Anglo American Plc · LSE:AAL
Anglo American — ESG Presentation (May 2005)
45 slides from Anglo American's sustainability presentation, May 17, 2005
Slide 1: Presentation to Financial Community on Anglo American's Sustainable Development Performance 2004/5
Presentation to Financial Community on Anglo American’s Sustainable Development Performance 2004/5 17 May 2005
Slide 2: Agenda
AGENDA 1. Strategic Overview Sir Mark Moody-Stuart 2. Overview of Financial Performance Tony Trahar 3. Safety Tony Trahar 4. Energy Tony Trahar 5. Sustainable Development Organisation, Risks and Assurance Process Dorian Emmett 6. Economic Contribution Dorian Emmett 7. Environment and Occupational He
Slide 3: Strategic Overview
Strategic Overview External • Outcomes and aftermath of Extractive Industries Review • Increased focus on role of mining in development • Debates on royalties • China Internal • Creation of AA plc Board Safety and Sustainable Development Committee • HIV/AIDS • Socio-Economic Assessment Toolbox • Wid
Slide 4: Reporting and Recognition
Reporting and Recognition • Leading mining company in Dow Jones Sustainability Index and STOXX Index 2004/05 • Included in JSE Sustainability Index • 2003 Report to Society received commendation from ACCA • Exploration Division work on biodiversity recognized by president of the Philippines • Global
Slide 5: Tony Trahar: Financial Performance, Safety, Energy
Tony Trahar • Financial Performance • Safety • Energy 5
Slide 6: Highlights
Highlights • Record results: - Headline earnings up 59% at $2,689m • Cash generation (EBITDA) up by $2.3bn to $7,110m • Total dividend up 30% at 70c per share • Record performances from Base and Ferrous Metals • $1.5bn of projects completed: $4.7bn project pipeline on track • Ongoing optimisation of
Slide 7: Headline earnings by business unit
Headline earnings by business unit 6% 12% 9% 18% 6% 25% 10% 14% 14% 23% 13% 10% 16% 12% 14% 39% 2003 2004 Platinum Gold Diamonds Coal Base Metals Industrial Minerals Paper and Packaging Ferrous and Industries 7
Slide 8: Geographic headline earnings mix
Geographic headline earnings mix 15% 22% 26% 34% 18% 14% 45% 26% 2003 2004 Europe South Africa Americas Rest of World 8
Slide 9: Safety – a mixed year
Safety – a mixed year Fatalities Surface (33%) 49 fatalities. Up 5 from 2003 Underground (67%) LTIFR reduced by 23% Falls of Ground cause one third of the LTIFR - 65% underground fatalities improvement since Causes of LTIs 2000 LTIFR target 0.5 for 16% Falls of Ground Transportation 23% 2005
Slide 10: Safety Trends
Safety Trends Lost Time Injury and Fatal Injury Frequency Rates LTIFR FIFR 2.5 0.10 2.0 0.08 1.5 0.06 0.78 1.0 0.04 0.51 0.5 0.02 0.0 0.00 00 01 02 03 04 05 20 20 20 20 20 20 Lost-time injury frequency rate (LTIFR) Fatal injury frequency rate (FIFR) 10
Slide 11: Safety – our programme
Safety – our programme OTTO campaign Visible Felt Leadership Safety Golden Rules implementation Chief Executive’s Safety Competition and comprehensive audits Behaviour Based Safety Safety linked to remuneration Du Pont executive training 11
Slide 12: Energy - Strategy
Energy - Strategy • Appointment of Head of Energy • Improve energy efficiency • Respond to carbon challenge • Longer-term initiatives 12
Slide 13: Energy – Efficiency
Energy – Efficiency • Group target of 12% reduction in energy intensity and 10% reduction in carbon emissions over next 10 years (2003 baseline) • Energy Technology Pilot Project with Rocky Mountain Institute • Energy efficiency improvements already underway 13
Slide 14: Responding to the carbon challenge
Responding to the carbon challenge • Developing a carbon trading strategy • Investment proposals to include ‘cost of carbon’ assumptions • Clean Development Mechanism screening tool developed 14
Slide 15: Longer-Term Activities
Longer-Term Activities • Investment in Johnson Matthey fuel cell company • Monash Energy – coal to liquid energy project with carbon dioxide sequestration 15
Slide 16: Dorian Emmett
Dorian Emmett • Sustainable Development Structure • Risks Assurance and Reporting • Economic Benefits • Material Stewardship 16
Slide 17: Organisation and SD Strategy
