Anglo American plc is one of the worlds largest mining and natural resource groups. With its subsidiaries, joint ventures and associates, it is a global leader in platinum group metals, gold and diamonds, with significant interests in coal, base and ferrous metals, industrial minerals and paper and packaging. The group is geographically diverse, with operations in Africa, Europe, South and North America, Australia and Asia.

            Red = 25 day moving average.           Green = 200 day moving average.

SALES PER ACTIVITY (Data as of 31/12/2005)

Packaging and Paper: 23%
Ferrous metals:         20.5%
Industrial minerals:    14%
Platinum:                 12.5%
Nonferrous metals:    12%
Coal:                       9%
Gold:                       9%

Telegraph.com - 29/10/2006

Business comment - By Dan Roberts, Sunday Business Editor

Boards should listen without prejudice



Tony Trahar may have big hands and a grip that could crush rocks but to listen to some of the talk in the mining industry last week you would think the outgoing chief executive of Anglo American was down there every morning digging out diamonds with his fingernails.

The accepted version of events is not without pathos. The scene opens in a macho saloon bar full of male mining characters with butch nicknames like "Big Mick". Whenever they go down the mine, they are reminded of the old superstition that says it is bad luck to let women go underground.

Then last Tuesday, a door swings open and in walks the new boss: a woman. Once the gruff coughing subsides, word leaks out to the investors and there is a run on the share price. Before the day is ended, some 500m has been lost and the shareholders have revealed themselves to be almost as irredeemably sexist as the companies they own.

Unfortunately, this interpretation of the City's reaction to the appointment of Cynthia Carroll as Anglo American's chief executive is as misleading as it is simplistic.

The first myth to knock on the head is that the men running global mining are all horny-handed sons of toil whose cultural attitudes are stuck in the 19th century. Today's global mining companies are thousands of miles from the coal face literally. Based mostly in London, these multinational giants may have more swagger than some but there is nothing spit and sawdust about their modern, cosmopolitan headquarters.

More importantly, the shareholders who reacted so unenthusiastically to Carroll's appointment should not be dismissed as sexist just because they do not think she is up to the job. No doubt some of the more trigger-happy traders may have been encouraged to mark down Anglo shares on some misguided notion that this is man's work, but the idea that so much real money would have been taken off the table on a whim is hard to swallow.

Genuine concerns remain about Carroll's limited qualifications for the job and why the board failed to attract the more senior candidates it was widely known to have been pursuing. The lingering suspicion is that the 49-year-old American is there because she ticks the right boxes for today's breed of politically correct headhunter rather than because she is the ideal candidate to lead Anglo through its big challenges. It would not be the first time.

There are far too few women at the top of big companies, but there are also far too few women in the middle of big companies. Until this is addressed, no amount of fast-tracking will fix the problem. For every positive discrimination candidate who succeeds there will also be those who do not casting unfair suspicion on those who do get there by merit.

In management as in everything thing else, what matters is ability. Age, gender, race and sexual preference are all about as relevant as the size of Tony Trahar's hands.

The Sunday Times - October 29, 2006

Anglo a new chief and a new direction - DOMINIC O'CONNELL


EXECUTIVES reading our exclusive interview with Cynthia Carroll, the new boss of Anglo American, will be chuckling appreciatively by the end.

Unlike many incoming chief executives, who are only too keen to throw their weight around and talk about their big plans for their new commands, Carroll carefully avoids offering too many hostages to fortune.

She is wise to do so. She is taking over from a long-serving chief executive, Tony Trahar, who oversaw a steady process of diversification away from the core mining activities, only to begin to reverse the policy towards the end of his time with the company. The end result is the creation of Mondi, a new company that will be created later this year by the spin- off of Anglos paper and packaging interests.

To offer a snap judgment on where Anglo needs to go from here would simply be tempting fate. But as Carroll does her tour of the African mines that are the companys heartbeat, she should reflect that in choosing her, the board was in effect embracing a mandate for change.

If the directors wanted Anglo to continue on its familiar path, they would undoubtedly have chosen an insider, or a South African (all the companys bosses have to date been South Africans), or an experienced executive from another mining company.

But they didnt. They chose a rank outsider, one with almost no profile in the City, and as if to make a point in a male-dominated industry a woman.

Carroll should take that as a clear indication that she can take a radical approach. I would bet the shake-up of Anglo started by Trahar will accelerate.

The Times - November 11, 2006

Chinese tycoon in $800m Anglo share buy - By Carl Mortished


The Oppenheimer family has sold a third of its stake in Anglo American to China Vision Resources, a company controlled by the Chinese tycoon Larry Yung.

