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NEWS RELEASE: Anglo American delivers the largest financial commitment ever made by a mining company to protect northern caribou in British Columbia

(L to R) Brent Waldron, Chief Financial Officer of Anglo American’s Metallurgical Coal business; the Honourable Steve Thomson, Minister of Forests, Lands and Natural Resource Operations with the Government of British Columbia, and Mike Bernier, M.L.A. Peace River South for the Province of British Columbia.

VANCOUVER, Sept. 18, 2013 /CNW/ – Today the Chief Financial Officer of Anglo American’s Metallurgical Coal business, Mr Brent Waldron, presented the Minister of Forests, Lands and Natural Resource Operations for the Government of British Columbia, the Honourable Steve Thomson with a $2.566 million cheque for the Government of British Columbia’s Peace Northern Caribou Plan in Vancouver, B.C.

This is the largest funding contribution made by a mining company for caribou mitigation measures under the Peace Northern Caribou Plan and Mr Waldron said he was proud to personally present the donation on behalf of Anglo American.

“This contribution comes as part of Anglo American’s Trend-Roman project, an open cut expansion for the Peace River operation near Tumbler Ridge in north-east British Columbia and represents the company’s commitment to maintaining the highest standards of environmental protection,” Mr Waldron said.

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REFILE-Anglo departure not the end of Alaska’s Pebble mine, locals say – by Yereth Rosen (Reuters U.S. – September 17, 2013)

http://www.reuters.com/

(Reuters) – Supporters and opponents of a giant mine to tap Alaska’s gold and copper wealth have found a rare point of agreement: The Pebble project remains alive even without its heavyweight financial backer.

Anglo American, the global mining group that partnered with Canada’s Northern Dynasty Minerals Ltd in 2007 to develop Pebble, said on Monday it was pulling out, less than two month after promising shareholders it would cut costs and halve its $17 billion pipeline of potential mines.

Anglo’s departure dealt a sharp blow to the ambitious plan to build an open-pit mine in Alaska’s unspoiled Bristol Bay region, at a time when investors are increasingly cautious about plowing cash into building expensive new mines.

But the hiccups aren’t stopping Northern Dynasty. It sees plenty of opportunity to push ahead on the project, which is expected to produce some 1 million tonnes of copper concentrate a year, on its own or with a new partner.

“This is a huge asset – a huge, valuable asset for the State of Alaska,” said Ron Thiessen, Northern Dynasty’s chief executive, who added that he remains very confident the mine will be built within the next 10 years.

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Will Pebble Project’s growing risks cloud investor rewards? – by Dorothy Kosich (Mineweb.com – September 17, 2013)

http://www.mineweb.com/

More bad news for Northern Dynasty’s massive, but struggling Pebble copper-gold-silver-moly project as the deep-pocketed Anglo American announces it is leaving the Pebble Partnership.

RENO (MINEWEB) – The withdrawal of Anglo American from one of the most controversial mining projects in the United States, the Pebble Project in Alaska, should not come as a major surprise to those who have following the project since 2001, the year it was acquired by Northern Dynasty Minerals. Anglo American would become a 50/50 partner in the massive project in 2007.

On Monday, however, Anglo American CEO Mark Cutifani—who is definitely no dummy when it comes to determining project feasibility—said: “Despite our belief that Pebble is a deposit of rare magnitude and quality, we have taken the decision to withdraw following a thorough assessment of Anglo American’s extensive pipeline of long-dated project options.”

“We wish the project well through its forthcoming permitting process and express our thanks to all those who have supported Pebble and who recognize the opportunities and benefits that such an investment may bring to Alaska,” he added. Anglo will take a $300 million writedown on its Pebble investment.

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NEWS RELEASE: Anglo American statement re: Pebble project

16 September 2013

Anglo American plc (“Anglo American”) announces that its wholly owned US subsidiary Anglo American (US) Pebble LLC (“AA Pebble”) has given notice under the Pebble limited partnership agreement that it is withdrawing from the Pebble copper project in Alaska. The Pebble Limited Partnership (PLP) was created in 2007 between AA Pebble and an affiliate of Northern Dynasty Minerals Ltd. (“Northern Dynasty”), who are equal partners in PLP. Following the withdrawal, PLP will proceed under the sole ownership of Northern Dynasty.

In light of the parties’ shared desire to ensure an orderly exit, the detailed aspects of AA Pebble’s withdrawal from the Pebble project are being developed and implemented.

Anglo American expects to record an impairment charge of $0.3bn at 31 December 2013 on a post-tax basis.

