Anglo American Annual Report 2012

OVERVIEW CHIEF EXECUTIVE’S STATEMENTCHIEF EXECUTIVE’SSTATEMENTCynthia CarrollUNDERLYING OPERATING PROFIT(2011: $11.1 bn)$6.2 bnFor more informationturn to page 42FINAL DIVIDEND PER SHARE(2011: 46 cents)53 centsAs a result of markedly weakercommodity prices, ongoingcost pressures and an operatingloss in our Platinum business,Anglo American reported anunderlying operating profit of$6.2 billion, a 44% decrease.Underlying EBITDA decreased by35% to $8.7 billion and underlyingearnings decreased by 54% to$2.8 billion.Our safety performance has alwaysbeen my first priority and our effortscontinue to build on the progress wehave made since 2006, both in termsof lives lost and lost time injuriessustained. I am deeply saddened that13 of our colleagues lost their lives in2012 – a constant reminder that wemust persevere to achieve zero harm.Anglo American continued its drivefor strong operational performancethroughout 2012 in an environmentof tough macroeconomic headwindsand a number of industry-wideand company-specific challenges.Record volumes of metallurgical coal,achieving benchmark equipmentperformance levels, and of iron oreand increased volumes of exportthermal coal and copper helpedoffset the impact of illegal industrialaction, declining grades and higherwaste stripping.The new mining operationsand expansions delivered andcommissioned during 2011contributed to production growth andgenerated $1.2 billion of underlyingoperating profit. The Los Broncesexpansion contributed 196,100 tonnesof copper in 2012 and has achievedfull ramp up since August 2012, whileKumba’s Kolomela mine exceededexpectations by producing 8.5 milliontonnes for the year – both considerableachievements – while we have beenslowly ramping up Barro Alto.Beyond organic growth, we havecompleted our acquisition of theOppenheimer family’s 40% interestin De Beers, taking our holding to85%. In Chile, our joint ownership ofAnglo American Sur (AA Sur) withCodelco, Mitsubishi and Mitsui, whilewe retain control of the business, firmlyaligns our interests in one of the mostexciting producing and prospectivecopper orebodies in the world – theLos Bronces district. During the year,we also increased our shareholding inKumba Iron Ore, lifting our ownershipby 4.5% to 69.7%, reflecting our viewon the quality of the business and itshighly attractive performance andgrowth profile.Our divestment programme hasgenerated proceeds as announcedof $4 billion on a debt and cash freebasis, which excludes $7.4 billion cashgenerated from the sale of 49.9% ofAA Sur. In line with our divestmentprogramme of non-core businesses asset out in October 2009, I am delightedthat Tarmac’s UK joint venture withLafarge was completed in January2013, creating a leading UKconstruction materials companywith significant synergies expected.We are focused on deliveringshareholder value and returns throughthe cycle by maintaining a prudentand disciplined approach to managingour businesses and capital allocation.Despite the macroeconomicheadwinds and likely sustained highercapital and operating cost environmentfor the industry, we are committed toreturning cash to shareholders andhave recommended an increase to ourfinal dividend of 15% to 53 cents pershare, bringing total dividends for theyear to 85 cents per share, a 15%The new miningoperations andexpansionsdelivered andcommissionedduring 2011contributedto productiongrowth andgenerated$1.2 billionof underlyingoperating profit.0110 Anglo American plc Annual Report 2012