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Anglo American

UPDATE 2-Anglo’s overhaul starts to pay off with sharp output rise – by Silvia Antonioli (Reuters India – January 29, 2014)

http://in.reuters.com/

LONDON, Jan 29 (Reuters) – Anglo American on Wednesday produced a forecast-beating rise in fourth quarter iron ore output and a new quarterly record for copper, a sign efforts to improve performance at its major mines are starting to pay off.

Anglo, the fifth-largest diversified mining group, has embarked on an overhaul plan under chief executive Mark Cutifani, after years of sector-lagging returns.

Cutifani said in December the plan would focus mainly on improving operations of major mines but did not envisage immediate asset sales. Anglo has long lagged rivals in returns and share performance. Its shares have lost about 60 percent of their value in the last three years compared with a 40 percent decline for the sector.

In the past two years, it has been hit by labour troubles in South Africa, operational hiccups at copper mines and multibillion-dollar cost overruns in Brazil. The fourth-quarter production figures helped to boost Anglo’s shares which were one of the top gainers in the FTSE 100 index.

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Anglo chief warns on pace of innovation – by James Wilson (Financial Times – January 26, 2014)

http://www.ft.com/home/us

One of the world’s senior mining leaders has called on the sector to speed up innovation or risk being marginalised by groups that spend more on research.

Mark Cutifani, Anglo American chief executive, said research and development in mining was lagging behind the oil and gas sector at a time when there was an urgent need for larger and better deposits of many metals and minerals.

In 10 years the world would “have to pay to move twice the amount of waste to get the same minerals to market”, he said. “We need to do it differently. We need a better way. We need to innovate.”
Innovation in oil and gas has transformed the energy landscape in the US, with fracking and horizontal drilling unlocking vast reservoirs of shale gas previously considered uneconomic to develop. By contrast innovation in mining has been incremental. Many methods have changed little except for the size of equipment used.

“Our industry is damned by the fact that our spending on innovation, research and development is one-10th that of the petroleum industry,” Mr Cutifani said.

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Cutifani vows to restore Anglo American’s iconic status – by Martin Creamer (MiningWeekly.com – December 12, 2013)

http://www.miningweekly.com/page/americas-home

JOHANNESBURG (miningweekly.com) – Anglo American CEO Mark Cutifani, who this week charted the company’s progress and pathway forward, has vowed to restore its iconic status.

“Anglo American in my 37 years in this industry has been an icon. We intend to put it right back up there,” he said in a media conference call from London.

On Thursday, the the day of the company’s major investor update, Anglo American opened at a higher £13.08 a share on the London Stock Exchange, after investment banker Canadian Imperial Bank of Commerce set a “sector outperform” rating on the shares the day before and investment management company Sanford C Bernstein reiterated the “outperform” rating the next day, American Banking & Market News reported.

Analysts at Deutsche Bank last week reiterated a “buy” rating on the stock in a research note to investors, Analyst RN reported. Hosting a presentation to update investors on the London- and Johannesburg-listed company’s strategy, Cutifani said he knew of no other mining major that was in the process of doubling its earnings before interest and taxation (Ebit).

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Miners say Anglo American departure casts pall on all of Alaska industry – by Yereth Rosen (Alaska Dispatch – November 10, 2013)

http://www.alaskadispatch.com/

When Mike Heatwole, vice president of corporate communications for the Pebble Limited Partnership, gave a status report of the controversial and beleaguered Pebble project to a friendly audience in Anchorage Thursday afternoon, he laced his speech with sadness and resignation.

“What a difference a year makes. If you think about it, what a difference a few months makes,” Heatwole told attendees at the Alaska Miners Association convention.

Heatwole’s company would build one of the world’s largest open-pit copper mines in the headwaters of Alaska’s Bristol Bay. He closed his presentation with a slideshow of smiling workers, in the company’s Anchorage office, in the field and elsewhere. All were laid off after Anglo American, the moneyed partner in the project, announced in September that it was abandoning Pebble and its investment in it.

