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%

Deutsche Bank note today:
"In this note we examine the high quality longwall assets that Anglo American has put up for sale in Australia and potential buyers. These coal assets form the most valuable part of the disposal programme, but are in a commodity that few are excited to enter. Achieving an acceptable valuation for shareholders may prove challenging. We think the two logical buyers are BHP and Rio. Both can extract operating synergies, BHP more though. We also think Japanese trading house, private equity, South32 and X2 may take a look.
We believe from BHP’s standpoint, the acquisition of Anglo’s coal assets would provide operational synergies around Goonyella and Caval Ridge, plus best practice opportunities which could unlock material value for Broadmeadow. But the company has made it clear that its preferred areas of investment are copper and oil. In addition, regulators are likely to investigate any acquisition by BHP. Rio Tinto has expressed interest in met coal previously, but does it need more exposure to Chinese steel? There may be synergies with its Kestrel UG mine. But does it want to assist in Anglo’s balance sheet repair or does it see other assets that may fall from the tree if the environment deteriorates further? Would the Japanese trading houses, PE, X2 or S32 have any interest? Based on a long term met coal price of US$125/t and AUDUSD of 75c our NPV of Grosvenor and Moranbah is US$3.3bn. Every US$5/t reduction in our LT met coal price curve reduces NPV by US$328m.
Anglo has announced it is shrinking its operations to three core areas and has effectively put “the for sale sign up” on all remaining assets. It has also talked about debt reduction to US$6bn, suggesting US$7bn of disposals. But in reality, we expect Anglo to try and sell only a portion of the assets for sale. The extent of any disposal program beyond the US$3-4bn targeted for 2016 will be dependent on progress on cost cutting and operational gains as well as operating cash flow. Investors should focus on progress towards the 2.5x ratio more than the absolute level of debt reduction, in our opinion. Given the size of the disposal program (1x current market cap potentially) management will be under significant pressure to limit the value destruction on any single disposal by their owners- the shareholders.
The underlying value of Anglo’s assets remains materially in excess of the current share price. However, execution risk around the disposal program remains high making any investment case difficult without signs of progress on delivery. Main risks include higher/lower commodity prices, stronger/weaker FX and progress or delays on the disposal program."

Jefferies note today:
"We hosted Anglo’s CEO, Mark Cutifani, FD, Rene Medori, and Head of IR, Paul Galloway, for meetings in the US yesterday. Investors are in general skeptical about the company’s ability to deliver on its planned restructuring. We are waiting for real progress before including the potential value uplift in our analysis. The ball is in Anglo’s court, and it is time for mgmt to prove the doubters wrong.
Core Anglo has value: Anglo’s restructuring plan involves selling non core assets to pay down debt and improve margins. According to mgmt, core Anglo (DeBeers, Platinum, Copper) will consist of just 16 assets (versus 45 today) and will generate $2.5bn-$4.0bn of EBITDA through the cycle with net debt of just $6bn (versus Anglo’s net debt of $12.9bn). At the midpoint of the EBITDA range and a mid-cycle EV/EBITDA multiple of 6.5x, core Anglo’s fair equity value would be $15.3bn, or 833p per share.
Restructuring risks: Anglo believes that selling non-core assets is a better approach than issuing equity or selling core assets at premium multiples. Mr Cutifani argues that the resource optionality within tier-1 mines is difficult to value and it is unlikely that full value would be realized in a sale. In the case of non-core assets, the difference between Anglo’s assumed valuation and the buyer’s valuation should be mostly a function of differing commodity price assumptions. Mgmt believes it can realize full value for these non-core assets. Investors, however, are concerned that the sale process will take too much time and that the company’s ability to sell these assets for “full value” depends on commodity prices staying firm. Several investors would prefer an equity issuance as a faster, less risky solution. Either way, it is clear that deleveraging is essential for Anglo.
Fade the rally: Based on our analysis, the tradeoff between risk and reward is not favorable in AAL shares at the current price. The recent rally has been extraordinary, with the AAL share price up 137% since Jan 20. Some of that could be attributed to a modest recovery in commodity prices and improved sentiment toward the sector, but we are reluctant to give Anglo additional credit for restructuring targets at this time. We would take profits after the recent strength.
Valuation/Risks
Higher commodity prices and/or successful restructuring are risks to our Underperform rating. Our 300p target is at a discount to NPV due to operational risks. We are not modeling restructuring benefits at this time."

