Anglo American plc · LSE:AAL
Anglo American — ESG Presentation (June 2007)
40 slides from Anglo American's sustainability presentation, Jun 18, 2007
Slide 1: Presentation on Anglo American's Sustainable Development Performance 2006
Presentation on Anglo American’s Sustainable Development Performance 2006 18 June 2007
Slide 2: Agenda
AGENDA 1. Welcome • Sir Mark Moody-Stuart, Chairman, Anglo American plc 2. Strategic Overview • Cynthia Carroll – Chief Executive, Anglo American plc 3. Safety, Health, Environment and Energy • Dorian Emmett – Head of Sustainable Development 4. Social and Community Issues and International Initiativ
Slide 3: Welcome and Opening Remarks
Welcome and Opening Remarks Sir Mark Moody-Stuart, Chairman 3
Slide 4: Strategic Overview
Strategic Overview Cynthia Carroll, Chief Executive • Financial summary • One Anglo • Our ambition • Key issues: – Safety – Climate change – Stakeholder engagement – Distribution of economic benefits 4
Slide 5: Financial Summary
Financial Summary • Underlying earnings: $5.5 billion (↑ 46 percent) • Operating profit: $9.8 billion (↑ 54 percent) • EBITDA: $12.2 billion (↑ $3.2 billion) 5
Slide 6: Financial Summary
Financial Summary • Strong growth in earnings per share • Consistent growth in dividends per share: – Total 2002: 41 cents per share – Total 2006: 175 cents per share • Special dividends in 2005 and 2006 6
Slide 7: Financial Summary
Financial Summary $6.9bn of approved projects $10-15bn of future projects MMX MINAS RIO Iron Ore MICHIQUILLAY Copper FALEME & OTHER Iron ore MACCAUVLEI WEST COLLAHUASI SASA marine $44m debottlenecking SADDLER’S $52m Copper CREEK LEBOWA Coal TWICKENHAM $179m PAARDEKRAAL Platinum CERREJÓN 2 $316m MARI
Slide 8: Business Model: One Anglo
Business Model: One Anglo • Functional standardisation: – Especially in safety • Capitalising on our scale: – Procurement – Talent management – Central services • Sharing expertise: – Collaborative tools (over 250 collaborative groups) – Better coordination across businesses and geographies • Accele
Slide 9: Our Ambition
Our Ambition • To be the leading mining company of choice: – Highest performing assets – Maximise our share of profitable industry growth – Set the standard for the industry in safety – Preferred partner for governments and communities – Supplier of choice for customers – Best developer of talent an
Slide 10: Key Issues – Safety
Key Issues – Safety • One incident is one too many • Safety performance: – 44 fatalities in 2006 (46 in 2005) – LTIFR was 1.16 (0.94 in 2005) – Outcomes not acceptable • Management actions: – Personal and collective responsibilities clarified – Consistent application and enforcement of standards – S
Slide 11: Key Issues – Climate Change
Key Issues – Climate Change • Large energy consumer and coal producer • 36 m. tonnes CO2e from energy and process emissions • Risks: growth increases energy demands, carbon costs / caps, power shortages, markets for coal • Opportunities: energy efficiency, CDM projects, coal bed methane generation,
Slide 12: Key Issues – Stakeholders
Key Issues – Stakeholders • Stakeholder engagement increasingly important: – Potential for high impacts on our neighbours – Host and home governments are partners – Vital to protection of licence to operate – Active debate on mining’s role in development – Accurate understanding of political / gover
Slide 13: Key Issues – Distribution of Benefits
Key Issues – Distribution of Benefits • All key stakeholders should benefit from mining • Implemented a number of programmes to measure and enhance benefits, particularly in developing countries • Most of our employment, tax and procurement benefits are incurred in Southern Africa and South America
Slide 14: Safety, Health, Energy and Environment
Safety, Health, Energy and Environment Dorian Emmett, Head of Sustainable Development • Key challenges: – Safety – Climate change – Mine closure • Strengths: – Biodiversity – Water – Occupational health 14
Slide 15: Safety – Where Have We Come From?
