Anglo American financial results 2021

RNS Number : 6323C

Anglo American PLC

24 February 2022

 

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YEAR END FINANCIAL REPORT

for the year ended 31 December 2021  

24 February 2022

Anglo American Preliminary Results 2021

Strong market dynamics and operational performance drive underlying EBITDA of $20.6 billion

Financial highlights for the year ended 31 December 2021

• Underlying EBITDA* of $20.6 billion: strong demand and prices, and resilient operational performance

• Profit attributable to equity shareholders of $8.6 billion

• Net debt* of $3.8 billion (0.2x underlying EBITDA): strong cash generation partially offset by investment in growth

• $6.2 billion shareholder return: capital discipline and commitment to return excess cash

◦ $2.1 billion proposed final dividend, equal to $1.18 per share final dividend, consistent with our 40% payout policy, and $0.50 per share special dividend

◦ $4.1 billion return announced at half year, including $1.0 billion special dividend and $1.0 billion buyback

• Exit from thermal coal operations completed

Mark Cutifani, Chief Executive of Anglo American , said: "In a year of two distinct halves, we recorded strong demand and prices for many products as economies recouped lost ground, spurred by government stimulus. Copper and PGMs - essential to the global decarbonisation imperative - and premium quality iron ore for greener steelmaking, supported by an improving market for diamonds, all contributed to a record financial performance, generating underlying EBITDA of $20.6 billion.

"We generated attributable free cash flow of $7.8 billion due largely to a strong price environment in the first half, which moderated in the second half. Our return on capital employed of 43% was well above our targeted 15% through-the-cycle return, as it should be in times of strong pricing, and we increased our mining EBITDA margin to 56%. We are resolutely committed to capital discipline and to maintaining a strong and flexible balance sheet. At the end of 2021, net debt of $3.8 billion, or 0.2x underlying EBITDA, reflects the strong cash generation of the business, partially offset by our investments in growth. The proposed final dividend of $1.18 per share, in line with our 40% payout policy, in addition to a special dividend of $0.50 per share, will bring our total return to shareholders in respect of 2021 to $6.2 billion (including our share buyback), equal to $4.99 per share.

"We continue to make progress in reducing fatal incidents and our broader safety processes and procedures. Sadly, however, we still lost one colleague in a vehicle incident in Peru. Our total injury frequency rate tracked up marginally, after multiple years of progressive improvement, reflecting the changed operating configurations necessary to manage Covid-19. Our health focus remains on helping keep our people protected from Covid-19. In many ways, the pandemic has proven more challenging in 2021, particularly where vaccination roll-outs have been slower and uptake lower. We have provided significant monetary and other support to accelerate vaccination rates, including by using our own health facilities and encouraging vaccination at the earliest opportunity.

"Our balanced investments are driving margin-enhancing volume growth of 35%⁽¹⁾ over the next decade, including copper from Quellaveco, due to start up mid-year. The large majority of our output and investment capital is focused on future-enabling products - metals and minerals essential for decarbonisation and to meet global consumer demand. Through our integrated technology and sustainability programme, we are well positioned to run the business safely and sustainably, further enhance our competitive position and - disciplined with our capital - deliver value-adding growth as a foundation for future returns."

Year ended	31 December 2021	31 December 2020	Change
US$ million, unless otherwise stated
Revenue(2)	41,554	25,447	63 %
Underlying EBITDA*	20,634	9,802	111 %
Mining EBITDA margin*	56  %	43  %
Attributable free cash flow*	7,803	1,209
Profit attributable to equity shareholders of the Company	8,562	2,089	310  %
Basic underlying earnings per share* ($)	7.22	2.53	185 %
Basic earnings per share ($)	6.93	1.69	310 %
Final dividend per share ($)	1.18	0.72	64  %
Final special dividend per share ($)	0.50	-
Interim and special dividend per share ($)	2.51	0.28
Share buyback per share ($)	0.80	-
Total dividend and buyback per share ($)	4.99	1.00	399 %
Group attributable ROCE*	43  %	17  %

Terms with this symbol * are defined as Alternative Performance Measures (APMs). For more information refer to page 83.

⁽¹⁾   Copper equivalent volume growth vs. 2021 copper equivalent production .

⁽²⁾  The comparative figure for 2020 has been restated. See note 2 to the Condensed financial statements for further details.

Sustainability performance

Key sustainability performance indicators

Anglo American tracks its strategic progress using KPIs that are based on our seven pillars of value: safety and health, environment, socio-political, people, production, cost and financial. In addition to the financial performance set out above, our performance for the first four pillars is set out below:

Pillar of Value	Metric	2021	2020		Target	Target achieved
Safety and health	Work-related fatal injuries	1	2		Zero	Not achieved
	Total recordable case frequency rate per million hours	2.24	2.14		Year-on-year reduction	Not achieved
	New cases of occupational disease	16	30		Year-on-year reduction	On track
	Workforce potentially exposed to noise over 85 dBA(1)	30,832	33,253		Year-on-year reduction	On track
	Workforce potentially exposed to inhalable hazards over the occupational exposure limit (1)	1,796	1,994		10% reduction year-on-year	On track
Environment	Energy consumption (million GJ)	85	81		Improve energy efficiency by 30% by 2030	On track
	GHG emissions - Scopes 1 & 2 (Mt CO2e)	14.8	16.1		Reduce absolute GHG emissions by 30% by 2030	On track
	Operational water withdrawals (million m3)	176.5	197.5		Reduce freshwater abstraction in water scarce areas by 50% by 2030	On track
	Level 4-5 environmental incidents	0	0		Zero	On track
Socio-political	Social Way implementation (based on updated Social Way 3.0 for 2020)(2)	49  %	23  %		Full compliance with Social Way 3.0 by end 2022	On track
	Local procurement spend ($bn)(3)	10.0	10.0
	Taxes and royalties ($m)(4)	7,134	3,778
	Jobs supported by Enterprise and Supplier Development (ESD) initiatives	147,374	137,777
People	Women in management	31%	27%		To achieve 33% by 2023	On track
	Women in the workforce	23%	23%
	Voluntary labour turnover	3.5%	2.8%		< 5%	On track

⁽¹⁾ Reflects the number of employees and contractors who work in environments where there is potential for exposure above the exposure limit. All employees and contractors working in such environments are issued with protective equipment to prevent occupational illness.

⁽²⁾  In 2020, we launched a new integrated social performance management system (Social Way 3.0) which has raised performance expectations and has resulted in continued improvement in our social performance. Sites are expected to have implemented the Social Way 3.0 by the end of 2022. While sites are assessed annually against all requirements applicable to their context, for consistency during the transition period, the metric reflects performance against the Social Way foundational requirements.

⁽³⁾ Local procurement spend relates to spend within the country where an operation is located. The basis of calculation has been amended to more closely reflect the Group's financial accounting consolidation, i.e. 100% of subsidiaries and a proportionate share of joint operations, based on Anglo American's  shareholding. The prior year comparative has been restated.

⁽⁴⁾ Taxes and royalties include all taxes and royalties both borne and collected by the Group. This includes corporate income taxes, withholding taxes, mining taxes royalties, employee taxes and social security contributions and other taxes, levies and duties directly incurred by the Group, as well as taxes incurred by other parties (e.g. customers and employees) but collected and paid by the Group on their behalf. Figures disclosed are based on cash remitted, net of entities consolidated for accounting purposes, plus a proportionate share, based on the percentage shareholding, of joint operations. Taxes borne and collected by associates and joint ventures are not included.

Safety

Anglo American's most important priority is always safety - keeping our colleagues safe and well. We also look beyond safety, working towards everyone being better off and healthier having worked for Anglo American. This drives our thinking and the commitment to quality of life and sustainable livelihoods across the company. We continue to make progress in reducing fatal incidents and our broader safety processes and procedures. Sadly, however, we still lost one colleague in a vehicle incident on our major project in Peru. Our total injury frequency rate tracked up marginally, after multiple years of progressive improvement, reflecting the changed operating configurations necessary to manage Covid that tend to disrupt planned work routines. The increase in the first half of the year reduced in the second half as we reinforced the importance of these new routines across the business.

On fatal incidents, our Elimination of Fatalities Taskforce has supported a 93% reduction in fatal incidents since 2013 and we are engaging with our non-managed joint operations and our approach to influencing better performance, as they reported three fatal incidents in the year. For us, every loss of life is a tragedy, and we will continue to mobilise our resources across the Group to support our zero harm imperative.

Health

We tackle the threats to health and wellbeing wherever we find them, with separate programmes for physical and mental health - including our Living with Dignity programme to help tackle gender-based and domestic violence; for creating a healthier working environment; and for encouraging healthy lifestyles. We are paying greater attention to psychological safety, intrinsic to embedding a safety-conscious mindset, establishing a steering group to investigate psychological safety issues while also introducing the thinking into an array of other programmes.

Our health focus remains on helping keep our people protected from Covid-19, while sustaining our work to continuously improve our key health measures. The pandemic proved to be more challenging in 2021, particularly in those countries where vaccination roll-outs lagged. We provided significant monetary and other support to accelerate vaccination rates, using our own health facilities and encouraging vaccination at the earliest opportunity, including in many host communities. With the pandemic as a backdrop, we are pleased to have met our three major annual improvement targets for health - for occupational disease, noise exposure and inhalable hazards.

Recognising the link between employee health and broader community wellbeing, in 2021 we completed community health improvement strategies for our operations in support of our Sustainable Mining Plan targets. Building on our extensive Covid-19 support, implementation of these strategies will begin in 2022.

Environment

Our Sustainable Mining Plan (SMP) includes commitments to be a leader in environmental stewardship. By 2030, we aim to: reduce GHG emissions (Scopes 1 and 2) by 30%; improve energy efficiency by 30%; achieve a 50% net reduction in freshwater abstraction in water-scarce areas; and deliver net-positive impacts in biodiversity wherever we operate.

Our environmental performance continues to improve, with no Level 5 or 4 incidents in 2021. This achievement reflects the improvements to our planning and operating disciplines across the business. We launched a 'no repeats' challenge during the year to help us learn from low level incidents and prevent repeats of a similar nature across the business, which has led to improvements in controls, specifically helping to prevent significant incidents.

Energy consumption increased in line with production following the operational shutdowns during the first half of 2020 due to the pandemic. Nevertheless, we achieved an 8% reduction in GHG emissions due to our Copper business in Chile moving to a renewable electricity supply in 2021, thereby reducing its Scope 2 emissions, as well as a reduction in methane emissions from our metallurgical coal mines in Australia.

We have a target to be carbon neutral across our operations by 2040, and an ambition to reduce our Scope 3 emissions by 50%, also by 2040. We are making encouraging progress. In 2020, around one third of the electricity Anglo American used globally was drawn from renewables. Having secured 100% renewable electricity supply across our operations in South America, by 2023 we expect to be drawing 56% of our global grid supply from renewables.

Socio-political

As we grow our business and improve our performance, so our total tax contribution increases, benefiting host countries. Total taxes and royalties borne and collected in 2021 amounted to $7.1 billion, an 89% increase from 2020. We also made further progress with our enterprise and supplier development initiatives, supporting 147,374 jobs in the year - a key component of our SMP goal to support five jobs offsite for every job onsite by 2030.

People

Tightly linked to our safety imperative and our Values, we strive to create a workplace that is safe in every respect, inclusive and that empowers every colleague to bring their whole self to work. We have zero tolerance for any form of bullying, harassment or victimisation and we know there is no room for complacency when it comes to culture in any organisation. To that end, we have extensive training, systems and processes in place to keep improving both physical and psychological safety, with an increased focus on addressing gender-based and domestic violence since 2019, including in host communities. We will continue to embed and launch initiatives that will allow us to realise our vision of a truly inclusive workplace where every employee can reach their full potential.

We also continue to make progress against our diversity goals, including to achieve 33% female representation in management by 2023. The proportion of women at this level increased to 31% (2020: 27%), while female employees across the company represent 23% of our workforce.

WeCare - our global response to the pandemic

Anglo American acted quickly at the onset of the pandemic to support the lives and livelihoods of our workforce and host communities through the health, social and economic effects of the Covid-19 pandemic - through our global "WeCare" response programme. Our mines and host communities, which are also often home to much of our workforce, operate as an ecosystem and both must be healthy to prosper. Across our operational footprint and in those communities that are local to our operations, WeCare provides information and extensive practical support across four pillars of: physical health, mental health, Living with Dignity, and community response:

Physical health - education and behavioural change to support personal health and hygiene; health screening and testing; PPE and medical equipment and facilities; vaccination information programme; and support for government-led vaccination programmes, including licensing our own medical facilities in South Africa to vaccinate employees, to encourage vaccination at the earliest opportunity.

Mental health - employee support programmes, including via our employee app, expanding the number of professionally trained mental health first aiders, and online events and other digital materials.

Living with Dignity - direct employee and community support to combat the prevalence of gender-based and domestic violence; work with health authorities to identify abuse cases and referrals to support mechanisms.

Community response - wide-ranging livelihoods programme to support communities through the social and economic effects of the pandemic, including: public information campaigns aimed at health and hygiene; health screening and Covid-19 testing; support for health service provision; continuation of essential services (e.g. water, energy, accommodation); food package distribution; employee match-giving programme; support for SMEs and entrepreneurs; support for teachers and students; job training for post-pandemic employability; and regional development planning to enhance local economic activity for the long term.

