Anglo American plc · LSE:AAL
Anglo American — ESG Presentation (March 2018)
45 slides from Anglo American's sustainability presentation, Mar 13, 2018
Slide 1: 2017 Sustainability Performance
2017 SUSTAINABILITY PERFORMANCE Presentation to Investors - 13 March 2018 1
Slide 2: Our 2017 Results
OUR 2017 RESULTS Mark Cutifani Chief Executive 5
Slide 3: Our Investment Proposition
OUR INVESTMENT PROPOSITION Assets Capabilities Returns Focus on quality Operating Model Strong balance sheet Diversified portfolio Innovation & sustainability leader Capital discipline Low cost growth Marketing quality products Dividend payout ratio “World class assets and leading capabilities to de
Slide 4: How We Measure Our Business Performance
HOW WE MEASURE OUR BUSINESS PERFORMANCE Pillars of value Description Safety and health Do no harm to our workforce Environment Minimise our impact on the environment Partner in the benefits of mining with local communities Socio-political and government Create a sustainable competitive advantage thr
Slide 5: A Fundamentally Different Business
A FUNDAMENTALLY DIFFERENT BUSINESS More efficient More competitive Better returns Number of assets1 Unit costs2 Free cash flow ($bn)3 4.9 47% 26% (1.7) 2012 2017 Production4 EBITDA margin5 ROCE6 19% 9% 33% 11% 2012 2017 8
Slide 6: Sustainability Scorecard
SUSTAINABILITY SCORECARD A snapshot of 2017 performance Safety HIV+ Employees Employees New cases of & Recordable employees HIV testing exposed to Health Fatal Injuries injury rate undergoing exposed to inhalable occupational & counselling ART(1) noise hazards disease Level 3-5 Greenhouse Environmen
Slide 7: Sustainability Scorecard
SUSTAINABILITY SCORECARD A snapshot of 2017 performance Safety & 9 0.63 83% 34,999 2,499 5,064 96 Health Environment 2 Level 3 6% 21% 79% Socio-political 89.2% $2.02bn 116,298 62,447 People 25% 2.2% Detailed metrics available on page 13 of the 2017 Sustainability Report. 10 KPIs met 7 KPIs not met o
Slide 8: Safety
SAFETY 15 6.00 Injuries and injury rates 2500 5.00 2000 10 4.00 1500 3.00 5 1000 2.00 1.00 500 0 2013 2014 2015 2016 2017 0.00 0 De Beers Platinum 2013 2014 2015 2016 2017 Copper Metallurgical Coal Coal South Africa Kumba Iron Ore Total recordable cases Iron Ore Brazil Nickel Monthly total recordabl
Slide 9: Health
HEALTH Anglo American TB incidence rate relative to the South African national average 2013-2017 250 New cases of occupational disease 1500 TB incidence rate per 100,000 200 1000 150 employees 500 100 0 50 2013 2014 2015 2016 2017 0 Anglo American Platinum TB incidence rate 2013 2014 2015 2016 2017
Slide 10: Water
WATER Adopting a catchment-wide approach Performance 2018 focus • Around 75% of our current portfolio is located • Our focus is on understanding catchment in high-water-risk regions and 50% are water balances and developing regional, water stressed long-term water strategies with partners • Despite
Slide 11: Climate Change and Energy
CLIMATE CHANGE AND ENERGY Climate projections inform our decisions Performance • Avoided 5Mt of CO2e emissions, primarily through the capture of mine methane for power generation (equivalent to CO2 emitted from ~1.6M cars per annum) • Avoided over 15 million litres in fuel use at our SA based operat
Slide 12: Climate Change and Energy
CLIMATE CHANGE AND ENERGY Climate projections inform our decisions 2018 focus • Deep dive reviews on major Energy and CO2 emissions abatement opportunities • Continued focus on innovation and the uptake of climate-smart technologies • Scenario modelling on portfolio product demand to quanitfy climat
Slide 13: Inclusion and Diversity
INCLUSION AND DIVERSITY UK gender pay gap – the numbers Anglo American’s UK gender pay gap data was published on 5 March 2018 • Our UK gender pay gap data relates to the 258 people we employed in our UK head office at 5 April 2017 (Total global workforce = 69,000) • While women represented 42% of th
Slide 14: Inclusion and Diversity
INCLUSION AND DIVERSITY UK gender pay gap – next steps This is sizeable and the Commitment to increasing benefits to our business female representation on our and to our employees of GMC and its direct reports. redressing this imbalance is recognised. We are making a series of targeted changes to ou
