit 180 136
Copebrás 29 54
Catalão 45 21
Amapá (1) 112 45
Tarmac (24) (22)
Scaw Metals 28 27
Zinc 20
Projects and corporate (10) (9)
EBITDA 278 247
Net operating assets 3,504 4,293
Capital expenditure 109 88
Share of Group operating profit 5% 2%
Share of Group net operating assets 8% 9%
(1) In 2012 Amapá has been reclassified from Iron Ore and Manganese to Other Mining and Industrial to align with internal management reporting.
Comparatives have been reclassified to align with current year presentation.
Other Mining and Industrial Copebrás and Catalão
Markets
Copebrás
Fertiliser demand is expected to increase in 2012 reflecting the favourable exchange ratios between fertiliser
and commodity prices and the higher product availability supported by higher year-end inventories in 2011.
Dicalcium phosphate sales are expected to be higher as customers build their stocks.
Catalão
A deteriorating macroeconomic environment in Europe and Japan is suppressing niobium demand in these
regions and, in turn, prices. This decrease in demand has been partially offset by spot sales in other regions,
such as South Korea and India. China, however, remains the main driver of demand globally and is likely to
drive near term pricing. In spite of the increased competition and pressure on prices, Catalão has managed
to allocate all produced tonnages profitably.
Operating performance
Copebrás
Operating profit decreased to $29 million, 46% down on the previous year. This was primarily due to lower
international fertiliser prices combined with the weakening of the Brazilian real, and increased labour costs
(reflecting new union agreements).
Catalão
Catalão generated an operating profit of $45 million, a 114% increase on the previous year. Sales volumes
of niobium were also 31% higher. This was primarily attributable to an increase in production due to better
performance at the tailings plant and improvements in the concentration process at the Boa Vista mine.
Production costs have improved due to lower aluminium and power prices and more efficient use of
consumables, combined with the impact of higher production.
Projects
Catalão
The Boa Vista Fresh Rock (BVFR) project continued to progress with an additional tranche of capital
expenditure approved in June 2012. The existing plant will be adapted to process new rock instead of oxide
ore, leading to an increase in production capacity to approximately 6,500 tonnes of niobium per year from
3,900 tonnes produced in 2011.
Outlook
Copebrás
The continuing healthy prices for grain encouraged farmers to bring forward fertiliser purchases during the
first half of the year. These positive prices are expected to be sustained during the second half of 2012,
stimulating fertiliser demand worldwide. International fertiliser prices started to recover from May as a
consequence of strong demand in Brazil and the beginning of demand in the US and India for summer
crops.
Catalão
Production is expected to decline in the second half of 2012 as a result of lower grade and recovery due to
lower quality ore from the Boa Vista mine. In addition, tailings production is expected to decrease as a result
of lower niobium grade contained within the phosphate tailings.
The niobium market is expected to remain under pressure due to a decrease in demand impacting price as
well as sales volumes.
Other Mining and Industrial Amapá, Tarmac and Scaw
Amapá
Amapá generated an operating profit of $112 million, an increase of $67 million on the first half of 2011. The
higher profit was primarily due to the reversal of penalty provisions, which were in place at the end of 2011,
as a result of contract re-negotiations.
Production increased significantly, mainly due to higher mass recovery in the beneficiation plant as a result
of improved stability of the plant. In addition to improved production, higher sales were achieved as a result
of lower delays associated with transportable moisture limits.
The favourable impact of improved production and sales, however, was more than offset by a sharp
decrease in sales prices during 2012 compared to the same period last year. Tight cost control and improved
operating efficiencies are in place to mitigate the effect of the decrease in selling prices.
Anglo American has transformed the operational performance of Amapá since it acquired the asset in 2008,
increasing production from 1.2 Mt in 2008 to 4.8 Mt in 2011 and an expected 5.5 Mt in 2012 (first six months
2012: 3.0 Mt). As part of our regular evaluation of our portfolio of assets in order to maximise shareholder
value, however, we are currently exploring the possibility of divesting of our stake in the Amapá system an
asset that we have always maintained we do not envisage holding over the long term.
Tarmac
Tarmac reported an operating loss of $24 million, compared to a loss of $22 million in the first half of 2011.
Tarmac's EBITDA was positive at $37 million, 21% lower than the same period last year.
Quarry Materials
Price increases, and further improvements in the use of recycled asphalt material in the UK Quarry Materials
business, have mitigated the impact that increased oil costs had in the first half on bitumen used in asphalt.
Cement production levels have also been held up through maximising operational efficiencies. The market
continues to decline, however, with weak private sector demand reducing concrete and aggregates volumes
in the first half and reduced public spend on road building and repairs adversely affecting asphalt volumes.
The business continues to identify performance improvements, despite the challenging outlook for 2012,
which is characterised by weaker than expected private sector growth and reduced public sector spending.
Building Products
An improvement in performance has been driven by strong volume growth in aircrete blocks, an increase in
premium product sales on bagged aggregates, and the production of sleepers to service the Network Rail
contract. Additional improvements in financial performance have arisen from actions taken in 2011 which
include the closure of the Precast businesses and the asset impairment review.
However, performance has been eroded by wet weather during the second quarter of 2012 which has
caused disruption in building activity and a reduction in retail sales affecting sales volumes.
The general market remains weak which is resulting in a very competitive pricing environment to secure the
limited sales volumes available. Cost reduction projects and improvements in operating efficiencies are high
on the agenda to mitigate the impact of lower sales.
Although a number of initiatives are in progress to improve performance, the short term market outlook
remains difficult.
Scaw Metals
Scaw Metals generated an operating profit of $28 million, a 4% increase on prior year, largely as a result of
improved trading conditions in the foundry businesses partly offset by weaker trading conditions within
grinding media. The rolled products business continues to suffer from weak demand and low margins. The
effect of cost containment and internal sales has seen a reduction in rolled products loss compared to the
first six months of 2011.
Cast products showed a marked improvement, owing to increased demand and market pricing, assisted by a
weaker rand. Margins widened as the benefits of the turnaround strategy started to be realised. Grinding
media showed a decrease in operating profit compared to prior year due to lower demand from the mining
sector owing to decreased activity as a result of strike actions. Wire rod products' performance decreased
from the prior year on the back of weak market conditions in the mining and construction sector. Total
production of steel products was 319,100 tonnes, a decrease of 10% over the prior year.
CONDENSED FINANCIAL STATEMENTS
for the six months ended 30 June 2012
Consolidated income statement
for the six months ended 30 June 2012
6 months ended 30.06.12 6 months ended 30.06.11 Year ended 31.12.11
Before Special Before Special Before Special
special items and special items and special items and
items and remeasure- items and remeasure- items and remeasure-
remeasure- ments remeasure- ments remeasure- ments
US$ million Note ments (note 4) Total ments (note 4) Total ments (note 4) Total
Group revenue 2 13,678 13,678 15,237 15,237 30,580 30,580
Total operating costs (10,437) (452) (10,889) (10,057) 303 (9,754) (20,912) (229) (21,141)
Operating profit from subsidiaries and joint
ventures 2 3,241 (452) 2,789 5,180 303 5,483 9,668 (229) 9,439
Non-operating special items 4 (39) (39) 417 417 183 183
Share of net income from associates 2 324 (9) 315 593 12 605 978 (1) 977
Total profit from operations and associates 3,565 (500) 3,065 5,773 732 6,505 10,646 (47) 10,599
Investment income 316 316 340 340 668 668
Interest expense (377) (377) (348) (348) (695) (695)
Other financing (losses)/gains (77) 15 (62) 28 46 74 7 203 210
Net finance (costs)/income 7 (138) 15 (123) 20 46 66 (20) 203 183
Profit before tax 3,427 (485) 2,942 5,793 778 6,571 10,626 156 10,782
Income tax expense 8 (954) (54) (1,008) (1,696) 140 (1,556) (2,741) (119) (2,860)
Profit for the financial period 2,473 (539) 1,934 4,097 918 5,015 7,885 37 7,922
Attributable to:
Non-controlling interests 782 (55) 727 977 50 1,027 1,765 (12) 1,753
Equity shareholders of the Company 1,691 (484) 1,207 3,120 868 3,988 6,120 49 6,169
Earnings per share (US$)
Basic 9 1.38 (0.40) 0.98 2.58 0.72 3.30 5.06 0.04 5.10
Diluted 9 1.35 (0.38) 0.97 2.47 0.68 3.15 4.85 0.04 4.89
Consolidated statement of comprehensive income
for the six months ended 30 June 2012
6 months ended 6 months ended Year ended
US$ million 30.06.12 30.06.11 31.12.11
Profit for the financial period 1,934 5,015 7,922
Net gain on revaluation of available for sale investments 105 237 115
Net loss on cash flow hedges (5) (64) (94)
Net exchange difference on translation of foreign operations (including associates) (159) (283) (4,060)
Actuarial net gain/(loss) on post employment benefit schemes 76 (18) (214)
Share of associates' expense recognised directly in equity, net of tax (1) (5) (32)
Tax on items recognised directly in equity (70) (48) 24
Net expense recognised directly in equity (54) (181) (4,261)
Transferred to income statement: sale of available for sale investments (11) (10)
Transferred to income statement: impairment of available for sale investments 33
Transferred to income statement: cash flow hedges 2 2 5
Transferred to initial carrying amount of hedged items: cash flow hedges 6 35 54
Transferred to income statement: exchange differences on disposal of foreign operations 42 45
Tax on items transferred from equity (1) (12) (14)
Total transferred from equity 40 56 80
Total comprehensive income for the financial period 1,920 4,890 3,741
Attributable to:
Non-controlling interests 742 921 1,142
Equity shareholders of the Company 1,178 3,969 2,599
Consolidated balance sheet
as at 30 June 2012
US$ million Note 30.06.12 30.06.11 31.12.11
Intangible assets 2,259 2,341 2,322
Property, plant and equipment 41,269 41,433 40,549
Environmental rehabilitation trusts 368 385 360
Investments in associates 5,396 5,301 5,240
Financial asset investments 2,936 3,555 2,896
Trade and other receivables 496 340 437
Deferred tax assets 620 534 530
Other financial assets (derivatives) 721 509 668
Other non-current assets 139 191 138
Total non-current assets 54,204 54,589 53,140
Inventories 3,901 3,770 3,517
Trade and other receivables 3,711 4,430 3,674
Current tax assets 152 270 207
Other financial assets (derivatives) 104 488 172
Cash and cash equivalents 12b 11,249 6,805 11,732
Total current assets 19,117 15,763 19,302
Assets classified as held for sale 14 645
Total assets 73,966 70,352 72,442
Trade and other payables (4,500) (5,068) (5,098)
Short term borrowings 11,12b (788) (1,061) (1,018)
Provisions for liabilities and charges (341) (318) (372)
Current tax liabilities (350) (749) (1,528)
Other financial liabilities (derivatives) (190) (57) (162)
Total current liabilities (6,169) (7,253) (8,178)
Medium and long term borrowings 11,12b (12,957) (12,497) (11,855)
Retirement benefit obligations (533) (566) (639)
Deferred tax liabilities (6,082) (6,059) (5,730)
Other financial liabilities (derivatives) (1,125) (508) (950)
Provisions for liabilities and charges (1,866) (1,747) (1,830)
Other non-current liabilities (52) (83) (71)
Total non-current liabilities (22,615) (21,460) (21,075)
Liabilities directly associated with assets classified as held for sale 14 (483)
Total liabilities (29,267) (28,713) (29,253)
Net assets 44,699 41,639 43,189
Equity
Called-up share capital 10 772 738 738
Share premium account 4,357 2,714 2,714
Own shares (6,709) (7,051) (6,985)
Other reserves (176) 3,548 283
Retained earnings 42,384 37,748 42,342
Equity attributable to equity shareholders of the Company 40,628 37,697 39,092
Non-controlling interests 4,071 3,942 4,097
Total equity 44,699 41,639 43,189
The Condensed financial statements of Anglo American plc, registered number 3564138, were approved by the Board
of directors on 26 July 2012 and signed on its behalf by:
Cynthia Carroll René Médori
Chief Executive Finance Director
Consolidated cash flow statement
for the six months ended 30 June 2012
US$ million Note 6 months ended 30.06.12 6 months ended 30.06.11 Year ended 31.12.11
Cash flows from operations 12a 3,201 5,233 11,498
Dividends from associates 165 165 344
Dividends from financial asset investments 33 32 59
Income tax paid (921) (1,444) (2,539)
Net cash inflows from operating activities 2,478 3,986 9,362
Cash flows from investing activities
Purchase of property, plant and equipment 2 (2,322) (2,595) (6,203)
Cash inflows from derivatives related to capital expenditure 2 14 267 439
Investments in associates (30) (23) (47)
Net repayment/(advance) of loans granted 46 (24) 22
Interest received and other investment income 164 169 350
Disposal of subsidiaries, net of cash and cash equivalents disposed 13 486 514
Sale of interests in joint ventures 13 19 19
Other investing activities 7 19 53
Net cash used in investing activities (2,121) (1,682) (4,853)
Cash flows from financing activities
Interest paid (412) (424) (807)
Cash inflows from derivatives related to financing activities 112 53 226
Dividends paid to Company shareholders (559) (495) (818)
Dividends paid to non-controlling interests (753) (686) (1,404)
Repayment of short term borrowings (272) (691) (1,261)
Net receipts of medium and long term borrowings 3,043 457 964
Movements in non-controlling interests (690) 7 4,964
Tax on sale of non-controlling interest in Anglo American Sur (1,015)
Sale of shares under employee share schemes 11 14 20
(1)
Purchase of shares by subsidiaries for employee share schemes (230) (132) (367)
Other financing activities (2) (12) (43)
Net cash (used in)/from financing activities (767) (1,909) 1,474
Net (decrease)/increase in cash and cash equivalents (410) 395 5,983
Cash and cash equivalents at start of period 11,732 6,460 6,460
Cash movements in the period (410) 395 5,983
Effects of changes in foreign exchange rates (32) (50) (711)
(2)
Cash and cash equivalents at end of period 12c 11,290 6,805 11,732
(1) Includes purchase of Kumba Iron Ore Limited and Anglo American Platinum Limited shares for their respective employee share schemes.