Anglo American Foundation - special endowment of $100 million

Building on the extensive in-kind support and financial contributions as part of the WeCare programme detailed above, in July 2021 we committed to endowing the Anglo American Foundation with a $100 million donation. The Anglo American Foundation is focused on accelerating progress towards the United Nations' Sustainable Development Goals (UNSDGs), placing a particular importance on programmes that empower women, youth and vulnerable groups. By partnering with non-profit, public and private organisations, the Anglo American Foundation supports health, education, economic and environmental projects aligned with the goals of Anglo American's Sustainable Mining Plan - itself designed to align with the UNSDGs.

This special endowment presented an opportunity for the Foundation to redefine its strategy, including governance and operating model, to ensure it can deliver to an entirely new level - creating systemic impact at scale. Aligned with Anglo American's Purpose, the Foundation will become a strategic grant-maker focusing on long-term system‑level change within three themes, each with two 'signature' topics:

• Clean water and energy: water resource management; access to (clean) energy / off-grid solutions

• Skills and job creation for growth: development of relevant skills for current and future jobs (focus on youth); incubating innovative tech; and supporting SMEs and entrepreneurs

• Healthy living: access to primary health care; preventative health care

Geographically, the Foundation focuses its funding on the current, and potential future, footprint of Anglo American. During 2022, the Foundation is working with strategic partners to detail the priority areas of focus and design a number of programmatic interventions.

Operational and financial review of Group results for the year ended 31 December 2021

Operational performance

Improved operational performances at PGMs, De Beers and Kumba (Iron Ore) contributed to a 5% production increase on a copper equivalent basis⁽¹⁾. This was driven in part by the easing of certain Covid-19 related restrictions that impacted production throughout 2020, as well as improved mining performance and processing stability at PGMs, planned higher rough diamond production at De Beers in response to strong consumer demand, and improved plant availability at Kumba. These improvements were partially offset by the continued suspension of longwall operations at Grosvenor, operational issues and geological conditions at Moranbah (Metallurgical Coal), unplanned maintenance at Minas-Rio (Iron Ore), and licensing delays at Nickel. In response to the pandemic, comprehensive safeguarding measures remain in place at operations, which have helped a return to more normal operating levels, with production generally maintained at approximately 95%⁽²⁾ of normal capacity across the year.

De Beers' rough diamond production increased by 29% to 32.3 million carats (2020: 25.1 million carats), in response to the strong recovery in consumer demand following the impact of Covid-19 in 2020.

Copper production was in line with the prior year at 647,200 tonnes (2020: 647,400 tonnes). At Los Bronces, production increased marginally by 1% to 327,700 tonnes (2020: 324,700 tonnes) due to higher water availability owing to water management initiatives, partially offset by planned lower grades. A strong plant performance at Collahuasi improved attributable production to a record 277,200 tonnes (2020: 276,900 tonnes).

Nickel production decreased by 4% to 41,700 tonnes (2020: 43,500 tonnes), due to licencing delays and lower ore grades.

PGMs' production (metal in concentrate) increased by 13% to 4,298,700 ounces (2020: 3,808,900 ounces), reflecting the impact in 2020 of the temporary shutdown of operations in response to the Covid-19 pandemic, the improved mining performance at both Amandelbult and Mogalakwena, as well as processing stability. Refined PGM production increased to a record 5,138,400 ounces (2020: 2,713,000 ounces), reflecting the strong performance of the converter plant (ACP) Phase A unit following its successful rebuild in 2020. The ACP Phase B rebuild was completed in January 2022 and is expected to be recommissioned in the first quarter of 2022.

Iron ore production increased by 3% to 63.8 Mt (2020: 61.7 Mt). At Kumba, production increased by 9% to 40.9 Mt (2020: 37.6 Mt), owing to the easing of Covid-19 related restrictions that had affected production in 2020, and improved plant availability. Minas-Rio production decreased by 5% to 22.9 Mt (2020: 24.1 Mt), due to unplanned maintenance at the beneficiation plant.

Metallurgical coal production decreased by 11% to 14.9 Mt (2020: 16.8 Mt), principally due to the suspension of longwall operations at Grosvenor since May 2020 following the underground incident, and the elevated gas levels at Moranbah that resulted in the stoppage of longwall operations from 21 February 2021 until 3 June 2021. Operations at Moranbah were further impacted by challenging geological conditions in the second half of the year. Grosvenor longwall production received approval to restart in February 2022 and is now operational again.

Manganese ore production increased by 5% to 3.7 Mt (2020: 3.5 Mt).

Thermal coal export production was 9.3 Mt (2020: 20.6 Mt). In South Africa, production was 5.7 Mt (2020: 16.5 Mt), reflecting the demerger of operations on 4 June 2021. In Colombia, attributable production was 3.6 Mt (2020: 4.1 Mt), which reflects production until 30 June 2021, when the sale agreement for Cerrejón was reached. Both of these businesses have now been exited.

Group copper equivalent unit costs⁽¹⁾ increased by 16% in US dollar terms and 10% in local currency terms, due to stronger producer currencies and input cost increases at most of our operations, despite higher production.    

⁽¹⁾  Copper equivalent production and unit cost is normalised to reflect the demerger of the South Africa thermal coal operations, the sale of our shareholding in Cerrejón  and the closure of the manganese alloy operations.

⁽²⁾  Production capacity excludes Grosvenor.

Financial performance

Anglo American's profit attributable to equity shareholders increased significantly to $8.6 billion (2020: $2.1 billion). Underlying earnings were $8.9 billion (2020: $3.1 billion), while operating profit was $17.6 billion (2020: $5.6 billion).

Underlying EBITDA*

Group underlying EBITDA increased by $10.8 billion to $20.6 billion (2020: $9.8 billion). The Group Mining EBITDA margin* of 56% was significantly higher than the prior year (2020: 43%), due to the increase in the price for the Group's basket of products and improved production at PGMs, De Beers and Kumba (Iron Ore), partly offset by unfavourable exchange rates and higher input costs across the Group. A reconciliation of 'Profit before net finance costs and tax', the closest equivalent IFRS measure to underlying EBITDA, is provided within note 3 to the Condensed financial statements.

Underlying EBITDA* by segment⁽¹⁾

	Year ended	Year ended
$ million	31 December 2021	31 December 2020
De Beers	1,100	417
Copper	4,011	1,864
Nickel	320	206
PGMs	7,099	2,555
Iron Ore	6,871	4,565
Metallurgical Coal	962	50
Manganese	315	304
Crop Nutrients	(41)	1
Corporate and other	(3)	(160)
Total	20,634	9,802

⁽¹⁾ Following the demerger of Thungela, the Group has reassessed its reportable segments to include thermal coal operations in Corporate and other. Prior period comparatives have been restated. See note 3 to the Condensed financial statements for further details.

Underlying EBITDA* reconciliation for the year ended 31 December 2020 to year ended 31 December 2021

The reconciliation of underlying EBITDA from $9.8 billion in 2020 to $20.6 billion in 2021 shows the controllable factors (e.g. cost and volume), as well as those outside of management control (e.g. price, foreign exchange, inflation and the impact of the pandemic), that drive the Group's performance.

$ billion
2020 underlying EBITDA*	9.8
Price	10.2
Foreign exchange	(1.0)
Inflation	(0.5)
Covid-19 volume recovery	1.1
Net cost and volume	1.2
Other	(0.2)
2021 underlying EBITDA*	20.6

Price

Average market prices for the Group's basket of products increased by 43% compared to 2020, increasing underlying EBITDA by $10.2 billion. Higher realised prices were achieved across all of our products, with the dollar PGM basket increasing by 36%, primarily driven by rhodium which increased by 85% in the year, as well as iron ore and copper which increased by 41% and 52% respectively.

Foreign exchange

The unfavourable year-on-year foreign exchange impact on underlying EBITDA of $1.0 billion was due to stronger local currencies in our countries of operation, principally the South African rand.

Inflation

The Group's weighted average CPI for the year was 5.0%, compared with 2.9% in 2020, as inflation increased in all countries of operation. The impact of inflation on costs reduced underlying EBITDA by $0.5 billion.

Covid-19 volume recovery

The positive $1.1 billion effect on the Group's underlying EBITDA reflects the easing of certain Covid-19 related restrictions that impacted global demand in 2020 (particularly in the first half), as well as the continued strong recovery in the diamond market. The ongoing cost of disruption to production owing to enhanced preventative Covid-19 safety measures and supply chain interruptions is included within net cost and volume.

Net cost and volume

The net effect of cost and volume was a $1.2 billion increase in underlying EBITDA, as strong PGM sales due to higher refined volumes following the successful restart of PGMs' converter plant (ACP) Phase A unit more than offset operational issues at Metallurgical Coal, unplanned maintenance at Minas-Rio and above CPI cost increases across the Group.

Other

The $0.2 billion negative movement in underlying EBITDA from other factors was largely driven by a change in inventory value estimation methodology at PGMs (see note 8 to the Condensed Financial Statements for more detail) and unfavourable foreign exchange movements at Samancor (Manganese). This was partially offset by a decrease in environmental restoration provisions at Copper Chile as a result of recent market volatility affecting the discount rate. Despite no underlying earnings from thermal coal assets in the second half of the year, high thermal coal prices in the first half of 2021, as well as the impact of Covid-19 disruptions in 2020, resulted in higher EBITDA than for the full year 2020.

Underlying earnings*

Group underlying earnings increased to $8.9 billion (2020: $3.1 billion), driven by the significantly higher underlying EBITDA, partly offset by a corresponding increase in income tax expense and earnings attributable to non‑controlling interests.

Reconciliation from underlying EBITDA* to underlying earnings*

	Year ended	Year ended
$ million	31 December 2021	31 December 2020
Underlying EBITDA*	20,634	9,802
Depreciation and amortisation	(2,844)	(2,752)
Net finance costs and income tax expense	(5,783)	(2,745)
Non-controlling interests	(3,082)	(1,170)
Underlying earnings*	8,925	3,135

Depreciation and amortisation

Depreciation and amortisation increased by 3% to $2.8 billion (2020: $2.8 billion), reflecting the increased production of the Group.

Net finance costs and income tax expense

Net finance costs, before special items and remeasurements, were $0.3 billion (2020: $0.8 billion). The decrease was principally driven by foreign exchange gains and a decrease in other net fair value losses.

The underlying effective tax rate was 31.4% (2020: 31.2%). The underlying effective tax rate was impacted by the relative levels of profits arising in the Group's operating jurisdictions. Over the longer term, the underlying effective tax rate is expected to be in the range of 31% to 35%. The tax charge for the period, before special items and remeasurements, was $5.3 billion (2020: $1.8 billion).

Non-controlling interests

The share of underlying earnings attributable to non-controlling interests of $3.1 billion (2020: $1.2 billion) principally relates to minority shareholdings in Kumba (Iron Ore), PGMs and Copper.

Special items and remeasurements

Special items and remeasurements (after tax and non-controlling interests) are a net charge of $0.4 billion (2020: net charge of $1.0 billion), including tax special items and remeasurements arising in Iron Ore Brazil (Iron Ore) and Nickel of $0.3 billion; impairment charges of $0.6 billion at Moranbah/Grosvenor, Dawson and Capcoal (Metallurgical Coal); and a loss of $0.4 billion on the demerger of the South African thermal coal operations (Corporate and other), offset by impairment reversals of $1.0 billion mainly related to Minas-Rio (Iron Ore).

Full details of the special items and remeasurements recorded are included in note 9 to the Condensed financial statements.

Net debt*

$ million	2021	2020
Opening net debt* at 1 January(1)	(5,530)	(4,535)
Underlying EBITDA* from subsidiaries and joint operations	19,808	9,284
Working capital movements	1,059	(1,534)
Other cash flows from operations	(279)	248
Cash flows from operations	20,588	7,998
Capital repayments of lease obligations	(336)	(195)
Cash tax paid	(4,341)	(1,606)
Dividends from associates, joint ventures and financial asset investments(2)	236	226
Net interest(3)	(245)	(358)
Dividends paid to non-controlling interests	(2,838)	(668)
Sustaining capital expenditure(4)	(3,437)	(2,675)
Sustaining attributable free cash flow*	9,627	2,722
Growth capital expenditure and other(4)	(1,824)	(1,513)
Attributable free cash flow*	7,803	1,209
Dividends to Anglo American plc shareholders	(4,047)	(904)
Acquisitions	-	(520)
Disposals	63	384
Foreign exchange and fair value movements	(227)	17
Other net debt movements(5)	(1,904)	(1,181)
Total movement in net debt*	1,688	(995)
Closing net debt* at 31 December	(3,842)	(5,530)

(1) Opening net debt and prior year comparatives have been restated following an amendment to the definition of net debt to exclude all variable vessel lease contracts that are priced with reference to a freight index. For more information please refer to note 13 to the Condensed financial statements.

(2) Excludes dividends received from Cerrejón of $240 million now presented within 'other net debt movements'.

(3) Includes cash inflows of $101 million (2020: inflows of $29 million), relating to interest receipts on derivatives hedging net debt, which are included in cash flows from derivatives related to financing activities.

(4) Included within sustaining capital expenditure is $8 million (2020: $51 million) of capitalised operating cash flows relating to life extension projects. In addition to Growth capex, 'Growth capital expenditure and other' includes $4 million (2020: $12 million) of capitalised operating cash flows relating to growth projects and $68 million (2020: $63 million) of expenditure on non-current intangible assets.

(5) Includes the purchase of shares under a buyback of $814 million; the purchase of shares for other purposes (including for employee share schemes) of $270 million; Mitsubishi's share of Quellaveco capital expenditure of $530 million; new leases entered into (less capital repayments of lease obligations) of $369 million; dividends received from Cerrejón of $240 million; and contingent and deferred consideration paid in respect of acquisitions completed in previous years of $117 million. 2020 includes Mitsubishi's share of Quellaveco capital expenditure of $526 million; $253 million of debt recognised on the acquisition of Sirius Minerals Plc; the purchase of shares under a buyback of $223 million; and the purchase of shares for other purposes (including for employee share schemes) of $162 million.