UBS note today:
"We downgrade Anglo to Sell (from Neutral), lifting our price target to £4.00/s. The stock is up 137% from the low in mid-Jan, outperforming the sector by ~85%. We believe the outlook for Anglo's key commodity prices has not improved materially and the execution risk with the proposed restructuring remains high. Our key concern is that Anglo will struggle to sell coal, nickel and iron ore assets at attractive prices in the current market and thus, if they do, it could be destructive to shareholder value."

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Investec today reaffirms its sell investment rating on Anglo American PLC (LON:AAL) and raised its price target to 303p (from 153p).

Public Investment Corp, the South African pension fund manager, raises its stake to more than 11%, buying circa 8m shares in AAL.

JP Morgan Cazenove today reaffirms its underweight investment rating on Anglo American PLC (LON:AAL) and raised its price target to 450p (from 250p).

Global miner Anglo American suspended mining activities at its flagship Los Bronces copper mine and the smaller El Soldado deposit for security reasons.

StockMarketWire.com
Anglo American's production guidance for 2016 remains unchanged after solid progress in the first quarter.

Diamond production decreased by 10% to 6.9 million carats, reflecting the decision to reduce production in response to trading conditions in 2015.

Platinum production (expressed as metal in concentrate) increased by 4% to 567,000 ounces driven primarily by increases at Amandelbult and Mogalakwena. Refined platinum production decreased by 52% due to a planned stocktake and a Section 54 safety stoppage at the Precious Metals Refinery (PMR) for 12 days.

Copper production from the retained operations (excluding the AA Norte assets that were sold effective 1 September 2015) was in line with Q1 2015. Overall production decreased by 15%.

Nickel production increased by 67% to 11,200 tonnes following the successful completion of the Barro Alto furnace rebuilds.

Iron ore production from Kumba decreased by 27% to 8.9 million tonnes as Sishen is being transitioned to a lower cost pit configuration.

Iron ore production from Minas-Rio increased to 3.3 million tonnes (wet basis) as the operation continues to ramp-up. Production increased by 3% vs. Q4 2015.

Export metallurgical coal production decreased by 9% to 4.5 million tonnes due to planned longwall moves taking place at both Moranbah and Grasstree, partially offset by improved operational performance at Dawson and development coal production at Grosvenor.

Export thermal coal production decreased by 13% to 7.7 million tonnes due to planned production cuts at Cerrejon as a result of market conditions and a change in mix at Landau to higher margin domestic sales.

Chief executive Mark Cutifani said "The Q1 2016 operating results are in line with the equivalent period of 2015 on a copper equivalent basis and reflect the major restructuring programme under way and our ongoing efficiency and cost reduction strategy. They also demonstrate the market discipline we continue to show in our key markets, particularly diamonds and platinum, and are consistent with our restructuring plans as we focus on lower cost and higher margin assets.

"We are encouraged that the actions we have taken in diamonds are continuing to have a positive effect, while operational productivity continues on an upward trajectory. As a consequence of our solid progress, our production guidance for 2016 remains unchanged."

Deutsche Bank today reaffirms its hold investment rating on Anglo American PLC (LON:AAL) and raised its price target to 690p (from 515p).

AAL is retreating... I feel it has gone up too fast without much good news at all.
Fundamentals still bleak and demand for commodities has not improve.
Now 680p.

hlyeo.....I think all of the miners have gone up a little too fast. The brokers are convinced that they are overvalued atm. Not sure if they are right, as some of their price targets are way off, imo. I am trying to keep most of the miner boards up to date as they have been pretty decent investments over the last five months. Just a matter of deciding if they have hit bottom and the cycle is changing.

Sell AAL now... crashing fast.

