London-based global miner Anglo American is divesting a bunch of non-core assets in coal, nickel and diamonds for working capital to focus on the development and acquisition of copper and iron ore assets.
Since fending off a US$49 billion takeover offer from BHP (ASX : BHP) which wanted exposure to the coveted Collahuesi mine, Anglo American (LON : AAL) has decided to concentrate on shoring up its copper assets
Collahuesi is considered one of the world’s largest and highest grade copper mines in the world, of which Anglo American operates in a JV with fellow takeover target Glencore.
Pivot to copper
The sale of its steelmaking and coal business will generate US$4.8 billion and it will bank an extra US$500m with the sale of its ferro-nickel businesses in Brazil to China-backed MMG.
A demerger of its Anglo American Platinum (AAP) business is expected in June, with the company retaining a 19.9% interest.
“We are fast transforming Anglo American into a far higher margin and more valuable mining company focused on exceptional copper, premium iron ore and crop nutrients assets and significant growth optionality,” Anglo American chief executive Duncan Wanblad said.
“Copper is at the forefront of our growth ambitions and we already have a clear pathway to more than 1Mt of annual copper production by the early 2030s, a 30% increase.”
Latest results
Writedowns and non-core asset selloffs across coal, nickel and diamonds will likely generate enough capital for Anglo ambitions, even with a decrease in earnings.
Underlying EBITDA decreased by US$1.5 billion to US$8.5 billion, predominantly impacted by lower iron ore, PGM and steelmaking coal prices and challenging diamond market conditions.
It also chalked up a US$3.8 billion impairment - $US3.1 billion of which is the writedown of its ailing DeBeers diamond business - and declared a dividend of 64c per share for ~US$800 million, down from 96c per share previously.
While Anglo landed within its 2024 copper production guidance of 730-790kt (delivering 773kt) Q4 production of 198kt rose by 9% QoQ but declined 14% YoY - primarily due to planned underperformance at Los Bronces over the calendar year.
Looking ahead, 2025 guidance is set lower than 2024, reflecting expectations that its 50.1%-owned Los Bronces copper operation in Chile will not return to normal production levels until 2027.
That may change though, as on the same day the financials were released earlier this week, it announced a US$5 billion agreement with Chile’s state run miner Codelco to implement a mine plan for both Los Blancos and the Andina mine.
Together the projects are pegged to produce 2.7Mt of additional copper over 21 years from 2030. Codelco will retain ownership rights and split the earnings 50:50.
The $US30 billion market-capped miner was trading up 3.99% on the London Stock Exchange at GBX 2,464.50 at the time of writing.
