Anglo American Plc · LSE:AAL
Anglo American — ESG Presentation (June 2004)
40 slides from Anglo American's sustainability presentation, Jun 14, 2004
Slide 1: Presentation on Sustainable Development and Corporate Responsibility
PRESENTATION ON SUSTAINABLE DEVELOPMENT AND CORPORATE RESPONSIBILITY 14th June 2004
Slide 2: Presentation Team
PRESENTATION TEAM Sir Mark Moody-Stuart - Chairman Tony Trahar - Chief Executive Russell King - Head of HR and Sustainable Development Dr John Groom - Head, Safety, Health & Environment Edward Bickham - Head, External Affairs
Slide 3: Governance
Governance Implemented Higgs and compliant with Combined Code 70% Non-Executive Directors (50% Independent) Appointment of Dr Silvia Bastos Marques to Board Board performance evaluation
Slide 4: Business Principles Implementation
Business Principles Implementation Specific programmes on: community engagement; employee communication; anti-trust compliance; diversity/BEE Good progress with embedding Principles in supply chain contracts 857 dismissals; 10 supply contracts terminated Roll-out of ‘speakup’ whistle- blowin
Slide 5: International Policy Context
International Policy Context Extractive Industries Review Extractive Industries Transparency Initiative UN Panel on the DRC
Slide 6: Tony Trahar
Tony Trahar Financial Performance 2003 Strategy Safety Innovation South African Mining Charter
Slide 7: 2003 Key Financial Factors
2003 Key Financial Factors Political and economic uncertainty Weak US dollar especially relative to South African and Australian currencies Strong recovery in some commodity prices in H2 Pre-tax cost and efficiency savings of $335 million Resilient overall performance vindicating strategy
Slide 8: Key Financials
Key Financials Headline EPS Headline earnings down 4% $1.25 $1.20 Dividend increased by 6% to 54c per share Strong EBITDA unchanged at $4.79bn DPS DPS Net Debt/Total Capital of 26.6% 54c 51c 2002 2003
Slide 9: Strategy
Strategy A World Leader in Mining and Natural Resources Unique precious metals and minerals portfolio; leadership positions in diamonds, gold and platinum Diverse portfolio to produce stable profits and cash flows despite currency and commodity price swings Commitment to world-class safety, et
Slide 10: Delivering on Strategy
Delivering on Strategy Significant restructuring of a complex Group $13bn of acquisitions and $8bn of disposals Elimination of De Beers cross holding Balanced geographic and product diversity achieved EBITDA growth of 11.3% CAGR since 1999 Two years of cost cutting - over $600 million sa
Slide 11: Sustainable Development - Key Issues
Sustainable Development - Key Issues Improving safety performance Good progress on South African Mining Charter Biodiversity – progress at all levels Development of energy efficiency and carbon risk strategies Roll-out of HIV/AIDS ART programme Launch of Socio-Economic Assessment Toolbox
Slide 12: Safety – spreading best practice
Safety – spreading best practice OTTO campaign Goal is to do business without hurting people Visible Felt Leadership Safety Golden Rules implementation and audits Behaviour Based Safety Improved communication Safety linked to remuneration
Slide 13: Safety Results
Safety Results 3 fewer fatalities than 2002 - equivalent to 10% reduction in FIFR 18% 14% Material Handling LTIFR reduced by 26% 11% Falling LTIFR - 58% improvement Moving machinery over past 3 years Falling objects 21% 11% Transportation LTIFR target 0.45 for 2004 25% Falls of ground repres
Slide 14: Safety Trends
Safety Trends LTIFR FIFR 2.5 0.10 Lost-time injury frequency rate (LTIFR) including RWCs Lost-time injury frequency rate (LTIFR) excluding RWCs 2.0 Fatal injury frequency rate (FIFR) 0.08 1.5 0.06 0.73 1.0 0.04 0.73 0.5 0.02 0.47 0.47 0.0 0.00 00 01 02 03 04 20 20 20 20 20
Slide 15: Innovation
Innovation Creation of more empowering and entrepreneurial culture Leading technological innovation Paper and Packaging Innovation Zone has generated 2,110 ideas 466 implemented at plant level Base Metals CEO’s Innovation Award Codemin charcoal to wood-chip conversion Industrial Mi
Slide 16: SA Mining Charter I
SA Mining Charter I Act has recently come into force – providing greater certainty and stability Targets achievable Target: 15% (within 5 years) and 26% (within 10 years) of attributable production should be in hands of HDSAs Royalties Bill expected Q4 2004 – but not effective until 2009
Slide 17: SA Mining Charter II
SA Mining Charter II Empowerment transactions worth R3.2 billion concluded in 2003 – cumulatively over R15 billion since 1994 Programme underway to upgrade housing and encourage home ownership and improve literacy Procurement expenditure with BEE companies rose to R3.1 billion (R3.6 billion in
Slide 18: Russell King
Russell King Sustainable development work programme Human Resources Communication and Knowledge Sharing
Slide 19: Sustainable Development Programme
Sustainable Development Programme Group SD Conference - March Risk management approach - Base Metals workshop - Group level pilot 5 year reporting strategy
Slide 20: People
People Key Data 132,000 employees in managed operations Africa = 77,000 Europe = 42,000 The Americas = 8,000 Australasia = 5,000 33,000 contractors in managed operations 2003 – no major industrial disputes Support freedom of association – 70% union membership
Slide 21: SA Employment Equity