E Oppenheimer & Sons, the family investment company, said that it had sold 17 million shares in the mining company, which was founded by Sir Ernest Oppenheimer early in the last century.

The family will continue to hold 40 per cent of De Beers, the diamond group and its remaining 2 per cent in Anglo.

The value of the deal, which was not disclosed, is likely to have been in excess of $800 million (418 million).

Shares in Anglo gained 2 per cent yesterday in response to the purchase by China Vision Resources, a special purpose vehicle created for the transaction.

Anglo has world-class interests in platinum, gold, diamonds and coal, mainly in southern Africa, but the company has been the subject of bid speculation and is engaged in a restructuring and sale of its non-mining interests.

Demand for metals is soaring in China and the country is already a leading consumer of precious metals, such as gold and platinum, owing to an anticipated surge in demand for catalytic converters in a fast-growing nation of car owners.

Larry Yung, who is believed to be behind China Vision Resources, is the chairman of Citic Pacific, a Hong Kong-based conglomerate with interests in steel, iron ore, property and infrastructure. Mr Yung topped Chinas rich list last year in Forbes magazine, with an estimated personal fortune of $1.6 billion.

Nicky Oppenheimer, the chairman of De Beers, said that the sale reflected the familys desire to diversify its holdings into areas other than mining. Mr Oppenheimer was at pains yesterday to declare his support for the restructuring and last months appointment of Cynthia Carroll as chief executive.

She is just the right person to lead Anglo into the future, he said.

Chinese companies are engaged in a scramble to acquire control of mineral resources in Africa. The countrys construction and manufacturing expansion is sucking in imports of copper and iron ore, as well as precious metals, such as platinum.

The leading Chinese oil companies CNOOC, CNPC and PetroChina are scouring the continent for hydrocarbons. Angola is already a leading supplier of crude oil to China.

Broker note from Numis today (summary):
"The mining sector lends itself to long-term analysis. This report, six months
in the making, argues that sector equities are 'myopic', attributing little value to
company pipelines and the power of Chinese urbanisation. The combination of
these factors will produce upside to current share prices of 50-100%. Anglo
American is our top pick."

Credit Suisse has lowered its price target for diversified miner Anglo American from 2,500p to 2,200p after slashing its forecasts on the back of lower volumes within copper and iron ore. The broker said that Anglo is expected to lag peers on volume growth over the next two years (2-3% per annum in 2013/14); "we believe the market continues to underestimate the potential margin squeeze in 2013 and beyond." Earnings per share (EPS) estimates for 2012, 2013 and 2014 have been reduced by 7%, 3% and 13%, respectively. With the valuation being "far from compelling", the broker maintains its 'hold' rating on the stock

Shares in Anglo American ended October 86p up on 1,903p. That's only a little under 5%, but it could be the start of something bigger.

Anglo shares have crashed this year as the miner's profits took a hit -- disproportionately higher than the rest of the sector, so it wasn't all down to falling commodities demand. But the shares have been creeping up over the month, and got an extra boost when the firm announced that chief executive Cynthia Carroll is to step down.

The well-publicised problems surrounding platinum mining in South Africa remain, but if they can be addressed over the next few months, it could turn out that we're at a good buying opportunity now.

Anglo American appoints new Chief Executive

Anglo American appoints Mark Cutifani as Chief Executive

Anglo American plc ("Anglo American") announces the appointment of Mark Cutifani as Chief Executive, with effect from 3 April 2013.

Mark Cutifani has been Chief Executive Officer of AngloGold Ashanti Limited, the South Africa-based gold producer, since 2007 and has led the successful restructuring and development of its business, which includes operations in ten countries on four continents.

Prior to his current role, Mr Cutifani was the Chief Operating Officer of CVRD Inco, the Canadian nickel company. He started his career in the coal and gold mining industries in Australia and has experience across a wide range of commodities. He has a degree in Mining Engineering and is the current President of the South African Chamber of Mines.

Fall in output http://www.moneyam.com/action/news/showArticle?id=4689330

JP Morgan Cazenove reiterates underweight on Anglo American, target cut from 1040p to 980p.