(2) Includes cash and cash equivalents relating to a disposal group, see note 12b.
Consolidated statement of changes in equity
for the six months ended 30 June 2012
Total equity
attributable
Share- Cumulative to equity
Total based translation Fair value shareholders Non-
share Own Retained payment adjustment and other of the controlling Total
US$ million capital (1) shares (2) earnings reserve reserve reserves (3) Company interests equity
Balance at 1 January 2011 3,451 (7,159) 34,305 476 1,474 1,692 34,239 3,732 37,971
Total comprehensive income 3,969 (167) 167 3,969 921 4,890
Dividends payable to Company shareholders (495) (495) (495)
Dividends payable to non-controlling interests (664) (664)
Issue of shares to non-controlling interests 7 7
Equity settled share-based payment schemes 108 (31) (88) (11) (12) (23)
Other 1 (6) (5) (42) (47)
Balance at 30 June 2011 3,452 (7,051) 37,748 382 1,307 1,859 37,697 3,942 41,639
Total comprehensive income 1,959 (3,237) (92) (1,370) 221 (1,149)
Dividends payable to Company shareholders (339) (339) (339)
Dividends payable to non-controlling interests (737) (737)
Changes in ownership interest in subsidiaries 3,027 3,027 788 3,815
Issue of shares to non-controlling interests 9 9
Equity settled share-based payment schemes 66 (162) 70 (26) (155) (181)
IFRS 2 charges on black economic empowerment
transactions 102 102 29 131
Other 7 1 (7) 1 1
Balance at 31 December 2011 3,452 (6,985) 42,342 453 (1,930) 1,760 39,092 4,097 43,189
Total comprehensive income 1,291 (182) 69 1,178 742 1,920
Dividends payable to Company shareholders (559) (559) (559)
Dividends payable to non-controlling interests (738) (738)
Conversion of convertible bond (note 11) 1,677 185 (355) 1,507 1,507
Changes in ownership interest in subsidiaries (631) (631) (59) (690)
Issue of shares to non-controlling interests 8 8
Equity settled share-based payment schemes 276 (244) 9 41 21 62
Balance at 30 June 2012 5,129 (6,709) 42,384 462 (2,112) 1,474 40,628 4,071 44,699
(1) Includes share capital and share premium.
(2) Own shares comprise shares of Anglo American plc held by the Company (treasury shares), its subsidiaries and employee benefit trusts. Own shares have previously been aggregated with
retained earnings. Comparatives have been reclassified to align with current presentation.
(3) Includes the convertible debt reserve, available for sale reserve, cash flow hedge reserve, legal reserve, capital redemption reserve and revaluation reserve.
Dividends
6 months ended 6 months ended Year ended
30.06.12 30.06.11 31.12.11
Proposed ordinary dividend per share (US cents) 32 28 46
Proposed ordinary dividend (US$ million) 409 339 557
Ordinary dividends payable during the period per share (US cents) 46 40 68
Ordinary dividends payable during the period (US$ million) 559 495 834
Notes to the Condensed financial statements
1. Basis of preparation
The Condensed financial statements for the six month period ended 30 June 2012 have been prepared in accordance
with 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 2011, which were
prepared in accordance with International Financial Reporting Standards (IFRS) adopted for use by the European
Union. The financial information for the year ended 31 December 2011 does not constitute statutory accounts as
defined in section 434 of the Companies Act 2006. This information was derived from the statutory accounts for the
year ended 31 December 2011, a copy of which has been delivered to the Registrar of Companies. The auditor's
report on these accounts was unqualified, did not include a reference to any matters to which the auditor 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.
Accounting policies
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 2011, with the exception of certain amendments to accounting standards or new
interpretations issued by the International Accounting Standards Board, which were applicable from 1 January 2012.
These have not had a material impact on the accounting policies, methods of computation or presentation applied by
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 15. The Group's net debt at 30 June 2012 was $3.1 billion (including related
hedges) (30 June 2011: $6.8 billion; 31 December 2011: $1.4 billion) representing a gearing level of 6.5%
(30 June 2011: 14.0%; 31 December 2011: 3.1%). Further analysis of net debt is set out in note 12 and details of
borrowings and facilities are set out in note 11.
The directors have considered the Group's cash flow forecasts for the period to the end of 31 December 2013. The
Board is satisfied that the Group's forecasts and projections, taking account of reasonably possible changes in trading
performance, show that the Group will be able 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 in preparing its Condensed financial
statements.
Non-GAAP measures
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 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 2, 3, 5 and 9 to the Condensed financial statements.
Changes in estimates
Due to the nature of Platinum in-process inventories being contained in weirs, pipes and other vessels, physical
counts only take place annually, except in the Precious Metal Refinery which take place once every three years (the
latest being in 2010). Consequently, the Platinum business runs a theoretical metal inventory system based on inputs,
the results of previous physical counts and outputs. Once the results of the physical count are finalised, the variance
between the theoretical count and actual count is investigated and recorded as a change in estimate.
During the six month period to 30 June 2012, the change in estimate following the annual physical count has had the
effect of increasing the value of inventory by $172 million (2011: $61 million). This resulted in the recognition of an
after tax gain in the period of $124 million (2011: $44 million).
2. Segmental information
The Group's segments are aligned to the structure of business units based around core commodities. Each business
unit has a management team that is accountable to the Chief Executive. 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).
Following a strategic review during the six month period to 30 June 2012, Amapá is now managed as part of the
Other Mining and Industrial business unit, and accordingly is presented as part of the Other Mining and Industrial
segment. It was previously reported as part of the Iron Ore and Manganese segment. Consistent with the Group's
financial statements for the year ended 31 December 2011, Peace River Coal is managed as part of the Metallurgical
Coal business unit, and accordingly is presented as part of the Metallurgical Coal segment. At 30 June 2011 it was
reported within the Other Mining and Industrial segment. Comparatives have been reclassified to align with current
presentation.
Catalão and Copebrás, reported in the Other Mining and Industrial segment, are considered core to the Group.
Tarmac and Scaw have been identified for divestment, whilst the possibility of divesting the Group's stake in Amapá
is being explored. These operations are not considered to be individually significant to the Group and are also
presented in the Other Mining and Industrial segment.
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 Iron Ore and Manganese: iron ore, manganese ore and alloys;
Metallurgical Coal: metallurgical coal; Thermal Coal: thermal coal; Copper and Nickel: base metals; Platinum:
platinum group metals; Diamonds: rough and polished diamonds and diamond jewellery; and Other Mining and
Industrial: phosphates, niobium, heavy building materials, steel products and iron ore.
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.
Analysis by segment
Revenue and operating profit
Revenue (1) Operating profit/(loss) (2)
6 months ended 6 months ended Year ended 6 months ended 6 months ended Year ended
US$ million 30.06.12 30.06.11 31.12.11 30.06.12 30.06.11 31.12.11
Iron Ore and Manganese 3,611 3,989 7,643 1,779 2,462 4,400
Metallurgical Coal 2,006 1,942 4,347 159 501 1,189
Thermal Coal 1,774 1,693 3,722 433 521 1,230
Copper 2,569 2,609 5,144 978 1,401 2,461
Nickel 219 293 488 58 93 57
Platinum 2,582 3,760 7,359 84 542 890
Diamonds 1,506 1,750 3,320 250 450 659
Other Mining and Industrial 2,138 2,256 4,520 180 136 315
Exploration (72) (46) (121)
Corporate Activities and Unallocated Costs 3 2 5 (125) (36) 15
Segment measure 16,408 18,294 36,548 3,724 6,024 11,095
Reconciliation:
Less: Associates (2,730) (3,057) (5,968) (483) (844) (1,427)
Operating special items and remeasurements (452) 303 (229)
Statutory measure 13,678 15,237 30,580 2,789 5,483 9,439
(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 before special
items and remeasurements. 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
Associates' revenue Associates' operating profit/(loss) (1)
6 months ended 6 months ended Year ended 6 months ended 6 months ended Year ended
US$ million 30.06.12 30.06.11 31.12.11 30.06.12 30.06.11 31.12.11
Iron Ore and Manganese 426 491 926 20 106 165
Metallurgical Coal 165 172 372 65 115 207
Thermal Coal 515 507 1,080 214 212 482
Platinum 117 136 269 (66) (39) (86)
Diamonds 1,506 1,750 3,320 250 450 659
Other Mining and Industrial 1 1 1
2,730 3,057 5,968 483 844 1,427
Reconciliation:
Associates' net finance costs (35) (26) (48)
Associates' income tax expense (121) (217) (385)
Associates' non-controlling interests (3) (8) (16)
Share of net income from associates
(before special items and remeasurements) 324 593 978
Associates' special items and
remeasurements (11) 17 (5)
Associates' special items and
remeasurements tax 3 (4) 1
Associates' non-controlling interests on
special items and remeasurements (1) (1) 3
Share of net income from associates 315 605 977
(1) Associates' operating profit is the Group's attributable share of associates' revenue less operating costs before special items and remeasurements.
Non-cash items
Significant non-cash items included within operating profit before special items and remeasurements are as follows:
Depreciation and amortisation (1) Other non-cash movements (2)
6 months ended 6 months ended Year ended 6 months ended 6 months ended Year ended
US$ million 30.06.12 30.06.11 31.12.11 30.06.12 30.06.11 31.12.11
Iron Ore and Manganese 96 77 153 (18) 43 95
Metallurgical Coal 213 175 375 78 40 104
Thermal Coal 62 65 128 50 13 30
Copper 232 126 289 29 49 124
Nickel 14 13 27 9 2 10
Platinum 335 364 729 39 36 76
Other Mining and Industrial 98 111 225 (64) 22 83
Exploration 1 1 3
Corporate Activities and Unallocated Costs 21 18 41 40 24 54
(3) (3) (3)
1,071 949 1,967 164 230 579
(1) The Group's attributable share of depreciation and amortisation in associates is $147 million (six months ended 30 June 2011: $139 million; year ended 31 December 2011: $286 million) and
is split by segment as follows: Iron Ore and Manganese $37 million (six months ended 30 June 2011: $15 million; year ended 31 December 2011: $33 million), Metallurgical Coal
$7 million (six months ended 30 June 2011: $7 million; year ended 31 December 2011: $13 million), Thermal Coal $27 million (six months ended 30 June 2011: $25 million; year ended
31 December 2011: $52 million), Platinum $20 million (six months ended 30 June 2011: $25 million; year ended 31 December 2011: $53 million) and Diamonds $56 million (six months ended
30 June 2011: $67 million; year ended 31 December 2011: $135 million).
(2) Other non-cash movements include equity settled share-based payment charges and amounts included in operating costs in respect of provisions, excluding amounts recorded within special
items.
(3) In addition $44 million (six months ended 30 June 2011: $42 million; year ended 31 December 2011: $84 million) of accelerated depreciation has been recorded within operating special items
(see note 4) and $34 million (six months ended 30 June 2011: $10 million; year ended 31 December 2011: $39 million) of pre-commercial production depreciation has been capitalised.
Capital expenditure and net debt
Capital expenditure (1) Net debt (2)
6 months ended 6 months ended Year ended
US$ million 30.06.12 30.06.11 31.12.11 30.06.12 30.06.11 31.12.11
Iron Ore and Manganese 784 563 1,659 1,377 725 1,277
Metallurgical Coal 370 222 695 (213) (642) (211)
Thermal Coal 101 31 190 85 28 81
Copper 488 831 1,570 (803) (562) (781)
Nickel 89 177 398 541 547 603
Platinum 356 410 970 192 (77) 20
Other Mining and Industrial 109 88 225 (149) 442 272
Exploration 1 1 (10) (2) (6)
Corporate Activities and Unallocated Costs 10 6 56 1,842 6,335 119
2,308 2,328 5,764 2,862 6,794 1,374
Net debt in disposal group 262
3,124 6,794 1,374
Remove: cash inflows from derivatives
relating to capital expenditure 14 267 439
Purchase of property, plant and equipment 2,322 2,595 6,203
Interest capitalised 139 152 321
Non-cash movements (3) (44) 30 27
Property, plant and equipment additions in
disposal group (7) (2) (2)
Property, plant and equipment additions (4) 2,410 2,775 6,549
(1) Capital expenditure is segmented on a cash basis and is reconciled to balance sheet additions. Cash capital expenditure includes cash flows on related derivatives.
(2) Segment net debt includes related hedges and excludes net debt in the disposal group. For a reconciliation of net debt to the balance sheet see note 12b.
(3) Includes movements on capital expenditure accruals, movements relating to deferred stripping and the impact of realised cash flow hedges.
(4) Capital expenditure on an accruals basis is split by segment as follows: Iron Ore and Manganese $852 million (30 June 2011: $827 million; 31 December 2011: $2,052 million), Metallurgical
Coal $390 million (30 June 2011: $201 million; 31 December 2011: $681 million), Thermal Coal $100 million (30 June 2011: $37 million; 31 December 2011: $231 million), Copper $482 million
(30 June 2011: $975 million; 31 December 2011: $1,877 million), Nickel $100 million (30 June 2011: $201 million; 31 December 2011: $405 million), Platinum $379 million (30 June 2011:
$445 million; 31 December 2011: $1,014 million), Other Mining and Industrial $96 million (30 June 2011: $83 million; 31 December 2011: $232 million), Exploration $1 million (30 June 2011: nil;
31 December 2011: $1 million) and Corporate Activities and Unallocated Costs $10 million (30 June 2011: $6 million; 31 December 2011: $56 million).
