Wrap Text
Year end results for the twelve months ended 31 December 2013
Anglo American plc
Incorporated in the United Kingdom
(Registration number: 3564138)
Short name: Anglo
Share code: AGL
ISIN number: GB00B1XZS820
YEAR END RESULTS
FOR THE TWELVE MONTHS ENDED 31 DECEMBER 2013
14 FEBRUARY 2014
Anglo American announces 6% increase in underlying operating profit(1) to $6.6 billion
Financial results reflect improved operational performance, with currency gains offsetting weaker prices
- 6% increase in Group underlying operating profit(1) to $6.6 billion
- Margin improvement: EBITDA margin increased by 2% to 29%; EBIT margin by 1% to 20%
- Effective tax rate increased from 29% to 32%
- 7% decrease in underlying earnings(2) to $2.7 billion; underlying EPS of $2.09
- Special items after tax and non-controlling interest include impairments of $1.9 billion, principally in
relation to Barro Alto ($0.7bn), Platinum portfolio review ($0.2bn), Michiquillay ($0.3bn) and Foxleigh
($0.2bn)
- After total special items and remeasurements, loss attributable to equity shareholders of $961 million
(2012: $1.5 billion loss)
- Net debt(3) of $10.7 billion as at 31 December 2013 (2012: $8.5bn)
- Attributable ROCE(4) of 11%, in line with 2012
Business performance improving to support operating profit growth
- Improved operational performance, particularly in the fourth quarter, reflecting a greater focus on mining
processes, costs and margins
- Impact of lower commodity prices offset by weakening producer currencies
- Kumba Iron Ore – safety stoppages and pit constraints at Sishen, partially offset by strong performance at
Kolomela
- Metallurgical Coal – record production, cost reductions and improved product mix more than offset by 24% fall
in price
- Copper – record production, led by Los Bronces’ fully ramped up Confluencia plant and higher grades and
recoveries at Collahuasi, largely offset by lower realised prices
- Platinum – higher sales volumes supported by rand depreciation, partially offset by input cost increases and
lower prices across most metals
- Diamonds – increased production reflecting improved asset performance and customer demand, with higher
realised prices
Project update
- Minas-Rio 26.5 Mtpa iron ore (Brazil) – 84% completed and FOOS (First Ore On Ship) target of end 2014;
capital expenditure on track at $8.8 billion
- Grosvenor 5.0 Mtpa metallurgical coal (Australia) – longwall production end of 2016; capital expenditure on
track at $1.95 billion
Disciplined capital allocation
- $6.3 billion capital expenditure for 2013. Guidance maintained at $7.0 to $7.5 billion for 2014 and expected
to reduce in 2015 and 2016
- Final dividend maintained at 53 US cents per share, bringing total dividends for 2013 to 85 US cents per
share, reflecting the Board’s commitment to the rebased dividend
Safety
- Regrettably, 14 employees and contractors lost their lives, and two others are missing, in work related
incidents
- LTIFR (lost-time injury frequency rate) reduced by 16% to 0.49, the lowest level recorded for the Group
- We are elevating our focus on achieving zero harm in the workplace, through leadership behaviours at every
level, business processes and further strengthening of major risk hazard assessments
HIGHLIGHTS
US$ million, unless otherwise stated
Year ended Year ended
31 Dec 2013 31 Dec 2012(5) Change
Group revenue including
associates and joint
ventures(6) 33,063 32,785 1%
Underlying operating
profit(1) 6,620 6,253 6%
Underlying earnings(2) 2,673 2,860 (7)%
Underlying EBITDA(7) 9,520 8,860 7%
Net cash inflows from
operating activities 6,792 5,919 15%
Profit /(loss) before
tax(8)(9) 1,700 (171) –
Loss for the financial
year attributable to equity
shareholders of the
Company(8)(9) (961) (1,470) 35%
Attributable ROCE%(4) 11% 11% 0%
Earnings per share (US$):
Basic loss per share(8) (0.75) (1.17) 36%
Underlying earnings per
share(2) 2.09 2.28 (8)%
(1) Underlying operating profit is presented before special items and remeasurements and includes the Group’s
attributable share of associates’ and joint ventures’ operating profit before special items and remeasurements,
unless otherwise stated - see notes 2 and 4 to the Condensed financial statements. For the definition of special
items and remeasurements, see note 5 to the Condensed financial statements.
(2) See note 8 to the Condensed financial statements for basis of calculation of underlying earnings.
(3) Net debt includes related hedges and net debt in disposal groups. See note 10 to the Condensed financial
statements.
(4) Attributable ROCE reflects the realised prices and foreign exchange during the period, and in line with
commitments made as part of Driving Value. Please refer to page 83-84 for the detailed methodology.
(5) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 to the Condensed financial statements for details.
(6) Includes the Group’s attributable share of associates’ and joint ventures’ revenue of $3,721 million
(2012: $4,105 million). See note 2 to the Condensed financial statements.
(7) Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is operating profit before
special items, remeasurements, depreciation and amortisation in subsidiaries and joint operations, and includes
attributable share of EBITDA ofassociates and joint ventures. See note 2 to the Condensed financial statements.
(8) Stated after special items and remeasurements. See note 5 to the Condensed financial statements.
(9) For the year ended 31 December 2013, special items and remeasurements, including associates and joint
ventures, before tax and non-controlling interests, amounted to aloss of $4,435 million (2012:loss of
$5,847 million), and after tax and non-controlling interests, amounted to a loss of $3,634million (2012: loss of
$4,330 million).
Mark Cutifani, Chief Executive of Anglo American, said: “Against a backdrop of weaker growth in the world
economy in 2013, particularly in the emerging and developing economies, commodity demand remained soft with a
decline in average realised prices for most of the commodities Anglo American produces.
For our business, the effects of such a difficult macro-economic environment were exacerbated by operating
challenges at key operations and adversarial labour relations in South Africa. Despite the challenges,
significant operating improvements in Copper, Metallurgical Coal and Diamonds in the second half of the year and
the sharp fall in the South African rand in the final quarter, drove a 6% increase in underlying operating
profit to $6.6 billion, with underlying EBITDA increasing to $9.5 billion, up by 7%. After deducting tax and
profits attributable to non-controlling interests (e.g. Diamonds, Platinum and Copper), which represented a
greater proportion of profit than in 2012, underlying earnings decreased by 7% to $2.7 billion.
While we continued to make progress on the safety front, the loss of 14 colleagues, and a further two who are
still missing, overshadowed improvements to lost time and total accident frequency rates. We are deeply
distressed that people are still being killed and injured while on company business. I am determined that we
elevate our focus on achieving zero harm through a combination of leadership behaviours at every level,
restructuring our key business processes and further strengthening our work around major risk hazards.
Turning to our operations, we have started to make solid progress at Los Bronces and Collahuasi, our two biggest
copper interests in Chile, where improvements in waste stripping volumes and process tonnages supported a
significant improvement in copper production. At the currently constrained Sishen iron ore mine in South Africa,
a redesign of the pit and changes to core operating processes should result in consistently higher production
from 2015 onwards. The Sishen challenges have been partially offset by solid performance from Kolomela, which is
now operating at well above nameplate capacity. At our underground metallurgical coal mines, production improved
by 30%, with Moranbah North lifting longwall output by 39% on the back of an improvement in cutting hours, an
increase in automated cutting rates and reduced unplanned downtime. In the South African thermal coal business,
the priority is to implement a range of optimisation initiatives aimed at driving greater value across the
mines and expansion projects. DeBeers had a good year and was able to increase output against a background of
rising demand. Meanwhile, our single largest investment, the Minas-Rio iron ore project in Brazil, was 84%
complete by the end of the year and remains on track to ship its first iron ore by the end of 2014.
Our Platinum business faced the significant challenges of cost pressures, declining productivity, trade union
militancy and continuing price pressure. We finalised a “root-and-branch” review of the business to address the
changed fundamentals of the platinum industry and to understand the primary drivers of the dramatic reduction in
profitability across the sector. Following an extensive but constructive process of engagement with government
and the unions, our labour force is being aligned with operational requirements, and we are putting the review’s
proposals into action across the business and concentrating on those assets with sustained profitability
potential, while adjusting production more closely with current product demand.
We are making headway on our strategy that sets the path for Anglo American to deliver sustainable returns to
shareholders. We are doing so through a change programme called ‘Driving Value’, which has focused on
revitalising our business and laying the foundation for long-term success. We have set demanding but achievable
targets and we are determined to meet them by working efficiently and effectively to drive significantly greater
value from our asset base. We are seeing early progress, including in our Platinum and Metallurgical Coal
businesses, across our Commercial initiatives and in reducing early stage project evaluation costs by
$200 million in 2013 alone. Our pathway to increase margins and returns by 2016 is clear.
While I expect headwinds to continue in 2014 as we reset the business, the benefits of much-improved operational
processes and performance will flow through largely in 2015 and 2016. In the immediate-term, we have already
delivered significant sustainable improvements, including early operational improvements, overhead reduction and
reducing early-stage project expenditure.
The world economy should also strengthen in 2014 and 2015 as we continue to emerge from the challenges of the
global financial crisis. China should continue to grow by around 7% and the diminishing effects of fiscal
tightening should support a firmer recovery in the US and beyond.”
Review of 2013
Financial Results
Anglo American reported underlying earnings of $2.7 billion (2012: $2.9 billion), with underlying operating
profit increasing by 6% to $6.6 billion.
Underlying operating profit increased owing to De Beers contributing for a full year as a subsidiary, improved
sales at both Copper and Platinum and the weakening of the South African rand, partially offset by lower prices
across the majority of our commodities.
Iron Ore and Manganese generated an underlying operating profit of $3,119 million, a 4% increase. Kumba Iron
Ore’s underlying operating profit of $3,047 million, closely matched the previous year’s, owing to slightly
higher average prices and an increase in waste stripping, partially offset by the weaker rand. Samancor reported
a more than doubling of underlying operating profit of $210 million, driven by higher manganese ore prices.
Metallurgical Coal generated an underlying operating profit of $46 million, an 89% decrease, primarily owing to
lower realised export selling prices, partly offset by increased production and sales volumes, the weaker
Australian dollar and cost-cutting initiatives.
Thermal Coal generated an underlying operating profit of $541 million, a 32% decrease, mainly as a result of
lower export thermal coal prices for both South African and Colombian coal and above inflation cost pressure in
South Africa, partly offset by the weaker rand and cost containment measures.
Copper delivered an underlying operating profit of $1,739 million, in line with 2012, as a result of lower
realised sales prices, offset by increased production and sales volumes.
Nickel reported an underlying operating loss of $44 million, a $70 million decrease, owing to lower realised
prices, a reduction in sales volumes, as well as the non-recurrence of the insurance receivable that benefited
the business in 2012.
Niobium and Phosphates delivered a combined underlying operating profit of $150 million, a decrease of 11%,
mainly driven by lower phosphate prices.
Platinum generated an underlying operating profit of $464 million, (2012: loss of $120 million) as a result of
increased production and sales and a weaker rand, partly offset by weaker prices.
Diamonds generated an underlying operating profit of $1,003 million, a 112% increase, reflecting the Group’s
increased shareholding, together with improved prices, largely owing to the product mix, and a weaker rand.
Other Mining and Industrial reported an underlying operating loss of $13 million, a $181 million decrease, owing
to a nil contribution from Scaw South Africa (which was divested in November 2012), a weaker market at the
Lafarge Tarmac joint venture, and the Amapá operation not benefiting from the reversal of penalty provisions, as
it had in 2012.
Corporate costs decreased by 12%, partly driven by the positive impact of the weaker rand.
Production
Metallurgical Coal, Copper, Platinum and Diamonds all reported production increases for 2013.
Iron Ore and Manganese ?production of iron ore decreased by 2% to 42.4 million tonnes (Mt), with higher
production from Kolomela offset by a weaker performance from Sishen as a result of Section 54 safety stoppages
and ongoing pit constraints. Manganese ore production was flat, though alloy output increased.
Metallurgical Coal ? production increased by 2% to 31.2 Mt, with record metallurgical coal production of
18.7 Mt, benefiting from the longwall improvement programmes at Moranbah North and Capcoal’s underground
operations, as well as operational improvements at Peace River Coal, partly offset by the impact of flooding at
Dawson.
Thermal Coal ? production decreased by 2% to 67.6Mt, with improved machine rates and waste treatment at Greenside
offset by lower than expected production at New Vaal and Cerrejón. The decrease at New Vaal was owing to wet weather
interruptions and reduced demand from Eskom, while Cerrejón was as a result of the 32-day strike in the first quarter
of the year, although was partly mitigated by an effective recovery plan.
Copper ? production increased by 17% to 775 kt, benefiting at Los Bronces from the fully ramped up Confluencia
plant and improved ore characteristics, and higher grades and recoveries at Collahuasi.
Nickel ? production decreased by 12% to 34,400 tonnes following the cessation of production at Loma de Níquel
from September 2012, partly offset by increased production at Barro Alto.
Niobium ? production increased by 2% to 4,500 tonnes, as throughput and recovery improvements offset the decline
in ore quality.
Phosphates ? fertiliser production increased by 6% to 1,199,000 tonnes owing to improved performance following
optimised maintenance scheduling, increased plant availability and improved performance at the acidulation and
granulation plants.
Platinum ? equivalent refined platinum production increased by 5% to 2,320,400 ounces as the company recovered
from the impact of the strike in the fourth quarter of 2012, partially offset by the production lost from
Khuseleka 2, Khomanani and Union North decline shaft being put on to long term care and maintenance from mid-
August as a result of the business restructuring.
Diamonds ? production increased by 12% to 31.2 million carats, largely owing to the full restoration of
operations at Jwaneng in the third quarter following the slope failure incident in June 2012. Production from
Canada also increased owing to further increases in mining volumes and improved grades at Snap Lake.
Capital Structure and Balance Sheet
Net assets at 31 December 2013 were $6.4 billion lower than at 31 December 2012 due to net movements in equity
including currency translation adjustments, dividends and retained earnings in the year.
Net debt
US$ million Year ended Year ended
31 Dec 2013 31 Dec 2012(1)
Opening net debt (8,510) (1,278)
Underlying EBITDA(2) 8,806 7,867
Working capital movements (1,121) (526)
Other cash flows from operations 44 29
Cash flows from operations 7,729 7,370
Capital expenditure including related
derivatives (6,261) (6,030)
Cash tax paid (1,201) (1,799)
Dividends from associates, joint
ventures and financial asset investments 264 348
Net interest (533) (348)
Dividends paid to non-controlling
interests (1,159) (1,267)
Attributable free cash flow (1,161) (1,726)
Dividends paid to Company shareholders (1,078) (970)
Tax on sale of non-controlling interest
in Anglo American Sur (395) (1,015)
Acquisitions of subsidiaries – (4,816)
Disposals 252 439
Movements in non-controlling interests 71 1,220
Purchase of shares by subsidiaries for
employee share schemes (92) (253)
Other net debt movements 261 (111)
Total movement in net debt (2,142) (7,232)
Closing net debt (10,652) (8,510)
(1)Certain
balances related to 2012 have been restated to reflect the adoption of new accounting pronouncements.
See note 1 to the Condensed financial statements for details.
(2)Underlying EBITDA is underlying operating profit/(loss) before depreciation and amortisation in subsidiaries
and joint operations, excluding associates and joint ventures.
The reconciliation in the table above is the method by which management reviews movements in net debt and
comprises key movements in cash and any significant non-cash movements on net debt items.
Net debt increased by $2,142 million to $10,652 million (2012: $8,510 million) and net debt to total capital at
31 December 2013 was 22.2%, compared with 16.3% at 31 December 2012.
The working capital increase of $1,121 million (2012: increase of $526 million) represents investment in stock
of $562 million (2012: increase of $329 million), increase in debtors of $541 million (2012: increase of
$32 million) and a decrease in creditors of $18 million (2012: decrease of $165 million). Within the investment
in stock movement, $395 million relates to increases in platinum stock owing to the growth in precious metal
stock holding to manage business risk and an increase in the average stock valuation due to higher production
costs. The majority of the remaining stock increases reflect strong production performance in the closing months
of the year at both Kumba Iron Ore and Copper. This also resulted in increased sales, with a resultant increase
in debtors of $373 million.
Cash tax paid has decreased to $1,201 million from $1,799 million, owing to tax rebates at both Copper and
Metallurgical Coal. Copper received a $191 million rebate owing to overpayment in the prior tax year, while
Metallurgical Coal received a net tax refund in 2013 of $43 million (compared to a net payment in 2012 of
$330 million) following a reassessment by the Australian Tax Office of the tax instalment rate.
The majority of dividends paid to non-controlling interests of $1,159 million (2012: $1,267 million) were to
minority shareholders of Copper and Kumba Iron Ore, where external dividends of $474 million and$663 million
were paid respectively (2012: $100 million and $1,120 million).
Other net debt movements mainly relate to the Main Street preference share structure, which was established
to provide funding via preference shares for a black economic empowerment (BEE) company relating to SIOC. In
November 2013, the preference shares held by Anglo American in the company were redeemed for $279 million and a
mezzanine debt facility of $85 million repaid. This resulted in the Group reducing net debt by $364 million on
the unwinding of the structure.
Capital expenditure
Total capital expenditure increased from $6,030 million in 2012 to $6,261 million in 2013, predominantly as a
result of the increased expansionary spend at Minas-Rio and Grosvenor, and the increased holding in DeBeers.
Cash capital expenditure is expected to be between $7.0 billion and $7.5 billion in 2014. Net debt is expected
to continue to rise in 2014, as expenditure on the Group’s projects more than offsets cash generated from
operations.
Liquidity and funding
At 31 December 2013, the Group had undrawn committed bank facilities of $9.3 billion and cash of $7.7 billion.
The Group’s forecasts and projection, taking accounting of reasonably possible changes in trading performance,
indicated the Group’s ability to operate within the level of its current facilities for the foreseeable future.
Exploration enabling Anglo American’s growth
Global exploration activity for 2013 focused on greenfield projects across a number of mature and frontier
locations, as well as on adding value, through increasing resources and reserves, to our operations and advanced
projects.
Exploration expenditure for the year amounted to $207 million (2012: $206 million) across 19 countries.
Evaluation expenditure
Evaluation expenditure decreased by 38% to $326 million, driven by reductions in Copper andNickel, partly offset
by increases in De Beers following the acquisition of the additional interest in August2012.
Projects
The Group has a number of projects in the execution phase, as summarised below, and is progressing with the
development of other growth projects, including the greenfield Quellaveco copper project in Peru.
Minas-Rio
Minas-Rio is expected to produce 26.5 Mt (wet basis) of iron ore per annum and to capture a significant part of
the global pellet feed market, with its premium product featuring high iron content and low contaminants.
Construction of the project in Brazil continues in line with the revised plan announced in 2012. By the end of
2013, the project was 84% complete and is on schedule to deliver first ore on ship at the end of 2014.
Attributable capital expenditure at the Minas-Rio project is on track at $8.8 billion, with cash unit costs in a
competitive position in the lower half of the global seaborne iron ore cost curve.
The main schedule risks identified at the end of 2012 have been resolved and, over the past year, significant
construction and operational progress was made.
Grosvenor
The wholly owned greenfield Grosvenor metallurgical coal project is situated immediately to the south of our
highly productive Moranbah North metallurgical coal mine in the Bowen Basin of Queensland, Australia. The mine
is expected to produce 5.0 Mtpa of high-quality metallurgical coal from its underground longwall operation over
a projected mine life of 31 years and to benefit from operating costs in the lower half of the cost curve.
The project remains on target for first longwall production in 2016. All key permits and licences are in place.
Critical engineering and procurement activities have been completed and the majority of the project budget has
been contracted and committed. Surface construction is well advanced; earthworks and concrete are essentially
complete; structural, mechanical and piping works are advancing well; and electrical works have commenced. The
drift portal works are complete and underground development has commenced with the commissioning of a tunnel
boring machine.
Venetia
In South Africa, the first blast took place in September 2013 for the construction of an underground mine
beneath the open pit at Venetia. With capital investment of $2 billion, the underground expansion represents
De Beers’ largest ever investment in South Africa. Production is expected to commence from the underground mine
in 2021 and will extend the life of the mine to beyond 2040. The projected life of mine plan will treat
approximately 129 million tonnes of ore, containing an estimated 94 million carats (Scheduled Inferred Resources
constitute 28% - 26.3 Mct - of the estimated carats).
Boa Vista Fresh Rock
The Boa Vista Fresh Rock project in Brazil continued to progress during 2013 and is expected to start production
later in 2014. The project includes the construction of a new upstream plant that will enable continuity of the
Catalão site through processing the fresh rock ore body. Production capacity will increase to approximately
6,500 tonnes of niobium per year (2013: 4,500 tonnes), allowing use of the full plant capacity.
Divestment update
On 4 January 2013, Anglo American announced that it had reached an agreement to sell its 70% interest in Amapá
to Zamin Ferrous Ltd (Zamin). Following the 28 March 2013 major geological event which resulted in the loss of
four lives, with a further two people still missing, as well as the loss of the Santana port operation of Amapá
and the suspension of all export shipments, Anglo American entered into further discussions with its partner
Cliffs Natural Resources (Cliffs) and Zamin. Anglo American subsequently entered into an agreement with Cliffs
to acquire its 30% interest in Amapá, subject to certain conditions, and entered into an amended sale agreement
with Zamin to reflect Anglo American’s disposal of a 100% interest in Amapá to Zamin.
On 1 November 2013, Anglo American completed the acquisition from Cliffs and simultaneously completed the sale
of the 100% interest in Amapá to Zamin for an initial total consideration of approximately $134million, net of
certain completion adjustments. In addition, Zamin will pay Anglo American conditional deferred consideration of
up to a maximum of $130 million in total, payable over a five year period and calculated on the basis of the
market price for iron ore. As part of the transaction, Anglo American has assumed responsibility for, and the
risks and rewards of, certain insurance claims including those relating to the Santana port incident, through
the purchase of the claims from Amapá at the full claim value.
Dividends
Analysis of dividends US cents per share 2013 2012
Interim dividend 32 32
Recommended final dividend 53 53
Total dividends 85 85
Anglo American’s dividend policy is to provide a base dividend that will be maintained or increased through the
cycle. Consistent with the policy, the Board has recommended to maintain the final dividend of 53 US cents per
share, giving a total dividend of 85 US cents per share for the year (2012: 85 US cents per share), subject to
shareholder approval at the Annual General Meeting to be held on 24 April 2014.
The maintenance of the level of the dividend reflects the Board’s confidence in the underlying business. This
recommendation is consistent with the commitment to have a disciplined balance between the maintenance of a
strong investment grade rating, returns to shareholders and sequencing of future investment in line with
resulting funding capacity. From time to time any cash surplus to requirements will be returned to shareholders.
Outlook
In the near term, the world economy is expected to strengthen in 2014 and 2015 as it continues to emerge from
the challenges of the global financial crisis. China should continue to grow by around 7% and the diminishing
effects of fiscal tightening should support a firmer recovery in the US and beyond.
In the medium term, the US, Europe and Japan should experience a normalisation of their underlying economic
growth rates as the impact of the financial crisis fades. A successful reform programme in China should lay the
foundations for more sustainable growth. Looking beyond the short term hiatus in emerging markets, we expect
continuing robust economic growth in the medium to longer term as they benefit from continued convergence of
living standards.
In China and other emerging economies, there remains significant potential for further urbanisation and
industrialisation to support robust growth and demand for key commodities, including crude steel (iron ore, and
metallurgical coal), copper, nickel and thermal coal. The emergence of the expanding middle class will support
rising intensity of consumption for later cycle products, PGMs and diamonds, and will also benefit the
phosphates business to the expected benefit of Anglo American’s diversified commodity portfolio and
differentiated competitive position.
Supply growth in the near to medium term poses challenges to the prices of some global commodities, most notably
iron ore and copper. However, in the long term, prices for Anglo American’s products are expected to be
supported by supply constraints in many jurisdictions and the challenges producers face in bringing new supply
into production. Economic uncertainty, as we are seeing currently, tends to restrain new supply; in the longer
term Anglo American therefore expects to see tightening market fundamentals and a recovery in price performance
to support further margin improvement and returns.
Selected major projects
Approved
First Full Capital
Greenfield/ production production expenditure Production
Segment Project Country Brownfield date date $bn(1) volume(2)
Iron Ore and
Manganese Minas-Rio Brazil G 2014 2016 8.8(3) 26.5 Mtpa
iron ore
pellet
feed(4)
Metallurgical
Coal Grosvenor Australia G 2014 2016 2 5.0 Mtpa
metallurgical
Thermal Coal Cerrejón
P40 Colombia B 2013 2015 <2 8.0 Mtpa
thermal
Copper Collahuasi
expansion
Phase 2 Chile B 2013 2014 <1 20ktpa
Copper
Platinum Twickenham South 202kozpa
Africa G 2013 2024 <2 refined
platinum
Bathopele South
Phase 5 Africa B 2013 2017 <1 Replace 128
kozpa refined
platinum
Diamonds Jwaneng – Botswana B 2016 2018(5) 3(6) approximately
Cut-8 10 million
carats pa
Venetia South
U/G Africa B 2021 2024 ~2 approximately
4 million
carats pa
Niobium and Boa Vista
Phosphates Fresh Rock Brazil B 2014 2015 <1(7) 6.5 ktpa
niobium
production
(1) Capital expenditure shown on 100% basis in nominal terms.
(2) Represents 100% of average incremental or replacement production, at full production, unless otherwise
stated.
(3) Capital expenditure, post-acquisition of Anglo American’s shareholding in Minas-Rio, includes 100% of the
mine and pipeline, and an attributable share of the port.
(4) Iron ore pellet feed on wet tonnes basis at 8% moisture.
(5) Waste stripping at Cut-8, an extension to Jwaneng mine, began in 2010. Carat recovery will commence in
2016, with Cut-8 becoming the main ore source for Jwaneng from 2018.
(6) Infrastructure expenditure of approximately $450 million has already been spent. Project expenditure,
including infrastructure expenditure, is likely to total approximately $3 billion and is anticipated to create
access to an estimated 113 million carats over the life of the mine.
(7) An extension to mine life by mining the unweathered ore after oxides have been depleted. New processing
plant (from crushing to leaching) required.
For further information, please contact:
Media Investors
UK UK
James Wyatt-Tilby Paul Galloway
Tel: +44 (0)20 7968 8759 Tel: +44 (0)20 7968 8718
Emily Blyth Caroline Crampton
Tel: +44 (0)20 7968 8481 Tel: +44 (0)20 7968 2192
South Africa Sarah McNally
Pranill Ramchander Tel: +44 (0)20 7968 8747
Tel: +27 (0)11 638 2592
Anglo American is one of the world’s largest mining companies, is headquartered in the UK and listed on the
London and Johannesburg stock exchanges. Our portfolio of mining businesses meets our customers’ changing needs
and spans bulk commodities – iron ore and manganese, metallurgical coal and thermal coal; base metals and
minerals – copper, nickel, niobium and phosphates; and precious metals and minerals – in which we are a global
leader in both platinum and diamonds.At Anglo American, we are committed to working together with our
stakeholders –our investors, our partners and our employees–to create sustainable value that makes a real
difference, while upholding the highest standards of safety and responsibility across all our businesses and
geographies. The Company’s mining operations, pipeline of growth projects and exploration activities span
southern Africa, South America, Australia, North America, Asia and Europe.
www.angloamerican.com
Webcast of presentation:
A live webcast of the results presentation, starting at 9.00am UK time on 14 February 2014, can be accessed
through the Anglo American website at www.angloamerican.com
Note: Throughout this results announcement, ‘$’ denotes United States dollars and ‘cents’ refers to United
States cents; operating profit includes attributable share of associates’ and joint ventures’ operating profit
and is before special items and remeasurements, unless otherwise stated; special items and remeasurements are
defined in note 5 to the Condensed financial statements. Underlying earnings, unless otherwise stated, is
calculated as set out in note 8 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 operations and includes attributable share of EBITDA of associates
and joint ventures. 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 Conduct 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
Underlying operating profit Year ended Year ended
$ million 31 Dec 2013 31 Dec 2012(1)
Iron Ore and Manganese 3,119 3,011
Metallurgical Coal 46 405
Thermal Coal 541 793
Copper 1,739 1,736
Nickel (44) 26
Niobium and Phosphates 150 169
Platinum 464 (120)
Diamonds 1,003 474
Other Mining and Industrial (13) 168
Exploration (207) (206)
Corporate Activities and Unallocated
Costs (178) (203)
Operating profit including associates
and joint ventures before special items
and remeasurements 6,620 6,253
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 to the Condensed financial statements for details.
