Wrap Text
Publication of annual report 2018 and notice of annual general meeting 2019
Anglo American plc (the “Company”)
Registered office: 20 Carlton House Terrace, London SW1Y 5AN
Registered number: 3564138 (incorporated in England and Wales)
Legal Entity Identifier: 549300S9XF92D1X8ME43
ISIN: GBOOB1XZS820
JSE Share Code: AGL
NSX Share Code: ANM
4 March 2019
PUBLICATION OF ANNUAL REPORT 2018 AND NOTICE OF ANNUAL GENERAL MEETING 2019
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 2018 (the “2018 Annual Report”)
- Notice of the 2019 Annual General Meeting to be held on 30 April 2019
- Sustainability Report 2018
The 2018 Annual Report and Notice of the 2019 Annual General Meeting (and proxy form for the
2019 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/agm2019 respectively, and will be
posted to shareholders on 18 March 2019. 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
21 February 2019. 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 2018 Annual Report. Page references and references to notes
to the financial statements, refer to those contained in the 2018 Annual Report.
An indication of the important events that occurred in 2018 and their impact on the consolidated
financial statements and the consolidated financial statements themselves were announced to the
London Stock Exchange on 21 February 2019, forming part of the Preliminary Results announcement
for the year ended 31 December 2018. Additional content forming part of the management report is
set out in the appendix to this announcement.
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 Robert Greenberg
marcelo.esquivel@angloamerican.com robert.greenberg@angloamerican.com
Tel: +44 (0)20 7968 8891 Tel: +44 (0)20 7968 2124
South Africa Emma Waterworth
Pranill Ramchander emma.waterworth@angloamerican.com
pranill.ramchander@angloamerican.com Tel: +44 (0)20 7968 8574
Tel: +27 (0)11 638 2592
Ann Farndell
ann.farndell@angloamerican.com
Tel: +27 (0)11 638 2786
Anglo American is a leading global mining company and our products are the essential ingredients in
almost every aspect of modern life. Our portfolio of world-class competitive mining operations and
undeveloped resources provides the metals and minerals that enable a cleaner, more electrified world
and that meet the fast growing consumer-driven demands of the world’s developed and maturing
economies. With our people at the heart of our business, we use innovative practices and the latest
technologies to discover new resources and mine, process, move and market our products to our
customers around the world – safely, responsibly and sustainably.
As a responsible miner – of diamonds (through De Beers), copper, platinum group metals, iron ore, coal
and nickel – we are the custodians of what are precious natural resources. We work together with our
business partners and diverse stakeholders to unlock the sustainable value that those resources
represent for our shareholders, the communities and countries in which we operate, and for society as
a whole. Anglo American is re-imagining mining to improve people’s lives.
www.angloamerican.com
The Company has a primary listing on the Main Market of the London Stock Exchange and secondary
listings on the Johannesburg Stock Exchange, the Botswana Stock Exchange, the Namibia Stock
Exchange and the SIX Swiss Exchange.