Segment assets and liabilities
The following balance sheet segment measures are provided for information:
Segment assets (1) Segment liabilities (2) Net segment assets/(liabilities)
US$ million 30.06.12 30.06.11 31.12.11 30.06.12 30.06.11 31.12.11 30.06.12 30.06.11 31.12.11
Iron Ore and Manganese 13,773 12,720 12,909 (458) (508) (482) 13,315 12,212 12,427
Metallurgical Coal 5,779 5,818 5,660 (983) (1,135) (968) 4,796 4,683 4,692
Thermal Coal 2,522 2,864 2,650 (780) (784) (764) 1,742 2,080 1,886
Copper 9,122 8,112 8,767 (1,060) (1,062) (1,124) 8,062 7,050 7,643
Nickel 2,739 2,630 2,655 (97) (104) (120) 2,642 2,526 2,535
Platinum 12,652 14,408 12,288 (984) (1,150) (1,097) 11,668 13,258 11,191
Other Mining and Industrial 4,180 5,164 4,660 (676) (871) (817) 3,504 4,293 3,843
Exploration 3 4 2 (4) (6) (3) (1) (2) (1)
Corporate Activities and Unallocated
Costs 339 405 375 (498) (363) (584) (159) 42 (209)
51,109 52,125 49,966 (5,540) (5,983) (5,959) 45,569 46,142 44,007
Other assets and liabilities
Investments in associates (3) 5,396 5,301 5,240 5,396 5,301 5,240
Financial asset investments 2,936 3,555 2,896 2,936 3,555 2,896
Deferred tax assets/(liabilities) 620 534 530 (6,082) (6,059) (5,730) (5,462) (5,525) (5,200)
Other financial assets/(liabilities)
derivatives 825 997 840 (1,315) (565) (1,112) (490) 432 (272)
Cash and cash equivalents 11,249 6,805 11,732 11,249 6,805 11,732
Other non-operating assets/(liabilities) 1,831 1,035 1,238 (1,787) (1,841) (2,715) 44 (806) (1,477)
Borrowings (13,745) (13,558) (12,873) (13,745) (13,558) (12,873)
Other provisions for liabilities and charges (798) (707) (864) (798) (707) (864)
73,966 70,352 72,442 (29,267) (28,713) (29,253) 44,699 41,639 43,189
(1) Segment assets are operating assets and consist of intangible assets of $2,259 million (30 June 2011: $2,341 million; 31 December 2011: $2,322 million), property, plant and equipment of
$41,269 million (30 June 2011: $41,433 million; 31 December 2011: $40,549 million), biological assets of $17 million (30 June 2011: $4 million; 31 December 2011: $17 million), environmental
rehabilitation trusts of $368 million (30 June 2011: $385 million; 31 December 2011: $360 million), retirement benefit assets of $83 million (30 June 2011: $127 million; 31 December 2011:
$70 million), inventories of $3,901 million (30 June 2011: $3,770 million; 31 December 2011: $3,517 million) and operating receivables of $3,212 million (30 June 2011: $4,065 million;
31 December 2011: $3,131 million).
(2) Segment liabilities are operating liabilities and consist of non-interest bearing current liabilities of $3,598 million (30 June 2011: $4,059 million; 31 December 2011: $3,982 million), environmental
restoration and decommissioning provisions of $1,409 million (30 June 2011: $1,358 million; 31 December 2011: $1,338 million) and retirement benefit obligations of $533 million (30 June 2011:
$566 million; 31 December 2011: $639 million).
(3) Investments in associates are split by segment as follows: Iron Ore and Manganese $922 million (30 June 2011: $925 million; 31 December 2011: $936 million), Metallurgical Coal $269 million
(30 June 2011: $284 million; 31 December 2011: $294 million), Thermal Coal $1,013 million (30 June 2011: $837 million; 31 December 2011: $932 million), Platinum $810 million (30 June
2011: $1,021 million; 31 December 2011: $848 million) and Diamonds $2,382 million (30 June 2011: $2,234 million; 31 December 2011: $2,230 million).
Revenue by product
The Group's analysis of segment revenue by product (including attributable share of revenue from associates) is
as follows:
US$ million 6 months ended 30.06.12 6 months ended 30.06.11 Year ended 31.12.11
Iron ore 3,170 3,535 6,830
Manganese ore and alloys 426 491 926
Metallurgical coal 1,606 1,497 3,444
Thermal coal 2,172 2,136 4,621
Copper 2,528 2,536 5,023
Nickel 423 567 948
Platinum 1,548 2,251 4,578
Palladium 423 561 1,076
Rhodium 207 395 703
Diamonds 1,506 1,750 3,320
Phosphates 296 259 571
Heavy building materials 1,100 1,197 2,347
Steel products 445 483 931
Other 558 636 1,230
16,408 18,294 36,548
Geographical analysis
Revenue by destination and non-current segment assets by location
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 Non-current segment assets (1)
6 months ended 6 months ended Year ended
US$ million 30.06.12 30.06.11 31.12.11 30.06.12 30.06.11 31.12.11
South Africa 1,623 1,799 3,589 14,885 17,194 15,215
Other Africa 285 321 618 353 390 357
Brazil 564 571 1,177 13,257 11,957 12,622
Chile 693 1,143 2,030 7,204 6,358 7,001
Other South America 17 38 50 622 645 655
North America 561 1,040 1,861 730 569 685
Australia 145 200 312 4,319 4,219 4,170
China 3,413 3,109 6,446 5
India 1,160 1,084 2,343
Japan 2,024 2,381 4,925
Other Asia 1,796 1,624 3,487 32 38 47
United Kingdom (Anglo American plc's country of domicile) 1,661 1,952 3,962 2,123 2,348 2,117
Other Europe 2,466 3,032 5,748 3 51 2
16,408 18,294 36,548 43,528 43,774 42,871
(1) Non-current segment assets are non-current operating assets and consist of intangible assets and property, plant and equipment.
Revenue and operating profit by origin
Segment revenue and operating profit before special items and remeasurements by origin (including attributable
share of revenue and operating profit from associates) have been provided for information:
Revenue Operating profit/(loss) before special items and remeasurements
6 months ended 6 months ended Year ended 6 months ended 6 months ended Year ended
US$ million 30.06.12 30.06.11 31.12.11 30.06.12 30.06.11 31.12.11
South Africa 7,519 9,099 17,855 2,138 3,322 6,059
Other Africa 1,276 1,440 2,763 207 371 501
Brazil 684 642 1,404 116 67 152
Chile 2,569 2,622 5,170 1,052 1,450 2,581
Other South America 643 692 1,364 238 260 512
North America 278 271 615 (54) 72 256
Australia and Asia 2,398 2,319 5,058 204 603 1,318
Europe 1,041 1,209 2,319 (177) (121) (284)
16,408 18,294 36,548 3,724 6,024 11,095
Segment assets and liabilities by location
The Group's geographical analysis of segment assets and liabilities, allocated based on where the assets and
liabilities are located, has been provided for information:
Segment assets (1) Segment liabilities Net segment assets
US$ million 30.06.12 30.06.11 31.12.11 30.06.12 30.06.11 31.12.11 30.06.12 30.06.11 31.12.11
South Africa 18,190 20,746 18,364 (2,360) (2,717) (2,620) 15,830 18,029 15,744
Other Africa 423 393 385 (16) (37) (20) 407 356 365
Brazil 13,859 12,475 13,188 (293) (307) (303) 13,566 12,168 12,885
Chile 8,252 7,411 7,950 (1,042) (1,053) (1,101) 7,210 6,358 6,849
Other South America 818 746 808 (44) (36) (48) 774 710 760
North America 815 640 782 (97) (46) (107) 718 594 675
Australia and Asia 5,659 6,014 5,450 (946) (1,158) (953) 4,713 4,856 4,497
Europe 3,093 3,700 3,039 (742) (629) (807) 2,351 3,071 2,232
51,109 52,125 49,966 (5,540) (5,983) (5,959) 45,569 46,142 44,007
(1) Investments in associates of $5,396 million (30 June 2011: $5,301 million; 31 December 2011: $5,240 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 $1,889 million (30 June 2011: $2,233 million; 31 December 2011: $1,950 million), Other Africa
$1,117 million (30 June 2011: $1,043 million; 31 December 2011: $996 million), Other South America $1,004 million (30 June 2011: $817 million; 31 December 2011: $917 million), North
America $325 million (30 June 2011: $342 million; 31 December 2011: $343 million), Australia and Asia $833 million (30 June 2011: $788 million; 31 December 2011: $794 million) and Europe
$228 million (30 June 2011: $78 million; 31 December 2011: $240 million).
3. Operating profit and underlying earnings by segment
The following table analyses operating profit (including attributable share of associates' operating profit) by segment
and reconciles it to underlying earnings by segment. In 2012 Amapá has been reclassified from the Iron Ore and
Manganese segment to Non-core within the Other Mining and Industrial segment to align with internal management
reporting. Consistent with the Group's financial statements for the year ended 31 December 2011, Peace River Coal
is managed as part of the Metallurgical Coal business unit, and accordingly is presented as part of the Metallurgical
Coal segment. Comparatives have been reclassified to align with current presentation.
Underlying earnings is an alternative earnings measure, which the directors consider to be a useful additional
measure of the Group's performance. Underlying earnings is profit for the financial period attributable to equity
shareholders of the Company before special items and remeasurements and is therefore presented after net finance
costs, income tax expense and non-controlling interests. For a reconciliation from 'Profit for the financial period
attributable to equity shareholders of the Company' to 'Underlying earnings for the financial period', see note 9.
6 months ended 30.06.12
Net finance costs,
Operating Operating Operating income tax
profit/(loss) before profit/(loss) after special items and expense and non-
special items and special items and remeasurements controlling Underlying
US$ million remeasurements (1) remeasurements (note 4) interests earnings
Iron Ore and Manganese 1,779 1,680 99 (1,228) 551
Metallurgical Coal 159 20 139 (49) 110
Thermal Coal 433 433 (148) 285
Copper 978 986 (8) (468) 510
Nickel 58 58 (26) 32
Platinum 84 (113) 197 (63) 21
Diamonds 250 254 (4) (74) 176
Other Mining and Industrial 180 197 (17) (78) 102
Exploration (72) (72) 3 (69)
Corporate Activities and Unallocated Costs (125) (125) 98 (27)
Total 3,724 3,260 464 (2,033) 1,691
Analysed as:
Core operations 3,616 3,135 481 (1,981) 1,635
Non-core operations (2) 108 125 (17) (52) 56
(1) Operating profit includes attributable share of associates' operating profit which is reconciled to 'Share of net income from associates' in note 2.
(2) Non-core operations relate to Amapá, Tarmac and Scaw and, until February 2011, the zinc operations.
6 months ended 30.06.11
Net finance
Operating Operating Operating costs, income
profit/(loss) before profit/(loss) after special items and tax expense and
special items and special items and remeasurements non-controlling Underlying
US$ million remeasurements (1) remeasurements (note 4) interests earnings
Iron Ore and Manganese 2,462 2,747 (285) (1,595) 867
Metallurgical Coal 501 501 (143) 358
Thermal Coal 521 519 2 (136) 385
Copper 1,401 1,406 (5) (559) 842
Nickel 93 89 4 (35) 58
Platinum 542 563 (21) (257) 285
Diamonds 450 458 (8) (151) 299
Other Mining and Industrial 136 136 (46) 90
Exploration (46) (46) 1 (45)
Corporate Activities and Unallocated Costs (36) (38) 2 17 (19)
Total 6,024 6,335 (311) (2,904) 3,120
Analysed as:
Core operations 5,962 6,273 (311) (2,877) 3,085
Non-core operations (2) 62 62 (27) 35
Year ended 31.12.11
Net finance
Operating Operating Operating costs, income
profit/(loss) before profit/(loss) after special items and tax expense and
special items and special items and remeasurements non-controlling Underlying
US$ million remeasurements (1) remeasurements (note 4) interests earnings
Iron Ore and Manganese 4,400 4,321 79 (2,943) 1,457
Metallurgical Coal 1,189 1,189 (345) 844
Thermal Coal 1,230 1,231 (1) (328) 902
Copper 2,461 2,460 1 (851) 1,610
Nickel 57 (15) 72 (34) 23
Platinum 890 884 6 (480) 410
Diamonds 659 641 18 (216) 443
Other Mining and Industrial 315 245 70 (140) 175
Exploration (121) (121) 3 (118)
Corporate Activities and Unallocated Costs 15 13 2 359 374
Total 11,095 10,848 247 (4,975) 6,120
Analysed as:
Core operations 10,968 10,791 177 (4,910) 6,058
Non-core operations (2) 127 57 70 (65) 62
(1) Operating profit includes attributable share of associates' operating profit which is reconciled to 'Share of net income from associates' in note 2.
(2) Non-core operations relate to Amapá, Tarmac and Scaw and, until February 2011, the zinc operations.
US$ million 6 months ended 30.06.12 6 months ended 30.06.11 Year ended 31.12.11
South Africa 899 1,503 2,726
Other Africa 137 246 326
South America 783 1,110 2,080
North America (58) 57 218
Australia and Asia 146 456 967
Europe (216) (252) (197)
1,691 3,120 6,120
4. 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 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, including partial disposals through broad based empowerment schemes, as
well as certain adjustments 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:
- unrealised gains and losses on 'non-hedge' derivative instruments open at the period end (in respect of future
transactions) and the reversal of the historical marked to market value of such instruments settled in the period.