Mark Cutifani, Chief Executive of Anglo American, said: “Despite our belief that Pebble is a deposit of rare magnitude and quality, we have taken the decision to withdraw following a thorough assessment of Anglo American’s extensive pipeline of long-dated project options. Our focus has been to prioritise capital to projects with the highest value and lowest risks within our portfolio, and reduce the capital required to sustain such projects during the pre-approval phases of development as part of a more effective, value-driven capital allocation model. We wish the project well through its forthcoming permitting process and express our thanks to all those who have supported Pebble and who recognise the opportunities and benefits that such an investment may bring to Alaska.”

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How Mark Cutifani plans to reshape Anglo American – by Charlotte Mathews (Financial Mail – September 12, 2013)

http://www.fm.co.za/

Sculpting new shapes

New Anglo American CEO Mark Cutifani says its new strategy will capitalise on future shortages of food, water, energy and the commodities needed for infrastructure development. Charlotte Mathews assesses the challenges faced by the miner.

Big mining companies are groping for their hangover remedies after the long commodities supercycle party. Anglo American had less fun than the rest but still got the hangover. Between 2001 and 2008 BHP Billiton’s share price on the JSE rose almost 10 times — to R300. Anglo American’s rose fivefold to R550. Now Billiton’s share price is R303 and Anglo’s is R255.

The supercycle was a theory put forward in 2004 by Chip Goodyear, then CEO of Billiton. He argued that as China and India played catch-up with the rest of the world in infrastructural development, demand for commodities would stay “stronger for longer” for at least a decade or more.

In fact the supercycle lasted only another two years. A 10-year graph of “Dr Copper”, a proxy for demand for industrial metals, shows prices flattened from mid-2006 and, apart from the dip after September 2008, have tracked sideways ever since. To some analysts, this represents only a “mid cycle correction”.

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Anglo American Platinum to Eliminate Thousands of Jobs in South Africa – by Abayomi Azikiwe (Global Research – September 02, 2013)

http://www.globalresearch.ca/

Downsizing comes amid rising strikes by workers

South African workers are continuing their struggle against the bosses with strike actions spreading from the mines, automobile plants, air transport technology stations to construction sites. On September 3, thousands of members of the National Union of Metalworkers Union (NUMSA) were scheduled to march through Pretoria to the headquarters of the National Association of Automobile Manufacturers of South Africa to deliver a memorandum demanding that the trade group pressure car production firms to settle a strike that was in its third week.

In the most significant industry, platinum mining, the largest owner Anglo American Platinum (Amplats), has announced that up to 7,000 jobs could be eliminated in a restructuring program. The company had earlier threatened to fire twice as many workers but revised its plan to wipe out only 50 percent in the initial proposal.

These developments are taking place throughout the mining industry inside the country. Anglo American, which is also involved in other extractive markets such as gold, has reported a 10 percent decline in value since the beginning of 2013. Amplats produces 40 percent of the platinum sales internationally. The most profitable region for the firm is located in Rustenberg where during 2012 police shot dead 34 miners at the Lonmin corporation facility at Marikana on August 16.

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Tearful Cutifani in appeal to end ‘tide of destruction’ in mining – by Allan Seccombe (South Africa Business Day – August 30, 2013)

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

A DEEPLY emotional Mark Cutifani, the CEO of Anglo American and president of the Chamber of Mines, has urged the government not to add to the risks besetting the mining sector by creating regulatory uncertainty.

“Our most important industry is in crisis and we have not yet found the answer to stemming the tide of destruction,” he said.

Mr Cutifani broke down in tears at the start of a speech at a dinner on Thursday marking the end of the three-day Mining Lekgotla in Sandton, where stakeholders gathered to discuss the sector’s competitiveness and transformation.

He said “cowards, thugs and murderers” and “loud-mouthed opportunists” should not be allowed to intimidate and bully others and to define the dialogue South Africa was having.

Mr Cutifani, the former CEO of AngloGold Ashanti, praised the achievements of South Africa, which had undergone one of the world’s largest social reconstructions since the demise of apartheid in 1994. However, despite the JSE outperforming the New York bourse since 2007, posting a 60% growth, the mining index was flat and had destroyed 30% of absolute value in the same time, he said.

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COLUMN-Diversified miners’ short-term challenges at odds with long-term views – by Clyde Russell (Reuters U.S. – August 21, 2013)

http://www.reuters.com/

Clyde Russell is a Reuters market analyst. The views expressed are his own.