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Forward-looking statements:
This announcement includes forward-looking statements. All statements other than statements of historical facts included in
this document, including, without limitation, those regarding Anglo American’s financial position, business, acquisition and
divestment strategy, dividend policy, plans and objectives of management for future operations (including development plans
and objectives relating to Anglo American’s products, production forecasts and Ore Reserve and mineral resource estimates),
are forward-looking statements. By their nature, such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance or achievements of Anglo American, or
industry results, to be materially different from any future results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding
Anglo American’s present and future business strategies and the environment in which Anglo American will operate in the
future. Important factors that could cause Anglo American’s actual results, performance or achievements to differ materially
from those in the forward-looking statements include, among others, levels of actual production during any period, levels of
global demand and commodity market prices, mineral resource exploration and development capabilities, recovery rates and
other operational capabilities, the availability of mining and processing equipment, the ability to produce and transport products
profitably, the availability of transportation infrastructure, the impact of foreign currency exchange rates on market prices and
operating costs, the availability of sufficient credit, the effects of inflation, political uncertainty and economic conditions in
relevant areas of the world, the actions of competitors, activities by governmental authorities such as permitting and changes in
taxation or safety, health, environmental or other types of regulation in the countries where Anglo American operates, conflicts
over land and resource ownership rights and such other risk factors identified in the section of this document titled ‘Managing
Risk Effectively’. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance
should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this
document. Anglo American expressly disclaims any obligation or undertaking (except as required by applicable law, the City
Code on Takeovers and Mergers (the “Takeover Code”), the UK Listing Rules, the Disclosure and Transparency Rules of the
Financial Conduct Authority, the Listings Requirements of the securities exchange of the JSE Limited in South Africa, the SIX
Swiss Exchange, the Botswana Stock Exchange and the Namibian Stock Exchange and any other applicable regulations) to
release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in
Anglo American’s expectations with regard thereto or any change in events, conditions or circumstances on which any such
statement is based. Certain statistical and other information about Anglo American included in this document is sourced from
publicly available third-party sources. As such, it has not been independently verified and presents the views of those third
parties, though these may not necessarily correspond to the views held by Anglo American and Anglo American expressly
disclaims any responsibility for, or liability in respect of, such third party information.
APPENDIX
PRINCIPAL RISKS
We define a principal risk as a risk or combination of risks that would threaten the business model,
future performance, solvency or liquidity of Anglo American. In addition to these principal risks, we
continue to be exposed to other risks related to currency, inflation, community relations, environment,
litigation and regulatory proceedings, changing social expectations, infrastructure and human
resources. These risks are subject to our normal procedures to identify, implement and oversee
appropriate mitigation actions, supported by internal audit work to provide assurance over the status
of controls or mitigating actions. These principal risks are considered over the next three years as a
minimum, but we recognise that many of them will be relevant for a longer period.
Principal risks 2-10 on pages 44-47
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 44
RISK APPETITE
We define risk appetite as ‘the nature and extent of risk Anglo American is willing to accept in relation
to the pursuit of its objectives’. We look at risk appetite from the context of severity of the
consequences should the risk materialise, any relevant internal or external factors influencing the risk,
and the status of management actions to mitigate or control the risk. A scale is used to help determine
the limit of appetite for each risk, recognising that risk appetite will change over time.
If a risk exceeds appetite, it will threaten the achievement of objectives and may require a change to
strategy. Risks that are approaching the limit of the Group’s risk appetite may require management
actions to be accelerated or enhanced to ensure the risks remain within appetite levels.
For catastrophic and operational risks, our risk appetite for exceptions or deficiencies in the status of
our controls that have safety implications is very low. Our internal audit programme evaluates these
controls with technical experts at operations and the results of that audit work will determine the risk
appetite evaluation, along with the management response to any issues identified.
Further details on the risk management and internal control systems and the review of their
effectiveness are provided on pages 97-98
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: Tailings dam failure
tailings dam failure; slope production loss, reputational and slope and underground
wall failure; mineshaft damage and loss of licence to excavation failure risks are
failure; and fire and operate. Financial costs operating within the limits of our
explosion. associated with recovery and appetite. Fire and explosion and
liability claims may be mineshaft failure risks are currently
Root cause: Any of these risks significant. Regulatory issues operating outside of our risk
may result from inadequate may result and community appetite, but actions being taken
design or construction, adverse relations may be affected. are expected to bring these risks
geological conditions, back within our risk appetite during
shortcomings in operational Mitigation: Technical 2019.
performance, natural events standards exist that provide
such as seismic activity or minimum criteria for design Commentary: These very high
flooding, and failure of and operational performance impact but very low frequency risks
structures or machinery and requirements, implementation are treated with the highest
equipment. of which is regularly inspected priority.