Safety – Where Have We Come From? • 2002: Du Pont survey of 13 sites led to: – Safety Standards and Golden Rules – Visible felt leadership – Dependent/ Independent / Interdependent Behaviours • 2005: – Training of top 30 executives – Anglo Safety Framework 15
Slide 16: Safety – 2006 / 2007
Safety – 2006 / 2007 • 44 Fatalities in 2006 (46 in 2005): – This is unacceptable – Required progress has not been made • Progress in 2006 / 2007: – Framework implementation – Communication of the Vision and Three Principles – Training – Anglo Safety Way: World class management system standards – Pe
Slide 17: Safety – Work Programme
Safety – Work Programme • One, consistent standard being rolled out in the form of the Anglo Safety Framework: – We believe the framework is world-class, and learns from “best- in-class” examples, especially Australian experience – Compulsory fatal risk management protocols – Institutionalising best
Slide 18: Energy and Climate Change
Energy and Climate Change • CO2e emitted: 36 million tonnes • Target: 10% carbon intensity decline 2004 – 2014 15% energy intensity decline 2004 – 2014 • 5 carbon projects: Saving > 2.6mt CO2e/year • Engagement: Carbon Sequestration Leadership Forum International Emissions Trading Association Intern
Slide 19: Clean Coal Initiatives
Clean Coal Initiatives Anglo-Shell • Monash Energy, Australia: Clean Coal – Coal-to-liquids plus carbon capture and storage Energy – Multi-$billion investment, 60k barrels/day, 13 million tonnes CO2/year stored Alliance • Xiwan Project, China: – Jointly progressing with Shell – Impact mitigation and
Slide 20: Biodiversity
Biodiversity • Partnerships: – Fauna and Flora International Memorandum of Understanding (MOU) • Draft MOU’s: – Kew – Earthwatch – Botanical Society of South Africa • Group Biodiversity Action Planning peer reviews 2007: – 12 sites scheduled • ICMM Biodiversity Good Practice guidance document issued
Slide 21: Water Resources
Water Resources • Planning a survey of effects of climate change on water management • Draft Guidelines: – Reporting water information – Developing integrated water management plans • International Network for Acid Prevention (INAP): – Guidelines for acid rock drainage • WBCSD Inventory Tool: – Tied
Slide 22: Occupational Health
Occupational Health • New Group-wide occupational health function established: – Centre of excellence and Occupational expertise Health – Policy development – Investigation – Training • Three key principles: – Prevention of occupational ill-health Occupational Occupational – No repeats Hygiene Medic
Slide 23: Mine Closure
Mine Closure • Mine closure is both a risk and an opportunity: – Vital for the good name of Anglo and the industry – Early planning can leave behind infrastructure with viable post-mining uses → lasting benefits for host communities and better value decommissioning • Mine Closure Planning Toolkit de
Slide 24: SD Plan Guidelines
SD Plan Guidelines • For new mines. The objective is the integrated planning of: – Environmental – Social – Economic – Local / regional / national considerations • Moving away from narrow impact assessments • Aims to minimise impacts, maximise benefits: – eg infrastructure planning for community and
Slide 25: Social Agenda
Social Agenda Edward Bickham, Head of External Affairs • Key challenges: – Growing stakeholder expectations – Resource nationalism / distribution of benefits – Resettlement • Strengths: – Sector leading tools and initiatives – Engagement in key international fora – Human resource development – HIV/A
Slide 26: Social Agenda – Context
Social Agenda – Context • Higher commodity prices feeding resource nationalism • Increasingly assertive and better networked communities • Companies’ ability to operate constrained by lack of host government capacities • Skills shortages in key countries • Need to examine benefit models for communit
Slide 27: Resource Nationalism – Responses
Resource Nationalism – Responses • Resource nationalism: – Explaining distribution of benefits – Greater engagement with host governments – Greater focus on generating benefits for host communities – Ensure focus on sustainability of tax / royalty burdens across cycle – ICMM Resource Endowment proje
