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Publication of annual report 2017 and notice of general meeting 2018
Anglo American plc
(incorporated in England and Wales)
Registration number 3564138
Registered office: 20 Carlton House Terrace, London SW1Y 5AN
ISIN: GBOOB1XZS820
JSE Share Code: AGL
NSX Share Code: ANM
(the "Company")
5 March 2018
PUBLICATION OF ANNUAL REPORT 2017 AND NOTICE OF ANNUAL GENERAL MEETING 2018
In accordance with Listing Rule 9.6 and Disclosure Guidance and Transparency Rule (“DTR”) 4.1, the
Company announces that the following documents are today published on its website:
www.angloamerican.com
• Annual Report and Accounts for the year ended 31 December 2017 (the “2017 Annual
Report”)
• Notice of the 2018 Annual General Meeting to be held on 8 May 2018
• Sustainability Report 2017
The 2017 Annual Report and Notice of the 2018 Annual General Meeting (and proxy form for the
2018 Annual General Meeting) have been submitted to the UK Listing Authority via the National
Storage Mechanism and will shortly be made available for inspection at
www.morningstar.co.uk/uk/NSM.
The above mentioned documents (except for the Proxy form) are available on our website at
www.angloamerican.com/investors/annual-reporting and
www.angloamerican.com/investors/shareholder-information/agm/agm2018 respectively, and will be
posted to shareholders on 26 March 2018. Shareholders can obtain additional copies of the proxy
form from our Registrar, Equiniti Limited at Aspect House, Spencer Road, Lancing, West Sussex
BN99 6DA or view online at www.shareview.co.uk.
This announcement should be read in conjunction with the Company’s announcement issued on 22
February 2018. Together these constitute the material required by DTR 6.3.5 to be communicated to
the media in full unedited text through a Regulatory Information Service. This material is not a
substitute for reading the Company’s 2017 Annual Report. Page references and references to notes
to the financial statements, refer to those contained in the 2017 Annual Report.
An indication of the important events that occurred in 2017 and their impact on the consolidated
financial statements and the consolidated financial statements themselves were announced to the
London Stock Exchange on 22 February 2018, forming part of the Preliminary Results announcement
for the year ended 31 December 2017. Additional content forming part of the management report is
below.
PRINCIPAL RISKS
We define a principal risk as a risk or combination of risks that would threaten the business model,
future performance, solvency or liquidity of Anglo American. In addition to these principal risks, we
continue to be exposed to other risks related to currency, inflation, community relations, environment,
litigation and regulatory proceedings, changing social expectations, infrastructure and human
resources. These risks are subject to our normal procedures to identify, implement and oversee
appropriate mitigation actions. These principal risks are considered over the next three years as a
minimum, but we recognise that many of them will be relevant for a longer period.
Principal risks 2-11 on pages 42-45
CATASTROPHIC RISKS
We also face certain risks that we deem catastrophic risks. These are very high severity, very low
likelihood events that could result in multiple fatalities or injuries, an unplanned fundamental change
to strategy or the way we operate, and have significant financial consequences. We do not consider
likelihood when assessing these risks, as the potential impacts mean these risks must be treated as a
priority. Catastrophic risks are included as principal risks.
For more on catastrophic risks see page 42
RISK APPETITE
We define risk appetite as ‘the nature and extent of risk Anglo American is willing to accept in relation
to the pursuit of its objectives’. We look at risk appetite from the context of severity of the
consequences should the risk materialise, any relevant internal or external factors influencing the risk,
and the status of management actions to mitigate or control the risk. A scale is used to help determine
the limit of appetite for each risk, recognising that risk appetite will change over time.
If a risk exceeds appetite, it will threaten the achievement of objectives and may require a change to
strategy. Risks that are approaching the limit of the Group’s risk appetite may require management
actions to be accelerated or enhanced in order to ensure the risks remain within appetite levels.