Slide 15: Introducing Our Purpose
INTRODUCING OUR PURPOSE Mark Cutifani 19
Slide 16: Purpose: to improve people's lives
PURPOSE Anglo American’s purpose is to: Re-imagine mining to improve people’s lives What mining could be and how we envisage A Purpose is about more than just the work mining in the future. How we think differently we do and the profits we make, it’s about the and innovatively about mining and our e
Slide 17: At the Core of Our Strategy
AT THE CORE OF OUR STRATEGY • Focus on quality and long-life assets • Diversified portfolio with low-cost Portfolio growth options • Sustainable cash flow of returns with capital discipline • Operating Model • FutureSmart MiningTM Innovation 1. Technical innovation 2. Sustainability Strategy • Marke
Slide 18: FutureSmart Mining
FUTURESMART MININGTM Jon Samuel Group Head of Social Performance Rohan McGowan-Jackson Head of Environment Tony O’Neill Technical Director 24
Slide 19: Sustainability Strategy
SUSTAINABILITY STRATEGY “To deliver a transformational strategy to create long-term value for Anglo American and our stakeholders, intended to be a source of organisational identity, employee pride, and competitive differentiation.” 25
Slide 20: Why?
WHY? Failure to manage sustainability issues has decreased trust and increased capex, opex and risk Shareholder value Managing risk Building trust Community disruptions – Mining is still operating under a Business must show risk of operating interruption. legacy of weak environmental commitment to t
Slide 21: Sustainability Strategy Framework
SUSTAINABILITY STRATEGY FRAMEWORK 28
Slide 22: Trusted Corporate Leader
TRUSTED CORPORATE LEADER Accountability Vision: To transform the relationship between mines, communities and wider society. Policy Advocacy Vision: To take a lead on issues that affect our business in a way that is collaborative and aimed at society’s wider goals. Ethical Value Chains Vision: To be
Slide 23: Thriving Communities
THRIVING COMMUNITIES Livelihoods Vision: Shared, sustainable prosperity in our host communities. Education Vision: For all children in host communities to have access to excellent education and training. Health and well-being Vision: For the SDG targets for health to be achieved in all our host comm
Slide 24: Improving Education in South Africa
IMPROVING EDUCATION IN SOUTH AFRICA The Anglo American South Africa Education Programme • Investing in the most critical education needs within our host communities • Five-year partnership with South Africa’s Department of Basic Education (2018-2022) • Early Childhood Development (ECD) practitioners
Slide 25: Healthy Environment
HEALTHY ENVIRONMENT Climate change Vision: To operate carbon-neutral mines. Biodiversity Vision. To deliver net positive impact (NPI) across Anglo American through implementing the mitigation hierarchy and investment in biodiversity stewardship. Water Vision. To operate waterless mines in water scar
Slide 26: Partnerships Are at the Heart of Our Strategy
PARTNERSHIPS ARE AT THE HEART OF OUR STRATEGY Partnerships will underpin how we deliver on the stretch goals. Existing partnerships include: Collaborative regional development Biodiversity stretch goal Education stretch goal in South Africa Livelihoods stretch goal Livelihoods stretch goal in Latin
Slide 27: Technical Innovation
TECHNICAL INNOVATION 34
Slide 28: Mining Is on the Cusp of Game-Changing Innovation
MINING IS ON THE CUSP OF GAME-CHANGING INNOVATION Unprecedented opportunity for those prepared to take a fresh approach to purposeful innovation Anglo American has a portfolio of world-class competitive Mining innovation is driven by increasingly critical challenges mining operations and undeveloped
Slide 29: Mining Without Fresh Water
MINING WITHOUT FRESH WATER Technological innovation to eliminate fresh water from our mining processes Challenge Around 75% of our current portfolio is located in high-water-risk regions Approach • Dry processing • Rapid dewatering • Data-rich technologies e.g. pervasive sensors • Evaporation contro
Slide 30: Example: Rapid Dewatering of Fines