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 in Risk appetite: Operating within
rates can occur in any making investment decisions, the limits of our appetite.
country in which we operate. which can influence future
financial performance. Commentary: Global economic
Root cause: The Group has Increased costs can be conditions can have a significant
no control over political acts, incurred through additional impact on countries whose
actions of regulators, or regulations or resource taxes, economies are exposed to
changes in local tax rates. Our while the ability to execute commodities, placing greater
licence to operate through strategic initiatives that reduce pressure on governments to
mining rights is dependent costs or divest assets may also find alternative means of raising
on a number of factors, be restricted, all of which may revenues,and increasing the risk of
including compliance with reduce profitability and affect social and labour unrest. These
regulations. future performance. Political factors could increase the political
instability can also result in civil risks faced by the Group.
unrest and nullification or non-
renewal of existing
agreements, mining permits,
sales agreements or leases.
These may adversely affect the
Group’s operations or
performance of those
operations.
Mitigation: Anglo American
has an active engagement
strategy with governments,
regulators and other
stakeholders within the
countries in which we operate,
or plan to operate, as well as at
an international level. We
assess portfolio capital
investments against political
risks and avoid or minimise
exposure to jurisdictions with
unacceptable risk levels. We
actively monitor regulatory and
political developments at a
national level, as well as global
themes and international policy
trends, on a continuous basis.
See page 16 for more detail on
how we engage with our key
stakeholders.
3. SAFETY
Failure to eliminate fatalities. Impact: Loss of life, workplace No change in risk
injuries and safety-related
Root cause: Inability to stoppages all immediately Risk appetite: Operating within
eliminate fatalities will result affect production, while, over the limits of our appetite.
from management the longer term, such factors
interventions and training are also a threat to our licence Commentary: During 2018, there
initiatives failing to translate to operate. were five fatalities in our managed
into behavioural change by all operations, compared with
employees and contractors. Mitigation: All operations nine in 2017. This is still an
Non-compliance with critical continue to implement safety unacceptable level. Management
controls is a common failure in improvement plans, with a remains committed to eliminating
safety incidents. focus on: effective fatalities and the risk definition has
management of critical controls been updated to focus on this.
required to manage significant
safety risks; learning from high
potential incidents and
hazards; embedding a safety
culture; and leadership
engagement and
accountability. An elimination
of fatalities taskforce is
assessing safety risks at all
operations to establish further
actions necessary to improve
safety performance.
4. PRODUCT PRICES
Global macro-economic Impact: Low product prices The risk has decreased since
conditions leading to can result in lower levels of 2017
sustained low product prices cash flow, profitability and
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 a The Group may be unable to of an economic shock in China has
continued slowdown in growth complete any divestment reduced, with a measured
in China and other emerging programme within the desired slowdown being the more likely
markets, low growth rates in timescales or achieve scenario. More broadly, global
developed economies and an expected values. The capacity economic activity has improved
oversupply of commodities into to invest in growth projects is slightly, although downside risks
the market. Other factors such constrained during periods of remain.
as weak regional economies, low product prices – which
fiscal crises and conflict can may, in turn, affect future
also influence the economic performance.
environment and contribute to
weak product prices. Mitigation: The successful
delivery of cash improvement
and operational performance
targets remains the key
mitigation strategy for this risk.
Regular updates of economic
analysis and product price
assumptions are discussed
with executive management
and the Board.
5. CORRUPTION
Bribery or other forms of Impact: Potential criminal No change in 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: During 2018, we
has operations in some commissioned a report from an
countries where there is a Mitigation: A comprehensive external law firm to review the
relatively high risk of anti-bribery and corruption Group’s policy and programme to
corruption. policy and programme, manage bribery risk. The review
including risk assessment, made recommendations to further
training and awareness, with strengthen our anti-bribery
active monitoring, is in place. programme which we have shared
with the Audit Committee and are
in the process of implementing.
6. OPERATIONAL PERFORMANCE
Unplanned operational Impact: Inability to achieve No change in risk
stoppages impacting production, cash flow or
production. profitability targets. There are Risk appetite: Operating within
potential safety-related matters the limits of our appetite.
Root cause: Unplanned and associated with unplanned
unexpected operational issues operational stoppages, along Commentary: During 2018, this
will affect delivery of the with a loss of investor risk materialised in our Minas-Rio
underlying EBITDA target. confidence. operation (see page 64).