Further details on the risk management and internal control systems and the review of their
effectiveness are provided on pages 85-86
1.CATASTROPHIC RISKS
We are exposed to the Impact: Multiple fatalities and No change in risk
following risks we deem as injuries, damage to assets,
potentially catastrophic: environmental damage, Risk appetite: Operating within
tailings dam failure; slope production loss, reputational the limits of our appetite.
wall failure; mineshaft damage and loss of licence to
failure; and fire and operate. Financial costs Commentary: These very high
explosion. associated with recovery and impact but very low frequency risks
liability claims may be are treated with the highest
Root cause: Any of these risks significant. Regulatory issues priority.
may result from inadequate may result and community
design or construction, adverse relations may be affected.
geological conditions,
shortcomings in operational Mitigation: Technical
performance, natural events standards exist that provide
such as seismic activity or minimum criteria for design
flooding, and failure of and operational performance
structures or machinery and requirements, implementation
equipment. of which is regularly inspected
by technical experts. Additional
assurance work is conducted
to assess the adequacy of
controls associated with these
risks.
2.POLITICAL AND REGULATORY
Uncertainty and adverse Impact: Uncertainty over No change in risk
changes to mining industry future business conditions
regulation, legislation or tax leads to a lack of confidence Risk appetite: Operating within
rates can occur in any in making investment decisions, the limits of our appetite.
country in which we operate. which can influence future
financial performance. Commentary: Global economic
Root cause: The Group has Increased costs can be conditions can have a significant
no control over political acts, incurred through additional impact on countries whose
actions of regulators, or regulations or resource taxes, economies are exposed to
changes in local tax rates. Our while the ability to execute commodities, placing greater
licence to operate through strategic initiatives that reduce pressure on governments to find
mining rights is dependent on a costs or divest assets may also alternative means of raising
number of factors including be restricted, all of which may revenues, and increasing the risk
compliance with regulations. reduce profitability and affect of social and labour unrest. These
future performance. Political factors could increase the political
instability can also result in risks faced by the Group.
civil unrest, nullification -
or nonrenewal of existing
agreements, mining permits,
sales agreements or leases.
These may adversely affect the
Group’s operations or results
of those operations.
Mitigation: Anglo American
has an active engagement
strategy with the governments,
regulators and other
stakeholders within the
countries in which we operate
or plan to operate, as well as at
international level. We assess
portfolio capital investments
against political risks and avoid
or minimise exposure to
jurisdictions with unacceptable
risk levels. We actively monitor
regulatory and political
developments at a national
level, as well as global themes
and international policy trends,
on a continuous basis. See
page 14 for more detail on how
we engage with our key
stakeholders.
3.COMPETITIVE POSITION
Inability to pursue a Impact: Inability to execute A new principal risk
profitable growth strategy. growth strategy, resulting in a
reduced valuation. Risk appetite: Operating within
Root cause: While Anglo the limits of our appetite.
American aims to pursue an Mitigation: A cash
asset-driven profitable growth improvement programme has Commentary: This is a new
strategy, forecast cash flows been implemented across the principal risk for 2017.
may not be adequate to fund business and the Group’s debt
growth options that maintain profile has been restructured to
competitiveness owing to low support business growth plans.
commodity prices or
operational performance being
below expectations.
4.INVESTOR ACTIVISM
Inability to execute strategy Impact: Investor pressure may A new principal risk
or significantly change cover portfolio composition,
strategy in the event of commodity choices or Risk appetite: Operating within
investors seeking to geographical locations in which the limits of our appetite.
influence management to we operate or plan to operate
take an alternative direction. in, all of which may have an Commentary: This is a new
impact on longer term financial principal risk for 2017.
returns.
Root cause: Any larger,
influential shareholder(s) may
exert pressure on management Mitigation: A proactive and
of companies they invest in to regular engagement
take a direction they assert is programme with shareholders
more conducive to realising is undertaken to explain the
higher returns. Group’s strategy and portfolio,
listen to and consider investor
concerns, and to provide
reassurance on any risks that
are of major concern to
investors.
5.FUTURE DEMAND FOR DIAMONDS
Demand for diamonds Impact: Potential loss of rough This risk has increased since
impacted as production and diamond sales, leading to a 2016
marketing of synthetics negative impact on revenue,
increases. cash flow, profitability and Risk appetite: Operating within
value. the limits of our appetite.