Slide 28: Resettlement
Resettlement • A key risk: – To Anglo and affected communities • Successful relocation of squatter camp for safety reasons at Skorpion Zinc, Namibia • PPL Platinum Project – addressing community concerns • Initial learnings from recent experiences: – Ensuring stakeholder representatives remain repre
Slide 29: Sector Leading Responses
Sector Leading Responses We are developing guidance and models for increasing local benefits: INFRASTRUCTURE SUPPORT FOR COMPLEMENTARY JOBS / WAGES ACTIVITIES CAPACITY SOCIAL INVESTMENT Operation BUILDING / TRAINING SME PROCUREMENT DEVELOPMENT SOUND ENVIRONMENTAL STEWARDSHIP 29
Slide 30: Social Agenda – Key Tools
Social Agenda – Key Tools • SEAT 2 – key improvements: – Simplification and consolidation of existing tools – Links to new Anglo guidance, eg Mine Closure Toolbox – More guidance on how to plan a SEAT study and SEAT reporting – Greater coverage of health and human rights issues – Provision of new “r
Slide 31: SEAT Community Development Tools
SEAT 2 Community Development Tools 5E Alternative SEAT Needs 5A Establishing Livelihoods Assessment Partnerships 5D Increasing 5F Human Capital Local Employment Capacity Development Procurement for Creation Development LBD Step 5 5K Institutional Community Capacity Development Development 5C Micro-c
Slide 32: Human Resource Development
Human Resource Development • More than 125,000 permanent employees in over 45 countries • Direct investment in training reached $171 million – 4.5% of payroll costs – Safety health and environment training accounted for 20 percent of these costs • Two new world class leadership development programme
Slide 33: Transformation and Workforce Diversity
Transformation and Workforce Diversity • South African Mining Charter target of 10 percent women in mining workforce by 2009: – Anglo Platinum at 9.1% in 2006 (up from 5.8% in 2005) – Anglo Coal already at 12.5% and aiming for 14% by end-2007 • Anglo is ahead of target for historically disadvantaged
Slide 34: Community Health / HIV and AIDS
Community Health / HIV and AIDS Community Health • New Community Health Guidelines in SEAT 2 HIV/AIDS • 66,000 employees received VCT • 21% (23,500) HIV positive • Bushbuckridge community pilot project with Virgin and US PEPFAR – Strengthen community health system, targets AIDS, TB, Malaria – Integr
Slide 35: HIV and AIDS
HIV and AIDS • Strategy remains unchanged: – Leadership, prevention, counselling and testing, care and support • The business case is becoming clearer • Focus on developing capacities of partner organisations Cost per patient Net cost / savings per Health care Absenteeism per month on patient per mo
Slide 36: Enterprise Development
Enterprise Development • New Anglo Zimele strategy: – Developing enterprise decentralised hubs at mine sites for threefold expansion in activities Business Hub Structure Current Platinum Coal SA Kumba model Labour- Western Eastern Northern sending Witbank Bethal Vereeniging Limpopo Limb Limb Cape ar
Slide 37: Enterprise Development
Enterprise Development • New Anglo Foundation in Chile – Need identified through SEAT assessments – Aims to address income inequality around Anglo operations • Implemented in partnership with NGO Fondo Esperanza (“Hope Fund”) • Uses Micro-credit model • Builds on the experience and expertise of Angl
Slide 38: Black Economic Empowerment
Black Economic Empowerment • On course to meet 26 percent BEE ownership target for 2014 • Rapid progress in growing procurement from Black Economically Empowered Suppliers – 26 percent of South African procurement from BEE enterprises in 2006 BEE Procurement and Business Development Spend Since 1998
Slide 39: International Initiatives
International Initiatives • Extractive Industries Transparency Initiative • Investment Climate Facility • Global Business Coalition on HIV / AIDS • Voluntary Principles on Security and Human Rights 39
Slide 40: Questions
Questions 40