Where the underlying transaction is recorded in the income statement, the 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 operating when the underlying exposure is in respect of the operating
performance of the Group, and otherwise as financing.
- foreign exchange impacts arising in US dollar functional currency entities where tax calculations are generated
based on local currency financial information and hence deferred tax is susceptible to currency fluctuations. Such
amounts are included within income tax expense.
6 months ended 30.06.12 6 months ended 30.06.11 Year ended 31.12.11
Subsidiaries Subsidiaries Subsidiaries
and joint and joint and joint
US$ million ventures Associates (1) Total ventures Associates (1) Total ventures Associates (1) Total
Impairment and related charges (368) (16) (384) (15) (15) (154) (154)
Restructuring costs (10) (10) (10) (9) (19)
Operating special items (368) (16) (384) (25) (25) (164) (9) (173)
Operating remeasurements (84) 4 (80) 328 8 336 (65) (9) (74)
Operating special items and
remeasurements (452) (12) (464) 303 8 311 (229) (18) (247)
Disposal of Lisheen and
Black Mountain 397 397 397 397
Disposal of Tarmac businesses (75) (75)
Platinum BEE transactions and
related charges (141) (141)
Kumba Envision Trust (39) (39)
Other 20 6 26 2 20 22
Non-operating special items (39) (39) 417 6 423 183 20 203
Financing special items (9) (9)
Financing remeasurements 15 1 16 46 3 49 203 2 205
Total special items and
remeasurements before tax
and non-controlling interests (476) (11) (487) 766 17 783 157 (5) 152
Special items and remeasurements
tax (54) 3 (51) 140 (4) 136 (119) 1 (118)
Non-controlling interests on special
items and remeasurements 55 (1) 54 (50) (1) (51) 12 3 15
Net total special items and
remeasurements attributable
to equity shareholders of the
Company (475) (9) (484) 856 12 868 50 (1) 49
(1) Relates to the Diamonds segment and Samancor.
Operating special items
Impairment and related charges were $384 million in the six months ended 30 June 2012 (six months ended
30 June 2011: $15 million; year ended 31 December 2011: $154 million). This principally relates to asset write-offs
and impairments of $184 million in the Platinum segment primarily arising from certain operations being placed into
care and maintenance and an impairment of $139 million relating to the Callide operation within Metallurgical Coal.
Accelerated depreciation of $44 million (six months ended 30 June 2011: $42 million; year ended 31 December 2011:
$84 million) has been recognised at Loma de Níquel (Nickel segment) due to ongoing uncertainty over the renewal of
three concessions that expire in 2012 and over the restoration of 13 concessions that have been cancelled.
Operating remeasurements
Operating remeasurements reflect a net loss of $80 million (six months ended 30 June 2011: gain of $336 million;
year ended 31 December 2011: loss of $74 million) principally in respect of non-hedge derivatives related to capital
expenditure in Iron Ore Brazil. Derivatives which have been realised during the period had a cumulative net operating
remeasurement gain since their inception of $13 million (six months ended 30 June 2011: $224 million; year ended
31 December 2011: $383 million).
Non-operating special items
The Kumba Envision Trust charge of $39 million relates to Kumba's broad based employee share scheme provided
solely for the benefit of non-managerial Historically Disadvantaged South African employees who do not participate in
other Kumba share schemes.
There were no gains or losses on disposals of businesses in the six months ended 30 June 2012 (six months ended
30 June 2011: gain of $423 million; year ended 31 December 2011: gain of $203 million).
Financing remeasurements
Financing remeasurements reflect a net gain of $16 million (six months ended 30 June 2011: $49 million; year ended
31 December 2011: $205 million) and relate to an embedded interest rate derivative, non-hedge derivatives relating
to debt and other financing remeasurements.
Special items and remeasurements tax
Special items and remeasurements tax amounted to a charge of $51 million (six months ended 30 June 2011: credit
of $136 million; year ended 31 December 2011: charge of $118 million). This relates to a credit for one-off tax items
of $18 million (six months ended 30 June 2011: $154 million; year ended 31 December 2011: $137 million), a tax
remeasurement charge of $152 million (six months ended 30 June 2011: credit of $126 million; year ended
31 December 2011: charge of $230 million) and a tax credit on special items and remeasurements of $83 million (six
months ended 30 June 2011: charge of $144 million; year ended 31 December 2011: charge of $25 million).
The total tax charge relating to subsidiaries and joint ventures of $54 million (six months ended 30 June 2011: credit
of $140 million; year ended 31 December 2011: charge of $119 million) comprises a current tax credit of $10 million
(six months ended 30 June 2011: charge of $21 million; year ended 31 December 2011: charge of $12 million) and a
deferred tax charge of $64 million (six months ended 30 June 2011: credit of $161 million; year ended 31 December
2011: charge of $107 million).
The credit relating to one-off tax items of $18 million (six months ended 30 June 2011: $154 million; year ended
31 December 2011: $137 million), relates principally to the reassessment of deferred tax assets as a result of
changes in tax regimes within operating segments.
5. EBITDA
Earnings before interest, tax, depreciation and amortisation (EBITDA) is operating profit before special items and
remeasurements, depreciation and amortisation in subsidiaries and joint ventures and includes attributable share of
EBITDA of associates.
6 months ended 6 months ended Year ended
US$ million 30.06.12 30.06.11 31.12.11
By segment
Iron Ore and Manganese (1) 1,912 2,554 4,586
Metallurgical Coal (2) 379 683 1,577
Thermal Coal 522 611 1,410
Copper 1,210 1,527 2,750
Nickel 72 106 84
Platinum 439 931 1,672
Diamonds 306 517 794
Other Mining and Industrial (1)(2) 278 247 540
Exploration (72) (46) (121)
Corporate Activities and Unallocated Costs (104) (18) 56
EBITDA 4,942 7,112 13,348
(1) In 2012 Amapá has been reclassified from Iron Ore and Manganese to Other Mining and Industrial to align with internal management reporting. Comparatives have been reclassified to align
with current presentation.
(2) In 2011 Peace River Coal was reclassified from Other Mining and Industrial to Metallurgical Coal to align with internal management reporting. Comparatives have been reclassified to align with
current presentation.
EBITDA 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 ended 6 months ended Year ended
US$ million 30.06.12 30.06.11 31.12.11
Total profit from operations and associates 3,065 6,505 10,599
Operating special items and remeasurements 452 (303) 229
Non-operating special items 39 (417) (183)
Associates' net special items and remeasurements 9 (12) 1
Share of associates' net finance costs, tax and non-controlling interests 159 251 449
Operating profit, including associates, before special items and remeasurements 3,724 6,024 11,095
Depreciation and amortisation: subsidiaries and joint ventures 1,071 949 1,967
Depreciation and amortisation: associates 147 139 286
EBITDA 4,942 7,112 13,348
EBITDA is reconciled to 'Cash flows from operations' as follows:
6 months ended 6 months ended Year ended
US$ million 30.06.12 30.06.11 31.12.11
EBITDA 4,942 7,112 13,348
Share of operating profit of associates before special items and remeasurements (483) (844) (1,427)
Cash element of operating special items (1) (12) (31) (59)
Share of associates' depreciation and amortisation (147) (139) (286)
Share-based payment charges 133 115 254
Provisions (115) (116) 6
Increase in inventories (620) (176) (352)
Increase in operating receivables (177) (725) (264)
(Decrease)/increase in operating payables (271) 119 457
Deferred stripping (39) (78) (171)
Other adjustments (10) (4) (8)
Cash flows from operations 3,201 5,233 11,498
(1) Includes cash outflows related to prior year operating special items.
6. Exploration expenditure
6 months ended 6 months ended Year ended
US$ million 30.06.12 30.06.11 31.12.11
By commodity
Iron ore 7 1 5
Metallurgical coal 4 1 5
Thermal coal 3 4 9
Copper 16 10 27
Nickel 16 9 26
Platinum group metals 2 2 5
Central exploration activities 24 19 44
72 46 121
Finance costs and exchange (losses)/gains are presented net of hedges for respective interest bearing and foreign
currency borrowings.
The weighted average capitalisation rate applied to qualifying capital expenditure was 3.8% (six months ended
30 June 2011: 4.4%; year ended 31 December 2011: 5.0%).
6 months ended 6 months ended Year ended
US$ million 30.06.12 30.06.11 31.12.11
Investment income
Interest income from cash and cash equivalents 94 119 239
Other interest income 103 101 194
Expected return on defined benefit arrangements 88 100 199
Dividend income from financial asset investments 35 32 59
320 352 691
Less: interest income capitalised (4) (12) (23)
Total investment income 316 340 668
Interest expense
Interest and other finance expense (327) (305) (615)
Interest payable on convertible bond (25) (34) (68)
Unwinding of discount on convertible bond (25) (34) (71)
Interest cost on defined benefit arrangements (98) (103) (205)
Unwinding of discount relating to provisions and other non-current liabilities (45) (36) (80)
(520) (512) (1,039)
Less: interest expense capitalised 143 164 344
Total interest expense (377) (348) (695)
Other financing (losses)/gains
Net foreign exchange (losses)/gains (73) 32 (16)
Net fair value (losses)/gains on fair value hedges (17) 1 16
Other net fair value gains/(losses) 13 (5) 7
Total other financing (losses)/gains (77) 28 7
Net finance (costs)/income before remeasurements (138) 20 (20)
Remeasurements (note 4) 15 46 203
Net finance (costs)/income after remeasurements (123) 66 183
8. Income tax expense
a) Analysis of charge for the period
6 months ended 6 months ended Year ended
US$ million 30.06.12 30.06.11 31.12.11
United Kingdom corporation tax at 24.5% (2011: 26.5%) 36 8 16
South Africa tax 496 721 1,307
Other overseas tax 244 608 1,067
Prior period adjustments 19 (61) (92)
Current tax (1) 795 1,276 2,298
Deferred tax 159 420 443
Income tax expense before special items and remeasurements 954 1,696 2,741
Special items and remeasurements tax (note 4) 54 (140) 119
Income tax expense 1,008 1,556 2,860
(1) Includes royalties which meet the definition of income tax and are in addition to royalties recorded in operating costs.
b) Factors affecting tax charge for the period
The effective tax rate for the period of 34.3% (six months ended 30 June 2011: 23.7%; year ended
31 December 2011: 26.5%) is higher (six months ended 30 June 2011: lower; year ended 31 December 2011: the
same as) than the applicable weighted average statutory rate of corporation tax in the United Kingdom of 24.5%
(six months ended 30 June 2011 and year ended 31 December 2011: 26.5%). The reconciling items are:
6 months ended 6months ended Year ended
US$ million 30.06.12 30.06.11 31.12.11
Profit before tax 2,942 6,571 10,782
Less: share of net income from associates (315) (605) (977)
Profit before tax (excluding associates) 2,627 5,966 9,805
Tax on profit (excluding associates) calculated at United Kingdom corporation tax rate of 24.5% (2011: 26.5%) 644 1,581 2,598
Tax effects of:
Items not taxable/deductible for tax purposes
Exploration expenditure 19 10 27
Non-taxable/deductible net foreign exchange losses 4 6 24
Non-taxable/deductible net interest income (9) (19) (20)
Other non-deductible expenses 24 72 60
Other non-taxable income (11) (27) (57)
Temporary difference adjustments
Current year losses not recognised 11 25 38
Recognition of losses not previously recognised (86) (30) (103)
Other temporary differences (17) (13) (57)
Special items and remeasurements 171 (343) 77
Other adjustments
Secondary tax on companies and dividend withholding taxes 186 328 407
Effect of differences between local and United Kingdom tax rates 74 (1) (61)
Prior year adjustments to current tax 19 (61) (92)
Other adjustments (21) 28 19
Income tax expense 1,008 1,556 2,860
IAS 1 requires income from associates to be presented net of tax on the face of the income statement. Associates'
tax is therefore not included within the Group's income tax expense. Associates' tax included within 'Share of net
income from associates' for the six months ended 30 June 2012 is $118 million (six months ended 30 June 2011:
$221 million; year ended 31 December 2011: $384 million). Excluding special items and remeasurements this
becomes $121 million (six months ended 30 June 2011: $217 million; year ended 31 December 2011: $385 million).
The effective rate of tax before special items and remeasurements including attributable share of associates' tax for
the six months ended 30 June 2012 was 30.3%. This was lower than the equivalent effective rate of 31.8% in the six
months ended 30 June 2011 due to the further recognition of previously unrecognised losses. The equivalent
effective rate for the year ended 31 December 2011 was 28.3% due to a number of non-recurring factors that include
the recognition of previously unrecognised tax losses and the reassessment of certain withholding tax provisions
across the Group. In future periods it is expected that the effective tax rate, including associates' tax, will remain
above the United Kingdom statutory tax rate.
9. Earnings per share
6 months ended 6 months ended Year ended
US$ 30.06.12 30.06.11 31.12.11
Profit for the financial period attributable to equity shareholders of the Company
Basic earnings per share 0.98 3.30 5.10
Diluted earnings per share 0.97 3.15 4.89
Headline earnings for the financial period (1)
Basic earnings per share 1.15 2.96 4.89
Diluted earnings per share 1.13 2.84 4.69
Underlying earnings for the financial period (1)
Basic earnings per share 1.38 2.58 5.06
Diluted earnings per share 1.35 2.47 4.85
(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
30.06.12 30.06.11 31.12.11
Earnings (US$ million)
Basic earnings, being profit for the financial period attributable to equity shareholders of the Company 1,207 3,988 6,169
Effect of dilutive potential ordinary shares
Interest payable on convertible bond prior to conversion (net of tax) (1) 19 25 50
Unwinding of discount on convertible bond prior to conversion (net of tax) (1) 19 25 52
Diluted earnings 1,245 4,038 6,271
Number of shares (million)
Basic number of ordinary shares outstanding (2) 1,230 1,209 1,210
Effect of dilutive potential ordinary shares (3)
Share options and awards 7 10 10
Convertible bond 47 62 62
Diluted number of ordinary shares outstanding (2) 1,284 1,281 1,282
(1) All outstanding convertible bonds were converted or redeemed during the six months ended 30 June 2012, see note 11.