The Pebble partners had planned to submit a formal mine plan by the end of the year, kicking off permitting applications, he said. Now, with Vancouver-based Northern Dynasty Minerals Ltd as the only remaining partner, that timetable is unclear.

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Mining benefits 8 in 10 South Africans ‘directly, literally’ – Cutifani – by Martin Creamer (November 5, 2013)

 http://www.miningweekly.com/page/americas-home

JOHANNESBURG (miningweekly.com) – Eight out of every ten South Africans benefited “directly and literally” from mining, outgoing Chamber of Mines of South Africa president Mark Cutifani said on Tuesday.

Cutifani, who is also Anglo American CEO, told the chamber’s 123rd annual general meeting (AGM) in Johannesburg that the mining industry was South Africa’s best chance of eradicating poverty. “In the end, we are an industry for the people,” he said.

The National Development Plan (NDP), which was endorsed by most constituencies, clearly reasserted the conviction that the mining sector was at the epicentre of the economic growth strategy and it was critical that all South Africans understood that they were actually the owners of the South African mining industry.

For example, more than 60% of Anglo American’s operating South Africa assets in coal, platinum, iron-ore, diamonds and manganese were held by the historically disadvantaged – “a massive transformation of ownership”.

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SA GDP could have gained if mining had grown like peers – Cutifani – by Forecaster Ecosa (Mineweb.com – November 1, 2013)

http://www.mineweb.com/

Mining should have raised South Africa’s GDP annual growth rate by 1% if it had grown at the same rate as its peers, says Mark Cutifani.

JOHANNESBURG, SOUTH AFRICA – Mining should have raised SA GDP annual growth rate by 1% if we had grown at the same rate as our mining peers, Anglo American CEO Mark Cutifani said on Thursday at the Fourth Enterprise Development Conference in Midrand.

“If mining had grown over the last seven years like our peers, instead of contracting, we would be heading the country towards the 5,4% growth target of the National Development Plan (NDP). A growing mining industry will be vital in creating an environment for sustainable employment growth and rising living standards, inclusive economic development and improving the country’s competitiveness. Mining has been, and remains, the bedrock of the South African economy, but we want to make it once again the engine of the South African economy,” he said.

Real value added in the mining sector peaked in 2005 on an annual basis, but then dropped by 9.8% in the subsequent seven years. In the second quarter 2013 it contracted by 5.6% compared with the first quarter on seasonally adjusted annualised basis.

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Quo vadis Amplats, Griffith & Cutifani’s Anglo? – by David McKay (Miningmx.com – October 16, 2013)

http://www.miningmx.com/

[miningmx.com] – AN analyst at Johannesburg asset management company, Stanlib, planted the idea recently that although the South African government had formally rejected mines nationalisation as policy, a subtler expression of state interference had become practice.

This is, of course, a reference to the repeated government and union interference in restructuring activities of the publicly-listed Anglo American Platinum (Amplats).

The logic is that in allowing government to dictate the final shape of its restructuring plans, Amplats had granted the state a role in its affairs as if it owned it. As a stakeholder, the state has more influence over Amplats than shareholders who finance it. That has now been extended to unions.

So it is that Amplats agreed to adjust its restructuring plans a third time falling in with demands from the Association of Mineworkers & Construction Union (AMCU) to provide voluntary separation packages to employees identified for retrenchment, and replacing contractors with full-time employees.

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Mining is critical for the planet – Cutifani – by William Lawrence (Mineweb.com – October 10, 2013)

http://www.mineweb.com/

Anglo American CEO, Mark Cutifani, is the new chairman of the ICMM Council and has already made it apparent where he would like the organisation to focus in the year ahead.

LONDON (MINEWEB) – “Mining is critical for everyone on the planet” said Mark Cutifani at an ICMM reception yesterday evening in London, as he set out his stall on what he thinks the International Council on Mining and Metals should be focussing on as his term begins as the august organisation’s chairman.

According to its website, the ICMM’s basic brief is as follows: to improve sustainable development performance in the mining and metals industry. Its core membership comprises 21 mining and metals companies (the world’s largest miners) as well as 35 national and regional mining associations and global commodity associations working, in combination, to address core sustainable development challenges.

