Operational agility underpins underlying EBITDA of $3.4 billion

Mark Cutifani, Chief Executive of Anglo American, said: “The first half of 2020 has tested society to its limits and I am encouraged by – and proud of – how our people have pulled together to do what’s right for each other, our business and for society as a whole. Anglo American acted quickly at the onset of the pandemic to protect both the health of our people and host communities through our global “WeCare” lives and livelihoods programme. At the same time, we secured the continuity and integrity of our operations.

“The pandemic did materially impact production, with varying degrees of lockdown being the main driver for our 11% overall reduction in output⁽¹⁾ and 16% decrease in revenue, alongside operational incidents at PGMs and Met Coal. These reductions were partially offset by strong performances from our Brazilian iron ore and Chilean copper operations. By the end of June, we were back at c.90% capacity across the portfolio⁽¹⁾ and the significant transformation of our underlying operational capabilities that has made the business more resilient helped to deliver $3.4 billion of underlying EBITDA*.

“The safety of our people comes first, no matter what. We have made so much progress, yet we are acutely aware that serious incidents continue in our business, none more alarming than at our Grosvenor underground mine in Australia in May. Across the global business, we recorded another all-time low injury frequency rate, representing a further 3% improvement compared to the record low of 2019 and a 62% improvement since 2013.

“Looking beyond the near term, we continue to invest in high quality growth. We still expect first production at our world class Quellaveco copper project in Peru in 2022, despite the prolonged slowdown through the national quarantine, reflecting the excellent progress achieved prior to March. The trajectory of our portfolio is towards later cycle products, with development of our recently acquired Tier 1 Woodsmith polyhalite fertiliser project continuing to progress well, while in May we set out our plans to exit our remaining South African thermal coal operations.

“During the second half, I expect our product diversification and Operating Model to continue to serve us well. As the global economy recovers, PGMs, copper and iron ore are all particularly well positioned, while De Beers, as the world's leading diamond business, is taking all appropriate steps to address the effects of acute disruption. As a company, we are continuing to invest and grow, with our products increasingly geared towards a fast-growing population and a cleaner, greener, more sustainable world.”

Financial highlights – six months ended 30 June 2020

• Generated underlying EBITDA* of $3.4 billion, a 39% decrease
• Profit attributable to equity shareholders of $0.5 billion (30 June 2019: $1.9 billion)
• Net debt* increased to $7.6 billion (21% gearing), due to investment in growth and temporary working capital build-up at De Beers and PGMs
• Interim dividend of $0.28 per share, consistent with our 40% payout policy
• Investing in high quality growth in later cycle products, including Quellaveco (copper) and Woodsmith (fertiliser)
• Working towards exit from remaining South African thermal coal operations
• Targeting carbon neutrality across operations by 2040

_{(1) On a copper equivalent basis.}

_{Terms with this symbol * are defined as Alternative Performance Measures (APMs). For more information on the APMs used by the Group, including definitions, please refer to page 66 of our Interim Results PDF.}

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