(2) 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.
(3) 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 from the
beginning of the period presented.
In the six months ended 30 June 2012 there were 6,442,855 share options (six months ended 30 June 2011:
188,733; year ended 31 December 2011: 270,095) which were potentially dilutive but were not included in the
calculation of diluted earnings per share because they were anti-dilutive.
Underlying earnings is presented after non-controlling interests and excludes special items and remeasurements (see
note 4). 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:
6 months ended 6 months ended Year ended
US$ million 30.06.12 30.06.11 31.12.11
Profit for the financial period attributable to equity shareholders of the Company 1,207 3,988 6,169
Operating special items 246 70
Operating special items tax (15)
Operating special items non-controlling interests (29)
Non-operating special items (423) (347)
Non-operating special items tax 40 36
Non-operating special items non-controlling interests 2
Financing special items 9
Tax special items (24) (24)
Headline earnings for the financial period 1,409 3,583 5,913
Operating special items (1) 138 25 103
Operating remeasurements 80 (336) 74
Non-operating special items (2) 39 144
Financing remeasurements (16) (49) (205)
Special items and remeasurements tax 66 (152) 106
Non-controlling interests on special items and remeasurements (25) 49 (15)
Underlying earnings for the financial period 1,691 3,120 6,120
(1) Includes onerous contract provisions, accelerated depreciation and related charges.
(2) Includes Kumba Envision Trust charge (2011: Platinum BEE transactions and related charges).
10. Called-up share capital
30.06.12 30.06.11 31.12.11
Number of shares US$ million Number of shares US$ million Number of shares US$ million
Called-up, allotted and fully paid:
5% cumulative preference shares of £1 each 50,000 50,000 50,000
Ordinary shares of 54 86/91 US cents each 1,405,454,933 772 1,342,964,288 738 1,342,967,458 738
In the six months ended 30 June 2012, 3,534 ordinary shares of 54 86/91 US cents each were allotted to certain non-
executive directors by subscription of their after tax directors' fees (six months ended 30 June 2011: 2,317 ordinary
shares; year ended 31 December 2011: 5,487 ordinary shares).
In addition, 62,483,941 ordinary shares of 54 86/91 US cents each were allotted upon the conversion of Anglo American
plc convertible bonds due 2014 (six months ended 30 June 2011 and year ended 31 December 2011: 29,257), see
note 11.
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. Financial liabilities analysis
An analysis of borrowings, as presented on the Consolidated balance sheet, is set out below:
30.06.12 30.06.11 31.12.11
Due within Due after Due within Due after Due within Due after
US$ million one year one year Total one year one year Total one year one year Total
Secured
Bank loans and overdrafts 59 362 421 55 276 331
Obligations under finance leases 2 19 21 3 3 6 4 17 21
2 19 21 62 365 427 59 293 352
Unsecured
Bank loans and overdrafts 602 1,842 2,444 743 1,972 2,715 673 1,722 2,395
Bonds issued under EMTN programme (1) 63 6,051 6,114 100 4,501 4,601 163 4,167 4,330
US bonds 4,047 4,047 3,300 3,300 3,408 3,408
Convertible bond (2) 1,467 1,467 1,504 1,504
Other loans 121 998 1,119 156 892 1,048 123 761 884
786 12,938 13,724 999 12,132 13,131 959 11,562 12,521
Total (3) 788 12,957 13,745 1,061 12,497 13,558 1,018 11,855 12,873
(1) Refers to the Euro Medium Term Note programme.
(2) All outstanding convertible bonds were converted or redeemed during the six months ended 30 June 2012, see below.
(3) Excludes secured borrowings relating to a disposal group, see note 14.
The Group had the following undrawn committed borrowing facilities at the period end:
US$ million 30.06.12 30.06.11 31.12.11
Expiry date
Within one year (1) 2,186 2,072 1,781
Greater than one year, less than two years 1,248 1,907 1,268
Greater than two years, less than five years 4,527 4,904 5,294
Greater than five years 88 76
7,961 8,971 8,419
(1) Includes undrawn rand facilities equivalent to $1.6 billion (30 June 2011: $1.7 billion; 31 December 2011: $1.6 billion) in respect of a series of facilities with 364 day maturities which roll
automatically on a daily basis, unless notice is served.
Net receipts of medium and long term borrowings were $3,043 million (six months ended 30 June 2011: $457 million;
year ended 31 December 2011: $964 million) and net repayments of short term borrowings were $272 million (six
months ended 30 June 2011: $691 million; year ended 31 December 2011: $1,261 million) as disclosed in the
Consolidated cash flow statement.
Corporate bonds
In the six months ended 30 June 2012, the Group issued corporate bonds with a US$ equivalent value of $2.8 billion
in the US, European and South African markets. These included $600 million 2.625% senior notes due 2017,
750 million 3.50% guaranteed notes due 2022 and 750 million 2.75% guaranteed notes due 2019 issued under the
EMTN programme, and R600 million floating rate notes at JIBAR + 1.38% due 2017 and R1.4 billion 9.27% fixed rate
notes due 2019 issued under the South African Domestic Medium Term Note programme.
Convertible bond
On 23 March 2012, Anglo American plc gave notice that it had exercised its right to redeem its $1.7 billion of
convertible bonds (the Bonds) on 22 May 2012 (the optional redemption date). The Bonds were due to mature on
7 May 2014. On 13 April 2012, following the announcement of the recommended 2011 full year dividend, and in
accordance with the terms and conditions of the Bonds, the conversion price was adjusted from £18.36 to £18.02.
Of the $1,700 million Bonds issued, $1,678 million were converted to equity prior to the optional redemption date,
including $1 million converted in 2011, and the remaining $22 million were redeemed by the Group. As a result,
62.5 million ordinary shares were issued and the financial liability of $1,529 million, representing the notional value of
the outstanding Bonds of $1,699 million less unamortised discount of $170 million, was derecognised. The balance in
the convertible debt reserve of $355 million, which related to the Bonds, was transferred to share premium
($170 million) and retained earnings ($185 million).
12. Consolidated cash flow analysis
a) Reconciliation of profit before tax to cash flows from operations
US$ million 6 months ended 30.06.12 6 months ended 30.06.11 Year ended 31.12.11
Profit before tax 2,942 6,571 10,782
Depreciation and amortisation 1,071 949 1,967
Share-based payment charges 133 115 254
Non-operating special items 39 (417) (183)
Operating and financing remeasurements 69 (374) (138)
Operating special items 356 (6) 105
Net finance costs/(income) before remeasurements 138 (20) 20
Share of net income from associates (315) (605) (977)
Provisions (115) (116) 6
Increase in inventories (620) (176) (352)
Increase in operating receivables (177) (725) (264)
(Decrease)/increase in operating payables (271) 119 457
Deferred stripping (39) (78) (171)
Other adjustments (10) (4) (8)
Cash flows from operations 3,201 5,233 11,498
b) Reconciliation to the balance sheet
Cash and cash equivalents Short term borrowings Medium and long term borrowings
US$ million 30.06.12 30.06.11 31.12.11 30.06.12 30.06.11 31.12.11 30.06.12 30.06.11 31.12.11
Balance sheet 11,249 6,805 11,732 (788) (1,061) (1,018) (12,957) (12,497) (11,855)
Balance sheet disposal group (1) (note 14) 41 (58) (245)
Net debt classifications 11,290 6,805 11,732 (846) (1,061) (1,018) (13,202) (12,497) (11,855)
(1) 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 Net debt Net debt
cash within after excluding including
US$ million equivalents (1) one year one year hedges Hedges (2) hedges
Balance at 1 January 2011 6,460 (1,535) (11,904) (6,979) (405) (7,384)
Cash flow 395 691 (457) 629 (53) 576
Unwinding of discount on convertible bond (34) (34) (34)
Reclassifications (187) 187
Movements in fair value (10) (10) 418 408
Other non-cash movements (10) (11) (21) (21)
Currency movements (50) (20) (268) (338) (1) (339)
Balance at 30 June 2011 6,805 (1,061) (12,497) (6,753) (41) (6,794)
Cash flow 5,588 570 (507) 5,651 (173) 5,478
Unwinding of discount on convertible bond (37) (37) (37)
Disposal of businesses 5 5 5
Reclassifications (590) 590
Movements in fair value (254) (254) (14) (268)
Other non-cash movements (8) (27) (35) (35)
Currency movements (661) 66 877 282 (5) 277
Balance at 31 December 2011 11,732 (1,018) (11,855) (1,141) (233) (1,374)
Cash flow (410) 272 (3,043) (3,181) (112) (3,293)
Unwinding of discount on convertible bond (25) (25) (25)
Conversion of convertible bond 1,507 1,507 1,507
Reclassifications (111) 111
Movements in fair value (88) (88) (21) (109)
Other non-cash movements (9) (5) (14) (14)
Currency movements (32) 20 196 184 184
Balance at 30 June 2012 11,290 (846) (13,202) (2,758) (366) (3,124)
(1) The Group operates in certain countries where the existence of exchange controls may restrict the use of certain cash balances (principally South Africa and Venezuela). 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 assets of $56 million (30 June 2011: $91 million; 31 December 2011: $82 million) and net non-current derivative liabilities of $422 million (30 June 2011: $132 million;
31 December 2011: $315 million) which are classified within 'Other financial assets (derivatives)' and 'Other financial liabilities (derivatives)' on the balance sheet.
13. Disposals of subsidiaries and joint ventures
There were no disposals of subsidiaries or joint ventures in the six months ended 30 June 2012.
US$ million 6 months ended 30.06.11 Year ended 31.12.11
Net assets disposed
Property, plant and equipment 110 167
Other non-current assets 53 79
Current assets 431 461
Current liabilities (39) (55)
Non-current liabilities (100) (108)
Net assets 455 544
Non-controlling interests (42) (42)
Net assets disposed 413 502
Cumulative translation differences recycled from reserves 42 45
Net profit on disposals (note 4) 397 337
Net sale proceeds 852 884
Net cash and cash equivalents disposed (356) (358)
Accrued transaction costs and similar items 3 3
Net cash inflow from disposals (1) 499 529
(1) Net cash inflow in the six months ended 30 June 2012 was nil in respect of disposals in previous periods (six months ended 30 June 2011: $6 million; year ended 31 December 2011:
$4 million). Total cash inflows were $505 million in the six months ended 30 June 2011 and $533 million in the year ended 31 December 2011. Of this, a net cash inflow of $486 million related to
disposals of subsidiaries and $19 million related to the sale of interests in joint ventures in the six months ended 30 June 2011, and a net cash inflow of $514 million related to disposals of
subsidiaries and $19 million related to the sale of interests in joint ventures in the year ended 31 December 2011.
Disposals of subsidiaries during 2011 mainly related to the disposal of Lisheen and a 74% interest in Black Mountain
(the Group's remaining zinc operations) and disposals of Tarmac businesses (China, Turkey and Romania) in the
Other Mining and Industrial segment.
14. Assets and liabilities held for sale
The following assets and liabilities were classified as held for sale at 30 June 2012. The Group expects to complete
the sale of this disposal group within 12 months of this reporting date. There were no assets or liabilities classified as
held for sale at 30 June 2011 or 31 December 2011.
US$ million
30.06.12 (1)
Intangible assets 41
Property, plant and equipment 206
Other non-current assets 23
Total non-current assets 270
Inventories 179
Trade and other receivables 155
Cash and cash equivalents 41
Total current assets 375
Total assets 645
Trade and other payables (115)
Short term borrowings (58)
Provisions for liabilities and charges (18)
Total current liabilities (191)
Medium and long term borrowings (245)
Provisions for liabilities and charges (6)
Other non-current liabilities (41)
Total non-current liabilities (292)
Total liabilities (483)
Net assets 162
(1) Relates to the Group's investment in Scaw South Africa (Other Mining and Industrial segment) for which the disposal transaction had not been completed at 30 June 2012.
15. 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 the Mondi Group have agreed to indemnify each other, subject
to certain limitations, against certain liabilities. Anglo American has also provided Mitsubishi Corporation LLC
(Mitsubishi) with indemnities against certain liabilities as part of the sale of a 24.5% interest in Anglo American Sur SA
(AA Sur). Having taken appropriate legal advice, the Group believes that the likelihood of a material liability arising
from the indemnities provided is unlikely.
The Group is required to provide guarantees in several jurisdictions in respect of environmental restoration and
decommissioning obligations. The Group has provided for the estimated cost of these activities.
No contingent liabilities were secured on the assets of the Group at 30 June 2012, 30 June 2011 or 31 December
2011.
Other
Anglo American Sur SA
Anglo American and Enami, a wholly owned Chilean state controlled minerals company, amended an agreement
Anglo American inherited when it acquired AA Sur in 2002. In 2008 the option under this agreement was transferred
by Enami to Codelco, the Chilean state copper company. AA Sur is majority owned by the Group and owns the Los
Bronces and El Soldado copper mines and the Chagres smelter. The agreement granted Codelco the right, subject to
certain conditions and limitations, to acquire up to a 49% interest in AA Sur. The right to exercise the option was
restricted to a window that occurred once every three years in the month of January until January 2027. The previous
option exercise window was in January 2009.