Anglo American reported underlying earnings of $2.7 billion (2012: $2.9 billion), with underlying operating
profit increasing by 6% to $6.6 billion.
Underlying operating profit increased owing to De Beers contributing for a full year as a subsidiary, improved
sales at both Copper and Platinum and the weakening of the South African rand, partially offset by lower prices
across the majority of our commodities.
Attributable ROCE was in line with 2012 at 11% as a consequence of a higher proportion of operating profit
coming from our businesses that are not wholly-owned: Anglo American Platinum, De Beers, Anglo American Sur and
Kumba Iron Ore. Average attributable capital employed increased from $38 billion in 2012 to $40 billion in 2013
due to the capital expenditure in 2013 partially offset by the weakening of the South African rand in which 29%
of our balance sheet is denominated. With the exception of Foxleigh, Peace River Coal and the Barro Alto
impairment, all impairments and loss on disposal/exit have been taken as a reduction to capital employed.
Underlying operating profit increased, despite the fall in realised prices for most of the commodities produced
by the Group, owing to the impact of the weaker South African rand and Australian dollar, the increased holding
in De Beers and improved production at Copper and Platinum.
The Group’s results are affected by currency fluctuations in the countries where the operations are based. The
strengthening of the US dollar against the South African rand and the Australian dollar resulted in a $1,702
million positive exchange variance in underlying operating profit compared with 2012. CPI inflation had a
negative $595 million impact on underlying operating profit compared with the prior year.
Special items and remeasurements after tax and non-controlling interest include:relating to Barro Alto ($0.7
billion), Michiquillay ($0.3 billion) and Foxleigh ($0.2 billion); loss on disposal of Amapá ($0.1 billion) and
exit from Pebble ($0.3 billion); and increased onerous contract provisions at Callide ($0.3 billion). Full
details of the special items and remeasurements charges are in note 5 to the Condensed financial statements.
Net finance costs, before remeasurements, and excluding associates and joint ventures, were $276 million (2012:
$299 million) lower than 2012 due to the increased capitalised interest and the gain on fair value hedges
partially offset by increased net debt levels during the year.
The effective rate of tax, before special items and remeasurements and including attributable share of
associates’ and joint ventures’ tax, increased from 29% in 2012 to 32%. This is higher due to the impact of
various prior year adjustments and the remeasurement of certain withholding tax provisions across the Group. In
future periods it is expected that the effective tax rate will remain above the United Kingdom statutory tax
rate. Group underlying earnings per share were $2.09 compared with $2.28 in 2012.
Reconciliation of loss for the year to
underlying earnings Year ended Year ended
$ million 31 Dec 2013 31 Dec 2012(1)
Loss for the financial year attributable
to equity shareholders of the Company (961) (1,470)
Operating special items (including
associates and joint ventures) 3,291 7,039
Operating remeasurements (including
associates and joint ventures) 550 112
Non-operating special items 469 594
Non-operating remeasurement – (1,990)
Financing remeasurements 130 88
Special items and remeasurements tax (590) (1,110)
Non-controlling interests on special
items and remeasurements (216) (403)
Underlying earnings(2) 2,673 2,860
Underlying earnings per share ($) 2.09 2.28
Summary income statement Year ended Year ended
$ million 31 Dec 2013 31 Dec 2012(1)
Operating profit from subsidiaries and
joint operations before special items and
remeasurements 6,168 5,493
Operating special items (3,211) (6,977)
Operating remeasurements (550) (116)
Operating profit/(loss) from
subsidiaries and joint operations 2,407 (1,600)
Non-operating special items and
remeasurements (469) 1,396
Share of net income from associates and
joint ventures 168 421
Profit from operations, associates and
joint ventures 2,106 217
Net finance costs before remeasurements (276) (299)
Financing remeasurements (130) (89)
Profit/(loss) before tax 1,700 (171)
Income tax expense (1,274) (393)
Profit/(loss) for the financial year 426 (564)
Attributable to: Non-controlling
interests 1,387 906
Equity shareholders of the Company (961) (1,470)
Basic loss per share ($) (0.75) (1.17)
Group operating profit including
associates and joint ventures before
special items and remeasurements(3) 6,620 6,253
Operating profit from associates and
joint ventures before special items and
remeasurements 452 760
Net finance costs (before special items
and remeasurements) (36) (75)
Income tax expense (before special items
and remeasurements) (158) (197)
Non-controlling interests (before
special items and remeasurements) (15) (6)
Special items and remeasurements (80) (57)
Special items and remeasurements tax 3 (3)
Non-controlling interests on special
items and remeasurements 2 (1)
Share of net income from associates and
joint ventures 168 421
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 of the condensed financial statements for details.
(2) See note 8 to the Condensed financial statements.
(3) Operating profit before special items and remeasurements from subsidiaries and joint operations was
$6,168million (2012:$5,493million) and attributable share from associates and joint ventures was $452 million
(2012: $760 million). For special items and remeasurements, see note 5 to the Condensed financial statements.
IRON ORE AND MANGANESE
$ million Year ended Year ended
(unless otherwise stated) 31 Dec 2013 31 Dec 2012(1)
Underlying operating profit 3,119 3,011
Kumba Iron Ore 3,047 3,042
Iron Ore Brazil (31) (5)
Samancor 210 103
Projects and corporate (107) (129)
Underlying EBITDA 3,390 3,262
Capital expenditure 2,517 2,139
Share of Group underlying operating
profit 47% 48%
Attributable return on capital employed % 19% 21%
(1)Certain balances related to 2012 have been restated to reflect the adoption of new accounting pronouncements.
See note 1 to the Condensed financial statements for details.
Financial and operational overview
Underlying operating profit increased by 4% from $3,011 million to $3,119million, principally as a result of
stronger average export iron ore prices at Kumba and higher prices, reduced costs and improved volumes at
Safety and environment
Kumba Iron Ore
Kumba completed the year without loss of life. The overall safety performance, however, suffered some setbacks,
which were reflected in a worsening lost-time injury frequency rate (LTIFR) of 0.18 (2012: 0.10). Kumba has
renewed its focus on entrenching individual responsibility and behaviour, while various processes are under way
to improve employee engagement through regular and visible interaction with leadership, as well as hazard
identification.
Environmental compliance is important to Kumba. To that extent, all environmental management plans were approved
by South Africa’s Department of Mineral Resources. Kumba’s targeted savings for 2013 were 271,834 GJ of energy
and 39,949 tonnes CO2e greenhouse gases. Kumba continues to implement energy and water savings projects, some of
which have already delivered quantifiable gains. Several savings projects are still at a conceptual stage, but
actual savings in 2013 are estimated to be 133,394 GJ of energy and 30,574 tonnes CO2e greenhouse gases.
Iron Ore Brazil?
The Minas-Rio project continues to be developed in a safe and responsible way, with no loss of life recorded
during the year and more than 33 million man-hours worked without any lost-time injuries.
Markets
The global steel and iron ore markets have generally been stable in 2013, and better than anticipated. An
increase in global steel production of 3% to 1,582 Mt (2012: 1,529 Mt), supported demand for iron ore. Sustained
government infrastructure spend in East Asia, as well as steel mill restocking prior to the winter season,
assisted this rise. China, the main producer of steel worldwide, increased its production by an unexpectedly
strong 7% this year to 779 Mt (2012: 731 Mt). Growth in Japan and Korea was also above expectations, and Europe
has stabilised during the year, which supported global demand.
Seaborne iron ore supplies increased by 10% in 2013 to 1,324 Mt (2012: 1,208 Mt), as the increase from Australia
more than compensated for lower supplies from India and flat exports from Brazil.
Iron ore prices were strong and averaged 4% higher at $135/tonne (Platts 62% Fe CFR China) (2012: $130/tonne).
Index prices reached a high of $160/tonne in February 2013, but fell to a low of $110/tonne in May 2013, before
stabilising at around $135/tonne towards the end of the year. Kumba’s pricing mechanism continued to evolve with
prices in China now mostly based on index values around the discharge date. In other markets, we largely
continue to use a quarterly pricing mechanism.
Operating performance
Kumba Iron Ore
Underlying operating profit increased slightly from $3,042 million to $3,047 million principally as a result of
1% stronger average export iron ore prices and the impact of the weaker South African rand, partly offset by a
1% decrease in export sales volumes. Total operating costs rose by 20% in local currency terms, driven primarily
by above-inflation cost increases and the mining of 47.5 Mt of additional waste at Sishen and Kolomela mines.
Total iron ore output decreased by 2% to 42.4 Mt mainly due to production losses at Sishen mine, partially
offset by the strong performance at Kolomela. Total tonnes mined at Sishen rose by 22% to 208.8 Mt (2012:
171.6 Mt), of which waste mined amounted to 167.8Mt, an increase of 26% (2012: 133.5 Mt) as the planned waste
ramp-up continues to alleviate the current pit constraints. The mine’s iron ore production, however, decreased
by 8% to 30.9Mt (2012: 33.7 Mt). Production from the DMS plant was mainly impacted by availability of material
from the pit and resulted in 12% lower output for the year. At the Jig plant, production was in line with the
prior year although still below design capacity owing to feedstock quality constraints. The mine was hampered
further by several Section 54 safety stoppages relating to the operation of trackless mobile machinery in August
2013 and subsequent gradual ramp-up of the mine. The Sishen mine pit is currently constrained, resulting in
insufficient exposed ore. A production recovery plan to address the current pit constraints and a longer-term
operational optimisation strategy are being implemented.
Kolomela continued its strong performance in 2013, increasing production by 26% to 10.8 Mt (2012: 8.5 Mt).
Production exceeded monthly design capacity for most of the year, and reached a new record level of 1.04Mt for
the month during October 2013. Kolomela’s total tonnage mined increased by 38% to 59.9Mt (2012: 43.5 Mt), of
which waste mined amounted to 46.7 Mt (2012: 33.5 Mt), an increase of 39%.
Production at Thabazimbi mine was 24% lower at 0.6 Mt (2012: 0.8 Mt), mainly as a result of partial plant
shutdowns towards the end of 2013. An agreement regulating the sale and purchase of iron ore between Sishen Iron
Ore Company (SIOC) and ArcelorMittal South Africa Limited (ArcelorMittal S.A.), which became effective on 1
January 2014, may enable Thabazimbi life of mine to be extended through the introduction of low-grade
beneficiation technologies.
Kumba’s total sales volumes were 1% lower at 43.7 Mt (2012: 44.4 Mt) as both export and domestic sales volumes
decreased by 1% to 39.1 Mt (2012:39.7 Mt) and 4.6 Mt (2012: 4.7 Mt), respectively. The lower export sales
volumes were mainly the result of production losses at Sishen which reduced export stock levels across the value
chain, but were mostly offset by the performance from Kolomela. Export sales volumes to China accounted for 68%
of the company’s total export volumes for the year, compared to 69% in 2012. Sales volumes to Japan and South
Korea rose by 13% to 8.3 Mt and represented 21% of total export sales, with the remaining 11% going to Europe.
In 2014, this mix is expected to change slightly as more iron ore is shipped to China and less to Europe.
Total finished product stockpiles amounted to 2.8 Mt at the end of the year, compared to 3.7 Mt at the end of
2012.
Kumba spent $455 million on stay-in-business capital (2012: $383 million), mainly on heavy mining equipment such
as haul trucks and shovels for Sishen and Kolomela mines in support of the waste mining ramp-up.
Iron Ore Brazil
Iron Ore Brazil generated an underlying operating loss of $31million, reflecting the pre-operational state of
the Minas-Rio project.
Samancor
Underlying operating profit more than doubled to $210million (2012: $103 million), driven by higher prices and
focused cost control, supported by strong volumes.
Production of ore was flat at 3.3 Mt (attributable basis) owing to a consistently strong operating performance
and improved plant productivity at both GEMCO in Australia and Hotazel in South Africa. Alloy production
increased by 27% to 251,100 tonnes (attributable basis) as production was restored at TEMCO in Australia
following the production suspension in 2012.
Projects
Kumba Iron Ore
Kumba’s aims to capitalise on its current mining right holdings and existing infrastructure to develop and
sustain a project pipeline that enables a return to optimal levels of production, maintenance of these levels
and growth in accordance with the needs of the market.
Kumba is focused on restoring Sishen mine to its full capacity but is also looking to facilitate the expansion
of Sishen mine to the west. A comprehensive feasibility study has been completed for the relocation of the
Dingleton community and the company has engaged in an extensive consultation process with interested and
affected parties, the community and the relevant government departments. The plan to resettle the community in
the town of Kathu in the Northern Cape Province is expected to cost an estimated $457million (nominal) over a
four to six year period.
At Kolomela, technical studies have confirmed the mine’s capacity at 10 Mtpa, 1 Mtpa above its original design
capacity. Kumba is currently studying opportunities for further incremental expansion of Kolomela’s production.
Significant progress has been made in the progression of the Sishen Western Expansion Project (SWEP). Project
development remains within budget, and construction activities have been completed. A major milestone in the
development of the project was the relocation of the Transnet railway line from its previous position to the
west of the current Sishen pit, to the far western extent of the SIOC property. The relocation of the railway
line was completed in May 2013.
As a consequence of Transnet having previously held the surface rights over the SWEP rail properties, the rail
properties were excluded from the Sishen Mining Right area. SIOC applied to the Department of Mineral Resources
(DMR) to obtain the necessary rights in relation to the rail properties, which were granted by the DMR on 11
February 2014. The granting of the mining right gives SIOC access to approximately 33% of the Sishen reserve
included in SIOC's Life of Mine plan which is located on either side of the affected area. This portion of the
reserve, which had been classified as probable, can now be reclassified as proven. SIOC will accordingly proceed
with the implementation of its mining plan and will start waste stripping in the affected area from the second
half of 2014.
Iron Ore Brazil
Construction of the 26.5 Mtpa Minas-Rio iron ore project continues in line with the revised plan announced in
2012. By the end of 2013, the project was 84% complete overall and is on schedule to deliver first ore on ship
at the end of 2014.
The main schedule risks identified at the end of 2012 have been resolved and over the past year significant
construction and operational progress has been made.
Highlights during 2013 include:
•The mine’s cave suppression permit was granted in March and mine access approved in May, allowing stripping of
surface overburden to be completed;
•Land release for the 230 kV transmission line was obtained, and the transmission line has been completed, ahead
of schedule;
•Closure of the tailings dam was achieved in April, as planned, and the dam is near completion; •The pipeline
and land-access permits were obtained on schedule and 481 kilometres of pipe (representing 91% of the total 525
kilometre length) had been installed by the end of 2013.
•No outstanding permits or licences now impede the construction process, while good progress is being made in
converting the installation permits to operating licences;
•The beneficiation plant is 83% complete. Civil engineering work has finished on the first ball mill and primary
crusher, while the long-distance conveyor belt is almost assembled;
•Assembly of the ship-loader at Açu is 96% complete and caissons are being placed in position for the 2,624
metre-long breakwater.
Potential risks for 2014 are being addressed and mainly relate to manpower availability to complete construction
activities at the beneficiation plant and the completion of the breakwater.
Capital expenditure remains in line with the previously announced cost of $8.8billion, including a centrally
held contingency of $600million. To date, $5.6 billion has been spent on the project and it is envisaged that
$3.2 billion (inclusive of the $600 million contingency) will need to be spent in order to deliver the project.
Samancor
The $279 million GEEP2 project (Anglo American’s 40% share: $112 million) was delivered, on schedule and budget,
in the third quarter of 2013. The project 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 expansion will also address
infrastructure constraints by increasing road and port capacity to 5.9 Mtpa, creating 1.1Mtpa of latent capacity
for future expansion.
The $91 million (100% basis) high-carbon ferromanganese furnace at the Metalloys smelter in South Africa was
delivered, on schedule and budget, in the first quarter of 2013. The project will add an additional 130,000
tonnes of capacity per year.
Outlook
In 2014, it is anticipated that global crude steel demand will grow by 3%, with China’s production rising to
approximately 806 Mt, while growth in production in other developing countries is expected to be countered by a
reduction in output in some of the developed markets. It is anticipated, however, that the supply and demand
balance will shift in the second half of 2014 owing to more supply from Australia and Brazil as demand growth
begins to slow. This is expected to put some pressure on the iron ore price in the second half of the year.
The Sishen mine recovery and optimisation plan expects a phased production increase from 30.9 Mt in 2013, to
approximately 35Mt in 2014. As the ore body dips and thins out towards the west, waste stripping of up to
270Mtpa will be required for the production of 37 Mtpa at current marketing specifications, planned for 2016.
Kumba anticipates total iron ore production, excluding Thabazimbi, of between 44 and 46 Mt in 2014. Export sales
volumes are expected to be in line with 2013 levels.
The recovery in manganese ore pricing continued into 2013; however, muted demand expectations are expected to
limit the rate and extent of the recovery in the near term.
Kumba Iron Ore update
21.4% undivided share of the Sishen mine mineral rights
On 28 March 2013 the Supreme Court of Appeal (SCA) dismissed the appeals of the Department of Mineral Resources
(DMR) and Imperial Crown Trading 289 (Pty) Ltd (ICT) against the decision of the North Gauteng High Court,
which, inter alia, confirmed that Sishen Iron Ore Company (Pty) Ltd (SIOC) became the exclusive holder of the
mining rights at the Sishen mine in 2008 when the DMR converted SIOC’s old order rights, and further set aside
the grant of a prospecting right to ICT by the DMR. The SCA held that as a matter of law and as at midnight on
30 April 2009, SIOC became the sole holder of the mining right to iron ore in respect of the Sishen mine, after
ArcelorMittal South Africa Limited (ArcelorMittal S.A.) failed to convert its undivided share of the old order
mining right.
Both ICT and the DMR lodged applications for leave to appeal against the SCA to the Constitutional Court. The
Constitutional Court hearing was held on 3 September 2013.
On 12 December 2013 the Constitutional Court granted the DMR’s appeal in part against the SCA judgment. In a
detailed judgment, the Constitutional Court clarified that SIOC, when it lodged its application for conversion
of its old order right, converted only the right it held at that time (being a 78.6% undivided share in the
Sishen mining right). The Constitutional Court further held that ArcelorMittal S.A. retained the right to lodge
its old order right (21.4% undivided share) for conversion before midnight on 30 April 2009, but failed to do
so. As a consequence of such failure by ArcelorMittal S.A., the 21.4% undivided right remained available for
allocation by the DMR.
The Constitutional Court ruled further that, based on the provisions of the Mineral and Petroleum Resources
Development Act (MPRDA), only SIOC can apply for the residual 21.4% undivided share of the Sishen mining right.
The grant of the mining right may be made subject to such conditions considered by the Minister to be
appropriate, provided that the proposed conditions are permissible under the MPRDA. SIOC had previously applied
for this 21.4%, and continues to account for 100% of what is mined from the reserves at Sishen mine. SIOC has
however, in compliance with the Constitutional Court order, submitted a further application to be granted this
right.
As a further consequence of this finding, the High Court’s ruling setting aside the prospecting right granted by
the DMR to ICT also stands. The findings made by the Constitutional Court are favourable to both SIOC and the
DMR. SIOC’s position as the only competent applicant for the residual right protects SIOC’s interests. The DMR’s
position as custodian of the mineral resources on behalf of the nation, and the authority of the DMR to allocate
rights, has also been ratified by the Court.
ArcelorMittal S.A. supply agreement
The dispute between SIOC and ArcelorMittal S.A. regarding the contract mining agreement had been referred to
arbitration in 2010. In December 2011 the parties agreed to delay the arbitration proceedings until the final
resolution of the mining rights dispute (see above).
Interim Pricing Agreements were implemented to 31 December 2013.
In November 2013 SIOC and ArcelorMittal S.A. entered into a new Supply Agreement regulating the sale and
purchase of iron ore between the parties which became effective from 1 January 2014. This agreement, subject to
certain express conditions, is contemplated to endure until the end of Life of Mine for the Sishenmine.
The conclusion of this agreement settled the arbitration and the various other disputes between the companies.
Following the Constitutional Court ruling (see above), the sale of iron ore from SIOC to ArcelorMittal S.A. will
remain regulated by the recently concluded SupplyAgreement.
METALLURGICAL COAL
$ million Year ended Year ended
(unless otherwise stated) 31 Dec 2013(1) 31 Dec 2012(2)
Underlying operating profit 46 405
Underlying EBITDA 612 877
Capital expenditure 1,050 1,028
Share of Group underlying operating
profit 0.7% 6%
Attributable return on capital employed % 1% 9%
(1) Throughout the Metallurgical Coal commentary, all volumes are expressed on an attributable basis.
(2) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 to the Condensed financial statements for details.
Financial and operational overview
Metallurgical Coal recorded an underlying operating profit of $46 million, 89% lower than the 2012 figure of
$405million. This was attributable to a 24% decrease in the average quarterly HCC benchmark coal price,
partially offset by the implementation of significant cost reductions initiated in 2012, a 9% increase in
metallurgical coal sales volumes, and favourable exchange rate movements in the Australian dollar.
A
focus on high margin products has resulted in a favourable product mix towards higher quality coking coal, with
the proportion of sales of HCC to PCI increasing by 3% to 70%.
Metallurgical Coal continues to focus on cost reductions, with Australian and Canadian export FOB cash unit
costs reducing by 8% and 15%, respectively.
Safety and environment
There were no fatal injuries at Metallurgical Coal’s operations in 2013. The lost-time injury frequency and
total recordable frequency rates of 1.00 and 1.48 were the lowest on record and represent a respective
improvement of 43% and 36% over 2012. These results are attributable to visible and proactive leadership
presence in the field, increased accountability and specific monitoring of supervisor safety performance. A
reduction in the overall high level risk profile was achieved through formal contractor management improvements
and increased focus on the management of high level risks, such as those associated with vehicles and machinery.
To assist in mitigating the emissions that may contribute to climate change and reduce exposure to the carbon
pricing mechanism, Metallurgical Coal has expanded the German Creek Power Station by more than 12 MW per annum
and, in doing so, reduces CO2e emissions by capturing methane that would otherwise be vented, and producing
electricity. Metallurgical Coal has also implemented a number of asset optimisation projects that improve heavy
mining equipment efficiency in order to reduce fuel usage.
Markets
Anglo American weighted average achieved
sales prices ($/tonne) 2013 2012
Export metallurgical coal (FOB) 140 178
Export thermal coal (FOB Australia) 84 96
Domestic thermal coal 39 37
Attributable sales volumes (’000 tonnes) 2013 2012
Export metallurgical coal 19,045 17,413
Export thermal coal 6,372 6,043
Domestic thermal coal 6,125 6,921
Australian metallurgical coal production continued at record levels in the second half of 2013, with seaborne
exports reaching an all-time high of 16.3 Mt in October 2013 (194 Mt annualised), and totalling 169.7 Mt for the
year (2012:144.5Mt). This increased production, combined with sustained high export levels from the US and
Canada, created an oversupply of seaborne metallurgical coal for the year.
Quarterly benchmark prices for seaborne metallurgical coal dropped sharply in the latter half of the year,
reaching a four-year low of $145/tonne in the third quarter. The average 2013 HCC quarterly price fell by 24%
to $159/tonne from the 2012 average of $210/tonne.
Around 75% of AngloAmerican’s metallurgical coal sales were placed against term contracts with quarterly
negotiated price settlements, while the balance of sales comprised short-term priced transactions. Hard coking
coal accounted for 70% of Metallurgical Coal’s export metallurgical coal sales in 2013, an increase of 3%, as a
result of the focus on high margin production.
Operating performance
Attributable production (’000 tonnes) 2013 2012
Export metallurgical coal 18,656 17,664
Export thermal coal 6,264 6,046
Domestic thermal coal 6,239 6,925
Export metallurgical coal production increased by 6% to a record 18.7 Mt, while export thermal coal production
increased 4% to 6.3 Mt. Production improved by 30% at the underground operations owing to a significant step-
change in performance over the past 18 months. Production at the open cut operations decreased by 5%, mainly as
a result of excessive rainfall causing flooding and rail disruptions in the first quarter, and planned capacity
reductions. Metallurgical Coal’s sustained focus on costs reduced FOB costs by 10%, despite export volumes
increasing by 5%.
Moranbah North’s underground operation delivered record production. Output rose by 39% following best practice
longwall performance, driven in turn by a 45% year-on-year improvement in cutting hours, an increase in
automated cutting, and a reduction in unplanned downtime.
Performance improved by 16% year-on-year at Capcoal’s underground operation, through increased reliability of
the longwall with a 15% improvement in cutting hours and improved coal clearance system uptime.
Record coal production was achieved at Foxleigh open cut mine, with a 4% increase over the prior year, on the
back of productivity improvements arising from increased equipment availability and optimal alignment of
equipment to pit conditions.
In Canada, Peace River Coal increased coal production by 22%, reflecting improvements in mining design,
greater productivity in mining operations as well as yield and throughput enhancements in the coal preparation plant.
Export thermal coal production was 4% higher for the year following productivity improvements.
Projects
The wholly owned Grosvenor project remains on target for first longwall production in 2016. All key permits and
licences are in place. Critical engineering and procurement activities have been completed and the majority of
the project budget has been contracted and committed. Surface construction is well advanced; earthworks and
concrete are essentially complete; structural, mechanical and piping works are advancing well; and electrical
works have commenced. The drift portal works are complete and underground development has commenced
with the commissioning of a tunnel boring machine.
As announced in July 2013, the capital costs to develop the Grosvenor project increased by $250 million to
$1.95 billion owing to scope changes resulting from an investigation into the drift failure at Moranbah North
in 2011 that led to a complete redesign of the Grosvenor drift and its construction method. Costs have also been
impacted by adverse exchange rate movements during the construction phase.
Outlook
An oversupply of metallurgical coal has been generated by strong metallurgical production from Australia and
high US exports, with metallurgical coal prices expected to remain subdued into 2014.
US exports are starting to reduce in response to lower prices; however, record Australian production has more
than offset any reductions. Capacity increases from Australian greenfield supply in the second half of 2014 will
continue to limit any significant price improvement.
Seaborne metallurgical coal demand is expected to increase to around 305 Mt in 2014, approximately 8% higher
than 2013.
Metallurgical Coal is positioned to take advantage of any future coal price increases as a result of its focus
on delivering high margin, low cost capacity, and the demonstrated benefits of asset optimisation initiatives.
THERMAL COAL
$ million Year ended Year ended
(unless otherwise stated) 31 Dec 2013 31 Dec 2012(1)
Underlying operating profit 541 793
South Africa 356 482
Colombia 228 358
Projects and corporate (43) (47)
Underlying EBITDA 735 972
Capital expenditure 217 266
Share of Group underlying operating
profit 8% 13%
Attributable return on capital employed % 23% 35%
(1)Certain balances related to 2012 have been restated to reflect the adoption of new accounting pronouncements.
See note 1 to the Condensed financial statements for details.
Financial and operational overview
Thermal Coal generated an underlying operating profit of $541 million, a 32% decrease over the prior year,
primarily driven by lower average export thermal coal prices, partly offset by the impact of the weaker South
African rand. Business performance was also affected by a 32 day strike at Cerrejón in the first quarter.
Safety and environment
Sadly, three colleagues lost their lives while working at Thermal Coal operations in South Africa. One
contractor was also fatally injured at Cerrejón, in Colombia. Thorough incident investigations were conducted to
ensure that the root causes of these incidents are understood, addressed and shared across the Group.
Over the past five years, Thermal Coal has continued to improve its performance in relation to injuries, which
is reflected in the 42% reduction in lost-time injury frequency rate (LTIFR) from 0.31 in 2008 to the current
0.18. Cerrejón achieved an LTIFR of 0.16, the lowest in the operation’s history.
Thermal Coal’s energy, greenhouse gas (GHG) and water footprints are managed through the implementation of Anglo
American’s WETT and ECO2MAN programmes, and energy and GHG levels are trending well below business as usual
projections.
Markets
Anglo American weighted average achieved
sales prices ($/tonne) 2013 2012
South Africa export thermal coal (FOB) 77 92
South Africa domestic thermal coal 19 21
Colombia export thermal coal (FOB) 73 89
Attributable sales volumes (‘000 tonnes) 2013 2012
South Africa export thermal coal 17,502 17,151
South Africa domestic thermal coal(1) 39,044 40,110
Colombia export thermal coal 11,152 10,926
(1) Includes domestic metallurgical coal of 91,800 tonnes in 2012.