SA Employment Equity % of HDSA employees in management/supervisory ranks Target = 40% by 2007 60 50 56 40 46 43 41 39 37 30 34 27 20 10 0 l di ta s s tre l um es oa al al on to t ri n et et C in Ce M AA us M M at o gl d Pl se us te In An ra o Ba rro gl po Fe An or C
Slide 22: Managing Talent
Managing Talent Philosophy Business Unit commitment to talent decisions that support best interests of Group OPCO responsible for stewardship, development and retention of talent Process Annual Group Talent Review Process starts with each BU/function conducting annual review All strategic
Slide 23: Improving Communication
Improving Communication BU and corporate programmes to improve employee communication Repeat of Managers’ Communication Survey end 2004 Roll-out of Enterprise Information Portal ¾ Knowledge sharing platform ¾ Create greater Anglo identity ¾ Support communication and training programme
Slide 24: John Groom
John Groom Environment Overview Biodiversity Energy/Carbon Risk Air and Water Product Stewardship Occupational Health
Slide 25: Environment Overview
Environment Overview ISO 14001 Certification – 61% certification of operations – Target 93% by end 2004 (recent acquisitions have up to two years) Incidents – Increasing number of incidents due to better reporting – No level 3 incidents since 2000 Targets – Business units set clear and quantif
Slide 26: Biodiversity
Biodiversity Committed to wise use of environmental resources and the active stewardship of land and biodiversity As member of ICMM we will not explore or mine in existing World Heritage sites 35% of operations have developed BAPs Biodiversity projects across the group include SKEP programme
Slide 27: Energy
Energy Energy usage 5% higher than 2002 – due to the inclusion of Syktyvkar and expansion programme at Anglo Platinum Biomass constitutes 43% of energy used in pulp mills Energy pilot project for 2004 – Targets 12% saving over 10 years – 2m t/a CO2 reduction – Major financial returns
Slide 28: Carbon Risk
Carbon Risk Carbon working group Estimated that period to 2010 could have negative impact on sales revenue offset by Platinum fuel cells Estimated that by 2012 compliance costs would be 1% of 2003 operating profit CO2 and CH4 emissions from countries that are signatory to the Kyoto protocol
Slide 29: Air & Water Quality
Air & Water Quality 15 % reduction from 2002 in SO2 emissions (282 thousand tonnes of SO2) Project at Merebank could reduce their SO2 emissions by 66% over 2 years Complaints regarding excessive emissions Innovation and technology strategies to target water Water management projects includ
Slide 30: Product Stewardship and Recycling
Product Stewardship and Recycling Better understanding and reporting of “environmental rucksack” of our products Active engagement in life cycle and eco-efficiency debates Our key focus is on “Process Stewardship” Mine Certification Evaluation Project Waste recycling in a number of operati
Slide 31: Occupational Health
Occupational Health Occupational Health Management: guideline compliance audited – 80% Half of the number of operations had independent third party certification – target by 2005 is 75% (usually OHSAS 18001) Self assessment of performance to UK Health & Safety Executive Occupational exposure l
Slide 32: Edward Bickham
Edward Bickham Communities Local Business Development HIV/AIDS Social Investment Economic Impacts
Slide 33: Communities - Engagement
Communities - Engagement 88% CEP coverage of significant operations 3-year time horizons; annually reviewed Each Community Engagement Plan (CEP) must include: ¾ Stakeholder engagement ¾ Issue management ¾ Community projects ¾ Resources and accountabilities ¾ Complaints Total community social
Slide 34: Communities - Assessment
Communities - Assessment Socio-Economic Assessment Toolbox (SEAT) Toolbox SIA/EIAs for new projects Improve social performance; build management capacity Engagement and assessment techniques ÎAction Plan Tools to support: local business creation; skills development; partnerships; community i
Slide 35: Local Business Development - Performance
Local Business Development - Performance Anglo Zimele Khula Mining Fund Mondi Black Gold Charcoal projects Latin American initiatives
Slide 36: Anglo HIV/AIDS - Strategy
Anglo HIV/AIDS - Strategy Pursue HIV prevention programmes with vigour Conduct voluntary, anonymous, unlinked HIV prevalence surveys at all operations annually Vigorously promote Voluntary Counselling and Testing set targets for annual VCT uptake Implement wellness programs for HIV +ve emp
Slide 37: HIV/AIDS - Progress
HIV/AIDS - Progress 1762 employees started on ART by end May 2004 1501 employees currently on ART; 3,300 on wellness programmes 95% of employees taking ART capable of normal work Many of these would have died by now without treatment 91% reported adherence to treatment regimen Viral Lo
Slide 38: HIV/AIDS - Communities
HIV/AIDS - Communities Long-standing partnerships – PowerBelt; Carletonville; Western Cape loveLife public/private partnership for adolescent friendly clinics $4 million Anglo cash contribution Spread workplace best practice Capacity building partnerships at 7 Anglo operations PEPFAR app
Slide 39: Value Added
Value Added Total: $7.8bn Of which: payments to employees $3.9bn payments to providers of capital $1.4bn Developing countries 45% Developed countries 55%
Slide 40: Taxes
Taxes Total: $1.76bn Of which: payments by Anglo companies $1060m payments by Anglo employees $ 700m payments to Africa $ 650m payments to South America $ 150m