EXAMPLE: RAPID DEWATERING OF FINES Working with partners to deliver innovative solutions Innovation Rapid dewatering of fine particles will bring true dry disposal one step closer The energy required to separate fine particles and water is high – new chemistry opens up different (lower energy) techn
Slide 31: Mining Without Tailings Dams
MINING WITHOUT TAILINGS DAMS Technological innovation to eliminate the need for tailing dams Challenge Water sent to the tailings pond often represents the largest water loss at a mine Approach • Coarse particle flotation to concentrate the mineral • (Low-cost) dry stacking technologies to dewater t
Slide 32: Example: Coarse Particle Flotation
EXAMPLE: COARSE PARTICLE FLOTATION Technological innovation to eliminate the need for tailing dams Innovation Coarse particle flotation is part of our pioneering Concentrating the Mine™ concept It allows us to float particles at sizes two to three times larger than normal making it easier to extract
Slide 33: Mining With a Minimal Carbon Footprint
MINING WITH A MINIMAL CARBON FOOTPRINT Technological innovation to reduce our carbon footprint Challenge Our energy use dramatically affects our carbon footprint Approach • $201 million investment in low-carbon technologies including approximately $10 million in clean-coal technology • Low-emission
Slide 34: Example: Shock Break – Changing the Way We Break Rock
EXAMPLE: SHOCK BREAK – CHANGING THE WAY WE BREAK ROCK Technological innovation to reduce our carbon footprint Innovation INPUT Shock Break has the potential to radically reduce our energy consumption. Comminution accounts for over half of the total energy consumed at an average mine site. Tests on M
Slide 35: In Conclusion…
IN CONCLUSION… 42
Slide 36: Transition to Low Carbon Future
TRANSITION TO LOW CARBON FUTURE Anglo American recognises its responsibility to contribute towards addressing climate change – a critical issue facing all of us. • The opportunities = Copper, nickel, iron ore, PGMs • The impact = FutureSmart Mining™ will execute our vision of carbon neutral and wate
Slide 37: Open Forum: Future of Mining
OPEN FORUM: FUTURE OF MINING In April 2018, we will convene an Open Forum to explore key questions relating to FutureSmart Mining™... Re-imagine mining to Redefining shared value Preparing our workforce improve people’s lives • What challenges and • What will FutureSmart • How have other industries
Slide 38: How We Measure Our Business Performance
HOW WE MEASURE OUR BUSINESS PERFORMANCE Pillars of value Safety and health Environment Socio-political People Production Cost Financial 45
Slide 39: Our Investment Proposition
OUR INVESTMENT PROPOSITION Assets Capabilities Returns Focus on quality Operating Model Strong balance sheet Diversified portfolio Innovation & sustainability leader Capital discipline Low cost growth Marketing quality products Dividend payout ratio “World class assets and leading capabilities to de
Slide 40: Thank You
THANK YOU 48
Slide 41: Appendix
APPENDIX • Global Stretch Goals • Footnotes 49
Slide 42: Global Stretch Goals
GLOBAL STRETCH GOALS Trusted Corporate Leader – Milestone Targets Accountability 2020: • Establish, or support the functioning of existing, local stakeholder Our vision is to transform accountability forums and national multi-stakeholder dialogue groups by 2020 the relationship between • Engage in s
Slide 43: Global Stretch Goals
GLOBAL STRETCH GOALS Thriving Communities – Milestone targets Milestones Education • Baselines and strategies to achieve the target in place by 2020 Our vision is for all children in • Schools in host communities to perform within the top 30% of state schools nationally by 2025 host communities to h
Slide 44: Global Stretch Goals
GLOBAL STRETCH GOALS Healthy Environment – Milestone Targets Milestones Biodiversity • Net-positive impact (NPI) methodology, biodiversity value assessments and site-specific Our vision is to deliver net positive indicators in place at all high-risk sites by 2020 impact (NPI) across Anglo American •
Slide 45: Footnotes
FOOTNOTES 1. 2013 to 2017. Includes impact of announced disposals and assets closed or placed on care and maintenance. 2. 2012 to 2017. 3. Attributable free cash flow is defined as net cash inflows from operating activities net of total capital expenditure, net interest paid and dividends paid to mi