The ICMM now serves as an agent for change and continual improvement on issues relating to mining and sustainable development. It requires member companies to make a public commitment to improve their sustainability performance and report against their progress on an annual basis.

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Alaska’s Zombie Gold Mine to Nowhere – by James Greiff (Bloomberg News – October 1, 2013)

http://www.bloomberg.com/

James Greiff is a Bloomberg View editorial board member.

What happens when the main financial backer pulls out of a project? The answer is usually clear: The deal fails, which is what the foes of a gigantic gold and copper mine in Alaska are counting on. But in this case the mine has only been dealt a setback and is far from dead.

That about sums up the state of play after last month’s announcement by Anglo American Plc that it would pull out of a partnership that planned to build what’s known as Pebble Mine, proposed for the Bristol Bay region of southwest Alaska. If the mine were developed, it would be the biggest of its type in North America — and located on the headwaters of rivers flowing into the world’s most productive salmon fishery.

Environmentalists, the commercial salmon industry and local indigenous tribes were ecstatic, as one might expect. They had argued — no doubt correctly — that the mine couldn’t be safely developed without damaging the salmon fishery, and they waged a savvy campaign that no doubt raised the stakes for Anglo American.

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Silicosis claims and the gold mines: To settle or not? – by Sarah Evans (Mail and Guardian – October 1, 2013)

http://mg.co.za/ [South Africa]

A recent settlement between miners and Anglo American could be a precedent as the gold industry prepares for a looming silicosis class action suit.

Despite being a landmark case, the confidential nature of a recent settlement between Anglo American and silicosis sufferers means there is little legal precedent for future cases, at least in terms of financial compensation.

But the agreement has other implications: as the number of silicosis damages claims against the gold mining industry piles up, and in the face of a looming class action suit, out-of-court settlements could become the norm as mining companies try to avoid bank-breaking court rulings.

In the weeks to follow, the high court in Johannesburg will decide whether to collate three class action claims against 30 of South Africa’s gold mines.

This comes on the back of a landmark settlement between Anglo American and 23 silicosis sufferers, seven of whom died waiting for the case to be finalised. Their claim was instituted in 2004 and was due to go to arbitration in 2014.

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Why Miners Walked Away From the Planet’s Richest Undeveloped Gold Deposit – by Brad Wieners (Bloomberg Business Week – September 27, 2013)

http://www.businessweek.com/

Before pulling out of the Pebble Mine project last week, Anglo American (AAUKY), one of the world’s biggest mining companies, had invested six years and at least $541 million—in a partnership with Vancouver-based Northern Dynasty Minerals (NAK)—to develop the site in southwestern Alaska. Wait, pause on that number for a sec: $541 million.

That’s right, the London-based multinational and its U.S. subsidiary (AA Pebble) just forfeited a return on more than half a billion dollars of its shareholders’ money. By the end of its 60-day withdrawal from the project (mid-November), that figure will probably end up closer to $580 million. Anglo American has also indicated it will write down a $300 million loss (misreported as a “penalty” elsewhere) to remove the proposed mine as an asset from its books.

Although a far smaller player, Northern Dynasty will soon own 100 percent of the project, thought to be worth $300 billion or more, and vows to carry on. Having completed more than a million feet of exploratory, diamond-core drilling in 1,200 holes, the former partners also amassed a 27,000-page study of the terrain, but had not begun the formal permitting process. In fact, Northern Dynasty has plowed $180 million into Pebble since it first secured the rights to the region in 2001.

Huge mining consortiums frequently seed nine-figure projects, but $760 million-plus is still a large sum, so why did Anglo American bail now?

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Will silicosis be SA gold’s next big trial? – by Geoff Candy (Mineweb.com – September 26, 2013)

http://www.mineweb.com/

Wage negotiations may have concluded but South Africa’s gold sector still faces a number of challenges, not least of which is a looming class action suit.