LAUNCESTON, Australia, Aug 21 (Reuters) – The world’s top diversified mining companies are starting to resemble choir boys singing the same hymn about cutting projects and costs.

The recent financial results of BHP Billiton, Rio Tinto, Glencore Xstrata and Anglo American were remarkably similar, as were the accompanying comments by their chief executives.

All reported lower earnings, but not dramatically so, which may be a bit of a surprise given weaker commodity prices in the first half of 2013 and widespread concern of worse conditions to come.

And all four also repeated the mantra of cost cutting and slashing capital expenditure, while at the same time trying to give equity investors more of what they want in the form of dividends and higher share prices.

The question is whether this unanimity is the right path or whether the diversified miners are going too far in a bid to boost share prices.

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Anglo American expands B.C. coal mine with eye on Asia – Brent Jang (Globe and Mail – August 15, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

VANCOUVER — Anglo American PLC is expanding its northeastern B.C. mine, betting that the quality of the coal and the ease of transport to Asia will help the company win more contracts from steel makers in Japan, China and others in the region.

London-based Anglo American, one of the world’s largest mining companies, will make the expansion announcement Thursday at its operations near Tumbler Ridge, B.C., about 700 kilometres northeast of Vancouver.

The company has budgeted $50-million for the first phase of a $200-million, multiyear project to boost output of coking (or metallurgical) coal, a key ingredient in the production of steel.

Seamus French, head of Anglo American’s metallurgical coal division, said in an interview that its Tumbler Ridge coal is high quality, and that the rail line transporting it to the port of Prince Rupert for export is underutilized. “We see fantastic long-term potential,” he said in an interview, adding that the mining expansion will provide employment security for the 420 Anglo American workers in B.C. as well as generate 100 construction jobs.

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Zimbabwe to Seize Mines While Compensating Banks – by Franz Wild (Bloomberg News – August 6, 2013)

http://www.bloomberg.com/

President Robert Mugabe’s government plans to seize control of foreign-owned mines without paying for them as part of a program to accumulate $7 billion of assets following his July 31 election victory, a minister said.

The government will compensate bank owners as it takes control of their companies, Saviour Kasukuwere, the minister in charge of the program to compel foreign companies to cede 51 percent of their assets to black investors or the government, said in an interview in Harare, the capital, today. His comments echo a suggestion made by Mugabe earlier this year.

“When it comes to natural resources, Zimbabwe will not pay for her resources,” Kasukuwere said. “If they don’t want to follow the law that’s their problem.” Non-compliant mine owners risk losing their licenses, he said.

Anglo American Platinum Ltd. (AMS), Impala Platinum Holdings Ltd. (IMP), Barclays Plc (BARC) and Standard Chartered Plc (STAN) are among companies that operate in the country. Other industries may have to yield smaller stakes to black owners, Kasukuwere said. Metals and minerals, including platinum and gold, accounted for 71 percent, or $719.9 million, in exports in the first four months of this year, the state-controlled Herald newspaper said, citing the finance ministry.

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Falling profits for Vale – by Reuters and Star Staff (August 6, 2013)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

Battered by falling iron ore and nickel prices, Vale on Wednesday is expected to report a 30% drop in second-quarter profit to $1.85 billion US from a year earlier, analysts are predicting. If so, it would be Vale’s eighth consecutive quarterly profit fall, according to the average preliminary estimates of seven analysts surveyed by Reuters.

Most of the decline is due to a 12% drop in average iron ore prices and a 38% decline in nickel prices, more than offset-t ing increases in volumes shipped by the world’s No. 1 iron ore miner and No. 2 nickel producer.

Its shares have been the worst performer among the world’s big five mining companies, down 27% this year, despite a rally from nearly four-year lows in July. Of the big five, Rio Tinto, Brazil’s Vale, Glencore Xstrata and Anglo American are expected to report sharp drops in profit.

They have been slammed by weaker copper, iron ore and coal prices as they struggle to sell off assets. Anglo — the first of the diversified majors to publish results — said last week underlying operating profit fell in the six months to $3.3 billion, ahead of a consensus estimate of $3.12 billion.

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No quick fix as Anglo’s new boss prepares to woo investors – by Clara Ferreira-Marques (Reuters U.K. – July 24, 2013)

http://uk.reuters.com/

LONDON, July 24 (Reuters) – Anglo American’s new boss will lay out his stall on Friday after four months in the job and while investors are not counting on a quick fix, they are betting his plans will include cost cuts, more disciplined spending and potential asset sales.

