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| London: United Kingdom |
“We are also implementing a number of cash improvement measures, including operating cost reductions of at least $0.5 billion and an approximately $1.0 billion reduction to our 2020 capital expenditure guidance. This further builds on our already robust current liquidity position of $14.5 billion. Anglo American is a resilient and diversified metals and minerals business with a portfolio of attractive growth options spanning different products and time horizons. We are acting to protect our optionality through this uncertain period and will continue to act in the best interests of our shareholders, our employees, customers and our broad range of stakeholders across society.”
Mark Cutifani Chief Executive Anglo American.
Anglo American Plc has today provided an update on the current status of its global operations, production guidance for 2020, and various actions it is taking across the business given the uncertainty surrounding the impact of the COVID-19 pandemic.
Anglo American Chief Executive, Mark Cutifani, said: “Ensuring the safety of our people, their families and our host communities continues to be our priority in all our decision-making as we respond to the COVID-19 pandemic. Now, more than ever, we continue to play a vital role in many of our operating countries in providing support where it’s most needed.
“Most of our sites around the world are continuing to operate, with our focus on safety reflected through appropriate health, hygiene and distancing measures. We are taking all necessary steps to ensure the security and integrity of our assets for the long term, preserving our ability to swiftly return affected operations to normal levels of production when appropriate.
“We are also implementing a number of cash improvement measures, including operating cost reductions of at least $0.5 billion and an approximately $1.0 billion reduction to our 2020 capital expenditure guidance. This further builds on our already robust current liquidity position of $14.5 billion. Anglo American is a resilient and diversified metals and minerals business with a portfolio of attractive growth options spanning different products and time horizons. We are acting to protect our optionality through this uncertain period and will continue to act in the best interests of our shareholders, our employees, customers and our broad range of stakeholders across society.”
| Operational update
Anglo American has indicated that it continues to support the actions taken by governments in its host countries to curb the spread of COVID-19 and safeguard people’s health and wellbeing. The company has implemented appropriate measures across the operations, with a focus on de-densification of the workforce, rigorous health screening, and isolation where needed.
- At De Beers, lockdown measures have significantly impacted diamond production in southern Africa, manufacturing in India and retail operations in the United States, while consumer demand has returned to the Chinese market. Production guidance for 2020 has been reduced in line with anticipated demand by c.7 million carats to 25-27 million carats, with lower volumes at all operations.
- At its copper operations in Chile, Los Bronces and Collahuasi, production is at normal levels despite the workforce being reduced, by 50% and 40% respectively, to ensure adequate de-densification and health screening measures.
- At Platinum Group Metals, Mogalakwena is operating with 50% level of workforce. Amandelbult, Mototolo, the joint venture mines and the Mortimer and Waterval smelters are on temporary care and maintenance. Polokwane smelter is continuing to operate. Repair of the ACP is progressing well and is on track to start-up within the expected timeframe, by 25 May. The company anticipate overall PGM production levels will progressively build, with full production expected by year-end.
- At its Kumba iron ore operations in South Africa, the company is operating with 50% level of workforce, with production expected to progressively increase through May and June. Minas-Rio in Brazil is operating at normal levels with appropriate safety protocols in place to ensure social distancing. The scheduled one-month production stoppage to carry out routine internal scanning of the pipeline has been deferred to the second half of the year (previously scheduled for Q2).
- Metallurgical coal operations in Australia are continuing at normal levels despite revised rotations to manage social distancing and the impact of interstate travel restrictions.
- Export thermal coal operations in South Africa continue with 50% level of workforce, with production expected to progressively increase through May and June. The Cerrejón thermal coal joint venture in Colombia is on temporary care and maintenance.
- The Barro Alto nickel operation in Brazil is continuing at normal levels with appropriate protocols in place to ensure social distancing.
| Projects update
Anglo American benefits from an extensive pipeline of high quality growth projects. However, the prevailing measures to deal with COVID-19 and economic uncertainty are likely to result in delays to both project approvals and commissioning of certain in-progress projects.
In Peru, where strict national quarantine measures are in place, we withdrew most of our 15,000 strong workforce from our Quellaveco copper project site in mid-March, maintaining only critical works. In support of the government’s continuing efforts to control the spread of COVID-19, we have now decided to suspend non-critical works for up to three months, thereby providing greater certainty for planning a safe and responsible restart.
Given the very good development progress achieved to date, the company still expect first production in 2022, with the project now likely to be at the upper end of the $5.0-5.3 billion guidance (100% basis), pending final confirmation once the project remobilises. 2020 capex for the project on a 100% basis is revised to $1.2-1.5 billion (previously $1.5-1.7 billion), with its 60% share being $0.7-0.9 billion (previously $0.9-1.0 billion).
At the Woodsmith Project in the UK, strict social distancing measures are allowing essential work to progress, with 2020 capex expected to remain at ~$0.3 billion