Root cause: Technological Commentary: We believe the
developments have led to the Mitigation: While research likelihood of the disclosed
production of higher quality underlines consumers’ synthetics risk materialising has
synthetics. Producers and continued desire for natural increased owing to the factors
distributors of this material may diamonds owing to their described.
attempt to sell fraudulently into inherent value and rarity, De
the diamond pipeline Beers has a comprehensive
(undisclosed) or market and strategy to mitigate risk of both
sell as synthetics (disclosed), the entry of undisclosed
with manufacturing and synthetics into the pipeline and
distribution sources for the the potentially misleading
latter increasing. marketing of disclosed
synthetics. In addition,
measures to emphasise and
protect the inherent value of
natural diamonds include:
increased marketing
investment, including through
the Diamond Producers
Association, e.g. reasserting
the emotional symbolism of
diamonds through the Real is
Rare campaign; investment in
blockchain to give consumers
confidence as to the natural
provenance of a diamond; and
investment in bespoke
technology to readily detect all
synthetics. Details of how
technology is developed and
used to mitigate this risk are
provided on page 48.
6. FUTURE DEMAND FOR PGMs
Longer term demand for Impact: A negative impact on No change in risk
PGMs is impacted by revenue, cash flow, profitability
fundamental shifts in market and valuation.
forces. Risk appetite: Operating within
the limits of our appetite.
Mitigation: Our Platinum
Root cause: Longer term business has a strategy to Commentary: We see this as a
demand is at risk from grow PGM demand in longer term threat to the business.
declining internal combustion industrial and jewellery sectors
engine manufacturing, and a through marketing and
switch to battery operated investment initiatives in
vehicles instead of fuel cell research, product development
electric vehicles, which and market development
continue to use higher volumes opportunities, particularly in
of PGMs. Indian and Chinese jewellery
markets.
7.CYBER SECURITY
Potential loss or harm to our Impact: Theft or loss of A new principal risk
technical infrastructure and intellectual property, financial
the use of technology within losses, increased costs and Risk appetite: Operating within
the organisation from damage to reputation. the limits of our appetite.
malicious or unintentional
sources. Commentary: This is a new
Mitigation: We have employed principal risk for 2017.
a specialist third party to
Root cause: The number and oversee our network security.
sophistication of cyber criminal We have achieved UK Cyber
attacks is increasing. Essentials Certification and an
ongoing cyber awareness
programme is in place across
the Group.
8.SAFETY
Failure to deliver a sustained Impact: Loss of life, workplace This risk has increased since
improvement in safety injuries and safety-related 2016
performance. stoppages all immediately
affect production, while, over Risk appetite: Operating within
Root cause: Inability to deliver the longer term, such factors the limits of our appetite.
a sustained improvement in are also a threat to our licence
safety performance will result to operate. Commentary: During 2017 there
from management were nine fatalities, compared with
interventions and training Mitigation: All operations 11 in 2016. This is an
initiatives failing to translate continue to implement safety unacceptable level and explains
into behavioural change by all improvement plans, with a why the risk has increased.
employees and contractors. focus on: effective Management remains committed
Non-compliance with critical management of critical controls to eliminating fatalities.
controls is a common failure in required to manage significant
safety incidents. safety risks; learning from high
potential incidents and
hazards; embedding a safety
culture; and leadership
engagement and
accountability. Our Operating
Model has been updated to
further integrate safety.
9.COMMODITY PRICES
Global macro-economic Impact: Low commodity prices This risk has decreased since
conditions leading to can result in lower levels of 2016
sustained low commodity cash flow, profitability and
prices and/or volatility. valuation. Debt costs may rise Risk appetite: Operating within
owing to ratings agency the limits of our appetite.