The calculations of the price at which Codelco could have exercised its rights take account of company profitability
over a five year period, shareholder loans and undistributed earnings. Under IAS 39 Financial Instruments:
Recognition and Measurement, the fair valuation of an option is required to be performed from the perspective of a
market participant in an arm's length transaction and does not take into account specific factors relevant to any
individual counterparty. In particular, the IAS 39 valuation does not incorporate any capital gains tax payable by the
Group on exercise of the option to Codelco's shareholder, the Chilean government. The valuation also excludes any
commercial or strategic benefit to Anglo American in extinguishing the option.
The option's fair value is calculated as the difference between the estimated fair value of the underlying assets to
which the option relates and the estimated option price. The estimated fair value of the underlying assets may vary
based on a market participant's assumptions at any point in time, including, inter alia, commodity prices, foreign
exchange rates and discount rates. In addition, the option price cannot be finalised in advance of the option window
and must be estimated based on assumptions about inputs that are subject to significant fluctuations.
Further, Anglo American had a right to sell up to 100% of its interest in AA Sur to a third party at any time prior to the
exercise of the option, which would correspondingly reduce any value attributed to the option during the non-exercise
period.
Based on a range of scenarios for these key variables, it was concluded that the option had insufficient value to
warrant recognition on the balance sheet at 30 June 2011.
In the fourth quarter of 2011, Anglo American disposed of a 24.5% interest in AA Sur to Mitsubishi for $5.4 billion, as
it was entitled to do under the option agreement.
On 22 December 2011 Anglo American filed a writ with the Court of Appeals in Santiago against Codelco for breach
of contract. The breach consisted of Codelco's premature attempt to exercise the option outside of a contractual
exercise window and Codelco's actions aimed at preventing Anglo American from exercising its contractual rights
under the option agreement. The writ seeks to render ineffective the potential future exercise of the option by Codelco
and also seeks damages.
In accordance with Anglo American's legal advice, as a result of Codelco's breach of contract, it is no longer entitled
to enforce the option to acquire shares of AA Sur and any attempt to do so is ineffective. The Group remains
confident that this position will be upheld should the various claims and counter claims proceed to a court judgment.
As a liability would only be recognised by the Group where a present obligation, that could be measured reliably,
existed at the balance sheet date, no liability has been recognised as at 31 December 2011 or 30 June 2012. If the
option over 24.5% of AA Sur had been legally enforceable an option liability of $2.9 billion would have been
recognised by the Group at 31 December 2011. Upon exercise of the option in January 2012 this liability would have
been reversed and, in addition, an accounting gain of approximately $1.0 billion would have been recognised
in equity.
The Group remains open to reaching a commercial settlement and has agreed with Codelco to explore the possibility
of negotiating an agreement in relation to AA Sur. All legal proceedings are currently suspended during negotiations.
To date no settlement has been reached.
Kumba Iron Ore (Kumba)
Sishen Supply Agreement arbitration ArcelorMittal
A dispute arose between Sishen Iron Ore Company (SIOC) and ArcelorMittal South Africa Limited (ArcelorMittal) in
February 2010, in relation to SIOC's contention that the contract mining agreement concluded between them in 2001
had become inoperative as a result of the fact that ArcelorMittal had failed to convert its old order mining rights. This
dispute has been referred to arbitration. On 9 December 2011, SIOC and ArcelorMittal agreed to postpone the
arbitration until the final resolution of the mining right dispute (see below).
The Interim Pricing Arrangement (IPA) between SIOC and ArcelorMittal expires on 31 July 2012. Letters to
commence the negotiations regarding the extension or renewal of the IPA have been exchanged between the parties,
and the parties have commenced with negotiations.
21.4% undivided share of the Sishen mine mineral rights
On 3 February 2012 the Department of Mineral Resources (DMR) and Imperial Crown Trading 289 (Pty) Limited (ICT)
submitted applications for leave to appeal against the High Court judgment delivered in December 2011. SIOC has
noted an application for leave to present a conditional cross appeal, in order to protect its rights. The application for
leave to appeal was heard by the High Court on 11 May 2012. The High Court granted the DMR and ICT the leave to
appeal at the Supreme Court of Appeal (SCA) and SIOC leave to conditionally cross appeal. It is anticipated that the
hearing before the SCA will occur during the first quarter of 2013.
The High Court order does not affect the interim supply agreement between ArcelorMittal and SIOC, which will
endure until 31 July 2012 as indicated above.
SIOC will continue to take the necessary steps to protect its shareholders' interests in this regard.
Anglo American South Africa Limited (AASA)
AASA, a wholly owned subsidiary of the Company, is a defendant in 24 separate lawsuits in South Africa, 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. In addition, AASA is a defendant in one lawsuit filed in the High Court in London, England on
behalf of 19 former mineworkers, and a second lawsuit which is currently on behalf of 1,106 claimants and is also a
'representative claim' on behalf of all black underground miners in 'Anglo gold mines' who have been certified as
suffering from silicosis and related diseases. The Group understands a third claim on behalf of an additional 421
persons has been filed but no details on this claim have been received nor has this claim been served on AASA.
The aggregate amount of the 24 South African claims is less than $5 million. No specific amount of damages has
been specified in the claims filed in England. If these claims are determined adversely to AASA there are a
substantial number of additional former mineworkers (or their dependents or survivors) who may seek to bring similar
claims or whose claims could become part of the representative claim filed in England. The first trials of the South
African claims are not expected before August 2013. AASA is contesting the jurisdiction of the English courts to hear
the claims filed against it.
16. 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 to the Group 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 2012 totalled $165 million (six months
ended 30 June 2011: $165 million; year ended 31 December 2011: $344 million), as disclosed in the Consolidated
cash flow statement.
At 30 June 2012, the Group had provided loans to joint ventures of $255 million (30 June 2011: $331 million; 31 December
2011: $263 million). These loans are included in Financial asset investments. Amounts payable to joint ventures at
30 June 2012 were nil (30 June 2011: $43 million; 31 December 2011: nil).
In addition to the investments in associates disclosed on the Consolidated balance sheet, the Group had provided
loans to associates at 30 June 2012 of $600 million (30 June 2011: $621 million; 31 December 2011: $572 million).
These are included in Financial asset investments.
At 30 June 2012, the directors of the Company and their immediate relatives controlled 0.1% (30 June 2011: 0.1%;
31 December 2011: 0.1%) of the voting shares of the Company.
Related party transactions with De Beers
The Group has in prior financial periods entered into various transactions with DB Investments SA and De Beers SA
(together De Beers) which were considered to be related party transactions for the purposes of the United Kingdom
Listing Authority Listing Rules as a result of the interest in De Beers held by CHL Holdings Limited (CHL) and certain
of its subsidiaries in which Mr N. F. Oppenheimer, a director of the Company at the time of these transactions, had a
relevant interest for the purpose of the rules. The related party transactions entered into and which continue to be
relevant in the current financial period are detailed below.
At 30 June 2012, the amount of outstanding loans owed by De Beers (and included in the loans to associates amount
disclosed above) was $309 million (30 June 2011: $315 million; 31 December 2011: $301 million) which includes
accrued interest of $18 million (30 June 2011: nil; 31 December 2011: $10 million). These loans are subordinated in
favour of third party lenders and include:
- dividend reinvestment loans of $133 million (30 June 2011: $133 million; 31 December 2011: $133 million)
advanced during 2008 and 2009. These loans were interest free for two years from the date of advance and
subsequently became interest bearing in line with market rates at the date of the initial reinvestment.
- a further shareholder loan of $158 million (30 June 2011: $182 million; 31 December 2011: $158 million) advanced
in 2009. This loan was interest free for two years after which it reverted to a rate of interest equal to LIBOR plus 700
basis points. From April 2016, provided all interest payments are up to date, the rate of interest reduces to LIBOR
plus 300 basis points. No loan repayments were received from De Beers during the period (30 June 2011:
$45 million including $2 million of accrued interest; 31 December 2011: $72 million including $5 million of
accrued interest).
On 4 November 2011, Anglo American announced it had entered into an agreement with CHL and Centhold
International Limited (CHL Sellers), together representing the Oppenheimer family interests in De Beers, to acquire
up to their 40% interest in De Beers for a total cash consideration of $5.1 billion, subject to adjustment and conditions
as provided for in the agreement (the Transaction).
Under the terms of the existing shareholders' agreement between Anglo American, CHL and the Government of the
Republic of Botswana (GRB), the GRB has pre-emption rights in respect of the interests in De Beers to be sold,
enabling it to participate in the Transaction and to increase its interest in De Beers, on a pro rata basis, to up to 25%.
In the event that the GRB does not exercise pre-emption rights, in whole or in part, Anglo American's interest in
De Beers will increase to 85%.
In the event that the GRB exercises its pre-emption rights in full, Anglo American, under the Transaction, would
acquire an incremental 30% interest in De Beers, taking its total interest to 75%, and the consideration payable by
Anglo American to the sellers would be reduced proportionately.
In view of the fact that the CHL Sellers are ultimately controlled through intermediary companies by trusts of which
Mr N. F. Oppenheimer is a potential discretionary beneficiary and Mr N. F. Oppenheimer has been a director of
Anglo American within the 12 months preceding the agreement of the Transaction, the Transaction is categorised as
a related party transaction. As a result, the Transaction required the approval of Anglo American shareholders (other
than Mr N. F. Oppenheimer and his associates), which was obtained at a general meeting of the Company held on
6 January 2012.
17. Events occurring after the period end
On 6 July 2012, the Group's agreement to purchase up to an additional 40% stake in De Beers from the
Oppenheimer family interests became unconditional following the receipt of the final necessary regulatory clearances.
The transaction is expected to close in the third quarter of 2012 following completion of the period in which the GRB
may elect to exercise their pre-emption rights. Further information in relation to the transaction is set out in the circular
posted to the Company's shareholders in December 2011, see note 16.
On 20 July 2012, Anglo American increased its shareholding in Kumba Iron Ore Limited by 4.5% through the exercise
of options acquired in 2011 and 2012. This increased the Group's shareholding from 65.2% to 69.7%, for a total cost
of $948 million.
On 24 July 2012, Anglo American agreed to acquire a 58.9% interest in the Revuboè metallurgical coal project in
Mozambique from the Talbot Estate for a total cash consideration of approximately $555 million. The transaction is
subject to a number of conditions and is expected to be completed during the third quarter of 2012.
With the exception of the above and the declaration of the 2012 interim dividend, there have been no material
reportable events since 30 June 2012.
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, as required by DTR 4.2.4 R;
(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 René Médori
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 2012 which comprise 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 17. 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. 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 1, 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 have
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 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. 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 2012 are 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 Auditor
London, United Kingdom
26 July 2012
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.
6 months ended 6 months ended Year ended
30.06.12 30.06.11 31.12.11
Iron Ore and Manganese segment (tonnes)
Kumba Iron Ore (1)
Lump 13,339,600 11,784,300 25,445,100
Fines 8,216,100 7,369,600 15,822,500
Total Iron Ore and Manganese segment iron ore production (2) 21,555,700 19,153,900 41,267,600
Samancor (3)
Manganese ore 1,642,600 1,256,700 2,786,800
Manganese alloys (4) 85,200 144,900 300,500
Coal (tonnes)
Metallurgical Coal segment
Australia
Metallurgical Export 8,001,000 5,699,000 13,253,400
Thermal 5,856,900 6,089,800 13,426,500
13,857,900 11,788,800 26,679,900
Canada
Metallurgical Export 587,600 415,100 936,300
Total Metallurgical Coal segment coal production (5) 14,445,500 12,203,900 27,616,200
Thermal Coal segment
South Africa
Thermal Export 7,917,700 7,945,100 16,546,500
Thermal Domestic Eskom 16,088,900 17,057,600 35,296,000
Thermal Domestic other 3,094,100 2,398,600 4,841,600
Metallurgical Domestic 74,100 163,300 323,400
27,174,800 27,564,600 57,007,500
Colombia
Thermal Export 6,057,700 5,147,200 10,751,700
Total Thermal Coal segment coal production (6) 33,232,500 32,711,800 67,759,200
Total coal production 47,678,000 44,915,700 95,375,400
Coal (tonnes)
Metallurgical Coal segment
Australia
Callide 3,530,200 3,657,700 8,038,700
Capcoal 3,165,300 2,017,800 5,047,900
Dawson Complex 2,071,500 1,227,300 3,904,600
Drayton 1,576,300 1,808,500 3,991,900
Foxleigh 954,900 521,300 1,417,100
Jellinbah East 976,200 844,400 1,829,600
Moranbah North 1,583,500 1,711,800 2,450,100
13,857,900 11,788,800 26,679,900
Canada
Peace River Coal 587,600 415,100 936,300
Total Metallurgical Coal segment coal production (5) 14,445,500 12,203,900 27,616,200
Thermal Coal segment
South Africa
Goedehoop 2,365,500 2,702,100 5,200,800
Greenside 1,181,100 1,444,700 2,853,100
Isibonelo 2,797,000 2,131,900 4,338,200
Kleinkopje 1,853,600 2,136,000 4,400,600
Kriel 3,853,700 3,942,500 8,151,700
Landau 2,045,600 1,929,000 4,171,200
Mafube 877,400 1,109,700 2,313,100
New Denmark 1,512,200 2,331,600 4,812,600
New Vaal 8,405,000 8,503,800 17,399,700
Zibulo (6) 2,283,700 1,333,300 3,366,500
27,174,800 27,564,600 57,007,500
Colombia
Carbones del Cerrejón 6,057,700 5,147,200 10,751,700
Total Thermal Coal segment coal production 33,232,500 32,711,800 67,759,200
Total coal production 47,678,000 44,915,700 95,375,400
(1) Kolomela commenced commercial production on 1 December 2011. Revenue and related costs associated with 984,700 tonnes of production were capitalised for the year ended 31 December
2011.