International seaborne demand continues to grow (7% to 961 Mt); however the supply response to date has kept
pace with demand. In 2013, the international thermal coal seaborne market remained in oversupply, despite supply
disruptions that included the effects of industrial action in Colombia. This has kept prices suppressed and
discouraged investment.
Thermal coal prices generally continued their declining trend over the year, although with some volatility.
Delivered prices into Europe (API2) fell below $75/tonne in June, their lowest in three years, before regaining
some lost ground with a fourth quarter average price of $84.3/tonne. The average API2 price index was
$81.5/tonne for the year. The average API4 (FOB, Richards Bay) index price also fell below $75/tonne in June,
while the average for the year fell by approximately 14% to $80/tonne (2012: $93/tonne) to close at $85/tonne
(2012: $89/tonne).
Generally, the lower prices have forced producers to seek productivity gains and ramp up volumes in order to
reduce unit costs. In conjunction with newly commissioned infrastructure projects, this has resulted in strong
supply-side performance from various export countries. Depreciation of the Australian dollar and South African
rand, which declined by 6% and 18% respectively against the US dollar, provided some relief for producers.
Asia accounted for 75% of South African thermal coal shipments, 3% lower than 2012. South African thermal coal
shipments out of RBCT reached a record high of 70.2Mt, an increase of 3% over the prior year (2012: 68.3Mt),
bolstered by Transnet Freight Rail (TFR)’s improved performance. TFR also had a record calendar year with
70.5 Mt railed to RBCT, a 3% improvement over 2012 (68.5 Mt).
Operating performance
Attributable production (‘000 tonnes) 2013 2012
South Africa export thermal coal 17,031 17,132
Colombia export thermal coal 11,002 11,549
South Africa Eskom coal 33,567 33,706
South Africa domestic other(1) 5,992 6,293
(1)Includes domestic metallurgical coal of 74,100 tonnes for 2012.
South Africa
Underlying operating profit from South African operations decreased by 26% to $356 million, driven by 16%
lower average export thermal coal prices, partially offset by the impact of the weaker South African rand
(2013: $/ZAR 9.65, 2012:$/ZAR 8.21). However, the continuation of cost control measures has contained cost
increases in line with CPI in local currency terms, despite above-CPI increases for several major cost
components.
Export production at 17.0 Mt was in line with the prior year with a 13% improvement in performance at Greenside
offset by lower production at Goedehoop, owing to challenging mining conditions, and Landau following the slower
than anticipated plant ramp-up following maintenance.
Colombia
At Cerrejón, underlying operating profit of $228 million was 36% down on 2012, owing to the impact of lower
thermal coal prices, partly offset by significant cost efficiencies (8% lower than 2012) and marginally higher
sales volumes of 11.2 Mt as the operation recovered strongly from the 32 day strike in the first quarter.
Projects
In South Africa, the 11 Mtpa New Largo project has reached the feasibility stage gate and engagement with Eskom
to finalise the coal supply agreements is ongoing. The project is expected to be presented for board approval
once the necessary permits have been obtained for both the first and second stages of the project and the coal
supply and other commercial agreements have been concluded.
The Cerrejón expansion project (P40), to increase the port and logistics chain capacity to handle a total mine
output of 40 Mtpa (an additional 8.0 Mtpa), is progressing on schedule and budget.
Outlook
Demand for seaborne thermal coal is forecast to remain strong, driven mainly by strong growth in Asia with China
and India remaining the key markets. Atlantic demand is likely to be steady in the short term as new coal-fired
capacity is being offset by the closure, in certain cases at the insistence of regulators, of older power
stations.
The significant tonnages of domestic coal produced by China and India, the two largest thermal coal import
markets, will continue to act as a restraint on imported coal prices, a situation likely to be exacerbated as
domestic producers adjust their prices to stay competitive against imported coal.
BASE METALS & MINERALS – COPPER
$ million Year ended Year ended
(unless otherwise stated) 31 Dec 2013 31 Dec 2012(1)
Underlying operating profit 1,739 1,736
Underlying EBITDA 2,402 2,288
Capital expenditure 1,011 1,214
Share of Group underlying operating
profit 26% 28%
Attributable return on capital employed %(2) 25% 29%
(1)Certain balances related to 2012 have been restated to reflect the adoption of new accounting pronouncements.
See note 1 to the Condensed financial statements for details.
(2) Removing outstanding tax liabilities relating to the AA Sur divestment in 2012 and 2013, copper attributable
ROCE would fall to 24% in 2012, and 24% in 2013.
Financial and operational overview
Copper generated an underlying operating profit of $1,739 million, in line with the prior year. Higher sales
volumes from Los Bronces and Collahuasi, leading to lower unit costs were offset by the decline in the average
realised copper price. Operating profit also benefited from lower power prices, exploration and study costs.
In September 2013, Anglo American gave notice of its decision to withdraw from the Pebble copper project in
Alaska. As a result, the investment in Pebble was written off in full, resulting in a charge of $311 million
including exit costs.
Safety and environment
During the year, Copper recorded a single loss of life arising from a height-related incident at its Mantos
Blancos operation. The lost-time injury frequency rate was unchanged at 0.20. The business’s safety endeavours
continue to concentrate on risk and change management, learning from incidents and contractor management
processes.
Water supply is one of the major challenges for our operations and process optimisation continues in order to
minimise water consumption. The recirculation system at Los Bronces is now recycling 100% of processed water and
several new water supply projects at Los Bronces were implemented during the year. Significant progress has also
been made on the Mantoverde desalination plant, which is expected to start delivering water to the operation in
the first quarter of 2014. As a result of the initiatives, water savings of 44% have been delivered compared to
business as usual.
Ongoing reviews by our operations have highlighted challenges from an environmental standpoint where we are
evaluating potential environmental impacts generated by our operations or where we have not sufficiently
implemented measures to compensate. These are primarily centered around mine affected water quality and back log
in reforestation programs per original permit conditions. These anomalies are being addressed in conjunction
with the environmental agencies.
Copper’s social development strategy aims to deliver a lasting, net-positive benefit to its host communities,
notably in the fields of education and local economic development. One notable programme is the Emerge
enterprise development programme, for which the government of Chile awarded Copper with the prestigious ‘More
for Chile’ award. This initiative, begun in 2006, has supported more than 40,000 entrepreneurs, of whom more
than 80% are women. In Peru, the business has made a substantial contribution to early education through its
programme of working with children aged nought to three, as well as with their mothers and fathers in order to
improve parenting skills.
Markets
Average price 2013 2012
Average market prices (c/lb) 332 361
Average realised prices (c/lb) 326 364
The copper price rose at the start of 2013 to a high of 374 c/lb, buoyed by Chinese buying ahead of the Lunar
New Year and a temporary resolution to the fiscal stalemate in the US. Underwhelming macro-economic data
releases and a sharp rise in LME inventories followed, which resulted in prices retreating to 301 c/lb by the
end of June. A hot summer in China, increasing financial demand and tightness in the scrap market then
underpinned a modest recovery. However, strong mine supply and surging concentrate imports began to weigh on
sentiment by November, with prices falling back to 314c/lb, before ending the year at 335c/lb. For the full
year, the realised price averaged 326c/lb, a decrease of 10% compared with 2012. This included a negative
provisional price adjustment of $92 million versus a positive adjustment of $47 million for 2012.
Operating performance
Attributable production (tonnes) 2013 2012
Copper 774,800 659,700
Attributable copper production of 774,800 tonnes was 17% higher than in 2012, driven by improved operating
performance at Los Bronces and Collahuasi.
Production at Los Bronces was 14% higher at 416,300 tonnes, owing to continued strong throughput performance.
Reduced mine congestion and de-bottlenecking at the primary crushers has improved continuity of ore supply and
throughput at both processing plants. Improvements implemented in the Confluencia milling and flotation
processes have also resulted in higher recoveries. Mine development continues, with the initial opening of the
next two phases of ore supply completed during the period. Large-scale mining equipment is now in place in these
phases, with development stripping accelerating in the second half of 2013.
At Collahuasi, production increased by 58%, with Anglo American’s attributable output climbing to 195,600 tonnes.
Following the SAG 3 stator motor replacement and repowering in the second quarter of the year, plant
stability and mill throughput performance have improved significantly. Production also benefited from higher
than planned grades.
Production at El Soldado decreased by 4% to 51,500 tonnes, owing to lower grades. The development of the next
major phase of ore supply has slowed as mining activities intersected a geological fault, impacting ore
availability in the last quarter of the year. The lack of ore has been partially mitigated by the processing of
slag from the nearby Chagres smelter.
Production at Mantoverde decreased by 9% owing to lower grades, while Mantos Blancos production was in line with
the prior year.
During 2013, Copper undertook a full review of its contracted services processes, identifying a number of
improvements which are now being implemented. Cost savings have already started to be realised and the benefits
are expected to increase.
Projects
In Peru the Quellaveco project was evaluated as part of the Group asset review, which resulted in a decision to
reconfigure the project so that its economic returns are more robust. A final review of the project is expected
during 2015. During the intervening period, work will continue on the project site aimed mainly at progressing
the Asana river diversion tunnel along with various social and community programmes, thereby solidifying the
already high social support for the project.
In the Los Bronces District, the conceptual study of the Los Sulfatos deposit has commenced and the permits
required to start sub-surface hydrogeological drilling were received in the final quarter of 2013.
Outlook
Production levels in 2014 are expected to be impacted by lower ore grades at Los Bronces and Collahuasi.
At Los Bronces, costs are expected to rise as a result of ongoing mine development, along with restoring mine
flexibility. At El Soldado, the lack of ore availability is expected to result in a decrease in production over
the next two years before recovering in 2016.
Challenges remain in managing continuing industry-wide input cost pressures; however the contracted services
review conducted in 2013 is expected to alleviate some of this pressure. Ongoing market concerns arising from
uncertainties over the near term outlook for the global economy and new supply coming on line may lead to short
term volatility in the copper price. The long term fundamentals for copper, however, remain strong,
predominantly driven by robust demand from the emerging economies and supply constraints owing to ageing mines
and steadily declining average grades.
BASE METALS & MINERALS – NICKEL
$ million Year ended Year ended
(unless otherwise stated) 31 Dec 2013 31 Dec 2012(1)
Underlying operating (loss)/profit (44) 26
Underlying EBITDA (37) 50
Capital expenditure(2) (28) 100
Share of Group underlying operating
profit (0.7)% 0.4%
Attributable return on capital employed % (2)% 1%
(1)Certain balances related to 2012 have been restated to reflect the adoption of new accounting pronouncements.
See note 1 to the Condensed financial statements for details.
(2) In 2013, cash capital expenditure for Nickel of $76 million is offset by the capitalisation of $104 million
of net operating cash inflows generated by Barro Alto which has not yet reached commercial production.
Financial and operational overview
Nickel reported an underlying operating loss of $44 million. The 2012 underlying operating profit of $26million
included a self-insurance recovery of $57 million, in addition to which 2013 underlying operating profit was
affected by a 14% decline in the LME nickel price and increased discounts arising from weaker market conditions,
compensated in part by reductions in corporate and project spend. The underlying operating result for Barro
Alto continues to be capitalised.
A more challenging market outlook, the need for furnace rebuilding and updated operational planning has led to a
reduced valuation for Barro Alto, for which an impairment, post tax, of $529 million (relating to a value-in-use
carrying value assessment) and write-off of $195 million (relating to existing furnace equipment which is to be
rebuilt) were recognised in 2013.
Safety and environment
Nickel operated without any loss of life in 2013, but recorded a 55% deterioration in lost-time injury frequency
rate (LTIFR) to 0.17 (2012: 0.11). This prompted an increased focus on risk and change management and on
preventing incidents during the upcoming rebuild and maintenance stoppages.
There has been good progress towards the business’ 2015 environmental targets, with initiatives delivering water
savings of 2.6 million m3, energy savings of 3.3 million GJ and CO2 savings of 37,000 tonnes since 2011.
Markets
Average price 2013 2012
Average market price (c/lb) 680 794
Average realised price (c/lb)(1) 646 771
(1)Realised prices are now reported inclusive of Barro Alto sales. This has led to the restatement of the 2012
realised price from 765 c/lb to 771 c/lb.
After increasing moderately to 804 c/lb, LME nickel prices fell to a low of 622 c/lb in July owing to economic
concerns. These price declines led to a reduction in demand owing to the way in which stainless steel producers
pass on raw material costs to their buyers with a one month lag. Further pressure came from the impact of
increasing new nickel supply, most notably nickel pig iron in China.
The nickel market recorded a surplus of 102,000 tonnes for the year compared with a surplus of 48,000tonnes in
2012. Nickel consumption increased by 9.1% to 1.9 million tonnes, but supply also rose following the ramping up
of a number of new nickel plants. The growth in conventional supply was lower than expected as a result of
problems at a number of new operations.
Operating performance
Attributable nickel production (tonnes) 2013 2012
Nickel 34,400 39,300
Nickel production decreased by 12% to 34,400 tonnes, primarily as a consequence of the cessation of mining and
production activities at Loma de Níquel.
Barro Alto produced 25,100 tonnes of nickel in 2013, 16% higher than 2012. This increase reflects improved
operational stability in the second half of the year, following the planned line 2 sidewall rebuild and
subsequent metal run-out in the first half.
Despite this improvement, equipment sensitivities remain. Barro Alto’s furnace rebuild was a focus in the second
half of the year, with evaluation of the optimal design and construction scenario, as well as early engineering
activities now well progressed. The first rebuild is expected to commence in late 2014.
Codemin produced 9,300 tonnes of nickel in 2013, slightly lower than 2012, as a result of a planned decline in
grade.
Outlook
Production in 2014 is expected to be similar to 2013, as close monitoring of Barro Alto facilitates greater
operational stability in advance of the furnace rebuilds. The first rebuild is expected to commence in late 2014
and the second in late 2015, with the rebuilds and associated ramp-ups fully completed during 2016. We currently
expect production at Barro Alto and Codemin to be between 20,000 and 25,000 tonnes in 2015 and between
35,000 and 38,000 tonnes in 2016, although this forecast may be revised as the Barro Alto rebuild timetable is
finalised.
Short term prices are expected to remain under pressure owing to the prevailing macro-economic environment and
ramp up of new nickel supply. If the change in Indonesian government policy (announced in early 2014) to ban
nickel ore exports is sustained, this will tighten the nickel market and support strengthening prices. In any
event, medium to longer term nickel prices are expected to improve owing to forecast demand growth outstripping
that of supply.
BASE METALS &MINERALS – NIOBIUM & PHOSPHATES
$ million Year ended Year ended
(unless otherwise stated) 31 Dec 2013 31 Dec 2012(1)
Underlying operating profit 150 169
Niobium 89 81
Phosphates 79 91
Projects and corporate (18) (3)
Underlying EBITDA 176 196
Capital expenditure 237 94
Share of Group underlying operating
profit 2% 3%
Attributable return on capital employed % 24% 32%
(1)Certain balances related to 2012 have been restated to reflect the adoption of new accounting pronouncements.
See note 1 to the Condensed financial statements for details.
Financial and operational overview
Operating profit decreased by 11% to $150 million with lower realised sales prices at both Niobium and
Phosphates and higher study costs in the year, partly offset by lower cash costs and the positive impact of the
weaker Brazilian real on operating costs.
Safety and environment
During 2013, no fatal incidents were recorded in our Niobium and Phosphates business, which also saw a marginal
improvement in the lost-time injury frequency rate to 0.31 (2012: 0.39).
Detailed investigations of these incidents revealed that the root causes related largely to inadequate risk
assessment and inadequate change management processes. The outcomes of these investigations, coupled with those
conducted for medium and high potential incidents and existing safety priorities, resulted in a renewed focus on
risk management training, a refinement of operational risk management procedures, and specific initiatives to
address transportation risks, improve learning from incidents and increase safety communications.
Greenhouse gas emissions and energy consumption were higher in the year, mainly owing to changes in the
Brazilian energy matrix. The consumption volume remained approximately level with 2012, but the CO2 conversion
factor, as advised by the Ministry of Mines and Energy, was increased in the year. Specific initiatives to
reduce natural gas consumption at Cubatão’s Dicalcium Phosphate unit resulted in a 31,135 GJ saving, while the
phosphoric acid plants in Cubatão and Catalão achieved a combined 14,300 GJ reduction in electricity
consumption.
Water consumption was marginally reduced owing to increased recycling, from 8.30 Mm3 in 2012 to 8.27Mm3 in 2013.
Markets
Niobium
In 2013, our Niobium business exported 4,675 tonnes of niobium, representing an increase of 11% over the
previous year. However, the average realised price was $39per kg of niobium, a reduction of 5% compared with the
$41 per kg achieved in 2012.
Demand for niobium decreased by 5% owing to the lacklustre pace of recovery in the European markets and tighter
economic policies in China. In response to strong competition from producers in Brazil and Canada, putting
downward pressure on prices, the Niobium business developed a more diversified geographical sales portfolio in
order to capitalise on spot supply opportunities in other countries such as South Korea, Turkey, India, the UAE
and Taiwan.
Phosphates
Global demand for phosphates decreased during 2013, mainly as a result of high inventories, adverse weather
conditions in the US which affected the timing of crop planting, exchange rate fluctuations, and by a reduction
in the phosphates subsidy offered to farmers in India. Although some major phosphate suppliers reduced their
output in response to the weaker demand environment, prices for the year as a whole were subdued, with an
average monoammonium phosphate (MAP) price of $494/tonne, a 16% reduction over 2012.
Demand for phosphate fertilisers in Brazil totalled approximately 11.8Mt in 2013, a 7% increase, mainly owing to
increased production of soybean and corn crops. Domestic production of phosphate fertiliser products was 1%
lower at 7.3 Mt, resulting in the levels of imported intermediate fertilisers reaching 5 Mt, an increase of
approximately 20%. Brazil is running a high inventory position following a strong import programme in the first
half of 2013, with stocks at year end of 1.9 Mt estimated to be approximately 27% higher than the prioryear.
Operating performance
Niobium
Underlying operating profit of $89 million was 10% higher than in 2012, with higher sales volumes, lower cash
costs and the positive impact of the weaker Brazilian real on operating costs, partly offset by lower realised
sales prices and increased study costs.
Production of 4,500 tonnes was 2% higher, as throughput and recovery improvements offset the decline in ore
quality.
Phosphates
Underlying operating profit decreased by 13% to $79 million, with lower selling prices and higher study costs
only partly offset by lower labour and sulphur costs and the positive impact of the weaker Brazilian real on
operating costs.
Fertiliser production increased by 6% to 1,199,000 tonnes, owing to improved performance following optimised
maintenance scheduling, increased plant availability and enhanced performance at the acidulation and granulation
plants.
Projects
Niobium
The Boa Vista Fresh Rock project continued to progress and is expected to start production later in 2014. The
project includes the construction of a new upstream plant that will enable continuity of the Catalão site
through processing the Fresh Rock ore body. Production capacity will increase to approximately 6,500tonnes of
niobium per year (2013: 4,500 tonnes), allowing use of the full plant capacity. Both Niobium and Phosphates have
a series of smaller optimisation projects to improve plant capacity and productivity and to release the full
potential of the reserve base, including upstream and downstream de-bottlenecking projects and tailings
initiatives. The upstream project is expected to contribute to production in 2014, while the downstream projects
will deliver additional volumes in 2016. The tailings initiatives will increase niobium production through the
recovery of waste from Goiás II.
Phosphates
Goiás II is a brownfield project that aims to double the production of phosphate fertiliser concentrate at the
same site through the doubling of plant capacity and is expected to increase the production of high analysis
fertilizers to 7,225ktpa by 2018. Goiás II represents an opportunity to capture market share that is currently
supplied by imports. A conceptual study for the project was developed towards the end of 2012, and is expected
to enter the feasibility stage in 2014.
Outlook
Niobium
The three main niobium producers have all announced brownfield expansion plans though none is expected to be
producing at full capacity in 2014. Demand for niobium is expected to increase by around 5% in line with the
expected increase in production of crude steel and niobium bearing alloys in the final product mix of steel.
The outlook for 2014 is expected to be more positive owing to continued gradual recovery in the major economies,
with growth still driven by China and India and a moderate recovery in the US and Japan.
Phosphates
The fertiliser market is expected to show some improvement in both demand and prices in 2014, driven by a return
to more normal levels of demand following adverse weather conditions in the US which affected the timing of crop
planting, and a reduction in the phosphates subsidy offered to farmers in India in 2013.
PLATINUM
$ million Year ended Year ended
(unless otherwise stated) 31 Dec 2013 31 Dec 2012(1)
Underlying operating profit/(loss) 464 (120)
Underlying EBITDA 1,048 580
Capital expenditure 608 822
Share of Group underlying operating
profit 7% (2)%
Attributable return on capital employed % 6% (2)%
(1)Certain balances related to 2012 have been restated to reflect the adoption of new accounting pronouncements.
See note 1 to the Condensed financial statements for details.
Financial and operational overview
Platinum recorded an underlying operating profit of $464million in 2013, compared with an underlying operating
loss of $120 million in 2012. This was primarily due to a weaker average South African rand against the dollar
and an increase in sales volumes, which were partly offset by lower realised basket prices, and cost increases.
Cash operating costs per equivalent refined platinum ounce increased by 4% to ZAR17,053 (2012:ZAR16,364),
primarily owing to increases in the costs of labour, electricity, diesel and key inputs of processing
operations, partly offset by higher production. Productivity, however, increased by 9% to 6.57m2 (2012: 6.05m2).
Safety and environment
Platinum recorded its best ever safety performance, however, six employees sadly lost their lives on company
operations during 2013. The company extends its sincere condolences to their families, friends and colleagues.
Four fatal injuries were due to falls of ground and one involved moving machinery. The final incident is still
under investigation to determine whether this was work-related or not. The company’s safety performance has
shown very encouraging progress since 2007, with fatal injury and lost-time injury frequency rates declining by
60% and 49%, respectively.
The proactive management of safety risks has resulted in a continued fall in safety stoppages from the high in
2011, though the number of Section 54s remained level with 2012, at 72. In addition, 46,261 ounces of production
were lost as a result of safety stoppages (2012: 17,000 ounces), though this was well below 138,000 ounces in
2011.
Potable water used for primary and non-primary activities decreased by 6% to 17.3 million m3 (2012:18.4 million
m3). The decrease in potable water consumption was influenced mainly by the consistent use of treated sewage
water at Rustenburg operations to offset the use of potable water. Platinum remains committed to striving
towards zero use of potable water for industrial purposes.
There was one material environmental incident in 2013, with the occurrence of a tailings spillage from the
Blinkwater tailings dam at Mogalakwena mine. The incident, now contained and at an advanced stage of clean-up,
affected the Mohlosane river for 2.5 kilometres. The incident was caused by void tunnelling in the tailings dam
starter wall, and solutions have been put in place to prevent a recurrence.
Markets
In 2013, gross global platinum demand increased by 507,000 ounces, or 6.3%, as increases in industrial and
investment demand more than offset declines from the autocatalyst and jewellery sectors. Primary platinum supply
grew by 60,000 ounces, or 1%, as increased supply from South Africa and Zimbabwe exceeded declines in Russia and
North America. Secondary supplies from recycled autocatalyst, jewellery and industrial scrap decreased by
29,000 ounces, or 1%, resulting in a 0.4% increase in gross global platinum supply of 31,000 ounces. The
resultant platinum deficit of 856,000 ounces was satisfied by cumulative above-ground stocks at market prices
during the course of the year.
Gross global palladium demand decreased by 437,000 ounces, or 4%, as reduced demand from the jewellery,
industrial and investment sectors far exceeded the increase in autocatalyst demand. Primary palladium supply
reduced by 160,000 ounces, or 3%, as the reduction in supply from Russia and the rest of world more than offset
the increases from South Africa, Zimbabwe and North America. Secondary supplies from recycled autocatalyst,
jewellery and industrial scrap increased by 179,000 ounces, or 8%, resulting in flat gross global palladium
supply. The resultant palladium deficit for the year of 621,000 ounces was also satisfied by cumulative above-
ground stocks at market prices during the year.
In 2013, gross global rhodium demand increased by 19,000 ounces, or 2%. Although autocatalyst demand remained
flat, this was more than compensated by increases in industrial and investment demand. Primary supply decreased
by 3% and secondary supply increased by 9%, keeping gross supply flat and with a resultant market deficit of
9,000 ounces.
Autocatalysts
Global light vehicle sales grew by 3.8% in 2013, to 84.2 million units, driven by growth in China and North
America, offset by declines in India, Russia and Europe. Gross demand for platinum in autocatalysis declined by
5%, owing largely to lower vehicle production in the diesel-dominant Indian and European markets. Palladium use
in autocatalysis increased by 3%, in line with global growth in gasoline vehicle production, with an increase in
palladium purchases for autocatalysis in China offsetting weakness in other markets. Gross rhodium use in
autocatalysis was flat in 2013, as the increase in Chinese demand was offset by weakness in other markets.
Jewellery
The Chinese platinum jewellery market accounted for 67% of gross global jewellery demand in 2013, and is
positioned to grow as disposable income increases and the effective market development by PGI continues.
Platinum jewellery sales in China continued to benefit from the narrow price premium to gold; gross demand,
however, decreased by 5%. The weak platinum price also reduced the volume of jewellery recycled, resulting in
flat net demand. The much smaller markets of Europe, North America and India all increased in 2013, and this,
combined with lower Japanese recycled volumes, saw net global platinum jewellery demand increase by
86,000 ounces, or 5%.
Industrial
In 2013, platinum use in industrial applications increased by 250,000 ounces, or 14%, owing to growth in
electrical and glass applications.
Palladium industrial use declined by 146,000 ounces as increased substitution by base metals in electronic
capacitors and by ceramics in dentistry exceeded palladium’s increased use in polyester manufacture.
In 2013, industrial use for rhodium increased by 9,000 ounces, or 6%, following inventory changes in glass
manufacture and capacity increases in oxo-alcohol and acetic acid manufacture.
Investment
Platinum investment demand increased by 457,000 ounces, or 102%, owing to the rand-denominated platinum ETF
launched in April 2013. Palladium investment demand declined by 451,000 ounces, or 98%, as a result of ETF
disinvestment. Rhodium investment demand increased by 8,000 ounces, or 20%.
Operating performance
Production
Equivalent refined platinum production totalled 2.32 million ounces, up 5% on 2012. Platinum’s own mines,
including Western Limb Tailings Retreatment, produced 1.5 million of equivalent refined platinum ounces, which
was 2% higher year on year but in line with the company’s strategy.
Production at Khomanani mine, Khuseleka 2 shaft and Union North decline was suspended in August 2013, in line
with the proposed restructuring plans. The resources from these mines have now been integrated into the
surrounding operations. As a result of these initiatives, 250,000 ounces of annualised unprofitable production
have been removed.
The industrial action at Platinum’s mining operations from 27 September 2013 to 10 October 2013 resulted in a
loss of platinum production of 44,000 ounces. The company quickly ramped up to full production following the
strike, with little further loss of production.
Production at the Western Limb operations (Rustenburg, Union and Amandelbult mines) was affected by the
industrial action during the second half of 2013. In addition, platinum production at Tumela and Dishaba mines
decreased by 2% year on year owing to shortages of production crews and supervisors. The redeployment of labour
programme following the placement of mines on care and maintenance was completed in the final quarter of the
year and benefits arising from resulting productivity improvements should be seen in 2014.
Production at the Rustenburg mines increased by 12,700 ounces, or 3 %, while output from Union mines declined by
9%. At Mogalakwena mine, output increased by 12% to a record 335,800 ounces(1) following higher throughput at
the concentrators and improved head grade. Equivalent refined platinum production at Unki increased by 2% to
63,200 ounces as the mine bettered its ramp-up schedule, reaching steady state production levels ahead of
expectations.
Refined platinum production at 2.4 million ounces, remained constant year on year, primarily due to increased
feed from mining operations and improved performance at the Anglo American Platinum Converting Process (ACP)
plant which has been operating at a steady state level since production issues caused by a high-pressure leak
were resolved at the end of the second quarter of 2013. Refined production of palladium was relatively flat year
on year, decreasing by 1%, while rhodium decreased by 5%. Palladium and rhodium variances are a result of a
different source mix from operations and different pipeline processing times for each metal. Nickel production
saw a 28% increase as technical challenges in the new nickel tank house are being resolved and as ramp up
continues.