Root cause: The most downgrades and the possibility
significant factors contributing of restricted access to funding. Commentary: We believe the risk
to this risk at present are the The Group may be unable to of an economic shock in China has
slowdown in growth in China complete any divestment reduced, with a measured
and other emerging markets, programme within the desired slowdown being the more likely
low growth rates in developed timescales or achieve scenario. More broadly, global
economies and an oversupply expected values. The capacity economic activity has improved
of commodities into the market. to invest in growth projects is slightly, although downside risks
Other factors such as weak constrained during periods of remain.
regional economies, fiscal low commodity prices – which
crises and conflict can also may, in turn, affect future
influence the economic performance.
environment and contribute to
weak commodity prices. Mitigation: The successful
delivery of cash improvement
and operational performance
targets remains the key
mitigation strategy for this risk.
Regular updates of economic
analysis and commodity price
assumptions are discussed
with executive management
and the Board.
10.CORRUPTION
Bribery or other forms of Impact: Potential criminal A new principal risk
corruption committed by an investigations, adverse media
employee or agent of Anglo attention and reputational Risk appetite: Operating within
American. damage. A possible negative the limits of our appetite.
impact on licensing processes
Root cause: Anglo American and valuation. Commentary: This is a new
has operations in some principal risk for 2017, given the
countries where there is a Mitigation: A comprehensive heightened prominence of
relatively high risk of Anti-Bribery and Corruption corruption issues in the extractives
corruption. Policy and programme, sector.
including risk assessment,
training and awareness, with
active monitoring is in place.
11.OPERATIONAL PERFORMANCE INCLUDING DELIVERY OF CASH TARGETS
Unplanned operational Impact: Inability to achieve This risk has decreased since
stoppages impacting production, cash flow or 2016
production and inability to profitability targets.There are
deliver the underlying potential safety-related matters Risk appetite: Operating within
EBITDA improvement target associated with unplanned the limits of our appetite.
of $0.8 billion in 2018. operational stoppages, along
with a loss of investor Commentary: An underlying
confidence. EBITDA improvement target of
Root cause: Unplanned and $0.8 billion is planned for 2018.
unexpected operational issues The Operating Model is
will affect delivery of the Mitigation: Implementation of contributing to the mitigation of this
underlying EBITDA target. our Operating Model, risk.
Failure to implement the supported by operational risk
Operating Model, manage cost management and assurance
inflation or maintain critical processes, are the key
plant, machinery and mitigations against this risk.
infrastructure will affect our Compliance with our technical
performance levels. We are standards will prevent certain
also exposed to failure of operational risks occurring.
third-party owned and operated Regular tracking and
infrastructure, e.g. rail monitoring of progress against
networks and ports. Our the underlying EBITDA targets
operations may also be exposed is undertaken.
to natural catastrophes or
extreme weather.
RELATED PARTY TRANSACTIONS
35. RELATED PARTY TRANSACTIONS
The Group has a related party relationship with its subsidiaries, joint operations, associates and joint
ventures (see notes 34 and 35). Members of the Board and the Group Management Committee are
considered to be related parties.
The Company and its subsidiaries, in the ordinary course of business, enter into various sale,
purchase and service transactions with joint operations, associates, joint ventures and others in which
the Group has a material interest. These transactions are under terms that are no less favourable to
the Group than those arranged with third parties.
Associates Joint ventures Joint operations
US$ million 2017 2016 2017 2016 2017 2016
Transactions with related parties
Sale of goods and services 17 19 – 1 197 171
Purchase of goods and services (430) (399) (163) (137) (3,108) (3,390)
Balances with related parties
Trade and other receivables from related parties 3 5 1 1 23 17
Trade and other payables to related parties (211) (126) (29) (30) (93) (79)
Loans receivable from related parties – – 230 401 – –
Balances and transactions with joint operations or joint operation partners represent the portion that
the Group does not have the right to offset against the corresponding amount recorded by the
respective joint operations. These amounts primarily relate to purchases by De Beers and Platinum
from their joint operations in excess of the Group’s attributable share of their production.
Loans receivable from related parties are included in Financial asset investments on the Consolidated
balance sheet.
Remuneration and benefits received by directors are disclosed in the Remuneration report.
