Strategy
Becoming the leading global mining
company
Our ambition is to be the leading global mining company, becoming
the investment, partner and employer of choice.
Copper ore ready to be transported out of the open pit at Los Bronces mine, Chile
Investment of choice
Anglo American seeks to outperform its competitors in delivering value to shareholders. Everything that we hope to achieve for our other stakeholders – employees, host governments and communities – must be built on a platform of sector-leading financial performance.
To achieve this, we are:
- Uplifting the performance of our long life asset base through cost and productivity improvements.
- Integrating a stronger performance culture across the organisation and streamlining our management model.
- Prioritising capital expenditure towards those businesses and development projects that are expected to perform most strongly in the near term.
Uplifting the performance of the asset base
In 2007, we initiated a major drive to improve our cost and productivity performance and have announced a substantial cost reduction programme, targeting $1 billion of cost savings from procurement and shared services by 2011.
Our asset optimisation programme involves a thorough review of all our key mining operations and includes benchmarking our assets and processes relative to the best-in-class performance along key value drivers. The benefits of this programme will have a particular impact on our coal and platinum businesses, where we believe the greatest opportunities exist.
Integrating a stronger performance culture
To meet our strategic goals, we are accelerating the transformation of our organisational culture, from 'Old Anglo' to 'One Anglo'. We are capitalising on our global scale with increased integration in areas like shared services and supply chain management, knowledge-sharing between sites and across business units and adherence to common standards and policies.
Furthermore, we are embedding a performance culture throughout the organisation and building a management team driven by value maximisation. As part of this process, in 2009 we announced significant changes to our structure, creating seven commodity business units (BUs) with management teams located in the area of core geographic focus for the BU and responsible for operational performance and project delivery.
Growth
Our portfolio is strategically positioned for growth in the near, medium and long term, through both organic growth and targeted acquisitions across a number of geographies. Our approved project pipeline is of the order of $17 billion. This pipeline is focused on the most attractive commodity markets, such as copper, seaborne iron ore, export coal and capitalises on Anglo American's unique position in platinum.
Our projects offer scale and are positioned on the lower half of the industry cost curve. Our pipeline has the potential to deliver strong production growth and market share gains in all our core market segments. The rapid and steep decline in the prices of, and demand for, the majority of the commodities produced by Anglo American in the second half of 2008 as a consequence of global uncertainty has presented a significantly changed near term outlook for us. As a result, we completed a wide ranging review of capital expenditure programmes. The review focused particularly on prioritising projects that are expected to perform most strongly in the near term, with little detrimental effect on projects that are already at an advanced stage of development.
Planned capital expenditure for 2009 was reduced by more than 50% to $4.5 billion. This substantial reduction will be achieved principally by rescheduling capital spend on many of our major development projects. The $3.2 billion of capital expenditure that will be spent on our projects in 2009 will enable their continuing development without causing undue delays or penalties that may impact their investment case, balancing essential short term action in the context of the long term nature of the mining industry. These projects are a key driver of our long term growth and several are well timed to enter production from 2011 onwards. Stay-in-business capital expenditure for 2009 was reduced to $1.3 billion, equal to 64% of depreciation.
In addition to our organic growth plans, we are continuing to pursue targeted, value-enhancing acquisitions. At Anglo American, we take a rigorous and value-based approach in assessing acquisitive growth opportunities. We look for assets that:
- are in the most attractive market segments
- have scale, long lives and future growth options
- are cost-competitive
- offer large value creation potential to Anglo American above the investment cost
Partner of choice
Engaging with stakeholders
We have a long history of successful collaboration with our stakeholders, including governments, communities and non-governmental organisations (NGOs) and we understand that we can only thrive if Anglo American is welcomed and respected in the countries and communities in which we operate.
We recognise that building partnerships with governments at all levels is critical to earning and retaining our licence to operate, which is why we seek to engage with our host governments to understand and complement their objectives.
An example of this approach can be seen in our collaborative work with the South African government to improve safety performance in the mining sector, find solutions to the challenges around electricity supply, and to improve the teaching of maths and science in South African schools, to promote enterprise development and to make progress toward the country's transformation goals.
We seek to earn the consent and support of the communities who live around our operations and potential projects. Such communities rightly expect to share in the benefits of mining. We aim to work with them to deliver meaningful and long-lasting benefits, such as:
- through our ground-breaking work to fight the HIV/AIDS epidemic in southern Africa
- offering pre-employment training to local people to enable them to acquire the skills needed to work at our operations
- working with communities to improve their access to health services and education
- supporting farmers to help to improve their practices and income levels
- promoting sustainable enterprise development in South Africa, Chile and Brazil
We cannot do this alone and we welcome the knowledge, skills and expertise to be gained by working in partnership with NGOs, and aid and development agencies. To help us to understand better the concerns, priorities and needs of local people we have also pioneered a unique process called the socio-economic assessment toolbox (SEAT), which is based on comprehensive local stakeholder engagement, assessment of both our direct and indirect impacts and seeking ways in which our core business can help to support improved local development outcomes.
Employer of choice
Becoming the employer of choice for Anglo American begins with a guarantee to provide a safe and supportive working environment for everyone who works with us. Our commitment to zero harm remains our primary focus.
We offer a range of career paths for both technical and professional people. With our global footprint and growth aspirations, Anglo American can offer both an exciting and a fulfilling employment proposition.
We aim to attract the best people in the industry, and facilitate and encourage professional and personal development for all Anglo employees.
We are focused on developing talent and are actively interested in developing a diverse workforce where different experiences and points of view are supported and valued. We are particularly interested in encouraging more women into the organisation as well as facilitating entry for individuals at all levels from graduate to senior hire and from local recruitment to global appointments.