Anglo, the smallest of the major diversified miners, has underperformed its peers, most recently battling labour unrest in South Africa, where it generates half its earnings, and multi-billion dollar cost overruns in Brazil.

Investors piling into BHP Billiton, Rio Tinto and Anglo in 2006 would have made more than one and a half times their money at BHP and seen returns of 65 percent at Rio. But they would have lost money at Anglo – a negative total return of around 16 percent, according to Reuters data.

Anglo posted its first loss in a decade in 2012, a year of hefty writedowns and CEO departures across the industry. According to Citi, last year Anglo’s return on equity, a measure of profitability, hit its lowest level since the 1930s.

So while the market may not be preparing for what some analysts called a “big bang” menu of asset splits or a radical and frequently debated platinum spin-off – all are demanding change from boss Mark Cutifani, an Australian former miner and engineer who joined from bullion producer AngloGold.

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Mark Cutifani to set out his vision for Anglo American – by James Wilson and Andrew England (Financial Post – July 22, 2013)

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

Metals prices are under pressure. Costs remain sky-high. And disgruntled shareholders want more money back. Yet still there is a consolation for most mining chief executives: their problems are not as bad as Mark Cutifani’s.

At Anglo American, the diversified miner he has led since April, Mr Cutifani does not merely have to pep up the company’s financial performance. In South Africa, where Anglo’s roots date back nearly 100 years, he has to show political savvy to negotiate a sometimes violent environment of labour unrest and government anger. In Brazil, Anglo’s flagship iron ore project is wildly over schedule and budget.

This week Mr Cutifani, one of a cohort of recently anointed chief executives at the world’s largest mining groups, has promised his first public explanation of how he intends to improve Anglo, which underperformed its peers during the mining boom. Since 2008 Anglo’s total shareholder return has halved compared with a fall of 24 per cent for Rio Tinto and a 44 per cent increase for BHP Billiton.

“The company has not been delivering on shareholder expectations,” he acknowledges. “We need a much more commercial, value-focused mindset.” Rivals including BHP and Rio have promoted insiders to their top jobs, arguably giving them a head start in addressing a markedly more pessimistic environment for the sector.

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Get moving on Pebble Project permitting, mining plan! – Murkowski – by Dorothy Kosich (Mineweb.com – July 9, 2012)

http://www.mineweb.com/

U.S. Senator Lisa Murkowski urged the Pebble Partnership to set a timeline and stick with it for the benefit of Alaskans waiting nearly a decade for the massive copper-gold project.

RENO (MINEWEB) – The Ranking Member of the U.S. Senate Energy and Natural Resources Committee, Sen. Lisa Murkowski, R-Alaska, has urged the Pebble Partnership to release their mining plan for development of the Pebble copper-gold deposit in Southwest Alaska.

In a July 1st letter to Pebble Limited Partnership (PLP) CEO John Shivley, Anglo American CEO Mark Cutifani, and Northern Dynasty Minerals CEO Ron Thiessen, Murkowski said the partnership’s delay in describing the project and submitting permit applications has caused confusion and anxiety among Alaskans about the proposed mine, as well as allowed federal regulators to further muddy the water with several hypothetical mine scenarios.

Northern Dynasty and Anglo American are 50-50 partners in the massive project.

Murkowski said the partnership’s “failure to describe the project and submit permit applications” has deprived “relevant government agencies and all stakeholders of the specifics needed to make informed decisions.”

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MINING’S ROLE IN SOCIETY – by Anglo American CEO Mark Cutifani (June 26, 2013)

http://www.angloamerican.com/

This speech was given to the Minerals Council of Australia, Canaberra on 26 June 2013.

Distinguished guests, Colleagues of the Minerals Council of Australia, Ladies and gentlemen. Good morning. Thank you for that introduction Mitch and for the opportunity to speak here today.

Now, some of you may be wondering about the photo behind me [see image below]. Before I explain, let me set a little bit of context.

Mining – In Our Global Context

In 2010 the global mining industry, including the quarrying and petroleum sectors, represented 11.5% of the world’s GDP, as measured by revenues from products sold. Based on experiences in mining jurisdictions, if we include payments to service and support industries, mining’s direct contribution to global economic activity is estimated to be around 21%. But we need to think about mining in a much broader context. We produce products that make the world work.

Fuel for energy generation, products that support construction and industrial processes and most other value creating activities, are simple examples of how we literally make the world go around. So, let me get back to that photo showing two cornfields, one using phosphate fertilisers and one without. Since the turn of the last century it is estimated that the products of mining have supported a more than 100% increase in agricultural production per area unit under cultivation.

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