RBC note today:
"New headwinds face Anglo: We have adjusted our model for the recent Q1 production, and remodeled AngloPlat to come to a lower value. In addition, we see De Beers contributing less this year to Anglo because of soft conditions in diamonds which will limit volume and sales prices, and slow the rehabilitation of Anglo's balance sheet. The contribution of the bulks in the portfolio also remains under pressure. These factors have led to a lower valuation in our model and a change in Price Target to £9/share, with a downgrade in our recommendation to Underperform.
Challenging the "cheap" tag: Anglo's forward EBITDA and P/E multiples seem to compare favourably with its peer group, and it remains the most diversified of the large miners. But over the next few years free cashflow generation remains under pressure, and is threatened under a weaker price scenario. Essentially, debt continues to grow through 2017 as, on our numbers, free cash flow remains negative. Anglo's structure contributes to multiples appearing more attractive than they are, we believe. Using EBITDA as a proxy for cash flow, we modify Anglo's figures to account only for the cash received from AngloPlat and Kumba (ordinary dividends), and proportionately consolidate the EBITDA of De Beers. The result is a worsening in EV/EBITDA multiples relative to the peer group
Diamonds slow: De Beers was the largest contributor the earnings in 2014, and looks set to remain near the top of the ranking in 2015. Conditions in the diamond market have deteriorated with the result that Anglo has guided down De Beers' production this year from 32-34mct to 30-32mct; and we see potential for sales to suffer more in the near-term with prices under some pressure. We have modeled lower sales and prices and this results in De Beers' contribution to Anglo's bottom line falling from $776m to $428m.
The dividend intact for now: We do not see Anglo cutting its $1.1bn ordinary dividend this year, though it will remain a discussion point, we think, given negative free cashflow and rising debt due to still significant capex in iron ore, metcoal and diamonds.
Changing numbers: We adjust our model which results in cuts to our EPS and CFPS forecasts. Our FY15E EPS forecast of $1.15/sh compares with consensus of $1.04/share; our FY16E EPS reduces to $1.37/sh, vs. consensus at $1.48/sh. Our NAV cuts to £11.95/sh. As a result our Price Target, based on 1x NAV and 9x a blend of FY15E and FY16E EPS, reduces to £9/sh.

Investec retains hold on Anglo American, target cut from 1062p to 872p.

Anglo American receives total cash proceeds of $1.6 billion for sale of 50% interest in Lafarge Tarmac

Anglo American plc ("Anglo American") announces that it has completed the sale of its 50% ownership interest in Lafarge Tarmac Holdings Limited ("Lafarge Tarmac") to Lafarge SA ("Lafarge"). Anglo American has received cash proceeds of approximately £992 million ($1,559 million), constituting the agreed minimum consideration of £885 million set out in the July 2014 binding agreement and approximately £107 million of working capital and other adjustments, subject to certain post-closing adjustments.

The completion of this transaction brings the aggregate proceeds received by Anglo American for the sale of its Tarmac assets to approximately $2.5 billion since 2008.

StockMarketWire.com
Kumba Iron Ore will contribute $192m to Anglo American's underlying earnings for the six months to the end of June - down from $409m last year.

Kumba Iron Ore's IFRS headline earnings fell to $213m - down from $606m last time.

Anglo American will report its results for the six months ended 30 June on 24 July.

StockMarketWire.com
Anglo American posts a pre-tax loss of $1,920m for the six months to the end of June - compared with a profit of $2,945m a year ago. The group booked commodity price-driven impairments of $3.5 billion after tax, including $2.9 billion at Minas-Rio.

Underlying earnings fell by 30% to $904m and group revenues were down by 17% at $13,346. Underlying EBITDA fell by 24% to $3,280m.

Productivity improvements and indirect and capital cost reductions accelerated, with disposals being progressed: - $1.5 billion of operating and indirect cost reductions and productivity gains targeted in H2 2015 and 2016 (operating costs $800 million, productivity gains $400 million, indirect costs $300 million)

- Additional capital expenditure reductions of up to $1.0 billion by end 2016

- $1.6 billion of disposal proceeds delivered in July 2015



Chief executive Mark Cutifani said: "The transformation of Anglo American that I set out 18 months ago is progressing, despite considerable external challenges. I expect the operational turnaround to generate $1.2 billion(4) of underlying EBIT upside over the next 18 months, in addition to the $1.7 billion delivered to date. Structurally, we are focusing the portfolio around those assets that are of the scale and quality to generate most value to the Group.

"We expect to generate proceeds of at least $3 billion from asset sales, including the $1.6 billion received from the sale of our 50% interest in Lafarge Tarmac. We are unrelenting in enforcing strict cost and capital discipline across Anglo American, building upon the unit cost reductions delivered to date. Combined with planned capital expenditure reductions of up to $1.0 billion by end 2016, we are on track to deliver our long term net debt target of $10 billion to $12 billion, with net debt after the Lafarge Tarmac proceeds at $11.9 billion.