Projects
In an environment of capital austerity, careful consideration is taken to determine how projects are prioritised
in line with the company’s strategy to increase scrutiny over capital allocation. Projects including the
development of Twickenham and expansion of production capacity at Mogalakwena mine are in line with the longer
term strategy of increasing shallow, mechanised and lower cost production and continue to be progressed.
Outlook
The global platinum market is expected to remain balanced in the short term, with increasing deficits over the
medium term as steady demand growth in autocatalyst, jewellery and industrial applications exceeds growth in
supply from secondary recycled sources and capital-constrained mining supply. The platinum price remains below
sustainable incentive levels despite significant reductions in cumulative above-ground stocks in 2012 and 2013.
The record high in platinum investment demand from ETFs, bars and coins in 2013 is unlikely to be repeated and
some disinvestment from the greater than 850,000 oz holding in the South Africa based ETF should not be ruled
out.
Continued deficits in the palladium market are likely in the short and medium term owing to increased production
of gasoline vehicles and supply growth being limited by platinum supply constraints. Above ground stocks of
palladium are estimated to be far higher than those of platinum; however, demand growth is expected to more than
offset the negative price sentiment associated with elevated stock levels.
Following the implementation of the portfolio review, Platinum is expected to keep baseline production flat at
2.3 to 2.4 million platinum ounces in 2014, with production lost from the mines closed in 2013 offset by
production from higher margin operations through the implementation of various operational improvement plans.
Platinum continues to aim to align output with expected demand, and to maintain flexibility to meet potential
improvements in demand.
Cost inflation will remain a challenge in 2014, as the inflationary pressures from above inflation wage
increases and electricity increases in particular, offset the cost reductions realised following the Platinum
restructuring. As of 11 December 2013, Platinum settled on a two-year wage agreement with NUM and UASA at an
average wage increase of 8.1% for the period. Negotiations with AMCU and NUMSA are continuing, with the related
current strike impacting production. Cash unit costs are estimated to increase to around R18,000-R19,000 per
equivalent refined platinum ounce for 2014.
(1)Includes 16Koz produced at the Messina Baobab plant as part of a toll concentrating agreement.
Platinum’s project portfolio has been aligned with the proposals of the business restructuring, and capital
expenditure guidance will be ZAR6 billion to ZAR7.3 billion for 2014, excluding pre-production costs,
capitalised waste stripping and interest.
DIAMONDS
$ million Year ended Year ended
(unless otherwise stated) 31 Dec 2013 31 Dec 2012(1)
Underlying operating profit 1,003 474
Underlying EBITDA 1,451 712
Capital expenditure 551 161
Share of Group underlying operating
profit 15% 8%
Attributable return on capital employed % 11% 10%
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 to the Condensed financial statements for details. Amounts based on the Group’s
45% shareholding to 16 August 2012 (except for capital expenditure as defined) and a 100% basis thereafter.
De Beers’ 2012 attributable ROCE contains 8 months with DeBeers as an associate at 45% subsidiary, and 4 months
as a fully consolidated entity with shareholding at 85%.
Financial and operational overview
De Beers’ operating profit totalled $1,003 million, an increase of 112% compared with 2012, driven by the
Group’s increased shareholding and a greater than 35% improvement in the underlying results of the business.
The improvement reflected higher sales revenues and tight cost control, which benefited from favourable exchange
rate movements.
Markets
Despite global macro-economic uncertainty, diamond jewellery sales increased in local currency terms in all
major diamond markets, except India. In India, challenging economic conditions and a devaluation of the rupee
resulted in a decline in demand. The US market posted positive growth, with a generally strong holiday season in
the fourth quarter. China continued to show positive growth rates, but at levels consistent with slower economic
development.
Although the De Beers rough price index increased slightly in the first half, a combination of weaker polished
prices, high levels of stock in the cutting centres and tightening liquidity resulted in some of this increase
being reversed in the second half. The price decrease, together with an increase in polished sales, saw the
rough market stabilise and start to improve toward the end of the year.
Safety, health and environment
De Beers operated without any loss of life in 2013 and improved its lost-time injury frequency rate (LTIFR)
considerably from 0.32 in 2012 to 0.19 in 2013. The company continues to improve its monitoring of leading
indicators to ensure an increasingly proactive response to emerging risks.
In 2013, 14 new cases of occupational disease were reported. The occupational disease incidence rate remains
well below the target of 1 per 200,000 man-hours worked, with the biggest issue being noise-induced hearing
loss. The company continues to focus on occupational hygiene management, as well as on efforts to ensure fitness
to work, occupational exposure control, incident reporting and reducing absenteeism arising from illness.
Operating performance
Mining and manufacturing
De Beers’ full year production increased by 12% to 31.2million carats (2012:27.9 million carats) with
improvements across all regions, particularly in Botswana and Canada.
In Botswana, higher production was driven by Jwaneng’s recovery from the slope failure in June 2012, which
followed completion of the remediation programme in the third quarter. Production at Orapa was slightly higher
than 2012, despite unplanned maintenance on plant No. 1, which returned to full operation in October.
In South Africa, full production was restored at Venetia after the mine was impacted by very heavy flooding in
the Limpopo province at the start of the year. Shortfalls in ore mined were mitigated by the processing of ore
stockpiles. Production improved steadily in the third quarter, with full recovery by the fourth quarter.
In Canada, performance at Snap Lake improved significantly, with carats recovered up approximately 50% as a
result of a focus on throughput and mining efficiency. At Victor, carat recovery exceeded expectations and was
broadly in line with the prior year.
In Namibia, Debmarine Namibia performed strongly, largely due to the contribution of the MV Mafuta following its
production upgrade in early 2013. Namdeb also performed well, with carat recovery higher than in 2012.
While Element Six experienced a challenging start to the year, performance improved in the second half, driven
by the introduction of new products and a continued focus on cost control. In July, Element Six opened
Global Innovation Centre in the UK. The centre is the world’s largest and most sophisticated synthetic diamond
research and development facility, and will be a key enabler for growth in 2014 and beyond.
Sales
Sales increased slightly to $6.4 billion in 2013 (2012: $6.1billion on a comparable basis). De Beers’ rough
diamond price index has increased 2% since the start of the year, while average realised rough diamond prices
were 5% higher, driven by the product mix.
De Beers successfully completed the migration of its sales activities from London to Botswana ahead of schedule,
hosting international Sights in Gaborone in November and December.
Brands
Forevermark saw strong growth in 2013, with door numbers up by 39% on 2012. This growth was driven primarily by
the core markets of the US, China, Japan and India. The brand is now available at more than 1,200 retail
partners in 12 markets. Since the launch of Forevermark, more than 870,000 diamonds have received the
Forevermark inscription and unique identification number. The inscription is a promise that each diamond has met
the brand’s high standards of quality, ethical integrity and provenance.
De Beers Diamond Jewellers opened new directly operated stores in Shanghai and Hong Kong’s Times Square. Through
franchise partnerships it also opened stores in Kuala Lumpur, Baku, Vancouver and Kiev.
Projects
In Botswana, infrastructure construction at Debswana’s Jwaneng Cut-8 project is complete. Cut-8 will provide
access to an estimated 96 million tonnes of ore to be treated, containing approximately 113 million carats of
mainly high quality diamonds, and extend the life of one of the world’s richest diamond mines to at least
2028.(1)
In South Africa, the first blast took place in September 2013 for the construction of an underground mine
beneath the open pit at Venetia. With capital investment of $2 billion, this represents De Beers’ largest ever
investment in South Africa. Underground mine production is expected to start in 2021 and will extend the life of
the mine to beyond 2040. The life of mine plan will treat approximately 129 million tonnes of ore, containing an
estimated 94 million carats.(2)
In Canada, the Mackenzie Valley Land and Water Board approved a pioneer Land Use Permit for Gahcho Kué, which
allows land-based site works to commence in preparation for deliveries planned for the 2014 winter road season.
Outlook
De Beers expects a slight strengthening in growth in diamond jewellery demand in 2014, driven by continued
gradual improvements in the global economic outlook. The US and China are expected to continue to be the main
engines of growth for polished diamonds, while most other markets are expected to show positive growth in local
currency, with final dollar denominated results being partly dependent on currency fluctuations. Rough diamond
manufacturers, in India in particular, face continued pressures regarding levels of bank financing. In India,
further volatility of the rupee may potentially affect rough diamond sales. In the medium to long term, industry
fundamentals are expected to strengthen as diamond production plateaus and demand continues to increase.
(1) Scheduled Inferred Resources (below 401 metres) included in the Cut-8 estimates constitute 77% (86.7 Mct) of
the estimated carats. Not all inferred resources may be upgraded to reserves, even after additional drilling.
The numbers given are scheduled tonnes and carats as per the 2013 life-of-mine plan.
(2)The current mining rights expire in 2038; Venetia mine will apply to extend the mining rights at the
appropriate time in the future. Scheduled Inferred Resources constitute 28% (26.3 Mct) of the estimated carats.
Not all inferred resources may be upgraded to reserves, even after additional drilling. The numbers given are
scheduled tonnes and carats as per the 2013 life-of-mine plan.
OTHER MINING &INDUSTRIAL
$ million Year ended Year ended
(unless otherwise stated) 31 Dec 2013 31 Dec 2012(1)
Underlying operating (loss)/profit (13) 168
Underlying EBITDA 81 289
Capital expenditure 53 171
Share of Group underlying operating
profit (0.2)% 3%
(1)Certain balances related to 2012 have been restated to reflect the adoption of new accounting pronouncements.
See note 1 to the Condensed financial statements for details.
Amapá
Amapá recorded a nil underlying operating profit for the 10 months to the completion of the divestment of the
operation on 1 November 2013. All profits and losses generated by Amapá from the signing of the sales agreement
at the end of 2012 to completion were for the account of the purchaser and therefore the underlying operating
loss of $7 million incurred in the period has been excluded from the Group results. The loss of $7 million
(2012: $54 million profit) was mainly due to the suspension of export shipments following the event on 28 March
2013 (see below). The reversal of penalty provisions, as a result of contract renegotiations, which had a
beneficial impact on 2012 underlying operating profit, was not repeated in 2013.
On 28 March 2013, a major geological event occurred which resulted in the tragic loss of four lives, with a
further two people still missing, as well as the loss of the Santana port operation of Amapá and the suspension
of all export shipments. A detailed and independent technical investigation was conducted and a report was
shared with the authorities and the investigation commissions in September 2013. The independent investigation
report indicates that the incident was not caused by operational factors, but was a result of an unpredictable
combination of factors, including geotechnical factors.
On 4 January 2013, Anglo American announced that it had reached an agreement to sell its 70% interest in Amapá
to Zamin Ferrous Ltd (Zamin). Following the 28 March event, Anglo American entered into further discussions with
its partner Cliffs Natural Resources (Cliffs) and Zamin. Anglo American subsequently entered into an agreement
with Cliffs to acquire its 30% interest in Amapá, subject to certain conditions, and entered into an amended
sale agreement with Zamin to reflect Anglo American’s disposal of a 100% interest in Amapá to Zamin.
On 1 November 2013, Anglo American completed the acquisition from Cliffs and simultaneously completed the sale
of the 100% interest in Amapá to Zamin for an initial total consideration of approximately $134million, net of
certain completion adjustments. In addition, Zamin will pay Anglo American conditional deferred consideration of
up to a maximum of $130 million in total, payable over a five year period and calculated on the basis of the
market price for iron ore. As part of the transaction, Anglo American has assumed responsibility for, and the
risks and rewards of, certain insurance claims including those relating to the Santana port incident, through
the purchase of the claims from Amapá at the full claim value
Tarmac
Tarmac reported an underlying operating loss of $6 million, compared with a profit of $73 million in 2012.
Tarmac’s underlying EBITDA was $88 million, 41% lower than in 2012. The results of 2012 included 100% of the
contribution from Tarmac Quarry Materials, which formed part of the Lafarge Tarmac joint venture with effect
from 7 January 2013.
Building products
A significant improvement in trading performance was driven by higher sales volumes and continued focus on
managing the cost base in order to enhance margins and reduce operating costs. Unlike in 2012, there was minimal
disruption from poor weather, which enabled building activity to continue throughout the year. During 2013, the
market improved in certain sectors, particularly housing, and forecasts indicate that this improvement will
continue in 2014.
Middle East
The Middle East business experienced a lull in activity levels and profitability in 2013, following the
completion of three major projects in 2012 and early 2013. The road building market remains extremely
competitive due to new entrants over the past two to three years, while some customers are becoming competitors
through developing their own in-house asphalt and surfacing capability. The outlook for 2014, however, is now
more positive, as several major schemes have been approved across the region and the forward order book is
strengthening. The business has continued to focus on managing down key costs by improved raw material
procurement, productivity and energy consumption initiatives and rationalisation of the workforce.
Lafarge Tarmac joint venture
On 7 January 2013, following final clearance from the UK Competition Commission, AngloAmerican and Lafarge
announced the completion of the transaction to create an incorporated joint venture known as Lafarge Tarmac.
The Group’s share in the underlying operating profit for the newly formed joint venture was $9 million, but
cannot be validly compared to 2012 due to the separations and combinations of the merger. Despite weaker markets
and no surplus carbon credit sales, revenue from the continuing operations contributing to the joint venture
increased as a result of higher year-on-year volumes across all key product lines. Although cement prices
declined during the year, largely as a result of the entry of a new competitor, excellent progress has been made
with the integration process, with synergy delivery of $38million (100%), which was 23% above original
expectations. Although selected market indicators are pointing towards an improvement in 2014, Lafarge Tarmac
remains cautious about the underlying strength of recovery within the construction sector.
On 14 January 2014, the UK Competition Commission (CC) published its final report relating to the investigation
into the aggregates, cement and ready mix concrete (RMX) markets. In this report the CC concluded that there
were aspects of the cement markets that had adverse effects on competition. Accordingly it has determined that,
amongst other remedies, Lafarge Tarmac is required to divest of a cement plant (either the Cauldon or Tunstead
cement plants, plus relevant depots), and (if required by a prospective purchaser) a number of RMX plants. The
CC has determined that the prospective purchaser cannot be one of the existing cement producers in Great
Britain. Lafarge Tarmac disputes the conclusions of the CC and is reviewing its options taking into account the
best interests of its employees, contractors, customers and shareholders.
Condensed Financial Statements for the year ended 31 December 2013
Consolidated income statement
for the year ended 31 December 2013
2013 2012
restated (1)
US$ million Note Before Special Before Special
special items and special items and
items and remeasure items and remeasure
remeasure ments remeasure ments
ments (note 5) Total ments (note 5) Total
Group revenue 2 29,342 – 29,342 28,680 – 28,680
Operating
costs (23,174) (3,761) (26,935) (23,187) (7,093) (30,280)
Operating
profit/(loss)
from
subsidiaries
and joint
operations 2 6,168 (3,761) 2,407 5,493 (7,093) (1,600)
Non-operating
special items
and
remeasurements 5 – (469) (469) – 1,396 1,396
Share of net
income from
associates and
joint ventures 2 243 (75) 168 482 (61) 421
Profit from
operations,
associates and
joint ventures 6,411 (4,305) 2,106 5,975 (5,758) 217
Investment
income 271 – 271 418 – 418
Interest
expense (584) – (584) (630) – (630)
Other
financing
(losses)/gains 37 (130) (93) (87) (89) (176)
Net finance
costs 6 (276) (130) (406) (299) (89) (388)
Profit/(loss)
before tax 6,135 (4,435) 1,700 5,676 (5,847) (171)
Income tax
expense 7a (1,861) 587 (1,274) (1,506) 1,113 (393)
Profit/(loss)
for the
financial year 4,274 (3,848) 426 4,170 (4,734) (564)
Attributable
to:
Non-controlling
interests 1,601 (214) 1,387 1,310 (404) 906
Equity
shareholders of
the Company 2,673 (3,634) (961) 2,860 (4,330) (1,470)
Earnings/(loss)
per share (US$)
Basic 8 2.09 (2.84) (0.75) 2.28 (3.45) (1.17)
Diluted 8 2.08 (2.83) (0.75) 2.26 (3.43) (1.17)
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting pronouncements.
See note 1 for details.
Consolidated statement of comprehensive income
for the year ended 31 December 2013
US$ million Note 2013 2012
restated(1)
Profit/(loss) for the financial
year 426 (564)
Items that may subsequently be
reclassified to the income
statement
Net (loss)/gain on revaluation
of available for sale investments (69) 173
Net loss on cash flow hedges (16) –
Net exchange difference on
translation of foreign operations
(including associates and joint
ventures) (4,872) (750)
Share of associates’ and joint
ventures’ expense recognised
directly in equity, net of tax – (17)
Tax on items recognised directly
in equity that may be
reclassified 7c 173 (96)
Items that will not be
reclassified to the income
statement
Remeasurement of net retirement
benefit obligation 97 190
Share of associates’ and joint
ventures’ income recognised
directly in equity, net of tax – 14
Tax on items recognised directly
in equity that will not be
reclassified 7c (37) (25)
Net expense recognised directly
in equity (4,724) (511)
Transferred to the income
statement
Disposal of available for sale
investments (89) (57)
Impairment of available for sale
investments 14 84
Net exchange difference on
disposal of foreign operations 73 24
Cash flow hedges – 4
Transferred to the initial
carrying amount of hedged items:
cash flow hedges 4 5
Share of associates’ and joint
ventures’ net expense transferred
from equity – (10)
Tax on items transferred from
equity 7c 12 29
Total transferred from equity 14 79
Total comprehensive expense for
the financial year (4,284) (996)
Attributable to:
Non-controlling interests 769 867
Equity shareholders of the
Company (5,053) (1,863)
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
Consolidated balance sheet
US$ million Note 31 December 31 December 1 January
2013 2012 2012
restated(1) restated(1)
ASSETS
Non-current assets
Intangible assets 4,083 4,569 2,320
Property, plant and
equipment 41,505 44,731 40,082
Environmental
rehabilitation trusts 348 392 360
Investments in associates
and joint ventures 4,612 3,162 5,352
Financial asset
investments 1,446 2,389 3,003
Trade and other
receivables 797 560 434
Deferred tax assets 1,364 1,204 515
Derivative financial
assets 604 747 668
Other non-current assets 247 235 138
Total non-current assets 55,006 57,989 52,872
Current assets
Inventories 4,789 5,002 3,514
Financial asset
investments 19 102 –
Trade and other
receivables 3,351 3,243 3,639
Current tax assets 226 470 207
Derivative financial
assets 70 101 172
Cash and cash equivalents 10a 7,704 9,080 11,712
Total current assets 16,159 17,998 19,244
Assets classified as held
for sale – 3,150 –
Total assets 71,165 79,137 72,116
LIABILITIES
Current liabilities
Trade and other payables (4,369) (4,494) (5,047)
Short term borrowings 10a, 11 (2,108) (2,485) (902)
Provisions for liabilities
and charges (768) (560) (369)
Current tax liabilities (734) (819) (1,528)
Derivative financial
liabilities (372) (280) (162)
Total current liabilities (8,351) (8,638) (8,008)
Non-current liabilities
Trade and other payables (22) (18) –
Medium and long term
borrowings 10a, 11 (15,740) (15,150) (11,855)
Retirement benefit
obligations (1,204) (1,409) (639)
Deferred tax liabilities (4,657) (6,051) (5,693)
Derivative financial
liabilities (1,139) (801) (950)
Provisions for liabilities
and charges (2,688) (2,384) (1,829)
Other non-current
liabilities – (29) (71)
Total non-current
liabilities (25,450) (25,842) (21,037)
Liabilities directly
associated with assets
classified as held for sale – (919) –
Total liabilities (33,801) (35,399) (29,045)
Net assets 37,364 43,738 43,071
EQUITY
Called-up share capital 772 772 738
Share premium account 4,358 4,357 2,714
Own shares (6,463) (6,659) (6,985)
Other reserves (5,372) (1,202) 283
Retained earnings 38,376 40,343 42,240
Equity attributable to
equity shareholders of the
Company 31,671 37,611 38,990
Non-controlling interests 5,693 6,127 4,081
Total equity 37,364 43,738 43,071
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
The financial statements of Anglo American plc, registered number 03564138, were
approved by the Board of directors on 13 February 2014 and signed on its behalf by:
Mark Cutifani
Chief Executive
René Médori
Finance Director
Consolidated cash flow statement
for the year ended 31 December 2013
US$ million Note 2013 2012
restated(1)
Cash flows from operating
activities
Total profit/(loss) before tax 1,700 (171)
Net finance costs 406 388
Share of net income from
associates and joint ventures (168) (421)
Non-operating special items and
remeasurements 5 469 (1,396)
Total operating profit/(loss)
from subsidiaries and joint
operations 2,407 (1,600)
Depreciation and amortisation 2 2,638 2,374
Share-based payment charges 201 233
Operating remeasurements 5 550 116
Non-cash element of operating
special items 3,065 6,913
Decrease in provisions (56) (127)
Increase in inventories (562) (329)
Increase in operating
receivables (541) (32)
Decrease in operating payables (18) (165)
Other adjustments 45 (13)
Cash flows from operations 7,729 7,370
Dividends from associates and
joint ventures 246 294
Dividends from financial asset
investments 18 54
Income tax paid (1,201) (1,799)
Net cash inflows from operating
activities 6,792 5,919
Cash flows from investing
activities
Expenditure on property, plant
and equipment 9 (6,125) (5,959)
Cash flows from derivatives
related to capital expenditure 9 (136) (71)
Proceeds from disposal of
property, plant and equipment 140 66
Investments in associates and
joint ventures (221) (114)
Purchase of financial asset
investments – (16)
Net repayment of loans granted 301 81
Interest received and other
investment income 193 278
Acquisition of subsidiaries, net
of cash and cash equivalents
acquired – (4,816)
Disposal of subsidiaries, net of
cash and cash equivalents
disposed 13 13 100
Repayment of capitalised loans
by associates 108 36
Net proceeds from disposal of
interests in available for sale
investments 99 273
Other investing activities 3 (32)
Net cash used in investing
activities (5,625) (10,174)
Cash flows from financing
activities
Interest paid (907) (775)
Cash flows from derivatives
related to financing activities 10b 181 149
Dividends paid to Company
shareholders (1,078) (970)
Dividends paid to
non-controlling interests (1,159) (1,267)
Net repayment of short term
borrowings 10b (2,307) (747)
Net receipt of medium and long
term borrowings 10b 3,279 5,633
Movements in non-controlling
interests 71 1,220
Tax on sale of non-controlling
interest in Anglo American Sur (395) (1,015)
Sale of shares under employee
share schemes 14 24
Purchase of shares by
subsidiaries for employee share
schemes(2) (92) (253)
Other financing activities (9) (48)
Net cash (used in)/inflows from
financing activities (2,402) 1,951
Net decrease in cash and cash
equivalents (1,235) (2,304)
Cash and cash equivalents at
start of year 10b 9,298 11,712
Cash movements in the year (1,235) (2,304)
Effects of changes in foreign
exchange rates (361) (110)
Cash and cash equivalents at end
of year 10b 7,702 9,298
(1) Certain balances related to 2012 have been restated to reflect the adoption of new
accounting pronouncements. See note 1 for details.
(2) Includes purchase of Kumba Iron Ore Limited and Anglo American Platinum Limited shares
for their respective employee share schemes.
Consolidated statement of changes in equity
for the year ended 31 December 2013
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
At 1 January 2012 3,452 (6,985) 42,342 453 (1,930) 1,760 39,092 4,097 43,189
Adoption of
new
standards(4) – – (102) – – – (102) (16) (118)
At 1 January
2012
(restated) 3,452 (6,985) 42,240 453 (1,930) 1,760 38,990 4,081 43,071
Total
comprehensive
(expense)/income – – (1,304) – (687) 128 (1,863) 867 (996)
Dividends
payable to
Company
shareholders – – (970) – – – (970) – (970)
Dividends
payable to
non-controlling
interests – – – – – – – (1,259) (1,259)
Conversion
of
convertible
bond 1,677 – 185 – – (355) 1,507 – 1,507
Changes in
ownership
interest in
subsidiaries – – (219) – – – (219) 970 751
Acquired
through
business
combinations – – – – – – – 1,423 1,423
Issue of
shares to
non-controlling
interests – – – – – – – 17 17
Equity
settled
share-based
payment
schemes – 326 (256) 96 – – 166 28 194
Other – – 667 – – (667) – – –
At 31
December 2012
(restated) 5,129 (6,659) 40,343 549 (2,617) 866 37,611 6,127 43,738
Total
comprehensive
(expense)/income – – (901) – (4,023) (129) (5,053) 769 (4,284)
Dividends
payable to
Company
shareholders – – (1,078) – – – (1,078) – (1,078)
Dividends
payable to
non-controlling
interests – – – – – – – (1,273) (1,273)
Changes in
ownership
interest in
subsidiaries – – 38 – – – 38 (14) 24
Issue of
shares to
non-controlling
interests – – – – – – – 47 47
Equity
settled
share-based
payment
schemes – 196 (43) (1) – – 152 37 189
Other 1 – 17 – – (17) 1 – 1
At 31
December 2013 5,130 (6,463) 38,376 548 (6,640) 720 31,671 5,693 37,364
(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.
(3) Includes the convertible debt reserve, available for sale reserve, cash flow hedge reserve, legal reserve, capital redemption reserve
and revaluation reserve. In 2012, following a capital reduction in the Corporate segment, $667 million was transferred from the legal
reserve to retained earnings, reducing the legal reserve from $675 million to $8 million.
(4) Certain balances and changes in equity related to 2012 have been restated to reflect the adoption of new accounting pronouncements.
See note 1 for details.
(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.
(3) Includes the convertible debt reserve, available for sale reserve, cash flow hedge reserve, legal reserve,
capital redemption reserve and revaluation reserve. In 2012, following a capital reduction in the Corporate
segment, $667 million was transferred from the legal reserve to retained earnings, reducing the legal reserve
from $675 million to $8 million.
(4) Certain balances and changes in equity related to 2012 have been restated to reflect the adoption of new
accounting pronouncements. See note 1 for details.
Dividends
2013 2012
Proposed ordinary dividend per share (US cents) 53 53
Proposed ordinary dividend (US$ million) 678 676
Ordinary dividends payable during the year per share (US cents) 85 78
Ordinary dividends payable during the year (US$ million) 1,078 970
Notes to the Condensed financial statements
1. Basis of preparation
The financial information for the year ended 31 December 2013 does not constitute statutory accounts as defined
in section 435 (1) and (2) of the Companies Act 2006. Statutory accounts for the year ended 31 December 2012
have been delivered to the Registrar of Companies and those for 2013 will be delivered following the Company’s
Annual General Meeting convened for 24 April 2014. The auditors have reported on these accounts; their reports
were unqualified, did not include a reference to any matters to which the auditors drew attention by way of
emphasis of matter and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
Whilst the preliminary announcement (the Condensed financial statements) has been prepared in accordance with
International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRIC) interpretations
adopted for use by the European Union, with those parts of the Companies Act 2006 applicable to companies
reporting under IFRS and with the requirements of the United Kingdom Listing Authority (UKLA) Listing Rules,
these Condensed financial statements do not contain sufficient information to comply with IFRS. The Group will
publish full financial statements that comply with IFRS in March 2014.
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 2012, except for changes arising from the adoption of new accounting
pronouncements detailed below.
The following accounting amendments, standards and interpretations became effective in the current reporting
period:
- Amendments to IAS 1 Presentation of Financial Statements: Presentation of Items of Other Comprehensive
Income
- IAS 19 Employee Benefits revised 2011
- IFRS 13 Fair Value Measurement
- IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine
In addition, the Group has early adopted the following standards, which are endorsed by the EU but not effective
until 1 January 2014:
- IFRS 10 Consolidated Financial Statements
- IAS 27 Separate Financial Statements
- IFRS 11 Joint Arrangements
- IAS 28 Investments in Associates and Joint Ventures
- IFRS 12 Disclosure of Interests in Other Entities
The Group has not early adopted any other amendment, standard or interpretation that has been issued but is not
yet effective. It is expected that where applicable, these standards and amendments will be adopted on each
respective effective date.
A number of other amendments to accounting standards issued by the International Accounting Standards Board also
apply for the first time in 2013. These do not have a significant impact on the accounting policies, methods of
computation or presentation applied by the Group.