          Net debt (including related derivatives) of $3.8 billion has decreased by $1.7 billion since 31 December 2020, driven by robust cash flows from operations of $20.6 billion. The Group generated strong sustaining attributable free cash inflows of $9.6 billion, used in part to fund growth capital expenditure of $1.8 billion and dividends paid to Anglo American plc shareholders of $4.0 billion. New leases entered into, including for the Group's  London head office, added $0.7 billion to net debt. Net debt at 31 December 2021 represented gearing (net debt to equity) of 10% (2020: 14%).

      Cash flow

      Cash flows from operations

        Cash flows from operations increased to $20.6 billion (2020: $8.0 billion), reflecting an increase in underlying EBITDA from subsidiaries and joint operations, and a working capital reduction of $1.1 billion (2020: increase of $1.5 billion). A reduction in inventories of $0.3 billion was driven by a change in the inventory value estimation methodology that reduced the cost of purchased concentrate at PGMs (see note 8 to the Condensed financial statements for more detail); and an increase in payables of $1.4 billion was driven by a higher customer pre‑payment within PGMs and provisionally priced sale adjustments within Iron Ore. These were partly offset by an increase in receivables of $0.6 billion, mainly owing to increased base metal prices.

Capital expenditure*

	Year ended	Year ended
$ million	31 December 2021	31 December 2020
Stay-in-business	2,068	1,566
Development and stripping	904	769
Life extension projects	474	296
Proceeds from disposal of property, plant and equipment	(17)	(7)
Sustaining capital	3,429	2,624
Growth projects	1,752	1,438
Total	5,181	4,062
Capitalised operating cash flows	12	63
Total capital expenditure	5,193	4,125

Capital expenditure increased to $5.2 billion (2020: $4.1 billion), as comprehensive response plans partially mitigated the impact of the Covid-19 pandemic, which affected spend in 2020,   and ensured business continuity.

Sustaining capital expenditure increased to $3.4 billion (2020: $2.6 billion), driven by the roll-over of deferred expenditure from 2020 owing to Covid-19 related restrictions and the effect of stronger local currencies in our countries of operation.

Growth capital expenditure increased to $1.8 billion (2020: $1.4 billion), largely due to higher expenditure incurred at the Woodsmith polyhalite project of $0.5 billion (2020: $0.3 billion) following the acquisition of the project in the first half of 2020.

Attributable free cash flow*

The Group's attributable free cash flow increased to $7.8 billion (2020: $1.2 billion) due to higher cash flows from operations of $20.6 billion (2020: $8.0 billion). This was partially offset by increased capital expenditure of $5.2 billion (2020: $4.1 billion), higher tax payments of $4.3 billion (2020: $1.6 billion) and increased dividends paid to non-controlling interests of $2.8 billion (2020: $0.7 billion).

Shareholder returns

In line with the Group's established dividend policy to pay out 40% of underlying earnings, the Board has proposed a dividend of $1.18 per share (2020: $0.72 per share), as well as a special dividend of $0.50 per share, bringing the total dividends paid and proposed in respect of 2021 to $4.19 per share (2020: $1.00 per share), equivalent to $5.2 billion (2020: $1.2 billion). The timetable for the special dividend will follow the same timetable as for the payment of Anglo American's final dividend. For further information, please refer to the 'Notice of Final Dividend' set out on page 91.

The Group has made significant progress in deleveraging and strengthening the balance sheet and, given the levels of cash generated in the business, along with the further value potential in Anglo American, excess cash was paid out to shareholders in the second half of the year.   In September 2021, in addition to the interim base dividend, the Group paid a special dividend of $1.0 billion equal to $0.80 per share. Anglo American also returned $0.8 billion to shareholders in 2021, as part of a $1.0 billion on-market share buyback programme that completed on 11 February 2022, at an average price of £28.84 per share.

Acquisitions

The Group completed no material acquisitions in the year. In the prior year, on 17 March 2020, the Group completed the acquisition of Sirius Minerals Plc for a cash consideration of $0.5 billion.

Disposals

On 4 June 2021, the Group demerged its thermal coal operations in South Africa into a newly incorporated company, Thungela Resources Limited ('Thungela'), that was subsequently admitted to trading on both the Johannesburg and London stock exchanges on 7 June 2021. The demerged assets included net cash of $0.2 billion. Following the demerger, no further production from South African thermal coal was reported by Anglo American.

Net cash received from disposals was $0.1 billion (2020: $0.4 billion), being deferred and contingent consideration in respect of previous divestments by PGMs and Copper, partially offset by the net cash disposed in 2021 through the demerger of the Group's South African thermal coal operations.

Balance sheet

Net assets increased by $2.0 billion to $34.8 billion (2020: $32.8 billion), reflecting the profit for the period, offset by dividend payments to Company shareholders and non-controlling interests.

Attributable ROCE*

Attributable ROCE increased to 43% (2020: 17%). Attributable underlying EBIT was higher at $13.5 billion (2020: $5.3 billion), reflecting the impact of significantly higher realised prices achieved for the Group's products and the easing of Covid-19 related restrictions that impacted sales in 2020. Average attributable capital employed increased to $31.4 billion (2020: $30.5 billion), primarily due to growth capital expenditure, largely at Quellaveco (Copper) and Woodsmith (Crop Nutrients).

Liquidity and funding

Group liquidity remains conservative at $17.1 billion (2020: $17.5 billion), comprising $9.1 billion of cash and cash equivalents (2020: $7.5 billion) and $8.0 billion of undrawn committed facilities (2020: $10.0 billion).

In March 2021, the Group issued $500 million 2.250% Senior Notes due 2028, and $500 million 2.875% Senior Notes due 2031, as part of the Group's routine financing activities.

In June 2021, the Group bought back US dollar denominated bonds with maturities in 2025. The Group used $1.0 billion of cash to retire $0.9 billion of contractual repayment obligations (including derivatives hedging the bonds).

The weighted average maturity on the Group's bonds decreased marginally to 6.2 years (31 December 2020: 6.3 years).

The Group has an undrawn $4.7 billion revolving credit facility due to mature in March 2025.

In April 2020, the Group signed a new $2.0 billion revolving credit facility with an initial maturity date of April 2021. After the Group's $1.0 billion bond issuance in March 2021, the Group issued a notice of cancellation for the facility, which became effective in March 2021 and, accordingly, this facility is no longer available.

Portfolio upgrade

Anglo American continues to evolve its portfolio of competitive, world class assets towards those future-enabling products that are fundamental to enabling a low carbon economy and that cater to global consumer demand trends. Aligned to this strategy, the Group commenced or completed several transactions in 2021.

In April 2021, Anglo American reached a significant milestone in delivering our environmental commitments, securing 100% renewable electricity supply for all our operations in South America including by, for example, signing an agreement to provide 100% renewable electricity for the Quellaveco copper operation in Peru, where the mains power supply will come entirely from renewables from 2022, having already met our objective to source electricity entirely from renewables in Chile from 2021, and Brazil from 2022.

In June 2021, we completed the demerger of our thermal coal operations in South Africa through the creation of a new stand-alone company, Thungela, which has a primary listing on the Johannesburg Stock Exchange, and a standard listing on the London Stock Exchange.

On 20 December 2021, Anglo American Platinum announced its sale of its 49% interest in Bokoni. The transaction is subject to the fulfilment or waiver of notable conditions precedent and is expected to complete during 2022.

In January 2022, Anglo American Platinum entered into transaction agreements for the sale of its 50% interests in the Kroondal and Marikana pool-and-share agreements (the 'PSAs') to Sibanye-Stillwater (Sibanye). The transaction is subject to regulatory approvals, including section 11 consent for the transfer of the mining right and approvals by the Competition Authorities, as well as the delivery of 1.35 million 4E ounces of metal in concentrate by the Kroondal PSA (100% basis).

On 11 January 2022, we completed the sale of our 33.3% shareholding in Cerrejón to Glencore plc for a total cash consideration of $0.3 billion, before adjustment for dividends received in 2021. The agreement is effective on 31 December 2020 and, therefore, economic benefits from 1 January 2021 onwards have not accrued to Anglo American.

Both the Thungela demerger and Cerrejón sale represent the final stage of our responsible exit from thermal coal operations.

Growth projects (metrics presented on a 100% basis unless otherwise indicated)

Progress and current expectations in respect of our key growth projects are as follows:

Operation	Scope	Capex $bn	Remaining Capex $bn	First production	Progress
Copper
Quellaveco	New copper mine in Moquegua, Peru producing c. 300 ktpa (100% basis, 180 ktpa our share) over the first 10 years in Q1 cost curve position.	c.2.8 (Anglo American 60% share)	0.7 -0.8 (Anglo American 60% share)	2022	Construction began in 2018. The project is moving into the final stages as all major works near completion. Significant milestones delivered include: the start of pre-stripping in April 2021; first ore excavated in October; pre-commissioning activities commenced at the first grinding line in the processing plant; and completion of the water dam (to mainly provide fresh water to communities) and the tailings starter dam. First production is expected mid-2022 but remains subject to the current and ongoing impacts of the pandemic. Refer to the Technology projects table below for Coarse Particle Recovery at Quellaveco.
Collahuasi	Phase 1 expansion focused on near-term P101 optimisation opportunities, the implementation of a fifth ball mill (approved) and a restart of leaching activities to add c.50 ktpa (44% basis). Additional debottlenecking options to further increase throughput remain under study. Further phase expansions are in early stage study to increase production by up to an additional 100 ktpa (44% basis).	Fifth ball mill approved; other studies ongoing	c. 0.3 in total, with 5th ball mill c.0.1 (44% basis). Additional expansion studies ongoing. Subject to permitting and approvals	2023	As part of the routine environmental approval (EIA) cycle a nominal expansion of throughput to 210 ktpd has been submitted as part of this application. EIA approval was obtained in December 2021, enabling expansion of the processing capacity up to a maximum 210 ktpd and the construction of a desalination plant and related infrastructure to provide a sustainable alternative water source. The fifth ball mill project (first stage of the expansion) is progressing according to plan with the execution of early works and purchase of critical items. The expected start up is during Q4 2023.
Diamonds
Marine Namibia	New diamond recovery vessel, adding 0.5 Mctpa (100% basis) of some of the highest value diamonds in the portfolio.	c.0.2 (Anglo American 50% share)	<0.1 (Anglo American 50% share)	2022	Construction began in 2019 and the vessel was successfully completed and delivered to Cape Town in Q3 2021 where recovery and plant systems have been installed. The vessel is currently undergoing sea trials and is on track for commissioning in Q1 2022.
Crop Nutrients
Woodsmith	New polyhalite (natural mineral fertiliser) mine being developed in Yorkshire, UK. Expected to produce POLY4 - a premium quality, low carbon fertiliser certified for organic use.	Subject to development timeline review	Subject to development timeline review	Subject to development timeline review	Ongoing technical review confirmed there are several improvements to modify design to bring it up to Anglo American's safety and operating integrity standards and optimise value for the long term. There has also been a leadership change, with Tom McCulley having replaced Chris Fraser as CEO of Crop Nutrients.
Iron Ore
Sishen	Implementation of Ultra High Dense Media Separation (UHDMS) technology at Kumba's Sishen operation will enable an increase in premium product production and the beneficiation of lower grade materials by reducing the current cut-off grade of <48% Fe to <40% Fe. In addition, the project contributes an additional 3-4 years to Sishen's life of mine to 2039.	0.2	0.2	2023	Project execution approved in Feb 2021.
PGMs
Mogalakwena	Evaluating various options to expand PGM production of the mine through technology development and deployment and the optimal mine plan to deliver feed to the concentrators.	Number of options being considered	Not yet approved	~2026	The Future of Mogalakwena (FoM) work continues to make good progress in the six workstreams: Each of the six workstreams have several steps to unlock value. Although integrated, the workstreams allow for separate approval stage gates and an optimised development pathway.
Metallurgical Coal
Moranbah-Grosvenor	Expansion of the processing facilities to increase Anglo American's share of saleable tonnes of high quality metallurgical coal by c. 2.5 Mtpa (Anglo American 88%).	c.0.3 (Anglo American 88% share)	Not yet approved	2025	Project approval expected 2023, dependent on progress of longwall operations post-restart of Grosvenor mine.

Life extension projects (metrics presented on a 100% basis unless otherwise indicated)

Progress and current expectations in respect of our key life extension projects are as follows:

Operation	Scope	Capex $bn	Remaining spend $bn	Expected first production	Progress
Diamonds
Venetia	4 Mctpa underground replacement for the existing open pit. The project is expected to add an estimated 88 million carats and extend the life of the mine to 2047.	2.1	1.2	2023	Open-pit mining at Venetia is planned to end in H2 2022, with the transition to underground mining starting thereafter.
Jwaneng	9 Mctpa replacement (100% basis) for cuts 7 and 8. The Cut-9 expansion of Jwaneng will extend the life of the mine to 2036 and is expected to yield approximately 57 million carats of rough diamonds.	0.3 (Anglo American 19.2% share)	0.2 (Anglo American 19.2% share)	2027	Project progressing on schedule.
Metallurgical Coal
Aquila	3.5 Mtpa (70% basis), 7 year extension of Capcoal's underground operations with Grasstree approaching end of life. Aquila will be a longwall operation leveraging the existing Grasstree infrastructure and producing high quality hard coking coal. The project will extend the life of the Capcoal underground operations to 2028.	0.2 (Anglo American 70% share)	<0.1 (Anglo American 70% share)	2022	Development work began in September 2019 and first longwall production commenced in February 2022.
Iron Ore
Kolomela	4 Mtpa high grade iron ore replacement project. The development of a new pit, Kapstevel South, and associated infrastructure at Kolomela to help sustain output of c.13 Mtpa and extend the remaining life of mine to 2034.	0.4	0.4	2024	Approved in July 2020. Pit establishment and waste stripping has commenced in 2021, with first ore expected in 2024.
PGMs
Mototolo/Der Brochen	The development of the project leverages the existing Mototolo infrastructure, enabling mining to extend into the adjacent and down-dip Der Brochen resource, which will potentially extend the life of mine beyond 30 years.	0.2	Approved	2023	Approved in December 2021. Execution commenced in Q1 2022, with the majority of capital invested in 2022, 2023 and 2024. First production expected in late 2023.