GRONINGEN (MINEWEB) – Having only barely dispensed with the plummeting gold price, increasingly demanding shareholders and some of the tensest wage negotiations in memory, the South Africa’s gold producers were probably hoping for a little respite. But, instead, find themselves staring at the looming presence of a silicosis class action suit that seems to be growing inexorably larger with each passing month.

Right now, there are three separate class action matters pending against the country’s gold miners but, the three teams of lawyers have just applied to the courts to consolidate these various claims into a single one that will be defended by 31 companies, which include all of the country’s gold miners and their various operating entities as well as Anglo American South Africa and African Rainbow Minerals, who no longer operate gold mines but did so when some of the claimants contracted the lung disease in question.

It should be noted that Anglo American SA announced yesterday it has just settled 23 silicosis claims brought against it for an undisclosed sum and no admission of liability.

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The floodgates open: Anglo-American settles mineworkers’ silicosis claims – by Rebecca Davis (Daily Maverick/South Africa – September 26, 2013)

http://www.dailymaverick.co.za/

On Wednesday it was announced that Anglo-American South Africa would pay 23 former mineworkers undisclosed amounts to settle claims brought against the company after the workers contracted silicosis. The mining house remains adamant that this is not an admission of liability. But lawyers for the mineworkers are hopeful that the settlement may pave the way for payouts for silicosis victims across the industry.

Silicosis is a lung disorder caused by inhaling bits of silica, a mineral found in sand and rocks, over an extended period of time. Silica dust particles can make tiny cuts on the lungs, creating scar tissue which makes it more difficult to breathe. It’s a progressive condition, and sometimes it can come on up to ten years after exposure to silica. People who are most at risk for developing the condition are those who work with sand, rock or quartz, in industries like construction, demolition, or mining.

The South African government has recognised the problem of silicosis and committed to “significantly” reducing its prevalence by 2015 and eliminating it entirely by 2030. It’s a particular public health issue in South Africa because exposure to silica dust increases the risk of TB.

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Anglo American SA reaches settlement with silicosis-stricken miners – by Agency Staff (Business Day – September 25, 2013)

http://www.bdlive.co.za/

A SETTLEMENT between Anglo American South Africa and former miners who had contracted silicosis while working for the company benefited all parties, the company said on Wednesday.

“Anglo American South Africa announces that it has concluded an agreement which resolves fully and finally 23 stand-alone silicosis claims, instituted against it between 2004 and 2009,” the company said in a statement. “The settlement has been reached without admission of liability by Anglo American South Africa and the terms of the agreement remain confidential.”

The case was brought by 23 miners, 18 of whom had worked at Anglo’s President Steyn mine in the Free State. They claimed they contracted silicosis and silico-tuberculosis while working for the company up to 1998.

Anglo American South Africa executive director Khanyisile Kweyama said: “Anglo American South Africa believes that agreeing to settle this long-standing litigation is in the best interests of the plaintiffs, their families, Anglo American South Africa and its wider stakeholders.

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Anglo American pulls out; is it because we’re crazy? – by Paul Jenkins (Anchorage Daily News – September 22, 2013)

http://www.adn.com/

British mining giant Anglo American’s abandoning the complicated, expensive and grindingly slow slog to develop the rich Pebble prospect in Southwest Alaska is understandable — but you have to wonder how it must appear to other businesses and industries considering investments in Alaska.

Anglo American, which poured more than $541 million into the Pebble effort, points to its deep backlog of projects waiting for development. It says it is looking at higher-value, lower-risk undertakings, planning to cut by a third the nearly $950 million it spends annually on keeping afloat pre-approval stage, complicated, from-scratch projects such as Pebble.

All that may be a dodge, a way of saying Anglo American could see the handwriting on the wall and grew weary of trying to win anything resembling a fair hearing for Pebble in Alaska. With the Environmental Protection Agency poised, if not panting, to block Pebble ostensibly to protect Bristol Bay salmon — based, mind you, on an assessment that could not even pass muster with its own peer review panel — the $300 billion project’s future must have seemed sketchy.

It is notable that Anglo American did not sell, likely because there were no takers in the current environmental and regulatory atmosphere. It simply folded its cards and opted to eat a $300 million post-tax penalty for pulling out.

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