Anglo American Annual Report 2012

BUSINESS OVERVIEWPhosphatesOur Phosphates business is thesecond largest integrated phosphatefertiliser producer in Brazil. Itsoperations are vertically integrated,covering mining of phosphate ore,beneficiation of the ore to producephosphorus pentoxide (P 2O 5)concentrate, and processing intointermediate and final products.Our phosphates mine at Ouvidor, inGoiás state, currently produces, onaverage, around 5.9 Mt of ore perannum (dry basis). It is a primephosphate deposit, containing someof Brazil’s highest grades of ore(approximately 13% P 2O 5). Thecompany has approximately 15% ofcurrent Brazilian phosphate mineralresources and has a remaining mine lifeof 40 years at current production rates.Run-of-mine phosphate ore is treatedat a beneficiation facility on the samesite, and approximately 1.36 milliontonnes per annum (Mtpa) of finalphosphate concentrate is producedat an average grade of around 35%P 2O 5. Phosphates operates twochemical processing complexes:one in Catalão in Goiás, the other atCubatão in the state of São Paulo. Thecompany produces a wide variety ofproducts for the Brazilian agriculturesector, including low analysis(approximately 20% P 2O 5content) andhigh analysis (40%-55% P 2O 5content)phosphate fertilisers, dicalciumphosphate (DCP) for the animal feedindustry, as well as phosphoric andsulphuric acids for the food and animalfeed industries.NiobiumOur Niobium business is located in thecities of Catalão and Ouvidor, in Goiásstate, Brazil, and is one of the world’sthree principal niobium producers.In operation since 1973, our Boa Vistamine produces and exportsapproximately 4,000 tonnes ofniobium per year. Now, approachingthe end of the weathered ore, theNiobium business is investing inadapting the existing plant to processfresh rock.Our phosphatesmine, containingsome of Brazil’shighest gradesof ore hasapproximately15% of currentBrazilianphosphatemineralresources.INDUSTRY OVERVIEWPhosphatesPhosphate fertiliser demand isdriven by strong fundamental trends,including expanding food needs froma growing global population, changingdietary habits in major emergingeconomies such as China and India,and increased demand for biofuels.Brazil, a major agricultural nation, isthe fourth largest phosphate marketglobally and needs to import almost50% of its required phosphatefertilisers. Our phosphates mine,situated in Brazil’s under-suppliedCentral-West region, gives us acompetitive cash-cost advantage.NiobiumAs an alloying agent, niobium bringsunique properties to high strengthsteel alloys (HSSA), such as increasedformability, corrosion resistance,weldability and strength under toughworking environments, includingextreme high or low temperatures.Around 90% of total global niobiumconsumption is used as an alloyingelement, in the form of ferroniobium(FeNb) in high strength steels, whichare used in the manufacture ofautomobiles, ships and high pressurepipelines, as well as in the petroleumand construction industries. Theproduct is exported to major steelplants in Europe, the US and Asia.STRATEGYPhosphates and Niobium’s corestrategy is to expand the existingoperations and mineral reserves inboth commodities through a rigorousfocus on operational excellence, andthe execution of selected low cost andhigh returning projects.At Phosphates, significant brownfieldexpansion opportunities are currentlybeing evaluated in order to meet theexpected growing demand needs ofthe Brazilian agricultural market, whichis strategically placed to address theglobal shifts in dietary habits andwhere the outlook for the productionof fertiliser products is very positive.At Niobium, our investment in the BoaVista Fresh Rock project is expected toconsolidate the business as the secondlargest producer of niobium worldwide,feeding mainly into, and increasing ourmarket share in, the HSSA market.ORGANISINGVALUE FROMWASTE ATPHOSPHATESPhosphates is applying the‘reduce, re-use, recycle’philosophy on an industrial scale.A leading Brazilian producer ofphosphate fertilisers, each yearPhosphates generates 7,800tonnes of phosphate waste,with 20% being re-used at thegranulation stage of production.The rest was traditionally soldas a low-value by-product ordisposed of in waste lagoons.Following laboratory and, later,industrial-scale tests, aPhosphates technical teamdemonstrated that phosphatewaste could also be re-usedin the intermediate acidulationstage. The technique was putinto full-scale production inMarch 2012.Phosphate waste recoveredand re-used has now increasedto 40% – with a target of 60%.This has led to lower productioncosts, with no loss of quality,and the environmental benefitof significantly reducedwaste disposal.ImageLaboratory analyst Thiago Araujo.Operating and financial reviewAnglo American plc Annual Report 2012 87