(2) In 2012 Amapá has been reclassified from Iron Ore and Manganese to Other Mining and Industrial to align with internal management reporting. Comparatives have been reclassified to align
with current presentation.
(3) Saleable production.
(4) Production includes medium carbon ferro manganese.
(5) In 2011 Peace River Coal was reclassified from Other Mining and Industrial to Metallurgical Coal to align with internal management reporting. Comparatives have been reclassified to align with
current presentation.
(6) Zibulo commenced commercial production on 1 October 2011. Revenue and related costs associated with 1,333,300 tonnes of production were capitalised for the six months ended 30 June
2011 (year ended 31 December 2011: 2,155,200 tonnes). The 1,333,300 tonnes included Eskom coal of 396,900 tonnes (year ended 31 December 2011: 633,400 tonnes) and export thermal
coal production of 936,400 tonnes (year ended 31 December 2011: 1,521,800 tonnes).
6 months ended 6 months ended Year ended
30.06.12 30.06.11 31.12.11
Total coal production by commodity (tonnes)
Metallurgical
Australia 8,001,000 5,699,000 13,253,400
Canada 587,600 415,100 936,300
South Africa 74,100 163,300 323,400
Total metallurgical coal production 8,662,700 6,277,400 14,513,100
Thermal
Australia 5,856,900 6,089,800 13,426,500
Colombia 6,057,700 5,147,200 10,751,700
South Africa 27,100,700 27,401,300 56,684,100
Total thermal coal production 39,015,300 38,638,300 80,862,300
Total coal production 47,678,000 44,915,700 95,375,400
Copper segment
Collahuasi
100% basis (Anglo American share 44%)
Ore mined tonnes 23,769,700 23,224,200 45,240,000
Ore processed Oxide tonnes 3,876,500 3,686,900 8,075,800
Sulphide tonnes 22,292,900 24,387,700 47,747,400
Ore grade processed Oxide % Cu 0.9 0.5 0.7
Sulphide % Cu 0.8 1.0 1.0
Production Copper concentrate dry metric tonnes 492,700 801,600 1,535,800
Copper cathode tonnes 18,400 18,000 36,000
Copper in concentrate tonnes 127,000 216,500 417,300
Total copper production for Collahuasi (1) tonnes 145,400 234,500 453,300
Anglo American's share of copper production for Collahuasi (1) tonnes 63,900 103,200 199,500
Anglo American Sur
Los Bronces mine
Ore mined tonnes 24,020,500 11,709,300 26,587,500
Marginal ore mined tonnes 9,495,600 17,884,700 30,515,600
Las Tortolas concentrator Ore processed tonnes 9,268,200 10,539,200 20,595,700
Ore grade processed % Cu 0.9 0.9 0.9
Average recovery % 82.6 86.3 85.8
Confluencia concentrator Ore processed tonnes 12,985,400 3,329,400
Ore grade processed % Cu 0.9 0.7
Average recovery % 82.9 84.3
Production Copper concentrate dry metric tonnes 551,300 300,000 658,300
Copper cathode tonnes 21,600 18,100 38,400
Copper in sulphate tonnes 1,800 1,700 4,600
Copper in concentrate tonnes 159,600 81,900 178,800
Total tonnes 183,000 101,700 221,800
El Soldado mine
Ore mined Open pit ore mined tonnes 4,092,500 4,508,600 10,197,700
Ore processed Oxide tonnes 566,300 912,600 1,887,000
Sulphide tonnes 3,840,100 3,470,800 7,209,100
Ore grade processed Oxide % Cu 0.5 0.7 0.7
Sulphide % Cu 0.8 0.7 0.8
Production Copper concentrate dry metric tonnes 89,700 70,100 171,900
Copper cathode tonnes 1,100 2,500 5,000
Copper in concentrate tonnes 25,000 15,400 41,900
Total tonnes 26,100 17,900 46,900
(1) Includes copper cathode, copper in sulphate and copper in concentrate production.
6 months ended 6 months ended Year ended
30.06.12 30.06.11 31.12.11
Chagres Smelter
Ore smelted Copper concentrate smelted tonnes 80,600 66,700 143,000
Production Copper blister/anode tonnes 78,100 64,300 138,200
Acid tonnes 242,700 232,700 487,500
Total copper production for Anglo American Sur (1) tonnes 209,100 119,600 268,700
Anglo American Norte
Mantos Blancos mine
Ore processed Oxide tonnes 2,233,100 2,203,700 4,563,400
Sulphide tonnes 2,116,600 1,997,300 4,186,600
Marginal ore tonnes 2,118,200 2,513,600 5,109,400
Ore grade processed Oxide % Cu (soluble) 0.4 0.5 0.6
Sulphide % Cu (insoluble) 0.6 1.1 1.0
Marginal ore % Cu (soluble) 0.2 0.2 0.2
Production Copper concentrate dry metric tonnes 37,500 62,300 119,000
Copper cathode tonnes 14,400 16,500 36,000
Copper in concentrate tonnes 11,800 19,600 36,100
Total tonnes 26,200 36,100 72,100
Mantoverde mine
Ore processed Oxide tonnes 5,180,900 4,815,100 10,012,200
Marginal ore tonnes 3,453,600 3,957,200 8,025,300
Ore grade processed Oxide % Cu (soluble) 0.6 0.7 0.6
Marginal ore % Cu (soluble) 0.3 0.3 0.3
Production Copper cathode tonnes 30,300 30,200 58,700
Total copper production for Anglo American Norte(1) tonnes 56,500 66,300 130,800
Total Copper segment copper production(1) tonnes 329,500 289,100 599,000
Platinum copper production tonnes 6,200 6,800 12,800
Black Mountain copper production tonnes 300 300
Total attributable copper production(1) tonnes 335,700 296,200 612,100
Nickel segment
Barro Alto(2)
Ore mined tonnes 363,100 618,200 978,000
Ore processed tonnes 804,700 93,000 456,500
Ore grade processed % Ni 2.0 1.9 2.0
Production tonnes 12,000 1,100 6,200
Loma de Níquel
Ore mined tonnes 347,900 679,800 1,302,600
Ore processed tonnes 606,500 525,500 1,014,200
Ore grade processed % Ni 1.4 1.5 1.5
Production tonnes 6,300 7,000 13,400
Codemin
Ore mined(3) tonnes 255,400 216,700 549,900
Ore processed tonnes 283,200 270,900 562,900
Ore grade processed % Ni 1.8 1.9 1.9
Production tonnes 4,600 4,600 9,500
Total Nickel segment nickel production tonnes 22,900 12,700 29,100
Platinum nickel production tonnes 10,100 10,300 20,300
Total attributable nickel production tonnes 33,000 23,000 49,400
Platinum segment(4)
Platinum troy ounces 1,025,800 1,173,600 2,530,100
Palladium troy ounces 590,500 662,000 1,430,700
Rhodium troy ounces 129,000 165,600 337,600
troy ounces 1,745,300 2,001,200 4,298,400
Copper(5) tonnes 6,200 6,800 12,800
Nickel(5) tonnes 10,100 10,300 20,300
Gold troy ounces 48,100 60,000 105,100
Equivalent refined platinum troy ounces 1,176,800 1,160,100 2,410,100
(1) Includes copper cathode, copper in sulphate and copper in concentrate production.
(2) Barro Alto is currently not in commercial production and therefore all revenue and related costs associated with 12,000 tonnes (six months ended 30 June 2011: 1,100 tonnes; year ended
31 December 2011: 6,200 tonnes) of production have been capitalised.
(3) Represents ore mined at Barro Alto for processing at Codemin.
(4) See the published results of Anglo American Platinum Limited for further analysis of production information.
(5) Also disclosed within total attributable copper and nickel production.
6 months ended 6 months ended Year ended
30.06.12 30.06.11 31.12.11
Diamonds segment (De Beers) (diamonds recovered carats)
100% basis (Anglo American share 45%)
Debswana 10,294,000 11,320,000 22,890,000
Namdeb 778,000 599,000 1,335,000
De Beers Consolidated Mines 1,638,000 2,798,000 5,443,000
De Beers Canada 739,000 817,000 1,660,000
Total diamonds production for De Beers 13,449,000 15,534,000 31,328,000
Anglo American's share of diamonds production for De Beers 6,052,000 6,990,000 14,097,000
Other Mining and Industrial segment
Copebrás
Phosphates tonnes 518,400 501,500 1,060,900
Catalão
Niobium
Ore mined tonnes 310,200 335,700 866,600
Ore processed tonnes 470,900 434,200 902,600
Ore grade processed Kg Nb/tonne 8.4 7.4 8.1
Production tonnes 2,300 1,800 3,900
Amapá(1)
Sinter feed tonnes 1,044,700 641,600 1,401,000
Pellet feed tonnes 1,075,100 939,000 1,948,300
Spiral concentrates tonnes 920,200 744,400 1,472,200
3,040,000 2,325,000 4,821,500
Tarmac
Aggregates tonnes 19,569,600 22,076,100 42,878,400
Lime products tonnes 676,400 624,900 1,264,000
Concrete m3 1,556,900 1,691,000 3,285,700
Scaw Metals
South Africa steel products tonnes 319,100 356,300 677,400
Zinc and lead
Lisheen(2)
Ore mined tonnes 152,800 152,800
Ore processed tonnes 156,200 156,200
Ore grade processed Zinc % Zn 13.4 13.4
Lead % Pb 2.7 2.7
Production Zinc in concentrate tonnes 19,200 19,200
Lead in concentrate tonnes 2,900 2,900
Black Mountain(2)
Ore mined tonnes 132,800 132,800
Ore processed tonnes 126,200 126,200
Ore grade processed Zinc % Zn 3.4 3.4
Lead % Pb 4.5 4.5
Copper % Cu 0.4 0.4
Production Zinc in concentrate tonnes 3,300 3,300
Lead in concentrate tonnes 5,400 5,400
Copper in concentrate tonnes 300 300
Total attributable zinc production tonnes 22,500 22,500
Total attributable lead production tonnes 8,300 8,300
(1) In 2012 Amapá has been reclassified from Iron Ore and Manganese to Other Mining and Industrial to align with internal management reporting. Comparatives have been reclassified to align
with current presentation.
(2) The Group sold its interests in Lisheen and Black Mountain in February 2011.
Quarterly production statistics
Quarter ended % Change (Quarter ended)
30.06.12v 30.06.12v
30.06.12 31.03.12 31.12.11 30.09.11 30.06.11 31.03.12 30.06.11
Iron Ore and Manganese segment
(tonnes)
Iron ore(1) 11,449,200 10,106,500 11,160,200 10,953,500 10,359,400 13% 11%
Manganese ore(2) 826,400 816,200 722,500 807,600 716,100 1% 15%
Manganese alloys(2)(3) 30,200 55,000 78,000 77,600 76,100 (45)% (60)%
Metallurgical Coal segment (tonnes)
Metallurgical Export(4) 4,845,600 3,743,000 4,060,600 4,015,000 3,949,400 29% 23%
Thermal 3,286,300 2,570,600 3,358,700 3,978,000 3,087,500 28% 6%
Thermal Coal segment (tonnes)(5)
Thermal Export (RSA) 4,223,500 3,694,200 4,455,900 4,145,500 3,930,600 14% 7%
Thermal Domestic Eskom 8,326,200 7,762,700 9,487,000 8,751,400 8,782,600 7% (5)%
Thermal Domestic other 1,560,900 1,533,200 1,390,100 1,052,900 1,333,800 2% 17%
Metallurgical Domestic 15,700 58,400 84,500 75,600 83,800 (73)% (81)%
Thermal Export (Colombia) 3,104,700 2,953,000 2,752,700 2,851,800 2,537,700 5% 22%
Copper segment (tonnes)(6) 161,100 168,400 170,000 139,900 150,300 (4)% 7%
Nickel segment (tonnes)(7)(8) 10,900 12,000 9,900 6,500 6,600 (9)% 65%
Platinum segment
Platinum (troy ounces) 623,000 402,800 710,000 646,500 640,700 55% (3)%
Palladium (troy ounces) 355,500 235,000 392,700 376,000 373,800 51% (5)%
Rhodium (troy ounces) 75,100 53,900 96,800 75,200 79,900 39% (6)%
Copper (tonnes) 3,300 2,900 2,900 3,100 3,300 14%
Nickel (tonnes) 5,400 4,700 5,100 4,900 5,500 15% (2)%
Gold (troy ounces) 24,100 24,000 28,000 17,100 31,500 (23)%
Equivalent refined platinum
(troy ounces) 583,600 593,200 583,200 666,800 592,500 (2)% (2)%
Diamonds segment (De Beers)
(diamonds recovered carats)
Total diamond production for
De Beers 7,241,000 6,208,000 6,489,000 9,305,000 8,138,000 17% (11)%
Anglo American's share of
diamond production for
De Beers 3,259,000 2,793,000 2,920,000 4,187,000 3,662,000 17% (11)%
Other Mining and Industrial
segment (tonnes)(9)
Phosphates 271,500 246,900 274,900 284,500 260,700 10% 4%
Niobium 1,200 1,100 1,000 1,100 900 9% 33%
Iron ore(10) 1,468,000 1,572,000 1,267,100 1,229,400 1,174,700 (7)% 25%
South Africa steel products 156,700 162,400 163,100 158,000 183,100 (4)% (14)%
Coal production by commodity
(tonnes)(4)
Metallurgical 4,861,300 3,801,400 4,145,100 4,090,600 4,033,200 28% 21%
Thermal (non-Eskom) 12,175,400 10,751,000 11,957,400 12,028,200 10,889,600 13% 12%
Eskom 8,326,200 7,762,700 9,487,000 8,751,400 8,782,600 7% (5)%
(1) Kolomela commenced commercial production on 1 December 2011. Revenue and related costs associated with 984,700 tonnes of production were capitalised for the year ended 31 December
2011.
