Search: News Price
Home |  Register |  Price Index  |  Publication |  Consultancy |  Data |  Events |  Enquiry |  Language
Mar.29.2024 1USD=7.095RMB
  SteelHome >>Raw Material>>Market Info>>International Dynamics
 
Anglo Targets Further 1bn Dollars in Cost, Volume Improvements in 2017

https://en.steelhome.com [SteelHome] 2017-02-23 10:14:19

share to social network site
Diversified miner Anglo American is this year seeking an additional $1-billion in incremental net cost and volume improvements, while also aiming to return to an investment-grade credit rating and resume dividend payments.

The group has already identified 75% of these targeted net cost and volume improvements.

Additionally, Anglo plans to maintain its capital expenditure at $2.5-billion and increase its stay-in-business capital to $1.2-billion this year, with capital to be “appropriately prioritised” to ensure that protection is provided for the long-term value of its assets.

During a teleconference call, on Tuesday, to discuss the group’s results for 2016, Anglo CEO Mark Cutifani said the “decisive and wide-ranging” operational, cost, capital and portfolio actions that Anglo put in place in 2016 had enabled the company to reduce its net debt to $8.5-billion from $12.9-billion in 2015, which was significantly below Anglo’s $10-billion target.

He commented that despite a 3% decrease year-on-year in average commodity prices, Anglo had achieved a $3.5-billion increase in attributable free cash flow, a 25% increase in underlying interest, taxes, depreciation and amortisation (Ebitda) to $6.1-billion and increased its underlying Ebitda margin to 26%.

Cutifani said this “substantial” underlying Ebitda improvement was achieved despite headwinds, such as the labour stoppages and record snowfall at the company’s Los Bronces copper mine, in Chile, and the smelter run-out at its platinum business in South Africa.

He remarked that the $1.5-billion sale of the group’s niobium and phosphates businesses further supported its balance sheet recovery goal and combined with the sale of a number of coal and platinum assets during the year, Anglo received $1.8-billion of disposal proceeds in 2016.

“The high-quality assets across our De Beers, platinum-group metals and copper businesses underpin our positions in those respective markets and are the cornerstone of a more resilient and competitive Anglo, through the economic and commodity price cycle,” Cutifani stated.

In addition, he pointed out that the diversified miner continued to benefit from the performance of a number of its other assets across the bulk commodities of iron-ore, coal and nickel.

DODGING BARGAIN-BASEMENT ASSET SALES

Nonetheless, Cutifani noted that, while Anglo had received “strong interest” in a number of its assets for which the group had held sale processes during 2016 to further strengthen its financial position, Anglo had adhered to “strict value thresholds” and chose not to transact.

“We will continue to upgrade our portfolio as a matter of course, although asset disposals for the purposes of deleveraging are no longer required. We, therefore, retain Moranbah, Grosvenor and our nickel assets, ensuring that they continue to be optimised operationally to contribute cash and returns, while being allocated capital to both protect and enhance value,” he highlighted.

Cutifani pointed out that, with regard to the group’s South African assets, Anglo continued to work through all the potential options for its export thermal coal and iron-ore interests, as the company recognised the high quality and performance of these businesses and was intent on ensuring that maximum value was created for all its shareholders.

He emphasised that the retention of these assets remained a “viable position” given Anglo’s recent operational and other general improvements. “Therefore, our focus is on continuing improvements as we go forward,” Cutifani asserted.

AVOIDING COMPLACENCY

He said that despite the group’s significant progress, it was critically important that the lessons of recent years were applied, adding that although there was confidence in the long-term outlook for the company’s products, the balance sheet needed to be able to withstand expected price volatility in the short-to-medium term.

Cutifani noted that Anglo would continue to refine its asset portfolio over time to ensure its capital was deployed effectively to generate enhanced returns.

“Looking at the nuts and bolts, the focus for the year ahead is on the ongoing implementation of our operating model across the portfolio and to continue to leverage the group’s now significantly enhanced technical and marketing capabilities, while also driving our FutureSmart mining approach to innovation, he highlighted.

Cutifani also mentioned that considerable operating model and other gains continued to be realised, which was illustrated by the deliverance of $1.5-billion in cost and volume improvements in 2016 (in roughly equal proportions) across the group’s product portfolio.

SAFETY EMPHASIS

Meanwhile, he stressed that keeping people safe at work had always been an absolute priority for Anglo. In 2016, Anglo reported a 24% reduction in recordable case frequency rates, but an increase in fatal incidents.

Cutifani lamented that Anglo had “tragically” recorded 11 fatalities across its operations during 2016. He attributed these deaths largely to failures relating to Anglo’s critical safety risk areas.
“We can never accept even one serious injury and our efforts are concentrated around those major risk areas. We are determined that our goal of zero harm is achievable and we are working with every employee to get there,” he concluded.

source: miningweekly
Related News
上海市通信管理局
沪B2-20040629
Copyright© 2004-. SteelHome.com. All Rights Reserved
Shanghai SteelHome Information Technology Co., Ltd    Tel: +86) 021-50585733, 50585358    Fax: 021-50585277