The nature and the impact of each of the new amendments, standards or interpretations are described below:
Amendments to IAS 1 Presentation of Financial Statements: Presentation of Items of Other Comprehensive Income
The amendments to IAS 1 introduced the grouping of items presented in other comprehensive income. Items that may
be reclassified (or recycled) to the income statement at a future point in time are now presented separately
from items that will not be reclassified. The amendment affected presentation only and had no impact on the
Group’s financial position or performance.
IAS 19 Employee Benefits revised 2011 (IAS 19R)
IAS 19R includes a number of amendments to the accounting for defined benefit plans. The principal impact for
the Group arises from the requirement to replace the interest cost on the defined benefit obligation and the
expected return on plan assets, with a net interest cost/income based on the net defined benefit
liability/asset, calculated using the discount rate used to measure the defined benefit obligation. This has
increased the income statement charge as the discount rate now applied to the assets is lower than the expected
return on plan assets. There is no effect on total comprehensive income as the increased charge in the income
statement is offset by a credit in other comprehensive income.
The Group has applied the standard retrospectively in accordance with the transitional provisions, and the 2012
results have been restated accordingly. IAS 19R introduces more extensive disclosure requirements particularly
relating to the characteristics, risks and amounts in the financial statements related to defined benefit plans.
Further detail of the impact on the Group financial statements for the year ended 31 December 2012 is set out in
note 17.
IFRS 13 Fair Value Measurement
IFRS 13 establishes a single framework for measuring fair value when such measurements are required or permitted
by other standards. The application of IFRS 13 has not materially affected the fair value measurements carried
out by the Group. IFRS 13 also requires specific disclosures on fair values, some of which replace existing
disclosure requirements in other standards, including IFRS 7 Financial Instruments: Disclosures. The additional
disclosure requirements are reflected within the relevant notes to the Group financial statements for the year
ended 31 December 2013.
IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine
IFRIC 20 specifies the accounting for costs associated with waste removal (stripping) during the production
phase of a surface mine. When the benefit from the stripping activity is realised in the current period, the
stripping costs are accounted for as the cost of inventory. When the benefit is the improved access to ore in
future periods, the costs are recognised as a non-current asset, if certain criteria are met. After initial
recognition, the stripping activity asset is depreciated on a systematic basis (unit of production method) over
the expected useful life of the identified component of the orebody that becomes more accessible as a result of
the stripping activity.
There are two key changes to the Group’s previous accounting policy as a result of the adoption of IFRIC 20.
Firstly, the initial recognition of the stripping asset and subsequent depreciation is determined by reference
to components of the orebody rather than by reference to the entire operation. Secondly, the subsequent
remeasurement of the asset is recognised as depreciation on a unit of production basis, rather than as a charge
to operating costs based on the expected strip ratio.
The Group has applied IFRIC 20 retrospectively in accordance with the transitional provisions, and the 2012
results have been restated accordingly. Upon adoption of IFRIC 20, the stripping assets on the balance sheet at
1 January 2012 were assessed and it was determined that elements of the assets did not relate to identifiable
components of the orebodies. These elements of the assets have been derecognised and recorded against opening
retained earnings at 1 January 2012.
The adoption of IFRIC 20 has resulted in increased capitalisation of waste stripping costs and a reduction in
cost of sales in 2012. Further detail of the impact on the Group financial statements for the year ended
31 December 2012 is set out in note 17.
IFRS 10 Consolidated Financial Statements and IAS 27 Separate Financial Statements
IFRS 10 replaces the parts of the previously existing IAS 27 that dealt with consolidated financial statements.
The new standard changes the definition of control such that an investor controls an investee when it is
exposed, or has rights, to variable returns from its involvement with the investee and has the ability to
control those returns through its power over the investee. The adoption of IFRS 10 has had no impact on the
consolidation of investments held by the Group.
IFRS 11 Joint Arrangements and IAS 28 Investments in Associates and Joint Ventures
IFRS 11 replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointly-controlled Entities – Non-monetary
Contributions by Venturers. The new standard changes the classifications for joint arrangements and removes the
option to account for joint ventures using proportionate consolidation. Under IFRS 11, investments in joint
arrangements are classified as either joint ventures or joint operations based on the rights and obligations of
the parties to the arrangement. In a joint venture the parties sharing joint control of the arrangement have
rights to the net assets and must account for their interests in the arrangements using the equity method. In a
joint operation, the parties have rights to the assets and obligations for the liabilities and must account for
the assets and liabilities, revenues and expenses for which they have rights or obligations including their
share of such items held or incurred jointly.
The application of this standard has resulted in the newly formed joint venture, Lafarge Tarmac Holdings
Limited, and the existing joint venture in Brazil, LLX Minas-Rio Logística Comercial Exportadora SA, being
accounted for under the equity method. No other material joint arrangements within the Group were affected.
The Group has applied IFRS 11 retrospectively in accordance with the transitional provisions, and the 2012
results have been restated accordingly. There is no impact on the net assets or underlying earnings of the
Group. Further detail of the impact on the Group financial statements for the year ended 31 December 2012 is set
out in note 17.
IFRS 12 Disclosure of Interests in Other Entities
IFRS 12 sets out the requirements for disclosures relating to an entity’s interests in subsidiaries (including
related non-controlling interests), joint arrangements, associates and structured entities. These disclosures
are reflected within the relevant notes to the Group financial statements for the year ended 31 December 2013.
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 6 to 9. The Group's net debt (including related hedges) at
31 December 2013 was $10.7 billion (31 December 2012: $8.5 billion) representing a gearing level of 22.2%
(31 December 2012: 16.3%). Further analysis of net debt is set out in note 10 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 2014.
The Board is satisfied that the Group's forecasts and projections, taking into account 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 certain non-GAAP data to directly comparable IFRS financial measures are presented
in notes 2, 4 and 8 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 where counts take place once every three
years (the latest being in 2010, the planned stock count in 2013 having been deferred until 2014 due to
disruption caused by industrial action). 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 year ended 31 December 2013, the change in estimate following the annual physical count has had the
effect of increasing the value of inventory by $38 million (2012: $172 million), resulting in the recognition of
a post-tax gain in the period of $28 million (2012: $124 million) in the income statement.
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. In the instance of Copper, Nickel and
Niobium and Phosphates, the same management team is responsible for the management of all three business units.
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).
The Other Mining and Industrial segment includes the Lafarge Tarmac joint venture and other Tarmac businesses,
and also included Amapá until it was disposed of in November 2013. Until November 2012, this segment also
included Scaw South Africa. Following a Group reorganisation in the second half of 2013, and to align to the way
the businesses are now managed, the Niobium and Phosphates business is reported as a separate segment, having
previously been reported in the Other Mining and Industrial segment. Comparatives have been reclassified to
align with current year presentation.
On 16 August 2012, the Group acquired a controlling interest in De Beers Société Anonyme (De Beers) (Diamonds
segment). Until this date De Beers was accounted for as an associate of the Group. From 16 August 2012, De Beers
ceased to be an associate and has been accounted for as a subsidiary. For details of this acquisition see note
12.
The Group Management Committee evaluates the financial performance of the Group and its segments principally
with reference to underlying operating profit. Underlying operating profit is operating profit before special
items and remeasurements and includes the Group’s attributable share of associates’ and joint ventures’
operating profit before special items and remeasurements. Underlying EBITDA is underlying operating profit
before depreciation and amortisation in subsidiaries and joint operations and includes attributable share of
underlying operating profit before depreciation and amortisation of associates and joint ventures.
Segment revenue includes the Group’s attributable share of associates’ and joint ventures’ revenue. 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; Niobium and
Phosphates: niobium and phosphates; Platinum: platinum group metals; Diamonds: rough and polished diamonds; and
Other Mining and Industrial: heavy building materials, until November 2013, iron ore and until November 2012,
steel products.
The Exploration segment includes the cost of the Group’s exploration activities across all segments.
The segment results are stated after elimination of inter-segment transactions and include an allocation of
corporate costs.
Segment results
Revenue Underlying
operating
profit/(loss)
2013 2012 2013 2012
US$ million restated(1) restated(1)
Iron Ore and Manganese 6,517 6,403 3,119 3,011
Metallurgical Coal 3,396 3,889 46 405
Thermal Coal 3,004 3,447 541 793
Copper 5,392 5,122 1,739 1,736
Nickel 136 336 (44) 26
Niobium and Phosphates 726 770 150 169
Platinum 5,688 5,489 464 (120)
Diamonds 6,404 4,028 1,003 474
Other Mining and
Industrial 1,795 3,296 (13) 168
Exploration – – (207) (206)
Corporate Activities
and Unallocated Costs 5 5 (178) (203)
Segment measure 33,063 32,785 6,620 6,253
Reconciliation:
Less: associates and
joint ventures (3,721) (4,105) (452) (760)
Include: operating
special items and
remeasurements – – (3,761) (7,093)
Statutory measure 29,342 28,680 2,407 (1,600)
Depreciation Underlying
and amortisation EBITDA
2013 2012 2013 2012
US$ million restated(1) restated(1)
Iron Ore and Manganese 271 251 3,390 3,262
Metallurgical Coal 566 472 612 877
Thermal Coal 194 179 735 972
Copper 663 552 2,402 2,288
Nickel 7 24 (37) 50
Niobium and Phosphates 26 27 176 196
Platinum 584 700 1,048 580
Diamonds 448 238 1,451 712
Other Mining and
Industrial 94 121 81 289
Exploration 2 – (205) (206)
Corporate Activities and
Unallocated Costs 45 43 (133) (160)
2,900(2) 2,607(2) 9,520 8,860
Less: associates and joint
ventures (262) (233) (714) (993)
2,638 2,374 8,806 7,867
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
(2) In addition $131 million (2012: $41 million) of depreciation and amortisation charges arising
due to the fair value uplift of the Group’s pre-existing 45% shareholding in DeBeers and nil
(2012: $70 million) of accelerated depreciation arising from the cessation of Loma de Níquel have
been recorded within operating special items and remeasurements (see note 5), and $100 million
(2012: $81 million) of pre-commercial production depreciation has been capitalised.
Associates’ and joint ventures’ results by segment
Associates’
Associates’ and joint
and joint ventures’
ventures’ underlying
revenue operating Share of net
profit/(loss)(1) income/loss
2013 2012 2013 2012 2013 2012
US$ million restated(2) restated(2)
Iron Ore and
Manganese 874 831 205 103 91 20
Metallurgical Coal 319 315 44 111 27 80
Thermal Coal 817 970 231 355 135 248
Platinum 228 231 (19) (63) (30) (94)
Diamonds 89 1,675 (21) 249 (35) 163
Other Mining and
Industrial 1,394 83 12 5 (20) 4
3,721 4,105 452 760 168 421
Associates’ and joint Associates’ and joint
depreciation and amortisation ventures’ underlying EBITDA
2013 2012 2013 2012
US$ million restated(2) restated(2)
Iron Ore and Manganese 48 50 253 153
Metallurgical Coal 15 14 59 125
Thermal Coal 71 54 302 409
Platinum 35 42 16 (21)
Diamonds 5 68 (16) 317
Other Mining and
Industrial 88 5 100 10
262 233 714 993
(1) Associates’ and joint ventures’ underlying operating profit/(loss) is the Group’s attributable
share of associates’ and joint ventures’ revenue less operating costs before special items and remeasurements.
(2) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
The reconciliation of associates’ and joint ventures’ underlying operating profit to ‘Share of net income from
associates and joint ventures’ is as follows:
US$ million 2013 2012
restated(1)
Associates’ and joint ventures’
underlying operating profit 452 760
Net finance costs (36) (75)
Income tax expense (158) (197)
Non-controlling interests (15) (6)
Share of net income from associates and
joint ventures (before special items and
remeasurements) 243 482
Special items and remeasurements (80) (57)
Special items and remeasurements tax 3 (3)
Non-controlling interests on special
items and remeasurements 2 (1)
Share of net income from associates and
joint ventures 168 421
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
Underlying EBITDA is reconciled to underlying operating profit and to ‘Profit from
operations, associates and joint ventures’ as follows:
US$ million 2013 2012
restated(1)
Underlying EBITDA 9,520 8,860
Depreciation and amortisation:
subsidiaries and joint operations (2,638) (2,374)
Depreciation and amortisation:
associates and joint ventures (262) (233)
Underlying operating profit 6,620 6,253
Operating special items and
remeasurements (3,761) (7,093)
Non-operating special items and
remeasurements (469) 1,396
Associates’ and joint ventures’ net
special items and remeasurements (75) (61)
Share of associates’ and joint ventures’
net finance costs, tax and
non-controlling interests (209) (278)
Profit from operations, associates and
joint ventures 2,106 217
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
Other non-cash expenses
In addition to depreciation and amortisation, other non-cash expenses include equity settled
share-based payment charges and amounts in respect of provisions, excluding amounts recorded
within specialitems. Significant other non-cash expenses included within underlying operating
profit are as follows:
US$ million 2013 2012
Iron Ore and Manganese 73 31
Metallurgical Coal 149 140
Thermal Coal 65 30
Copper 142 98
Nickel 16 25
Niobium and Phosphates 6 (3)
Platinum 56 81
Diamonds 42 52
Other Mining and Industrial 5 (56)
Exploration 1 3
Corporate Activities and
Unallocated Costs 70 70
625 471
Segment assets and liabilities
Segment Segment Net segment
assets(1) liabilities(2) assets/(liabilities)
2013 2012 2013 2012 2013 2012
US$ million restated(3) restated(3) restated(3)
Iron Ore and
Manganese 11,502 9,603 (468) (465) 11,034 9,138
Metallurgical Coal 5,335 6,078 (705) (859) 4,630 5,219
Thermal Coal 2,148 2,726 (726) (761) 1,422 1,965
Copper 9,549 9,557 (1,169) (1,126) 8,380 8,431
Nickel 1,695 2,613 (98) (104) 1,597 2,509
Niobium and
Phosphates 955 806 (101) (115) 854 691
Platinum 9,579 11,490 (957) (1,071) 8,622 10,419
Diamonds 12,688 14,392 (1,337) (1,468) 11,351 12,924
Other Mining and
Industrial 86 105 (61) (40) 25 65
Exploration 8 8 (5) (4) 3 4
Corporate
Activities and
Unallocated Costs 492 424 (612) (709) (120) (285)
54,037 57,802 (6,239) (6,722) 47,798 51,080
Other assets and
liabilities
Investments in
associates and
joint ventures 4,612 3,162 – – 4,612 3,162
Financial asset
investments 1,465 2,491 – – 1,465 2,491
Deferred tax
assets/(liabilities) 1,364 1,204 (4,657) (6,051) (3,293) (4,847)
Derivative
financial
assets/(liabilities) 674 848 (1,511) (1,081) (837) (233)
Cash and cash
equivalents 7,704 9,080 – – 7,704 9,080
Other
non-operating
assets/(liabilities) 1,309 1,400 (1,733) (1,651) (424) (251)
Borrowings – – (17,848) (17,635) (17,848) (17,635)
Other provisions
for liabilities and
charges – – (1,813) (1,340) (1,813) (1,340)
Assets/(liabilities)
classified as held
for sale – 3,150(4) – (919)(4) – 2,231(4)
71,165 79,137 (33,801) (35,399) 37,364 43,738
(1) Segment assets are operating assets and consist of intangible assets of $4,083 million
(2012: $4,569 million), property, plant and equipment of $41,505 million (2012:$44,731million),
biological assets of $16 million (2012: $19 million), environmental rehabilitation trusts of
$348 million (2012: $392million), retirement benefit assets of $191 million (2012: $176million),
inventories of $4,789 million (2012: $5,002 million) and operating receivables of $3,105 million
(2012: $2,913 million).
(2) Segment liabilities are operating liabilities and consist of non-interest bearing current
liabilities of $3,392 million (2012:$3,709 million), environmental restoration and decommissioning
provisions of $1,643 million (2012: $1,604 million) and retirement benefit obligations of
$1,204 million (2012: $1,409 million).
(3) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
(4) Balances for 2012 relate to Amapá and Tarmac Quarry Materials.
Product analysis
Revenue by product
US$ million 2013 2012
Iron ore 5,365 5,508
Manganese ore and alloys 874 831
Metallurgical coal 2,610 3,048
Thermal coal 3,802 4,287
Copper 5,253 5,038
Nickel 461 678
Niobium 182 173
Phosphates 544 597
Platinum 3,586 3,441
Palladium 1,052 906
Rhodium 316 389
Diamonds 6,391 4,027
Heavy building materials 1,695 2,171
Steel products – 798
Other 932 893
33,063 32,785
Geographical analysis
Revenue by destination
The Group’s geographical analysis of segment revenue allocated based on the country in
which the customer islocated is asfollows:
US$ million 2013 2012
South Africa 2,474 3,115
Other Africa 1,201 715
Brazil 1,019 1,093
Chile 1,692 1,241
Other South America 32 46
North America 1,084 1,274
Australia 277 340
China 6,469 5,927
India 2,505 2,544
Japan 3,769 4,049
Other Asia 3,252 3,595
United Kingdom (Anglo American
plc’s country of domicile) 3,697 3,781
Other Europe 5,592 5,065
33,063 32,785
Revenue and underlying operating profit by origin
The origin of the revenue and underlying operating profit is the location of the operation
generating the revenue and operating profit.
Revenue Underlying
operating
profit/(loss)
2013 2012 2013 2012
US$ million restated(1)
South Africa 14,132 14,592 4,189 3,374
Other Africa 4,544 3,256 532 437
Brazil 965 1,274 75 200
Chile 5,392 5,122 1,849 1,913
Other South America 817 1,131 185 304
North America 882 559 (129) (138)
Australia and Asia 4,255 4,616 238 465
Europe 2,076 2,235 (319) (302)
33,063 32,785 6,620 6,253
(1) Certain balances related to 2012 have been restated to reflect the adoption of new
accounting pronouncements. See note 1 for details.
Segment assets and liabilities by location
Segment Segment Net
assets liabilities segment assets
2013 2012 2013 2012 2013 2012
US$ million restated(1) restated(1) restated(1)
South Africa 17,092 20,194 (2,654) (2,922) 14,438 17,272
Other Africa 7,783 8,313 (221) (202) 7,562 8,111
Brazil 9,964 8,833 (216) (228) 9,748 8,605
Chile 8,847 8,589 (1,131) (1,094) 7,716 7,495
Other South
America 653 717 (55) (55) 598 662
North America 1,954 2,500 (262) (298) 1,692 2,202
Australia and Asia 5,534 5,850 (724) (819) 4,810 5,031
Europe 2,210 2,806 (976) (1,104) 1,234 1,702
54,037 57,802 (6,239) (6,722) 47,798 51,080
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
Non-current segment assets by location
Non-current segment assets are non-current operating assets and consist of intangible assets and
property, plant and equipment.
2013 2012
US$ million restated(1)
South Africa 13,542 16,492
Other Africa 6,945 8,029
Brazil 9,650 8,424
Chile 7,472 7,364
Other South America 556 623
North America 1,764 2,205
Australia and Asia 4,260 4,687
United Kingdom (Anglo American plc’s
country of domicile) 1,257 1,325
Other Europe 142 151
45,588 49,300
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
3. Exploration and evaluation expenditure
Exploration Evaluation
expenditure(1) expenditure(2)
US$ million 2013 2012 2013 2012
By commodity
Iron ore 24 23 69 89
Metallurgical coal 19 18 39 68
Thermal coal 14 14 21 33
Copper 31 39 112 263
Nickel 22 32 8 32
Niobium and phosphates 6 2 16 1
Platinum group metals 2 4 15 24
Diamonds 53 23 46 15
Central exploration
activities 36 51 – –
207 206 326 525
(1) Exploration for mineral resources other than that occurring at existing operations and
projects.
(2) Evaluation of mineral resources relating to projects in the conceptual or pre-feasibility
stage or further evaluation of mineral resources at existing operations.
4.Operating profit and underlying earnings by segment
The following table analyses operating profit (including attributable share of
associates’ and joint ventures’ operating profit) by segment and reconciles it
to underlying earnings by segment.
Following a Group reorganisation in the second half of 2013, and to align to the way the
businesses are now managed, the Niobium and Phosphates business is reported as
a separate segment, having previously been reported in the Other Mining and
Industrial segment. Comparatives have been reclassified to align with current
year presentation.
Operating
profit/(loss) before special items and remeasurements includes attributable
share of associates’ and joint ventures’ operating profit before special items
and remeasurements which is reconciled to ‘Share of net income from associates
and joint ventures’ in note 2.
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 year 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 ‘Loss for the financial year attributable to equity
shareholders of the Company’ to ‘Underlying earnings for the financial year’,
see note 8.
2013
Operating Operating Operating
profit/(loss) special profit/(loss) Net finance
before items and after osts, income tax
special remeasure- special expense and
items and ments items and non-controlling Underlying
US$ million remeasurements (note 5) remeasurements interests earnings
Iron Ore and
Manganese 3,119 435 2,684 (1,994) 1,125
Metallurgical Coal 46 771 (725) 14 60
Thermal Coal 541 244 297 (144) 397
Copper 1,739 337 1,402 (936) 803
Nickel (44) 1,028 (1,072) (10) (54)
Niobium and
Phosphates 150 6 144 (58) 92
Platinum 464 522 (58) (177) 287
Diamonds 1,003 330 673 (471) 532
Other Mining and
Industrial (13) 162 (175) 11 (2)
Exploration (207) – (207) 17 (190)
Corporate
Activities and
Unallocated Costs (178) 6 (184) (199) (377)
6,620 3,841 2,779 (3,947) 2,673
2012
restated(1)
Operating Operating Operating
profit/(loss) special profit/(loss) Net finance
before items and after osts, income tax
special remeasure- special expense and
items and ments items and non-controlling Underlying
US$ million remeasurements (note 5) remeasurements interests earnings
Iron Ore and
Manganese 3,011 5,139 (2,128) (1,965) 1,046
Metallurgical Coal 405 365 40 (130) 275
Thermal Coal 793 (1) 794 (270) 523
Copper 1,736 (9) 1,745 (795) 941
Nickel 26 184 (158) (16) 10
Niobium and
Phosphates 169 4 165 (62) 107
Platinum (120) 921 (1,041) (105) (225)
Diamonds 474 456 18 (185) 289
Other Mining and
Industrial 168 24 144 (47) 121
Exploration (206) – (206) 11 (195)
Corporate
Activities and
Unallocated Costs (203) 68 (271) 171 (32)
6,253 7,151 (898) (3,393) 2,860
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
5.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 year’s results and require separate disclosure
in
accordance with IAS 1 paragraph 97. Special items that relate to the operating performance of the Group are
classified as operating special items and principally comprise impairment charges. Non-operating special items
include profits and losses on disposals of investments and businesses 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 year end (in respect of future
transactions) and the reversal of the historical marked to market value of such instruments settled in the year.
Where the underlying transaction is recorded in the income statement, the realised gains or losses are recorded
in underlying earnings in
the same year 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, for example 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.
- The remeasurement and subsequent depreciation of a previously held equity interest as a result of a business
combination.
2013 2012
restated(1)
Subsidiaries Associates Subsidiaries Associates
and and and and
joint joint joint joint
US$ million operations ventures(2) Total operations ventures(2) Total
Impairment of
Minas-Rio – – – (4,960) – (4,960)
Impairment of
Barro Alto (1,012) – (1,012) – – –
Platinum
operations (379) – (379) (860) – (860)
Impairment of
Foxleigh (331) – (331) – – –
Impairment of
Michiquillay (337) – (337) – – –
Impairment of
Thermal Coal
operations (243) – (243) – – –
Cessation of
Loma de Níquel – – – (159) – (159)
Other
impairments and
related charges (172) – (172) (168) (62) (230)
Onerous contract
provisions (434) – (434) (386) – (386)
Reversal of De
Beers inventory
uplift (126) – (126) (421) – (421)
Restructuring
costs (177) (80) (257) (23) – (23)
Operating
special items (3,211) (80) (3,291) (6,977) (62) (7,039)
Operating
remeasurements (550) – (550) (116) 4 (112)
Operating
special items and
remeasurements (3,761) (80) (3,841) (7,093) (58) (7,151)
Disposal of
Amapá (175) – (175) (404) – (404)
Exit from Pebble (311) – (311) – – –
Loss on
formation of
Lafarge Tarmac
joint venture (55) – (55) (135) – (135)
Atlatsa
refinancing
(note 15) (37) – (37) – – –
Kumba Envision
Trust (54) – (54) (77) – (77)
Other 163 – 163 22 – 22
Non-operating
special items (469) – (469) (594) – (594)
Non-operating
remeasurement –
net gain on
acquisition of
DeBeers – – – 1,990 – 1,990
Non-operating
special items and
remeasurements (469) – (469) 1,396 – 1,396
Financing
remeasurements (130) – (130) (89) 1 (88)
Total special
items and
remeasurements
before tax and
non-controlling
interests (4,360) (80) (4,440) (5,786) (57) (5,843)
Special items
and
remeasurements
tax 587 3 590 1,113 (3) 1,110
Non-controlling
interests on
special items and
remeasurements 214 2 216 404 (1) 403
Net total
special items and
remeasurements
attributable to
equity
shareholders of
the Company (3,559) (75) (3,634) (4,269) (61) (4,330)
(1) The non-operating remeasurement related to the net gain on acquisition of De Beers has been restated to
reflect the adoption of new accounting pronouncements. See note 1 for details.
(2) Relates to the Diamonds, Other Mining and Industrial and Thermal Coal segments (2012:Iron Ore and Manganese,
Platinum and, until 16 August, Diamonds).
Operating special items Barro Alto
The Barro Alto nickel project produced first metal in 2011 but its ramp-up has been significantly affected by
issues in the kilns and furnaces. In order to eliminate uncertainties, most notably as a result of furnace
design flaws, and enable attainment of the nominal capacity of the operation, a redesign and rebuild of the
furnaces is planned to take place. The cost of the existing furnaces of $211 million has been written-off and
the impact of lost production during the rebuild process (together with the associated capital expenditure) as
well as a decline in nickel prices and updated operational planning has resulted in a further impairment of
$801 million to the asset’s carrying value. Consequently a total impairment charge of $1,012 million has been
recorded. The post-tax impairment charge is $724million.
Platinum portfolio review
Platinum announced in August 2013 that it had completed the section 189 consultations on its proposals to create
a sustainable, competitive and profitable platinum business for the long term benefit of all its stakeholders.
Following the conclusion of these consultations, the proposals became effective. As a result, Khuseleka 2 shaft
and Khomanani 1 and 2 shafts have been placed on long term care and maintenance as part of the consolidation of
the Rustenburg operations into three operating mines, and the Union Mine North declines have been closed. As the
Group no longer expects to receive future economic benefits from these operations they have been fully
impaired, resulting in a charge of $379 million. The charge after tax and non-controlling interests is
$232 million. In 2012 an impairment charge of $860 million was recognised in relation to certain Platinum
projects and other assets not in use, that were not considered economically viable.
Foxleigh
An impairment charge of $331 million has been recorded in relation to Foxleigh (Metallurgical Coal), principally
driven by a decline in metallurgical coal prices. The post-tax impairment charge is $232 million.
Michiquillay
The Group acquired the Michiquillay copper project in northern Peru in 2007. To date, $337 million in costs have
been capitalised, primarily representing the costs of acquisition. In 2013, following a review of the concept
level study, the Group decided not to progress the study to the pre-feasibility stage in its existing form, and
engaged with the Peruvian government to agree a temporary suspension of acquisition payments to allow for a full
review of the conceptual study. In view of the uncertainty in relation to the implementation of the project and
its outcome, costs capitalised to date are no longer considered recoverable and have been fully impaired,
resulting in a charge of $337million. No tax arises on the impairment.
Thermal Coal
This relates to an impairment of $143million in relation to the Isibonelo operation, reflecting management’s
revised expectation of the operation’s future profitability under a long term coal supply contract, and an
impairment of $100million at the Kleinkopje operation, driven primarily by a decline in export thermal coal
prices. The total post-tax impairment charge is $177 million.
Onerous contract provisions
The charge of $434 million in relation to onerous contracts principally reflects a provision increase of
$393 million for coal supply agreements inherited on acquisition of Callide in 2000. The pricing in the
agreements, which extend to 2031, is significantly below market rates resulting in the unavoidable costs of
meeting the obligations exceeding the economic benefit expected to be received from the contract. The increased
provision reflects higher forecast operating expenditure. The post-tax charge in relation to onerous contract
provisions is $341 million.