Technology projects⁽¹⁾

The Group is investing $0.2-0.5 billion per year over the next three years on technology projects to support the FutureSmart Mining^TM programme (metrics presented on a 100% basis unless otherwise indicated):

Initiative	Scope	Progress
Copper, PGMs and Nickel
Bulk ore sorting	Deliver improved feed grade to plants through early rejection of waste, resulting in energy, water and cost savings.	- Testing complete at Barro Alto (Nickel) August 2020. c. 35 million capex for 100% throughput with phased upgrade through 2022-23. - Testing complete at Mogalakwena (PGMs) November 2020. Full scale North Concentrator unit operational, integration to business as usual is under way (~70% of complex feed).
Copper, PGMs and Iron Ore
Coarse particle recovery (CPR)	Innovative flotation process allows material to be ground to a larger particle size, rejecting coarse gangue and allowing water to release from coarser ore particles, improving energy efficiencies and water savings.	- Demo plant construction and commissioning completed in 2021 at El Soldado (Copper) with further testing in progress. - Constructing full scale system at Mogalakwena North concentrator (PGMs) with start-up anticipated Q3 2022. - CPR approved at Quellaveco (Copper) to treat flotation tails, improving recoveries by c.3% over the life of mine. Commissioning expected in late 2023. - Minas-Rio (Iron Ore) currently in PFS-A, advancing to PFS‑B in 2022 and Feasibility in 2023. - Feasibility work continues at Los Bronces (Copper) with options being investigated at Collahuasi.
Copper and PGMs
Hydraulic dry stack	Engineering of geotechnically stable tailings facilities that dry out in weeks, facilitating up to 85% water recovery.	- El Soldado (Copper) demonstration anticipated commissioning in Q1 2022. - Assessing application to tailings expansion at Mogalakwena (PGMs) with benefits from water quality and quantity improvements. - Together with CPR, potential for 20-30% additional production within existing water licences at Quellaveco and Collahuasi (Copper).
Portfolio-wide
Zero emissions haulage solution - Hydrogen Truck Proof of Concept	Developing the world's largest hydrogen powered mining truck to decarbonise high power transport, using renewable energy.	- Proof of concept delivered at Mogalakwena in Q4 2021 and commissioning anticipated Q1 2022. 40 truck roll-out planned to start in 2024, powered by a local solar plant. - Assessing rollouts at Copper, Diamonds and Iron Ore operations.

⁽¹⁾ Capital expenditure relating to technology projects is included within Growth capital expenditure.

Digital projects⁽¹⁾

The Group is investing $0.1-0.2 billion per year over the next three years on digital projects to support the FutureSmart Mining^TM programme (metrics presented on a 100% basis unless otherwise indicated):

Initiative	Scope	Progress
PGMs, Iron Ore, Met Coal and Diamonds
Predictive Maintenance, VOXEL Asset Strategy & Reliability	Maintenance planning based on predictive analytics - resulting in improvements in safety, reliability and availability of critical assets.	- A variety of deployments at Mogalakwena, Amandelbult, Amandelbult Concentrator Plant, Rustenburg Base Metal Refinery and Polokwane Smelter (PGMs), Kolomela (Iron Ore), Moranbah (Met Coal), Los Bronces (Copper), Mafuta Vessel, Jwaneng, and Gahcho Kué (Diamonds).
Copper, PGMs and Iron Ore
Rapid Resource Modelling, VOXEL Discovery & Geosciences	Enables consistent core logging, 3D implicit modelling, and statistical resource modelling as one integrated workflow in weeks vs years.	- Deployments at Mogalakwena (PGMs) and Quellaveco (Copper).
Spatial Inventory Management, VOXEL Discovery & Geosciences	Builds a digital twin of material flow, providing access to accurate information about material within the mining operation and enabling additional value through Bulk Ore Sorting.	- Deployments at Quellaveco and Los Bronces (Copper), Kolomela and Sishen (Iron Ore) and Mogalakwena (PGMs).
PGMs, Iron Ore, Met Coal and Nickel
Process Performance Review, VOXEL Processing	Delivers automated support to improve the detection, prioritisation, and resolution of process issues.	- Deployments at Moranbah (Met Coal), Kolomela (Iron Ore) and Mogalakwena (PGMs).
Recipe Advisor, VOXEL Processing	Identifies the most valuable way to operate a process given the operational constraints, using Machine Learning (ML) models to recommend the optimum targets for the Advanced Process Control (APC) to execute.	- Deployments at Barro Alto (Nickel).
Copper, PGMs, Iron Ore, and Met Coal
Digital Operational Planning, VOXEL Integrated Operations	Enables definition and management of models and data that then applies cutting edge simulation and elastic cloud-based computing technology to deliver optimised operational plans across the mining value chain.	- Deployments at Mogalakwena (PGMs), Sishen and Kolomela (Iron Ore), Los Bronces (Copper), and Moranbah (Met Coal).
Diamonds, Copper, PGMs, Iron Ore and Met Coal
Advanced Process Control	Up to 40% improvement in stability & productivity.	- Delivered at Minas-Rio (Iron Ore), Los Bronces (Copper), Kumba (Iron Ore), Mogalakwena (PGMs) and Venetia (Diamonds). - Ambition for 95% of automatable processes within our plant flowsheets to be under Advanced Process Control by end of 2022.

⁽¹⁾ Expenditure relating to digital programmes is included within underlying operating costs.

The Board

Changes during 2021 to the composition of the Board are set out below.

On 1 March 2021, Elisabeth Brinton joined the Board as a non-executive director and as a member of the Sustainability Committee in September 2021.

On 1 June 2021, Hilary Maxson joined the Board as a non-executive director and member of the Audit Committee.

The following non-executive changes were announced in October:

• Ian Tyler joined the Board as a non-executive director and member of the Audit and Remuneration committees on 1 January 2022.

• Anne Stevens and Byron Grote will step down from the Board at the Company's Annual General Meeting (AGM) on 19 April 2022, having both served for nine years.

• Ian Tyler will succeed Anne Stevens as chair of the Remuneration Committee, and Hilary Maxson will succeed Byron Grote as chair of the Audit Committee, both with effect from the AGM in April 2022.

The following executive changes were announced in November:

• Duncan Wanblad will join the Board as chief executive at the Company's AGM on 19 April 2022.

• Mark Cutifani will retire as chief executive and step down from the Board at the 2022 AGM, after nine years in the role.

O n 23 February 2022, the following non-executive appointments were announced; both to take effect on 19 April 2022:

• Ian Tyler will succeed Byron Grote as the Board's senior independent director.

• Marcelo Bastos will succeed Byron Grote as the designated non-executive director to chair the Anglo American Global Workforce Advisory Panel.

The names of the directors at the date of this report and the skills and experience our Board members contribute to the long term sustainable success of Anglo American are set out on the Group's website:

www.angloamerican.com/about-us/leadership-team/board

Principal risks and uncertainties

Anglo American is exposed to a variety of risks and uncertainties which may have a financial, operational or reputational impact on the Group, and which may also have an impact on the achievement of social, economic and environmental objectives. The principal risks and uncertainties facing the Group relate to the following:

• Catastrophic and natural catastrophe risks

• Product prices

• Cyber security

• Political

• Community and social relations

• Safety

• Climate change

• Regulatory and permitting

• Operational performance

• Pandemic

• Corruption

• Water

• Future demand

The Group is exposed to changes in the economic environment, including to tax rates and regimes, as with any other business. Details of any key risks and uncertainties specific to the period are covered in the Operations review section. Details of relevant tax matters are included in note 6 to the Condensed financial statements.

The principal risks and uncertainties facing the Group at the 2021 year end are set out in detail in the strategic report section of the Integrated Annual Report 2021 on the Group's website from 7 March 2022 www.angloamerican.com .

De Beers - Diamonds

Financial and operational metrics⁽¹⁾

	Production volume	Sales volume	Price	Unit cost*	Group revenue*	Underlying EBITDA*	EBITDA margin*(6)	Underlying EBIT*	Capex*	ROCE*
	'000 cts	'000  cts(2)	$/ct(3)	$/ct(4)	$m(5)	$m		$m	$m
De Beers	32,276	33,357	146	58	5,602	1,100	47  %	620	565	7  %
Prior year	25,102	21,380	133	57	3,378	417	54  %	0	381	0  %
Botswana	22,326	n/a	152	32	n/a	464	n/a	407	72	n/a
Prior year	16,559	-	124	35	-	225	-	178	66	-
Namibia	1,467	n/a	565	359	n/a	101	n/a	68	91	n/a
Prior year	1,448	-	492	272	-	113	-	82	77	-
South Africa	5,306	n/a	113	45	n/a	241	n/a	82	309	n/a
Prior year	3,771	-	99	53	-	165	-	16	147	-
Canada	3,177	n/a	62	44	n/a	68	n/a	4	42	n/a
Prior year	3,324	-	58	36	-	92	-	40	31	-
Trading	n/a	n/a	n/a	n/a	n/a	515	11  %	505	4	n/a
Prior year	-	-	-	-	-	80	3  %	74	3	-
Other(7)	n/a	n/a	n/a	n/a	n/a	(289)	n/a	(446)	47	n/a
Prior year	-	-	-	-	-	(258)	-	(390)	57	-

⁽¹⁾  Prepared on a consolidated accounting basis, except for production, which is stated on a 100% basis except for the Gahcho Kué joint operation in Canada, which is on an attributable 51% basis.

⁽²⁾ Total sales volumes on a 100% basis were 36.3 million carats (2020: 22.7 million carats). Total sales volumes (100%) include De Beers Group's joint arrangement partners' 50% proportionate share of sales to entities outside De Beers Group from Diamond Trading Company Botswana and Namibia Diamond Trading Company.

⁽³⁾ Pricing for the mining business units is based on 100% selling value post-aggregation of goods. Realised price includes the price impact of the sale of non-equity product and, as a result, is not directly comparable to the unit cost.

⁽⁴⁾ Unit cost is based on consolidated production and operating costs, excluding depreciation and operating special items, divided by carats recovered.

⁽⁵⁾  Includes rough diamond sales of $4.9 billion (2020: $2.8 billion).

⁽⁶⁾  Total De Beers EBITDA margin shows mining EBITDA margin on an equity basis, which excludes the impact of non-mining activities, third‑party sales, purchases, trading downstream and corporate.

⁽⁷⁾ Other includes Element Six, Brands and consumer markets, acquisition accounting adjustments and corporate.

Markets

The diamond industry continued to recover from the impacts of the Covid-19 pandemic during 2021. In the first half of the year, consumer sales of diamond jewellery in the US and mainland China posted positive growth not only on the Covid-19 affected sales in 2020, but also in comparison to 2019 before the onset of the pandemic. Other global consumer markets initially saw a less pronounced rebound due to the uneven timing of pandemic impacts across the world, but the second half of 2021 saw a more positive recovery trend across the entire international diamond value chain.

The ongoing increase in consumer demand led to strong growth rates in consumer sales of diamond jewellery in the US, with holiday season sales increasing by about a third compared to 2020. The strength of demand was the result of an accumulation of savings by US consumers through the various lockdowns and restrictions on movement seen earlier in the pandemic; a pent-up demand for weddings and engagements; a strong desire for diamonds as meaningful gifts that symbolise personal connection; less luxury travel; and supported by ongoing marketing campaigns (including an increase in marketing effectiveness from De Beers).

The positive demand trends in retail underpinned the increased demand for polished diamonds and as a result, stocks of polished diamonds in cutting centres steadily declined during the course of the year. Lower supply and steady demand for polished diamonds from retailers supported growth in polished diamond prices.

As downstream and midstream demand conditions continued to improve, rough diamond production and prices increased throughout the year, following the significant reductions seen at the start of the pandemic. Midstream sentiment and rough diamond demand were robust throughout 2021.

Financial and operational overview

Total revenue increased significantly to $5.6 billion⁽¹⁾ (2020: $3.4 billion), with rough diamond sales rising to $4.9 billion⁽¹⁾ (2020: $2.8 billion), driven by positive sentiment and strong demand for diamond jewellery in key consumer markets. With midstream capacity recovering, despite the second wave of Covid-19 infections in India in the second quarter of 2021, on a consolidated basis, rough diamond sales volumes were significantly higher at 33.4 million carats (2020: 21.4 million carats). The average realised price rose by 10% to $146/ct (2020: $133/ct), primarily as a result of positive market sentiment which gave rise to an 11% strengthening of the average rough price index. Revenue also increased within De Beers' other businesses, including Element Six.

Underlying EBITDA increased to $1,100 million (2020: $417 million), reflecting the improvement in sales driven by the recovery in demand. Unit costs were broadly flat at $58/ct (2020: $57/ct), as the benefit of higher production volumes was offset by an increase in input costs and unfavourable exchange rates.