Organisation and SD Strategy PRIORITIES IN 04/05 1. Provide meaningful employment in safe, healthy environment 2. Improve the efficiency of our resource use (esp. energy and water) 3. Understand/protect site biodiversity 4. Reflect concerns about climate change 5. Factor in regulatory initiatives (e
Slide 18: SD Content and Structure
SD Content and Structure EXBOARD RUSSELL KING HEAD OF SD DORIAN EMMETT CLUSTER JOHN EDWARD KARIN IRETON JULIE HEADS GROOM BICKHAM STACEY (PART OF TIME) SAFETY HEALTH BIOPHYSICAL ECONOMIC / OPERATIONS ENVIRONMENT SOCIAL MANUFACTURED ENVIRONMENT 18
Slide 19: Governance and Assurance
Governance and Assurance • Safety and SD Committees in Business Units • AA plc Board Safety and SD Committee • Letters of Assurance re. SD agenda to Chief Executive of AA plc - Reported to the Board S&SD Committee • Integrated in ’05 in Turnbull reporting format • SD risks and Opportunities Assessme
Slide 20: Reporting
Reporting • Report to Society published annually supported by divisional, business unit and site reports • Reports “in accordance with” GRI guidelines and Draft Boundary Protocol • KPMG undertake an independent assessment of the important data and systems • Significant progress in scope in four year
Slide 21: Sharing of Economic Benefits
Sharing of Economic Benefits $5.17 bn $22.8 bn $14.4 bn Sharing of economic benefits $ millions Employee s Distribution Suppliers 527 711 1,177 730 1,073 224 338 266 463 5,170 14,435 5,876 2,803 1,539 6,293 Australia /Asia Suppliers Australia/Asia South America Employees South America North America
Slide 22: Material Stewardship
Material Stewardship • Guidelines implemented for inclusion of cost of carbon evaluations and other SD parameters, into investment proposals • Implications of proposed EU chemicals legislation (REACH) • Steering groups focussing on product stewardship and recycling • Supplier engagement 22
Slide 23: John Groom
John Groom • Environment Overview • Biodiversity • Air and Quality • Product Stewardship/Recycling • Occupational Health 23
Slide 24: Environment Overview
Environment Overview • ISO 14001 Certification – 83% certification of operations – Further 6% in 2005: recent acquisitions have up to two years • Incidents – Increasing number of incidents due to better reporting – No level 3 incidents since 2000 • Targets – The challenge remains meaningful aggregat
Slide 25: Biodiversity
Biodiversity • Committed to responsible use of environmental resources and the active stewardship of land and biodiversity • Biodiversity Action Plans (BAPs) to be integrated into ISO14001 systems • Peer review of 10 BAPs in 2005 • Updated BAP Guideline – extensively used and to be integrated with m
Slide 26: Air Quality
Air Quality • 75 % reduction from 2003 in SO2 emissions due to improvements at Waterval smelter and sale of Hudson Bay • Mondi Merebank flue gas desulphurisation of coal-fired boilers to be commissioned in 2005: will result in 66% SO2 reduction • Ruzomberok $37 million project has reduced malodorous
Slide 27: 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 • Increased waste recycling and reuse 27
Slide 28: Occupational Health
Occupational Health • Occupational Health Management: guideline compliance audited – 87% • 70% of operations had independent third party certification – on target for 2005 coverage of 75% (usually OHSAS 18001) • Noise remains priority risk. Other risks include lung diseases, stress, malaria, hand-ar
Slide 29: Russell King
Russell King • Black Economic Empowerment • Human Resources • HIV/AIDS 29
Slide 30: Good progress in meeting requirements of Mining Charter
Good progress in meeting requirements of Mining Charter Highlights • Human Resource Development • Mineral rights conversion has significant momentum process has started • Employment Equity is on track • Proactive procurement policy to meet 40% target delivering results • Number of women in mining or
Slide 31: Empowerment transactions well underway
Empowerment transactions well underway • Paper and Packaging: two deals valued at US$600m in 2004 • Procurement – US$900m spent on goods and services from BEE companies in 2004 – Targeted growth rate of 20-30% pa 31