Failure to implement the
Operating Model, manage cost Mitigation: Implementation of
inflation or maintain critical our Operating Model,
plant, machinery and supported by operational risk
infrastructure will affect our management and assurance
performance levels. We are processes, are the key
also exposed to failure of third mitigations against this risk.
party-owned and -operated Compliance with our technical
infrastructure, e.g. rail networks standards will prevent
and ports. Our operations may certain operational risks
also be exposed to natural occurring. Regular tracking and
catastrophes or extreme monitoring of progress against
weather. the underlying EBITDA targets
is undertaken.
7. WATER
A new principal risk
Inability obtain or sustain the Impact: Loss of production Risk appetite: Operating within
level of water security and inability to achieve cash the limits of our appetite.
needed to support flow or volume improvement
operations over the current targets. Damage to Commentary: This is a new
life of mine plan or future stakeholder relationships or principal risk in 2018, as some of
growth options. reputational damage can result our business units are increasingly
from failure to manage this reporting water availability issues
Root cause: Poor water critical resource. as a risk to their operations, which
resource management or increases the need to prioritise this
inadequate onsite storage, Mitigation: Various projects risk at Group level.
combined with reduced water have been implemented at
supply at some operations as operations most exposed to
weather patterns change, can this risk, focused on: water
affect production. Water is a efficiency; water security; water
shared resource with local treatment; and discharge
communities and permits to management, as well as
use water in our operations are alternative supplies. New
at risk if we do not manage the technologies are being
resource in a sustainable developed that will reduce
manner. water demand.
8. CYBER SECURITY
Loss or harm to our Impact: Theft or loss of This risk has decreased since
technical infrastructure and intellectual property, financial 2017
the use of technology within losses, increased costs and
the organisation from damage to reputation. Risk appetite: Operating within
malicious or unintentional the limits of our appetite.
sources. Mitigation: We have employed
a specialist third party to Commentary: While the number
Root cause: The number and oversee our network security. of attacks continues to increase,
sophistication of cyber-criminal We have achieved UK Cyber the actions taken to mitigate this
attacks are increasing. Essentials Certification and an risk, including physical controls
ongoing cyber awareness and the programme to improve
programme is in place across employee awareness, have
the Group. reduced the likelihood of
successful attack.
9. FUTURE DEMAND FOR PGMS
Longer term demand for Impact: A negative impact on This risk has decreased since
PGMs is affected by revenue, cash flow, profitability 2017
fundamental shifts in market and valuation.
forces. Risk appetite: Operating within
Mitigation: Our PGMs the limits of our appetite
Root cause: Longer term business has a strategy to
demand is at risk from grow PGM demand in Commentary: We see this as a
declining internal combustion industrial and jewellery sectors longer term threat to the business.
engine manufacturing, and a through marketing and
switch to battery operated investment initiatives in
vehicles instead of fuel cell research, product development
electric vehicles, which and market development
continue to use higher volumes opportunities, particularly in the
of PGMs. automotive sector and in Indian
and Chinese jewellery markets.
10. FUTURE DEMAND FOR DIAMONDS
Demand for diamonds Impact: Potential loss of rough This risk has decreased since
affected as production and diamond sales, leading to a 2017
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 Mitigation: While research Commentary: We believe that
developments have led to the underlines consumers’ production of, and demand for,
production of higher quality continued desire for natural disclosed gem synthetics over the
gem synthetics. Producers and diamonds owing to their natural business has increased
distributors of this material may inherent value, emotional owing to the factors described;
attempt to sell fraudulently into connection and rarity, De however, De Beers’ mitigation
the diamond pipeline Beers has a comprehensive strategies have matured over 2018
(undisclosed) or market and strategy to mitigate risk of both to enable us to respond to this
sell as gem synthetics the entry of undisclosed development.
(disclosed), with manufacturing synthetics into the pipeline and
and distribution sources for the the potentially misleading
latter increasing. marketing of disclosed
synthetics.