Capital expenditure increased by 48% to $565 million (2020: $381 million), as spend returned to more normalised levels following the deferral of sustaining projects during 2020 in response to Covid-19. The execution of Venetia Underground (in South Africa) and Jwaneng Cut-9 (in Botswana) life extension projects continued to progress, and the mine life extension of the Namibian land operations was approved during the year. The new AMV3 vessel for Namibia, now named the Benguela Gem (the largest and most advanced diamond recovery vessel ever built), arrived in Cape Town in September 2021 to complete preparations for its commissioning in the first quarter of 2022.

⁽¹⁾ Total revenue and rough diamond sales for 2019 were $4.6 billion and $4.0 billion respectively.

Operational performance

Mining and manufacturing

Rough diamond production increased by 29% to 32.3 million carats (2020: 25.1 million carats) primarily due to the lower levels of production in 2020 as a result of the impact of Covid-19 related lockdowns and lower demand due to the pandemic. Despite the operational issues and heavy rains in southern Africa in the first quarter of 2021, production was increased to meet the stronger demand for rough diamonds.

In Botswana, production was 35% higher at 22.3 million carats (2020: 16.6 million carats) as production was increased in response to stronger prevailing demand. Production at Jwaneng increased by 71% to 12.9 million carats (2020: 7.5 million carats) due to the planned treatment of higher grade ore, and as a result of Covid-19 related lockdowns in the previous year. Production at Orapa increased marginally by 5% to 9.4 million carats (2020: 9.0 million carats), despite the impact of heavy rainfall at the beginning of the year and the planned closure of Plant 1 in late 2020.

In Namibia, production was broadly in line at 1.5 million carats (2020: 1.4 million carats), reflecting an increase from the remobilisation of most vessels in late 2020, partly offset by planned maintenance.

In South Africa, production increased by 41% to 5.3 million carats (2020: 3.8 million carats), owing to the impact of the Covid-19 lockdowns in the first half of 2020 and the planned processing of higher grade ore from the final cut of the Venetia open pit.

In Canada, production was marginally lower at 3.2 million carats (2020: 3.3 million carats), mainly due to a temporary Covid-19 related shutdown in the first quarter of 2021.

Brands and consumer markets

2021 saw a strong recovery in consumer demand for De Beers' branded diamond jewellery from De Beers Jewellers and De Beers Forevermark, with both achieving double digit retail growth year-on-year. De Beers also continued to expand its retail stores in 2021, including its new flagship store in Old Bond Street, London and new stores in China and Qatar.

In August 2021, De Beers Group announced its new 'One De Beers' approach and its focus on establishing De Beers as a 'purpose-led' brand. De Beers has now launched its new brand campaign built around a widening interpretation of the phrase 'I do', itself the embodiment of one of the most time-honoured expressions of intent and values.

Operational and market outlook

Expectations for retail restocking in early 2022 are encouraging following the strong retail sales of diamond jewellery over the holiday season. The growth in consumer demand for diamond jewellery is expected to continue, driven by the US, primarily due to continued economic recovery, higher accumulated savings and postponed marriages. Rough diamond demand is expected to remain steady as the midstream continues to operate with lower stock levels, manufacturing below full capacity but using a faster manufacturing cycle. While there continue to be risks relating to the effects of Covid-19 across the pipeline, geo-political uncertainty and cost inflation pressures, sentiment in the midstream is expected to remain positive on the back of anticipated strong US retailer restocking in the first quarter.

The longer term evolution of the diamond value chain continues, including a sustained focus on inventory balance, the efficient distribution of diamonds throughout the pipeline, increased online purchasing, and a greater focus on the provenance and sustainability credentials of companies and their products. De Beers is well positioned to take advantage of these changes. The long term outlook for diamond jewellery demand remains positive.

Production guidance for 2022 is 30-33 million carats (100% basis), subject to trading conditions and the extent of further Covid-19 related disruptions. Unit cost guidance for 2022 is c.$65/ct, reflecting the impact of inflation.

Copper

Financial and operational metrics

	Production volume	Sales volume	Price	Unit cost*	Group revenue*	Underlying EBITDA*	Mining EBITDA margin*(2)	Underlying EBIT*	Capex*	ROCE*
	kt	kt(1)	c/lb(2)	c/lb(3)	$m(4)	$m		$m	$m
Copper	647	641	453	120	6,433	4,011	62  %	3,428	1,773	39  %
Prior year	647	648	299	113	4,199	1,864	45  %	1,227	1,443	19  %
Los Bronces(5)	328	325	n/a	158	3,047	1,871	61  %	1,588	493	n/a
Prior year	325	325	-	149	2,013	639	32  %	294	272	-
Collahuasi(6)	277	273	n/a	61	2,641	2,188	83  %	1,970	365	n/a
Prior year	277	278	-	62	1,767	1,308	74  %	1,083	313	-
Quellaveco(7)	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a	777	n/a
Prior year	-	-	-	-	-	-	-	-	788	-
Other operations(8)	42	43	n/a	n/a	745	(48)	61  %	(130)	138	n/a
Prior year	46	45	-	-	419	(83)	9  %	(150)	70	-

⁽¹⁾ Excludes 432 kt third-party sales (2020: 453 kt).

⁽²⁾ Represents realised price and excludes impact of third-party sales.

⁽³⁾ C1 unit cost includes by-product credits.

⁽⁴⁾ Group revenue is shown after deduction of treatment and refining charges (TC/RCs). Total Copper and Other operations prior year comparatives have been restated from a gross to net presentation. See note 2 to the Condensed financial statements for more details.

⁽⁵⁾ Figures on a 100% basis (Group's share: 50.1%).

⁽⁶⁾   44% share of Collahuasi production, sales and financials.

⁽⁷⁾ Figures on a 100% basis (Group's share: 60%), except capex which represents the Group's share after deducting direct funding from non‑controlling interests. 2021 capex on a 100% basis is $1,295 million, of which the Group's share is $777 million. 2020 capex on a 100% basis was $1,314 million, of which the Group's share was $788 million.

⁽⁸⁾  Other operations includes El Soldado and Chagres (figures on a 100% basis, Group's share: 50.1%). Financials include third-party sales and purchases, projects and corporate costs.

Financial and operational overview

Underlying EBITDA more than doubled to $4,011 million (2020: $1,864 million), underpinned by record copper prices.

Copper production of 647,200 tonnes was in line with the prior year (2020: 647,400 tonnes). Planned lower grades were fully offset by continued strong plant performance at Collahuasi and the implementation of water management initiatives at Los Bronces. Unit costs increased by 6% to 120 c/lb (2020: 113 c/lb), reflecting a stronger Chilean peso and high levels of local inflation impacting production and selling costs, partly offset by an increase in waste stripping capitalised and higher by-product credits.

Capital expenditure increased by 23% to $1,773 million (2020: $1,443 million), reflecting adverse movements in the Chilean peso and higher capitalised waste stripping as a result of resuming mine development activity following the impact of the pandemic in 2020.

Markets

	31 December 2021	31 December 2020
Average market price (c/lb)	423	280
Average realised price (c/lb)	453	299

The difference between the market price and realised price is largely a function of provisional pricing adjustments, with 162,361 tonnes of copper provisionally priced at 442 c/lb at 31 December 2021 (2020: 140,599 tonnes provisionally priced at 352 c/lb), and the timing of sales across the year.

The average LME copper price increased by 51%, due to a strong recovery in economic activity following the initial waves of the Covid-19 outbreak in 2020. While demand rebounded sharply in 2020 in China, momentum in 2021 was led by the US and Europe, as China faced headwinds in its real estate sector. The strength of demand for copper, like many commodities, was reinforced by government measures which were implemented to help offset the effects of the pandemic, and during the year this was further affected by supply-chain bottlenecks in major economies. Copper supply growth continued to be constrained, resulting in declines in reported inventories to multi‑year lows. Demand for the metal has benefited from copper's key role in global decarbonisation efforts, with growth in copper-intensive applications, such as wind and solar power generation. Investment fund interest in copper also contributed to price strength, as prices reached a record high of 486c/lb in May 2021, although concerns about inflation and potential interest rate rises have tempered further advances.

Operational performance

Copper production was in line with the prior year at 647,200 tonnes (2020: 647,400 tonnes).

At Los Bronces, production increased marginally by 1% to 327,700 tonnes (2020: 324,700 tonnes) due to higher water availability owing to water management initiatives, partially offset by planned lower grades (0.70% vs. 0.81%). C1 unit costs increased by 6% to 158 c/lb (2020: 149 c/lb), with the benefit of higher waste stripping capitalised and higher by-product credits, offset by the stronger Chilean peso and inflation, as well as cost increases associated with water management.

At Collahuasi, Anglo American's attributable share of copper production of 277,200 tonnes was a record and slightly above the prior year (2020: 276,900 tonnes). C1 unit costs decreased by 2% to 61 c/lb (2020: 62 c/lb), reflecting the benefit of higher production and by-product credits, offset by the stronger Chilean peso and inflation.

Production at El Soldado decreased by 8% to 42,300 tonnes (2020: 45,800 tonnes) due to lower grades in accordance with the mine plan (0.73% vs. 0.84%). C1 unit costs of 206 c/lb are broadly in line with the prior year (2020: 204 c/lb), with the impact of lower production volumes, the stronger Chilean peso and inflation being offset by an increase in waste stripping capitalised.

Chile´s central zone continues to face severe drought conditions. While production impacts during 2021 have been fully mitigated by the successful implementation of water management initiatives, record low levels of precipitation during the year have reduced water availability for Los Bronces in the first half of 2022 and have been factored into our production guidance.

Operational outlook - Copper Chile

Production guidance for Chile for 2022 is 560,000-600,000 tonnes, subject to the extent of further Covid-19 related disruptions and water availability. C1 unit cost guidance for Chile for 2022 is c.145c/lb, reflecting lower production volumes, the impact of inflation, higher input costs and water purchases, as well as lower by-product credits.

Quellaveco update

The project is on track to achieve first production in mid-2022, in line with the original project schedule despite the challenges presented by the Covid-19 pandemic to date.

2021 saw the achievement of several major milestones and, as at February 2022, construction on all work fronts is reaching the final stages. The Vizcachas Dam - part of the infrastructure that will provide water to both the operation and local communities - is now commissioned and turned over to the operating team, and the 95 km water pipeline to site is on track to complete in the first quarter of 2022. In the mine, pre-stripping started in April 2021, moving 24 million tonnes in the year, and first ore was reached and excavated in October. The majority of the mine equipment fleet is now assembled, being the first in Peru to use fully automated haul trucks and drills, and all three rope shovels are operation-ready. Significant progress has been made on the primary crusher, with commissioning due to begin in the first quarter of 2022. The overland ore transport conveyor belt to the processing plant is being installed following completion of excavation work in the tunnel section of the conveyor route. We are also nearing construction completion at the processing plant, and pre-commissioning of the first of two milling lines began in January 2022. In the tailings area, the starter dam is built to its full elevation, and at the port, works to expand the existing port facilities remain on-track to allow copper concentrate shipments to begin in 2022.

During January and early February, Peru has been experiencing its third wave of Covid-19 following the spread of the Omicron variant throughout the country. While almost all of the on-site workforce is fully vaccinated and serious illness has been rare, progress has been negatively impacted by reduced workforce availability and the need to isolate the increasing number of Covid-19 cases identified on-site. To date, this disruption has not materially impacted the project schedule or capital estimate, however the camp has, at times, reduced to 50% occupancy rates, compared with 95% in December 2021 and early January 2022, and the full impact will depend on how long these challenging conditions last. As a result of this, production guidance for 2022 has been revised (see operational outlook below) and the total project capital expenditure estimate has been tightened to $5.4-5.5 billion (previously $5.3-5.5 billion), of which the Group's share is c.$2.8 billion.  

Capital expenditure in 2021 (on a 100% basis) was $1.3 billion, of which the Group's share is $0.8 billion. Guidance for 2022 remains $0.8-1.1 billion (100% basis), of which the Group's share is $0.5-0.7 billion.

In 2022, focus is shifting to commissioning and operational readiness, which is aligned with the Anglo American Operating Model. The operating team is largely in place, along with a dedicated commissioning team implementing an integrated commissioning plan. All key obtainable permits have been received, and we are on track to obtain operational permits that become available as infrastructure is completed. In addition, key operational contracts are placed or under negotiation. The local Moqueguan workforce has been key to the success of the project and, as we near the close-out of construction activities, we are working closely with government and local communities to manage the demobilisation and support future employment opportunities for the local workforce.

Revised mine design and planning at the Quellaveco district has led to an 18% increase in Ore Reserves, with estimated contained copper of c.8.9 million tonnes at 0.53% TCu, and a resultant six-year increase in the Life of Mine to 36 years.

Operational outlook - Quellaveco

We expect to achieve first production in mid-2022, followed by a 12-month ramp-up to full capacity. Production guidance for Quellaveco for 2022 is 100,000-150,000 tonnes (previously 120,000-160,000 tonnes).  Both the schedule and production guidance remain subject to the extent of current and ongoing Covid-19 related disruption.

C1 unit cost guidance for 2022 is c.125c/lb, based on ramp-up production volumes. It is, therefore, highly dependent on production start date and is subject to further Covid-19 impacts. Unit costs are expected to average c. 95c/lb over the first five years once the operation reaches full production capacity from 2023.

All guidance, project progress and capital expenditure remain subject to the extent of ongoing and further Covid-19 related disruption. Quellaveco expects to deliver around 300,000 tonnes per year of copper equivalent production on average in its first 10 years of operation.