Share price downgraded to sell by Liberum Capital to 400p

I think it's time to sell AAL at 570p now

StockMarketWire.com
Anglo American says the value of rough diamond sales for De Beers's fifth sales cycle of 2016, amounted to $560 million, compared with $636 million value of the fourth sales cycle of 2016.

De Beers Group chief executive Philippe Mellier said: "Sales in the fifth cycle of the year were somewhat lower than in the fourth cycle, in line with our expectations and typical seasonal demand patterns. Rough diamond demand and polished diamond prices remain stable, reflecting steady consumer demand, but we maintain a cautious outlook."

Credit Suisse today reaffirms its neutral investment rating on Anglo American PLC (LON:AAL) and raised its price target to 700p (from 630p).

StockMarketWire.com
Anglo American (AAL) said diamond production decreased by 19% to 6.4 million carats, reflecting the decision to reduce production in response to prevailing trading conditions in H2 2015.

Platinum production (expressed as metal in concentrate) increased by 1% to 585,700 ounces, whilst refined platinum production increased by 33% to 747,600 ounces.

This reflected the recovery at the Precious Metals Refinery after a planned stocktake and safety stoppage in Q1 2016.

HIGHLIGHTS:
- Copper production from the retained operations (excluding the AA Norte assets sold effective 1 September 2015) decreased by 8% to 144,200 tonnes. Expected lower grades and significant snowfall impacted operations at Los Bronces, albeit partly offset by plant stability improvements at Collahuasi.

- Nickel production increased by 76% to 11,100 tonnes following the successful completion of the Barro Alto furnace rebuilds in 2015.

- Iron ore production from Kumba decreased by 15% to 8.9 million tonnes as Sishen restructured (downsized) and transitioned the operations to a lower cost pit configuration.

- Iron ore production from Minas-Rio increased by 91% to 3.5 million tonnes (wet basis) as the operation continues its ramp-up.

- Export metallurgical coal production increased by 4% to 5.5 million tonnes due to first longwall production at Grosvenor in May and a longwall move at Grasstree in the prior year, partially offset by ramp-up at Moranbah after the completion of the longwall move in the prior quarter.

- Export thermal coal production decreased by 6% to 8.1 million tonnes due to ramping down production at Drayton where mining activities will cease in late 2016 and planned production cuts at Cerrejon, partly offset by higher production at most South African Export operations.

Anglo American chief executive Mark Cutifani said "The Q2 2016 operating results are in line with the equivalent period of 2015 on a copper equivalent basis.

"We are building upon the improving operational trend from the first quarter as we recover refined platinum production and continue to ramp-up Minas-Rio, Grosvenor and Barro Alto.

"We also continue to demonstrate discipline in our key markets, particularly diamonds and platinum, in line with our focus on higher margin and lower cost assets.

"The decisive actions taken by De Beers last year led to more normal trading conditions in the first half of 2016 with sales volumes increasing as a result, but we maintain a cautious outlook."

StockMarketWire.com
Anglo American reported net debt at 30 June 2016 decreased to $11.7 billion (vs. $12.9 billion as at 31 December 2015) through cost discipline and working capital and capex reductions.

HIGHLIGHTS
- Attributable free cash flow of $1.1 billion (vs. $0.2 billion in H1 2015)

- Disposal proceeds of $1.5 billion agreed and expect to be completed in H2 2016

- Group underlying EBIT(1) of $1.4 billion, a 27% decrease, due to lower commodity prices ($1.2 billion underlying EBIT impact), partially offset by weaker producer country currencies ($0.9 billion underlying EBIT benefit) and incremental cost reductions

Operating performance and associated cost and capex reductions mitigating headwinds:
- Unit costs decreased by 19% (vs. H1 2015) in US dollar terms

- Expect to deliver $1.6 billion of cost and volume improvements in 2016

- $1.9 billion target included $300 million now reclassified as capex and working capital reduction

- $0.3 billion of cost and volume improvements delivered in H1 2016

- Commodity price-driven impairment of $1.2 billion relating to Moranbah and Grosvenor coal assets contributing to a loss before tax of $364 million