In addition, measures to
emphasise, protect and
enhance the inherent value of
natural diamonds include:
increased marketing
investment, including through
the Diamond Producers
Association, e.g. reasserting
the emotional symbolism of
diamonds through the Real is
Rare campaign; investment in
blockchain to give consumers
confidence as to the natural
provenance of a diamond;
investment in bespoke
technology to readily detect all
synthetics; and the launch of
Lightbox(TM) to reinforce with
consumers the inherent
difference between synthetic
and natural diamonds.
RELATED PARTY TRANSACTIONS
35. RELATED PARTY TRANSACTIONS
The Group has related party relationships with its subsidiaries, joint operations, associates and joint
ventures (see notes 34 and 35). Members of the Board and the Group Management Committee are
considered to be related parties.
The Company and its subsidiaries, in the ordinary course of business, enter into various sale,
purchase and service transactions with joint operations, associates, joint ventures and others in which
the Group has a material interest. These transactions are under terms that are no more or less
favourable to the Group than those arranged with third parties.
Associates Joint ventures Joint operations
US$ million 2018 2017 2018 2017 2018 2017
Transactions with related parties
Sale of goods and services 1 17 - - 184 197
Purchase of goods and services (382) (430) (50) (163) (3,266) (3,108)
Balances with related parties
Trade and other receivables from related parties 2 3 5 1 16 23
Trade and other payables to related parties (44) (211) (7) (29) (97) (93)
Loans receivable from related parties - - 211 230 - -
Balances and transactions with joint operations or joint operation partners represent the portion that
the Group does not have the right to offset against the corresponding amount recorded by the
respective joint operations. These amounts primarily relate to purchases by De Beers and Platinum
Group Metals from their joint operations in excess of the Group’s attributable share of their
production.
Loans receivable from related parties are included in Financial asset investments on the Consolidated
balance sheet.
Remuneration and benefits received by directors are disclosed in the Remuneration report.
Remuneration and benefits of key management personnel, including directors, are disclosed in note
26. Information relating to pension fund arrangements is disclosed in note 27.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the Annual Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. The
directors are required to prepare the Group financial statements in accordance with International
Financial Reporting Standards (IFRS), as adopted by the European Union and Article 4 of the IAS
regulation, and have elected to prepare the parent Company financial statements in accordance with
Financial Reporting Standard 101 ‘Reduced Disclosure Framework’. The directors must not approve
the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that period.
In preparing the parent Company financial statements, the directors are required to:
- Select suitable accounting policies and then apply them consistently
- Make judgements and accounting estimates that are reasonable and prudent
- State whether Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ has been
followed, subject to any material departures disclosed and explained in the financial
statements
- Prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the Company will continue in business.
In preparing the Group financial statements, IAS 1 requires that directors:
- Properly select and apply accounting policies
- Present information, including accounting policies, in a manner that provides relevant,
reliable, comparable and understandable information
- Provide additional disclosures when compliance with the specific requirements in IFRS is
insufficient to enable users to understand the impact of particular transactions, other events
and conditions on the entity’s financial position and financial performance
- Make an assessment of the Group’s ability to continue as a going concern.
The directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the Group’s transactions, disclose with reasonable accuracy at any time the financial position
of the Company and enable them to ensure that the financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial
information included on the Group’s website. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
RESPONSIBILITY STATEMENT
for the year ended 31 December 2018
We confirm that to the best of our knowledge:
(a) The financial statements, prepared in accordance with the applicable set of accounting standards,
give a true and fair view of the assets, liabilities, financial position and profit of Anglo American plc
and the undertakings included in the consolidation taken as a whole
(b) The strategic report includes a fair review of the development and performance of the business
and the position of Anglo American plc and the undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and uncertainties that they face
(c) The Annual Report and financial statements, taken as a whole, are fair, balanced and
understandable and provide the information necessary for shareholders to assess the Group’s
performance, business model and strategy.
By order of the Board
Mark Cutifani Stephen Pearce
Chief Executive Finance Director
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