Nickel

Financial and operational metrics

	Production volume	Sales volume	Price	Unit cost*	Group revenue*	Underlying EBITDA*	Mining EBITDA margin*	Underlying EBIT*	Capex*	ROCE*
	t	t	c/lb(1)	c/lb(2)	$m(3)	$m		$m	$m
Nickel	41,700	42,100	773	377	710	320	45  %	261	29	21  %
Prior year	43,500	43,000	563	334	534	206	36  %	79	33	5  %

⁽¹⁾ Realised price.

⁽²⁾ C1 unit cost.

⁽³⁾ Nickel prior year revenue has been restated from a gross to net presentation. See note 2 to the Condensed financial statements for more details.

Financial and operational overview

Underlying EBITDA increased by 55% to $320 million (2020: $206 million), reflecting higher realised nickel prices and continued operational stability. C1 unit costs increased by 13% to 377 c/lb (2020: 334 c/lb) as a result of lower production volumes and higher input and selling costs, partly offset by energy sales and a favourable Brazilian real.

Capital expenditure decreased by 12% to $29 million (2020: $33 million), primarily due to lower capitalised waste stripping.

Markets

	31 December 2021	31 December 2020
Average market price (c/lb)	839	625
Average realised price (c/lb)	773	563

Differences between the market price (which are LME-based) and our realised price (the ferronickel price) are due to the discounts (or premiums) to the LME price, which depend on market conditions, supplier products and consumer preferences.

The average LME nickel price of 839 c/lb was 34% higher (2020: 625 c/lb), as demand outstripped supply, with demand benefiting from the easing of Covid-19 restrictions globally, and particularly robust consumption in stainless steel and batteries (electric vehicles and energy storage) end-markets.

Operational performance

Nickel production decreased by 4% to 41,700 tonnes (2020: 43,500 tonnes), due to licensing delays in the second half of the year (the relevant licences only being received towards the end of the final quarter of the year) and planned lower ore grades.

Operational outlook

Production guidance for 2022 is 40,000-42,000 tonnes, subject to the extent of further Covid-19 related disruption.

C1 unit cost guidance for 2022 is c.450 c/lb, reflecting the impact of inflation, higher input costs and marginally lower production volumes.  

Platinum Group Metals

Financial and operational metrics

	Production volume PGMs	Sales volume PGMs	Basket price	Unit cost*	Group revenue*	Underlying EBITDA*	Mining EBITDA margin*(6)	Underlying EBIT*	Capex*	ROCE*
	koz(1)	koz(2)	$/PGM oz(3)	$/PGM oz(4)	$m(5)	$m		$m	$m
PGMs	4,299	5,214	2,761	868	14,502	7,099	62  %	6,753	894	140 %
Prior year	3,809	2,869	2,035	713	6,604	2,555	51  %	2,270	571	48  %
Mogalakwena	1,215	1,479	2,563	694	3,787	2,611	69  %	2,471	435	n/a
Prior year	1,182	839	2,065	530	1,720	1,059	62  %	944	273	-
Amandelbult	773	907	3,122	1,127	2,817	1,633	58  %	1,571	81	n/a
Prior year	608	501	2,228	1,031	1,108	474	43  %	429	56	-
Other operations(7)	871	1,056	2,935	899	3,081	1,717	56  %	1,601	378	n/a
Prior year	759	576	2,083	757	1,295	562	43  %	461	242	-
Processing and trading(8)	1,440	1,772	n/a	n/a	4,817	1,138	24  %	1,110	n/a	n/a
Prior year	1,260	953	-	-	2,481	460	19  %	436	n/a	-

⁽¹⁾  Production reflects own-mined production and purchase of metal in concentrate. PGM volumes is 5E metals and gold.

⁽²⁾  Sales volumes exclude the sale of refined metal purchased from third parties and toll material. PGM volumes is 5E metals and gold.

⁽³⁾  Average US$ realised basket price, based on sold ounces (own mined and purchased concentrate). Excludes the impact of the sale of refined metal purchased from third parties.

⁽⁴⁾  Total cash operating costs (includes on-mine, smelting and refining costs only) per own mined PGM ounce of production.

⁽⁵⁾ Total PGMs and Processing and trading prior year comparatives have been restated from a gross to net presentation. See note 2 to the Condensed financial statements for more details.

⁽⁶⁾ The total PGMs mining EBITDA margin excludes the impact of the sale of refined metal purchased from third parties, purchase of concentrate and tolling.

⁽⁷⁾ Includes Unki, Mototolo and PGMs' share of joint operations (Kroondal and Modikwa). Other operations margin includes unallocated market development, care and maintenance, and corporate costs.

⁽⁸⁾ Purchase of concentrate from joint operations, associates and third parties for processing into refined metals, tolling and trading activities.

Financial and operational overview

Underlying EBITDA increased to $7,099 million (2020: $2,555 million), as a result of a 36% increase in the PGM basket price, driven mainly by the higher average rhodium price, as well as an 82% increase in sales volumes. EBITDA was slightly reduced by a change in inventory value estimation methodology, resulting in a $0.4 billion reduction in the value of inventory, with a corresponding increase in operating costs (see note 8 to the Condensed financial statements for more detail). Unit costs increased by 22% to $868/PGM ounce (2020: $713/PGM ounce), reflecting the stronger South African rand and input cost inflation, partly offset by higher production volumes following the Covid-19 lockdowns and ACP shutdown in 2020.

Capital expenditure increased by 57% to $894 million (2020: $571 million) due to lower capital expenditure in the first half of 2020 as a consequence of deferred projects due to the impact of Covid-19.

Markets

	31 December 2021	31 December 2020
Average platinum market price ($/oz)	1,086	885
Average palladium market price ($/oz)	2,388	2,197
Average rhodium market price ($/oz)	20,109	11,220
US$ realised basket price ($/PGM oz)	2,761	2,035

Annual average PGM prices were significantly higher than the prior year, with a multitude of price records in the first half of 2021 giving way to lower prices in the second half, reflecting supply and demand dynamics. In the first half of the year, demand was supported by a recovering global economy and optimism over the automotive production outlook; it moderated in the second half as the semi-conductor chip shortage curtailed automotive production. Meanwhile, supply was disrupted by the temporary closure of two Russian mines early in the year, but increased later on due to robust South African refined production and a recovery in Russian refined production. The average realised basket price increased by 36% in dollar terms to $2,761 per PGM ounce (2020: $2,035 per PGM ounce), with all PGMs contributing.

Operational performance

Total PGM production increased by 13% to 4,298,700 ounces (2020: 3,808,900 ounces), primarily reflecting a strong recovery from the Covid-19 impacts in the prior period.

Own-mined production

PGM production from own-managed mines (Mogalakwena, Amandelbult, Unki and Mototolo) and equity share of joint operations increased by 12% to 2,858,300 ounces (2020: 2,549,000 ounces) following a robust recovery from the Covid-19 impacts in the prior year.

Mogalakwena PGM production increased by 3% to 1,214,600 ounces (2020: 1,181,600 ounces), largely driven by mining efficiencies resulting from P101initiatives, leading to higher throughput at the concentrators, despite overall lower grade.

Amandelbult PGM production increased by 27% to 773,200 ounces (2020: 608,100 ounces), due to an improved underground mining performance, leading to increased stability and higher throughput at the concentrator, as well as a recovery from the impacts of Covid-19.

Production from other operations increased by 15% to 870,500 ounces (2020: 759,300 ounces), reflecting the strong recovery from the impacts of Covid-19. During the year, the concentrator debottlenecking projects at Unki and Mototolo were successfully completed.

Purchase of concentrate

Purchase of concentrate, excluding tolling, increased by 14% to 1,440,400 ounces (2020: 1,259,900 ounces), reflecting the strong recovery from the impact of Covid-19 at joint operations and third parties.

Refined production and sales volumes

Refined PGM production (excluding toll-treated metal) increased to a record 5,138,400 ounces (2020: 2,713,000 ounces), reflecting the strong recovery in the ACP Phase A unit's performance following its successful rebuild in 2020, as well as strong performance across all processing assets.

The build-up in work-in-progress inventory following the temporary closure of the ACP has largely been processed and refined. The ACP Phase B unit rebuild has been completed in January 2022 and recommissioning is expected to commence in the first quarter of 2022.

PGM sales volumes increased to 5,214,400 ounces (2020: 2,868,500 ounces), due to the higher refined production and the drawdown of refined inventory from minor metals to supplement sales. This was partially offset by the rebuild in 3E refined inventory to normalised levels.

Operational outlook

PGM metal in concentrate production guidance for 2022 is 4.1-4.5 million ounces, with own-mined output accounting for c.65%. Refined PGM production guidance for 2022 is 4.2-4.6 million ounces, subject to the impact of Eskom load-shedding. Both are subject to the extent of further Covid-19 related disruption. Unit cost guidance for 2022 is c.$900/PGM ounce, reflecting the impact of inflation and higher input costs, including labour and electricity.

Iron Ore

Financial and operational metrics

	Production  volume	Sales volume	Price	Unit  cost*	Group revenue*	Underlying EBITDA*	Mining EBITDA margin*	Underlying EBIT*	Capex*	ROCE*
	Mt(1)	Mt(1)	$/t(2)	$/t(3)	$m(4)	$m(4)		$m	$m
Iron Ore Total	63.8	63.3	157	33	11,104	6,871	62  %	6,359	628	62  %
Prior year	61.7	64.2	111	27	7,905	4,565	58  %	4,091	517	41  %
Kumba Iron Ore(5)	40.9	40.3	161	39	6,958	4,311	62  %	3,960	417	140  %
Prior year	37.6	40.4	113	31	4,880	2,702	55  %	2,386	354	84  %
Iron Ore Brazil (Minas-Rio)	22.9	23.0	150	24	4,146	2,560	61  %	2,399	211	42  %
Prior year	24.1	23.8	107	21	3,025	1,863	62  %	1,705	163	30  %

⁽¹⁾ Production and sales volumes are reported as wet metric tonnes. The comparative has been restated as Kumba previously reported on a dry basis. Product is shipped with c.9% moisture from Minas‑Rio and c.1.6% moisture from Kumba. Total iron ore is the sum of Kumba and Minas‑Rio.

⁽²⁾  Prices for Kumba Iron Ore are the average realised export basket price (FOB Saldanha) (wet basis) and the comparative has been restated as Kumba previously reported on a dry basis. Prices for Minas-Rio are the average realised export basket price (FOB Brazil) (wet basis). Prices for total iron ore are a blended average.

⁽³⁾  Unit costs are reported on an FOB wet basis. The comparative has been restated as Kumba previously reported on a dry basis. Unit costs for total iron ore are a blended average.

⁽⁴⁾  Total iron ore and Iron Ore Brazil prior year comparatives have been restated from a gross to net presentation. See note 2 to the Condensed financial statements for more details.

⁽⁵⁾  Sales volumes and realised price differ to Kumba's stand-alone reported results due to sales to other Group companies.

Financial and operational overview

Underlying EBITDA for Iron Ore increased by 51% to $6,871 million, following a 41% increase in the blended realised iron ore price to $157/tonne, despite marginally lower sales volumes and higher unit costs.

Kumba

Underlying EBITDA increased by 60% to $4,311 million (2020: $2,702 million), driven by a higher average realised FOB iron ore export price of $161/tonne (2020: $113/tonne), partly offset by the stronger South African rand. Unit costs of $39/tonne (2020: $31/tonne) reflected the stronger rand, as well as input cost inflation.

Total sales volumes were in line with the prior year at 40.3 Mt (2020: 40.4 Mt) due to third-party logistics constraints. Production increased by 9%, reflecting the Covid-19 related lockdowns in the first half of 2020, as well as improved equipment availability and reliability.

Capital expenditure increased by 18% to $417 million (2020: $354 million), owing to the effect of the stronger South African rand and spend related to the Kapstevel South pit life extension project at Kolomela and the Ultra High Dense Media Separation (UHDMS) technology growth project at Sishen as these projects ramp up.

Minas-Rio

Underlying EBITDA increased by 37% to $2,560 million (2020: $1,863 million), reflecting a higher average realised price, partly offset by lower volumes resulting from unplanned maintenance at the beneficiation plant. Unit costs increased by 16% to $24/tonne (2020: $21/tonne), as higher input costs, principally consumables and electricity, increased maintenance costs and lower production volumes more than offset the benefit of the weaker Brazilian real.

Capital expenditure was 29% higher at $211 million (2020: $163 million), as planned higher expenditure, including P101 initiatives, was partly offset by the weaker Brazilian real.

Markets

	31 December 2021	31 December 2020
Average market price (Platts 62% Fe CFR China - $/tonne)	160	109
Average market price (MB 66% Fe Concentrate CFR - $/tonne)	185	120
Average realised price (Kumba export - $/tonne) (FOB wet basis)	161	113
Average realised price (Minas-Rio - $/tonne) (FOB wet basis)	150	107

Kumba's FOB realised price of $161/wet metric tonne was 18% higher than the equivalent Platts 62% Fe FOB Saldanha market price (adjusted for moisture) of $136/wet metric tonne. This reflects the premium for the higher iron content at 64.1% and relatively high proportion (approximately 69%) of lump that the product portfolio attracts (which helps steel mills reduce emissions). There was also a benefit of $3/tonne (2020: $7/tonne) related to marketing activities.

Minas-Rio's pellet feed product is also higher grade (with iron content of 67% and lower impurities) than the reference product used for the Platts 62% Fe CFR China index. The Metal Bulletin (MB) 66 index, therefore, is used when referring to Minas-Rio product. The Minas-Rio realised price of $150/wet metric tonne was 6% higher than the equivalent MB 66 FOB Brazil index, (adjusted for moisture, of $142/wet metric tonne). This reflects the premium quality of the product, as well as a benefit of $5/tonne (2020: $13/tonne) related to marketing activities.