Reversal of De Beers inventory uplift Inventory held by De Beers at the date of acquisition (16August 2012) was
required to be recognised at fair value under IFRS. This resulted in negligible margins being realised upon the
subsequent sale of inventory held at the acquisition date. The reversal of fair value uplifts on the remaining
inventory sold in 2013 of $126 million (2012:$421million) has been excluded from the Group's underlying earnings
so as not to distort the operating margins of DeBeers and to provide more useful information about the
performance of the Group.
Restructuring costs
Restructuring costs principally comprise charges of $146 million relating to the implementation of the Platinum
portfolio review and $64 million related to integration costs incurred by the Lafarge Tarmac joint venture
following itsformation. Restructuring costs after tax and non-controlling interests is $167million.
2012
In 2012, significant operating special items included the impairment of the Minas-Rio iron ore project (Iron Ore
Brazil), impairments of certain Platinum projects and other Platinum assets not in use, a charge arising at Loma
de Níquel due to the cancellation of its mining concessions in November 2012, charges relating to onerous
contract provisions, principally in relation to Callide, and the reversal of fair value uplifts on inventory
sold by De Beers.
Operating remeasurements
Operating remeasurements reflect a net loss of $550 million (2012: $112 million) principally in respect of
derivatives related to capital expenditure in Iron Ore Brazil. Derivatives which have been realised during the
period had a cumulative net operating remeasurement loss since their inception of $137 million (2012: loss of
$71 million).
In addition, operating remeasurements includes a $131 million depreciation and amortisation charge (2012:
$41million) arising due to the fair value uplift on the pre-existing 45% shareholding of De Beers, which was
required on acquisition of a controlling stake.
Non-operating special items
A loss of $175 million ($124 million after non-controlling interests) has been recognised in the year relating
to the sale of Amapá in November 2013 (Other Mining and Industrial). In December 2012, Amapá was reclassified to
held for sale and recognised at fair value less costs to sell, resulting in a loss of $404 million being
recognised. For further details see note 13.
In December 2013, the Group withdrew from the Pebble copper project in Alaska. The Group’s 50% interest in the
project was written off in full, resulting in a charge of $311 million, including exit costs. No tax arises on
the exit fromPebble.
A loss of $55 million has been recognised on the formation of the Lafarge Tarmac joint venture in January 2013
(Other Mining and Industrial) (2012: $135 million). The loss in the current year primarily relates to the
transfer to the income statement of $62 million cumulative exchange losses previously recognised in equity,
partially offset by a net gain of $7 million arising on the formation of the joint venture and the associated
sale of certain of Tarmac Quarry Materials’ operations. For further details see note 12.
The Kumba Envision Trust charge of $54 million (2012: $77 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.
Other non-operating special items principally comprise a gain of $44 million on deferred proceeds following
payment received in the year in respect of undeveloped coal assets in Australia (Metallurgical Coal) which the
Group disposed of in 2010, and a gain on disposal of the Group’s 16.79% effective interest in Palabora Mining
Company Limited, a company listed on the Johannesburg Stock Exchange (JSE), in July 2013. Other non-operating
special items, after tax and non-controlling interests, are a gain of $154 million.
Financing remeasurements
Financing remeasurements reflect a net loss of $130 million (2012: net loss of $88 million) and relate to an
embedded interest rate derivative, derivatives relating to debt and other financing remeasurements.
Special items and remeasurements tax
Special items and remeasurements tax amounted to a credit of $590 million (2012: credit of $1,110million). This
includes a one-off tax charge of $188 million offset by a tax credit on special items and remeasurements of
$923million (2012: credit of $377million) and a tax remeasurement charge of $145 million (2012: charge of
$189million).The tax charge of $188 million relates principally to a settlement reached in the current year
between the South African Revenue Service and Rustenburg Platinum Mines Limited in respect of certain previously
unresolved historical tax matters. The total amount payable in terms of the settlement agreement is $324 million
and has been fully provided for.
The total tax credit relating to subsidiaries and joint operations of $587 million (2012: credit of
$1,113 million) comprises a current tax charge of $159million (2012: charge of $8million) offset by a deferred
tax credit of $746million (2012: credit of $1,121million).
6.Net finance costs
Net finance costs are presented net of hedges for respective interest bearing and foreign currency borrowings.
The weighted average capitalisation rate applied to qualifying capital expenditure was 4.79% (2012: 4.10%).
US$ million 2013 2012
restated(1)
Investment income
Interest income from cash and
cash equivalents 113 153
Other interest income 134 208
Net interest income on defined
benefit arrangements 13 9
Dividend income from financial
asset investments 18 54
278 424
Less: interest income
capitalised (7) (6)
Total investment income 271 418
Interest expense
Interest and other finance
expense (731) (675)
Interest payable on convertible
bond – (25)
Unwinding of discount on
convertible bond – (25)
Net interest cost on defined
benefit arrangements (74) (63)
Unwinding of discount relating
to provisions and other
liabilities (106) (114)
(911) (902)
Less: interest expense
capitalised 327 272
Total interest expense (584) (630)
Other financing gains/(losses)
Net foreign exchange losses (21) (90)
Net fair value gains/(losses) on
fair value hedges 81 (24)
Other net fair value
(losses)/gains (23) 27
Total other financing
gains/(losses) 37 (87)
Net finance costs before
remeasurements (276) (299)
Remeasurements (note 5) (130) (89)
Net finance costs after
remeasurements (406) (388)
(1) Certain balances related to 2012 have been restated to reflect the adoption of new
accounting pronouncements. See note 1 for details.
7.Income tax expense
a)Analysis of charge for the year
US$ million 2013 2012
restated(1)
United Kingdom corporation tax credit (1) (12)
South Africa tax 863 802
Other overseas tax 692 605
Prior year adjustments 32 61
Current tax(2) 1,586 1,456
Deferred tax 275 50
Income tax expense before special items
and remeasurements 1,861 1,506
Special items and remeasurements tax
(note 5) (587) (1,113)
Income tax expense 1,274 393
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
(2) 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 year
The effective tax rate for the year of 74.9% (2012: (229.8)%) is higher (2012: lower) than the applicable
weighted average statutory rate of corporation tax in the United Kingdom of 23.25% (2012:24.5%). The
reconciling items, excluding the impact of associates and joint ventures, are:
US$ million 2013 2012
restated(1)
Profit/(loss) before tax 1,700 (171)
Less: share of net income from
associates and joint ventures (168) (421)
Profit/(loss) before tax (excluding
associates and joint ventures) 1,532 (592)
Tax on profit/(loss) (excluding
associates and joint ventures) calculated
at United Kingdom corporation tax rate of
23.25% (2012: 24.5%) 356 (145)
Tax effects of:
Items non-taxable/deductible for tax
purposes
Exploration expenditure 22 43
Non-taxable/deductible net foreign
exchange (gains)/losses (16) 7
Non-taxable net interest income (9) (26)
Other non-deductible expenses 110 53
Other non-taxable income (105) (61)
Temporary difference adjustments
Current year losses not recognised 25 86
Recognition of losses not previously
recognised (6) (69)
Utilisation of losses not previously
recognised (8) –
Write-off of losses previously
recognised 29 –
Adjustment in deferred tax due to change
in tax rate 14 37
Other temporary differences (28) (77)
Special items and remeasurements 427 305
Other adjustments
Secondary tax on companies and dividend
withholding taxes 242 23
Effect of differences between local and
United Kingdom tax rates 173 70
Prior year adjustments to current tax 31 61
Other adjustments 17 86
Income tax expense 1,274 393
(1) Certain balances related to 2012 have been restated to reflect the adoption of new
accounting pronouncements. See note 1 for details.
IAS1 requires income from associates and joint ventures to be presented net of tax on the face of the
income statement. Associates’ and joint ventures’ tax is therefore not included within the Group’s income tax
expense. Associates’ and joint ventures’ tax included within ‘Share of net income from associates and joint
ventures’ for the year ended 31 December 2013 is $155 million (2012: $200 million). Excluding special items and
remeasurements this becomes $158 million (2012: $197 million).
The effective tax rate before special items and remeasurements including attributable share of associates’ and
joint ventures’ tax for the year ended 31 December 2013 was 32.0%. This is higher than the equivalent effective
rate of 29.0% for the year ended 31 December 2012 due to the impact of various prior year adjustments and the
remeasurement of certain withholding tax provisions across the Group. In future periods it is expected that the
effective tax rate will remain above the United Kingdom statutory tax rate.
c) Tax amounts included in total comprehensive income
An analysis of tax by individual item presented in the Consolidated statement of comprehensive income is
presented below:
US$ million 2013 2012
restated(1)
Tax credit/(charge) on items recognised
directly in equity that may subsequently
be reclassified to the income statement
Net loss/(gain) on revaluation of
available for sale investments 13 (79)
Net loss/(gain) on cash flow hedges 4 (1)
Net exchange difference on translation
of foreign operations 156 (16)
Tax charge on items recognised directly
in equity that will not be reclassified
to the income statement
Remeasurement of net retirement benefit
obligation (37) (25)
136 (121)
Tax credit/(charge) on items transferred
from equity
Transferred to income statement:
disposal of available for sale
investments 12 30
Transferred to initial carrying amount
of hedged items: cash flow hedges – (1)
12 29
(1) Certain balances related to 2012 have been restated to reflect the adoption of new
accounting pronouncements. See note 1 for details.
d) Tax amounts recognised directly in equity
A deferred tax credit of $106 million and a current tax charge of $106 million have been recognised directly in
equity in relation to the disposal of a 24.5% interest in Anglo American Sur SA in 2011 (2012: no material
current tax amounts, deferred tax charge of $110million). No capital gains tax has been charged directly to
equity (2012: charge of $290 million relating to the profit on sale of a 25.4% share in Anglo American Sur SA).
8.Earnings per share
US$ 2013 2012
restated(1)
Loss for the financial year attributable
to equity shareholders of the Company
Basic loss per share(2) (0.75) (1.17)
Diluted loss per share(2) (0.75) (1.17)
Headline earnings for the financial
year(3)
Basic earnings per share 1.02 0.97
Diluted earnings per share 1.02 0.97
Underlying earnings for the financial
year(3)
Basic earnings per share 2.09 2.28
Diluted earnings per share 2.08 2.26
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
(2) Basic loss per share equals diluted loss per share as all potential ordinary shares are anti-dilutive.
(3) Basic and diluted earnings per share are shown based on headline earnings, a Johannesburg Stock Exchange
(JSE) 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:
Loss
attributable
to
equity
shareholders
of the Headline Underlying
Company earnings earnings
2013 2012 2013 2012 2013 2012
restated(1) restated(1) restated(1)
Earnings
(US$ million)
Basic
(loss)/earnings (961) (1,470) 1,312 1,218 2,673 2,860
Effect of
dilutive
potential
ordinary shares
Interest
payable on
convertible
bond (net
oftax)(2) – – – – – 19
Unwinding of
discount on
convertible
bond (net of
tax)(2) – – – – – 19
Diluted
earnings
(US$ million) (961) (1,470) 1,312 1,218 2,673 2,898
Number of
shares
(million)
Basic number
of ordinary
shares
outstanding 1,281 1,254 1,281 1,254 1,281 1,254
Effect of
dilutive
potential
ordinary shares
Share options
and awards – – 4 5 4 5
Convertible
bond(2) – – – – – 23
Diluted number
of ordinary
shares
outstanding
(million) 1,281 1,254 1,285 1,259 1,285 1,282
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
(2) All outstanding convertible bonds were converted or redeemed in 2012.
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. Potential ordinary shares shall be
treated as dilutive when, and only when, their conversion to ordinary shares would decrease earnings per share
or increase loss per share from continuing operations.
Basic loss per share is equal to diluted loss per share as all 16,688,080 (2012: 16,325,905) potential ordinary
shares are anti-dilutive and 134,679 (2012: 10,339,454) have been excluded from the calculation of diluted
headline earnings per share and diluted underlying earnings per share as they are anti-dilutive.
Basic and diluted number of ordinary shares outstanding represent the weighted average for the year. The average
number of ordinary shares in issue excludes shares held by employee benefit trusts and Anglo American plc shares
held by Group companies.
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 defined performance
measure.
The calculation of basic and diluted earnings per share, based on headline and underlying earnings, uses the
following earnings data:
US$ million 2013 2012
restated(1)
Loss for the financial year attributable
to equity shareholders of the Company (961) (1,470)
Operating special items 2,491 6,050
Operating special items – tax (569) (1,600)
Operating special items –
non-controlling interests (53) (123)
Non-operating special items and
remeasurements 456 (1,494)
Non-operating special items – tax 10 35
Non-operating special items –
non-controlling interests (62) (180)
Headline earnings for the financial year 1,312 1,218
Operating special items(2) 800 989
Operating remeasurements 550 112
Non-operating special items(3) 13 98
Financing remeasurements 130 88
Tax special item 188 –
Special items and remeasurements tax (219) 455
Non-controlling interests on special
items and remeasurements (101) (100)
Underlying earnings for the financial
year 2,673 2,860
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
(2) Includes onerous contract provisions, restructuring costs and the reversal of the inventory
uplift on De Beers.
(3) Principally relates to the Kumba Envision Trust and elements of the Atlatsa refinancing
(2012:Kumba Envision Trust and transaction costs related to the De Beers
acquisition).
9. Capital expenditure
Expenditure on property, plant and equipment
Capital expenditure is segmented on a cash basis and includes cash flows on related
derivatives.
US$ million 2013 2012
restated(1)
Iron Ore and Manganese 2,517 2,139
Metallurgical Coal 1,050 1,028
Thermal Coal 217 266
Copper 1,011 1,214
Nickel (28)(2) 100
Niobium and Phosphates 237 94
Platinum 608 822
Diamonds 551 161
Other Mining and Industrial 53 171
Exploration 1 6
Corporate Activities and Unallocated
Costs 44 29
6,261 6,030
Less: cash outflows from derivatives
relating to capital expenditure (136) (71)
Expenditure on property, plant and
equipment 6,125 5,959
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
(2) Cash capital expenditure for Nickel of $76 million is offset by the capitalisation of $104 million of net
operating cash inflows generated by Barro Alto which has not yet reached commercial production.
Capital expenditure by category including associated derivatives
US$ million 2013 2012
restated(1)
Expansionary(2) 3,258 2,956
Stay-in-business 2,242 2,290
Stripping and development 761 784
Expenditure on property, plant and
equipment 6,261 6,030
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
(2) Cash flows from derivatives relating to capital expenditure relate entirely to expansionary capital
expenditure.
10.Net debt
Net debt is a measure of the Group’s financial position. The Group uses net debt to monitor the sources and uses
of financial resources, the availability of capital to invest or return to shareholders, and the resilience of
the balance sheet. Net debt is calculated as total borrowings less cash and cash equivalents (including
derivatives which provide an economic hedge of debt and the net debt of disposal groups).
a) Reconciliation to the balance sheet
Medium
Cash and Short and long
cash term term
equivalents borrowings borrowings
US$ million 2013 2012 2013 2012 2013 2012
restated(1) restated(1) restated(1)
Balance sheet 7,704 9,080 (2,108) (2,485) (15,740) (15,150)
Balance sheet –
disposal groups(2) – 227 – (14) – –
Bank overdrafts (2) (9) 2 9 – –
Net debt
classifications 7,702 9,298 (2,106) (2,490) (15,740) (15,150)
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
(2) Disposal group balances are shown within ‘Assets classified as held for sale’ and ‘Liabilities directly
associated with assets classified as held for sale’ on the balance sheet.
b) Movement in net debt
Medium
Cash and Short and long Net debt Derivatives Net debt
cash term term excluding hedging including
equivalents borrowings borrowings derivatives net debt derivatives
At 1 January 2012 11,732 (1,018) (11,855) (1,141) (233) (1,374)
Adoption of new
standards(1) (20) 116 – 96 – 96
At 1 January 2012
(restated) 11,712 (902) (11,855) (1,045) (233) (1,278)
Cash flow (2,304) 747 (5,633) (7,190) (149) (7,339)
Unwinding of
discount on
convertible bond – – (25) (25) – (25)
Conversion of
convertible bond – – 1,507 1,507 – 1,507
Acquired through
business
combinations – (3) (1,578) (1,581) (15) (1,596)
Disposal of
businesses – 53 228 281 – 281
Reclassifications – (2,396) 2,396 – – –
Movement in fair
value – 2 (198) (196) 229 33
Other non-cash
movements – – (21) (21) – (21)
Currency movements (110) 9 29 (72) – (72)
At 31 December
2012 (restated) 9,298 (2,490) (15,150) (8,342) (168) (8,510)
Cash flow (1,235) 2,307 (3,279) (2,207) (181) (2,388)
Disposal of
businesses – 69 – 69 – 69
Reclassifications – (2,084) 2,084 – – –
Movement in fair
value – 24 521 545 (155) 390
Other non-cash
movements – (5) (39) (44) – (44)
Currency movements (361) 73 123 (165) (4) (169)
At 31 December
2013 7,702 (2,106) (15,740) (10,144) (508) (10,652)
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
c) Net debt by segment
The Group’s policy is to hold the majority of its cash and borrowings at the corporate centre. Business units
may from time to time raise borrowings in connection with specific capital projects, and subsidiaries with non-
controlling interests have borrowings which are without recourse to the Group. Other than the impact of South
African exchange controls (see note 10d below), there are no significant restrictions over the Group’s
ability to access these cash balances or repay these borrowings. Net debt by segment is stated after elimination
of inter-segment balances and it includes related hedges. Net debt in disposal groups is part of total net debt
but not allocated to segments.
US$ million 2013 2012
restated(1)
Iron Ore and Manganese (1,413) (996)
Metallurgical Coal 218 510
Thermal Coal (49) (32)
Copper 531 775
Nickel (398) (477)
Niobium and Phosphates 68 18
Platinum (50) (98)
Diamonds (311) (839)
Other Mining and Industrial 33 16
Exploration 4 8
Corporate Activities and
Unallocated Costs (9,285) (7,608)
(10,652) (8,723)
Net cash in disposal groups – 213
(10,652) (8,510)
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
d) South Africa net debt
The Group operates in South Africa where the existence of exchange controls may restrict the use of certain cash
balances. The Group therefore monitors the cash and debt associated with these operations separately. These
restrictions are not expected to have a material effect on the Group’s ability to meet its ongoing obligations.
Below is a breakdown of net debt in South Africa.
US$ million 2013 2012
Cash and cash equivalents 2,247 1,893
Short term borrowings (512) (373)
Medium and long term borrowings (1,000) (1,754)
Net cash/(debt) excluding
derivatives 735 (234)
Derivatives hedging net debt 4 31
Net cash/(debt) including
derivatives 739 (203)
11. Borrowings
The Group accesses borrowings mostly in capital markets through bonds issued under the Euro Medium Term Note
(EMTN) programme, the South African Domestic Medium Term Note (DMTN) programme, through accessing the United
States (US) bond markets, and this year under the Australian Medium Term Note (AMTN) programme.
The Group uses interest rate and cross currency swaps to ensure that the majority of the Group’s borrowings are
floating rate US dollar denominated.
During 2013, the Group issued corporate bonds with a US$ equivalent value of $3.5 billion. These included
€750million 2.5% guaranteed notes due 2021, €900 million 1.75% guaranteed notes due 2017, and €600 million
2.875% guaranteed notes due 2020 issued under the EMTN programme, and AUD500 million 5.75% guaranteed notes
due 2018 issued under the AMTN programme.
An analysis of borrowings, as presented on the Consolidated balance sheet, is set out below:
2013 2012
restated(1)
Medium Medium
Short and long Contractual Short and long Contractual
term term Total repayments term term Total repayments
borrow- borrow- borrow- at hedged borrow- borrow- borrow- at hedged
US$ million ings ings ings rates ings ings ings rates
Secured
Bank loans
and
overdrafts(2) 9 32 41 41 5 21 26 26
Obligations
under finance
leases 7 49 56 56 3 19 22 22
16 81 97 97 8 40 48 48
Unsecured
Bank loans
and
overdrafts 433 2,003 2,436 2,467 251 2,871 3,122 3,141
Bonds issued
under EMTN
programme – 9,498 9,498 9,476 994 6,382 7,376 7,493
US bonds 1,256 3,194 4,450 4,450 767 4,628 5,395 5,200
Bonds issued
under AMTN
programme – 440 440 470 – – – –
Bonds issued
under DMTN
programme – 307 307 304 – 398 398 378
Other loans 403 217 620 621 465 831 1,296 1,282
2,092 15,659 17,751 17,788 2,477 15,110 17,587 17,494
Total
borrowings 2,108 15,740 17,848 17,885 2,485 15,150 17,635 17,542
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
(2) Assets with a book value of $56 million (2012: $49 million) have been pledged as security, of which
$30 million (2012: $35 million) are property, plant and equipment, $22 million (2012: $10 million) are
financial assets and $4 million (2012: $4 million) are inventories. Related to these assets are borrowings of
$41 million (2012:$26million).
The Group had the following undrawn committed borrowing facilities at 31 December:
US$ million 2013 2012
Expiry date
Within one year(1) 1,318 2,923
Greater than one year, less than two
years 637 569
Greater than two years, less than three
years 1,449 3,612
Greater than three years, less than four
years – 2,153
Greater than four years, less than five
years 5,847 –
Greater than five years – –
9,251 9,257
(1) Includes undrawn rand facilities equivalent to $1.2 billion (2012: $1.5 billion) in
respect of facilities with 364 day maturity which roll automatically on a daily basis, unless notice is served.
In March 2013 the Group replaced a $3.5 billion credit facility maturing in July 2015 with a $5 billion credit
facility maturing in March 2018. At the same time the $2 billion multi-currency credit facility within the
Diamond segment was repaid and cancelled.
12. Business combinations and formation of joint ventures
2013
Lafarge Tarmac transaction
On 18 February 2011 the Group announced an agreement with Lafarge SA (Lafarge) to combine their cement,
aggregates, ready-mix concrete, asphalt and asphalt surfacing, maintenance services and waste services
businesses in the United Kingdom, forming a 50:50 joint venture.
In May 2012 the Competition Commission approved the formation of the joint venture subject to a number of
conditions being met. In July 2012 the Group accepted the conditions of the Competition Commission and
consequently the associated Tarmac Quarry Materials assets were classified as held for sale and measured at fair
value less costs to sell.
On 7 January 2013 the Group announced the completion of the 50:50 joint venture. At the same time, and pursuant
to the Competition Commission’s conditions precedent to the formation of the joint venture, the Group completed
the sale of certain of Tarmac Quarry Materials’ operations for consideration of $196 million to Mittal
Investments. The agreed sale of Tarmac Quarry Materials’ 50% ownership interest in Midland Quarry Products was
subject to a right of pre-emption in favour of Hanson Quarry Products Europe Limited (Hanson), who
exercised their right in April 2013.
The main accounting effects of the transaction are set out below:
- At 31 December 2012 the assets and liabilities of Tarmac Quarry Materials were presented separately in the
Consolidated balance sheet, within ‘Assets held for sale’ and ‘Liabilities directly associated with assets held
forsale’.
- During the first half of 2013 the Group disposed of its interests in Tarmac Quarry Materials in exchange for
a 50% interest in the newly formed joint venture, plus cash, deferred consideration and contingent consideration
receivable for the operations that were sold to Mittal Investments and Hanson.
This resulted in derecognition of all assets and liabilities relating to the Tarmac Quarry Materials operations
and recognition of an investment in the Lafarge Tarmac joint venture (included in ‘Investments in associates and
joint ventures’ on the Consolidated balance sheet). The Group’s retained interest in the assets and liabilities
of Tarmac Quarry Materials was included at the pre-transaction carrying amount. The Group’s share of the Lafarge
business, acquired through its new interest in the Lafarge Tarmac joint venture, was accounted for at fair
value. The difference between the fair value of the acquired share of the Lafarge business and the fair value of
the acquired share of its identifiable net assets was recognised
as goodwill.
The fair values of the Lafarge identifiable net assets acquired and of the Lafarge Tarmac joint venture as a
whole, were determined primarily by reference to the present value of future income streams expected to be
generated by the assets, and to market prices achieved for comparable assets. Where appropriate, certain assets
were valued using a depreciated replacement cost approach. Fair values recognised on acquisition were
provisional at 30 June 2013 and are final at 31 December 2013.
The net assets derecognised, the proceeds and the resulting loss on disposal were as follows:
US$ million 2013
Intangible assets 417
Property, plant and equipment 1,642
Other non-current assets 11
Current assets excluding cash 400
Total assets classified as held for sale 2,470
Current liabilities (400)
Non-current liabilities (262)
Total liabilities directly associated with assets
classified as held for sale (662)
Net assets derecognised 1,808
Exchanged for:
50% interest in Lafarge Tarmac joint venture 1,658
Cash (net of cash derecognised(1)) 70
Deferred and contingent consideration 87
1,815
Net gain arising 7
Less: cumulative translation loss recycled from
reserves (62)
Net loss on disposal (55)
(1) Cash derecognised in the transaction was $39 million. In addition, transaction costs of $22 million,
accrued in 2012, were paid in the year, resulting in a net cash inflow of $48 million.
The Group’s share of the net assets of the joint venture (included in ‘Investments in associates and joint
ventures’ on the Consolidated balance sheet), based on final fair values at the date of acquisition, was as
follows:
2013
Retained share in Acquired share of Joint venture net
Tarmac Quarry Materials Lafarge business assets
US$ million Book values Fair values Total
Property, plant and equipment 721 560 1,281
Other non-current assets 6 8 14
Current assets 247 246 493
Net assets classified as held
for sale 28 – 28
Current liabilities (266) (239) (505)
Non-current liabilities (120) (81) (201)
Net identifiable assets 616 494 1,110
Goodwill 202 346 548
Investment in joint venture(1) 818 840 1,658
(1) Included within Other Mining and Industrial segment.
Goodwill of $548 million within the investment comprised $202 million of pre-existing goodwill relating to the
retained interest in the Tarmac Quarry Materials business, and $346 million of goodwill relating to the
formation of the new joint venture. The latter portion relates in part to synergies expected to be realised
through the combination of the two businesses, and also includes $26 million associated with the requirement to
recognise a deferred tax liability based on the difference between the fair value of the assets acquired and
their tax bases.
2012
De Beers
On 16 August 2012 Anglo American acquired an additional 40% of the share capital of De Beers Société Anonyme
(De Beers) to bring its total shareholding to 85%. De Beers is a leading diamond company with expertise in the
exploration, mining and marketing of diamonds.
The Group funded the acquisition by way of cash consideration of $5.2 billion, less cash acquired of
$0.4 billion. The acquisition has been accounted for as a business combination using the acquisition method of
accounting with an effective date of 16 August 2012, being the date the Group gained control of DeBeers.
Goodwill
recognised on acquisition, of $2,355 million, arose principally from the significant synergies associated with
the Group having control of De Beers, the value associated with the DeBeers workforce and the requirement to
recognise a deferred tax liability calculated as the difference between the tax effect of the fair value of the
assets acquired and their tax bases. No goodwill is expected to be deductible for tax purposes.
13. Disposals of subsidiaries
US$ million 2013 2012
Net assets disposed
Property, plant and equipment 214 208
Other non-current assets 5 65
Current assets 323 347
Current liabilities (296) (187)
Non-current liabilities (61) (273)
Net assets prior to completion(1) 185 160
Fair value of indemnities provided and
risks retained by Anglo American on sale 100 –
Non-controlling interests – (5)
Net assets disposed 285 155
Cumulative translation loss/(gain)
recycled from reserves 11 (6)
Other (credits)/charges (3) 2
Net loss on disposal(2) (129) (21)
Net consideration for equity interest 164 130
Less:
Net cash and cash equivalents disposed (11) (38)
Purchase of insurance claims for cash (168) –
Deferred contingent consideration at
fair value (30) –
Accrued transaction fees and similar
items – 8
Net cash (outflow)/inflow from disposals (45) 100
(1) These net assets were included within ‘Assets classified as held for sale’ and ‘Liabilities directly
associated with assets classified as held for sale’. Current liabilities included intercompany debt due to
Anglo American. The net assets do not include the insurance claims which were purchased by the Group for cash
consideration of $168 million.
(2) Included in non-operating special items, see note 5. The total net loss on disposal of Amapá of $175 million
also includes a $46 million impairment recognised in the six months ending 30 June 2013.
Disposal of Amapá
On 28 December 2012 Anglo American and Cliffs Natural Resources (Cliffs) agreed to sell their respective 70% and
30% interests in the Amapá iron ore system, including the mine, the rail infrastructure and the port of Santana,
to Zamin Ferrous Limited (Zamin). Amapá was classified as held for sale as at 31 December 2012.