Remuneration and benefits of key management personnel, including directors, are disclosed in note
26. Information relating to pension fund arrangements is disclosed in note 27.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the Annual Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. The
directors are required to prepare the Group financial statements in accordance with International
Financial Reporting Standards (IFRS), as adopted by the European Union and Article 4 of the IAS
regulation, and have elected to prepare the parent company financial statements in accordance with
Financial Reporting Standard 101 ‘Reduced Disclosure Framework’. The directors must not approve
the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that period.
In preparing the parent company financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently
• make judgements and accounting estimates that are reasonable and prudent
• state whether Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ has been
followed, subject to any material departures disclosed and explained in the financial
statements
• prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the Company will continue in business.
In preparing the Group financial statements, IAS 1 requires that directors:
• properly select and apply accounting policies
• present information, including accounting policies, in a manner that provides relevant,
reliable, comparable and understandable information
• provide additional disclosures when compliance with the specific requirements in IFRS is
insufficient to enable users to understand the impact of particular transactions, other events
and conditions on the entity’s financial position and financial performance
• make an assessment of the Company’s ability to continue as a going concern.
The directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the Company’s transactions, disclose with reasonable accuracy at any time the financial
position of the Company and enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial
information included on the Group’s website. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
RESPONSIBILITY STATEMENT
for the year ended 31 December 2017
We confirm that to the best of our knowledge:
(a) the financial statements, prepared in accordance with the applicable set of accounting standards,
give a true and fair view of the assets, liabilities, financial position and profit of Anglo American plc
and the undertakings included in the consolidation taken as a whole
(b) the strategic report includes a fair review of the development and performance of the business and
the position of Anglo American plc and the undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and uncertainties that they face
(c) the annual report and financial statements, taken as a whole, are fair, balanced and
understandable and provide the information necessary for shareholders to assess the Company’s
performance, business model and strategy.
By order of the Board
Mark Cutifani Stephen Pearce
Chief Executive Finance Director
For further information, please contact:
Media Investors
UK UK
James Wyatt-Tilby Paul Galloway
james.wyatt-tilby@angloamerican.com paul.galloway@angloamerican.com
Tel: +44 (0)20 7968 8759 Tel: +44 (0)20 7968 8718
Marcelo Esquivel Trevor Dyer
marcelo.esquivel@angloamerican.com trevor.dyer@angloamerican.com
Tel: +44 (0)20 7968 8891 Tel: +44 (0)20 7968 8992
South Africa Sheena Jethwa
Pranill Ramchander sheena.jethwa@angloamerican.com
pranill.ramchander@angloamerican.com Tel: +44 (0)20 7968 8680
Tel: +27 (0)11 638 2592
Ann Farndell
ann.farndell@angloamerican.com
Tel: +27 (0)11 638 2786
Notes to editors:
Anglo American is a globally diversified mining business. Our portfolio of world-class competitive
mining operations and undeveloped resources provides the raw materials to meet the growing
consumer-driven demands of the world’s developed and maturing economies. Our people are at the
heart of our business. It is our people who use the latest technologies to find new resources, plan and
build our mines and who mine, process and move and market our products to our customers around
the world.
As a responsible miner – of diamonds (through De Beers), copper, platinum and other precious
metals, iron ore, coal and nickel – we are the custodians of what are precious natural resources. We
work together with our key partners and stakeholders to unlock the long-term value that those
resources represent for our shareholders and for the communities and countries in which we operate
– creating sustainable value and making a real difference.
www.angloamerican.com
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 Ore Reserves and Mineral Resources), are forward-looking statements.
By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of Anglo American, or industry results, to be materially different from
any future results, performance or achievements expressed or implied by such forward-looking statements.
Such forward-looking statements are based on numerous assumptions regarding Anglo American's present and future
business strategies and the environment in which Anglo American will operate in the future. Important factors that could cause
Anglo American's actual results, performance or achievements to differ materially from those in the forward-looking statements
include, among others, levels of actual production during any period, levels of global demand and commodity market prices,
mineral resource exploration and development capabilities, recovery rates and other operational capabilities, the availability of
mining and processing equipment, the ability to produce and transport products profitably, the 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 Guidance
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.
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
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