Operational performance

Kumba

Despite third-party logistical constraints, production increased by 9% to 40.9 Mt relative to 2020, which was impacted by Covid-19 related disruptions (2020: 37.6 Mt). The increase was partly driven by improved plant availability and reliability in 2021. Production at Sishen increased by 9% to 28.0 Mt (2020: 25.8 Mt) and at Kolomela by 8% to 12.8 Mt (2020: 11.9 Mt).

Minas-Rio

Production decreased by 5% to 22.9 Mt (2020: 24.1 Mt), due to lower plant availability as a result of unplanned maintenance at the beneficiation plant.

Operational outlook

Kumba

Production guidance for 2022 is 39-41 Mt, subject to the extent of further Covid-19 related disruption and third‑party rail and port performance.

2022 unit cost guidance is c.$41/tonne, reflecting the impact of inflation and higher input costs.

Minas-Rio

Production guidance for 2022 is 24-26 Mt, subject to the extent of further Covid-19 related disruption.

2022 unit cost guidance is c.$25/tonne, reflecting the impact of inflation and higher input costs.

Metallurgical Coal

Financial and operational metrics

	Production volume	Sales volume	Price	Unit cost*	Group revenue*	Underlying EBITDA*	Mining EBITDA margin*	Underlying EBIT*	Capex*	ROCE*
	Mt(1)	Mt(2)	$/t(3)	$/t(4)	$m	$m		$m	$m
Metallurgical Coal	14.9	14.1	200	105	2,899	962	33  %	450	649	15  %
Prior year	16.8	16.9	109	86	1,909	50	3  %	(468)	683	(15)  %

⁽¹⁾ Production volumes are saleable tonnes, excluding thermal coal production of 1.7 Mt (2020: 2.0 Mt).

⁽²⁾ Sales volumes exclude thermal coal sales of 2.1 Mt (2020: 2.3 Mt).

⁽³⁾ Realised price is the weighted average hard coking coal and PCI sales price achieved at managed operations.

⁽⁴⁾  FOB cost per saleable tonne, excluding royalties and study costs.

Financial and operational overview

Underlying EBITDA increased to $962 million (2020: $50 million), driven by an 83% increase in the weighted average realised price for metallurgical coal, partially offset by 16% lower sales volumes, and 22% increase in unit costs to $105/tonne (2020: $86/tonne), reflecting the impact of lower production and the stronger Australian dollar. The volume and cost performances were principally affected by the impact of the underground incident at Grosvenor in May 2020, where longwall production received approval to restart in February 2022 and is now operational again, as well as the temporary suspension at Moranbah during the first half of 2021 in response to elevated gas levels.

Capital expenditure decreased by 5% to $649 million (2020: $683 million) due to reduced capitalised stripping at Grasstree, partly offset by the Aquila life extension project (replacing production from Grasstree), where longwall production commenced in February 2022.

Markets

	31 December 2021	31 December 2020
Average benchmark price - hard coking coal ($/tonne)(1)	226	124
Average benchmark price - PCI ($/tonne)(1)	164	78
Average realised price - hard coking coal ($/tonne)(2)	211	112
Average realised price - PCI ($/tonne)(2)	138	84

⁽¹⁾ Represents average spot prices.

⁽²⁾  Realised price is the sales price achieved at managed operations.

Average realised prices differ from the average market prices owing to differences in material grade and timing of contracts. Hard coking coal price realisation increased to 93% of benchmark (2020: 90%), driven by the return of premium quality hard coking coal production from Moranbah in the second half of the year, in a higher price environment.

The average market price for Australian hard coking coal increased by 82% to $226/tonne (2020: $124/tonne). Coking coal prices in the first half of 2021 were impacted by the ban on Australian-originated coal into Chinese ports and the Covid-19 outbreak in India, but recovered strongly in the second half of the year, due to a reduction of supply from Australian and North American producers, while demand from Asian steelmakers outside China, remained strong with steel production supported by robust margins.

Operational performance

Production decreased by 11% to 14.9 Mt (2020: 16.8 Mt), principally due to the suspension of longwall operations at Grosvenor since May 2020 following the underground gas incident, and at Moranbah from 21 February 2021 until 3 June 2021, in response to elevated gas levels. Operations at Moranbah were further impacted by challenging geological conditions during the second half of the year. Open cut operations returned to pre-Covid-19 production levels, having been scaled back at Dawson and Capcoal since mid-2020 in response to reduced demand for the products. At Grosvenor, development activities have progressed well and the longwall restarted operations in the first quarter of 2022, following approval from Resources Safety and Health Queensland.

Operational outlook

Following confirmation of the restart at Grosvenor, while export metallurgical coal production guidance for 2022 is 20-22 Mt, due to the impact of Covid-19 in early 2022 and a later than expected restart of operations at Grosvenor, production is expected to be towards the lower end of the guidance range. As a result, unit cost guidance for 2022 is revised to c.$85/tonne (previously c.$80/tonne and compared to 2021 unit costs of $105/tonne). These figures are subject to the extent of any further Covid-19 related disruptions.

Manganese

Financial and operational metrics⁽¹⁾

	Production volume	Sales volume	Price	Unit cost*	Group revenue*	Underlying EBITDA*	Mining EBITDA margin*	Underlying EBIT*	Capex*	ROCE*(3)
	Mt	Mt	c/lb(2)	c/lb	$m	$m		$m	$m
Manganese	3.7	3.7	n/a	n/a	768	315	41  %	250	n/a	104 %
Prior year	3.6	3.6	-	-	697	304	44  %	245	-	78  %

⁽¹⁾ Production, sales and financials include ore and alloy.

⁽²⁾   Realised price.

⁽³⁾  Attributable ROCE for 2020 has been updated to include allocation of corporate costs.

Financial and operational overview

Manganese (Samancor)

Underlying EBITDA increased by 4% to $315 million (2020: $304 million), benefiting from a 6% increase in manganese ore sales volumes, driven by higher South African production, partially offset by increased costs due to the stronger South African rand and Australian dollar.

Markets

The average benchmark price for manganese ore (Metal Bulletin 44% manganese ore CIF China) increased by 12% to $5.21/dmtu (2020: $4.67/dmtu), largely due to stronger demand and weather related supply disruptions that affected South African producers.

Operational performance

Attributable manganese ore production increased by 5% to 3.7 Mt (2020: 3.5 Mt), reflecting the impact of Covid-19 lockdowns in South Africa in 2020. There was no manganese alloy production as the South African smelter has been on care and maintenance since the Covid-19 lockdown in 2020. During the fourth quarter of 2021, an agreement was entered into to divest the Metalloys business (the smelter in South Africa) and that transaction is expected to complete during 2022.

Crop Nutrients

Financial and operational metrics

	Production volume	Sales volume	Price	Unit cost	Group revenue*	Underlying EBITDA*	Mining EBITDA margin*	Underlying EBIT*	Capex*	ROCE*
			c/lb	c/lb	$m	$m		$m	$m
Crop Nutrients	n/a	n/a	n/a	n/a	114	(41)	n/a	(42)	530	n/a
Prior year	-	-	-	-	107	1	-	1	292	-
Woodsmith project	n/a	n/a	n/a	n/a	n/a	n/a	n/a	n/a	530	n/a
Prior year	-	-	-	-	-	-	-	-	292	-
Other(1)	n/a	n/a	n/a	n/a	114	(41)	n/a	(42)	n/a	n/a
Prior year	-	-	-	-	107	1	-	1	-	-

⁽¹⁾  Other comprises projects and corporate costs as well as the share in associate results from The Cibra Group, a fertiliser distributor based in Brazil.

Crop Nutrients

Anglo American is developing the Woodsmith project in the north east of England to access the world's largest known deposit of polyhalite, a natural mineral fertiliser product containing potassium, sulphur, magnesium and calcium - four of the six nutrients that every plant needs to grow.

The Woodsmith project is located approximately 3 km south of Whitby, where polyhalite ore will be extracted via two 1.6 km deep mine shafts and transported to Teesside on an underground conveyor belt in a 37 km tunnel, thereby minimising impact on the surface. It will then be granulated at a materials handling facility to produce a low carbon fertiliser product - known as POLY4 - that will be exported from our dedicated port facility to a network of customers around the world.

In December, we appointed Tom McCulley, who has led the development of our Quellaveco copper project in Peru, as CEO of our Crop Nutrients business from 1 January 2022, replacing Chris Fraser who has taken up a strategic projects role for Anglo American.

Woodsmith Project

Development of the project continued to progress, with capital expenditure of $530 million (2020: $292 million). Excavation of the mineral transport tunnel had passed 18 km by the end of the year, beyond the intermediate access shaft site at Lockwood Beck. The Lockwood Beck shaft is complete, having reached its target depth of 383 m, and shaft lining is currently underway. At the mine head itself, shaft boring has started in the services shaft, while progress is also being made on the production shaft infrastructure.

Anglo American has conducted a detailed technical review of the project since mid-2020 to ensure the technical and commercial integrity of the full scope of its design. Now largely complete, the review has confirmed that a number of elements of the project's design would benefit from modification to bring it up to Anglo American's safety and operating integrity standards and to optimise the value of the asset for the long term.

The Woodsmith team is further developing the engineering to optimise the configuration of the project, recognising the multi-decade life of the mine. Particular attention is on those aspects identified at the outset of Anglo American's ownership - namely, the sinking of the two main shafts, the development of the underground mining area, and the changes required to accommodate both increased production capacity and the more efficient and scalable mining method of using only continuous miners; such improvements will also require the installation of additional ventilation earlier in the development of the underground mining area.

Ahead of the full project execution phase, the Woodsmith team, led by new CEO Tom McCulley, is working through the detailed design engineering throughout 2022 and is expected to make a number of changes to the phasing of work, particularly in relation to the two main shafts. The capital budget for 2022 is therefore expected to be reduced by approximately $0.1 billion to $0.6 billion to accommodate these changes.

Anglo American expects that the improvements it is making to the project will result in an enhanced configuration and therefore a different and longer construction schedule. Anglo American's capital budget for the development of Woodsmith will reflect such scope and timing changes to ensure that its exacting standards are met and the full commercial value of the asset is realised. Once the detailed design engineering is complete, and the capital budget and schedule are updated, the full project will be submitted to the Board.

Market development - POLY4

The ongoing focus of the market development activities is to develop and implement detailed sales and marketing strategies for each region and to support customers with their own market development activities in order to further promote POLY4 to the end users of the product - farmers.

We are accelerating the number of commercial scale on-farm demonstrations, with around 800 now in progress or complete. The demonstrations continue to validate the efficacy of the product and the improvements it can deliver to farmers in terms of crop yield, quality or both. In addition, POLY4 has been shown in studies to enhance soil health through resilience to compaction, erosion and run-off, as well as improving nutrient availability to crops, helping to reduce nutrient waste into watercourses. POLY4 offers farmers a solution to agricultural efficiency and sustainability challenges, through its naturally low chloride multi-nutrient composition, its suitability for organic use and ultra low carbon profile, generating up to 85% fewer carbon emissions than the equivalent conventional nutrient products, with little to no waste generated in its production.

Corporate and Other

Financial metrics

	Production volume	Sales volume	Price	Unit cost*	Group revenue*	Underlying EBITDA*	Underlying EBIT*	Capex*
	Mt(1)	Mt(2)	$/t(3)	$/t(4)	$m(5)	$m	$m	$m
Segment	n/a	n/a	n/a	n/a	1,126	(3)	(289)	125
Prior year	-	-	-	-	1,550	(160)	(395)	205
Exploration	n/a	n/a	n/a	n/a	n/a	(128)	(132)	n/a
Prior year	-	-	-	-	-	(101)	(102)	-
Corporate activities and unallocated costs	n/a	n/a	n/a	n/a	354	(63)	(270)	44
Prior year	-	-	-	-	191	(44)	(129)	21
Thermal Coal - South Africa(6)	5.7	5.3	77	46	553	101	70	81
Prior year	16.5	16.6	57	38	1,150	(15)	(81)	184
Thermal Coal - Colombia(7)	3.6	3.4	65	34	219	87	43	n/a
Prior year	4.1	4.5	46	39	209	-	(83)	-

⁽¹⁾  Production volumes are saleable tonnes. South African production volumes include export primary production, secondary production sold into export markets, production sold domestically at export parity pricing and excludes other domestic production of 5.6 Mt (2020: 14.0 Mt).

⁽²⁾ South African sales volumes include export primary production, secondary production sold into export markets and production sold domestically at export parity pricing and exclude domestic sales of 5.3 Mt (2020: 12.4 Mt) and third-party sales of 6.4 Mt (2020: 9.4 Mt).

⁽³⁾  Thermal Coal - South Africa realised price is the weighted average export thermal coal price achieved. Excludes third-party sales from locations other than Richards Bay.

⁽⁴⁾ Thermal Coal - South Africa FOB cost per saleable tonne from the trade operations, excluding royalties and study costs.

⁽⁵⁾   Total segment and Thermal Coal - South Africa prior year comparatives have been restated from a gross to net presentation. See notes 2 and 3 to the Condensed financial statements for more details.

⁽⁶⁾  Thermal Coal - South Africa mining activity included until the demerger on 4 June 2021, with prior year comparison up to 31 December 2020. Production in 2021 was 65% below 2020, reflecting the partial year of ownership, partly offset by Covid-19 related restrictions in 2020.