On 28 March 2013 an incident occurred which resulted in the tragic loss of four lives with a further two people
still missing, as well as the total loss of the port operation. A detailed investigation into the causes of the
incident has been undertaken and the results have been passed on to Amapá’s insurers.
In light of the incident at the port, Anglo American entered into further discussions with Cliffs and Zamin.
On 25September 2013 the Group announced that it had entered into an agreement with Cliffs to acquire its 30%
interest in Amapá and had agreed to amend its sale agreement with Zamin to reflect, inter alia, Anglo American’s
disposal of a 100% interest in Amapá to Zamin. These transactions completed on 1 November 2013.
Consideration of $164 million from Zamin comprised:
- $134 million in cash (net of certain adjustments at completion). A potential adjustment of up to an
additional $25million is subject to the outcome of certain rulings in respect of the port
reconstruction; and
- conditional deferred consideration of up to a maximum of $130 million in total, payable over a five year
period and calculated on the basis of the market price for iron ore. The estimated fair value of this
consideration was $30million.
Anglo American assumed responsibility for, and the risks and rewards of, certain insurance claims including
those relating to the port incident, through the purchase of the claims from Amapá at the full claim value of
$168 million.
After the transaction the Group continued to recognise a deferred consideration asset, an insurance receivable
and certain retained liabilities.
The valuation of the amounts receivable and the retained liabilities incorporates estimates, particularly in
relation to the likely value of conditional deferred consideration receivable and the fair value of the
insurance claims acquired from Amapá. These estimates are based on assumptions about future events and
conditions which are considered appropriate based on the information available. Reasonable changes in these
assumptions would not result in a material change in the loss on disposal.
Disposal proceeds in 2013
In addition to the net cash outflow of $45 million on disposal of Amapá, there was a net cash inflow of
$48 million in respect of the formation of the Lafarge Tarmac joint venture (Other Mining and Industrial
segment, see note 12), a cash inflow of $44 million relating to deferred proceeds in respect of undeveloped coal
assets in Australia which the Group disposed of in 2010 (Metallurgical Coal segment), a further $30 million cash
payment in respect of liabilities assumed as part of the Amapá disposal and payments of $4 million in respect of
transaction fees accrued in prior years. This resulted in a net cash inflow on disposal of subsidiaries, net of
cash disposed, of $13 million for the year ended 31 December 2013.
Disposals in 2012
Disposals during 2012 relate to the disposal of Scaw South Africa and related companies in the Other Mining and
Industrial segment.
14. 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 with indemnities against certain liabilities as part of the sale to Mitsubishi of a
24.5% interest in Anglo American Sur SA in 2011. Having taken appropriate legal advice, the Group believes
that 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 31 December 2013 or 31 December 2012.
Other
Kumba Iron Ore (Kumba)
21.4% undivided share of the Sishen mine mineral rights On 28 March 2013 the Supreme Court of Appeal (SCA)
dismissed the appeals of the Department of Mineral Resources (DMR) and Imperial Crown Trading 289 (Pty) Ltd
(ICT) against the decision of the North Gauteng High Court, which, inter alia, confirmed that Sishen Iron Ore
Company (Pty) Ltd (SIOC) became the exclusive holder of the mining rights at the Sishen mine in 2008 when the
DMR converted SIOC’s old order rights, and further set aside the grant of a prospecting right to ICT by the DMR.
The SCA held that as a matter of law and as at midnight on 30 April 2009, SIOC became the sole holder of the
mining right to iron ore in respect of the Sishen mine, after ArcelorMittal South Africa Limited (ArcelorMittal
S.A.) failed to convert its undivided share of the old order mining right.
Both ICT and the DMR lodged applications for leave to appeal against the SCA to the Constitutional Court.
The Constitutional Court hearing was held on 3 September 2013.
On 12 December 2013 the Constitutional Court granted the DMR’s appeal in part against the SCA judgment. In a
detailed judgment, the Constitutional Court clarified that SIOC, when it lodged its application for conversion
of its old order right, converted only the right it held at that time (being a 78.6% undivided share in the
Sishen mining right). The Constitutional Court further held that ArcelorMittal S.A. retained the right to lodge
its old order right (21.4% undivided share) for conversion before midnight on 30 April 2009, but failed to do
so. As a consequence of such failure by ArcelorMittal S.A., the 21.4% undivided right remained available for
allocation by the DMR.
The Constitutional Court ruled further that, based on the provisions of the Mineral and Petroleum Resources
Development Act (MPRDA), only SIOC can apply for the residual 21.4% undivided share of the Sishen mining right.
The grant of the mining right may be made subject to such conditions considered by the Minister to be
appropriate, provided that the proposed conditions are permissible under the MPRDA. SIOC had previously applied
for this 21.4%, and continues to account for 100% of what is mined from the reserves at Sishen mine. SIOC has
however, in compliance with the Constitutional Court order, submitted a further application to be granted this
right.
As a further consequence of this finding, the High Court’s ruling setting aside the prospecting right granted by
the DMR to ICT also stands.
The findings made by the Constitutional Court are favourable to both SIOC and the DMR. SIOC’s position as the
only competent applicant for the residual right protects SIOC’s interests. The DMR’s position as custodian of
the mineral resources on behalf of the nation, and the authority of the DMR to allocate rights, has also been
ratified by the Court.
ArcelorMittal S.A. supply agreement
The dispute between SIOC and ArcelorMittal S.A. regarding the contract mining agreement had been referred to
arbitration in 2010. In December 2011 the parties agreed to delay the arbitration proceedings until the final
resolution of the mining rights dispute (see above).
Interim Pricing Agreements were implemented to 31 December 2013.
In November 2013 SIOC and ArcelorMittal S.A. entered into a new Supply Agreement regulating the sale and
purchase of iron ore between the parties which became effective from 1 January 2014. This agreement, subject to
certain express conditions, is contemplated to endure until the end of Life of Mine for the Sishen mine.
The conclusion of this agreement settled the arbitration and the various other disputes between the companies.
Following the Constitutional Court ruling (see above), the sale of iron ore from SIOC to ArcelorMittal S.A. will
remain regulated by the recently concluded Supply Agreement.
Anglo American South Africa Limited (AASA) AASA, a wholly owned subsidiary of the Company, is a defendant in a
number of lawsuits filed in England and South Africa on behalf of former mineworkers (or their dependants 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 England: AASA is a defendant in five lawsuits filed in the High Court in London on behalf of approximately
6,000 named former mineworkers or their dependants. One of the lawsuits 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.
In South Africa: (i) AASA is a defendant in approximately 100 separate lawsuits filed in the North Gauteng High
Court (Pretoria) which have been referred to arbitration. (ii) AASA is named as one of 32 defendants in a
consolidated class certification application filed in South Africa. (iii) On 19 September 2013 AASA concluded a
settlement agreement in terms of which 23 claims (filed in South Africa between 2004 and 2009) were settled,
without admission of liability by AASA. The terms of the agreement and the settlement amount (which is not
material to AASA) are confidential.
The aggregate amount of the individual South African claims is less than $15 million (excluding claims for
interests and costs). No specific amount of damages has been specified in the claims filed in England or in the
consolidated class certification application filed in South Africa.
AASA successfully contested the jurisdiction of the English courts to hear the claims filed against it in that
jurisdiction. That ruling has been appealed. AASA is defending the separate lawsuits filed in South Africa and
will oppose the application for consolidated class certification in South Africa.
15. Related party transactions
The Group has a related party relationship with its subsidiaries, joint operations, associates and joint
ventures. Members of the Board and the Group Management Committee are considered to be related parties.
The Company and its subsidiaries, in the ordinary course of business, enter into various sales, purchase and
service transactions with joint operations, associates and joint ventures 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, other than purchases by
De Beers from its joint operations in excess of its attributable share of their production, which amounted to
$3,064 million (2012:$1,049million, representing purchases from 16 August 2012, the date the Group obtained
control of DeBeers).
US$ million 2013 2012
restated(1)
Loans receivable(2)
Associates 164 305
Joint ventures 265 242
429 547
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 for details.
(2) These loans are included in ‘Financial asset investments’.
At 31 December 2013 the directors of the Company and their immediate relatives controlled 0.1% (2012: 0.1%)
of the voting shares of the Company.
Refinancing of Atlatsa
In 2009, Platinum sold a 51% interest in Bokoni Platinum Mines Proprietary Limited (Bokoni) and a 1% interest in
certain undeveloped projects to Atlatsa Resources Corporation (Atlatsa) in a Black Economic Empowerment (BEE)
transaction. Platinum retained 49% of Bokoni, and in addition acquired an effective 27% interest in Atlatsa as
part of the sale consideration. Both Atlatsa and Bokoni are associates of the Group.
Between 2009 and December 2013 Platinum has provided Atlatsa and its subsidiaries, including Bokoni, with
additional debt and equity funding and in 2012, Platinum and Atlatsa agreed to restructure, recapitalise and
refinance both Atlatsa and Bokoni. The first phase of the refinancing transaction completed in December 2013,
whereby Platinum acquired certain properties from Bokoni and in return the level of debt outstanding from
Atlatsa was reduced. A charge of $37 million has been recorded within non-operating special items relating to
this transaction, see note 5.
Related party transaction with Mitsubishi During the year the Group entered into a transaction with a related
party of the Company for the purposes of the United Kingdom Listing Authority Listing Rules.
An Anglo American subsidiary entered into a Shareholder Agreement (SHA) with a subsidiary of Mitsubishi
Corporation (Mitsubishi) in relation to Anglo American Quellaveco SA, which owns Anglo American’s Quellaveco
copper project. Mitsubishi is a related party to Anglo American because its wholly owned subsidiary is a
substantial shareholder in Anglo American Sur SA, a significant subsidiary of the Company. Anglo American Sur SA
owns and operates copper mines and metallurgical plants in Chile and has no ownership interest in Quellaveco.
Anglo American has a controlling 81.9% interest in Anglo American Quellaveco SA. Mitsubishi purchased its
18.1% shareholding in this company in 2011 from an unrelated third party. The entry into the SHA provides a
formal contractual relationship with a minority shareholder to give more certainty to the way in which the
shareholding relationship in Anglo American Quellaveco SA is managed. It is primarily focused on the governance
aspects of the relationship, information rights, the transferability of shares, arrangements for future funding
and entitlement to production from the Quellaveco project. The entry into the SHA did not involve a purchase or
sale of an asset and no value is ascribed to this transaction.
16. Events occurring after end of year
With the exception of the proposed final dividend for 2013, there have been no reportable events since
31December 2013.
17. Accounting policy changes – restatements
As discussed in note 1, the Group has restated the financial performance and position of the Group for the year
ended 31 December 2012 to reflect the adoption of IFRS11, IFRIC 20 and IAS19R. The quantitative impact of
adopting these standards on the prior year Consolidated financial statements is set out in the tables below.
Adjustments to the Consolidated income statement
US$ million Year ended
31.12.12 Year ended
as previously 31.12.12
stated IFRS 11 IFRIC 20 IAS 19R restated
Group revenue 28,761 (81) – – 28,680
Total operating
costs(1) (30,449) 78 91 – (30,280)
Share of net income
from associates and
joint ventures 432 (7) (1) (3) 421
Non-operating special
items and
remeasurements 1,394 – 2 – 1,396
Net finance
(costs)/income (377) 14 – (25) (388)
Income tax expense (375) (4) (20) 6 (393)
Non-controlling
interests (879) – (27) – (906)
Loss for the financial
year attributable to
equity shareholders
of the Company (1,493) – 45 (22) (1,470)
(1) Restatements to operating costs include a decrease in depreciation of $5 million due to IFRS 11 and an
increase in depreciation of $90 million due to IFRIC 20.
Adjustments to the Consolidated statement of comprehensive income
US$ million Year ended
31.12.12 Year ended
as previously 31.12.12
stated IFRS 11 IFRIC 20 IAS 19R restated
Loss for the financial
year (614) – 72 (22) (564)
Items that may
subsequently be
reclassified to the
income statement
Net exchange
difference on
translation of foreign
operations (including
associates and joint
ventures) (747) – (3) – (750)
Other comprehensive
income that may be
reclassified 60 – – – 60
Items that will not be
reclassified to the
income statement
Remeasurement of net
retirement benefit
obligation 165 – – 25 190
Share of associates’
and joint ventures’
income recognised
directly in equity, net
of tax 11 – – 3 14
Tax on items
recognised directly in
equity that will not be
reclassified (19) – – (6) (25)
Items transferred from
equity 79 – – – 79
Total comprehensive
expense for the
financial year (1,065) – 69 – (996)
Adjustments to the Consolidated balance sheet
At 31 December 2012
31.12.12
as previously 31.12.12
stated IFRS 11 IFRIC 20 IAS 19R restated
Property, plant and
equipment(1) 45,089 (292) (66) – 44,731
Investments in
associates and joint
ventures 3,063 99 – – 3,162
Financial asset
investments
(non-current) 2,278 111 – – 2,389
Short term borrowings (2,604) 119 – – (2,485)
Deferred tax
liabilities (6,069) – 18 – (6,051)
Retained earnings (40,388) – 45 – (40,343)
Non-controlling
interests (6,130) – 3 – (6,127)
Other assets,
liabilities and
equity(2) 4,761 (37) – – 4,724
(1) The adjustment to property, plant and equipment in relation to IFRIC 20 includes the $155 million write-off
of opening stripping assets which do not relate to identifiable components of orebodies and depreciation of
$34 million in excess of amounts previously charged to operating costs, offset by $123 million of net additional
capitalisation.
(2) Restatements of the balance sheet at 31 December 2012 also had an immaterial impact on intangible assets,
environmental rehabilitation trusts, trade and other receivables (non-current), deferred tax assets, other non-
current assets, inventories, trade and other receivables (current), cash and cash equivalents, trade and other
payables (current), provisions for liabilities and charges (current) and other reserves.
At 1 January 2012
US$ million 01.01.12
as previously 01.01.12
stated IFRS 11 IFRIC 20 IAS 19R restated
Property, plant and
equipment 40,549 (312) (155) – 40,082
Investments in
associates and joint
ventures 5,240 113 (1) – 5,352
Financial asset
investments
(non-current) 2,896 107 – – 3,003
Short term borrowings (1,018) 116 – – (902)
Deferred tax
liabilities (5,730) – 37 – (5,693)
Retained earnings (42,342) – 102 – (42,240)
Non-controlling
interests (4,097) – 16 – (4,081)
Other assets,
liabilities and
equity(1) 4,502 (24) 1 – 4,479
(1) Restatements of the balance sheet at 1 January 2012 also had an immaterial impact on intangible assets,
environmental rehabilitation trusts, trade and other receivables (non-current), deferred tax assets, other non-
current assets, inventories, trade and other receivables (current), cash and cash equivalents, trade and other
payables (current), provisions for liabilities and charges (current) and other reserves.
Adjustments to the Consolidated cash flow statement
Year ended
31.12.12 Year ended
as previously 31.12.12
stated IFRS 11 IFRIC 20(1) IAS 19R restated
Cash flows from
operations 7,021 (7) 356 – 7,370
Dividends from
associates and joint
ventures 286 8 – – 294
Expenditure on
property, plant and
equipment (5,607) 4 (356) – (5,959)
Other investing and
financing cash flows (4,009) – – – (4,009)
Net
(decrease)/increase in
cash and cash
equivalents (2,309) 5 – – (2,304)
(1) The adjustment is due to a re-presentation of cash flows to better reflect internal management reporting
following the adoption of IFRIC 20.
Non-GAAP data
Year ended
31.12.12 Year ended
as previously 31.12.12
stated IFRS 11 IFRIC 20 IAS 19R restated
Underlying EBITDA 8,686 – 174 – 8,860
Depreciation and
amortisation(1) 2,522 – 85 – 2,607
Underlying operating
profit 6,164 – 89 – 6,253
Underlying earnings 2,839 – 43 (22) 2,860
Net debt (8,615) 105 – – (8,510)
(1) Includes attributable share of depreciation and amortisation in associates and joint ventures.
Depreciation and amortisation excluding associates and joint ventures has increased by $90 million in 2012 due
to the introduction of IFRIC 20.
Summary by business operation
Underlying
Underlying operating Underlying
Revenue(1) EBITDA(2) profit/(loss)(3) earnings
US$ million 2013 2012 2013 2012 2013 2012 2013 2012
restated(4) restated(4) restated(4)
Iron Ore
and Manganese 6,517 6,403 3,390 3,262 3,119 3,011 1,125 1,046
Kumba Iron
Ore 5,643 5,572 3,266 3,239 3,047 3,042 1,171(5) 1,107
Iron Ore
Brazil – – (27) (1) (31) (5) (51) (43)
Samancor 874 831 258 153 210 103 92 83
Projects and
corporate – – (107) (129) (107) (129) (87)(5) (101)
Metallurgical
Coal 3,396 3,889 612 877 46 405 60 275
Australia 3,138 3,657 665 940 176 519 132 365
Canada 258 232 7 13 (70) (38) (21) (27)
Projects and
corporate – – (60) (76) (60) (76) (51) (63)
Thermal
Coal 3,004 3,447 735 972 541 793 397 523
South Africa 2,187 2,477 479 607 356 482 283 312
Colombia 817 970 299 412 228 358 151 251
Projects and
corporate – – (43) (47) (43) (47) (37) (40)
Copper 5,392 5,122 2,402 2,288 1,739 1,736 803 941
Anglo
American Sur 3,300 3,186 1,642 1,762 1,220 1,402 464 695
Anglo
American
Norte 778 934 191 336 135 288 85 237
Collahuasi 1,314 1,002 718 484 533 340 386 243
Projects and
corporate – – (149) (294) (149) (294) (132) (234)
Nickel 136 336 (37) 50 (44) 26 (54) 10
Codemin 136 176 23 53 17 47 5 31
Loma de
Níquel – 160 (5) 46 (5) 29 (7) 17
Barro Alto – – (38) (7) (39) (8) (38) (5)
Projects and
corporate – – (17) (42) (17) (42) (14) (33)
Niobium and
Phosphates 726 770 176 196 150 169 92 107
Niobium 182 173 94 85 89 81 48 47
Phosphates 544 597 100 114 79 91 57 63
Projects and
corporate – – (18) (3) (18) (3) (13) (3)
Platinum 5,688 5,489 1,048 580 464 (120) 287 (225)
Operations 5,688 5,489 1,121 656 537 (44) 356 (155)
Projects and
corporate – – (73) (76) (73) (76) (69) (70)
Diamonds(6) 6,404 4,028 1,451 712 1,003 474 532 289
Operations 6,404 4,028 1,516 734 1,068 496 591 309
Projects and
corporate – – (65) (22) (65) (22) (59) (20)
Other
Mining and
Industrial 1,795 3,296 81 289 (13) 168 (2) 121
Amapá(7) 100 327 – 89 – 54 – 27
Tarmac 1,695 2,171 88 148 (6) 73 5 65
Scaw
Metals(8) – 798 – 60 – 49 – 37
Projects and
corporate – – (7) (8) (7) (8) (7) (8)
Exploration – – (205) (206) (207) (206) (190) (195)
Corporate
Activities
and
Unallocated
Costs 5 5 (133) (160) (178) (203) (377) (32)
33,063 32,785 9,520 8,860 6,620 6,253 2,673 2,860
(1) Revenue includes the Group’s attributable share of revenue of associates and joint ventures. Revenue for
copper is shown after deduction of treatment and refining charges (TC/RCs).
(2) Underlying EBITDA is underlying operating profit before depreciation and amortisation in subsidiaries
and joint operations and includes attributable share of underlying operating profit before depreciation and
amortisation of associates and joint ventures.
(3) Underlying operating profit/(loss) is operating profit/(loss) before special items and remeasurements,
and includes the Group’s attributable share of associates’ and joint ventures’ operating profit/(loss)
before special items and remeasurements.
(4) Certain balances related to 2012 have been restated to reflect the adoption of new accounting pronouncements.
See note 1 of the Condensed financial statements for details.
(5) Of the projects and corporate expense, which includes a corporate cost allocation, $63 million (2012: $67 million)
relates to Kumba Iron Ore. The total contribution from Kumba Iron Ore to the Group’s underlying earnings is
$1,108 million (2012: $1,040 million) as reported in the external earnings reconciliation, see page 83.
(6) On 16 August 2012 the Group acquired a controlling interest in De Beers (Diamonds segment).
De Beers ceased to be an associate of the Group and has been accounted for as a subsidiary since this date.
(7) The Group disposed of its interest in Amapá in November 2013.
(8) The Group disposed of its interest in Scaw Metals in November 2012.
Marketing activities are allocated to the underlying operation to which they relate.
Key financial data
US$ million
(unless
otherwise
stated) 2013 2012 2011 2010 2009 2008 2007 2006(2) 2005(2) 2004(2)
restated(1)
Group
revenue
including
associates
and joint
ventures 33,063 32,785 36,548 32,929 24,637 32,964 30,559 29,404 24,872 22,610
Less: share
of
associates’
and joint
ventures’
revenue (3,721) (4,105) (5,968) (4,969) (3,779) (6,653) (5,089) (4,413) (4,740) (5,429)
Group
revenue 29,342 28,680 30,580 27,960 20,858 26,311 25,470 24,991 20,132 17,181
Underlying
operating
profit
including
associates
and joint
ventures
before
special items
and
re
measure-
ments 6,620 6,253 11,095 9,763 4,957 10,085 9,590 8,888 5,549 3,832
Special
items and
re
measure-
ments
(excluding
financing
and tax
special
items
and re-
measure-
ments) (4,310) (5,755) (44) 1,727 (208) (330) (227) 24 16 556
Net finance
costs
(including
financing
special items
and
re-
measure-
ments),
tax and
non-
control-
ling
interests
of
associates
and joint
ventures (204) (281) (452) (423) (313) (783) (434) (398) (315) (391)
Total profit
from
operations,
associates
and joint
ventures 2,106 217 10,599 11,067 4,436 8,972 8,929 8,514 5,250 3,997
Net finance
(costs)/
income
(including
financing
special
items
and
re-
measure-
ments) (406) (388) 183 (139) (407) (401) (108) (71) (220) (385)
Profit/
(loss)
before tax 1,700 (171) 10,782 10,928 4,029 8,571 8,821 8,443 5,030 3,612
Income tax
expense
(including
special items
and
re-
measure-
ments) (1,274) (393) (2,860) (2,809) (1,117) (2,451) (2,693) (2,518) (1,208) (765)
Profit/(loss)
for the
financial
year –
continuing
operations 426 (564) 7,922 8,119 2,912 6,120 6,128 5,925 3,822 2,847
Profit for
the financial
year –
discontinued
operations – – – – – – 2,044 997 111 1,094
Profit/(loss)
for the
financial
year – total
Group 426 (564) 7,922 8,119 2,912 6,120 8,172 6,922 3,933 3,941
Non-control-
ling
interests (1,387) (906) (1,753) (1,575) (487) (905) (868) (736) (412) (440)
(Loss)/profit
attributable
to equity
shareholders
of the
Company (961) (1,470) 6,169 6,544 2,425 5,215 7,304 6,186 3,521 3,501
Underlying
earnings(3)–
continuing
operations 2,673 2,860 6,120 4,976 2,569 5,237 5,477 5,019 3,335 2,178
Underlying
earnings(3)–
discontinued
operations – – – – – – 284 452 401 506
Underlying
earnings(3) –
total Group 2,673 2,860 6,120 4,976 2,569 5,237 5,761 5,471 3,736 2,684
(Loss)/earnings
per share
(US$) –
continuing
operations (0.75) (1.17) 5.10 5.43 2.02 4.34 4.04 3.51 2.35 1.84
Earnings per
share (US$) –
discontinued
operations – – – – – – 1.54 0.70 0.08 0.60
(Loss)/earnings
per share
(US$) –
total
Group (0.75) (1.17) 5.10 5.43 2.02 4.34 5.58 4.21 2.43 2.44
Underlying
earnings per
share (US$) –
continuing
operations 2.09 2.28 5.06 4.13 2.14 4.36 4.18 3.42 2.30 1.52
Underlying
earnings per
share (US$) –
discontinued
operations – – – – – – 0.22 0.31 0.28 0.35
Underlying
earnings per
share (US$) –
total Group 2.09 2.28 5.06 4.13 2.14 4.36 4.40 3.73 2.58 1.87
Ordinary
dividend per
share
(UScents) 85.0 85.0 74.0 65.0 – 44.0 124.0 108.0 90.0 70.0
Special
dividend per
share
(US cents) – – – – – – – 67.0 33.0 –
Weighted
average basic
number of
shares
outstanding
(million) 1,281 1,254 1,210 1,206 1,202 1,202 1,309 1,468 1,447 1,434
Underlying
EBITDA(4)–
continuing
operations 9,520 8,860 13,348 11,983 6,930 11,847 11,171 10,431 7,172 5,359
Underlying
EBITDA(4)–
discontinued
operations – – – – – – 961 1,766 1,787 1,672
Underlying
EBITDA(4)–
total Group 9,520 8,860 13,348 11,983 6,930 11,847 12,132 12,197 8,959 7,031
Underlying
EBITDA
interest
cover(5)–
total Group 51.5 52.1 n/a 42.0 27.4 28.3 42.0 45.5 20.0 18.5
Operating
margin
(before
special items
and
re-
measure-
ments)
– total
Group 20.0% 19.1% 30.4% 29.6% 20.1% 30.6% 28.4% 25.4% 18.5% 14.7%
Ordinary
dividend
cover (based
on underlying
earnings per
share) –
total Group 2.5 2.7 6.8 6.4 – 9.9 3.5 3.5 2.9 2.7
See following page for footnotes.
Key financial data (continued)
US$ million
(unless
otherwise 2012
stated) 2013 restated(1) 2011 2010 2009 2008 2007 2006(2) 2005(2) 2004(2)
Balance sheet
Intangible
assets and
property,
plant and
equipment 45,588 49,300 42,871 42,126 37,974 32,551 25,090 25,632 33,368 35,816
Other
non-current
assets and
investments(6) 9,418 8,689 10,269 9,852 7,303 7,607 9,271 8,258 5,585 5,547
Working
capital 3,771 3,751 2,093 2,385 2,168 861 1,966 3,096 3,538 3,543
Other net
current
liabilities(6) (1,559) (986) (1,683) (785) (272) (840) (911) (1,430) (1,429) (611)
Other
non-current
liabilities
and
obligations(6) (9,710) (10,692) (9,220) (8,757) (8,487) (7,567) (6,387) (5,826) (8,491) (8,339)
Cash and
cash
equivalents
and
borrowings(7) (10,144) (8,555) (1,141) (7,038) (11,046) (11,051) (5,170) (3,244) (4,993) (8,243)
Net assets
classified as
held for sale – 2,231 – 188 429 195 471 641 – –
Net assets 37,364 43,738 43,189 37,971 28,069 21,756 24,330 27,127 27,578 27,713
Non-controlling
interests (5,693) (6,127) (4,097) (3,732) (1,948) (1,535) (1,869) (2,856) (3,957) (4,588)
Equity
attributable
to equity
shareholders
of the Company 31,671 37,611 39,092 34,239 26,121 20,221 22,461 24,271 23,621 23,125
Total
capital(8) 48,016 52,248 44,563 45,355 39,349 33,096 29,181 30,258 32,558 35,806
Cash flows
from
operations –
continuing
operations 7,729 7,370 11,498 9,924 4,904 9,579 9,375 9,012 5,963 3,857
Cash flows
from
operations –
discontinued
operations – – – – – – 470 1,045 1,302 1,434
Cash flows
from
operations –
total Group 7,729 7,370 11,498 9,924 4,904 9,579 9,845 10,057 7,265 5,291
Dividends
received from
associates,
joint
ventures and
financial
asset
investments –
continuing
operations 264 348 403 285 639 659 311 251 468 380
Dividends
received from
associates,
joint
ventures and
financial
asset
investments –
discontinued
operations – – – – – – 52 37 2 16
Dividends
received from
associates,
joint
ventures and
financial
asset
investments –
total Group 264 348 403 285 639 659 363 288 470 396
EBITDA/average
total
capital(8)–
total
Group 19.0% 18.3% 29.7% 28.3% 19.1% 38.0% 40.8% 38.8% 26.2% 21.3%
Net debt to
total capital
(gearing)(9) 22.2% 16.3% 3.1% 16.3% 28.7% 34.3% 16.6% 10.3% 15.3% 22.6%
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting pronouncements. See note 1 of the Condensed
financial statements fordetails.