(2) Saleable production.
(3) Production includes medium carbon ferro manganese.
(4) Includes Peace River Coal which in 2011 was reclassified from Other Mining and Industrial to Metallurgical Coal to align with internal management reporting. Comparatives have been
reclassified to align with current presentation.
(5) Zibulo commenced commercial production on 1 October 2011. Revenue and related costs associated with 1,333,300 tonnes of production were capitalised for the six months ended 30 June
2011 (year ended 31 December 2011: 2,155,200 tonnes). The 1,333,300 tonnes included Eskom coal of 396,900 tonnes (year ended 31 December 2011: 633,400 tonnes) and export thermal
coal production of 936,400 tonnes (year ended 31 December 2011: 1,521,800 tonnes).
(6) Excludes Platinum copper production.
(7) Excludes Platinum nickel production.
(8) Includes Barro Alto which is currently not in commercial production and therefore all revenue and related costs associated with 12,000 tonnes (six months ended 30 June 2011: 1,100 tonnes;
year ended 31 December 2011: 6,200 tonnes) of production have been capitalised.
(9) Excludes Tarmac.
(10) In 2012 Amapá has been reclassified from Iron Ore and Manganese to Other Mining and Industrial to align with internal management reporting. Comparatives have been reclassified to align
with current presentation.
Exchange rates and commodity prices
US$ exchange rates 30.06.12 30.06.11 31.12.11
Period end spot rates
Rand 8.19 6.78 8.11
Brazilian real 2.02 1.56 1.87
Sterling 0.64 0.62 0.65
Australian dollar 0.98 0.93 0.98
Euro 0.79 0.69 0.77
Chilean peso 502 469 520
Average rates for the period
Rand 7.94 6.90 7.26
Brazilian real 1.87 1.63 1.67
Sterling 0.63 0.62 0.62
Australian dollar 0.97 0.97 0.97
Euro 0.77 0.71 0.72
Chilean peso 493 475 484
Commodity prices 30.06.12 30.06.11 31.12.11
Period end spot prices
Iron ore (FOB Australia)(1) US$/tonne 129 162 127
Thermal coal (FOB South Africa)(2) US$/tonne 90 118 105
Thermal coal (FOB Australia)(2) US$/tonne 87 120 112
Hard coking coal (FOB Australia)(3) US$/tonne 210 330 285
Copper(4) US cents/lb 345 422 343
Nickel(4) US cents/lb 747 1,048 829
Platinum(5) US$/oz 1,415 1,730 1,388
Palladium(5) US$/oz 582 762 636
Rhodium(5) US$/oz 1,250 2,000 1,400
Average market prices for the period
Iron ore (FOB Australia)(1) US$/tonne 135 171 160
Thermal coal (FOB South Africa)(2) US$/tonne 99 121 116
Thermal coal (FOB Australia)(2) US$/tonne 104 124 121
Hard coking coal (FOB Australia)(6) US$/tonne 223 278 289
Copper(4) US cents/lb 367 426 400
Nickel(4) US cents/lb 836 1,159 1,035
Platinum(5) US$/oz 1,558 1,792 1,725
Palladium(5) US$/oz 658 779 736
Rhodium(5) US$/oz 1,395 2,304 2,022
(1) Source: Platts.
(2) Source: McCloskey.
(3) Source: 30 June 2012 and 30 June 2011 represent the quarter two benchmarks; 31 December 2011 represents the quarter four benchmark.
(4) Source: LME daily prices.
(5) Source: Johnson Matthey.
(6) Source: Represents the average quarterly benchmark for the respective periods.
Summary by business operation
Revenue(1) EBITDA(2) Operating profit/(loss)(3) Underlying earnings
6 months 6 months Year 6 months 6 months Year 6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended ended ended ended ended ended ended
US$ million 30.06.12 30.06.11 31.12.11 30.06.12 30.06.11 31.12.11 30.06.12 30.06.11 31.12.11 30.06.12 30.06.11 31.12.11
Iron Ore and
Manganese(4) 3,611 3,989 7,643 1,912 2,554 4,586 1,779 2,462 4,400 551 867 1,457
Kumba Iron Ore 3,185 3,498 6,717 1,934 2,511 4,546 1,840 2,437 4,397 614 824 1,462
Iron Ore Brazil (79) (77) (158) (81) (81) (162) (72) (59) (149)
Samancor 426 491 926 57 120 198 20 106 165 9 102 144
Metallurgical Coal(5) 2,006 1,942 4,347 379 683 1,577 159 501 1,189 110 358 844
Australia 1,896 1,812 4,068 384 674 1,526 184 502 1,161 131 362 831
Canada 110 130 279 12 20 82 (8) 10 59 (4) 7 44
Projects and corporate (17) (11) (31) (17) (11) (31) (17) (11) (31)
Thermal Coal 1,774 1,693 3,722 522 611 1,410 433 521 1,230 285 385 902
South Africa 1,259 1,186 2,642 298 384 902 235 319 775 148 249 611
Colombia 515 507 1,080 240 237 535 214 212 482 153 146 318
Projects and corporate (16) (10) (27) (16) (10) (27) (16) (10) (27)
Copper 2,569 2,609 5,144 1,210 1,527 2,750 978 1,401 2,461 510 842 1,610
Anglo American Sur 1,559 1,071 2,320 869 596 1,247 719 532 1,092 346 318 746
Anglo American Norte 460 614 1,136 199 373 641 180 355 606 137 219 444
Collahuasi 550 924 1,688 258 625 1,052 198 581 957 140 374 617
Projects and corporate (116) (67) (190) (119) (67) (194) (113) (69) (197)
Nickel 219 293 488 72 106 84 58 93 57 32 58 23
Codemin 84 108 203 34 51 77 32 49 73 20 32 52
Loma de Níquel 128 185 285 66 79 86 55 69 66 32 37 29
Projects and corporate 7 (28) (24) (79) (29) (25) (82) (20) (11) (58)
Platinum 2,582 3,760 7,359 439 931 1,672 84 542 890 21 285 410
Diamonds 1,506 1,750 3,320 306 517 794 250 450 659 176 299 443
Other Mining and
Industrial(4)(5) 2,138 2,256 4,520 278 247 540 180 136 315 102 90 175
Core 392 328 720 86 87 215 72 74 188 46 55 113
Copebrás 296 259 571 41 66 160 29 54 136 18 43 80
Catalão 96 69 149 47 22 57 45 21 54 30 13 35
Projects and corporate (2) (1) (2) (2) (1) (2) (2) (1) (2)
Non-core 1,746 1,928 3,800 192 160 325 108 62 127 56 35 62
Amapá 201 207 481 125 57 147 112 45 120 60 35 68
Tarmac(6) 1,100 1,197 2,347 37 47 106 (24) (22) (35) (15) (25) (31)
Scaw Metals 445 483 931 38 44 70 28 27 40 19 18 27
Lisheen(7) 36 36 17 17 17 17 14 14
Black Mountain(7) 5 5 3 3 3 3 1 1
Projects and corporate (8) (8) (18) (8) (8) (18) (8) (8) (17)
Exploration (72) (46) (121) (72) (46) (121) (69) (45) (118)
Corporate Activities
and Unallocated Costs 3 2 5 (104) (18) 56 (125) (36) 15 (27) (19) 374
16,408 18,294 36,548 4,942 7,112 13,348 3,724 6,024 11,095 1,691 3,120 6,120
(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) Earnings before interest, tax, depreciation and amortisation (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) In 2012 Amapá has been reclassified from Iron Ore and Manganese to Non-core within the Other Mining and Industrial segment to align with internal management reporting. Comparatives have
been reclassified to align with current presentation.
(5) In 2011 Peace River Coal was reclassified from Other Mining and Industrial to Metallurgical Coal to align with internal management reporting. Comparatives have been reclassified to align with
current presentation.
(6) In the year ended 31 December 2011 the Group sold Tarmac's businesses in China, Turkey and Romania.
(7) In the year ended 31 December 2011 the Group sold its interests in Lisheen and Black Mountain, which comprised the remainder of the Group's portfolio of zinc operations.
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 2012
Note: only key reported lines are reconciled
Kumba Iron Ore Limited
6 months ended 6 months ended Year ended
US$ million 30.06.12 30.06.11 31.12.11
IFRS headline earnings 932 1,319 2,366
Exploration 4 4
BEE transactions and related charges 20
Other adjustments 1 1 3
957 1,320 2,373
(1)
Non-controlling interests (304) (459) (826)
Elimination of intercompany interest (8) (12) (27)
Depreciation on assets fair valued on acquisition (net of tax) (4) (5) (9)
Corporate cost allocation (27) (20) (49)
Contribution to Anglo American plc underlying earnings 614 824 1,462
Anglo American Platinum Limited
6 months ended 6 months ended Year ended
US$ million 30.06.12 30.06.11 31.12.11
IFRS headline earnings 83 469 527
Exploration 2 2 5
Operating and financing remeasurements (net of tax) 13 (51) (27)
Restructuring costs included in headline earnings (net of tax) 6 6
BEE transactions and related charges 141
Other adjustments (3) 2
95 428 652
Non-controlling interests (19) (87) (132)
Elimination of intercompany interest 3 (1) (1)
Depreciation on assets fair valued on acquisition (net of tax) (25) (30) (55)
Corporate cost allocation (33) (25) (54)
Contribution to Anglo American plc underlying earnings 21 285 410
De Beers Société Anonyme
6 months ended 6 months ended Year ended
US$ million 30.06.12 30.06.11 31.12.11
De Beers underlying earnings (100%) 385 666 968
Difference in IAS 19 accounting policy 6 (1) 17
De Beers underlying earnings Anglo American plc basis (100%) 391 665 985
Contribution to Anglo American plc underlying earnings(2) 176 299 443
(1) On 20 July 2012, Anglo American plc increased its shareholding in Kumba Iron Ore Limited by 4.5% through the exercise of options acquired in 2011 and 2012, thereby increasing its
shareholding from 65.2% to 69.7% for a total cost of $948 million.
(2) Anglo American plc's 45% ordinary share interest.
ANGLO AMERICAN plc
(Incorporated in England and Wales Registered number 3564138)
(the Company)
Notice of Interim Dividend
(Dividend No. 24)
Notice is hereby given that an interim dividend on the Company's ordinary share capital in respect of the year to
31 December 2012 will be paid as follows:
Amount (United States currency) 32 cents per ordinary share (note 1)
Amount (South African currency) R2.6889 per ordinary share (note 2)
Last day to effect removal of shares between the UK and SA registers Wednesday 25 July 2012
Last day to trade on the JSE Limited (JSE) to qualify for dividend Friday 10 August 2012
Ex-dividend on the JSE from the commencement of trading on Monday 13 August 2012 (note 3)
Ex-dividend on the London Stock Exchange from the commencement of trading on Wednesday 15 August 2012
Record date (applicable to both the United Kingdom principal register and South
African branch register) Friday 17 August 2012
Last day for receipt of US$:£/ currency elections by the UK Registrars (note 1) Wednesday 22 August 2012
Last day for receipt of Dividend Reinvestment Plan (DRIP) mandate forms by the UK
Registrars (notes 4, 5 and 6) Wednesday 22 August 2012
Currency conversion US$:£/ rates announced on Thursday 30 August 2012
Removal of shares between the UK and SA registers permissible from Friday 31 August 2012
Last day for receipt of DRIP mandate forms by Central Securities Depository
Participants (CSDPs) (notes 4, 5 and 6) Friday 31 August 2012
Last day for receipt of DRIP mandate forms by the South African Transfer Secretaries
(notes 4, 5 and 6) Monday 3 September 2012
Dividend warrants posted Wednesday 12 September 2012
Payment date of dividend Thursday 13 September 2012
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 Wednesday 22 August 2012. 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. Dividend Tax will be withheld from the amount of the gross dividend of R2.6889 per ordinary share paid to South African shareholders at the rate of
15% unless a shareholder qualifies for exemption. After the Dividend Tax has been withheld, the net dividend will be R2.2855650 per ordinary share.
Anglo American plc had a total of 1,405,457,172 ordinary shares in issue, including 15,295,802 treasury shares, at the dividend declaration date of
Friday 27 July 2012. In South Africa the dividend will be distributed by Anglo South Africa Capital (Pty) Limited, a South African company with tax
registration number 9273/364/845, in terms of the Company's dividend access share arrangements. No Secondary Tax on Companies (STC) credits
will be used for the payment of the dividend.
3. Dematerialisation and rematerialisation of registered share certificates in South Africa will not be effected by CSDPs during the period from Monday
13 August 2012 to Friday 17 August 2012 (both days inclusive).
4. 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.
5. 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 no later than Wednesday 19 September 2012 in the UK and Tuesday 25 September 2012 in South Africa.
CREST accounts will be credited on Wednesday 19 September 2012.
6. Copies of the terms and conditions of the DRIP are available from the UK Registrars or the South African Transfer Secretaries.
Registered office UK Registrars South African Transfer Secretaries
20 Carlton House Terrace Equiniti Link Market Services South Africa (Pty) Limited
London Aspect House 13th Floor, Rennie House
SW1Y 5AN Spencer Road 19 Ameshoff Street
England Lancing Braamfontein 2001
West Sussex South Africa
BN99 6DA (PO Box 4844, Johannesburg 2000)
England
Sponsor: UBS South Africa (Pty) Ltd
Date: 27/07/2012 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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