Slide 32: We pride ourselves on having good people
We pride ourselves on having good people • 80% covered by a formal consultation process • 3.8% of total employment cost spent on training - up 50% since 2002 • 40% of training spend on SHE related subjects • Number of “trainees” has doubled since 2002 32
Slide 33: Improving diversity
Improving diversity • Gender diversity has not shown the progress that we have sought • But racial diversity in South Africa has – Increased percentage of HDSAs in management from 35% to 37% – Doubled number of HDSAs in senior management ranks - now 14% 33
Slide 34: Building a meritocracy is a key part of strategy
Building a meritocracy is a key part of strategy • Clear standards for employee development and selection – WiWTTSiA framework – Formal talent management process – Formal selection guidelines • Performance Review – All managerial staff to have a face to face performance and development review • Stro
Slide 35: HIV/AIDS
HIV/AIDS • HIV/AIDS epidemic remains the most significant health issue in sub-Saharan Africa • Strategy: – Strong line management leadership – Education & Wellness – Voluntary Counselling and Testing (VCT) – Treatment and care – Community partnerships 35
Slide 36: HIV Prevalence in Eastern and Southern Africa
HIV Prevalence in Eastern and Southern Africa No of employees in Estimated HIV Estimated HIV +ve region prevalence employees AngloGold Ashanti 39500 30% 12000 Anglo Platinum 46750 25% 12000 Anglo Coal 7500 17% 1300 Anglo F&I 40750 18% 7300 Anglo Base 2250 2% 50 Anglo Paper & 7500 12% 900 Packaging C
Slide 37: VCT is a key part of our strategy
VCT is a key part of our strategy VCT uptake 2004 AngloGold Ashanti 10% Anglo Platinum 15% Anglo Coal 63% Anglo F&I 17% Anglo Base 87% Anglo Paper & Packaging 69% Corporate Centre 70% TOTAL 21% 37
Slide 38: Anti Retroviral Therapy
Anti Retroviral Therapy • C. 2100 employees on ART • Needs meticulous adherence to treatment regimen • Employees on treatment - adherence >90% • Deaths on treatment (5.3%) seem to be due to fact that 75% of people seeking treatment wait until they are sick before seeking treatment • Estimated 25% of
Slide 39: HIV Community Partnerships
HIV Community Partnerships • Outreach to communities is a long-standing element of site-level HIV programmes • Anglo Community HIV and AIDS Partnership programme – $4.7 million over 3 years – 7 sites associated with Anglo operations – Partnerships with loveLife and public sector aimed at raising awa
Slide 40: Edward Bickham
Edward Bickham • Social and Community Issues • Local Business Development • Human Rights and International Initiatives 40
Slide 41: SEAT: Objectives
SEAT: Objectives • Build capacity at site level • Deliver on ‘Good Citizenship’ Principles • Ensure effective stakeholder engagement • Improve risk management • Develop uniform site-level social KPIs • Enrich quality of Community Engagement Plans • Consistency of approach to community ‘upliftment’;
Slide 42: SEAT: Structure
SEAT: Structure Stage 1 STEP A – Profile of Anglo American operation Profile Anglo operation and associated communities and STEP B – Profile the community and engage with identify key issues stakeholders to identify key issues STEP C – Identify and assess the social and economic impacts of the Anglo
Slide 43: SEAT: Implementation
SEAT: Implementation • Implemented in 10 countries (4 more planned) • 90 people trained at 3 regional workshops • 3 more training workshops planned • 16 SEATs completed • 20 more SEATs underway • 12 more SEATs planned for 2005 • Partnership models (e.g. Chile) 43
Slide 44: Local Enterprise Development
Local Enterprise Development • Best developed in South Africa – Anglo Zimele – 28 companies – Anglo Khula Mining Fund – 2,000 jobs • Mondi Forest Enterprise • Anglo Coal • Agricultural partnership in Chile 44
Slide 45: Human Rights & International Initiatives
Human Rights & International Initiatives • Extractive Industries Transparency Initiative • Voluntary Principles on Security and Human Rights • UN Global Compact • Indigenous Groups • Resettlement 45