⁽⁷⁾ Represents the Group's attributable share from its 33.3% shareholding in Cerrejón. The sale of Anglo American's interest in Cerrejón was completed on 11 January 2022 following receipt of the relevant regulatory approvals. The agreement is effective 31 December 2020 and, therefore, economic benefits from 1 January 2021 have not accrued to Anglo American. Metrics reflect earnings and volumes from the first half of the year only, before the agreement was entered into. Production in 2021 was 13% below 2020 reflecting the partial year recognised, partly offset by Covid-19 related restrictions in 2020.

Financial overview

Exploration

Exploration's underlying EBITDA loss was $128 million (2020: $101 million loss), driven by increased exploration activities across most product groups reflecting Covid-19 related restrictions in 2020.

Corporate activities and unallocated costs

Underlying EBITDA was a $63 million loss (2020: $44 million loss), driven primarily by an increase in corporate costs across various technical and strategic projects, partially offset by an increase in profits on third-party shipping.

Thermal Coal - South Africa

Underlying EBITDA was $101 million (2020: $15 million loss), with underlying EBITDA no longer reported by Anglo American from 4 June 2021, the date of the demerger of the South Africa thermal coal operations. Anglo American's Marketing business continues to support Thungela in the sale and marketing of its products, and sales and purchases under the offtake agreement are reported on a net basis together with the Group's other third-party trading activities within corporate activities and unallocated costs.

Thermal Coal - Colombia

Underlying EBITDA increased to $87 million. The sale of our 33.3% shareholding in Cerrejón was completed on 11 January 2022, with the sale agreement having an economic effective date of 31 December 2020. After the sale was agreed in June 2021, no further underlying EBITDA was recorded, with an impairment charge being recognised to offset reported earnings in the first half of the year (see note 12 of the Condensed financial statements for more detail).

Guidance summary

Production and unit costs

	Unit costs 2022F	Production volumes
		Units	2022F	2023F	2024F
Diamonds(1)	c.$65/ct	Mct	30-33	30-33	30-33
Copper(2)	c.140 c/lb	kt	660-750	910-1,020	910-1,020
			(previously 680-760)
PGMs - metal in concentrate(3)	c.$900/PGM ounce	Moz	4.1-4.5	4.1-4.5	4.1-4.5
Platinum		Moz	1.9-2.1	1.9-2.1	1.9-2.1
Palladium		Moz	1.3-1.4	1.3-1.4	1.3-1.4
Other		Moz	0.9-1.0	0.9-1.0	0.9-1.0
PGMs - refined(4)		Moz	4.2-4.6	3.8-4.2	4.1-4.5
Iron ore(5)	c.$35/tonne	Mt	63-67	64-68	67-71
Metallurgical coal(6)	c.$85/tonne	Mt	20-22	22-24	24-26
	(previously c.$80/tonne)
Nickel(7)	c.450 c/lb	kt	40-42	41-43	42-44

Note: Unit costs are subject to any further effects of Covid-19 and exclude royalties, depreciation and include direct support costs only. FX rates for 2022 costs: ~16 ZAR:USD, ~1.4 AUD:USD, ~5.6 BRL:USD, ~830 CLP:USD, ~4 PEN:USD. Production volumes are subject to the extent of further Covid-19 related disruption.

⁽¹⁾   Unit cost is based on De Beers' share of production. Production on a 100% basis except for the Gahcho Kué joint operation, which is on an attributable 51% basis, subject to trading conditions. Venetia continues to transition to underground operations during 2022, with ramp-up expected from 2023.

⁽²⁾   Copper business unit only. On a contained-metal basis. Total copper is the sum of Chile and Peru. Unit cost total is a weighted average based on the mid-point of production guidance. 2022 Chile: 560-600kt; Peru 100-150kt (previously 120-160kt). 2023 Chile: 590-650kt; Peru: 320-370kt. 2024 Chile: 590-650kt; Peru 320-370kt. Chile production is subject to water availability. Chile 2022 unit cost is c.145c/lb. Peru 2022 unit cost is c.125c/lb and based on ramp-up production volumes. It is therefore highly dependent on production start date and subject to further Covid-19 impacts. Chile production in 2022 impacted by lower expected grades at Collahuasi and Los Bronces, and lower water availability at Los Bronces. Peru production for 2022 has been revised down as a result of reduced workforce availability due to Covid-19 following the spread of the Omicron variant in Peru in early 2022.

⁽³⁾   Unit cost is per own mined 5E + gold PGMs metal in concentrate ounce. Production is 5E + gold produced metal in concentrate ounces. Includes own mined production (~65%) and purchased concentrate volumes (~35%).

⁽⁴⁾ 5E + gold produced refined ounces. Includes own mined production and purchased concentrate volumes. Refined production is subject to the potential impact of Eskom load-shedding.

⁽⁵⁾  Wet basis. Total iron ore is the sum of Kumba and Minas-Rio. Unit cost total is a weighted average based on the mid-point of production guidance. 2022 Kumba: 39-41Mt; Minas-Rio: 24-26Mt. 2023 Kumba: 39-41Mt; Minas-Rio: 25-27Mt. 2024 Kumba: 41-43Mt; Minas-Rio: 26-28Mt. Kumba production is subject to the third party rail and port performance. Kumba 2022 unit cost is c.$41/tonne. Minas-Rio 2022 unit cost is c.$25/tonne.

⁽⁶⁾ Metallurgical Coal FOB/t unit cost comprises managed operations and excludes royalties and study costs. Volumes excludes thermal coal production in Australia. 2022 production guidance is expected to be at the lower end of the range due to the delayed restart of operations at Grosvenor. 2022 unit cost revision reflects the impact of the delayed restart of operations at Grosvenor, resulting in production volumes towards the lower end of the guidance range.

⁽⁷⁾ Nickel business unit only. 2023 and 2024 volumes dependent on bulk ore sorting technology and briquetting.

Capital expenditure⁽¹⁾

	2022F	2023F	2024F
Growth	$1.6-2.1bn (previously $1.7-2.2bn) Includes ~$0.6bn Woodsmith capex (previously $0.7bn)	$1.2-1.7bn	$1.5-2.0bn
Sustaining	~$4.5bn Reflects ~$3.4bn baseline plus ~$0.7bn lifex projects plus ~$0.4bn Collahuasi desalination plant(2)	~$4.8bn Reflects ~$3.5bn baseline plus ~$0.8bn lifex projects and ~$0.5bn Collahuasi desalination plant(2)	~$4.1bn Reflects ~$3.3bn baseline plus ~$0.6bn lifex projects and ~$0.2bn Collahuasi desalination plant(2)
Total	$6.1-6.6bn (previously $6.2-6.7bn)	$6.0-6.5bn	$5.6-6.1bn

Further details on Anglo American's high quality growth and life-extension projects, including details of the associated volumes benefit, are disclosed on pages 11-14.

Long term sustaining capital expenditure is expected to be c.$3.0 billion per annum⁽³⁾, excluding life-extension projects.

Other guidance

• 2022 depreciation: $3.0-3.2 billion

• 2022 effective tax rate: 33-35%⁽⁴⁾

• Long term effective tax rate: 31-35%⁽⁴⁾

• Dividend pay-out ratio: 40% of underlying earnings

• Net debt:EBITDA: <1.5x at the bottom of the cycle

⁽¹⁾ Cash expenditure on property, plant and equipment including related derivatives, net of proceeds from disposal of property, plant and equipment and includes direct funding for capital expenditure from non-controlling interests. Shown excluding capitalised operating cash flows. Consequently, for Quellaveco, reflects attributable share of capex. Collahuasi desalination capex shown includes related infrastructure. Guidance includes unapproved projects and is, therefore, subject to progress of growth project studies and Woodsmith is excluded after 2022. Long-term sustaining capex guidance is shown on a real basis. Refer to the FY 2021 results presentation slides 44 to 48 for further detail on the breakdown of the capex guidance at project level.

⁽²⁾ Attributable share of capex.

⁽³⁾  Long-term sustaining capex guidance is shown on a real basis.

⁽⁴⁾ Effective tax rate is highly dependent on a number of factors, including the mix of profits, and may vary from the guided ranges.

For further information, please contact:

Media	Investors
UK James Wyatt-Tilby [e-mail] Tel: [phone]	UK Paul Galloway [e-mail] Tel: [phone]
Marcelo Esquivel [e-mail] Tel: [phone]	Juliet Newth [e-mail] Tel: [phone]
Katie Ryall [e-mail] Tel: [phone]	Emma Waterworth [e-mail] Tel: [phone]
South Africa Nevashnee Naicker [e-mail] Tel: [phone]	Michelle Jarman [e-mail] Tel: [phone]
Sibusiso Tshabalala [e-mail] Tel: [phone]

Notes to editors:

Anglo American is a leading global mining company and our products are the essential ingredients in almost every aspect of modern life. Our portfolio of world-class competitive operations, with a broad range of future development options, provides many of the future-enabling metals and minerals for a cleaner, greener, more sustainable world and that meet the fast growing every day demands of billions of consumers. With our people at the heart of our business, we use innovative practices and the latest technologies to discover new resources and to mine, process, move and market our products to our customers - safely and sustainably.

As a responsible producer of diamonds (through De Beers), copper, platinum group metals, premium quality iron ore and metallurgical coal for steelmaking, and nickel - with crop nutrients in development - we are committed to being carbon neutral across our operations by 2040. More broadly, our Sustainable Mining Plan commits us to a series of stretching goals to ensure we work towards a healthy environment, creating thriving communities and building trust as a corporate leader. We work together with our business partners and diverse stakeholders to unlock enduring value from precious natural resources for the benefit of the communities and countries in which we operate, for society as a whole, and for our shareholders. Anglo American is re-imagining mining to improve people's lives.

www.angloamerican.com

Webcast of presentation:

A live webcast of the results presentation, starting at 9.00am UK time on 24 February 2022, can be accessed through the Anglo American website at www.angloamerican.com

Note: Throughout this results announcement, '$' denotes United States dollars and 'cents' refers to United States cents. Tonnes are metric tons, 'Mt' denotes million tonnes and 'kt' denotes thousand tonnes, unless otherwise stated.

Group terminology

In this document, references to "Anglo American", the "Anglo American Group", the "Group", "we", "us", and "our" are to refer to either Anglo American plc and its subsidiaries and/or those who work for them generally, or where it is not necessary to refer to a particular entity, entities or persons. The use of those generic terms herein is for convenience only, and is in no way indicative of how the Anglo American Group or any entity within it is structured, managed or controlled. Anglo American subsidiaries, and their management, are responsible for their own day-to-day operations, including but not limited to securing and maintaining all relevant licences and permits, operational adaptation and implementation of Group policies, management, training and any applicable local grievance mechanisms. Anglo American produces group-wide policies and procedures to ensure best uniform practices and standardisation across the Anglo American Group but is not responsible for the day to day implementation of such policies. Such policies and procedures constitute prescribed minimum standards only. Group operating subsidiaries are responsible for adapting those policies and procedures to reflect local conditions where appropriate, and for implementation, oversight and monitoring within their specific businesses.

Forward-looking statements and third party information:

This document includes forward-looking statements. All statements other than statements of historical facts included in this document, including, without limitation, those regarding Anglo American's financial position, business, acquisition and divestment strategy, dividend policy, plans and objectives of management for future operations, prospects and projects (including development plans and objectives relating to Anglo American's products, production forecasts and Ore Reserve and Mineral Resource positions) and sustainability performance related (including environmental, social and governance) goals, ambitions, targets, visions, milestones and aspirations, are forward-looking statements. By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Anglo American or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such forward-looking statements are based on numerous assumptions regarding Anglo American's present and future business strategies and the environment in which Anglo American will operate in the future. Important factors that could cause Anglo American's actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, levels of actual production during any period, levels of global demand and commodity market prices, mineral resource exploration and project development capabilities and delivery, recovery rates and other operational capabilities, safety, health or environmental incidents, the effects of global pandemics and outbreaks of infectious diseases, natural catastrophes or adverse geological conditions, climate change and extreme weather events, the outcome of litigation or regulatory proceedings, the availability of mining and processing equipment, the ability to produce and transport products profitably, the availability of transport infrastructure, the development, efficacy and adoption of new technology, the impact of foreign currency exchange rates on market prices and operating costs, the availability of sufficient credit, the effects of inflation, political uncertainty, tensions and disputes and economic conditions in relevant areas of the world, evolving societal and stakeholder requirements and expectations, the actions of competitors, activities by courts, regulators and governmental authorities such as in relation to permitting or forcing closure of mines and ceasing of operations or maintenance of Anglo American's assets and changes in taxation or safety, health, environmental or other types of regulation in the countries where Anglo American operates, conflicts over land and resource ownership rights and such other risk factors identified in Anglo American's most recent Annual Report. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this document. Anglo American expressly disclaims any obligation or undertaking (except as required by applicable law, the City Code on Takeovers and Mergers, the UK Listing Rules, the Disclosure and Transparency Rules of the Financial Conduct Authority, the Listings Requirements of the securities exchange of the JSE Limited in South Africa, the SIX Swiss Exchange, the Botswana Stock Exchange and the Namibian Stock Exchange and any other applicable regulations) to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in Anglo American's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Nothing in this document should be interpreted to mean that future earnings per share of Anglo American will necessarily match or exceed its historical published earnings per share. Certain statistical and other information about Anglo American included in this document is sourced from publicly available third party sources. As such it has not been independently verified and presents the views of those third parties, but may not necessarily correspond to the views held by Anglo American and Anglo American expressly disclaims any responsibility for, or liability in respect of, such information.

Anglo American plc

17 Charterhouse Street London EC1N 6RA United Kingdom

Registered office as above. Incorporated in England and Wales under the Companies Act 1985.

Registered Number: 3564138 Legal Entity Identifier: 549300S9XF92D1X8ME43

 

END

 

 

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