(2) Comparatives for 2006, 2005 and 2004 were adjusted in the 2007 Annual Report to reclassify amounts relating to discontinued operations where
applicable.
(3) Underlying earnings is profit attributable to equity shareholders of the Company before special items and remeasurements, and is therefore
presented after net finance costs, income tax and non-controlling interests.
(4) Underlying EBITDA is operating profit before special items and remeasurements, depreciation and amortisation in subsidiaries and joint operations
and includes attributable share of EBITDA of associates and joint ventures.
(5) Underlying EBITDA interest cover is underlying EBITDA divided by net finance costs, excluding other net financial income, exchange gains and
losses on monetary assets and liabilities, unwinding of discount relating to provisions and other liabilities, financing special items and
remeasurements, and including attributable share of associates’ and joint ventures’ net interest expense, which in 2011 results in a net finance
income and therefore the ratio is not applicable.
(6) Comparatives for 2008, 2007, 2006 and 2005 were adjusted in the 2009 Annual Report in accordance with IAS 1 Presentation of Financial Statements
– Improvements to reclassify non-hedge derivatives whose expected settlement date was more than one year from the period end from current to non-
current.
(7) This differs from the Group’s measure of ‘Net debt’ as it excludes the net cash/(debt) of disposal groups (2013: nil; 2012:$213 million; 2011:
nil; 2010: $59million; 2009: $48 million; 2008: $8 million; 2007:$(69) million; 2006: $(80) million; 2005: nil; 2004: nil) and excludes related hedges
(2013: net liabilities of $508 million; 2012: net liabilities of $168 million; 2011: net liabilities of $233 million; 2010: net liabilities of
$405million; 2009: net liabilities of $285 million; 2008:net liabilities of$297 million; 2007: net assets of $388 million; 2006:net assets of
$193 million; 2005: nil; 2004: nil). See note 10 of the Condensed financial statements for furtherdetails.
(8) Total capital is net assets excluding net debt.
(9) Net debt to total capital is calculated as net debt (including related hedges and net debt in disposal groups) divided by total capital.
Comparatives are presented on aconsistent basis.
(1) Certain balances related to 2012 have been restated to reflect the adoption of new accounting
pronouncements. See note 1 of the Condensed financial statements fordetails.
(2) Comparatives for 2006, 2005 and 2004 were adjusted in the 2007 Annual Report to reclassify amounts relating
to discontinued operations where applicable.
(3) Underlying earnings is profit attributable to equity shareholders of the Company before special items and
remeasurements, and is therefore presented after net finance costs, income tax and non-controlling interests.
(4) Underlying EBITDA is operating profit before special items and remeasurements, depreciation and
amortisation in subsidiaries and joint operations and includes attributable share of EBITDA of associates
and joint ventures.
(5) Underlying EBITDA interest cover is underlying EBITDA divided by net finance costs, excluding other net
financial income, exchange gains and losses on monetary assets and liabilities, unwinding of discount relating
to provisions and other liabilities, financing special items and remeasurements, and including attributable
share of associates’ and joint ventures’ net interest expense, which in 2011 results in a net finance income
and therefore the ratio is not applicable.
(6) Comparatives for 2008, 2007, 2006 and 2005 were adjusted in the 2009 Annual Report in accordance with IAS 1
Presentation of Financial Statements – Improvements to reclassify non-hedge derivatives whose expected
settlement date was more than one year from the period end from current to non-current.
(7) This differs from the Group’s measure of ‘Net debt’ as it excludes the net cash/(debt) of disposal groups
(2013: nil; 2012:$213 million; 2011: nil; 2010: $59million; 2009: $48 million; 2008: $8 million; 2007:$(69)
million; 2006: $(80) million; 2005: nil; 2004: nil) and excludes related hedges (2013: net liabilities of $508
million; 2012: net liabilities of $168 million; 2011: net liabilities of $233 million; 2010: net liabilities of
$405million; 2009: net liabilities of $285 million; 2008:net liabilities of$297 million; 2007: net assets of
$388 million; 2006:net assets of $193 million; 2005: nil; 2004: nil). See note 10 of the Condensed financial
statements for furtherdetails.
(8) Total capital is net assets excluding net debt.
(9) Net debt to total capital is calculated as net
debt (including related hedges and net debt in disposal groups) divided by total capital. Comparatives are
presented on aconsistent basis.
Reconciliation of subsidiaries’ reported earnings to the underlying earnings included in the consolidated
financial statements
for the year ended 31 December 2013
Note only key reported lines are reconciled.
Kumba Iron Ore Limited
US$ million 2013 2012
restated(1)
IFRS headline earnings 1,604 1,534
Exploration 14 16
Kumba Envision Trust(2) 33 53
Other adjustments 2 3
1,653 1,606
Non-controlling interests (501) (513)
Elimination of intercompany interest 12 4
Depreciation on assets fair valued on
acquisition (net of tax) (6) (8)
Corporate cost allocation (50) (49)
Contribution to Anglo American
underlying earnings 1,108 1,040
(1) Headline and underlying earnings have been restated to reflect the adoption of new accounting pronouncements.
(2) The Kumba Envision Trust charge is included in IFRS headline earnings but is a non-operating special
item so is excluded from underlying earnings.
Anglo American Platinum Limited
US$ million 2013 2012
IFRS headline earnings/(loss) 152 (170)
Exploration 2 4
Operating and financing remeasurements
(net of tax) (8) 2
Restructuring costs included in headline
earnings (net of tax) 105 –
BEE transactions and related charges (44) –
Tax special item included in headline
earnings 188 –
Other adjustments 5 –
400 (164)
Non-controlling interests (80) 33
Elimination of intercompany interest 67 10
Depreciation on assets fair valued on
acquisition (net of tax) (36) (41)
Corporate cost allocation (64) (63)
Contribution to Anglo American
underlying earnings/(loss) 287 (225)
Exchange rates and commodity prices
US$ exchange rates 2013 2012
Year end spot rates
Rand 10.51 8.47
Brazilian real 2.36 2.05
Sterling 0.60 0.62
Australian dollar 1.12 0.96
Euro 0.73 0.76
Chilean peso 526 479
Botswana pula 8.76 7.79
Average rates for the year
Rand 9.65 8.21
Brazilian real 2.16 1.95
Sterling 0.64 0.63
Australian dollar 1.03 0.97
Euro 0.75 0.78
Chilean peso 495 486
Botswana pula 8.39 7.61
Commodity prices 2013 2012
Year end spot prices
Iron ore (FOB Australia)(1) US$/tonne 123 138
Thermal coal (FOB South
Africa)(2) US$/tonne 85 89
Thermal coal (FOB Australia)(2) US$/tonne 85 91
Hard coking coal (FOB
Australia)(3) US$/tonne 132 170
Copper(4) US cents/lb 335 359
Nickel(4) US cents/lb 663 771
Platinum(5) US$/oz 1,357 1,523
Palladium(5) US$/oz 716 699
Rhodium(5) US$/oz 975 1,080
Average market prices for the
year
Iron ore (FOB Australia)(1) US$/tonne 127 122
Thermal coal (FOB South
Africa)(2) US$/tonne 80 93
Thermal coal (FOB Australia)(2) US$/tonne 84 94
Hard coking coal (FOB
Australia)(6) US$/tonne 159 210
Copper(4) US cents/lb 332 361
Nickel(4) US cents/lb 680 794
Platinum(5) US$/oz 1,485 1,551
Palladium(5) US$/oz 725 644
Rhodium(5) US$/oz 1,066 1,275
(1) Source: Platts.
(2) Source: McCloskey.
(3) Source: Represents the quarter four benchmark.
(4) Source: London Metal Exchange (LME) daily prices.
(5) Source: London Platinum and Palladium Market (LPPM).
(6) Source: Represents the average quarterly benchmark.
Attributable Return on Capital Employed (ROCE) Definition
Attributable ROCE Definitions:
- Return on capital employed is a ratio that measures the efficiency and profitability of a company’s capital
investments. It displays how effectively assets are generating profit for the size of invested capital.
- ROCE is calculated as underlying operating profit divided by capital employed.
- Adjusted ROCE calculation is underlying operating profit divided by adjusted capital employed. Adjusted
Capital employed is net assets excluding net debt and financial asset investments, adjusted for
remeasurements of a previously held equity interest as a result of business combination and impairments
incurred in the current year and reported since 10 December 2013.
- Attributable ROCE is the return on the adjusted capital employed attributable to equity shareholders of
Anglo American, and therefore excludes the portion of underlying operating profit and capital employed
attributable to non-controlling interests in operations where Anglo American has control but does not hold
100% of the equity. Joint ventures, joint operations and associates are included in their proportionate
interest and in line with appropriate accounting treatment.
Adjustments
- Structural adjustments for the De Beers acquisition assuming ownership of 85% of De Beers for 1 January 2012
and disposals from Anglo American Sur assuming ownership of 50.1% from the start of 2012 will be included;
- The De Beers fair value uplift which resulted from the revaluing upward of Anglo American plc’s existing
45% share of De Beers will be removed from opening 2012 capital employed onwards;
- Impairments announced after 10 December 2013 are not removed from total capital employed;
- The impairments and disposals which will be removed from opening capital employed from 2012 and onwards,
on a post-tax basis, are:
– Pebble loss on exit
– Michiquillay impairment
– Barro Alto furnace write-down consequent on the rebuild of both furnaces (not the impairment)
– Khomanani, Khuseleka and Union North Declines, plus 2012 platinum project asset scrappings
– Isibonelo and Kleinkopje impairments.
In 2012, Anglo American took an impairment on Minas-Rio and asset scrappings in Platinum. These have been
removed from 2012 opening capital employed balance, on a post-tax basis, for consistency.
Attributable ROCE is based on realised prices and foreign exchange rates, and includes the above adjustments to
capital employed.
The 2013 attributable operating profit of $4,369 million is the underlying operating profit attributable to
equity shareholders of Anglo American plc.
Reconciliation of total capital employed to Average Attributable Capital Employed
US$ billion 31 December 31 December 1 January
2013 2012 2012
Net assets 37 44 43
Less: financial asset
investments (2) (2) (3)
Add: net debt 11 9 1
Less: De Beers fair value
adjustment on 45% pre-existing
stake(1) (1) (2) –
Total capital employed 45 48 41
Less: Impairments taken in
2012(2) – – (5)
Impairments taken in 2013 that
had been announced before 10
December 2013(3) – (1) (1)
Add: 2013 impairment where no
benefit taken for attributable
ROCE purposes(4) 1 – –
Structural assumptions – De
Beers increase holding to a
subsidiary(5) – – 8
Total capital employed 46 46 43
Less: non-controlling interest
capital employed (7) (7) (4)
Structural assumptions – Remove
non-controlling interest relating
to De Beers consolidation(5) – – (1)
Structural assumptions – Remove
non-controlling interest relating
to Anglo American Sur disposal(6) – – (1)
Closing attributable
non-controlling interest
adjustment (7) (7) (6)
Closing attributable capital
employed 39 40 37
Average attributable capital
employed 39 38 –
(1) Removal of the accounting fair value uplift adjustment on the Group’s existing 45% holding following
acquisition of control on 16 August 2012.
(2) 2012 Impairments (post tax): Minas Rio ($4.0 billion) and Platinum operations impairment ($0.6 billion).
(3) 2013 Impairments and disposals (post tax) reducing capital employed: Barro Alto furnace ($0.2 billion),
Platinum portfolio review ($0.3 billion), Michiquillay ($0.3billion), Isibonelo and Kleinkopje ($0.2billion),
disposal of Amapá ($0.2 billion) and Pebble ($0.3 billion).
(4) 2013 Impairments (post tax) not removed from capital employed: Barro Alto impairment ($0.5 billion) and
Foxleigh ($0.2 billion).
(5) De Beers has been consolidated into the Group’s results since its acquisition on 16 August 2012.
An adjustment has been made to the 2012 Capital Employed total to increase to a 100% of DeBeers
for the full year (net of fair value uplift) and the non-controlling interest of 15% stripped out within NCI
capital employed, so that 2012 and 2013 ROCE figures are comparable.
(6) The disposal of 25.4% of Anglo American Sur in 2012. An adjustment has been made to the 2012 non-controlling
interest capital employed to reduce the holding in Anglo American Sur to 50.1% for the full year, so that 2012
and 2013 ROCE figures are comparable.
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 DeBeers which are quoted on a 100% basis.
2013 2012
Iron Ore and Manganese
segment (tonnes)
Kumba Iron Ore
Lump 25,496,000 26,580,500
Fines 16,877,100 16,484,600
Total Kumba production 42,373,100 43,065,100
Sishen 30,938,500 33,696,700
Kolomela 10,808,700 8,544,900
Thabazimbi 625,900 823,500
Total Kumba production 42,373,100 43,065,100
Kumba sales volume
RSA export iron ore 39,076,000 39,657,000
RSA domestic iron ore 4,631,400 4,683,000
Samancor
Manganese ore(1) 3,301,700 3,347,800
Manganese alloys(1) (2) 251,100 198,400
Samancor sales volume
Manganese ore 3,262,100 3,212,400
Manganese alloys 248,700 236,000
Coal (tonnes)
Metallurgical Coal segment
Australia
Metallurgical – Export
Coking Coal 11,711,600 10,484,700
Metallurgical – Export PCI 5,260,200 5,802,700
Thermal – Export 6,264,000 6,045,900
Thermal – Domestic 6,239,400 6,924,600
Total Australian
Metallurgical Coal segment
coal production 29,475,200 29,257,900
Canada
Metallurgical – Export
Coking Coal 1,663,800 1,376,900
Metallurgical – Export PCI 20,000 –
Total Metallurgical Coal
segment coal production 31,159,000 30,634,800
Australia
Callide 6,317,800 7,464,000
Capcoal 6,061,400 6,022,400
Dawson complex 3,985,700 4,593,500
Drayton 3,710,700 3,663,300
Foxleigh 1,966,600 1,896,000
Jellinbah East 2,516,500 2,073,200
Moranbah North 4,916,500 3,545,500
Total Australian
Metallurgical Coal segment
coal production 29,475,200 29,257,900
Canada
Peace River Coal 1,683,800 1,376,900
Total Metallurgical Coal
segment coal production 31,159,000 30,634,800
Weighted average achieved
FOB prices
Metallurgical – Export(3)
US$/t 140 178
Thermal – Export US$/t 84 96
Thermal – Domestic US$/t 39 37
Sales volumes
Metallurgical – Export(4) 19,044,500 17,413,000
Thermal – Export 6,371,600 6,042,600
Thermal – Domestic 6,125,400 6,920,900
(1) Saleable production.
(2) Production includes Medium Carbon Ferro Manganese.
(3) Within export coking and export PCI coals there are different grades of coal with different weighted
average prices compared to benchmark.
(4) Includes both hard coking coal and PCI sales volumes.
2013 2012
Coal (tonnes) (continued)
Thermal Coal segment
South Africa
Thermal – Export 17,031,300 17,132,100
Thermal – Domestic (Eskom) 33,567,400 33,706,400
Thermal – Domestic (Other) 5,992,000 6,219,100
Metallurgical – Domestic – 74,100
Total South African
Thermal Coal production 56,590,700 57,131,700
Colombia Thermal – Export 11,001,500 11,548,800
Total Thermal Coal segment
coal production 67,592,200 68,680,500
South Africa
Goedehoop 4,680,800 4,859,900
Greenside 3,269,500 2,883,200
Isibonelo 5,066,800 5,399,200
Kleinkopje 3,997,200 3,765,500
Kriel 8,102,700 8,096,900
Landau 4,084,000 4,272,300
Mafube 1,825,400 1,804,100
New Denmark 3,586,900 3,401,200
New Vaal 17,105,700 17,623,300
Zibulo 4,871,700 5,026,100
Total South African
Thermal Coal production 56,590,700 57,131,700
Colombia Carbones del
Cerrejón 11,001,500 11,548,800
Total Thermal Coal segment
coal production 67,592,200 68,680,500
Weighted average achieved
FOB prices
South Africa
Thermal – Export US$/t 77 92
Thermal – Domestic US$/t 19 21
Colombia
Thermal – Export US$/t 73 89
Sales volumes
South Africa
Thermal – Export 17,501,800 17,150,600
Thermal – Domestic 39,044,100 40,018,000
Colombia
Thermal – Export 11,152,500 10,925,600
Total Thermal Coal Sales 67,698,400 68,094,200
2013 2012
Copper segment(1)
Collahuasi
100% basis (Anglo American
share 44%)
Ore mined tonnes 80,955,500 74,647,600
Ore processed Oxide tonnes 7,028,900 8,081,400
Sulphide tonnes 47,559,000 43,618,600
Ore grade process Oxide % ASCu(2) 0.81 0.88
Sulphide % TCu(3) 1.07 0.76
Production Copper cathode tonnes 28,400 36,800
Copper in
concentrate tonnes 416,100 245,300
Total copper production
for Collahuasi(4) tonnes 444,500 282,100
Anglo American’s share of
copper production for
Collahuasi(4) tonnes 195,600 124,100
Anglo American Sur
Los Bronces mine(5)
Ore mined tonnes 56,938,200 49,766,500
Marginal ore mined tonnes 17,221,300 17,854,200
Ore processed Sulphide tonnes 51,960,500 45,854,800
Ore grade processed Sulphide % TCu 0.83 0.84
Production Copper
cathode tonnes 37,700 40,800
Copper in
sulphate tonnes 600 2,500
Copper in
concentrate tonnes 378,000 322,000
Production total tonnes 416,300 365,300
El Soldado mine(5)
Ore mined tonnes 8,576,700 8,544,500
Ore processed Sulphide tonnes 7,312,500 7,782,300
Ore grade processed Sulphide % TCu 0.88 0.83
Production Copper
cathode tonnes 1,100 2,000
Copper in
concentrate tonnes 50,400 51,800
Production total tonnes 51,500 53,800
Chagres Smelter(5)
Ore smelted tonnes 149,800 142,900
Production tonnes 145,200 138,700
Total copper production
for Anglo American Sur tonnes 467,800 419,100
Anglo American Norte
Mantos Blancos mine
Ore processed Sulphide tonnes 4,329,600 4,393,200
Ore grade processed Sulphide % ICu(6) 0.65 0.64
Production Copper
cathode tonnes 29,500 29,200
Copper in
concentrate tonnes 25,100 25,000
Production total tonnes 54,600 54,200
Mantoverde mine
Ore processed Oxide tonnes 10,385,200 10,460,400
Marginal ore tonnes 8,280,400 8,671,700
Ore grade processed Oxide % ASCu 0.57 0.63
Marginal ore % ASCu 0.25 0.25
Production Copper
cathode tonnes 56,800 62,300
Total copper production
for Anglo American Norte tonnes 111,400 116,500
Total Copper segment
copper production tonnes 1,023,700 817,700
Total attributable copper
production(7) tonnes 774,800 659,700
Attributable sales volumes tonnes 768,200 643,600
(1) Excludes Anglo American Platinum’s copper production.
(2) ASCu = acid soluble copper.
(3) TCu = total copper.
(4) Anglo American’s share of Collahuasi production is 44%.
(5) Anglo American previously held 74.5% of Anglo American Sur; as from 24 August 2012, it held
50.1%.Production is stated at 100% as Anglo American continues to consolidate Anglo American Sur.
(6) ICu = insoluble copper (total copper less acid soluble copper).
(7) Difference between total copper production and attributable copper production arises from Anglo American’s
44% interest in Collahuasi.
2013 2012
Nickel segment
Barro Alto
Ore mined tonnes 1,999,000 1,844,400
Ore processed tonnes 1,616,300 1,422,100
Ore grade processed % Ni 1.82 1.94
Production tonnes 25,100 21,600
Codemin
Ore mined tonnes 6,800 –
Ore processed tonnes 602,400 581,100
Ore grade processed % Ni 1.71 1.81
Production tonnes 9,300 9,600
Loma de Níquel
Ore mined tonnes – 432,900
Ore processed tonnes – 767,400
Ore grade processed % Ni – 1.40%
Production tonnes – 8,100
Total Nickel segment
nickel production(1) tonnes 34,400 39,300
Sales volumes tonnes 33,800 40,000
Niobium and Phosphates
segment Niobium
Ore mined tonnes 1,228,809 933,203
Ore processed tonnes 963,118 973,484
Ore grade processed % Nb 1.16 1.21
Production tonnes 4,500 4,400
Phosphates
Concentrate tonnes 1,406,300 1,357,100
Phosphoric acid tonnes 317,100 299,800
Fertiliser(2) tonnes 1,199,000 1,127,600
DCP tonnes 159,600 150,000
Platinum segment
Refined production
Platinum troy ounces 2,379,500 2,378,600
Palladium troy ounces 1,380,800 1,395,900
Rhodium troy ounces 294,700 310,700
Copper refined(3) tonnes 8,300 11,400
Copper matte(3) tonnes 5,800 –
Nickel refined(3) tonnes 16,800 17,700
Nickel matte(3) tonnes 5,800 –
Gold troy ounces 100,000 105,200
Equivalent refined
Platinum troy ounces 2,320,400 2,219,100
4E Built-up head grade(4) g/tonne milled 3.26 3.20
Diamonds segment (De Beers)
Carats recovered 100% basis
Debswana 22,707,000 20,216,000
Namdeb Holdings 1,762,000 1,667,000
De Beers Consolidated
Mines 4,724,000 4,432,000
De Beers Canada 1,966,000 1,560,000
Total carats recovered 31,159,000 27,875,000
(1) Excludes Anglo American Platinum’s nickel production.
(2) 2012 fertiliser production restated to reflect the change in production quantification methodology in the
acidulation plant at Cubatão.
(3) Nickel and copper refined through third parties is now shown as production of nickel matte and copper matte.
Nickel and copper matte, per the table, reflect matte sold to a third party in Q4 2013 from 2012 and 2013
production stockpiles.
(4) 4E: the grade measured as the combined content of the four most valuable precious metals: platinum,
palladium, rhodium and gold.
Production statistics (continued)
Quarterly production statistics
Quarter ended % Change (Quarter ended)
31 December 31 December
2013 v 2013 v
31 December 30 September 30 June 31 March 31 December 30 September 31 December
2013 2013 2013 2013 2012 2013 2012
Iron Ore and
Manganese
segment
tonnes)
Iron ore 11,285,700 9,474,600 11,277,800 10,335,000 9,012,500 19% 25%
Manganese
ore(1) 846,000 788,100 864,200 803,400 846,800 7% –
Manganese
alloys(1)(2) 66,200 54,800 72,800 57,300 61,200 21% 8%
Metallurgical
Coal segment
(tonnes)
Metallurgical
– Export coking
coal 3,473,200 3,465,500 3,111,900 3,324,800 3,387,000 – 3%
Metallurgical
– Export PCI 1,260,200 1,446,400 1,283,800 1,289,800 1,193,000 (13)% 6%
Thermal –
Export 1,584,700 1,672,400 1,513,100 1,493,800 1,689,400 (5)% (6)%
Thermal –
Domestic 1,688,800 1,752,300 1,725,300 1,073,000 2,025,300 (4)% (17)%
Thermal Coal
segment
(tonnes)
Thermal –
Export (RSA) 4,602,000 4,504,900 4,015,200 3,909,200 4,659,100 2% (1)%
Thermal –
Domestic
(Eskom) 7,617,800 9,053,200 8,766,600 8,129,800 8,560,600 (16)% (11)%
Thermal –
Domestic other 1,234,100 1,665,300 1,573,800 1,518,800 1,594,500 (26)% (23)%
Thermal –
Export
(Colombia) 3,290,300 3,184,900 3,014,300 1,512,000 2,661,700 3% 24%
Copper
segment
(tonnes)(3)(4) 214,400 207,100 182,900 170,400 172,900 4% 24%
Nickel
segment
(tonnes)(5) 10,200 9,500 8,500 6,200 7,400 7% 38%
Niobium and
Phosphates
segment
(tonnes)
Niobium 1,200 1,100 1,100 1,100 1,000 9% 20%
Phosphates
(fertiliser)(6) 299,000 326,300 300,500 273,200 294,200 (8)% 2%
Platinum
segment
Platinum (troy
ounces) 692,100 666,400 581,800 439,200 703,800 4% (2)%
Palladium
(troy ounces) 428,200 369,300 319,700 263,600 413,300 16% 4%
Rhodium (troy
ounces) 83,500 84,900 69,800 56,500 91,200 (2)% (8)%
Copper refined
(tonnes) 1,800 2,600 1,900 2,000 2,500 (31)% (28)%
Copper matte
(tonnes) 1,400 300 4,100 – – 367% –
Nickel refined
(tonnes) 5,200 4,900 3,400 3,300 3,900 6% 33%
Nickel matte
(tonnes) 100 300 5,400 – – (67)% –
Gold (troy
ounces) 26,700 33,700 16,300 23,300 18,600 (21)% 44%
Equivalent
refined
platinum (troy
ounces) 520,300 622,600 594,500 583,000 416,000 (16)% 25%
Diamonds
segment (De
Beers)
(diamonds
recovered –
carats) 100%
basis
Diamonds 9,132,000 7,732,000 7,931,000 6,364,000 8,051,000 18% 13%
(1) Saleable production.
(2) Production includes medium carbon ferro-manganese.
(3) Excludes Platinum copper production.
(4) Copper segment attributable production.
(5) Excludes Platinum nickel production.
(6) 2012 fertiliser production restated to reflect the change in production quantification methodology in the acidulation plant at Cubatão.
ANGLO AMERICAN plc
(Incorporated in
England and Wales – Registered number 3564138)
(the Company)
Notice of Final Dividend (Dividend No. 27)
The directors have recommended that a dividend on the Company’s ordinary share capital in respect of the year ended 31 December 2013 will,
subject to approval by shareholders at the Annual General Meeting to be held at 2.30 pm on Thursday 24 April 2014, be paid as
follows:
Amount (United States currency) 53 cents per ordinary share (note 1)
Amount (South African currency) R5.8696440 per ordinary share (note 2)
Last day to effect removal of shares between the UK
and SA registers Thursday 13 February 2014
Last day to trade on the JSE Limited (JSE) to qualify
for dividend Thursday 13 March 2014
Ex-dividend on the JSE from the commencement of
trading on Friday 14 March 2014 (note 3)
Ex-dividend on the London Stock Exchange from the
commencement of trading on Wednesday 19 March 2014
Record date applicable to the South African branch
register Thursday 20 March 2014
Record date applicable to the United Kingdom principal
register Friday 21 March 2014
Removal of shares between the UK and SA registers
permissible from Monday 24 March 2014
Last day for receipt of US$:£/€ currency elections by
the UK Registrars (note 1) Friday 4 April 2014
Last day for receipt of Dividend Reinvestment Plan
(DRIP) mandate forms by the UK Registrars (notes 4, 5
and 6) Friday 4 April 2014
Last day for receipt of DRIP mandate forms by Central
Securities Depository Participants (CSDPs) (notes 4, 5
and 6) Tuesday 8 April 2014
Last day for receipt of DRIP mandate forms by South
African Transfer Secretaries (notes 4, 5 and 6) Wednesday 9 April 2014
Currency conversion US$:£/€ rates announced on Monday 14 April 2014
Dividend warrants posted SA Friday 25 April 2014
Dividend warrants posted UK Monday 28 April 2014
Payment date of dividend Tuesday 29 April 2014
Notes
1. Shareholders on the United Kingdom register of members with an address in the United Kingdom will be paid in
pounds sterling and those with an address in a country in the European Union which has adopted the euro, will be
paid in euros. Such shareholders may, however, elect to be paid their dividends in US dollars provided the UK
Registrars receive such election by Friday 4 April 2014. 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 R5.8696440 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 R4.9891974 per ordinary share. Anglo American plc had a total of
1,394,171,599 ordinary shares in issue, including 11,293,733 treasury shares, as at the date hereof. In South
Africa the dividend will be distributed by Anglo South Africa Capital (Pty) Limited, a South African company
with tax registration number 9273/364/84/5, 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 the JSE ex-dividend date to the record date (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 on Thursday 8 May 2014.
CREST accounts will be credited on Tuesday 6 May 2014.
6. Copies of the terms and conditions of the DRIP are available from the UK Registrars or the South African
Transfer Secretaries.
14 February 2014
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
14 February 2014
Sponsor: UBS South Africa (Pty) Ltd
Date: 14/02/2014 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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