"Having defined our portfolio and significantly improved operational performance, now is the right time to accelerate the right-sizing of the organisation that supports the future business; we are targeting a $500 million total cost saving, of which $300 million will be realised from our ongoing core business, through the reduction of 6,000 overhead and other indirect roles, a 46% decrease, including those that will transfer with the businesses we are divesting. Post asset sales, we expect to have reduced our number of assets from 55 to 40 and reduced total employees by 35%, while maintaining copper equivalent production.

"As a result, and following the asset disposals and further business improvement, our underlying EBITDA margin of 25% in the first half of 2015 would increase to 35% on a like for like basis, representing a 40% improvement off a substantially lower cost base."

StockMarketWire.com
Anglo American's third quarter production increased by 2% (on a copper equivalent basis) compared to a year ago and by 3% compared to the previous three months.

Iron ore production from Kumba decreased by 12% to 11.4 million tonnes due to a temporary lack of sufficient exposed high quality ore for blending purposes at Sishen and adjustments to the mine plan and schedule as it transitions to the lower cost pit configuration. Minas-Rio produced 2.9 million tonnes (wet basis) of iron ore, a 60% increase compared to Q2 2015, reflecting the ongoing ramp up of the operation. Export metallurgical coal production increased by 8% to 5.5 million tonnes, driven by productivity improvements at Grasstree, which more than offset the loss of production from Peace River Coal being placed on care and maintenance in December 2014. Export thermal coal production was broadly flat at 8.8 million tonnes, with higher production at Cerrejón offsetting lower production from South Africa. Copper production from retained operations increased by 1%, while total production decreased by 3% to 171,100 tonnes as a result of the sale of the Norte assets, effective for reporting from 1 September. Nickel production decreased by 36% to 6,800 tonnes due to the planned Barro Alto furnace rebuilds. Both furnace rebuilds are now complete, ahead of schedule and below budgeted cost, with Furnace 2 operating at design capacity and Furnace 1 currently being ramped up. Platinum production (expressed as metal in concentrate)(6) increased by 14% to 614,300 ounces due to Rustenburg, Amandelbult and Union mines ramping up to normal production levels during the comparable period in 2014 following the strike. Diamond production decreased by 27% to 6.0 million carats, following the decision to reduce production to better reflect current trading conditions.

RBC note today:
A mixed bag of production which will likely be overshadowed by production cuts in iron ore, diamonds and copper (previously guided).
Iron ore beat guidance cut: Kumba production of 11.4mt was a beat vs. RBC at 10.6mt driven by better performance from Sishen and a resurgence in production from Kolomela. Anglo has trimmed Kumba production guidance by 1mt to ~43mt, with weaker production expected from Sishen (31mt vs. 33mt previously) as waste mining picks up; this is offset partially by a 1mt increase to guidance for Kolomela (this will see an increase in waste mining). Minas Rio continues its ramp up with production of 2.9mt, although water issues in the quarter drove a miss vs. our 4mt estimate and Anglo has revised down its Minas Rio FY15 production guidance to 10mt from 11-14mt.
Copper misses: Copper production of 171kt was a miss vs. RBC at 191kt driven by a mixture of weaker throughput at Los Bronces due to water constraints (which have now abated) and weaker production vs. our forecasts from the AA Norte assets which were sold in the quarter. Production guidance has been reduced to 680-710kt (from 720-750kt) to reflect the sale of the AA Norte assets (~37kt) and a ~3kt cut at Collahuasi as oxide production is curtailed.
Export met up: Australian export met production of 5.5mt was a beat vs. RBC at 5.2mt due to stronger performance from Capcoal, while thermal export lagged our 1.9mt forecast at 1.4mt as Drayton nears the end of its life, and thermal domestic production of 1.8mt was lower than our 2.2mt forecast. Production guidance is unchanged at 20-21mt.
Thermal weaker: SA export thermal production of 4.9mt was in line vs. RBC; however, Eskom thermal production lagged our 7.7mt forecast at 6.8mt due to weaker demand, and non-Eskom thermal production of 1.7mt was a touch below our 1.8mt forecast. Cerrejon produced 2.5mt, vs. RBC at 3mt. Production guidance for export thermal is unchanged at 28-30mt.
Platinum broadly in line: Refined platinum production of 611koz was in line vs. RBC at 618koz, while refined palladium production of 391koz was in line with our 389koz; refined rhodium lagged our 87koz forecast at 78koz. Production guidance is unchanged at 2.3-2.4moz.
Diamonds miss: Diamonds continues its challenging year with production of 6mct missing our 7.4mct forecast driven by the bringing forward of planned maintenance at Jwaneng and Orapa due to weaker market conditions. Production guidance has been revised down to 29mct from ~29-31mct.
Nickel upside: Nickel production of 6.8kt slightly lagged our 7.2kt forecast, although progress at Barro Alto continues ahead of schedule and budget. FY15 guidance raised to 28-30kt (from 25-30kt).

nearly $20 billion of debt or over 3 times market cap. If it was a boxer the towel would be being prepped for launch..

Who goes first GLEN or AAL?

Anglo American sets out radical portfolio restructuring and further material cost savings and capex reduction

Key highlights to be set out in the presentation include:

Radical portfolio restructuring
· Focus on Priority 1 assets to deliver free cash flow and greater returns through the cycle - number of assets to be reduced by ~60%
· Corporate structures and overhead to be aligned to future portfolio
o Consolidate from six to three businesses: De Beers, Industrial Metals, Bulk Commodities
o London office co-locating with De Beers in 2017

Driving operational discipline
· $3.7 billion of cost and productivity improvements targeted from 2013 to 2017:
o $1.6 billion delivered by end 2015(1), including $0.3 billion in 2H15
o $1.1 billion in 2016
o $1.0 billion in 2017, with potential to accelerate in part into 2016
· Care & maintenance / closure of cash negative assets - Snap Lake C&M, Thabazimbi closure

Protecting the balance sheet
· Capex reductions expected of a further c.$1 billion(2) to the end of 2016
o $2.9 billion aggregate capex reduction vs. original guidance(3) for 2015-2017
o $2.5 billion capex in 2017, a c.55% reduction vs. 2014
o SIB & capitalised stripping capex reduction of 30% from 2014 to $2.0 billion in 2016
· Disposals target increased to $4.0 billion - Phosphates and Niobium confirmed for sale
o c.$2.0 billion asset disposals agreed to date
· Dividend suspended in respect of 2H15 and 2016 - upon resumption, policy will change to pay-out ratio to provide flexibility through the cycle and clarity for shareholders
· Net debt guidance at end 2015 unchanged at $13.0 - 13.5 billion, despite price deterioration
· c.$15 billion of liquidity maintained and limited refinancing required in 2016 of $1.6 billion
· Expected impairments of $3.7 - $4.7 billion, largely due to weaker prices and asset closures

Likely to be more chances to get in but those who bought earlier in the week are doing well on the week!

Canaccord note today:
"Anglo American reported underlying EBITDA of US$4,854M, down 38% from US $7,832M, and underlying earnings were US$827M, down 63% from US$2,217M in 2014. Underlying eps was also off 63%, at 64c vs 173c in 2014. Net debt at year end was US$12.9bn compared with guidance of US$13.0-13.5bn. The company said that it is free cashflow positive at current commodity prices, and anticipates an additional US$1.9bn EBIT benefit from additional cost and productivity gains in 2016. Anglo is targeting US$3-4bn of asset disposals this year, and pro forma net debt of US$10bn by year-end. Forecast capital expenditure for 2016 has been reduced by only US$200M relative to December guidance levels (to US$3.0bn), while 2017 capex, at US$2.5bn, is in line with December guidance.
Anglo American has now provided the detail on a more aggressive plan than we or the market anticipated. The company will focus on diamonds, Platinum Group Metals and copper. All other assets will be managed for cash generation or disposal. This potentially adds all coal, iron ore and nickel assets to the “For Sale” list which already included the Niobium and Phosphate businesses, and selective assets in coal and platinum. The company hopes to deliver US$3-4bn of asset sales this year, and US$5-6bn in total. If fully implemented, the asset portfolio would shrink from 55 assets in 2014 to 45 in 2015, and eventually just 16 core assets.
Following our review of the 2015 results, we have revised our estimates, primarily to reflect a slightly higher cost profile than we had been forecasting at most assets. The forecasts are based upon the current business, so clearly as the disposal programme proceeds, there could be some material changes to estimates. We now forecast 2016 underlying EBITDA of US$3,770M (previously US$4,252M), underlying earnings of US$317M (was US$461M) and eps of 25c (from 36c). The company has already announced that no dividend would be paid for 2016.
The revised restructuring plan is bold, but high risk. The company will be seen as a forced seller and a price-taker by potential asset acquirers. Anglo will need to take care with its restructuring, particularly in South Africa, where it plans to exit a substantial asset base, but retain diamond and platinum interests. Our 350p target price (unchanged), based on NPV, rolling 12-month earnings vs the market and EV/ EBITDA, includes a 25% discount for implementation risk. Even if the plan can be successfully executed, with diamonds and platinum, Anglo’s residual portfolio will be a later cycle, more consumer-driven portfolio and earnings may recover later than at its more diversified peers. Given these factors, and the fact that the share price has almost doubled since its January lows, we downgrade our recommendation from Hold to SELL."